SECOND REGULAR SESSION
SENATE COMMITTEE SUBSTITUTE FOR
HOUSE BILL NO. 2170
102ND GENERAL ASSEMBLY
4292S.03C KRISTINA MARTIN, Secretary
AN ACT
To amend chapters 135 and 620, RSMo, by adding thereto ten new sections relating to income
taxes.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapters 135 and 620, RSMo, are amended by 1
adding thereto ten new sections, to be known as sections 2
135.1310, 135.1325, 135.1350, 620.3500, 620.3505, 620.3510, 3
620.3515, 620.3520, 620.3525, and 620.3530, to read as follows:4
135.1310. 1. This section shall be known and may be 1
cited as the "Child Care Contribution Tax Credit Act". 2
2. For purposes of this section, the following terms 3
shall mean: 4
(1) "Child care", the same as defined in section 5
210.201; 6
(2) "Child care desert", a census tract that has a 7
poverty rate of at least twenty percent or a median family 8
income of less than eighty percent of the statewide average 9
and where at least five hundred people or thirty -three 10
percent of the population are located a t least one-half mile 11
away from a child care provider in urbanized areas or at 12
least ten miles away in rural areas; 13
(3) "Child care provider", a child care provider as 14
defined in section 210.201 that is licensed pursuant to 15
section 210.221, or th at is unlicensed and that is 16 SCS HB 2170 2
registered with the department of elementary and secondary 17
education; 18
(4) "Contribution", an eligible donation of cash, 19
stock, bonds or other marketable securities, or real 20
property. "Contribution" shall include the reasonable 21
purchase price paid for an employer's purchase of child care 22
from a child care provider for the children of the 23
employer's employees; 24
(5) "Department", the Missouri department of economic 25
development; 26
(6) "Intermediary", a nonpr ofit organization that is, 27
or agrees to become, subject to the jurisdiction of this 28
state for the purposes of the administration and enforcement 29
of this section, and that distributes funds for the purposes 30
of supporting a child care provider; 31
(7) "Person related to the taxpayer", an individual 32
connected with the taxpayer by blood, adoption, or marriage, 33
or an individual, corporation, partnership, limited 34
liability company, trust, or association controlled by, or 35
under the control of, the taxpa yer directly, or through an 36
individual, corporation, limited liability company, 37
partnership, trust, or association under the control of the 38
taxpayer; 39
(8) "Rural area", a town or community within the state 40
that is not within a metropolitan statist ical area and has a 41
population of six thousand or fewer inhabitants as 42
determined by the last preceding federal decennial census or 43
any unincorporated area not within a metropolitan 44
statistical area; 45
(9) "State tax liability", any liability incur red by a 46
taxpayer pursuant to chapter 143 or chapter 148, exclusive 47
of the provisions relating to the withholding of tax as 48 SCS HB 2170 3
provided for in sections 143.191 to 143.265 and related 49
provisions; 50
(10) "Tax credit", a credit against the taxpayer's 51
state tax liability; 52
(11) "Taxpayer", a corporation as defined in section 53
143.441 or 143.471, any charitable organization that is 54
exempt from federal income tax and whose Missouri unrelated 55
business taxable income, if any, would be subject to the 56
state income tax imposed under chapter 143, or individuals 57
or partnerships subject to the state income tax imposed by 58
the provisions of chapter 143. 59
3. For all tax years beginning on or after January 1, 60
2025, a taxpayer may claim the tax credit aut horized in this 61
section against the taxpayer's state tax liability for the 62
tax year in which a verified contribution was made in an 63
amount equal to seventy -five percent of the verified 64
contribution to a child care provider or intermediary. The 65
minimum amount of any tax credit issued shall not be less 66
than one hundred dollars and shall not exceed two hundred 67
thousand dollars per tax year. 68
(1) The child care provider or intermediary shall 69
apply to the department to participate in the program 70
established in this section, using a form prescribed by the 71
department. The department shall determine eligibility and 72
enter into an agreement that meets the requirement of 73
section 620.017 with an eligible child care facility or 74
intermediary. Only contributions to child care providers 75
and intermediaries that have entered into an agreement with 76
the department may receive a tax credit pursuant to this 77
section. 78
(2) The child care provider or intermediary receiving 79
a contribution shall, within si xty days of the date it 80 SCS HB 2170 4
received the contribution, file a contribution verification 81
with the department and issue a copy of the contribution 82
verification to the taxpayer. The contribution verification 83
shall be in the form established by the department and shall 84
include the taxpayer's name, taxpayer's state or federal tax 85
identification number or last four digits of the taxpayer's 86
Social Security number, amount of tax credit sought, amount 87
