HOUSE BILL NO. 1319 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE FOGLE.
1455H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 620.2005 and 620.2010, RSMo, and to enact in lieu thereof two new sections relating to financial incentives for business development.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 620.2005 and 620.2010, RSMo, are repealed and two new 2 sections enacted in lieu thereof, to be known as sections 620.2005 and 620.2010, to read as 3 follows: 620.2005. 1. As used in sections 620.2000 to 620.2020, the following terms mean: 2 (1) "Average wage", the aggregate gross new payroll divided by the [number of new 3 jobs] aggregate actual hours worked for new jobs multiplied by two thousand eighty, or 4 the aggregate gross payroll of the retained jobs divided by the [number of retained jobs] 5 aggregate actual hours worked for retained jobs multiplied by two thousand eighty; 6 (2) "Commencement of operations", the starting date for the qualified company's first 7 new employee, which shall be no later than twelve months from the date of the approval; 8 (3) "Contractor", a person, employer, or business entity that enters into an agreement 9 to perform any service or work or to provide a certain product in exchange for valuable 10 consideration. This definition shall include but not be limited to a general contractor, 11 subcontractor, independent contractor, contract employee, project manager, or a recruiting or 12 staffing entity; 13 (4) "County average wage", the average wages in each county as determined by the 14 department for the most recently completed full calendar year. However, if the computed 15 county average wage is above the statewide average wage, the statewide average wage shall 16 be deemed the county average wage for such county for the purpose of determining eligibility.
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 1319 2
17 The department shall publish the county average wage for each county at least annually. 18 Notwithstanding the provisions of this subdivision to the contrary, for any qualified company 19 that in conjunction with their project is relocating employees from a Missouri county with a 20 higher county average wage, the company shall obtain the endorsement of the governing body 21 of the community from which jobs are being relocated or the county average wage for their 22 project shall be the county average wage for the county from which the employees are being 23 relocated; 24 (5) "Department", the Missouri department of economic development; 25 (6) "Director", the director of the department of economic development; 26 (7) "Employee", a person employed by a qualified company, excluding: 27 (a) Owners of the qualified company unless the qualified company is participating in 28 an employee stock ownership plan; or 29 (b) Owners of a noncontrolling interest in stock of a qualified company that is 30 publicly traded; 31 (8) "Existing Missouri business", a qualified company that, for the ten-year period 32 preceding submission of a notice of intent to the department, had a physical location in 33 Missouri and full-time employees who routinely performed job duties within Missouri; 34 (9) "Full-time employee", an employee of the qualified company that is scheduled to 35 work an average of at least thirty-five hours per week for a twelve-month period, and one for 36 which the qualified company offers health insurance and pays at least fifty percent of such 37 insurance premiums. An employee that spends less than fifty percent of the employee's work 38 time at the facility shall be considered to be located at a facility if the employee receives his 39 or her directions and control from that facility, is on the facility's payroll, one hundred percent 40 of the employee's income from such employment is Missouri income, and the employee is 41 paid at or above the applicable percentage of the county average wage; 42 (10) "Gross wages", the total compensation paid by an employer to an employee 43 as reported in box 5 of the employee's W-2; 44 (11) "Industrial development authority", an industrial development authority 45 organized under chapter 349 that has entered into a formal written memorandum of 46 understanding with an entity of the United States Department of Defense regarding a 47 qualified military project; 48 [(11)] (12) "Infrastructure projects", highways, roads, streets, bridges, sewers, traffic 49 control systems and devices, water distribution and supply systems, curbing, sidewalks, storm 50 water and drainage systems, broadband internet infrastructure, and any other similar public 51 improvements, but in no case shall infrastructure projects include private structures; 52 [(12)] (13) "Local incentives", the present value of the dollar amount of direct benefit 53 received by a qualified company for a project facility from one or more local political HB 1319 3
54 subdivisions, but this term shall not include loans or other funds provided to the qualified 55 company that shall be repaid by the qualified company to the political subdivision; 56 [(13)] (14) "Manufacturing capital investment", expenditures made by a qualified 57 manufacturing company to retool or reconfigure a manufacturing project facility directly 58 related to the manufacturing of a new product or the expansion or modification of the 59 manufacture of an existing product; 60 [(14)] (15) "Memorandum of understanding", an agreement executed by an industrial 61 development authority and an entity of the United States Department of Defense, a copy of 62 which is provided to the department of economic development, that states, but is not limited 63 to: 64 (a) A requirement for the military to provide the total number of existing jobs, jobs 65 directly created by a qualified military project, and average salaries of such jobs to the 66 industrial development authority and the department of economic development annually for 67 the term of the benefit; 68 (b) A requirement for the military to provide an accounting of the expenditures