Missouri 2022 Regular Session

Missouri House Bill HB2587 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	4416S.09F
2		-	1
3		-	SENATE SUBSTITUTE
4		-	FOR
5		-	HOUSE COMMITTEE SUBSTITUTE
6		-	FOR
	1	+	SECONDREGULARSESSION
	2	+	[PERFECTED]
	3	+	HOUSECOMMITTEESUBSTITUTEFOR
7	4		HOUSEBILLNO.2587
	5	+	101STGENERALASSEMBLY
	6	+	4416H.02P DANARADEMANMILLER,ChiefClerk
8	7		ANACT
9		-	To repeal sections 130.029, 143.022, 143.071,
10		-	143.081, 144.030, and 285.730, RSMo, and to enact in
11		-	lieu thereof twenty -one new sections relating to
12		-	business entities.
13		-
	8	+	Toamendchapter620,RSMo,byaddingtheretosevennewsectionsrelatingtotheregulatory
	9	+	sandboxact.
14	10		BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
15		-	Section A. Sections 130.029, 143.022, 143.071, 143.081, 1
16		-	144.030, and 285.730, RSMo, are repealed and twenty -one new 2
17		-	sections enacted in lieu thereof, to be known as sections 3
18		-	34.195, 64.008, 65.710, 71.990, 89.500, 130.029, 143.022, 4
19		-	143.071, 143.081, 143.436, 144.030, 285.730, 407.475, 620.3800, 5
20		-	620.3900, 620.3905, 620.3910, 620.3915, 620.3920, 620.3925, and 6
21		-	620.3930, to read as follows:7
22		-	34.195. 1. This section shall be known and may be 1
23		-	cited as the "Right-to-Start Act". 2
24		-	2. No later than June 30, 2024, and annually 3
25		-	thereafter, the commissioner of administration shall file a 4
26		-	report with the general assembly that includes, but is not 5
27		-	limited to: 6
28		-	(1) The number of contracts awarded to businesses that 7
29		-	have been in operation for less than three years; 8
30		-	(2) The percentage of the number of contracts awarded 9
31		-	to businesses that have been in operation for less than 10
32		-	three years compared to the total number of contracts 11
33		-	awarded; 12
34		-	2
35		-	(3) The total dollar amount of all contracts awar ded 13
36		-	to businesses that have been in operation for less than 14
37		-	three years; 15
38		-	(4) The percentage of the total dollar amount of 16
39		-	contracts awarded to businesses that have been in operation 17
40		-	for less than three years compared to the total dollar 18
41		-	amount of contracts awarded; and 19
42		-	(5) The number and total dollar amount of contracts 20
43		-	awarded to minority-owned businesses compared to the total 21
44		-	number and dollar amount of contracts awarded. 22
45		-	3. The commissioner of administration, in conjunction 23
46		-	with the office of entrepreneurship under section 620.3800, 24
47		-	shall produce and file a report with the general assembly 25
48		-	making recommendations on improving access and resources for 26
49		-	new Missouri businesses that have been in operation for less 27
50		-	than three years on or before January 1, 2024. The report 28
51		-	shall also include recommendations on improving access and 29
52		-	resources for new minority -owned Missouri businesses that 30
53		-	have been in operation for less than three years on or 31
54		-	before January 1, 2024. 32
55		-	64.008. 1. As used in this section, the term "home - 1
56		-	based work" means any lawful occupation performed by a 2
57		-	resident within a residential home or accessory structure, 3
58		-	which is clearly incidental and secondary to the use of the 4
59		-	dwelling unit for residential purposes and does not change 5
60		-	the residential character of the residential building or 6
61		-	adversely affect the character of the surrounding 7
62		-	neighborhood. 8
63		-	2. A zoning ordinance or regulation adopted pursuant 9
64		-	to this chapter that regulates home-based work shall not: 10
65		-	(1) Prohibit mail order or telephone sales for home - 11
66		-	based work; 12
67		-	3
68		-	(2) Prohibit service by appointment within the home or 13
69		-	accessory structure; 14
70		-	(3) Prohibit or require structural modifications to 15
71		-	the home or accessory structure; 16
72		-	(4) Restrict the hours of operation for home -based 17
73		-	work; or 18
74		-	(5) Restrict storage or the use of equipment that does 19
75		-	not produce effects outside the home or accessory structure. 20
76		-	3. A zoning ordinance or regulation adopte d pursuant 21
77		-	to this chapter that regulates home -based work shall not 22
78		-	contain provisions that explicitly restrict or prohibit a 23
79		-	particular occupation. 24
80		-	4. The application of this section does not supersede 25
81		-	any deed restriction, covenant, or agreemen t restricting the 26
82		-	use of land nor any master deed, by law or other document 27
83		-	applicable to a common interest ownership community. 28
84		-	65.710. 1. As used in this section, the term "home - 1
85		-	based work" means any lawful occupation performed by a 2
86		-	resident within a residential home or accessory structure, 3
87		-	which is clearly incidental and secondary to the use of the 4
88		-	dwelling unit for residential purposes and does not change 5
89		-	the residential character of the residential building or 6
90		-	adversely affect the character of the surrounding 7
91		-	neighborhood. 8
92		-	2. A zoning ordinance or regulation adopted pursuant 9
93		-	to this chapter that regulates home -based work shall not: 10
94		-	(1) Prohibit mail order or telephone sales for home - 11
95		-	based work; 12
96		-	(2) Prohibit service by appointment within the home or 13
97		-	accessory structure; 14
98		-	(3) Prohibit or require structural modifications to 15
99		-	the home or accessory structure; 16
100		-	4
101		-	(4) Restrict the hours of operation for home -based 17
102		-	work; or 18
103		-	(5) Restrict storage or the use of equipment that does 19
104		-	not produce effects outside the home or accessory structure. 20
105		-	3. A zoning ordinance or regulation adopted pursuant 21
106		-	to this chapter that regulates home -based work shall not 22
107		-	contain provisions that explicitly restric t or prohibit a 23
108		-	particular occupation. 24
109		-	4. The application of this section does not supersede 25
110		-	any deed restriction, covenant, or agreement restricting the 26
111		-	use of land nor any master deed, by law or other document 27
112		-	applicable to a common interest ow nership community. 28
113		-	71.990. 1. As used in this section, the following 1
114		-	terms mean: 2
115		-	(1) "Goods", any merchandise, equipment, products, 3
116		-	supplies, or materials; 4
117		-	(2) "Home-based business", any business operated in a 5
118		-	residential dwelling that manufactures, provides, or sells 6
119		-	goods or services and that is owned and operated by the 7
120		-	owner or tenant of the residential dwelling. 8
121		-	2. Any person who resides in a residential dwelling 9
122		-	may use the residential dwelling for a home -based business 10
123		-	unless such use is restricted by: 11
124		-	(1) Any deed restriction, covenant, or agreement 12
125		-	restricting the use of land; or 13
126		-	(2) Any master deed, bylaw, or other document 14
127		-	applicable to a common -interest ownership community. 15
128		-	3. Except as prescribed under subsection 4 of this 16
129		-	section, a political subdivision shall not prohibit the 17
130		-	operation of a no-impact, home-based business or otherwise 18
131		-	require a person to apply for, register for, or obtain any 19
132		-	permit, license, variance, or ot her type of prior approval 20
133		-	from the political subdivision to operate a no -impact, home- 21
134		-	5
135		-	based business. For the purposes of this section, a home - 22
136		-	based business qualifies as a no -impact, home-based business 23
137		-	if: 24
138		-	(1) The total number of employees an d clients on-site 25
139		-	at one time does not exceed the occupancy limit for the 26
140		-	residential dwelling; and 27
141		-	(2) The activities of the business: 28
142		-	(a) Are limited to the sale of lawful goods and 29
143		-	services; 30
144		-	(b) May involve having more than one clie nt on the 31
145		-	property at one time; 32
146		-	(c) Do not cause a substantial increase in traffic 33
147		-	through the residential area; 34
148		-	(d) Do not violate any parking regulations established 35
149		-	by the political subdivision; 36
150		-	(e) Occur inside the residential dwel ling or in the 37
151		-	yard of the residential dwelling; 38
152		-	(f) Are not visible from the street; and 39
153		-	(g) Do not violate any narrowly tailored regulation 40
154		-	established under subsection 4 of this section. 41
155		-	4. A political subdivision may establish reaso nable 42
156		-	regulations on a home -based business if the regulations are 43
157		-	narrowly tailored for the purpose of: 44
158		-	(1) Protecting the public health and safety, including 45
159		-	regulations related to fire and building codes, health and 46
160		-	sanitation, transportation o r traffic control, solid or 47
161		-	hazardous waste, pollution, and noise control; or 48
162		-	(2) Ensuring that the business activity is compliant 49
163		-	with state and federal law and paying applicable taxes. 50
164		-	5. No political subdivision shall require a person, as 51
165		-	a condition of operating a home -based business, to: 52
166		-	(1) Rezone the property for commercial use; 53
167		-	6
168		-	(2) Obtain a home-based business license or other 54
169		-	general business license; or 55
170		-	(3) Install or equip fire sprinklers in a single - 56
171		-	family detached residential dwelling or any residential 57
172		-	dwelling with no more than two dwelling units. 58
173		-	6. Whether a regulation complies with this section is 59
174		-	a judicial question, and the political subdivision that 60
175		-	enacts the regulation shall establish by clea r and 61
176		-	convincing evidence that the regulation complies with this 62
177		-	section. 63
178		-	89.500. 1. As used in this section, the term "home - 1
179		-	based work" means any lawful occupation performed by a 2
180		-	resident within a residential home or accessory s tructure, 3
181		-	which is clearly incidental and secondary to the use of the 4
182		-	dwelling unit for residential purposes and does not change 5
183		-	the residential character of the residential building or 6
184		-	adversely affect the character of the surrounding 7
185		-	neighborhood. 8
186		-	2. A zoning ordinance or regulation adopted pursuant 9
187		-	to this chapter that regulates home -based work shall not: 10
188		-	(1) Prohibit mail order or telephone sales for home - 11
189		-	based work; 12
190		-	(2) Prohibit service by appointment within the home or 13
191		-	accessory structure; 14
192		-	(3) Prohibit or require structural modifications to 15
193		-	the home or accessory structure; 16
194		-	(4) Restrict the hours of operation for home -based 17
195		-	work; or 18
196		-	(5) Restrict storage or the use of equipment that does 19
197		-	not produce effects outside the home or accessory structure. 20
198		-	3. A zoning ordinance or regulation adopted pursuant 21
199		-	to this chapter that regulates home -based work shall not 22
200		-	7
201		-	contain provisions that explicitly restrict or prohibit a 23
202		-	particular occupation. 24
203		-	4. The application of this section does not supersede 25
204		-	any deed restriction, covenant, or agreement restricting the 26
205		-	use of land nor any master deed, by law or other document 27
206		-	applicable to a common interest ownership community. 28
207		-	130.029. 1. Nothing herein contained shall be 1
208		-	construed to prohibit any corporation organized under any 2
209		-	general or special law of this state, or any other state or 3
210		-	by an act of the Congress of the United States or any labor 4
211		-	organization, cooperative association or mutual association 5
212		-	from making any contributions or expenditures, provided: 6
213		-	(1) That the board of directors of any corporation by 7
214		-	resolution has authorized contributions or expenditures, or 8
215		-	by resolution has authorized a designated officer to make 9
216		-	such contributions or expenditures; or 10
217		-	(2) That the members of any labor organization, 11
218		-	cooperative association or mutual association have 12
219		-	authorized contributions or expenditures by a majority vote 13
220		-	of the members present at a duly called meeting of any such 14
221		-	labor organization, cooperative association or mutual 15
222		-	association or by such vote has authorized a designated 16
223		-	officer to make such contributions or expenditures. 17
224		-	2. No provision of this section shall be construed to 18
225		-	authorize contributions or expenditures otherwise prohibited 19
226		-	by, or to change any necessary percentage of vote otherwise 20
227		-	required by, the articles of incorporation or association or 21
228		-	bylaws of such labor organization, corporation, cooperative 22
229		-	or mutual association. 23
230		-	3. Authority to make contributions or expenditures as 24
231		-	authorized by this section shall be adopted by general or 25
232		-	specific resolution. This resolution shall state the total 26
233		-	amount of contributions or expenditures authorized, the 27
234		-	8
235		-	purposes of such contr ibutions or expenditures and the time 28
236		-	period within which such authority shall exist. 29
237		-	4. (1) Any limited liability company that is duly 30
238		-	registered pursuant to chapter 347 and that has not elected 31
239		-	to be classified as a corporation under the federa l tax code 32
240		-	may make contributions to any committee if the limited 33
241		-	liability company has: 34
242		-	(a) Been in existence for at least one year prior to 35
243		-	such contribution; and 36
244		-	(b) Electronically filed with the Missouri ethics 37
245		-	commission indicating tha t the limited liability company is 38
246		-	a legitimate business with a legitimate business interest 39
247		-	and is not created for the sole purpose of making campaign 40
248		-	contributions. 41
249		-	(2) The Missouri ethics commission shall develop a 42
250		-	method for limited liability companies to use for purposes 43
251		-	of paragraph (b) of subdivision (1) of this subsection. The 44
252		-	commission shall post all information submitted pursuant to 45
253		-	this subdivision on its website in a searchable format. 46
254		-	143.022. 1. As used in this section, "business 1
255		-	income" means the income greater than zero arising from 2
256		-	transactions in the regular course of all of a taxpayer's 3
257		-	trade or business and shall be limited to the Missouri 4
258		-	source net profit from the combination of the following: 5
259		-	(1) The total combined profit as properly reported to 6
260		-	the Internal Revenue Service on each Schedule C, or its 7
261		-	successor form, filed; and 8
262		-	(2) The total partnership and S corporation income or 9
263		-	loss properly reported to the Internal Revenue Serv ice on 10
264		-	Part II of Schedule E, or its successor form. 11
265		-	2. In addition to all other modifications allowed by 12
266		-	law, there shall be subtracted from the federal adjusted 13
267		-	gross income of an individual taxpayer a percentage of such 14
268		-	9
269		-	individual's business i ncome, to the extent that such 15
270		-	amounts are included in federal adjusted gross income when 16
271		-	determining such individual's Missouri adjusted gross income. 17
272		-	3. In the case of an S corporation described in 18
273		-	section 143.471 or a partnership computing the deduction 19
274		-	allowed under subsection 2 of this section, taxpayers 20
275		-	described in subdivision (1) or (2) of this subsection shall 21
276		-	be allowed such deduction apportioned in proportion to their 22
277		-	share of ownership of the business as reported on the 23
278		-	taxpayer's Schedule K-1, or its successor form, for the tax 24
279		-	period for which such deduction is being claimed when 25
280		-	determining the Missouri adjusted gross income of: 26
281		-	(1) The shareholders of an S corporation as described 27
282		-	in section 143.471; 28
283		-	(2) The partners in a partnership. 29
284		-	4. The percentage to be subtracted under subsection 2 30
285		-	of this section shall be increased over a period of years. 31
286		-	Each increase in the percentage shall be by five percent and 32
287		-	no more than one increase shall occur in a calenda r year. 33
288		-	The maximum percentage that may be subtracted is twenty 34
289		-	percent of business income. Any increase in the percentage 35
290		-	that may be subtracted shall take effect on January first of 36
291		-	a calendar year and such percentage shall continue in effect 37
292		-	until the next percentage increase occurs. An increase 38
293		-	shall only apply to tax years that begin on or after the 39
294		-	increase takes effect. 40
295		-	5. An increase in the percentage that may be 41
296		-	subtracted under subsection 2 of this section shall only 42
297		-	occur if the amount of net general revenue collected in the 43
298		-	previous fiscal year exceeds the highest amount of net 44
299		-	general revenue collected in any of the three fiscal years 45
300		-	prior to such fiscal year by at least one hundred fifty 46
301		-	million dollars. 47
302		-	10
303		-	6. The first year that a taxpayer may make the 48
304		-	subtraction under subsection 2 of this section is 2017, 49
305		-	provided that the provisions of subsection 5 of this section 50
306		-	are met. If the provisions of subsection 5 of this section 51
307		-	are met, the percentage that may be sub tracted in 2017 is 52
308		-	five percent. 53
309		-	7. As used in this section, the term "new business 54
310		-	income" means any business income from a taxpayer that 55
311		-	begins business operations in this state on or after January 56
312		-	1, 2023. The term "new business income" shall not include 57
313		-	any business income from a taxpayer that began business 58
314		-	operations in this state prior to January 1, 2023, dissolved 59
315		-	or otherwise terminated such business operations and 60
316		-	reincorporates, or otherwise reinstates such business 61
317		-	operations on or after January 1, 2023. 62
318		-	8. The first one hundred thousand dollars of any 63
319		-	remaining amount of new business income included in a 64
320		-	taxpayer's Missouri adjusted gross income after the 65
321		-	subtraction provided for in subsection 2 of this section 66
322		-	shall be reduced for the first through third tax years in 67
323		-	which the taxpayer's business is in operation by twenty 68
324		-	percent. 69
325		-	143.071. 1. For all tax years beginning before 1
326		-	September 1, 1993, a tax is hereby imposed upon the Missouri 2
327		-	taxable income of corporations in an amount equal to five 3
328		-	percent of Missouri taxable income. 4
329		-	2. For all tax years beginning on or after September 5
330		-	1, 1993, and ending on or before December 31, 2019, a tax is 6
331		-	hereby imposed upon the Missouri taxable inco me of 7
332		-	corporations in an amount equal to six and one -fourth 8
333		-	percent of Missouri taxable income. 9
334		-	3. For all tax years beginning on or after January 1, 10
335		-	2020, a tax is hereby imposed upon the Missouri taxable 11
336		-	11
337		-	income of corporations in an amount equa l to four percent of 12
338		-	Missouri taxable income. 13
339		-	4. As used in this section, the term "eligible new 14
340		-	corporation" means a corporation validly licensed as 15
341		-	provided in the applicable laws of this state that begins 16
342		-	operations in this state on and after January 1, 2023. The 17
343		-	term "eligible new corporation" shall not include any 18
344		-	corporation that dissolves or otherwise terminates business 19
345		-	operations and reincorporates or otherwise reinitiates 20
346		-	operations in this state on or after January 1, 2023. 21
347		-	5. (1) For all tax years beginning on and after 22
348		-	January 1, 2023, in lieu of the tax imposed pursuant to 23
349		-	subsection 3 of this section, a tax is hereby imposed upon 24
350		-	the Missouri taxable income of each eligible new corporation 25
351		-	for the first through third tax years of such eligible 26
352		-	corporation of three percent for the first one hundred 27
353		-	thousand dollars of income and any remaining portion of 28
354		-	income shall be taxed at a rate of four percent. 29
355		-	(2) For the fourth tax year of an eligible new 30
356		-	corporation and for all tax years thereafter, all income 31
357		-	shall be taxed as otherwise provided for in law. 32
358		-	6. The provisions of this section shall not apply to 33
359		-	out-of-state businesses operating under sections 190.270 to 34
360		-	190.285. 35
361		-	143.081. 1. A resident individual, resident estate, 1
362		-	and resident trust shall be allowed a credit against the tax 2
363		-	otherwise due pursuant to sections 143.005 to 143.998 for 3
364		-	the amount of any income tax imposed for the taxable year by 4
365		-	another state of the United States (or a political 5
366		-	subdivision thereof) or the District of Columbia on income 6
367		-	derived from sources therein and which is also subject to 7
368		-	tax pursuant to sections 143.005 to 143.998. For purposes 8
369		-	of this subsection, the phrase "income tax imposed" s hall be 9
370		-	12
371		-	that amount of tax before any income tax credit allowed by 10
372		-	such other state or the District of Columbia if the other 11
373		-	state or the District of Columbia authorizes a reciprocal 12
374		-	benefit for residents of this state. 13
375		-	2. The credit provided pur suant to this section shall 14
376		-	not exceed an amount which bears the same ratio to the tax 15
377		-	otherwise due pursuant to sections 143.005 to 143.998 as the 16
378		-	amount of the taxpayer's Missouri adjusted gross income 17
379		-	derived from sources in the other taxing jurisdi ction bears 18
380		-	to the taxpayer's Missouri adjusted gross income derived 19
381		-	from all sources. In applying the limitation of the 20
382		-	previous sentence to an estate or trust, Missouri taxable 21
383		-	income shall be substituted for Missouri adjusted gross 22
384		-	income. If the tax of more than one other taxing 23
385		-	jurisdiction is imposed on the same item of income, the 24
386		-	credit shall not exceed the limitation that would result if 25
387		-	the taxes of all the other jurisdictions applicable to the 26
388		-	item were deemed to be of a single jurisdi ction. 27