or description of contribution, legal name and address of 88
the child care provider receiving the tax credit, the child 89
care provider's federal employer identification number, the 90
child care provider's department of elementary and secondary 91
education vendor number or license number, the date the 92
child care provider received the contribution from the 93
taxpayer, and any other information requested by the 94
department. The contribution verification shall include a 95
signed attestation stating, in the case of a child care 96
provider, that the child care provider will u se the 97
contribution solely to promote child care and, in the case 98
of an intermediary, that the intermediary will distribute 99
the contribution and any income thereon in full to one or 100
more child care providers within two years of receipt. 101
(3) The failure of the child care provider or 102
intermediary to timely issue the contribution verification 103
to the taxpayer or file it with the department shall entitle 104
the taxpayer to a refund of the contribution from the child 105
care provider or intermediary. 106
4. A contribution, whether received from the taxpayer 107
claiming the tax credit pursuant to this section or from an 108
intermediary, is eligible when: 109
(1) The contribution is used directly by a child care 110
provider to promote child care for children t welve years of 111
age or younger, including by acquiring or improving child 112 SCS HB 2170 5
care facilities, equipment, or services, staff salaries, 113
staff training, or improving the quality of child care; 114
(2) The contribution, if made to an intermediary, is 115
distributed in full by the intermediary within two years of 116
receipt to one or more child care providers for the sole 117
purpose of promoting child care for children twelve years of 118
age or younger; 119
(3) The contribution is made to a child care provider 120
or intermediary in which the taxpayer or a person related to 121
the taxpayer does not have a direct financial interest; 122
(4) The contribution made to an intermediary is not 123
designated for a child care provider in which the taxpayer 124
or a person related to t he taxpayer has a direct financial 125
interest; and 126
(5) The contribution is not made in exchange for care 127
of a child or children, unless the contribution is made by 128
an employer in purchasing child care for the children of the 129
employer's employees. 130
5. A child care provider or intermediary that uses the 131
contribution for an ineligible purpose shall repay to the 132
department the value of the tax credit for the contribution 133
amount used for an ineligible purpose. An intermediary that 134
accepts a contribution and issues a taxpayer a contribution 135
verification is itself permanently ineligible to claim or 136
redeem a tax credit pursuant to this section. 137
6. (1) The tax credits authorized by this section 138
shall not be refundable and shall not be tran sferred, sold, 139
or otherwise conveyed. Any amount of approved tax credits 140
that a taxpayer is prohibited by this subsection from using 141
for the tax year in which the credit is first claimed may be 142
carried forward to the taxpayer's subsequent tax year for up 143
to six succeeding tax years. 144 SCS HB 2170 6
(2) In the case of a taxpayer that has or elects pass - 145
through taxation pursuant to federal income tax law, the tax 146
credits issued pursuant to this section shall be apportioned 147
in proportion to the share of owners hip of the taxpayer on 148
the last day of the taxpayer's tax period for which such tax 149
credits will be issued, to the following: 150
(a) The shareholders of the S corporation; 151
(b) The partners in a partnership; or 152
(c) The members of a limited liability company that 153
has or elects pass-through taxation pursuant to federal 154
income tax law. 155
(3) A taxpayer shall not claim a tax credit pursuant 156
to this section and a tax credit pursuant to section 157
135.1325 for the same contribution or expendi ture. 158
7. Notwithstanding any provision of subsection 6 of 159
this section to the contrary, a taxpayer that is exempt, 160
under 26 U.S.C. Section 501(c)(3), and any amendments 161
thereto, from all or part of the federal income tax shall be 162
eligible for a refund of its tax credit issued under this 163
section, without regard to whether it has incurred any state 164
tax liability. Such exempt taxpayer may claim a refund of 165
the tax credit on its tax return required to be filed under 166
the provisions of chapter 143, exclusive of the return for 167
the withholding of tax under sections 143.191 to 143.265. 168
If such exempt taxpayer is not required to file a tax return 169
under the provisions of chapter 143, the exempt taxpayer may 170
claim a refund of the tax credit on a refu nd claim form 171
prescribed by the department of revenue. The department of 172
revenue shall prescribe such forms, instructions, and rules 173
as it deems appropriate to carry out the provisions of this 174
subsection. 175 SCS HB 2170 7
8. (1) The amount of tax credits author ized pursuant 176
to this section shall not exceed twenty million dollars for 177
