HCS HB 780 -- ECONOMIC DEVELOPMENT (Scheve)

This substitute:

(1)  Changes the population criteria for a community to qualify
as an enterprise zone from 1,000 to 20,000 inhabitants to 1,000
to 25,000 inhabitants;

(2)  Allows up to $1 million of Missouri Small Business Tax
Credits to be set aside for qualified investments in Missouri
businesses which are engaged in pharmaceutical research and
development;

(3)  Extends to 10 years the time period during which Wood
Energy Producer Tax Credits can be claimed;

(4)  Allows an 80% tax credit to the owner of any recreational
facility in certain third classification counties.  The annual
cap on the tax credit is $10,000;

(5)  Allows the City of Washington to receive a tax credit for
the demolition of any building or structure which is located on
the site of an abandoned or underutilized property;

(6)  Allows Caldwell County to impose a sales tax on all retail
sales;

(7)  Allows Newton County to impose a hotel/motel sales tax in
addition to any transient guest tax currently in effect;

(8)  Expands the definition of a "revenue-producing enterprise,"
as it relates to enterprise zones, to include hotel and motel
activities in the City of Salem;

(9)  Designates the following cities in St. Louis County as
enterprise zones:  Berkeley, Cool Valley, Beverley Hills,
Ferguson, Jennings, Kinloch, Northwoods, and Pine Lawn;

(10)  Expands the definition of "new residence" to include
vacant residential, agricultural, and/or horticultural property
in all counties except St. Louis, St. Charles, and Jackson
counties;

(11)  Requires the Director of the Department of Economic
Development to reallocate certain community improvement tax
credits into other related tax credit programs if they are not
used by October 1 of any calendar year;

(12)  Allows any employee of Harley-Davidson in Kansas City to
be considered a resident of an enterprise zone, even if the
employee ceases to live in an enterprise zone, as long as the
following conditions are met:

(a)  the individual was a resident of an enterprise zone for one
calendar month prior to his or her employment with
Harley-Davidson;

(b)  the individual remains employed with the Harley-Davidson
facility; and

(c)  the individual continues to reside in Missouri;

(13)  Changes the definition of "affiliate of a certified
company";

(14)  Changes the term "certified capital" to "certified capital
investment" and defines it as an investment of cash in a
Missouri certified capital company that fully funds either the
investor's equity interest in a certified capital company, a
qualified debt instrument that a certified capital company
issues, or both;

(15)  Defines a new term, "qualified debt instrument";

(16)  Expands the definition of "qualified distribution";

(17)  Expands the definition of "qualified investment" to
include the stipulation that the investment must also be for the
purchase of either an equity security or a debt security of the
qualified business, given certain circumstances and conditions;

(18)  Defines a new term, "qualified Missouri agricultural
business";

(19)  Expands the definition of a "qualified Missouri business"
to include the stipulation that the business will maintain its
headquarters, principal business operations, and at least 80% of
its employees in Missouri, or in a distressed community, for 3
years following any qualified investment;

(20)  Requires the aggregate amount of certified capital for
which earned and vested credits against state premium tax
liability are allowed for calendar year 2002 to be set at an
amount which would entitle all Missouri certified capital
company investors to take aggregate credits of up to $4 million
annually;

(21)  Prohibits the cumulative tax credits for investments of
certified capital in certified capital companies to exceed $180
million;

(22)  Delineates the requirements for a company to be certified;

(23)  States under what circumstances and in what manner
certified capital that is not required to be placed in qualified
investments or that has been placed in qualified investments and
can now be received by the company can be invested;

(24)  Explains the penalties and remedies for cases in which a
business where a qualified investment has been made fails to
comply with its agreement to retain its headquarters in Missouri
or a distressed community;

(25)  Requires, by January 31 of each year, all certified
capital companies to submit a report to the department for the
period ending December 31 of the last calendar year;

(26)  Allows the department to audit the records of certified
capital companies, certified investors, and qualified Missouri
businesses that received qualified investments;

(27)  Requires that, on March 31, 2002, and on March 31 of each
subsequent even-numbered year, the department will provide the
Governor, the Speaker of the House of Representatives, and the
President Pro Tempore of the Senate with a report on the
certified capital tax credit program;

(28)  Requires that the amount of the qualified investment made
in a Missouri small business must remain in that business for a
minimum of 5 years and, if the business is in a distressed
community, it must remain in the distressed community for 5
years;

(29)  Changes the definition of "capital in a qualified Missouri
business" to include "capital in a qualified Missouri business
or a qualified Missouri agricultural business";

(30)  Expands the definition of "distressed community" to
include metropolitan statistical areas that are designated as
either a federal empowerment zone, a federal enhanced enterprise
community, or a state enterprise zone that was originally
designated prior to January 1, 1986;

(31)  Reduces the limit on tax credits relating to the Family
Development Account Program from $4 million to no more than $2
million per year; and

(32)  Reduces the limit on tax credits relating to the
Individual Training Account Program from $6 million to no more
than $1 million annually.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$2,858,871 to Unknown in FY 2002, $2,861,653 to Unknown in FY
2003, and $2,910,888 to Unknown in FY 2004.

Missouri House of Representatives
Last Updated November 26, 2001 at 11:45 am