389		-	3. (1) For the purposes of this section, in the case 28
390		-	of an S corporation, each resident S shareholder shall be 29
391		-	considered to have paid a tax imposed on the shareholder in 30
392		-	an amount equal to the shareholder's pro rata share of any 31
393		-	net income tax paid by the S corporation to a state which 32
394		-	does not measure the income of shareholders on an S 33
395		-	corporation by reference to the income of the S corporation 34
396		-	or where a composite return and composite payments are made 35
397		-	in such state on behalf of the S shareholders by the S 36
398		-	corporation. 37
399		-	(2) A resident S shareholder shall be eligible for a 38
400		-	credit issued pursuant to this section in an amount equal to 39
401		-	the shareholder's pro rata share of any income tax imposed 40
402		-	pursuant to chapter 143 on income d erived from sources in 41
403		-	another state of the United States, or a political 42
404		-	13
405		-	subdivision thereof, or the District of Columbia, and which 43
406		-	is subject to tax pursuant to chapter 143 but is not subject 44
407		-	to tax in such other jurisdiction. 45
408		-	4. For purposes of subsection 3 of this section, in 46
409		-	the case of an S corporation that is a bank chartered by a 47
410		-	state, the Office of Thrift Supervision, or the comptroller 48
411		-	of currency, each Missouri resident S shareholder of such 49
412		-	out-of-state bank shall qualify for the shareholder's pro 50
413		-	rata share of any net tax paid, including a bank franchise 51
414		-	tax based on the income of the bank, by such S corporation 52
415		-	where bank payment of taxes are made in such state on behalf 53
416		-	of the S shareholders by the S bank to the extent of t he tax 54
417		-	paid. 55
418		-	143.436. 1. This section shall be known and may be 1
419		-	cited as the "SALT Parity Act". 2
420		-	2. For the purposes of this section, the following 3
421		-	terms shall mean: 4
422		-	(1) "Affected business entity", any partnership or S 5
423		-	corporation that elects to be subject to tax pursuant to 6
424		-	subsection 10 of this section; 7
425		-	(2) "Direct member", a member that holds an interest 8
426		-	directly in an affected business entity; 9
427		-	(3) "Indirect member", a member that itself holds an 10
428		-	interest, through a direct or indirect member that is a 11
429		-	partnership or an S corporation, in an affected business 12
430		-	entity; 13
431		-	(4) "Member": 14
432		-	(a) A shareholder of an S corporation; 15
433		-	(b) A partner in a general partnership, a limited 16
434		-	partnership, or a limited liability partnership; or 17
435		-	(c) A member of a limited liability company that is 18
436		-	treated as a partnership or S corporation for federal income 19
437		-	tax purposes; 20
438		-	14
439		-	(5) "Partnership", the same meaning as provided in 26 21
440		-	U.S.C. Section 7701(a)(2 ). The term "partnership" shall 22
441		-	include a limited liability company that is treated as a 23
442		-	partnership for federal income tax purposes; 24
443		-	(6) "S corporation", a corporation or limited 25
444		-	liability company that is treated as an S corporation for 26
445		-	federal income tax purposes; 27
446		-	(7) "Tax year", the tax year of a partnership or S 28
447		-	corporation for federal income tax purposes. 29
448		-	3. (1) Notwithstanding any provision of law to the 30
449		-	contrary, a tax is hereby imposed on each affected business 31
450		-	entity that is a partnership and that is doing business in 32
451		-	this state. Such affected business entity shall, at the 33
452		-	time that the affected business entity's return is due, pay 34
453		-	a tax in an amount equal to the sum of the separately and 35
454		-	nonseparately computed items, as described in 26 U.S.C. 36
455		-	Section 702(a), of the affected business entity, to the 37
456		-	extent derived from or connected with sources within this 38
457		-	state, as determined pursuant to section 143.455, decreased 39
458		-	by the deduction allowed under 26 U.S.C. Section 19 9A 40
459		-	computed as if such deduction was allowed to be taken by the 41
460		-	affected business entity for federal tax purposes, and 42
461		-	increased or decreased by any modification made pursuant to 43
462		-	section 143.471 that relates to an item of the affected 44
463		-	business entity's income, gain, loss, or deduction, to the 45
464		-	extent derived from or connected with sources within this 46
465		-	state, as determined pursuant to section 143.455, with such 47
466		-	sum multiplied by the highest rate of tax used to determine 48
467		-	a Missouri income tax liability for an individual pursuant 49
468		-	to section 143.011. An affected entity paying the tax 50
469		-	pursuant to this subsection shall include with the payment 51
470		-	of such taxes each report provided to a member pursuant to 52
471		-	subsection 7 of this section. 53
472		-	15
473		-	(2) If the amount calculated pursuant to subdivision 54
474		-	(1) of this section results in a net loss, such net loss may 55
475		-	be carried forward to succeeding tax years for which the 56
476		-	affected business entity elects to be subject to tax 57
477		-	pursuant to subsection 11 of this section u ntil fully used. 58
478		-	4. (1) Notwithstanding any provision of law to the 59
479		-	contrary, a tax is hereby imposed on each affected business 60
480		-	entity that is an S corporation and that is doing business 61
481		-	in this state. Such affected business entity shall, at the 62
482		-	time that the affected business entity's return is due, pay 63
483		-	a tax in an amount equal to the sum of the separately and 64
484		-	nonseparately computed items, as described in 26 U.S.C. 65
485		-	Section 1366, of the affected business entity, to the extent 66
486		-	derived from or connected with sources within this state, as 67
487		-	determined pursuant to section 143.455, decreased by the 68
488		-	deduction allowed under 26 U.S.C. Section 199A computed as 69
489		-	if such deduction was allowed to be taken by the affected 70
490		-	business entity for federal tax purposes, and increased or 71
491		-	decreased by any modification made pursuant to section 72
492		-	143.471 that relates to an item of the affected business 73
493		-	entity's income, gain, loss, or deduction, to the extent 74
494		-	derived from or connected with sources within this state , as 75
495		-	determined pursuant to section 143.455, with such sum 76
496		-	multiplied by the highest rate of tax used to determine a 77
497		-	Missouri income tax liability for an individual pursuant to 78
498		-	section 143.011. An affected entity paying the tax pursuant 79
499		-	to this subsection shall include with the payment of such 80
500		-	taxes each report provided to a member pursuant to 81
501		-	subsection 7 of this section. 82
502		-	(2) If the amount calculated pursuant to subdivision 83
503		-	(1) of this section results in a net loss, such net loss may 84
504		-	be carried forward to succeeding tax years for which the 85
505		-	16
506		-	affected business entity elects to be subject to tax 86
507		-	pursuant to subsection 11 of this section until fully used. 87
508		-	5. If an affected business entity is a direct or 88
509		-	indirect member of another affecte d business entity, the 89
510		-	member affected business entity shall, when calculating its 90
511		-	net income or loss pursuant to subsections 3 or 4 of this 91
512		-	section, subtract its distributive share of income or add 92
513		-	its distributive share of loss from the affected busi ness 93
514		-	entity in which it is a direct or indirect member to the 94
515		-	extent that the income or loss was derived from or connected 95
516		-	with sources within this state, as determined pursuant to 96
517		-	section 143.455. 97
518		-	6. A nonresident individual who is a member shal l not 98
519		-	be required to file an income tax return pursuant to this 99
520		-	chapter for a tax year if, for such tax year, the only 100
521		-	source of income derived from or connected with sources 101
522		-	within the state for such member, or the member and the 102
523		-	member's spouse if a joint federal income tax return is or 103
524		-	shall be filed, is from one or more affected business 104
525		-	entities and such affected business entity or entities file 105
526		-	and pay the tax due under this section. 106
527		-	7. Each partnership and S corporation shall report to 107
528		-	each of its members, for each tax year, such member's direct 108
529		-	pro rata share of the tax imposed pursuant to this section 109
530		-	on such partnership or S corporation if it is an affected 110
531		-	business entity and its indirect pro rata share of the tax 111
532		-	imposed on any affected business entity in which such 112
533		-	affected business entity is a direct or indirect member. 113
534		-	8. (1) Each member that is subject to the tax imposed 114
535		-	pursuant to section 143.011 shall be entitled to a credit 115
536		-	against the tax imposed pursuant to s ection 143.011. Such 116
537		-	credit shall be in an amount equal to such member's direct 117
538		-	and indirect pro rata share of the tax paid pursuant to this 118
539		-	17
540		-	section by any affected business entity of which such member 119
541		-	is directly or indirectly a member. 120
542		-	(2) If the amount of the credit authorized by this 121
543		-	subsection exceeds such member's tax liability for the tax 122
544		-	imposed pursuant to section 143.011, the excess amount shall 123
545		-	not be refunded but may be carried forward to each 124
546		-	succeeding tax year until such credit is fully taken. 125
547		-	9. (1) Each member that is subject to the tax imposed 126
548		-	pursuant to section 143.011 as a resident or part -year 127
549		-	resident of this state shall be entitled to a credit against 128
550		-	the tax imposed pursuant to section 143.011 for such 129
551		-	member's direct and indirect pro rata share of taxes paid to 130
552		-	another state of the United States or to the District of 131
553		-	Columbia, on income of any partnership or S corporation of 132
554		-	which such person is a member that is derived therefrom, 133
555		-	provided the taxes paid to another state of the United 134
556		-	States or to the District of Columbia results from a tax 135
557		-	that the director of revenue determines is substantially 136
558		-	similar to the tax imposed pursuant to this section. Any 137
559		-	such credit shall be calculated in a manner to b e prescribed 138
560		-	by the director of revenue, provided such calculation is 139
561		-	consistent with the provisions of this section, and further 140
562		-	provided that the limitations provided in subsection 2 of 141
563		-	section 143.081 shall apply to the credit authorized by this 142
564		-	subsection. 143
565		-	(2) If the amount of the credit authorized by this 144
566		-	subsection exceeds such member's tax liability for the tax 145
567		-	imposed pursuant to section 143.011, the excess amount shall 146
568		-	not be refunded and shall not be carried forward. 147
569		-	10. (1) Each corporation that is subject to the tax 148
570		-	imposed pursuant to section 143.071 and that is a member 149
571		-	shall be entitled to a credit against the tax imposed 150
572		-	pursuant to section 143.071. Such credit shall be in an 151
573		-	18
574		-	amount equal to such corporation's direct and indirect pro 152
575		-	rata share of the tax paid pursuant to this section by any 153
576		-	affected business entity of which such corporation is 154
577		-	directly or indirectly a member. Such credit shall be 155
578		-	applied after all other credits. 156
579		-	(2) If the amount of the cr edit authorized by this 157
580		-	subsection exceeds such corporation's tax liability for the 158
581		-	tax imposed pursuant to section 143.071, the excess amount 159
582		-	shall not be refunded but may be carried forward to each 160
583		-	succeeding tax year until such credit is fully taken . 161
584		-	11. A partnership or an S corporation may elect to 162
585		-	become an affected business entity that is required to pay 163
586		-	the tax pursuant to this section in any tax year. A 164
587		-	separate election shall be made for each taxable year. Such 165
588		-	election shall be ma de on such form and in such manner as 166
589		-	the director of revenue may prescribe by rule. An election 167
590		-	made pursuant to this subsection shall be signed by: 168
591		-	(1) Each member of the electing entity who is a member 169
592		-	at the time the election is filed; or 170
593		-	(2) Any officer, manager, or member of the electing 171
594		-	entity who is authorized to make the election and who 172
595		-	attests to having such authorization under penalty of 173
596		-	perjury. 174
597		-	12. The provisions of sections 143.425 and 143.601 175
598		-	shall apply to any modi fications made to an affected 176
599		-	business entity's federal return, and such affected business 177
600		-	entity shall pay any resulting underpayment of tax to the 178
601		-	extent not already paid pursuant to section 143.425. 179
602		-	13. (1) With respect to an action required o r 180
603		-	permitted to be taken by an affected business entity 181
604		-	pursuant to this section, a proceeding under section 143.631 182
605		-	for reconsideration by the director of revenue, an appeal to 183
606		-	the administrative hearing commission, or a review by the 184
607		-	19
608		-	judiciary with respect to such action, the affected business 185
609		-	entity shall designate an affected business entity 186
610		-	representative for the tax year, and such affected business 187
611		-	entity representative shall have the sole authority to act 188
612		-	on behalf of the affected business en tity, and the affected 189
613		-	business entity's members shall be bound by those actions. 190
614		-	(2) The department of revenue may establish reasonable 191
615		-	qualifications and procedures for designating a person to be 192
616		-	the affected business entity representative. 193
617		-	(3) The affected business entity representative shall 194
618		-	be considered an authorized representative of the affected 195
619		-	business entity and its members under section 32.057 for the 196
620		-	purposes of compliance with this section, or participating 197
621		-	in a proceeding described in subdivision (1) of this 198
622		-	subsection. 199
623		-	14. The provisions of this section shall only apply to 200
624		-	tax years ending on or after December 31, 2022. 201
625		-	15. The department of revenue may promulgate rules to 202
626		-	implement the provisions of this sec tion. Any rule or 203
627		-	portion of a rule, as that term is defined in section 204
628		-	536.010, that is created under the authority delegated in 205
629		-	this section shall become effective only if it complies with 206
630		-	and is subject to all of the provisions of chapter 536 and, 207
631		-	if applicable, section 536.028. This section and chapter 208
632		-	536 are nonseverable and if any of the powers vested with 209
633		-	the general assembly pursuant to chapter 536 to review, to 210
634		-	delay the effective date, or to disapprove and annul a rule 211
635		-	are subsequently held unconstitutional, then the grant of 212
636		-	rulemaking authority and any rule proposed or adopted after 213
637		-	August 28, 2022, shall be invalid and void. 214
638		-	144.030. 1. There is hereby specifically exempted 1
639		-	from the provisions of sections 14 4.010 to 144.525 and from 2
640		-	the computation of the tax levied, assessed or payable 3
641		-	20
642		-	pursuant to sections 144.010 to 144.525 such retail sales as 4
643		-	may be made in commerce between this state and any other 5
644		-	state of the United States, or between this state and any 6
645		-	foreign country, and any retail sale which the state of 7
646		-	Missouri is prohibited from taxing pursuant to the 8
647		-	Constitution or laws of the United States of America, and 9
648		-	such retail sales of tangible personal property which the 10
649		-	general assembly of the state of Missouri is prohibited from 11
650		-	taxing or further taxing by the constitution of this state. 12
651		-	2. There are also specifically exempted from the 13
652		-	provisions of the local sales tax law as defined in section 14
653		-	32.085, section 238.235, and sections 14 4.010 to 144.525 and 15
654		-	144.600 to 144.761 and from the computation of the tax 16
655		-	levied, assessed or payable pursuant to the local sales tax 17
656		-	law as defined in section 32.085, section 238.235, and 18
657		-	sections 144.010 to 144.525 and 144.600 to 144.745: 19
658		-	(1) Motor fuel or special fuel subject to an excise 20
659		-	tax of this state, unless all or part of such excise tax is 21
660		-	refunded pursuant to section 142.824; or upon the sale at 22
661		-	retail of fuel to be consumed in manufacturing or creating 23
662		-	gas, power, steam, electri cal current or in furnishing water 24
663		-	to be sold ultimately at retail; or feed for livestock or 25
664		-	poultry; or grain to be converted into foodstuffs which are 26
665		-	to be sold ultimately in processed form at retail; or seed, 27
666		-	limestone or fertilizer which is to be used for seeding, 28
667		-	liming or fertilizing crops which when harvested will be 29
668		-	sold at retail or will be fed to livestock or poultry to be 30
669		-	sold ultimately in processed form at retail; economic 31
670		-	poisons registered pursuant to the provisions of the 32
671		-	Missouri pesticide registration law, sections 281.220 to 33
672		-	281.310, which are to be used in connection with the growth 34
673		-	or production of crops, fruit trees or orchards applied 35
674		-	before, during, or after planting, the crop of which when 36
675		-	21
676		-	harvested will be sold at reta il or will be converted into 37
677		-	foodstuffs which are to be sold ultimately in processed form 38
678		-	at retail; 39
679		-	(2) Materials, manufactured goods, machinery and parts 40
680		-	which when used in manufacturing, processing, compounding, 41
681		-	mining, producing or fabricatin g become a component part or 42
682		-	ingredient of the new personal property resulting from such 43
683		-	manufacturing, processing, compounding, mining, producing or 44
684		-	fabricating and which new personal property is intended to 45
685		-	be sold ultimately for final use or consump tion; and 46
686		-	materials, including without limitation, gases and 47
687		-	manufactured goods, including without limitation slagging 48
688		-	materials and firebrick, which are ultimately consumed in 49
689		-	the manufacturing process by blending, reacting or 50
690		-	interacting with or by becoming, in whole or in part, 51
691		-	component parts or ingredients of steel products intended to 52
692		-	be sold ultimately for final use or consumption; 53
693		-	(3) Materials, replacement parts and equipment 54
694		-	purchased for use directly upon, and for the repair and 55
695		-	maintenance or manufacture of, motor vehicles, watercraft, 56
696		-	railroad rolling stock or aircraft engaged as common 57
697		-	carriers of persons or property; 58
698		-	(4) Replacement machinery, equipment, and parts and 59
699		-	the materials and supplies solely required for the 60
700		-	installation or construction of such replacement machinery, 61
701		-	equipment, and parts, used directly in manufacturing, 62
702		-	mining, fabricating or producing a product which is intended 63
703		-	to be sold ultimately for final use or consumption; and 64
704		-	machinery and equipme nt, and the materials and supplies 65
705		-	required solely for the operation, installation or 66
706		-	construction of such machinery and equipment, purchased and 67
707		-	used to establish new, or to replace or expand existing, 68
708		-	material recovery processing plants in this state . For the 69
709		-	22
710		-	purposes of this subdivision, a "material recovery 70
711		-	processing plant" means a facility that has as its primary 71
712		-	purpose the recovery of materials into a usable product or a 72
713		-	different form which is used in producing a new product and 73
714		-	shall include a facility or equipment which are used 74
715		-	exclusively for the collection of recovered materials for 75
716		-	delivery to a material recovery processing plant but shall 76
717		-	not include motor vehicles used on highways. For purposes 77
718		-	of this section, the terms motor vehicle and highway shall 78
719		-	have the same meaning pursuant to section 301.010. For the 79
720		-	purposes of this subdivision, subdivision (5) of this 80
721		-	subsection, and section 144.054, as well as the definition 81
722		-	in subdivision (9) of subsection 1 of section 144.01 0, the 82
723		-	term "product" includes telecommunications services and the 83
724		-	term "manufacturing" shall include the production, or 84
725		-	production and transmission, of telecommunications 85
726		-	services. The preceding sentence does not make a 86
727		-	substantive change in the law and is intended to clarify 87
728		-	that the term "manufacturing" has included and continues to 88
729		-	include the production and transmission of 89
730		-	"telecommunications services", as enacted in this 90
731		-	subdivision and subdivision (5) of this subsection, as well 91
732		-	as the definition in subdivision (9) of subsection 1 of 92
733		-	section 144.010. The preceding two sentences reaffirm 93
734		-	legislative intent consistent with the interpretation of 94
735		-	this subdivision and subdivision (5) of this subsection in 95
736		-	Southwestern Bell Tel. Co. v. Direc tor of Revenue, 78 S.W.3d 96
737		-	763 (Mo. banc 2002) and Southwestern Bell Tel. Co. v. 97
738		-	Director of Revenue, 182 S.W.3d 226 (Mo. banc 2005), and 98
739		-	accordingly abrogates the Missouri supreme court's 99
740		-	interpretation of those exemptions in IBM Corporation v. 100
741		-	Director of Revenue, 491 S.W.3d 535 (Mo. banc 2016) to the 101
742		-	extent inconsistent with this section and Southwestern Bell 102
743		-	23
744		-	Tel. Co. v. Director of Revenue , 78 S.W.3d 763 (Mo. banc 103
745		-	2002) and Southwestern Bell Tel. Co. v. Director of Revenue , 104
746		-	182 S.W.3d 226 (Mo. b anc 2005). The construction and 105
747		-	application of this subdivision as expressed by the Missouri 106