each calendar year. The department shall approve tax credit 178
applications on a first -come, first-served basis until the 179
tax credit authorization limit is reached for the calendar 180
year. A taxpayer shall apply to the department for the 181
child care contribution tax credit by submitting a copy of 182
the contribution verification provided by a child care 183
provider or intermediary to such taxpayer. Upon receipt of 184
such contribution ve rification, the department shall issue a 185
tax credit certificate to the taxpayer. 186
(2) If the maximum amount of tax credits allowed in 187
any calendar year as provided pursuant to subdivision (1) of 188
this subsection is authorized, the maximum amount of tax 189
credits allowed pursuant to subdivision (1) of this 190
subsection shall be increased by fifteen percent, provided 191
that all such increases in the allowable amount of tax 192
credits shall be reserved for contributions made to child 193
care providers located in a child care desert. The director 194
of the department shall publish such adjusted amount. 195
9. The tax credits allowed under this section shall be 196
considered a domestic and social tax credit under 197
subdivision (5) of subsection 2 of section 135.800 . 198
10. All action and communication undertaken or 199
required under this section shall be exempt from section 200
105.1500. 201
11. The department may promulgate rules to implement 202
and administer the provisions of this section. Any rule or 203
portion of a rule, as that term is defined in section 204
536.010, that is created pursuant to the authority delegated 205
in this section shall become effective only if it complies 206
with and is subject to all of the provisions of chapter 536 207 SCS HB 2170 8
and, if applicable, section 5 36.028. This section and 208
chapter 536 are nonseverable and if any of the powers vested 209
with the general assembly pursuant to chapter 536 to review, 210
to delay the effective date, or to disapprove and annul a 211
rule are subsequently held unconstitutional, t hen the grant 212
of rulemaking authority and any rule proposed or adopted 213
after August 28, 2024, shall be invalid and void. 214
12. Pursuant to section 23.253 of the Missouri sunset 215
act: 216
(1) The program authorized under this section shall 217
expire on December 31, 2030, unless reauthorized by the 218
general assembly; 219
(2) If such program is reauthorized, the program 220
authorized under this section shall automatically sunset six 221
years after the effective date of the reauthorization of 222
this section; 223
(3) This section shall terminate on September first of 224
the calendar year immediately following the calendar year in 225
which the program authorized under this section is sunset; 226
and 227
(4) The provisions of this subsection shall not be 228
construed to limit or in any way impair the department of 229
revenue's ability to redeem tax credits authorized on or 230
before the date the program authorized pursuant to this 231
section expires or a taxpayer's ability to redeem such tax 232
credits. 233
135.1325. 1. This section shall be known and may be 1
cited as the "Employer Provided Child Care Assistance Tax 2
Credit Act". 3
2. For purposes of this section, the following terms 4
shall mean: 5 SCS HB 2170 9
(1) "Child care desert", a census tract that has a 6
poverty rate of at least twenty percent or a median family 7
income of less than eighty percent of the statewide average 8
and where at least five hundred people or thirty -three 9
percent of the population are located at least one -half mile 10
away from a child care provider in urbanized areas or at 11
least ten miles away in rural areas; 12
(2) "Child care facility", a child care facility as 13
defined in section 210.201 that is licensed pursuant to 14
section 210.221, or that is unlicensed and that is 15
registered with the department of elementary and secondary 16
education; 17
(3) "Child care provider", a child care provider as 18
defined in section 210.201 that is licensed pursuant to 19
section 210.221, or that is unlicensed and that is 20
registered with the departmen t of elementary and secondary 21
education; 22
(4) "Department", the Missouri department of economic 23
development; 24
(5) "Employer matching contribution", a contribution 25
made by the taxpayer to a cafeteria plan, as that term is 26
used in 26 U.S.C. Sec tion 125, of an employee of the 27
taxpayer, which matches a dollar amount or percentage of the 28
employee's contribution to the cafeteria plan. "Employer 29
matching contribution" shall not include the amount of any 30
salary reduction or other compensation for egone by the 31
employee in connection with the cafeteria plan; 32
(6) "Qualified child care expenditure", an amount paid 33
of reasonable costs incurred that meet any of the following: 34
(a) To acquire, construct, rehabilitate, or expand 35
property that will be, or is, used as part of a child care 36
facility that is either operated by the taxpayer or 37 SCS HB 2170 10
contracted with by the taxpayer and which does not 38
constitute part of the principal residence of the taxpayer 39
or any employee of the taxpayer; 40