of 69 capital investment made by the military directly related to the qualified military project to the 70 industrial development authority and the department of economic development annually for 71 the term of the benefit; 72 (c) The process by which the industrial development authority shall monetize the tax 73 credits annually and any transaction cost or administrative fee charged by the industrial 74 development authority to the military on an annual basis; 75 (d) A requirement for the industrial development authority to provide proof to the 76 department of economic development of the payment made to the qualified military project 77 annually, including the amount of such payment; 78 (e) The schedule of the maximum amount of tax credits which may be authorized in 79 each year for the project and the specified term of the benefit, as provided by the department 80 of economic development; and 81 (f) A requirement that the annual benefit paid shall be the lesser of: 82 a. The maximum amount of tax credits authorized; or 83 b. The actual calculated benefit derived from the number of new jobs and average 84 salaries; 85 [(15)] (16) "NAICS" or "NAICS industry classification", the classification provided 86 by the most recent edition of the North American Industry Classification System as prepared 87 by the Executive Office of the President, Office of Management and Budget; 88 [(16)] (17) "New capital investment", shall include costs incurred by the qualified 89 company at the project facility after acceptance by the qualified company of the proposal for 90 benefits from the department or the approval notice of intent, whichever occurs first, for real HB 1319 4
91 or personal property, and may include the value of finance or capital leases for real or 92 personal property for the term of such lease at the project facility executed after acceptance by 93 the qualified company of the proposal for benefits from the department or the approval of the 94 notice of intent; 95 [(17)] (18) "New direct local revenue", the present value of the dollar amount of 96 direct net new tax revenues of the local political subdivisions likely to be produced by the 97 project over a ten-year period as calculated by the department, excluding local earnings tax, 98 and net new utility revenues, provided the local incentives include a discount or other direct 99 incentives from utilities owned or operated by the political subdivision; 100 [(18)] (19) "New job", the number of full-time employees located at the project 101 facility that exceeds the project facility base employment less any decrease in the number of 102 full-time employees at related facilities below the related facility base employment. No job 103 that was created prior to the date of the notice of intent shall be deemed a new job; 104 [(19)] (20) "New payroll", the amount of gross wages paid for all new jobs, located at 105 the project facility during the qualified company's tax year that exceeds the project facility 106 base payroll. For a qualified company that offers health insurance to all full-time 107 employees of all facilities located in this state, and certifies that it pays one hundred 108 percent of such insurance premiums, "new payroll" shall include all amounts paid by 109 the qualified company for such insurance premiums; 110 [(20)] (21) "New product", a new model or line of a manufactured good that has not 111 been manufactured in Missouri by a qualified manufacturing company at any time prior to the 112 date of the notice of intent, or an existing brand, model, or line of a manufactured good that is 113 redesigned; 114 [(21)] (22) "Notice of intent", a form developed by the department and available 115 online, completed by the qualified company, and submitted to the department stating the 116 qualified company's intent to request benefits under this program. The notice of intent shall 117 be accompanied with a detailed plan by the qualifying company to make good faith efforts to 118 employ, at a minimum, commensurate with the percentage of minority populations in the state 119 of Missouri, as reported in the previous decennial census, the following: racial minorities, 120 contractors who are racial minorities, and contractors that, in turn, employ at a minimum 121 racial minorities commensurate with the percentage of minority populations in the state of 122 Missouri, as reported in the previous decennial census. At a minimum, such plan shall 123 include monitoring the effectiveness of outreach and recruitment strategies in attracting 124 diverse applicants and linking with different or additional referral sources in the event that 125 recruitment efforts fail to produce a diverse pipeline of applicants. The notice of intent shall 126 be accompanied by an affidavit signed by the qualified company's human resources lead HB 1319 5
127 or chief financial officer attesting to the estimated number of new jobs, position types, 128 and new payroll; 129 [(22)] (23) "Percent of local incentives", the amount of local incentives divided by the 130 amount of new direct local revenue; 131 [(23)] (24) "Program", the Missouri works program established in sections 620.2000 132 to 620.2020; 133 [(24)] (25) "Project facility", the building or buildings used by a qualified company at 134 which new or retained jobs and any new capital investment are or will be located or by a 135 qualified manufacturing company at which a manufacturing capital investment is or will be 136 located. A project facility may include separate buildings located within sixty miles of each 137 other such that their purpose and operations are interrelated; provided that where the 138 buildings making up the project facility are not located within the same county, the average 139 wage of the new gross payroll shall exceed the applicable percentage of the highest county 140 average wage among the counties in which the buildings are located. Upon approval by the 141 department, a subsequent project facility may be designated if the qualified