748		-	supreme court in DST Systems, Inc. v. Director of Revenue , 107
749		-	43 S.W.3d 799 (Mo. banc 2001); Southwestern Bell Tel. Co. v. 108
750		-	Director of Revenue, 78 S.W.3d 763 (Mo. banc 2002); and 109
751		-	Southwestern Bell Tel. Co. v. Director of Revenue , 182 110
752		-	S.W.3d 226 (Mo. banc 2005), is hereby affirmed. Material 111
753		-	recovery is not the reuse of materials within a 112
754		-	manufacturing process or the use of a product previously 113
755		-	recovered. The material recovery processing plant shall 114
756		-	qualify under the provisions of this section regardless of 115
757		-	ownership of the material being recovered; 116
758		-	(5) Machinery and equipment, and parts and the 117
759		-	materials and supplies solely required for the installat ion 118
760		-	or construction of such machinery and equipment, purchased 119
761		-	and used to establish new or to expand existing 120
762		-	manufacturing, mining or fabricating plants in the state if 121
763		-	such machinery and equipment is used directly in 122
764		-	manufacturing, mining or fabric ating a product which is 123
765		-	intended to be sold ultimately for final use or 124
766		-	consumption. The construction and application of this 125
767		-	subdivision as expressed by the Missouri supreme court in 126
768		-	DST Systems, Inc. v. Director of Revenue , 43 S.W.3d 799 (Mo. 127
769		-	banc 2001); Southwestern Bell Tel. Co. v. Director of 128
770		-	Revenue, 78 S.W.3d 763 (Mo. banc 2002); and Southwestern 129
771		-	Bell Tel. Co. v. Director of Revenue , 182 S.W.3d 226 (Mo. 130
772		-	banc 2005), is hereby affirmed; 131
773		-	(6) Tangible personal property which is used 132
774		-	exclusively in the manufacturing, processing, modification 133
775		-	or assembling of products sold to the United States 134
776		-	government or to any agency of the United States government; 135
777		-	24
778		-	(7) Animals or poultry used for breeding or feeding 136
779		-	purposes, or captive wildli fe; 137
780		-	(8) Newsprint, ink, computers, photosensitive paper 138
781		-	and film, toner, printing plates and other machinery, 139
782		-	equipment, replacement parts and supplies used in producing 140
783		-	newspapers published for dissemination of news to the 141
784		-	general public; 142
785		-	(9) The rentals of films, records or any type of sound 143
786		-	or picture transcriptions for public commercial display; 144
787		-	(10) Pumping machinery and equipment used to propel 145
788		-	products delivered by pipelines engaged as common carriers; 146
789		-	(11) Railroad rolling stock for use in transporting 147
790		-	persons or property in interstate commerce and motor 148
791		-	vehicles licensed for a gross weight of twenty -four thousand 149
792		-	pounds or more or trailers used by common carriers, as 150
793		-	defined in section 390.020, in the transportation of persons 151
794		-	or property; 152
795		-	(12) Electrical energy used in the actual primary 153
796		-	manufacture, processing, compounding, mining or producing of 154
797		-	a product, or electrical energy used in the actual secondary 155
798		-	processing or fabricating of the product, or a ma terial 156
799		-	recovery processing plant as defined in subdivision (4) of 157
800		-	this subsection, in facilities owned or leased by the 158
801		-	taxpayer, if the total cost of electrical energy so used 159
802		-	exceeds ten percent of the total cost of production, either 160
803		-	primary or secondary, exclusive of the cost of electrical 161
804		-	energy so used or if the raw materials used in such 162
805		-	processing contain at least twenty -five percent recovered 163
806		-	materials as defined in section 260.200. There shall be a 164
807		-	rebuttable presumption that the raw mat erials used in the 165
808		-	primary manufacture of automobiles contain at least twenty - 166
809		-	five percent recovered materials. For purposes of this 167
810		-	subdivision, "processing" means any mode of treatment, act 168
811		-	25
812		-	or series of acts performed upon materials to transform and 169
813		-	reduce them to a different state or thing, including 170
814		-	treatment necessary to maintain or preserve such processing 171
815		-	by the producer at the production facility; 172
816		-	(13) Anodes which are used or consumed in 173
817		-	manufacturing, processing, compounding, mining , producing or 174
818		-	fabricating and which have a useful life of less than one 175
819		-	year; 176
820		-	(14) Machinery, equipment, appliances and devices 177
821		-	purchased or leased and used solely for the purpose of 178
822		-	preventing, abating or monitoring air pollution, and 179
823		-	materials and supplies solely required for the installation, 180
824		-	construction or reconstruction of such machinery, equipment, 181
825		-	appliances and devices; 182
826		-	(15) Machinery, equipment, appliances and devices 183
827		-	purchased or leased and used solely for the purpose of 184
828		-	preventing, abating or monitoring water pollution, and 185
829		-	materials and supplies solely required for the installation, 186
830		-	construction or reconstruction of such machinery, equipment, 187
831		-	appliances and devices; 188
832		-	(16) Tangible personal property purchased by a ru ral 189
833		-	water district; 190
834		-	(17) All amounts paid or charged for admission or 191
835		-	participation or other fees paid by or other charges to 192
836		-	individuals in or for any place of amusement, entertainment 193
837		-	or recreation, games or athletic events, including museums, 194
838		-	fairs, zoos and planetariums, owned or operated by a 195
839		-	municipality or other political subdivision where all the 196
840		-	proceeds derived therefrom benefit the municipality or other 197
841		-	political subdivision and do not inure to any private 198
842		-	person, firm, or corporat ion, provided, however, that a 199
843		-	municipality or other political subdivision may enter into 200
844		-	revenue-sharing agreements with private persons, firms, or 201
845		-	26
846		-	corporations providing goods or services, including 202
847		-	management services, in or for the place of amuseme nt, 203
848		-	entertainment or recreation, games or athletic events, and 204
849		-	provided further that nothing in this subdivision shall 205
850		-	exempt from tax any amounts retained by any private person, 206
851		-	firm, or corporation under such revenue -sharing agreement; 207
852		-	(18) All sales of insulin, and all sales, rentals, 208
853		-	repairs, and parts of durable medical equipment, prosthetic 209
854		-	devices, and orthopedic devices as defined on January 1, 210
855		-	1980, by the federal Medicare program pursuant to Title 211
856		-	XVIII of the Social Security Act of 1965, including the 212
857		-	items specified in Section 1862(a)(12) of that act, and also 213
858		-	specifically including hearing aids and hearing aid supplies 214
859		-	and all sales of drugs which may be legally dispensed by a 215
860		-	licensed pharmacist only upon a lawful prescription of a 216
861		-	practitioner licensed to administer those items, including 217
862		-	samples and materials used to manufacture samples which may 218
863		-	be dispensed by a practitioner authorized to dispense such 219
864		-	samples and all sales or rental of medical oxygen, home 220
865		-	respiratory equipment and accessories including parts, and 221
866		-	hospital beds and accessories and ambulatory aids including 222
867		-	parts, and all sales or rental of manual and powered 223
868		-	wheelchairs including parts, and stairway lifts, Braille 224
869		-	writers, electronic Braille equipm ent and, if purchased or 225
870		-	rented by or on behalf of a person with one or more physical 226
871		-	or mental disabilities to enable them to function more 227
872		-	independently, all sales or rental of scooters including 228
873		-	parts, and reading machines, electronic print enlarger s and 229
874		-	magnifiers, electronic alternative and augmentative 230
875		-	communication devices, and items used solely to modify motor 231
876		-	vehicles to permit the use of such motor vehicles by 232
877		-	individuals with disabilities or sales of over -the-counter 233
878		-	or nonprescription d rugs to individuals with disabilities, 234
879		-	27
880		-	and drugs required by the Food and Drug Administration to 235
881		-	meet the over-the-counter drug product labeling requirements 236
882		-	in 21 CFR 201.66, or its successor, as prescribed by a 237
883		-	health care practitioner licensed to pr escribe; 238
884		-	(19) All sales made by or to religious and charitable 239
885		-	organizations and institutions in their religious, 240
886		-	charitable or educational functions and activities and all 241
887		-	sales made by or to all elementary and secondary schools 242
888		-	operated at public expense in their educational functions 243
889		-	and activities; 244
890		-	(20) All sales of aircraft to common carriers for 245
891		-	storage or for use in interstate commerce and all sales made 246
892		-	by or to not-for-profit civic, social, service or fraternal 247
893		-	organizations, including fraternal organizations which have 248
894		-	been declared tax-exempt organizations pursuant to Section 249
895		-	501(c)(8) or (10) of the 1986 Internal Revenue Code, as 250
896		-	amended, in their civic or charitable functions and 251
897		-	activities and all sales made to eleemosyn ary and penal 252
898		-	institutions and industries of the state, and all sales made 253
899		-	to any private not-for-profit institution of higher 254
900		-	education not otherwise excluded pursuant to subdivision 255
901		-	(19) of this subsection or any institution of higher 256
902		-	education supported by public funds, and all sales made to a 257
903		-	state relief agency in the exercise of relief functions and 258
904		-	activities; 259
905		-	(21) All ticket sales made by benevolent, scientific 260
906		-	and educational associations which are formed to foster, 261
907		-	encourage, and promote progress and improvement in the 262
908		-	science of agriculture and in the raising and breeding of 263
909		-	animals, and by nonprofit summer theater organizations if 264
910		-	such organizations are exempt from federal tax pursuant to 265
911		-	the provisions of the Internal Revenue Code and all 266
912		-	admission charges and entry fees to the Missouri state fair 267
913		-	28
914		-	or any fair conducted by a county agricultural and 268
915		-	mechanical society organized and operated pursuant to 269
916		-	sections 262.290 to 262.530; 270
917		-	(22) All sales made to any private not -for-profit 271
918		-	elementary or secondary school, all sales of feed additives, 272
919		-	medications or vaccines administered to livestock or poultry 273
920		-	in the production of food or fiber, all sales of pesticides 274
921		-	used in the production of crops, livestock or poultry for 275
922		-	food or fiber, all sales of bedding used in the production 276
923		-	of livestock or poultry for food or fiber, all sales of 277
924		-	propane or natural gas, electricity or diesel fuel used 278
925		-	exclusively for drying agricultural crops, natural gas used 279
926		-	in the primary manufa cture or processing of fuel ethanol as 280
927		-	defined in section 142.028, natural gas, propane, and 281
928		-	electricity used by an eligible new generation cooperative 282
929		-	or an eligible new generation processing entity as defined 283
930		-	in section 348.432, and all sales of farm machinery and 284
931		-	equipment, other than airplanes, motor vehicles and 285
932		-	trailers, and any freight charges on any exempt item. As 286
933		-	used in this subdivision, the term "feed additives" means 287
934		-	tangible personal property which, when mixed with feed for 288
935		-	livestock or poultry, is to be used in the feeding of 289
936		-	livestock or poultry. As used in this subdivision, the term 290
937		-	"pesticides" includes adjuvants such as crop oils, 291
938		-	surfactants, wetting agents and other assorted pesticide 292
939		-	carriers used to improve or enhance th e effect of a 293
940		-	pesticide and the foam used to mark the application of 294
941		-	pesticides and herbicides for the production of crops, 295
942		-	livestock or poultry. As used in this subdivision, the term 296
943		-	"farm machinery and equipment" [means] shall mean: 297
944		-	(a) New or used farm tractors and such other new or 298
945		-	used farm machinery and equipment , including utility 299
946		-	vehicles used for any agricultural use, and repair or 300
947		-	29
948		-	replacement parts thereon and any accessories for and 301
949		-	upgrades to such farm machinery and equipment [,] and rotary 302
950		-	mowers used [exclusively] for any agricultural purposes [, 303
951		-	and]; 304
952		-	(b) Supplies and lubricants used exclusively, solely, 305
953		-	and directly for producing crops, raising and feeding 306
954		-	livestock, fish, poultry, pheasants, chukar, quail, or for 307
955		-	producing milk for ultimate sale at retail, including field 308
956		-	drain tile[,]; and 309
957		-	(c) One-half of each purchaser's purchase of diesel 310
958		-	fuel therefor which is: 311
959		-	[(a)] a. Used exclusively for agricultural purposes; 312
960		-	[(b)] b. Used on land owned or leased for the purpose 313
961		-	of producing farm products; and 314
962		-	[(c)] c. Used directly in producing farm products to 315
963		-	be sold ultimately in processed form or otherwise at retail 316
964		-	or in producing farm products to be fed to livestock or 317
965		-	poultry to be sold ult imately in processed form at retail; 318
966		-	For the purposes of this subdivision, "utility vehicle" 319
967		-	shall mean any motorized vehicle manufactured and used 320
968		-	exclusively for off-highway use which is more than fifty 321
969		-	inches but no more than eighty inches in width, measured 322
970		-	from outside of tire rim to outside of tire rim, with an 323
971		-	unladen dry weight of three thousand five hundred pounds or 324
972		-	less, traveling on four or six wheels. 325
973		-	(23) Except as otherwise provided in section 144.032, 326
974		-	all sales of metered water service, electricity, electrical 327
975		-	current, natural, artificial or propane gas, wood, coal or 328
976		-	home heating oil for domestic use and in any city not within 329
977		-	a county, all sales of metered or unmetered water service 330
978		-	for domestic use: 331
979		-	(a) "Domestic use" means that portion of metered water 332
980		-	service, electricity, electrical current, natural, 333
981		-	30
982		-	artificial or propane gas, wood, coal or home heating oil, 334
983		-	and in any city not within a county, metered or unmetered 335
984		-	water service, which an individual occupant of a residential 336
985		-	premises uses for nonbusiness, noncommercial or 337
986		-	nonindustrial purposes. Utility service through a single or 338
987		-	master meter for residential apartments or condominiums, 339
988		-	including service for common areas and facilities and vacant 340
989		-	units, shall be deemed to be for domestic use. Each seller 341
990		-	shall establish and maintain a system whereby individual 342
991		-	purchases are determined as exempt or nonexempt; 343
992		-	(b) Regulated utility sellers shall determine whether 344
993		-	individual purchases are exempt or n onexempt based upon the 345
994		-	seller's utility service rate classifications as contained 346
995		-	in tariffs on file with and approved by the Missouri public 347
996		-	service commission. Sales and purchases made pursuant to 348
997		-	the rate classification "residential" and sales to and 349
998		-	purchases made by or on behalf of the occupants of 350
999		-	residential apartments or condominiums through a single or 351
1000		-	master meter, including service for common areas and 352
1001		-	facilities and vacant units, shall be considered as sales 353
1002		-	made for domestic use and such sales shall be exempt from 354
1003		-	sales tax. Sellers shall charge sales tax upon the entire 355
1004		-	amount of purchases classified as nondomestic use. The 356
1005		-	seller's utility service rate classification and the 357
1006		-	provision of service thereunder shall be conclusive as to 358
1007		-	whether or not the utility must charge sales tax; 359
1008		-	(c) Each person making domestic use purchases of 360
1009		-	services or property and who uses any portion of the 361
1010		-	services or property so purchased for a nondomestic use 362
1011		-	shall, by the fifteenth day of t he fourth month following 363
1012		-	the year of purchase, and without assessment, notice or 364
1013		-	demand, file a return and pay sales tax on that portion of 365
1014		-	nondomestic purchases. Each person making nondomestic 366
1015		-	31
1016		-	purchases of services or property and who uses any porti on 367
1017		-	of the services or property so purchased for domestic use, 368
1018		-	and each person making domestic purchases on behalf of 369
1019		-	occupants of residential apartments or condominiums through 370
1020		-	a single or master meter, including service for common areas 371
1021		-	and facilities and vacant units, under a nonresidential 372
1022		-	utility service rate classification may, between the first 373
1023		-	day of the first month and the fifteenth day of the fourth 374
1024		-	month following the year of purchase, apply for credit or 375
1025		-	refund to the director of revenue and the director shall 376
1026		-	give credit or make refund for taxes paid on the domestic 377
1027		-	use portion of the purchase. The person making such 378
1028		-	purchases on behalf of occupants of residential apartments 379
1029		-	or condominiums shall have standing to apply to the direct or 380
1030		-	of revenue for such credit or refund; 381
1031		-	(24) All sales of handicraft items made by the seller 382
1032		-	or the seller's spouse if the seller or the seller's spouse 383
1033		-	is at least sixty-five years of age, and if the total gross 384
1034		-	proceeds from such sales do not constitute a majority of the 385
1035		-	annual gross income of the seller; 386
1036		-	(25) Excise taxes, collected on sales at retail, 387
1037		-	imposed by Sections 4041, 4071, 4081, 4091, 4161, 4181, 388
1038		-	4251, 4261 and 4271 of Title 26, United States Code. The 389
1039		-	director of revenue shall promulgate rules pursuant to 390
1040		-	chapter 536 to eliminate all state and local sales taxes on 391
1041		-	such excise taxes; 392
1042		-	(26) Sales of fuel consumed or used in the operation 393
1043		-	of ships, barges, or waterborne vessels which are used 394
1044		-	primarily in or for th e transportation of property or cargo, 395
1045		-	or the conveyance of persons for hire, on navigable rivers 396
1046		-	bordering on or located in part in this state, if such fuel 397
1047		-	is delivered by the seller to the purchaser's barge, ship, 398
1048		-	or waterborne vessel while it is af loat upon such river; 399
1049		-	32
1050		-	(27) All sales made to an interstate compact agency 400
1051		-	created pursuant to sections 70.370 to 70.441 or sections 401
1052		-	238.010 to 238.100 in the exercise of the functions and 402
1053		-	activities of such agency as provided pursuant to the 403
1054		-	compact; 404
1055		-	(28) Computers, computer software and computer 405
1056		-	security systems purchased for use by architectural or 406
1057		-	engineering firms headquartered in this state. For the 407
1058		-	purposes of this subdivision, "headquartered in this state" 408
1059		-	means the office for th e administrative management of at 409
1060		-	least four integrated facilities operated by the taxpayer is 410
1061		-	located in the state of Missouri; 411
1062		-	(29) All livestock sales when either the seller is 412
1063		-	engaged in the growing, producing or feeding of such 413
1064		-	livestock, or the seller is engaged in the business of 414
1065		-	buying and selling, bartering or leasing of such livestock; 415
1066		-	(30) All sales of barges which are to be used 416
1067		-	primarily in the transportation of property or cargo on 417
1068		-	interstate waterways; 418
1069		-	(31) Electrical energy or gas, whether natural, 419
1070		-	artificial or propane, water, or other utilities which are 420
1071		-	ultimately consumed in connection with the manufacturing of 421
1072		-	cellular glass products or in any material recovery 422
1073		-	processing plant as defined in subdivision (4) o f this 423
1074		-	subsection; 424
1075		-	(32) Notwithstanding other provisions of law to the 425
1076		-	contrary, all sales of pesticides or herbicides used in the 426
1077		-	production of crops, aquaculture, livestock or poultry; 427
1078		-	(33) Tangible personal property and utilities 428
1079		-	purchased for use or consumption directly or exclusively in 429
1080		-	the research and development of agricultural/biotechnology 430
1081		-	and plant genomics products and prescription pharmaceuticals 431
1082		-	consumed by humans or animals; 432
1083		-	33
1084		-	(34) All sales of grain bins for storage of grain for 433
1085		-	resale; 434
1086		-	(35) All sales of feed which are developed for and 435
1087		-	used in the feeding of pets owned by a commercial breeder 436
1088		-	when such sales are made to a commercial breeder, as defined 437
1089		-	in section 273.325, and licensed pursuant to sections 438
1090		-	273.325 to 273.357; 439
1091		-	(36) All purchases by a contractor on behalf of an 440
1092		-	entity located in another state, provided that the entity is 441
1093		-	authorized to issue a certificate of exemption for purchases 442
1094		-	to a contractor under the provisions of that state's law s. 443
1095		-	For purposes of this subdivision, the term "certificate of 444
1096		-	exemption" shall mean any document evidencing that the 445
1097		-	entity is exempt from sales and use taxes on purchases 446
1098		-	pursuant to the laws of the state in which the entity is 447
1099		-	located. Any contractor making purchases on behalf of such 448
1100		-	entity shall maintain a copy of the entity's exemption 449
1101		-	certificate as evidence of the exemption. If the exemption 450
1102		-	certificate issued by the exempt entity to the contractor is 451
1103		-	later determined by the director of r evenue to be invalid 452