(b) For the operating costs of a child care facility 41
of the taxpayer, including costs relating to the training of 42
child care employees, scholarship programs, and for 43
compensation to child care employees; or 44
(c) Under a contract with a child care facili ty to 45
provide child care services to employees of the taxpayer; or 46
(d) As an employer matching contribution, but only to 47
the extent such employer matching contribution is restricted 48
by the taxpayer solely for the taxpayer's employee to obtain 49
child care services at a child care facility and is used for 50
that purpose during the tax year; 51
(7) "Rural area", a town or community within the state 52
that is not within a metropolitan statistical area and has a 53
population of six thousand or fewer inh abitants as 54
determined by the last preceding federal decennial census or 55
any unincorporated area not within a metropolitan 56
statistical area; 57
(8) "State tax liability", any liability incurred by 58
the taxpayer pursuant to the provisions of chapter 1 43 or 59
chapter 148, exclusive of the provisions relating to the 60
withholding of tax as provided for in sections 143.191 to 61
143.265 and related provisions; 62
(9) "Tax credit", a credit against the taxpayer's 63
state tax liability; 64
(10) "Taxpayer", a corporation as defined in section 65
143.441 or 143.471, any charitable organization that is 66
exempt from federal income tax and whose Missouri unrelated 67
business taxable income, if any, would be subject to the 68
state income tax imposed under chapter 143 , or individuals 69 SCS HB 2170 11
or partnerships subject to the state income tax imposed by 70
the provisions of chapter 143. 71
3. For all tax years beginning on or after January 1, 72
2025, a taxpayer with two or more employees may claim a tax 73
credit authorized in this section in an amount equal to 74
thirty percent of the qualified child care expenditures paid 75
or incurred with respect to a child care facility in order 76
to provide child care to the taxpayer's employees. The 77
maximum amount of any tax credit issued under this section 78
shall not exceed two hundred thousand dollars per taxpayer 79
per tax year. 80
4. A facility shall not be treated as a child care 81
facility with respect to a taxpayer unless enrollment in the 82
facility is open to the dependents of employees of the 83
taxpayer during the tax year, provided that the dependents 84
fall within the age range ordinarily cared for by, and only 85
require a level of care ordinarily provided by, such 86
facility. 87
5. (1) The tax credits authorized by this section 88
shall not be refundable or transferable. The tax credits 89
shall not be sold, assigned, or otherwise conveyed. Any 90
amount of approved tax credits that a taxpayer is prohibited 91
by this subsection from using for the tax year in which the 92
credit is first clai med may be carried forward to the 93
taxpayer's subsequent tax year for up to six succeeding tax 94
years. 95
(2) In the case of a taxpayer that has or elects pass - 96
through taxation pursuant to federal income tax law, the tax 97
credits issued pursuant to th is section shall be apportioned 98
in proportion to the share of ownership of the taxpayer on 99
the last day of the taxpayer's tax period for which such tax 100
credits will be issued, to the following: 101 SCS HB 2170 12
(a) The shareholders of the S corporation; 102
(b) The partners in a partnership; or 103
(c) The members of a limited liability company that 104
has or elects pass-through taxation pursuant to federal 105
income tax law. 106
(3) A taxpayer shall not claim a tax credit pursuant 107
to this section and a tax cred it pursuant to section 108
135.1310 or 135.1350 for the same contribution or 109
expenditure. 110
6. Notwithstanding any provision of subsection 5 of 111
this section to the contrary, a taxpayer that is exempt, 112
under 26 U.S.C. Section 501(c)(3), and any amendmen ts 113
thereto, from all or part of the federal income tax shall be 114
eligible for a refund of its tax credit issued under this 115
section, without regard to whether it has incurred any state 116
tax liability. Such exempt taxpayer may claim a refund of 117
the tax credit on its tax return required to be filed under 118
the provisions of chapter 143, exclusive of the return for 119
the withholding of tax under sections 143.191 to 143.265. 120
If such exempt taxpayer is not required to file a tax return 121
under the provisions o f chapter 143, the exempt taxpayer may 122
claim a refund of the tax credit on a refund claim form 123
prescribed by the department of revenue. The department of 124
revenue shall prescribe such forms, instructions, and rules 125
as it deems appropriate to carry out the provisions of this 126
subsection. 127
7. (1) The amount of tax credits authorized pursuant 128
to this section shall not exceed twenty million dollars for 129
each calendar year. The department shall approve tax credit 130
applications on a first -come, first-served basis until the 131
tax credit authorization limit is reached for the calendar 132
year. 133 SCS HB 2170 13
(2) If the maximum amount of tax credits allowed in 134