company 142 demonstrates a need to relocate to the subsequent project facility at any time during the 143 project period. For qualified military projects, the term "project facility" means the military 144 base or installation at which such qualified military project is or shall be located; 145 [(25)] (26) "Project facility base employment", the greater of the number of full-time 146 employees located at the project facility on the date of the notice of intent or, for the twelve- 147 month period prior to the date of the notice of intent, the average number of full-time 148 employees located at the project facility. In the event the project facility has not been in 149 operation for a full twelve-month period, the average number of full-time employees for the 150 number of months the project facility has been in operation prior to the date of the notice of 151 intent; 152 [(26)] (27) "Project facility base payroll", the annualized gross payroll for the project 153 facility base employment or the total amount of [taxable] gross wages paid by the qualified 154 company to full-time employees of the qualified company located at the project facility in the 155 twelve months prior to the notice of intent. For purposes of calculating the benefits under this 156 program, the amount of base payroll shall increase each year based on an appropriate 157 measure, as determined by the department; 158 [(27)] (28) "Project period", the time period within which benefits are awarded to a 159 qualified company or within which the qualified company is obligated to perform under an 160 agreement with the department, whichever is greater; 161 [(28)] (29) "Projected net fiscal benefit", the total fiscal benefit to the state less any 162 state benefits offered to the qualified company, as determined by the department; HB 1319 6
163 [(29)] (30) "Qualified company", a firm, partnership, joint venture, association, 164 private or public corporation whether organized for profit or not, or headquarters of such 165 entity registered to do business in Missouri that is the owner or operator of a project facility, 166 certifies that it offers health insurance to all full-time employees of all facilities located in this 167 state, and certifies that it pays at least fifty percent of such insurance premiums. For the 168 purposes of sections 620.2000 to 620.2020, the term "qualified company" shall not include: 169 (a) Gambling establishments (NAICS industry group 7132); 170 (b) Store front consumer-based retail trade establishments (under NAICS sectors 44 171 and 45), except with respect to any company headquartered in this state with a majority of its 172 full-time employees engaged in operations not within the NAICS codes specified in this 173 subdivision and except for any such establishments located in a county of the third or fourth 174 classification; 175 (c) Food and drinking places (NAICS subsector 722); 176 (d) Public utilities (NAICS 221 including water and sewer services); 177 (e) Any company that is delinquent in the payment of any nonprotested taxes or any 178 other amounts due the state or federal government or any other political subdivision of this 179 state; 180 (f) Any company requesting benefits for retained jobs that has filed for or has 181 publicly announced its intention to file for bankruptcy protection. However, a company that 182 has filed for or has publicly announced its intention to file for bankruptcy may be a qualified 183 company provided that such company: 184 a. Certifies to the department that it plans to reorganize and not to liquidate; and 185 b. After its bankruptcy petition has been filed, it produces proof, in a form and at 186 times satisfactory to the department, that it is not delinquent in filing any tax returns or 187 making any payment due to the state of Missouri, including but not limited to all tax 188 payments due after the filing of the bankruptcy petition and under the terms of the plan of 189 reorganization. Any taxpayer who is awarded benefits under this subsection and who files for 190 bankruptcy under Chapter 7 of the United States Bankruptcy Code, Title 11 U.S.C., shall 191 immediately notify the department and shall forfeit such benefits and shall repay the state an 192 amount equal to any state tax credits already redeemed and any withholding taxes already 193 retained; 194 (g) Educational services (NAICS sector 61); 195 (h) Religious organizations (NAICS industry group 8131); 196 (i) Public administration (NAICS sector 92); 197 (j) Ethanol distillation or production; 198 (k) Biodiesel production; or 199 (l) Health care and social services (NAICS sector 62). HB 1319 7
200 201 Notwithstanding any provision of this section to the contrary, the headquarters, administrative 202 offices, or research and development facilities of an otherwise excluded business may qualify 203 for benefits if the offices or facilities serve a multistate territory. In the event a national, state, 204 or regional headquarters operation is not the predominant activity of a project facility, the jobs 205 and investment of such operation shall be considered eligible for benefits under this section if 206 the other requirements are satisfied; 207 [(30)] (31) "Qualified manufacturing company", a company that: 208 (a) Is a qualified company that manufactures motor vehicles (NAICS group 3361); 209 (b) Manufactures goods at a facility in Missouri; 210 (c) Manufactures a new product or has commenced making a manufacturing capital 211 investment to the project facility necessary for the manufacturing of such new product, or 212 modifies or expands the manufacture of an existing product or has commenced making a 213 manufacturing capital investment for the project facility necessary for the modification or 214 expansion of the manufacture of such existing product; and 215 (d) Continues to meet the requirements of paragraphs (a) to (c) of this subdivision for 216 the project period; 217 [(31)] (32) "Qualified military project", the expansion or improvement of a military 218