1104		-	for any reason and the contractor has accepted the 453
1105		-	certificate in good faith, neither the contractor or the 454
1106		-	exempt entity shall be liable for the payment of any taxes, 455
1107		-	interest and penalty due as the result of use of the invalid 456
1108		-	exemption certificate. Materials shall be exempt from all 457
1109		-	state and local sales and use taxes when purchased by a 458
1110		-	contractor for the purpose of fabricating tangible personal 459
1111		-	property which is used in fulfilling a contract for the 460
1112		-	purpose of constructin g, repairing or remodeling facilities 461
1113		-	for the following: 462
1114		-	(a) An exempt entity located in this state, if the 463
1115		-	entity is one of those entities able to issue project 464
1116		-	34
1117		-	exemption certificates in accordance with the provisions of 465
1118		-	section 144.062; or 466
1119		-	(b) An exempt entity located outside the state if the 467
1120		-	exempt entity is authorized to issue an exemption 468
1121		-	certificate to contractors in accordance with the provisions 469
1122		-	of that state's law and the applicable provisions of this 470
1123		-	section; 471
1124		-	(37) All sales or other transfers of tangible personal 472
1125		-	property to a lessor who leases the property under a lease 473
1126		-	of one year or longer executed or in effect at the time of 474
1127		-	the sale or other transfer to an interstate compact agency 475
1128		-	created pursuant to sections 70. 370 to 70.441 or sections 476
1129		-	238.010 to 238.100; 477
1130		-	(38) Sales of tickets to any collegiate athletic 478
1131		-	championship event that is held in a facility owned or 479
1132		-	operated by a governmental authority or commission, a quasi - 480
1133		-	governmental agency, a state univers ity or college or by the 481
1134		-	state or any political subdivision thereof, including a 482
1135		-	municipality, and that is played on a neutral site and may 483
1136		-	reasonably be played at a site located outside the state of 484
1137		-	Missouri. For purposes of this subdivision, "neutra l site" 485
1138		-	means any site that is not located on the campus of a 486
1139		-	conference member institution participating in the event; 487
1140		-	(39) All purchases by a sports complex authority 488
1141		-	created under section 64.920, and all sales of utilities by 489
1142		-	such authority at the authority's cost that are consumed in 490
1143		-	connection with the operation of a sports complex leased to 491
1144		-	a professional sports team; 492
1145		-	(40) All materials, replacement parts, and equipment 493
1146		-	purchased for use directly upon, and for the modification, 494
1147		-	replacement, repair, and maintenance of aircraft, aircraft 495
1148		-	power plants, and aircraft accessories; 496
1149		-	35
1150		-	(41) Sales of sporting clays, wobble, skeet, and trap 497
1151		-	targets to any shooting range or similar places of business 498
1152		-	for use in the normal course of busin ess and money received 499
1153		-	by a shooting range or similar places of business from 500
1154		-	patrons and held by a shooting range or similar place of 501
1155		-	business for redistribution to patrons at the conclusion of 502
1156		-	a shooting event; 503
1157		-	(42) All sales of motor fuel, as defined in section 504
1158		-	142.800, used in any watercraft, as defined in section 505
1159		-	306.010; 506
1160		-	(43) Any new or used aircraft sold or delivered in 507
1161		-	this state to a person who is not a resident of this state 508
1162		-	or a corporation that is not incorporated in this sta te, and 509
1163		-	such aircraft is not to be based in this state and shall not 510
1164		-	remain in this state more than ten business days subsequent 511
1165		-	to the last to occur of: 512
1166		-	(a) The transfer of title to the aircraft to a person 513
1167		-	who is not a resident of this state or a corporation that is 514
1168		-	not incorporated in this state; or 515
1169		-	(b) The date of the return to service of the aircraft 516
1170		-	in accordance with 14 CFR 91.407 for any maintenance, 517
1171		-	preventive maintenance, rebuilding, alterations, repairs, or 518
1172		-	installations that are completed contemporaneously with the 519
1173		-	transfer of title to the aircraft to a person who is not a 520
1174		-	resident of this state or a corporation that is not 521
1175		-	incorporated in this state; 522
1176		-	(44) Motor vehicles registered in excess of fifty -four 523
1177		-	thousand pounds, and the trailers pulled by such motor 524
1178		-	vehicles, that are actually used in the normal course of 525
1179		-	business to haul property on the public highways of the 526
1180		-	state, and that are capable of hauling loads commensurate 527
1181		-	with the motor vehicle's registered w eight; and the 528
1182		-	materials, replacement parts, and equipment purchased for 529
1183		-	36
1184		-	use directly upon, and for the repair and maintenance or 530
1185		-	manufacture of such vehicles. For purposes of this 531
1186		-	subdivision, "motor vehicle" and "public highway" shall have 532
1187		-	the meaning as ascribed in section 390.020; 533
1188		-	(45) All internet access or the use of internet access 534
1189		-	regardless of whether the tax is imposed on a provider of 535
1190		-	internet access or a buyer of internet access. For purposes 536
1191		-	of this subdivision, the following te rms shall mean: 537
1192		-	(a) "Direct costs", costs incurred by a governmental 538
1193		-	authority solely because of an internet service provider's 539
1194		-	use of the public right -of-way. The term shall not include 540
1195		-	costs that the governmental authority would have incurred i f 541
1196		-	the internet service provider did not make such use of the 542
1197		-	public right-of-way. Direct costs shall be determined in a 543
1198		-	manner consistent with generally accepted accounting 544
1199		-	principles; 545
1200		-	(b) "Internet", computer and telecommunications 546
1201		-	facilities, including equipment and operating software, that 547
1202		-	comprises the interconnected worldwide network that employ 548
1203		-	the transmission control protocol or internet protocol, or 549
1204		-	any predecessor or successor protocols to that protocol, to 550
1205		-	communicate information of all kinds by wire or radio; 551
1206		-	(c) "Internet access", a service that enables users to 552
1207		-	connect to the internet to access content, information, or 553
1208		-	other services without regard to whether the service is 554
1209		-	referred to as telecommunications, communicati ons, 555
1210		-	transmission, or similar services, and without regard to 556
1211		-	whether a provider of the service is subject to regulation 557
1212		-	by the Federal Communications Commission as a common carrier 558
1213		-	under 47 U.S.C. Section 201, et seq. For purposes of this 559
1214		-	subdivision, internet access also includes: the purchase, 560
1215		-	use, or sale of communications services, including 561
1216		-	telecommunications services as defined in section 144.010, 562
1217		-	37
1218		-	to the extent the communications services are purchased, 563
1219		-	used, or sold to provide the service described in this 564
1220		-	subdivision or to otherwise enable users to access content, 565
1221		-	information, or other services offered over the internet; 566
1222		-	services that are incidental to the provision of a service 567
1223		-	described in this subdivision, when furnished to users a s 568
1224		-	part of such service, including a home page, electronic 569
1225		-	mail, and instant messaging, including voice -capable and 570
1226		-	video-capable electronic mail and instant messaging, video 571
1227		-	clips, and personal electronic storage capacity; a home page 572
1228		-	electronic mail and instant messaging, including voice - 573
1229		-	capable and video-capable electronic mail and instant 574
1230		-	messaging, video clips, and personal electronic storage 575
1231		-	capacity that are provided independently or that are not 576
1232		-	packed with internet access. As used in this subdivision, 577
1233		-	internet access does not include voice, audio, and video 578
1234		-	programming or other products and services, except services 579
1235		-	described in this paragraph or this subdivision, that use 580
1236		-	internet protocol or any successor protocol and for which 581
1237		-	there is a charge, regardless of whether the charge is 582
1238		-	separately stated or aggregated with the charge for services 583
1239		-	described in this paragraph or this subdivision; 584
1240		-	(d) "Tax", any charge imposed by the state or a 585
1241		-	political subdivision of the state for the purpose of 586
1242		-	generating revenues for governmental purposes and that is 587
1243		-	not a fee imposed for a specific privilege, service, or 588
1244		-	benefit conferred, except as described as otherwise under 589
1245		-	this subdivision, or any obligation imposed on a seller to 590
1246		-	collect and to remit to the state or a political subdivision 591
1247		-	of the state any gross retail tax, sales tax, or use tax 592
1248		-	imposed on a buyer by such a governmental entity. The term 593
1249		-	tax shall not include any franchise fee or similar fee 594
1250		-	imposed or authorized un der section 67.1830 or 67.2689; 595
1251		-	38
1252		-	Section 622 or 653 of the Communications Act of 1934, 47 596
1253		-	U.S.C. Section 542 and 47 U.S.C. Section 573; or any other 597
1254		-	fee related to obligations of telecommunications carriers 598
1255		-	under the Communications Act of 1934, 47 U.S.C . Section 151, 599
1256		-	et seq., except to the extent that: 600
1257		-	a. The fee is not imposed for the purpose of 601
1258		-	recovering direct costs incurred by the franchising or other 602
1259		-	governmental authority from providing the specific 603
1260		-	privilege, service, or benefit conferr ed to the payer of the 604
1261		-	fee; or 605
1262		-	b. The fee is imposed for the use of a public right -of- 606
1263		-	way based on a percentage of the service revenue, and the 607
1264		-	fee exceeds the incremental direct costs incurred by the 608
1265		-	governmental authority associated with the pr ovision of that 609
1266		-	right-of-way to the provider of internet access service. 610
1267		-	Nothing in this subdivision shall be interpreted as an 611
1268		-	exemption from taxes due on goods or services that were 612
1269		-	subject to tax on January 1, 2016. 613
1270		-	3. Any ruling, agreement, or contract, whether written 614
1271		-	or oral, express or implied, between a person and this 615
1272		-	state's executive branch, or any other state agency or 616
1273		-	department, stating, agreeing, or ruling that such person is 617
1274		-	not required to collect sales and use tax in this stat e 618
1275		-	despite the presence of a warehouse, distribution center, or 619
1276		-	fulfillment center in this state that is owned or operated 620
1277		-	by the person or an affiliated person shall be null and void 621
1278		-	unless it is specifically approved by a majority vote of 622
1279		-	each of the houses of the general assembly. For purposes of 623
1280		-	this subsection, an "affiliated person" means any person 624
1281		-	that is a member of the same controlled group of 625
1282		-	corporations as defined in Section 1563(a) of the Internal 626
1283		-	Revenue Code of 1986, as amended, as the vendor or any other 627
1284		-	entity that, notwithstanding its form of organization, bears 628
1285		-	39
1286		-	the same ownership relationship to the vendor as a 629
1287		-	corporation that is a member of the same controlled group of 630
1288		-	corporations as defined in Section 1563(a) of the Inter nal 631
1289		-	Revenue Code, as amended. 632
1290		-	285.730. 1. Except as specifically provided in 1
1291		-	sections 285.700 to 285.750 or in the professional employer 2
1292		-	agreement, in each coemployment relationship: 3
1293		-	(1) The client shall be entitled to exerc ise all 4
1294		-	rights, and shall be obligated to perform all duties and 5
1295		-	responsibilities otherwise applicable to an employer in an 6
1296		-	employment relationship; 7
1297		-	(2) The PEO shall be entitled to exercise only those 8
1298		-	rights and obligated to perform only those d uties and 9
1299		-	responsibilities specifically required under sections 10
1300		-	285.700 to 285.750 or set forth in the professional employer 11
1301		-	agreement. The rights, duties, and obligations of the PEO 12
1302		-	as coemployer with respect to any covered employee shall be 13
1303		-	limited to those arising pursuant to the professional 14
1304		-	employer agreement and sections 285.700 to 285.750 during 15
1305		-	the term of coemployment by the PEO of such covered 16
1306		-	employee; and 17
1307		-	(3) Unless otherwise expressly agreed by the PEO and 18
1308		-	the client in a profes sional employer agreement, the client 19
1309		-	retains the exclusive right to direct and control the 20
1310		-	covered employees as is necessary to conduct the client's 21
1311		-	business, to discharge any of the client's fiduciary 22
1312		-	responsibilities, or to comply with any licensure 23
1313		-	requirements applicable to the client or to the covered 24
1314		-	employees. 25
1315		-	2. Except as specifically provided under sections 26
1316		-	285.700 to 285.750, the coemployment relationship between 27
1317		-	the client and the PEO and between each coemployer and each 28
1318		-	covered employee shall be governed by the professional 29
1319		-	40
1320		-	employer agreement. Each professional employer agreement 30
1321		-	shall include the following: 31
1322		-	(1) The allocation of rights, duties, and obligations 32
1323		-	as described in subsection 1 of this section; 33
1324		-	(2) A requirement that the PEO shall have 34
1325		-	responsibility to: 35
1326		-	(a) Pay wages to covered employees; 36
1327		-	(b) Withhold, collect, report, and remit payroll - 37
1328		-	related and unemployment taxes; and 38
1329		-	(c) To the extent the PEO has assumed responsibility 39
1330		-	in the professional employer agreement, to make payments for 40
1331		-	employee benefits for covered employees. 41
1332		-	As used in this section, the term "wages" does not include 42
1333		-	any obligation between a client and a covered employee for 43
1334		-	payments beyond or in addition to the cov ered employee's 44
1335		-	salary, draw, or regular rate of pay, such as bonuses, 45
1336		-	commissions, severance pay, deferred compensation, profit 46
1337		-	sharing, vacation, sick, or other paid -time off pay, unless 47
1338		-	the PEO has expressly agreed to assume liability for such 48
1339		-	payments in the professional employer agreement; and 49
1340		-	(3) A requirement that the PEO shall have a right to 50
1341		-	hire, discipline, and terminate a covered employee as may be 51
1342		-	necessary to fulfill the PEO's responsibilities under 52
1343		-	sections 285.700 to 285.750 an d the professional employer 53
1344		-	agreement. The client shall have a right to hire, 54
1345		-	discipline, and terminate a covered employee. 55
1346		-	3. With respect to each professional employer 56
1347		-	agreement entered into by a PEO, such PEO shall provide 57
1348		-	written notice to each covered employee affected by such 58
1349		-	agreement of the general nature of the coemployment 59
1350		-	relationship between and among the PEO, the client, and such 60
1351		-	covered employee. 61
1352		-	41
1353		-	4. Except to the extent otherwise expressly provided 62
1354		-	by the applicable profes sional employer agreement: 63
1355		-	(1) A client shall be solely responsible for the 64
1356		-	quality, adequacy, or safety of the goods or services 65
1357		-	produced or sold in the client's business; 66
1358		-	(2) A client shall be solely responsible for 67
1359		-	directing, supervising, training, and controlling the work 68
1360		-	of the covered employees with respect to the business 69
1361		-	activities of the client and solely responsible for the 70
1362		-	acts, errors, or omissions of the covered employees with 71
1363		-	regard to such activities; 72
1364		-	(3) A client shall not be liable for the acts, errors, 73
1365		-	or omissions of a PEO or of any covered employee of the 74
1366		-	client and a PEO if such covered employee is acting under 75
1367		-	the express direction and control of the PEO; 76
1368		-	(4) A PEO shall not be liable for the acts, erro rs, or 77
1369		-	omissions of a client or of any covered employee of the 78
1370		-	client if such covered employee is acting under the express 79
1371		-	direction and control of the client; 80
1372		-	(5) Nothing in this subsection shall serve to limit 81
1373		-	any contractual liability or oblig ation specifically 82
1374		-	provided in the written professional employer agreement; and 83
1375		-	(6) A covered employee is not, solely as the result of 84
1376		-	being a covered employee of a PEO, an employee of the PEO 85
1377		-	for purposes of general liability insurance, fidelity bonds, 86
1378		-	surety bonds, employer's liability that is not covered by 87
1379		-	workers' compensation, or liquor liability insurance carried 88
1380		-	by the PEO unless the covered employees are included by 89
1381		-	specific reference in the professional employer agreement 90
1382		-	and applicable prearranged employment contract, insurance 91
1383		-	contract, or bond. 92
1384		-	5. A PEO under sections 285.700 to 285.750 is not 93
1385		-	engaged in the sale of insurance or in acting as a third - 94
1386		-	42
1387		-	party administrator by offering, marketing, selling, 95
1388		-	administering, or pr oviding professional employer services 96
1389		-	that include services and employee benefit plans for covered 97
1390		-	employees. A client and a registered professional employer 98
1391		-	organization shall each be deemed an employer under the laws 99
1392		-	of this state for purposes of s ponsoring retirement and 100
1393		-	welfare benefits plans for its covered employees. A fully 101
1394		-	insured welfare benefit plan sponsored by a registered 102
1395		-	professional employer organization for the benefit of its 103
1396		-	covered employees shall be treated for the purposes of state 104
1397		-	law as a single employer welfare benefit plan. For purposes 105
1398		-	of sponsoring welfare benefit plans for its eligible covered 106
1399		-	employees, a registered professional employer organization 107
1400		-	shall be considered the employer of all of its eligible 108
1401		-	covered employees, and all eligible covered employees of one 109
1402		-	or more clients participating in a health benefit plan 110
1403		-	sponsored by a registered professional employer organization 111
1404		-	shall be considered employees of such registered 112
1405		-	professional employer organization . The provisions of this 113
1406		-	section shall not supersede or preempt any requirements 114
1407		-	under section 375.014. 115
1408		-	6. For purposes of this state or any county, 116
1409		-	municipality, or other political subdivision thereof: 117
1410		-	(1) Any tax or assessment imposed upo n professional 118
1411		-	employer services or any business license or other fee that 119
1412		-	is based upon gross receipts shall allow a deduction from 120
1413		-	the gross income or receipts of the business derived from 121
1414		-	performing professional employer services that is equal to 122
1415		-	that portion of the fee charged to a client that represents 123
1416		-	the actual cost of wages and salaries, benefits, payroll 124
1417		-	taxes, withholding, or other assessments paid to or on 125
1418		-	behalf of a covered employee by the professional employer 126
1419		-	organization under a pr ofessional employer agreement; 127
1420		-	43
1421		-	(2) Any tax assessed or assessment or mandated 128
1422		-	expenditure on a per -capita or per-employee basis shall be 129
1423		-	assessed against the client for covered employees and 130
1424		-	against the professional employer organization for its 131
1425		-	employees who are not covered employees coemployed with a 132
1426		-	client. Benefits or monetary consideration that meet the 133
1427		-	requirements of mandates imposed on a client and that are 134
1428		-	received by covered employees through the PEO either through 135
1429		-	payroll or through benefit plans sponsored by the PEO shall 136
1430		-	be credited against the client's obligation to fulfill such 137
1431		-	mandates; and 138
1432		-	(3) In the case of a tax or an assessment imposed or 139
1433		-	calculated upon the basis of total payroll, the professional 140
1434		-	employer organization shall be eligible to apply any small 141
1435		-	business allowance or exemption available to the client for 142
1436		-	the covered employees for purposes of computing the tax. 143
1437		-	407.475. 1. Except when specifically required or 1
1438		-	authorized by federa l law, no state agency or state official 2
1439		-	shall impose any additional annual filing or reporting 3
1440		-	requirements on an organization regulated or specifically 4
1441		-	exempted from regulation under sections 407.450 to 407.478 5
1442		-	that are more stringent, restrictive, o r expansive than the 6
1443		-	requirements authorized under section 407.462. 7
1444		-	2. This section shall not apply to state grants or 8
1445		-	contracts, nor investigations under section 407.472 and 9
1446		-	shall not restrict enforcement actions against specific 10
1447		-	charitable organizations. This section shall not apply to 11
1448		-	labor organizations, as that term is defined in section 12
1449		-	105.500. 13
1450		-	3. This section shall not apply when an organization 14
1451		-	regulated or specifically exempted from regulation under 15
1452		-	sections 407.450 to 407.475 is providing any report or 16
1453		-	44
1454		-	disclosure required by state law to be filed with the 17
1455		-	secretary of state. 18
1456		-	620.3800. There is hereby created within the 1
1457		-	department of economic development the "Office of 2
1458		-	Entrepreneurship". The office shall employ an individual to 3
1459		-	promote policies and initiatives to support the growth of 4
1460		-	entrepreneurship, including minority entrepreneurship, in 5
1461		-	the state. The office shall work with stakeholders and 6