any calendar year as provided pursuant to subdivision (1) of 135
this subsection is authorized, the maximum am ount of tax 136
credits allowed pursuant to subdivision (1) of this 137
subsection shall be increased by fifteen percent, provided 138
that all such increases in the allowable amount of tax 139
credits shall be reserved for qualified child care 140
expenditures for child care facilities located in a child 141
care desert. The director of the department shall publish 142
such adjusted amount. 143
8. A taxpayer who has been issued a tax credit under 144
this section shall notify the department within sixty days 145
of any cessation of operation, change in ownership, or 146
agreement to assume recapture liability as such terms are 147
defined by 26 U.S.C. Section 45F, in the form and manner 148
prescribed by department rule or instruction. If there is a 149
cessation of operation or change in ow nership relating to a 150
child care facility, the department may require the taxpayer 151
to repay the department an amount equal to the credit issued 152
under this section, but this recapture amount shall be 153
limited to the tax credit allowed under this section. The 154
recapture amount shall be considered a tax liability arising 155
on the tax payment due date for the tax year in which the 156
cessation of operation, change in ownership, or agreement to 157
assume recapture liability occurred and shall be assessed 158
and collected under the same provisions that apply to a tax 159
liability under chapter 143 or chapter 148, provided that no 160
interest shall be assessed against any amounts recaptured 161
pursuant to this subsection. 162
9. The tax credit allowed pursuant to this sec tion 163
shall be considered a domestic and social tax credit under 164
subdivision (5) of subsection 2 of section 135.800. 165 SCS HB 2170 14
10. All action and communication undertaken or 166
required under this section shall be exempt from the 167
provisions of section 105.1500 . 168
11. The department may promulgate rules to implement 169
and administer the provisions of this section. Any rule or 170
portion of a rule, as that term is defined in section 171
536.010, that is created pursuant to the authority delegated 172
in this section shall become effective only if it complies 173
with and is subject to all of the provisions of chapter 536 174
and, if applicable, section 536.028. This section and 175
chapter 536 are nonseverable and if any of the powers vested 176
with the general assembly pursuan t to chapter 536 to review, 177
to delay the effective date, or to disapprove and annul a 178
rule are subsequently held unconstitutional, then the grant 179
of rulemaking authority and any rule proposed or adopted 180
after August 28, 2024, shall be invalid and void. 181
12. Pursuant to section 23.253 of the Missouri sunset 182
act: 183
(1) The program authorized under this act shall expire 184
on December 31, 2030, unless reauthorized by the general 185
assembly; 186
(2) If such program is reauthorized, the program 187
authorized under this act shall automatically sunset six 188
years after the effective date of the reauthorization of 189
this section; 190
(3) This section shall terminate on September first of 191
the calendar year immediately following the calendar year in 192
which the program authorized under this section is sunset; 193
and 194
(4) The provisions of this subsection shall not be 195
construed to limit or in any way impair the department of 196
revenue's ability to redeem tax credits authorized on or 197 SCS HB 2170 15
before the date the pr ogram authorized pursuant to this 198
section expires or a taxpayer's ability to redeem such tax 199
credits. 200
135.1350. 1. This section shall be known and may be 1
cited as the "Child Care Providers Tax Credit Act". 2
2. For purposes of this section, the following terms 3
shall mean: 4
(1) "Capital expenditures", expenses incurred by a 5
child care provider, during the tax year for which a tax 6
credit is claimed pursuant to this section, for the 7
construction, renovation, or rehabilitati on of a child care 8
facility to the extent necessary to operate a child care 9
facility and comply with applicable child care facility 10
regulations promulgated by the department of elementary and 11
secondary education; 12
(2) "Child care desert", a census tract that has a 13
poverty rate of at least twenty percent or a median family 14
income of less than eighty percent of the statewide average 15
and where at least five hundred people or thirty -three 16
percent of the population are located at least one -half mile 17
away from a child care provider in urbanized areas or at 18
least ten miles away in rural areas; 19
(3) "Child care facility", a child care facility as 20
defined in section 210.201 that is licensed pursuant to 21
section 210.221, or that is unlicensed and that is 22
registered with the department of elementary and secondary 23
education; 24
(4) "Child care provider", a child care provider as 25
defined in section 210.201 that is licensed pursuant to 26
section 210.221, or that is unlicensed and that is 27
registered with the department of elementary and secondary 28
education; 29 SCS HB 2170 16
(5) "Department", the department of elementary and 30
secondary education; 31
(6) "Eligible employer withholding tax", the total 32
amount of tax that the child care provider was required, 33
under section 143.191, to deduct and withhold from the wages 34
it paid to employees during the tax year for which the child 35
care provider is claiming a tax credit pursuant to this 36
section, to the extent actually paid. "Eligible employer 37
withholding tax" shall not include any additional voluntary 38
withholding requested by an employee; 39
(7) "Employee", an employee, as that term is used in 40
subsection 2 of section 143.191, of a child care provider 41
who worked for the child care provider for an averag e of at 42
least ten hours per week for at least a three -month period 43
during the tax year for which a tax credit is claimed 44
pursuant to this section and who is not an immediate family 45
member of the child care provider; 46
(8) "Rural area", a town or co mmunity within the state 47
that is not within a metropolitan statistical area and has a 48
population of six thousand or fewer inhabitants as 49
determined by the last preceding federal decennial census or 50
any unincorporated area not within a metropolitan 51
statistical area; 52
(9) "State tax liability", any liability incurred by 53
the taxpayer pursuant to the provisions of chapter 143, 54
exclusive of the provisions relating to the withholding of 55
tax as provided for in sections 143.191 to 143.265 and 56
related provisions; 57
(10) "Tax credit", a credit against the taxpayer's 58
state tax liability; 59
(11) "Taxpayer", a corporation as defined in section 60
143.441 or 143.471, any charitable organization that is 61 SCS HB 2170 17
exempt from federal income tax and whose Missour i unrelated 62
business taxable income, if any, would be subject to the 63
state income tax imposed under chapter 143, or an individual 64
or partnership subject to the state income tax imposed by 65
the provisions of chapter 143. 66
3. For all tax years beginn ing on or after January 1, 67
2025, a child care provider with three or more employees may 68
claim a tax credit authorized in this section in an amount 69
equal to the child care provider's eligible employer 70
withholding tax, and may also claim a tax credit in an 71
amount up to thirty percent of the child care provider's 72
capital expenditures. No tax credit for capital 73
expenditures shall be allowed if the capital expenditures 74
are less than one thousand dollars. The amount of any tax 75
credit issued under this section shall not exceed two 76
hundred thousand dollars per child care provider per tax 77
year. 78
4. To claim a tax credit authorized pursuant to this 79
section, a child care provider shall submit to the 80
department, for preliminary approval, an applicati on for the 81
tax credit on a form provided by the department and at such 82
times as the department may require. If the child care 83
provider is applying for a tax credit for capital 84
expenditures, the child care provider shall present proof 85
acceptable to the department that the child care provider's 86
capital expenditures satisfy the requirements of subdivision 87
(1) of subsection 2 of this section. Upon final approval of 88
an application, the department shall issue the child care 89
provider a certificate of ta x credit. 90
5. (1) The tax credits authorized by this section 91
shall not be refundable and shall not be transferred, sold, 92
assigned, or otherwise conveyed. Any amount of credit that 93 SCS HB 2170 18
exceeds the child care provider's state tax liability for 94
the tax year for which the tax credit is issued may be 95
carried forward to the child care provider's subsequent tax 96
year for up to six succeeding tax years. 97
(2) In the case of a taxpayer that has or elects pass - 98
through taxation pursuant to federal income tax law, the tax 99
credits issued pursuant to this section shall be apportioned 100
in proportion to the share of ownership of the taxpayer on 101
the last day of the taxpayer's tax period for which such tax 102
credits will be issued, to the following: 103
(a) The shareholders of the S corporation; 104
(b) The partners in a partnership; or 105
(c) The members of a limited liability company that 106
has or elects pass-through taxation pursuant to federal 107
income tax law. 108
(3) A taxpayer shall not claim a tax credit pursuant 109
to this section and a tax credit pursuant to section 110
135.1325 for the same contribution or expenditure. 111
6. Notwithstanding any provision of subsection 5 of 112
this section to the contrary, a child care provider that is 113
exempt, under 26 U.S.C. Section 501(c)(3), and any 114
amendments thereto, from all or part of the federal income 115
tax shall be eligible for a refund of its tax credit issued 116
under this section, without regard to whether it has 117
incurred any state tax liability. Such exempt child care 118
provider may claim a refund of the tax credit on its tax 119
return required to be filed under the provisions of chapter 120
143, exclusive of the return for the withholding of tax 121
under sections 143.191 to 143.265. If such exempt child 122