1462		-	communities, including minority communities, to prov ide 7
1463		-	information and technical support to entrepreneurs. The 8
1464		-	office shall support and advise the office of administration 9
1465		-	with preparing the report pursuant to subsection 3 of 10
1466		-	section 34.195. 11
1467		-	620.3900. 1. Sections 620.3900 to 620 .3930 shall be 1
1468		-	known and may be cited as the "Regulatory Sandbox Act". 2
1469		-	2. For the purposes of sections 620.3900 to 620.3930, 3
1470		-	the following terms shall mean: 4
1471		-	(1) "Advisory committee", the general regulatory 5
1472		-	sandbox program advisory committee created in section 6
1473		-	620.3910; 7
1474		-	(2) "Applicable agency", a department or agency of the 8
1475		-	state that by law regulates a business activity and persons 9
1476		-	engaged in such business activity, including the issuance of 10
1477		-	licenses or other types of authorization, and which the 11
1478		-	regulatory relief office determines would otherwise regulate 12
1479		-	a sandbox participant. A participant may fall under 13
1480		-	multiple applicable agencies if multiple agencies regulate 14
1481		-	the business activity that is subject to the sandbox program 15
1482		-	application. "Applicable agency" shall not include the 16
1483		-	division of professional registration and its boards, 17
1484		-	commissions, committees and offices; 18
1485		-	(3) "Applicant" or "sandbox applicant", a person or 19
1486		-	business that applies to participate in the sandbo x program; 20
1487		-	45
1488		-	(4) "Consumer", a person who purchases or otherwise 21
1489		-	enters into a transaction or agreement to receive a product 22
1490		-	or service offered through the sandbox program pursuant to a 23
1491		-	demonstration by a program participant; 24
1492		-	(5) "Demonstrate" or "demonstration", to temporarily 25
1493		-	provide an offering of an innovative product or service in 26
1494		-	accordance with the provisions of the sandbox program; 27
1495		-	(6) "Department", the department of economic 28
1496		-	development; 29
1497		-	(7) "Innovation", the use or inco rporation of a new 30
1498		-	idea, a new or emerging technology, or a new use of existing 31
1499		-	technology to address a problem, provide a benefit, or 32
1500		-	otherwise offer a product, production method, or service; 33
1501		-	(8) "Innovative offering", an offering of a product or 34
1502		-	service that includes an innovation; 35
1503		-	(9) "Product", a commercially distributed good that is: 36
1504		-	(a) Tangible personal property; and 37
1505		-	(b) The result of a production process; 38
1506		-	(10) "Production", the method or process of creating 39
1507		-	or obtaining a good, which may include assembling, breeding, 40
1508		-	capturing, collecting, extracting, fabricating, farming, 41
1509		-	fishing, gathering, growing, harvesting, hunting, 42
1510		-	manufacturing, mining, processing, raising, or trapping a 43
1511		-	good; 44
1512		-	(11) "Regulatory relief office", the office 45
1513		-	responsible for administering the sandbox program within the 46
1514		-	department; 47
1515		-	(12) "Sandbox participant" or "participant", a person 48
1516		-	or business whose application to participate in the sandbox 49
1517		-	program is approved in accordance wi th the provisions of 50
1518		-	section 620.3915; 51
1519		-	(13) "Sandbox program", the general regulatory sandbox 52
1520		-	program created in sections 620.3900 to 620.3930 that allows 53
1521		-	46
1522		-	a person to temporarily demonstrate an innovative offering 54
1523		-	of a product or service under a waiver or suspension of one 55
1524		-	or more state laws or regulations; 56
1525		-	(14) "Sandbox program director", the director of the 57
1526		-	regulatory relief office; 58
1527		-	(15) "Service", any commercial activity, duty, or 59
1528		-	labor performed for another person or business. "Service" 60
1529		-	shall not include a product or service when its use would 61
1530		-	impact rates, statutorily authorized service areas, or 62
1531		-	system safety or reliability of an electrical corporation or 63
1532		-	gas corporation, as defined in section 386.020, as 64
1533		-	determined by the public service commission, or of any rural 65
1534		-	electric cooperative organized or operating under the 66
1535		-	provisions of chapter 394, or to any corporation organized 67
1536		-	on a nonprofit or a cooperative basis as described in 68
1537		-	subsection 1 of section 394.200, or to a ny electrical 69
1538		-	corporation operating under a cooperative business plan as 70
1539		-	described in subsection 2 of section 393.110. 71
1540		-	620.3905. 1. There is hereby created within the 1
1541		-	department of economic development the "Regulatory Relief 2
1542		-	Office", which shall be administered by the sandbox program 3
1543		-	director. The sandbox program director shall report to the 4
1544		-	director of the department and may appoint staff, subject to 5
1545		-	the approval of the director of the department. 6
1546		-	2. The regulatory relief office shall: 7
1547		-	(1) Administer the sandbox program pursuant to 8
1548		-	sections 620.3900 to 620.3930; 9
1549		-	(2) Act as a liaison between private businesses and 10
1550		-	applicable agencies that regulate such businesses to 11
1551		-	identify state laws or regulations that c ould potentially be 12
1552		-	waived or suspended under the sandbox program; 13
1553		-	(3) Consult with each applicable agency; and 14
1554		-	47
1555		-	(4) Establish a program to enable a person to obtain 15
1556		-	monitored access to the market in the state along with legal 16
1557		-	protections for a product or service related to the laws or 17
1558		-	regulations that are being waived as a part of participation 18
1559		-	in the sandbox program, in order to demonstrate an 19
1560		-	innovative product or service without obtaining a license or 20
1561		-	other authorization that might oth erwise be required. 21
1562		-	3. The regulatory relief office shall: 22
1563		-	(1) Review state laws and regulations that may 23
1564		-	unnecessarily inhibit the creation and success of new 24
1565		-	companies or industries and provide recommendations to the 25
1566		-	governor and the gener al assembly on modifying or repealing 26
1567		-	such state laws and regulations; 27
1568		-	(2) Create a framework for analyzing the risk level of 28
1569		-	the health, safety, and financial well -being of consumers 29
1570		-	related to permanently removing or temporarily waiving laws 30
1571		-	and regulations inhibiting the creation or success of new 31
1572		-	and existing companies or industries; 32
1573		-	(3) Propose and enter into reciprocity agreements 33
1574		-	between states that use or are proposing to use similar 34
1575		-	regulatory sandbox programs as described in sec tions 35
1576		-	620.3900 to 620.3930, provided that such reciprocity 36
1577		-	agreement is supported by a two -thirds majority vote of the 37
1578		-	advisory committee and the regulatory relief office is 38
1579		-	directed by an order of the governor to pursue such 39
1580		-	reciprocity agreement; 40
1581		-	(4) Enter into agreements with or adopt best practices 41
1582		-	of corresponding federal regulatory agencies or other states 42
1583		-	that are administering similar programs; 43
1584		-	(5) Consult with businesses in the state about 44
1585		-	existing or potential proposals for the sandbox program; and 45
1586		-	(6) In accordance with the provisions of chapter 536 46
1587		-	and the provisions of sections 620.3900 to 620.3930, make 47
1588		-	48
1589		-	rules regarding the administration of the sandbox program, 48
1590		-	including making rules regarding the application proces s and 49
1591		-	the reporting requirements of sandbox participants. Any 50
1592		-	rule or portion of a rule, as that term is defined in 51
1593		-	section 536.010, that is created under the authority 52
1594		-	delegated in this section shall become effective only if it 53
1595		-	complies with and is subject to all of the provisions of 54
1596		-	chapter 536 and, if applicable, section 536.028. This 55
1597		-	section and chapter 536 are nonseverable, and if any of the 56
1598		-	powers vested with the general assembly pursuant to chapter 57
1599		-	536 to review, to delay the effective dat e, or to disapprove 58
1600		-	and annul a rule are subsequently held unconstitutional, 59
1601		-	then the grant of rulemaking authority and any rule proposed 60
1602		-	or adopted after August 28, 2022, shall be invalid and void. 61
1603		-	4. (1) The regulatory relief office shall creat e and 62
1604		-	maintain on the department's website a web page that invites 63
1605		-	residents and businesses in the state to make suggestions 64
1606		-	regarding laws and regulations that could be modified or 65
1607		-	eliminated to reduce the regulatory burden on residents and 66
1608		-	businesses in the state. 67
1609		-	(2) On at least a quarterly basis, the regulatory 68
1610		-	relief office shall compile the relevant suggestions from 69
1611		-	the web page created pursuant to subdivision (1) of this 70
1612		-	subsection and provide a written report to the governor and 71
1613		-	the general assembly. 72
1614		-	(3) In creating the report described in subdivision 73
1615		-	(2) of this subsection, the regulatory relief office: 74
1616		-	(a) Shall provide the identity of residents and 75
1617		-	businesses that make suggestions on the web page if those 76
1618		-	residents and businesses wish to comment publicly, and shall 77
1619		-	ensure that the private information of residents and 78
1620		-	businesses that make suggestions on the web page is not made 79
1621		-	public if they do not wish to comment publicly; and 80
1622		-	49
1623		-	(b) May evaluate the suggestions and provide analysis 81
1624		-	and suggestions regarding which state laws and regulations 82
1625		-	could be modified or eliminated to reduce the regulatory 83
1626		-	burden on residents and businesses in the state while still 84
1627		-	protecting consumers. 85
1628		-	5. (1) By October first of each year, the department 86
1629		-	shall submit an annual report to the governor, the general 87
1630		-	assembly, and to each state agency which shall include: 88
1631		-	(a) Information regarding each participant in the 89
1632		-	sandbox program, including industries represented by e ach 90
1633		-	participant and the anticipated or actual cost savings that 91
1634		-	each participant experienced; 92
1635		-	(b) The anticipated or actual benefit to consumers 93
1636		-	created by each demonstration in the sandbox program; 94
1637		-	(c) Recommendations regarding any laws or regulations 95
1638		-	that should be permanently modified or repealed; 96
1639		-	(d) Information regarding any health and safety events 97
1640		-	related to the activities of a participant in the sandbox 98
1641		-	program; and 99
1642		-	(e) Recommendations for changes to the sandbox program 100
1643		-	or other duties of the regulatory relief office. 101
1644		-	(2) The department may provide an interim report from 102
1645		-	the sandbox program director to the governor and general 103
1646		-	assembly on specific, time -sensitive issues for the 104
1647		-	functioning of the sandbox progra m, for the health and 105
1648		-	safety of consumers, for the success of participants in the 106
1649		-	program, and for other issues of urgent need. 107
1650		-	620.3910. 1. There is hereby created the "General 1
1651		-	Regulatory Sandbox Program Advisory Committee", to b e 2
1652		-	composed of the following members: 3
1653		-	(1) The director of the department of economic 4
1654		-	development or his or her designee; 5
1655		-	50
1656		-	(2) The director of the department of commerce and 6
1657		-	insurance or his or her designee; 7
1658		-	(3) The attorney general or hi s or her designee; 8
1659		-	(4) A member of the public to be appointed by the 9
1660		-	governor; 10
1661		-	(5) A member of the public or of an institution of 11
1662		-	higher education, to be appointed by the governor; 12
1663		-	(6) A member of an institution of higher education, to 13
1664		-	be appointed by the director of the department of higher 14
1665		-	education and workforce development; 15
1666		-	(7) Two members of the house of representatives, one 16
1667		-	to be appointed by the speaker of the house of 17
1668		-	representatives and one to be appointed by the minor ity 18
1669		-	leader of the house of representatives; 19
1670		-	(8) Two members of the senate, one to be appointed by 20
1671		-	the president pro tempore of the senate and one to be 21
1672		-	appointed by the minority leader of the senate; and 22
1673		-	(9) An employee of the office of publ ic counsel, to be 23
1674		-	appointed by the public counsel. 24
1675		-	2. (1) Advisory committee members shall be appointed 25
1676		-	to a four-year term. Members who cease holding elective 26
1677		-	office shall be replaced by the speaker or minority leader 27
1678		-	of the house of represent atives or the president pro tempore 28
1679		-	or minority floor leader of the senate, as applicable. The 29
1680		-	sandbox program director may establish the terms of initial 30
1681		-	appointments so that approximately half of the advisory 31
1682		-	committee is appointed every two years. 32
1683		-	(2) The sandbox program director shall select a chair 33
1684		-	of the advisory committee every two years in consultation 34
1685		-	with the members of the advisory committee. 35
1686		-	(3) No appointee of the governor, speaker of the house 36
1687		-	of representatives, or preside nt pro tempore of the senate 37
1688		-	may serve more than two complete terms. 38
1689		-	51
1690		-	3. A majority of the advisory committee shall 39
1691		-	constitute a quorum for the purpose of conducting business, 40
1692		-	and the action of a majority of a quorum shall constitute 41
1693		-	the action of the advisory committee, except as provided in 42
1694		-	subsection 4 of this section. 43
1695		-	4. The advisory committee may, at its own discretion, 44
1696		-	meet to override a decision of the regulatory relief office 45
1697		-	on the admission or denial of an applicant to the sandbo x 46
1698		-	program, provided such override is decided with a two -thirds 47
1699		-	majority vote of the members of the advisory committee, and 48
1700		-	further provided that such vote shall be taken within 49
1701		-	fifteen business days of the regulatory relief office's 50
1702		-	decision. 51
1703		-	5. The advisory committee shall advise and make 52
1704		-	recommendations to the regulatory relief office on whether 53
1705		-	to approve applications to the sandbox program pursuant to 54
1706		-	section 620.3915. 55
1707		-	6. The regulatory relief office shall provide 56
1708		-	administrative staff support for the advisory committee. 57
1709		-	7. The members of the advisory committee shall serve 58
1710		-	without compensation, but may be reimbursed for any actual 59
1711		-	and necessary expenses incurred in the performance of the 60
1712		-	advisory committee's official duties. 61
1713		-	8. Meetings of the advisory committee shall be 62
1714		-	considered public meetings for the purposes of chapter 610. 63
1715		-	However, a meeting of the committee shall be a closed 64
1716		-	meeting if the purpose of the meeting is to discuss an 65
1717		-	application for participation in the regulatory sandbox and 66
1718		-	failing to hold a closed meeting would reveal information 67
1719		-	that constitutes proprietary or confidential trade secrets. 68
1720		-	Upon approval by a majority vote by members of the advisory 69
1721		-	committee, the advisory committee shall be allowed to 70
1722		-	conduct remote meetings, and individual members shall be 71
1723		-	52
1724		-	allowed to attend meetings remotely. The advisory committee 72
1725		-	shall provide the public the ability to view any such remote 73
1726		-	meetings. 74
1727		-	620.3915. 1. An applicant for the sandbox program 1
1728		-	shall provide to the regulatory relief office an application 2
1729		-	in a form prescribed by the regulatory relief office that: 3
1730		-	(1) Confirms the applicant is subject to the 4
1731		-	jurisdiction of the state; 5
1732		-	(2) Confirms the applicant has established physical 6
1733		-	residence or a virtual location in the state from which the 7
1734		-	demonstration of an innovative offering will be developed 8
1735		-	and performed, and where all required records, documents, 9
1736		-	and data will be maintained; 10
1737		-	(3) Contains relevant personal and contact information 11
1738		-	for the applicant, including legal names, addresses, 12
1739		-	telephone numbers, email addresses, website addresses, and 13
1740		-	other information required by the regulatory relief office; 14
1741		-	(4) Discloses criminal convictions o f the applicant or 15
1742		-	other participating personnel, if any; and 16
1743		-	(5) Contains a description of the innovative offering 17
1744		-	to be demonstrated, including statements regarding: 18
1745		-	(a) How the innovative offering is subject to 19
1746		-	licensing, legal prohibitio n, or other authorization 20
1747		-	requirements outside of the sandbox program; 21
1748		-	(b) Each law or regulation that the applicant seeks to 22
1749		-	have waived or suspended while participating in the sandbox 23
1750		-	program; 24
1751		-	(c) How the innovative offering would benefit 25
1752		-	consumers; 26
1753		-	(d) How the innovative offering is different from 27
1754		-	other innovative offerings available in the state; 28
1755		-	(e) The risks that might exist for consumers who use 29
1756		-	or purchase the innovative offering; 30
1757		-	53
1758		-	(f) How participating in the sand box program would 31
1759		-	enable a successful demonstration of the innovative offering 32
1760		-	of an innovative product or service; 33
1761		-	(g) A description of the proposed demonstration plan, 34
1762		-	including estimated time periods for beginning and ending 35
1763		-	the demonstration; 36
1764		-	(h) Recognition that the applicant will be subject to 37
1765		-	all laws and regulations pertaining to the applicant's 38
1766		-	innovative offering after the conclusion of the 39
1767		-	demonstration; 40
1768		-	(i) How the applicant will end the demonstration and 41
1769		-	protect consumers if the demonstration fails; 42
1770		-	(j) A list of each applicable agency, if any, that the 43
1771		-	applicant knows regulates the applicant's business; and 44
1772		-	(k) Any other required information as determined by 45
1773		-	the regulatory relief office. 46
1774		-	2. An applicant shall remit to the regulatory relief 47
1775		-	office an application fee of three hundred dollars per 48
1776		-	application for each innovative offering. Such application 49
1777		-	fees shall be used by the regulatory relief office solely 50
1778		-	for the purpose of implementing the p rovisions of sections 51
1779		-	620.3900 to 620.3930. 52
1780		-	3. An applicant shall file a separate application for 53
1781		-	each innovative offering that the applicant wishes to 54
1782		-	demonstrate. 55
1783		-	4. An applicant for the sandbox program may contact 56
1784		-	the regulatory relief o ffice to request a consultation 57
1785		-	regarding the sandbox program before submitting an 58
1786		-	application. The regulatory relief office may provide 59
1787		-	assistance to an applicant in preparing an application for 60
1788		-	submission. 61
1789		-	5. (1) After an application is filed , the regulatory 62
1790		-	relief office shall: 63
1791		-	54
1792		-	(a) Consult with each applicable agency that regulates 64
1793		-	the applicant's business regarding whether more information 65
1794		-	is needed from the applicant; and 66
1795		-	(b) Seek additional information from the applicant 67
1796		-	that the regulatory relief office determines is necessary. 68
1797		-	(2) No later than fifteen business days after the day 69
1798		-	on which a completed application is received by the 70
1799		-	regulatory relief office, the regulatory relief office shall: 71
1800		-	(a) Review the application and refer the application 72
1801		-	to each applicable agency that regulates the applicant's 73
1802		-	business; and 74
1803		-	(b) Provide to the applicant: 75
1804		-	a. An acknowledgment of receipt of the application; and 76
1805		-	b. The identity and contact information of each 77
1806		-	applicable agency to which the application has been referred 78
1807		-	for review. 79
1808		-	(3) No later than forty-five days after the day on 80
1809		-	which an applicable agency receives a completed application 81
1810		-	for review, the applicable agency shall provide a written 82
1811		-	report to the sandbox program director with the applicable 83
1812		-	agency's findings. Such report shall: 84
1813		-	(a) Describe any identifiable, likely, and significant 85
1814		-	harm to the health, safety, or financial well -being of 86
1815		-	consumers that the relevant law or re gulation protects 87
1816		-	against; and 88
1817		-	(b) Make a recommendation to the regulatory relief 89
1818		-	office that the applicant either be admitted or denied 90
1819		-	entrance into the sandbox program. 91
1820		-	(4) An applicable agency may request an additional ten 92
1821		-	business days to deliver the written report required by 93
1822		-	subdivision (3) of this subsection by providing notice to 94
1823		-	the sandbox program director, which request shall 95
1824		-	automatically be granted. An applicable agency may request 96
1825		-	55
1826		-	only one extension per application. The sandbox program 97
1827		-	director may also provide an additional extension to the 98
1828		-	applicable agency for cause. 99
1829		-	(5) If an applicable agency recommends an applicant 100
1830		-	under this section be denied entrance into the sandbox 101
1831		-	program, the written report required by subdivision (3) of 102
1832		-	this subsection shall include a description of the reasons 103
1833		-	for such recommendation, including the reason a temporary 104
1834		-	waiver or suspension of the relevant laws or regulations 105
1835		-	would potentially significantly harm the health, safety, or 106
1836		-	financial well-being of consumers or the public and the 107
1837		-	assessed likelihood of such harm occurring. 108
1838		-	(6) If an applicable agency determines that the 109