care provider is not required to file a tax return under the 123
provisions of chapter 143, the exempt child care provider 124
may claim a refund of the tax credit on a refund claim form 125 SCS HB 2170 19
prescribed by the department of revenue. The department of 126
revenue shall prescribe such forms, instructions, and rules 127
as it deems appropriate to carry out the provisions of this 128
subsection. 129
7. (1) The amount of tax credits authorized pursuant 130
to this section shall not exceed twenty million dollars for 131
each calendar year. The department shall approve tax credit 132
applications on a first -come, first-served basis until the 133
tax credit authorization limit is reached for the calendar 134
year. 135
(2) If the maximum amount of tax credits allowed in 136
any calendar year as provid ed pursuant to subdivision (1) of 137
this subsection is authorized, the maximum amount of tax 138
credits allowed pursuant to subdivision (1) of this 139
subsection shall be increased by fifteen percent, provided 140
that all such increases in the allowable amount of tax 141
credits shall be reserved for child care providers located 142
in a child care desert. The director of the department 143
shall publish such adjusted amount. 144
8. The tax credit authorized by this section shall be 145
considered a domestic and social tax credit under 146
subdivision (5) of subsection 2 of section 135.800. 147
9. All action and communication undertaken or required 148
with respect to this section shall be exempt from the 149
provisions of section 105.1500. Notwithstanding section 150
32.057 or any other tax confidentiality law to the contrary, 151
the department of revenue may disclose tax information to 152
the department for the purpose of the verification of a 153
child care provider's eligible employer withholding tax 154
under this section. 155
10. The department may promulgate rules and adopt 156
statements of policy, procedures, forms, and guidelines to 157 SCS HB 2170 20
implement and administer the provisions of this section. 158
Any rule or portion of a rule, as that term is defined in 159
section 536.010, that is created pur suant to the authority 160
delegated in this section shall become effective only if it 161
complies with and is subject to all of the provisions of 162
chapter 536 and, if applicable, section 536.028. This 163
section and chapter 536 are nonseverable and if any of th e 164
powers vested with the general assembly pursuant to chapter 165
536 to review, to delay the effective date, or to disapprove 166
and annul a rule are subsequently held unconstitutional, 167
then the grant of rulemaking authority and any rule proposed 168
or adopted after August 28, 2024, shall be invalid and void. 169
11. Pursuant to section 23.253 of the Missouri sunset 170
act: 171
(1) The program authorized under this section shall 172
expire on December 31, 2030, unless reauthorized by the 173
general assembly; 174
(2) If such program is reauthorized, the program 175
authorized under this section shall automatically sunset six 176
years after the effective date of the reauthorization of 177
this section; 178
(3) This section shall terminate on September first of 179
the calendar year immediately following the calendar year in 180
which the program authorized under this section is sunset; 181
and 182
(4) The provisions of this subsection shall not be 183
construed to limit or in any way impair the department of 184
revenue's ability to r edeem tax credits authorized on or 185
before the date the program authorized pursuant to this 186
section expires or a taxpayer's ability to redeem such tax 187
credits. 188 SCS HB 2170 21
620.3500. Sections 620.3500 to 620.3530 shall be known 1
and may be cited as the "Missouri Rural Access to Capital 2
Act". 3
620.3505. As used in sections 620.3500 to 620.3530, 1
the following terms shall mean: 2
(1) "Affiliate", an entity that directly, or 3
indirectly through one or more intermediaries, contr ols or 4
is controlled by or is under common control with another 5
entity. An entity is controlled by another entity if the 6
controlling entity holds, directly or indirectly, the 7
majority voting or ownership interest in the controlled 8
entity or has control over day-to-day operations of the 9
controlled entity by contract or by law; 10
(2) "Affiliate capital", capital raised by a rural 11
investor directly or indirectly from sources, including 12
leverage sources, directors, members, employees, officers, 13
and affiliates of the rural investor, other than the amount 14
invested by the allocatee claiming the tax credits in 15
exchange for such allocation of tax credits; 16
(3) "Agribusiness", a business that produces or 17
provides any goods or services produced in this state that 18
are normally used by farmers, ranchers, or producers and 19
harvesters of aquatic products in their business operations, 20
or to improve the welfare or livelihood of such persons; or 21
is involved in the processing and marketing of agricultur al 22
products, farm supplies, and input suppliers; or is engaged 23
in agribusiness as defined by the United States Department 24
of Agriculture; or if not engaged in such industries, the 25