1839		-	consumer's or public's health, safety, or financial well - 110
1840		-	being can be protected through less r estrictive means than 111
1841		-	the existing relevant laws or regulations, the applicable 112
1842		-	agency shall provide a recommendation of how that can be 113
1843		-	achieved. 114
1844		-	(7) If an applicable agency fails to deliver the 115
1845		-	written report required by subdivision (3) of this 116
1846		-	subsection, the sandbox program director shall provide a 117
1847		-	final notice to the applicable agency for delivery of the 118
1848		-	written report. If the report is not delivered within five 119
1849		-	days of such final notice, the sandbox program director 120
1850		-	shall assume that the applicable agency does not object to 121
1851		-	the temporary waiver or suspension of the relevant laws or 122
1852		-	regulations for an applicant seeking to participate in the 123
1853		-	sandbox program. 124
1854		-	6. (1) Notwithstanding any provision of this section 125
1855		-	to the contrary, an applicable agency may, by written notice 126
1856		-	to the regulatory relief office: 127
1857		-	(a) Reject an application, provided such rejection 128
1858		-	occurs within forty-five days after the day on which the 129
1859		-	56
1860		-	applicable agency receives a complete application for 130
1861		-	review, or within fifty days if an extension has been 131
1862		-	requested by the applicable agency, if the applicable agency 132
1863		-	determines, in the applicable agency's sole discretion, that 133
1864		-	the applicant's offering fails to comply with standards or 134
1865		-	specifications: 135
1866		-	a. Required by federal rule or regulation; or 136
1867		-	b. Previously approved for use by a federal agency; or 137
1868		-	(b) Reject an application preliminarily approved by 138
1869		-	the regulatory relief office, if the applicable agency: 139
1870		-	a. Recommends rejection of the application in the 140
1871		-	applicable agency's written report submitted pursuant to 141
1872		-	subdivision (3) of subsection 5 of this section; and 142
1873		-	b. Provides in the written report submitted pursuant 143
1874		-	to subdivision (3) of subsection 5 of this section a 144
1875		-	description of the applicable agency's reasons approval of 145
1876		-	the application would create a substantial risk of harm to 146
1877		-	the health or safety of the public, or create unreasonable 147
1878		-	expenses for taxpayers in the state. 148
1879		-	(2) If any applicable agency rejects an app lication on 149
1880		-	a nonpreliminary basis pursuant to subdivision (1) of this 150
1881		-	subsection, the regulatory relief office shall not approve 151
1882		-	the application. 152
1883		-	7. (1) The sandbox program director shall provide all 153
1884		-	applications and associated written reports to the advisory 154
1885		-	committee upon receiving a written report from an applicable 155
1886		-	agency. 156
1887		-	(2) The sandbox program director may call the advisory 157
1888		-	committee to meet as needed, but not less than once per 158
1889		-	quarter if applications are available for review. 159
1890		-	(3) After receiving and reviewing the application and 160
1891		-	each associated written report, the advisory committee shall 161
1892		-	provide to the sandbox program director the advisory 162
1893		-	57
1894		-	committee's recommendation as to whether the applicant 163
1895		-	should be admitted as a sandbox participant. 164
1896		-	(4) As part of the advisory committee's review of each 165
1897		-	report, the advisory committee shall use criteria used by 166
1898		-	applicable agencies to evaluate applications. 167
1899		-	8. The regulatory relief office shall consult with 168
1900		-	each applicable agency and the advisory committee before 169
1901		-	admitting an applicant into the sandbox program. Such 170
1902		-	consultation may include seeking information about whether: 171
1903		-	(1) The applicable agency has previously issued a 172
1904		-	license or other authorization to the applicant; and 173
1905		-	(2) The applicable agency has previously investigated, 174
1906		-	sanctioned, or pursued legal action against the applicant. 175
1907		-	9. In reviewing an application under this section, the 176
1908		-	regulatory relief office and applicable agencies shall 177
1909		-	consider whether: 178
1910		-	(1) A competitor to the applicant is or has been a 179
1911		-	sandbox participant and, if so, weigh that as a factor in 180
1912		-	favor of allowing the applicant to also become a sandbox 181
1913		-	participant; 182
1914		-	(2) The applicant's plan will adequately p rotect 183
1915		-	consumers from potential harm identified by an applicable 184
1916		-	agency in the applicable agency's written report; 185
1917		-	(3) The risk of harm to consumers is outweighed by the 186
1918		-	potential benefits to consumers from the applicant's 187
1919		-	participation in the sa ndbox program; and 188
1920		-	(4) Certain state laws or regulations that regulate an 189
1921		-	innovative offering should not be waived or suspended even 190
1922		-	if the applicant is approved as a sandbox participant, 191
1923		-	including applicable anti -fraud or disclosure provisions. 192
1924		-	10. An applicant shall become a sandbox participant if 193
1925		-	the regulatory relief office approves the application for 194
1926		-	the sandbox program and enters into a written agreement with 195
1927		-	58
1928		-	the applicant describing the specific laws and regulations 196
1929		-	that are waived or suspended as part of participation in the 197
1930		-	sandbox program. Notwithstanding any other provision of 198
1931		-	this section to the contrary, the regulatory relief office 199
1932		-	shall not enter into a written agreement with an applicant 200
1933		-	that exempts the applicant fro m any income, property, or 201
1934		-	sales tax liability unless such applicant otherwise 202
1935		-	qualifies for an exemption from such tax. 203
1936		-	11. (1) The sandbox program director may deny at his 204
1937		-	or her sole discretion any application submitted under this 205
1938		-	section for any reason, including if the sandbox program 206
1939		-	director determines that the preponderance of evidence 207
1940		-	demonstrates that suspending or waiving enforcement of a law 208
1941		-	or regulation would cause significant risk of harm to 209
1942		-	consumers or residents of the state. 210
1943		-	(2) If the sandbox program director denies an 211
1944		-	application submitted under this section, the regulatory 212
1945		-	relief office shall provide to the applicant a written 213
1946		-	description of the reasons for not allowing the applicant to 214
1947		-	become a sandbox participa nt. 215
1948		-	(3) The denial of an application submitted under this 216
1949		-	section shall not be subject to judicial or administrative 217
1950		-	review. 218
1951		-	(4) The acceptance or denial of an application 219
1952		-	submitted under this section may be overridden by an 220
1953		-	affirmative vote of a two-thirds majority of the advisory 221
1954		-	committee at the discretion of the advisory committee, 222
1955		-	provided such vote shall take place within fifteen business 223
1956		-	days of the sandbox program director's decision. 224
1957		-	Notwithstanding any other provision of this section to the 225
1958		-	contrary, the advisory committee shall not override a 226
1959		-	rejection made by an applicable agency. 227
1960		-	59
1961		-	(5) The sandbox program director shall deny an 228
1962		-	application for participation in the sandbox program if the 229
1963		-	applicant or any person who se eks to participate with the 230
1964		-	applicant in demonstrating an innovative offering has been 231
1965		-	convicted, entered into a plea of nolo contendere, or 232
1966		-	entered a plea of guilty or nolo contendere held in 233
1967		-	abeyance, for any crime involving significant theft, fraud, 234
1968		-	or dishonesty if the crime bears a significant relationship 235
1969		-	to the applicant's or other participant's ability to safely 236
1970		-	and competently participate in the sandbox program. 237
1971		-	12. When an applicant is approved for participation in 238
1972		-	the sandbox program, the sandbox program director may 239
1973		-	provide notice of the approval to competitors of the 240
1974		-	applicant and to the general public. 241
1975		-	13. Applications to participate in the sandbox program 242
1976		-	shall be considered public records for the purposes of 243
1977		-	chapter 610, provided, however, that any information 244
1978		-	contained in such applications that constitutes proprietary 245
1979		-	or confidential trade secrets shall not be subject to 246
1980		-	disclosure pursuant to chapter 610. 247
1981		-	620.3920. 1. If the regulatory relief office approves 1
1982		-	an application pursuant to section 620.3915, the sandbox 2
1983		-	participant shall have twenty -four months after the day on 3
1984		-	which the application was approved to demonstrate the 4
1985		-	innovative offering described in the sandbox participant's 5
1986		-	application. 6
1987		-	2. An innovative offering that is demonstrated within 7
1988		-	the sandbox program shall only be available to consumers who 8
1989		-	are residents of Missouri or of another state. No law or 9
1990		-	regulation shall be waived or suspended if waiving or 10
1991		-	suspending such law or regulation would prevent a consumer 11
1992		-	from seeking restitution in the event that the consumer is 12
1993		-	harmed. 13
1994		-	60
1995		-	3. Nothing in sections 620.3900 to 620.3930 shall 14
1996		-	restrict a sandbox participant that holds a license or other 15
1997		-	authorization in ano ther jurisdiction from acting in 16
1998		-	accordance with such license or other authorization in that 17
1999		-	jurisdiction. 18
2000		-	4. A sandbox participant shall be deemed to possess an 19
2001		-	appropriate license or other authorization under the laws of 20
2002		-	this state for the purp oses of any provision of federal law 21
2003		-	requiring licensure or other authorization by the state. 22
2004		-	5. (1) During the demonstration period, a sandbox 23
2005		-	participant shall not be subject to the enforcement of state 24
2006		-	laws or regulations identified in the wri tten agreement 25
2007		-	between the regulatory relief office and the sandbox 26
2008		-	participant. 27
2009		-	(2) A prosecutor shall not file or pursue charges 28
2010		-	pertaining to any action related to a law or regulation 29
2011		-	identified in the written agreement between the regulatory 30
2012		-	relief office and the sandbox participant that occurs during 31
2013		-	the demonstration period. 32
2014		-	(3) A state agency shall not file or pursue any 33
2015		-	punitive action against a sandbox participant, including a 34
2016		-	fine or license suspension or revocation, for the vi olation 35
2017		-	of a law or regulation that is identified as being waived or 36
2018		-	suspended in the written agreement between the regulatory 37
2019		-	relief office and the sandbox participant that occurs during 38
2020		-	the demonstration period. 39
2021		-	6. Notwithstanding any provision of this section to 40
2022		-	the contrary, a sandbox participant shall not have immunity 41
2023		-	related to any criminal offense committed during the sandbox 42
2024		-	participant's participation in the sandbox program. 43
2025		-	7. By written notice, the regulatory relief office may 44
2026		-	end a sandbox participant's participation in the sandbox 45
2027		-	program at any time and for any reason, including if the 46
2028		-	61
2029		-	sandbox program director determines that a sandbox 47
2030		-	participant is not operating in good faith to bring an 48
2031		-	innovative offering to market; provided, however, that the 49
2032		-	sandbox program director's decision may be overridden by an 50
2033		-	affirmative vote of a two -thirds majority of the members of 51
2034		-	the advisory committee. 52
2035		-	8. The regulatory relief office and regulatory relief 53
2036		-	office's employees shall not be liable for any business 54
2037		-	losses or the recouping of application expenses or other 55
2038		-	expenses related to the sandbox program, including for: 56
2039		-	(1) Denying an applicant's application to participate 57
2040		-	in the sandbox program for any reason; or 58
2041		-	(2) Ending a sandbox participant's participation in 59
2042		-	the sandbox program at any time and for any reason. 60
2043		-	620.3925. 1. Before demonstrating an innovative 1
2044		-	offering to a consumer, a sandbox participant shall disclose 2
2045		-	the following information to the consumer: 3
2046		-	(1) The name and contact information of the sandbox 4
2047		-	participant; 5
2048		-	(2) A statement that the innovative offering is 6
2049		-	authorized pursuant to the sandbox program and, if 7
2050		-	applicable, that the sandbox participant does not have a 8
2051		-	license or other authorization to provide an innovative 9
2052		-	offering under state laws that regulate offerings outside of 10
2053		-	the sandbox program; 11
2054		-	(3) A statement that specific laws and regulations 12
2055		-	have been waived for the sandbox participant f or the 13
2056		-	duration of its demonstration in the sandbox program, with a 14
2057		-	summary of such waived laws and regulations; 15
2058		-	(4) A statement that the innovative offering is 16
2059		-	undergoing testing and may not function as intended and may 17
2060		-	expose the consumer to ce rtain risks as identified by the 18
2061		-	applicable agency's written report; 19
2062		-	62
2063		-	(5) A statement that the provider of the innovative 20
2064		-	offering is not immune from civil liability for any losses 21
2065		-	or damages caused by the innovative offering; 22
2066		-	(6) A statement that the provider of the innovative 23
2067		-	offering is not immune from criminal prosecution for 24
2068		-	violations of state law or regulations that are not 25
2069		-	suspended or waived as allowed within the sandbox program; 26
2070		-	(7) A statement that the innovative offering i s a 27
2071		-	temporary demonstration that may be discontinued at the end 28
2072		-	of the demonstration period; 29
2073		-	(8) The expected end date of the demonstration period; 30
2074		-	and 31
2075		-	(9) A statement that a consumer may contact the 32
2076		-	regulatory relief office and file a comp laint regarding the 33
2077		-	innovative offering being demonstrated, providing the 34
2078		-	regulatory relief office's telephone number, email address, 35
2079		-	and website address where a complaint may be filed. 36
2080		-	2. The disclosures required by subsection 1 of this 37
2081		-	section shall be provided to a consumer in a clear and 38
2082		-	conspicuous form and, for an internet - or application-based 39
2083		-	innovative offering, a consumer shall acknowledge receipt of 40
2084		-	the disclosure before any transaction may be completed. 41
2085		-	3. The regulatory relie f office may require that a 42
2086		-	sandbox participant make additional disclosures to a 43
2087		-	consumer. 44
2088		-	620.3930. 1. At least forty-five days before the end 1
2089		-	of the twenty-four-month demonstration period, a sandbox 2
2090		-	participant shall: 3
2091		-	(1) Notify the regulatory relief office that the 4
2092		-	sandbox participant will exit the sandbox program and 5
2093		-	discontinue the sandbox participant's demonstration after 6
2094		-	the day on which the twenty -four-month demonstration period 7
2095		-	ends; or 8
	11	+	SectionA.Chapter620,RSMo,isamendedbyaddingtheretosevennewsections,to
	12	+	2beknownassections620.3900,620.3905,620.3910,620.3915,620.3920,620.3925,and
	13	+	3620.3930,toreadasfollows:
	14	+	620.3900.1.Sections620.3900to620.3930shallbeknownandmaybecitedas
	15	+	2the"RegulatorySandboxAct".
	16	+	3 2.Forthepurposesofsections620.3900to620.3930,thefollowingtermsshall
	17	+	4mean:
	18	+	5 (1)"Advisorycommittee",thegeneralregulatorysandboxprogramadvisory
	19	+	6committeecreatedinsection620.3910;
	20	+	7 (2)"Applicableagency",adepartmentoragencyofthestatethatbylaw
	21	+	8regulatesabusinessactivityandpersonsengagedinsuchbusinessactivity,includingthe
	22	+	9issuanceoflicensesorothertypesofauthorization,andwhichtheregulatoryreliefoffice
	23	+	10determineswouldotherwiseregulateasandboxparticipant.Aparticipantmayfall
	24	+	11undermultipleapplicableagenciesifmultipleagenciesregulatethebusinessactivity
	25	+	12thatissubjecttothesandboxprogramapplication."Applicableagency"shallnot
	26	+	13includethedivisionofprofessionalregistrationanditsboards,commissions,committees
	27	+	14andoffices;
	28	+	15 (3)"Applicant"or"sandboxapplicant",apersonorbusinessthatappliesto
	29	+	16participateinthesandboxprogram;
	30	+	EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
	31	+	intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 17 (4)"Consumer",apersonwhopurchasesorotherwiseentersintoatransaction
	32	+	18oragreementtoreceiveaproductorserviceofferedthroughthesandboxprogram
	33	+	19pursuanttoademonstrationbyaprogramparticipant;
	34	+	20 (5)"Demonstrate"or"demonstration",totemporarilyprovideanofferingofan
	35	+	21innovativeproductorserviceinaccordancewiththeprovisionsofthesandbox
	36	+	22program;
	37	+	23 (6)"Department",thedepartmentofeconomicdevelopment;
	38	+	24 (7)"Innovation",theuseorincorporationofanewidea,aneworemerging
	39	+	25technology,oranewuseofexistingtechnologytoaddressaproblem,provideabenefit,
	40	+	26orotherwiseofferaproduct,productionmethod,orservice;
	41	+	27 (8)"Innovativeoffering",anofferingofaproductorservicethatincludesan
	42	+	28innovation;
	43	+	29 (9)"Product",acommerciallydistributedgoodthatis:
	44	+	30 (a)Tangiblepersonalproperty;and
	45	+	31 (b)Theresultofaproductionprocess;
	46	+	32 (10)"Production",themethodorprocessofcreatingorobtainingagood,which
	47	+	33mayincludeassembling,breeding,capturing,collecting,extracting,fabricating,
	48	+	34farming,fishing,gathering,growing,harvesting,hunting,manufacturing,mining,
	49	+	35processing,raising,ortrappingagood;
	50	+	36 (11)"Regulatoryreliefoffice",theofficeresponsibleforadministeringthe
	51	+	37sandboxprogramwithinthedepartment;
	52	+	38 (12)"Sandboxparticipant"or"participant",apersonorbusinesswhose
	53	+	39applicationtoparticipateinthesandboxprogramisapprovedinaccordancewiththe
	54	+	40provisionsofsection620.3915;
	55	+	41 (13)"Sandboxprogram",thegeneralregulatorysandboxprogramcreatedin
	56	+	42sections620.3900to620.3930thatallowsapersontotemporarilydemonstratean
	57	+	43innovativeofferingofaproductorserviceunderawaiverorsuspensionofoneormore
	58	+	44statelawsorregulations;
	59	+	45 (14)"Sandboxprogramdirector",thedirectoroftheregulatoryreliefoffice;
	60	+	46 (15)"Service",anycommercialactivity,duty,orlaborperformedforanother
	61	+	47personorbusiness.
	62	+	620.3905.1.Thereisherebycreatedwithinthedepartmentofeconomic
	63	+	2developmentthe"RegulatoryReliefOffice",whichshallbeadministeredbythe
	64	+	3sandboxprogramdirector.Thesandboxprogramdirectorshallreporttothedirector
	65	+	4ofthedepartmentandmayappointstaff,subjecttotheapprovalofthedirectorofthe
	66	+	5department.
	67	+	6 2.Theregulatoryreliefofficeshall:
	68	+	HCSHB2587 2 7 (1)Administerthesandboxprogrampursuanttosections620.3900to620.3930;
	69	+	8 (2)Actasaliaisonbetweenprivatebusinessesandapplicableagenciesthat
	70	+	9regulatesuchbusinessestoidentifystatelawsorregulationsthatcouldpotentiallybe
	71	+	10waivedorsuspendedunderthesandboxprogram;
	72	+	11 (3)Consultwitheachapplicableagency;and
	73	+	12 (4)Establishaprogramtoenableapersontoobtainlegalprotectionsand
	74	+	13monitoredaccesstothemarketinthestatetodemonstrateaninnovativeproductor
	75	+	14servicewithoutobtainingalicenseorotherauthorizationthatmightotherwisebe
	76	+	15required.
	77	+	16 3.Theregulatoryreliefofficeshall:
	78	+	17 (1)Reviewstatelawsandregulationsthatmayunnecessarilyinhibitthecreation
	79	+	18andsuccessofnewcompaniesorindustriesandproviderecommendationstothe
	80	+	19governorandthegeneralassemblyonmodifyingorrepealingsuchstatelawsand
	81	+	20regulations;
	82	+	21 (2)Createaframeworkforanalyzingtherisklevelofthehealth,safety,and
	83	+	22financialwell-beingofconsumersrelatedtopermanentlyremovingortemporarily
	84	+	23waivinglawsandregulationsinhibitingthecreationorsuccessofnewandexisting
	85	+	24companiesorindustries;
	86	+	25 (3)Proposeandenterintoreciprocityagreementsbetweenstatesthatuseorare
	87	+	26proposingtousesimilarregulatorysandboxprogramsasdescribedinsections620.3900
	88	+	27to620.3930,providedthatsuchreciprocityagreementissupportedbyamajorityvoteof
	89	+	28theadvisorycommitteeandtheregulatoryreliefofficeisdirectedbyanorderofthe
	90	+	29governortopursuesuchreciprocityagreement;
	91	+	30 (4)Enterintoagreementswithoradoptbestpracticesofcorrespondingfederal
	92	+	31regulatoryagenciesorotherstatesthatareadministeringsimilarprograms;
	93	+	32 (5)Consultwithbusinessesinthestateaboutexistingorpotentialproposalsfor
	94	+	33thesandboxprogram;and
	95	+	34 (6)Inaccordancewiththeprovisionsofchapter536andtheprovisionsof
	96	+	35sections620.3900to620.3930,makerulesregardingtheadministrationofthesandbox
	97	+	36program,includingmakingrulesregardingtheapplicationprocessandthereporting
	98	+	37requirementsofsandboxparticipants.Anyruleorportionofarule,asthattermis
	99	+	38definedinsection536.010,thatiscreatedundertheauthoritydelegatedinthissection
	100	+	39shallbecomeeffectiveonlyifitcomplieswithandissubjecttoalloftheprovisionsof
	101	+	40chapter536and,ifapplicable,section536.028.Thissectionandchapter536are
	102	+	41nonseverable,andifanyofthepowersvestedwiththegeneralassemblypursuantto
	103	+	42chapter536toreview,todelaytheeffectivedate,ortodisapproveandannularuleare
	104	+	HCSHB2587 3 43subsequentlyheldunconstitutional,thenthegrantofrulemakingauthorityandanyrule
	105	+	44proposedoradoptedafterAugust28,2022,shallbeinvalidandvoid.
	106	+	45 4.(1)Theregulatoryreliefofficeshallcreateandmaintainonthedepartment's
	107	+	46websiteawebpagethatinvitesresidentsandbusinessesinthestatetomakesuggestions
	108	+	47regardinglawsandregulationsthatcouldbemodifiedoreliminatedtoreducethe
	109	+	48regulatoryburdenonresidentsandbusinessesinthestate.
	110	+	49 (2)Onatleastaquarterlybasis,theregulatoryreliefofficeshallcompilethe
	111	+	50relevantsuggestionsfromthewebpagecreatedpursuanttosubdivision(1)ofthis
	112	+	51subsectionandprovideawrittenreporttothegovernorandthegeneralassembly.
	113	+	52 (3)Increatingthereportdescribedinsubdivision(2)ofthissubsection,the
	114	+	53regulatoryreliefoffice:
	115	+	54 (a)Shallprovidetheidentityofresidentsandbusinessesthatmakesuggestions
	116	+	55onthewebpageifthoseresidentsandbusinesseswishtocommentpublicly,andshall
	117	+	56ensurethattheprivateinformationofresidentsandbusinessesthatmakesuggestionson
	118	+	57thewebpageisnotmadepubliciftheydonotwishtocommentpublicly;and
	119	+	58 (b)Mayevaluatethesuggestionsandprovideanalysisandsuggestionsregarding
	120	+	59whichstatelawsandregulationscouldbemodifiedoreliminatedtoreducethe
	121	+	60regulatoryburdenonresidentsandbusinessesinthestatewhilestillprotecting
	122	+	61consumers.
	123	+	62 5.(1)ByOctoberfirstofeachyear,thedepartmentshallsubmitanannual
	124	+	63reporttothegovernorandthegeneralassembly,whichshallinclude:
	125	+	64 (a)Informationregardingeachparticipantinthesandboxprogram,including
	126	+	65industriesrepresentedbyeachparticipantandtheanticipatedoractualcostsavings
	127	+	66thateachparticipantexperienced;
	128	+	67 (b)Theanticipatedoractualbenefittoconsumerscreatedbyeach
	129	+	68demonstrationinthesandboxprogram;
	130	+	69 (c)Recommendationsregardinganylawsorregulationsthatshouldbe
	131	+	70permanentlymodifiedorrepealed;
	132	+	71 (d)Informationregardinganyhealthandsafetyeventsrelatedtotheactivitiesof
	133	+	72aparticipantinthesandboxprogram;and
	134	+	73 (e)Recommendationsforchangestothesandboxprogramorotherdutiesofthe
	135	+	74regulatoryreliefoffice.
	136	+	75 (2)Thedepartmentmayprovideaninterimreportfromthesandboxprogram
	137	+	76directortothegovernorandgeneralassemblyonspecific,time-sensitiveissuesforthe
	138	+	77functioningofthesandboxprogram,forthehealthandsafetyofconsumers,forthe
	139	+	78successofparticipantsintheprogram,andforotherissuesofurgentneed.
	140	+	HCSHB2587 4 620.3910.1.Thereisherebycreatedthe"GeneralRegulatorySandbox
	141	+	2ProgramAdvisoryCommittee",tobecomposedofthefollowingmembers:
	142	+	3 (1)Thedirectorofthedepartmentofeconomicdevelopment;
	143	+	4 (2)Thedirectorofthedepartmentofcommerceandinsurance;
	144	+	5 (3)Theattorneygeneralorhisorherdesignee;
	145	+	6 (4)Amemberofthepublicorofaninstitutionofhighereducation,tobe
	146	+	7appointedbythegovernor;
	147	+	8 (5)Amemberofthepublicorofaninstitutionofhighereducation,tobe
	148	+	9appointedbythespeakerofthehouseofrepresentatives;
	149	+	10 (6)Amemberofthepublicorofaninstitutionofhighereducation,tobe
	150	+	11appointedbythepresidentprotemporeofthesenate;
	151	+	12 (7)Onememberofthehouseofrepresentatives,tobeappointedbythespeaker
	152	+	13ofthehouseofrepresentatives;and
	153	+	14 (8)Onememberofthesenate,tobeappointedbythepresidentprotemporeof
	154	+	15thesenate.
	155	+	16 2.(1)Advisorycommitteemembersshallbeappointedtoafour-yearterm.
	156	+	17Memberswhoceaseholdingelectiveofficeshallbereplacedbythespeakerofthehouse
	157	+	18ofrepresentativesorthepresidentprotemporeofthesenate,asapplicable.The
	158	+	19sandboxprogramdirectormayestablishthetermsofinitialappointmentssothat
	159	+	20approximatelyhalfoftheadvisorycommitteeisappointedeverytwoyears.
	160	+	21 (2)Thesandboxprogramdirectorshallselectachairoftheadvisorycommittee
	161	+	22everytwoyears.
	162	+	23 (3)Noappointeeofthegovernor,speakerofthehouseofrepresentatives,or
	163	+	24presidentprotemporeofthesenatemayservemorethantwocompleteterms.
	164	+	25 3.Amajorityoftheadvisorycommitteeshallconstituteaquorumforthe
	165	+	26purposeofconductingbusiness,andtheactionofamajorityofaquorumshall
	166	+	27constitutetheactionoftheadvisorycommittee,exceptasprovidedinsubsection4of
	167	+	28thissection.
	168	+	29 4.Theadvisorycommitteemay,atitsowndiscretion,meettooverrideadecision
	169	+	30oftheregulatoryreliefofficeontheadmissionordenialofanapplicanttothesandbox
	170	+	31program,providedsuchoverrideisdecidedwithamajorityvoteofthemembersofthe
	171	+	32advisorycommittee,andfurtherprovidedthatsuchvoteshallbetakenwithinten
	172	+	33businessdaysoftheregulatoryreliefoffice'sdecision.
	173	+	34 5.Theadvisorycommitteeshalladviseandmakerecommendationstothe
	174	+	35regulatoryreliefofficeonwhethertoapproveapplicationstothesandboxprogram
	175	+	36pursuanttosection620.3915.
	176	+	HCSHB2587 5 37 6.Theregulatoryreliefofficeshallprovideadministrativestaffsupportforthe
	177	+	38advisorycommittee.
	178	+	39 7.Themembersoftheadvisorycommitteeshallservewithoutcompensation,
	179	+	40butmaybereimbursedforanyactualandnecessaryexpensesincurredinthe
	180	+	41performanceoftheadvisorycommittee'sofficialduties.
	181	+	42 8.Meetingsoftheadvisorycommitteeshallbeconsideredpublicmeetingsfor
	182	+	43thepurposesofchapter610.However,ameetingofthecommitteeshallbeaclosed
	183	+	44meetingifthepurposeofthemeetingistodiscussanapplicationforparticipationinthe
	184	+	45regulatorysandboxandfailingtoholdaclosedmeetingwouldrevealinformationthat
	185	+	46constitutesproprietaryorconfidentialtradesecrets.
	186	+	620.3915.1.Anapplicantforthesandboxprogramshallprovidetothe
	187	+	2regulatoryreliefofficeanapplicationinaformprescribedbytheregulatoryreliefoffice
	188	+	3that:
	189	+	4 (1)Confirmstheapplicantissubjecttothejurisdictionofthestate;
	190	+	5 (2)Confirmstheapplicanthasestablishedphysicalresidenceoravirtual
	191	+	6locationinthestatefromwhichthedemonstrationofaninnovativeofferingwillbe
	192	+	7developedandperformed,andwhereallrequiredrecords,documents,anddatawillbe
	193	+	8maintained;
	194	+	9 (3)Containsrelevantpersonalandcontactinformationfortheapplicant,
	195	+	10includinglegalnames,addresses,telephonenumbers,emailaddresses,website
	196	+	11addresses,andotherinformationrequiredbytheregulatoryreliefoffice;
	197	+	12 (4)Disclosescriminalconvictionsoftheapplicantorotherparticipating
	198	+	13personnel,ifany;and
	199	+	14 (5)Containsadescriptionoftheinnovativeofferingtobedemonstrated,
	200	+	15includingstatementsregarding:
	201	+	16 (a)Howtheinnovativeofferingissubjecttolicensing,legalprohibition,orother
	202	+	17authorizationrequirementsoutsideofthesandboxprogram;
	203	+	18 (b)Eachlaworregulationthattheapplicantseekstohavewaivedorsuspended
	204	+	19whileparticipatinginthesandboxprogram;
	205	+	20 (c)Howtheinnovativeofferingwouldbenefitconsumers;
	206	+	21 (d)Howtheinnovativeofferingisdifferentfromotherinnovativeofferings
	207	+	22availableinthestate;
	208	+	23 (e)Therisksthatmightexistforconsumerswhouseorpurchasetheinnovative
	209	+	24offering;
	210	+	25 (f)Howparticipatinginthesandboxprogramwouldenableasuccessful
	211	+	26demonstrationoftheinnovativeofferingofaninnovativeproductorservice;
	212	+	HCSHB2587 6 27 (g)Adescriptionoftheproposeddemonstrationplan,includingestimatedtime
	213	+	28periodsforbeginningandendingthedemonstration;
	214	+	29 (h)Recognitionthattheapplicantwillbesubjecttoalllawsandregulations
	215	+	30pertainingtotheapplicant'sinnovativeofferingaftertheconclusionofthe
	216	+	31demonstration;
	217	+	32 (i)Howtheapplicantwillendthedemonstrationandprotectconsumersifthe
	218	+	33demonstrationfails;
	219	+	34 (j)Alistofeachapplicableagency,ifany,thattheapplicantknowsregulatesthe
	220	+	35applicant'sbusiness;and
	221	+	36 (k)Anyotherrequiredinformationasdeterminedbytheregulatoryreliefoffice.
	222	+	37 2.Anapplicantshallremittotheregulatoryreliefofficeanapplicationfeeof
	223	+	38threehundreddollarsperapplicationforeachinnovativeoffering.
	224	+	39 3.Anapplicantshallfileaseparateapplicationforeachinnovativeofferingthat
	225	+	40theapplicantwishestodemonstrate.
	226	+	41 4.Anapplicantforthesandboxprogrammaycontacttheregulatoryreliefoffice
	227	+	42torequestaconsultationregardingthesandboxprogrambeforesubmittingan
	228	+	43application.Theregulatoryreliefofficemayprovideassistancetoanapplicantin
	229	+	44preparinganapplicationforsubmission.
	230	+	45 5.(1)Afteranapplicationisfiled,theregulatoryreliefofficeshall:
	231	+	46 (a)Consultwitheachapplicableagencythatregulatestheapplicant'sbusiness
	232	+	47regardingwhethermoreinformationisneededfromtheapplicant;and
	233	+	48 (b)Seekadditionalinformationfromtheapplicantthattheregulatoryrelief
	234	+	49officedeterminesisnecessary.
	235	+	50 (2)Nolaterthanfivebusinessdaysafterthedayonwhichacompleted
	236	+	51applicationisreceivedbytheregulatoryreliefoffice,theregulatoryreliefofficeshall:
	237	+	52 (a)Reviewtheapplicationandrefertheapplicationtoeachapplicableagency
	238	+	53thatregulatestheapplicant'sbusiness;and
	239	+	54 (b)Providetotheapplicant:
	240	+	55 a.Anacknowledgmentofreceiptoftheapplication;and
	241	+	56 b.Theidentityandcontactinformationofeachapplicableagencytowhichthe
	242	+	57applicationhasbeenreferredforreview.
	243	+	58 (3)Nolaterthanthirtydaysafterthedayonwhichanapplicableagency
	244	+	59receivesacompletedapplicationforreview,theapplicableagencyshallprovidea
	245	+	60writtenreporttothesandboxprogramdirectorwiththeapplicableagency'sfindings.
	246	+	61Suchreportshall:
	247	+	HCSHB2587 7 62 (a)Describeanyidentifiable,likely,andsignificantharmtothehealth,safety,or
	248	+	63financialwell-beingofconsumersthattherelevantlaworregulationprotectsagainst;
	249	+	64and
	250	+	65 (b)Makearecommendationtotheregulatoryreliefofficethattheapplicant
	251	+	66eitherbeadmittedordeniedentranceintothesandboxprogram.
	252	+	67 (4)Anapplicableagencymayrequestanadditionalfivebusinessdaystodeliver
	253	+	68thewrittenreportrequiredbysubdivision(3)ofthissubsectionbyprovidingnoticeto
	254	+	69thesandboxprogramdirector,whichrequestshallautomaticallybegranted.An
	255	+	70applicableagencymayrequestonlyoneextensionperapplication.
	256	+	71 (5)Ifanapplicableagencyrecommendsanapplicantunderthissectionbe
	257	+	72deniedentranceintothesandboxprogram,thewrittenreportrequiredbysubdivision
	258	+	73(3)ofthissubsectionshallincludeadescriptionofthereasonsforsuchrecommendation,
	259	+	74includingthereasonatemporarywaiverorsuspensionoftherelevantlawsor
	260	+	75regulationswouldpotentiallysignificantlyharmthehealth,safety,orfinancialwell-
	261	+	76beingofconsumersorthepublicandtheassessedlikelihoodofsuchharmoccurring.
	262	+	77 (6)Ifanapplicableagencydeterminesthattheconsumer'sorpublic'shealth,
	263	+	78safety,orfinancialwell-beingcanbeprotectedthroughlessrestrictivemeansthanthe
	264	+	79existingrelevantlawsorregulations,theapplicableagencyshallprovidea
	265	+	80recommendationofhowthatcanbeachieved.
	266	+	81 (7)Ifanapplicableagencyfailstodeliverthewrittenreportrequiredby
	267	+	82subdivision(3)ofthissubsection,thesandboxprogramdirectorshallassumethatthe
	268	+	83applicableagencydoesnotobjecttothetemporarywaiverorsuspensionoftherelevant
	269	+	84lawsorregulationsforanapplicantseekingtoparticipateinthesandboxprogram.
	270	+	85 6.(1)Notwithstandinganyprovisionofthissectiontothecontrary,an
	271	+	86applicableagencymay,bywrittennoticetotheregulatoryreliefoffice:
	272	+	87 (a)Rejectanapplication,providedsuchrejectionoccurswithinthirtydaysafter
	273	+	88thedayonwhichtheapplicableagencyreceivesacompleteapplicationforreview,or
	274	+	89withinthirty-fivedaysifanextensionhasbeenrequestedbytheapplicableagency,ifthe
	275	+	90applicableagencydetermines,intheapplicableagency'ssolediscretion,thatthe
	276	+	91applicant'sofferingfailstocomplywithstandardsorspecifications:
	277	+	92 a.Requiredbyfederalruleorregulation;or
	278	+	93 b.Previouslyapprovedforusebyafederalagency;or
	279	+	94 (b)Rejectanapplicationpreliminarilyapprovedbytheregulatoryreliefoffice,
	280	+	95iftheapplicableagency:
	281	+	96 a.Recommendsrejectionoftheapplicationintheapplicableagency'swritten
	282	+	97reportsubmittedpursuanttosubdivision(3)ofsubsection5ofthissection;and
	283	+	HCSHB2587 8 98 b.Providesinthewrittenreportsubmittedpursuanttosubdivision(3)of
	284	+	99subsection5ofthissectionadescriptionoftheapplicableagency'sreasonsapprovalof
	285	+	100theapplicationwouldcreateasubstantialriskofharmtothehealthorsafetyofthe
	286	+	101public,orcreateunreasonableexpensesfortaxpayersinthestate.
	287	+	102 (2)Ifanyapplicableagencyrejectsanapplicationonanonpreliminarybasis
	288	+	103pursuanttosubdivision(1)ofthissubsection,theregulatoryreliefofficeshallnot
	289	+	104approvetheapplication.
	290	+	105 7.(1)Thesandboxprogramdirectorshallprovideallapplicationsand
	291	+	106associatedwrittenreportstotheadvisorycommitteeuponreceivingawrittenreport
	292	+	107fromanapplicableagency.
	293	+	108 (2)Thesandboxprogramdirectormaycalltheadvisorycommitteetomeetas
	294	+	109needed,butnotlessthanonceperquarterifapplicationsareavailableforreview.
	295	+	110 (3)Afterreceivingandreviewingtheapplicationandeachassociatedwritten
	296	+	111report,theadvisorycommitteeshallprovidetothesandboxprogramdirectorthe
	297	+	112advisorycommittee'srecommendationastowhethertheapplicantshouldbeadmitted
	298	+	113asasandboxparticipant.
	299	+	114 (4)Aspartoftheadvisorycommittee'sreviewofeachreport,theadvisory
	300	+	115committeeshallusecriteriausedbyapplicableagenciestoevaluateapplications.
	301	+	116 8.Theregulatoryreliefofficeshallconsultwitheachapplicableagencyandthe
	302	+	117advisorycommitteebeforeadmittinganapplicantintothesandboxprogram.Such
	303	+	118consultationmayincludeseekinginformationaboutwhether:
	304	+	119 (1)Theapplicableagencyhaspreviouslyissuedalicenseorotherauthorization
	305	+	120totheapplicant;and
	306	+	121 (2)Theapplicableagencyhaspreviouslyinvestigated,sanctioned,orpursued
	307	+	122legalactionagainsttheapplicant.
	308	+	123 9.Inreviewinganapplicationunderthissection,theregulatoryreliefofficeand
	309	+	124applicableagenciesshallconsiderwhether:
	310	+	125 (1)Acompetitortotheapplicantisorhasbeenasandboxparticipantand,ifso,
	311	+	126weighthatasafactorinfavorofallowingtheapplicanttoalsobecomeasandbox
	312	+	127participant;
	313	+	128 (2)Theapplicant'splanwilladequatelyprotectconsumersfrompotentialharm
	314	+	129identifiedbyanapplicableagencyintheapplicableagency'swrittenreport;
	315	+	130 (3)Theriskofharmtoconsumersisoutweighedbythepotentialbenefitsto
	316	+	131consumersfromtheapplicant'sparticipationinthesandboxprogram;and
	317	+	132 (4)Certainstatelawsorregulationsthatregulateaninnovativeofferingshould
	318	+	133notbewaivedorsuspendedeveniftheapplicantisapprovedasasandboxparticipant,
	319	+	134includingapplicableanti-fraudordisclosureprovisions.
	320	+	HCSHB2587 9 135 10.Anapplicantshallbecomeasandboxparticipantiftheregulatoryrelief
	321	+	136officeapprovestheapplicationforthesandboxprogramandentersintoawritten
	322	+	137agreementwiththeapplicantdescribingthespecificlawsandregulationsthatare
	323	+	138waivedorsuspendedaspartofparticipationinthesandboxprogram.Notwithstanding
	324	+	139anyotherprovisionofthissectiontothecontrary,theregulatoryreliefofficeshallnot
	325	+	140enterintoawrittenagreementwithanapplicantthatexemptstheapplicantfromany
	326	+	141income,property,orsalestaxliabilityunlesssuchapplicantotherwisequalifiesforan
	327	+	142exemptionfromsuchtax.
	328	+	143 11.(1)Thesandboxprogramdirectormaydenyathisorhersolediscretionany
	329	+	144applicationsubmittedunderthissectionforanyreason,includingifthesandbox
	330	+	145programdirectordeterminesthatthepreponderanceofevidencedemonstratesthat
	331	+	146suspendingorwaivingenforcementofalaworregulationwouldcausesignificantriskof
	332	+	147harmtoconsumersorresidentsofthestate.
	333	+	148 (2)Ifthesandboxprogramdirectordeniesanapplicationsubmittedunderthis
	334	+	149section,theregulatoryreliefofficeshallprovidetotheapplicantawrittendescriptionof
	335	+	150thereasonsfornotallowingtheapplicanttobecomeasandboxparticipant.
	336	+	151 (3)Thedenialofanapplicationsubmittedunderthissectionshallnotbesubject
	337	+	152tojudicialoradministrativereview.
	338	+	153 (4)Theacceptanceordenialofanapplicationsubmittedunderthissectionmay
	339	+	154beoverriddenbyanaffirmativevoteofamajorityoftheadvisorycommitteeatthe
	340	+	155discretionoftheadvisorycommittee,providedsuchvoteshalltakeplacewithinten
	341	+	156businessdaysofthesandboxprogramdirector'sdecision.
	342	+	157 (5)Thesandboxprogramdirectorshalldenyanapplicationforparticipationin
	343	+	158thesandboxprogramiftheapplicantoranypersonwhoseekstoparticipatewiththe
	344	+	159applicantindemonstratinganinnovativeofferinghasbeenconvicted,enteredintoa
	345	+	160pleaofnolocontendere,orenteredapleaofguiltyornolocontendereheldinabeyance,
	346	+	161foranycrimeinvolvingsignificanttheft,fraud,ordishonestyifthecrimebearsa
	347	+	162significantrelationshiptotheapplicant'sorotherparticipant'sabilitytosafelyand
	348	+	163competentlyparticipateinthesandboxprogram.
	349	+	164 12.Whenanapplicantisapprovedforparticipationinthesandboxprogram,
	350	+	165thesandboxprogramdirectormayprovidenoticeoftheapprovaltocompetitorsofthe
	351	+	166applicantandtothegeneralpublic.
	352	+	167 13.Applicationstoparticipateinthesandboxprogramshallbeconsidered
	353	+	168publicrecordsforthepurposesofchapter610,provided,however,thatanyinformation
	354	+	169containedinsuchapplicationsthatconstitutesproprietaryorconfidentialtradesecrets
	355	+	170shallnotbesubjecttodisclosurepursuanttochapter610.
	356	+	HCSHB2587 10 620.3920.1.Iftheregulatoryreliefofficeapprovesanapplicationpursuantto
	357	+	2section620.3915,thesandboxparticipantshallhavetwenty-fourmonthsaftertheday
	358	+	3onwhichtheapplicationwasapprovedtodemonstratetheinnovativeofferingdescribed
	359	+	4inthesandboxparticipant'sapplication.
	360	+	5 2.Aninnovativeofferingthatisdemonstratedwithinthesandboxprogramshall
	361	+	6onlybeavailabletoconsumerswhoareresidentsofthestate.Nolaworregulationshall
	362	+	7bewaivedorsuspendedifwaivingorsuspendingsuchlaworregulationwouldpreventa
	363	+	8consumerfromseekingrestitutionintheeventthattheconsumerisharmed.
	364	+	9 3.Nothinginsections620.3900to620.3930shallrestrictasandboxparticipant
	365	+	10thatholdsalicenseorotherauthorizationinanotherjurisdictionfromactingin
	366	+	11accordancewithsuchlicenseorotherauthorizationinthatjurisdiction.
	367	+	12 4.Asandboxparticipantshallbedeemedtopossessanappropriatelicenseor
	368	+	13otherauthorizationunderthelawsofthisstateforthepurposesofanyprovisionof
	369	+	14federallawrequiringlicensureorotherauthorizationbythestate.
	370	+	15 5.(1)Duringthedemonstrationperiod,asandboxparticipantshallnotbe
	371	+	16subjecttotheenforcementofstatelawsorregulationsidentifiedinthewritten
	372	+	17agreementbetweentheregulatoryreliefofficeandthesandboxparticipant.
	373	+	18 (2)Aprosecutorshallnotfileorpursuechargespertainingtoanyactionrelated
	374	+	19toalaworregulationidentifiedinthewrittenagreementbetweentheregulatoryrelief
	375	+	20officeandthesandboxparticipantthatoccursduringthedemonstrationperiod.
	376	+	21 (3)Astateagencyshallnotfileorpursueanypunitiveactionagainstasandbox
	377	+	22participant,includingafineorlicensesuspensionorrevocation,fortheviolationofa
	378	+	23laworregulationthatisidentifiedasbeingwaivedorsuspendedinthewritten
	379	+	24agreementbetweentheregulatoryreliefofficeandthesandboxparticipantthatoccurs
	380	+	25duringthedemonstrationperiod.
	381	+	26 6.Notwithstandinganyprovisionofthissectiontothecontrary,asandbox
	382	+	27participantshallnothaveimmunityrelatedtoanycriminaloffensecommittedduring
	383	+	28thesandboxparticipant'sparticipationinthesandboxprogram.
	384	+	29 7.Bywrittennotice,theregulatoryreliefofficemayendasandboxparticipant's
	385	+	30participationinthesandboxprogramatanytimeandforanyreason,includingifthe
	386	+	31sandboxprogramdirectordeterminesthatasandboxparticipantisnotoperatingin
	387	+	32goodfaithtobringaninnovativeofferingtomarket;provided,however,thatthe
	388	+	33sandboxprogramdirector'sdecisionmaybeoverriddenbyanaffirmativevoteofa
	389	+	34majorityofthemembersoftheadvisorycommittee.
	390	+	35 8.Theregulatoryreliefofficeandregulatoryreliefoffice'semployeesshallnot
	391	+	36beliableforanybusinesslossesortherecoupingofapplicationexpensesorother
	392	+	37expensesrelatedtothesandboxprogram,includingfor:
	393	+	HCSHB2587 11 38 (1)Denyinganapplicant'sapplicationtoparticipateinthesandboxprogramfor
	394	+	39anyreason;or
	395	+	40 (2)Endingasandboxparticipant'sparticipationinthesandboxprogramatany
	396	+	41timeandforanyreason.
	397	+	620.3925.1.Beforedemonstratinganinnovativeofferingtoaconsumer,a
	398	+	2sandboxparticipantshalldisclosethefollowinginformationtotheconsumer:
	399	+	3 (1)Thenameandcontactinformationofthesandboxparticipant;
	400	+	4 (2)Astatementthattheinnovativeofferingisauthorizedpursuanttothe
	401	+	5sandboxprogramand,ifapplicable,thatthesandboxparticipantdoesnothavealicense
	402	+	6orotherauthorizationtoprovideaninnovativeofferingunderstatelawsthatregulate
	403	+	7offeringsoutsideofthesandboxprogram;
	404	+	8 (3)Astatementthatspecificlawsandregulationshavebeenwaivedforthe
	405	+	9sandboxparticipantforthedurationofitsdemonstrationinthesandboxprogram,with
	406	+	10asummaryofsuchwaivedlawsandregulations;
	407	+	11 (4)Astatementthattheinnovativeofferingisundergoingtestingandmaynot
	408	+	12functionasintendedandmayexposetheconsumertocertainrisksasidentifiedbythe
	409	+	13applicableagency'swrittenreport;
	410	+	14 (5)Astatementthattheprovideroftheinnovativeofferingisnotimmunefrom
	411	+	15civilliabilityforanylossesordamagescausedbytheinnovativeoffering;
	412	+	16 (6)Astatementthattheprovideroftheinnovativeofferingisnotimmunefrom
	413	+	17criminalprosecutionforviolationsofstatelaworregulationsthatarenotsuspendedor
	414	+	18waivedasallowedwithinthesandboxprogram;
	415	+	19 (7)Astatementthattheinnovativeofferingisatemporarydemonstrationthat
	416	+	20maybediscontinuedattheendofthedemonstrationperiod;
	417	+	21 (8)Theexpectedenddateofthedemonstrationperiod;and
	418	+	22 (9)Astatementthataconsumermaycontacttheregulatoryreliefofficeandfile
	419	+	23acomplaintregardingtheinnovativeofferingbeingdemonstrated,providingthe
	420	+	24regulatoryreliefoffice'stelephonenumber,emailaddress,andwebsiteaddresswherea
	421	+	25complaintmaybefiled.
	422	+	26 2.Thedisclosuresrequiredbysubsection1ofthissectionshallbeprovidedtoa
	423	+	27consumerinaclearandconspicuousformand,foraninternet-orapplication-based
	424	+	28innovativeoffering,aconsumershallacknowledgereceiptofthedisclosurebeforeany
	425	+	29transactionmaybecompleted.
	426	+	30 3.Theregulatoryreliefofficemayrequirethatasandboxparticipantmake
	427	+	31additionaldisclosurestoaconsumer.
	428	+	620.3930.1.Atleastthirtydaysbeforetheendofthetwenty-four-month
	429	+	2demonstrationperiod,asandboxparticipantshall:
	430	+	HCSHB2587 12 3 (1)Notifytheregulatoryreliefofficethatthesandboxparticipantwillexitthe
	431	+	4sandboxprogramanddiscontinuethesandboxparticipant'sdemonstrationafterthe
	432	+	5dayonwhichthetwenty-four-monthdemonstrationperiodends;or
	433	+	6 (2)Seekanextensionpursuanttosubsection4ofthissection.
	434	+	7 2.Iftheregulatoryreliefofficedoesnotreceivenotificationasrequiredby
	435	+	8subsection1ofthissection,thedemonstrationperiodshallendattheendofthetwenty-
	436	+	9four-monthdemonstrationperiod.
	437	+	10 3.Ifademonstrationincludesaninnovativeofferingthatrequiresongoing
	438	+	11servicesordutiesbeyondthetwenty-four-monthdemonstrationperiod,thesandbox
	439	+	12participantmaycontinuetodemonstratetheinnovativeofferingbutshallbesubjectto
	440	+	13enforcementofthelawsorregulationsthatwerewaivedorsuspendedaspartofthe
	441	+	14sandboxprogram.
	442	+	15 4.(1)Nolaterthanthirtydaysbeforetheendofthetwenty-four-month
	443	+	16demonstrationperiod,asandboxparticipantmayrequestanextensionofthe
	444	+	17demonstrationperiod.
	445	+	18 (2)Theregulatoryreliefofficeshallgrantordenyarequestforanextensionby
	446	+	19theendofthetwenty-fourmonthdemonstrationperiod.
	447	+	20 (3)Theregulatoryreliefofficemaygrantanextensionfornotmorethantwelve
	448	+	21monthsaftertheendofthedemonstrationperiod.
	449	+	22 (4)Sandboxparticipantsmayapplyforadditionalextensionsinaccordancewith
	450	+	23thecriteriausedtoassesstheirinitialapplication,uptoacumulativemaximumofseven
	451	+	24yearsinclusiveoftheoriginaltwenty-four-monthdemonstrationperiod.
	452	+	25 5.(1)Asandboxparticipantshallretainrecords,documents,anddataproduced
	453	+	26intheordinarycourseofbusinessregardinganinnovativeofferingdemonstratedinthe
	454	+	27sandboxprogramfortwenty-fourmonthsafterexitingthesandboxprogram.
	455	+	28 (2)Theregulatoryreliefofficemayrequestrelevantrecords,documents,and
	456	+	29datafromasandboxparticipant,and,upontheregulatoryreliefoffice'srequest,the
	457	+	30sandboxparticipantshallmakesuchrecords,documents,anddataavailablefor
	458	+	31inspectionbytheregulatoryreliefoffice.
	459	+	32 6.Ifasandboxparticipantceasestoprovideaninnovativeofferingbeforethe
	460	+	33endofademonstrationperiod,thesandboxparticipantshallnotifytheregulatoryrelief
	461	+	34officeandeachapplicableagencyandreportonactionstakenbythesandbox
	462	+	35participanttoensureconsumershavenotbeenharmedasaresult.
	463	+	36 7.Theregulatoryreliefofficeshallestablishquarterlyreportingrequirements
	464	+	37foreachsandboxparticipant,includinginformationaboutanyconsumercomplaints.
	465	+	38 8.(1)Thesandboxparticipantshallnotifytheregulatoryreliefofficeandeach
	466	+	39applicableagencyofanyincidentsthatresultinharmtothehealth,safety,orfinancial
	467	+	HCSHB2587 13 40well-beingofaconsumer.Theparametersforsuchincidentsthatshallbereportedshall
	468	+	41belaidoutinthewrittenagreementbetweentheapplicantandtheregulatoryrelief
	469	+	42office.Anyincidentreportsshallbepubliclyavailableontheregulatorysandbox
	470	+	43webpageprovided,however,thatanyinformationcontainedinsuchreportsthat
	471	+	44constitutesproprietaryorconfidentialtradesecretsshallnotbesubjecttodisclosure
	472	+	45pursuanttochapter610.
	473	+	46 (2)Ifasandboxparticipantfailstonotifytheregulatoryreliefofficeandeach
	474	+	47applicableagencyofanyincidentsrequiredtobereported,ortheregulatoryreliefoffice
	475	+	48oranapplicableagencyhasevidencethatsignificantharmtoaconsumerhasoccurred,
	476	+	49theregulatoryreliefofficemayimmediatelyremovethesandboxparticipantfromthe
	477	+	50sandboxprogram.
	478	+	51 9.Nolaterthanthirtydaysafterthedayonwhichasandboxparticipantexits
	479	+	52thesandboxprogram,thesandboxparticipantshallsubmitawrittenreporttothe
	480	+	53regulatoryreliefofficeandeachapplicableagencydescribinganoverviewofthe
	481	+	54sandboxparticipant'sdemonstration.Failuretosubmitsuchareportshallresultinthe
	482	+	55sandboxparticipantandanyentitythatlateremploysamemberoftheleadershipteam
	483	+	56ofthesandboxparticipantbeingprohibitedfromfutureparticipationinthesandbox
	484	+	57program.Suchreportshallincludeany:
	485	+	58 (1)Incidentsofharmtoconsumers;
	486	+	59 (2)Legalactionfiledagainstthesandboxparticipantasaresultofthe
	487	+	60participant'sdemonstration;or
	488	+	61 (3)Complaintfiledwithanapplicableagencyasaresultofthesandbox
	489	+	62participant'sdemonstration.
2096	490		63
2097		-	(2) Seek an extension pursuant to subsection 4 of this 9
2098		-	section. 10
2099		-	2. If the regulatory relief office does not receive 11
2100		-	notification as required by subsection 1 of this section, 12
2101		-	the demonstration period shall end at the end of the twenty - 13
2102		-	four-month demonstration period . 14
2103		-	3. If a demonstration includes an innovative offering 15
2104		-	that requires ongoing services or duties beyond the twenty - 16
2105		-	four-month demonstration period, the sandbox participant may 17
2106		-	continue to demonstrate the innovative offering but shall be 18
2107		-	subject to enforcement of the laws or regulations that were 19
2108		-	waived or suspended as part of the sandbox program. 20
2109		-	4. (1) No later than forty-five days before the end 21
2110		-	of the twenty-four-month demonstration period, a sandbox 22
2111		-	participant may request an extensi on of the demonstration 23
2112		-	period. 24
2113		-	(2) The regulatory relief office shall grant or deny a 25
2114		-	request for an extension by the end of the twenty -four month 26
2115		-	demonstration period. 27
2116		-	(3) The regulatory relief office may grant an 28
2117		-	extension for not more t han twelve months after the end of 29
2118		-	the demonstration period. 30
2119		-	(4) Sandbox participants may apply for additional 31
2120		-	extensions in accordance with the criteria used to assess 32
2121		-	their initial application, up to a cumulative maximum of 33
2122		-	seven years inclusiv e of the original twenty -four-month 34
2123		-	demonstration period. 35
2124		-	5. (1) A sandbox participant shall retain records, 36
2125		-	documents, and data produced in the ordinary course of 37
2126		-	business regarding an innovative offering demonstrated in 38
2127		-	the sandbox program for twenty-four months after exiting the 39
2128		-	sandbox program. 40
2129		-	64
2130		-	(2) The regulatory relief office may request relevant 41
2131		-	records, documents, and data from a sandbox participant, 42
2132		-	and, upon the regulatory relief office's request, the 43
2133		-	sandbox participant shall make such records, documents, and 44
2134		-	data available for inspection by the regulatory relief 45
2135		-	office. 46
2136		-	6. If a sandbox participant ceases to provide an 47
2137		-	innovative offering before the end of a demonstration 48
2138		-	period, the sandbox participant shall notify t he regulatory 49
2139		-	relief office and each applicable agency and report on 50
2140		-	actions taken by the sandbox participant to ensure consumers 51
2141		-	have not been harmed as a result. 52
2142		-	7. The regulatory relief office shall establish 53
2143		-	quarterly reporting requirements f or each sandbox 54
2144		-	participant, including information about any consumer 55
2145		-	complaints. 56
2146		-	8. (1) The sandbox participant shall notify the 57
2147		-	regulatory relief office and each applicable agency of any 58
2148		-	incidents that result in harm to the health, safety, or 59
2149		-	financial well-being of a consumer. The parameters for such 60
2150		-	incidents that shall be reported shall be laid out in the 61
2151		-	written agreement between the applicant and the regulatory 62
2152		-	relief office. Any incident reports shall be publicly 63
2153		-	available on the regulatory sandbox webpage provided, 64
2154		-	however, that any information contained in such reports that 65
2155		-	constitutes proprietary or confidential trade secrets shall 66
2156		-	not be subject to disclosure pursuant to chapter 610. 67
2157		-	(2) If a sandbox participant fails t o notify the 68
2158		-	regulatory relief office and each applicable agency of any 69
2159		-	incidents required to be reported, or the regulatory relief 70
2160		-	office or an applicable agency has evidence that significant 71
2161		-	harm to a consumer has occurred, the regulatory relief 72
2162		-	65
2163		-	office may immediately remove the sandbox participant from 73
2164		-	the sandbox program. 74
2165		-	9. No later than thirty days after the day on which a 75
2166		-	sandbox participant exits the sandbox program, the sandbox 76
2167		-	participant shall submit a written report to the regulato ry 77
2168		-	relief office and each applicable agency describing an 78
2169		-	overview of the sandbox participant's demonstration. 79
2170		-	Failure to submit such a report shall result in the sandbox 80
2171		-	participant and any entity that later employs a member of 81
2172		-	the leadership team o f the sandbox participant being 82
2173		-	prohibited from future participation in the sandbox 83
2174		-	program. Such report shall include any: 84
2175		-	(1) Incidents of harm to consumers; 85
2176		-	(2) Legal action filed against the sandbox participant 86
2177		-	as a result of the partic ipant's demonstration; or 87
2178		-	(3) Complaint filed with an applicable agency as a 88
2179		-	result of the sandbox participant's demonstration. 89
2180		-	Any incident reports of harm to consumers, legal actions 90
2181		-	filed against a sandbox participant, or complaints filed 91
2182		-	with an applicable agency shall be compiled and made 92
2183		-	publicly available on the regulatory sandbox webpage 93
2184		-	provided, however, that any information contained in such 94
2185		-	reports or complaints that constitutes proprietary or 95
2186		-	confidential trade secrets shall not be subject to 96
2187		-	disclosure pursuant to chapter 610. 97
2188		-	10. No later than thirty days after the day on which 98
2189		-	an applicable agency receives the quarterly report required 99
2190		-	by subsection 7 of this section or a written report from a 100
2191		-	sandbox participant as req uired by subsection 9 of this 101
2192		-	section, the applicable agency shall provide a written 102
2193		-	report to the regulatory relief office on the demonstration, 103
2194		-	which describes any statutory or regulatory reform the 104
2195		-	66
2196		-	applicable agency recommends as a result of the 105
2197		-	demonstration. 106
2198		-	11. The regulatory relief office may remove a sandbox 107
2199		-	participant from the sandbox program at any time if the 108
2200		-	regulatory relief office determines that a sandbox 109
2201		-	participant has engaged in, is engaging in, or is about to 110
2202		-	engage in any practice or transaction that is in violation 111
2203		-	of sections 620.3900 to 620.3930 or that constitutes a 112
2204		-	violation of a law or regulation for which suspension or 113
2205		-	waiver has not been granted pursuant to the sandbox 114
2206		-	program. Information on any removal of a sandbox 115
2207		-	participant for engaging in any practice or transaction that 116
2208		-	constitutes a violation of law or regulation for which 117
2209		-	suspension or waiver has not been granted pursuant to the 118
2210		-	sandbox program shall be made publicly available on the 119
2211		-	regulatory sandbox webpage provided, however, that any 120
2212		-	information that constitutes proprietary or confidential 121
2213		-	trade secrets shall not be subject to disclosure pursuant to 122
2214		-	chapter 610. 123
	491	+	64Anyincidentreportsofharmtoconsumers,legalactionsfiledagainstasandbox
	492	+	65participant,orcomplaintsfiledwithanapplicableagencyshallbecompiledandmade
	493	+	66publiclyavailableontheregulatorysandboxwebpageprovided,however,thatany
	494	+	67informationcontainedinsuchreportsorcomplaintsthatconstitutesproprietaryor
	495	+	68confidentialtradesecretsshallnotbesubjecttodisclosurepursuanttochapter610.
	496	+	69 10.Nolaterthanthirtydaysafterthedayonwhichanapplicableagency
	497	+	70receivesthequarterlyreportrequiredbysubsection7ofthissectionorawrittenreport
	498	+	71fromasandboxparticipantasrequiredbysubsection9ofthissection,theapplicable
	499	+	72agencyshallprovideawrittenreporttotheregulatoryreliefofficeonthe
	500	+	73demonstration,whichdescribesanystatutoryorregulatoryreformtheapplicable
	501	+	74agencyrecommendsasaresultofthedemonstration.
	502	+	75 11.Theregulatoryreliefofficemayremoveasandboxparticipantfromthe
	503	+	76sandboxprogramatanytimeiftheregulatoryreliefofficedeterminesthatasandbox
	504	+	HCSHB2587 14 77participanthasengagedin,isengagingin,orisabouttoengageinanypracticeor
	505	+	78transactionthatisinviolationofsections620.3900to620.3930orthatconstitutesa
	506	+	79violationofalaworregulationforwhichsuspensionorwaiverhasnotbeengranted
	507	+	80pursuanttothesandboxprogram.Informationonanyremovalofasandbox
	508	+	81participantforengaginginanypracticeortransactionthatconstitutesaviolationoflaw
	509	+	82orregulationforwhichsuspensionorwaiverhasnotbeengrantedpursuanttothe
	510	+	83sandboxprogramshallbemadepubliclyavailableontheregulatorysandboxwebpage
	511	+	84provided,however,thatanyinformationthatconstitutesproprietaryorconfidential
	512	+	85tradesecretsshallnotbesubjecttodisclosurepursuanttochapter610.
	513	+	✔
	514	+	HCSHB2587 15