department determines that such investment will be 26
beneficial to the ru ral area and the economic growth of the 27
state; 28 SCS HB 2170 22
(4) "Applicable percentage", zero percent for the 29
initial credit allowance date and the second credit 30
allowance date and fifteen percent for the next four credit 31
allowance dates; 32
(5) "Base employment", the total number of qualified 33
employees receiving taxable wages from an eligible business 34
in the tax year preceding the date of the initial capital 35
investment; 36
(6) "Base payroll", the total amount of taxable wages 37
paid by an eligible bus iness to qualified employees in the 38
tax year preceding the date of the initial capital 39
investment; 40
(7) "Base revenue", the total net revenue earned by an 41
eligible business in the tax year preceding the date of the 42
initial capital investment; 43
(8) "Base taxable sales", the taxable sales of an 44
eligible business in the tax year preceding the date of the 45
initial investment; 46
(9) "Capital investment", any equity investment in a 47
rural fund by a rural investor that: 48
(a) Is acquired after the effective date of sections 49
620.3500 to 620.3530 at its original issuance solely in 50
exchange for cash; 51
(b) Has one hundred percent of its cash purchase price 52
used by the rural fund to make qualified investments in 53
eligible businesses locate d in this state by the third 54
credit allowance date; and 55
(c) Is designated by the rural fund as a capital 56
investment under sections 620.3500 to 620.3530 and is 57
certified by the department under the provisions of section 58
620.3510. This shall include any capital investment that 59
does not meet the provisions of subdivision (1) of 60 SCS HB 2170 23
subsection 1 of section 620.3510 if such investment was a 61
capital investment in the hands of a prior holder; 62
(10) "Credit allowance date", the anniversary of the 63
initial credit allowance date; 64
(11) "Department", the Missouri department of economic 65
development; 66
(12) "Eligible business", a business that, at the time 67
of the initial qualified investment in the business: 68
(a) Has fewer than two hundred fifty employees; 69
(b) Has its principal business operations in this 70
state; 71
(c) Is not an alien, foreign entity or foreign -owned 72
entity, or a foreign government; and 73
(d) Is engaged in North American Industry 74
Classification System (NAICS) Sector 11, 21, 22, 31 -33, 48- 75
49, 62, or 811, or if not engaged in such industries, the 76
department determines that such investment will be 77
beneficial to the rural area and economic growth of the 78
state. 79
Any business that is classified as an eligible bus iness at 80
the time of the initial investment in such business by a 81
rural fund shall remain classified as an eligible business 82
and may receive follow -on investments from any rural fund, 83
and such follow-on investments shall be qualified 84
investments even though such business may not meet paragraph 85
(a) of this subdivision at the time of such investments; 86
(13) "Full-time employee", an employee of an eligible 87
business who is scheduled to work an average of at least 88
thirty-five hours per week for a tw elve-month period; 89 SCS HB 2170 24
(14) "Initial credit allowance date", the date on 90
which the department certifies a rural fund's capital 91
investment; 92
(15) "Leverage source", third -party capital raised as 93
debt from a depository institution; 94
(16) "Maintained job", the number of qualified 95
employees at an eligible business at or below base 96
employment; 97
(17) "Maintained payroll", the total taxable wages 98
paid by an eligible business to qualified employees at or 99
below base payroll; 100
(18) "Maintained revenue", the total revenue earned by 101
an eligible business at or below base revenue; 102
(19) "Maintained taxable sales", the total taxable 103
sales of an eligible business at or below base taxable sales; 104
(20) "New jobs", the number of qualifi ed employees at 105
an eligible business less the eligible business's base 106
employment; 107
(21) "New payroll", the amount of taxable wages paid 108
to qualified employees at an eligible business less the 109
eligible business's base payroll; 110
(22) "New revenue", the total revenue earned by an 111
eligible business less the eligible business's base revenue; 112
(23) "New taxable sales", the total taxable sales of 113
an eligible business less the eligible business's base 114
taxable sales; 115
(24) "Principal business operations", the location 116
where at least sixty percent of a business's employees work 117
or where employees who are paid at least sixty percent of 118
such business's payroll work. A business that has agreed to 119
relocate employees using the proceeds of a qualified 120
investment to establish its principal business operations in 121 SCS HB 2170 25
a new location shall be deemed to have its principal 122
business operations in such new location if it satisfies the 123
requirements of this subdivision no later than one hundred 124
eighty days after receiving a qualified investment; 125
(25) "Purchase price", the amount paid to a rural fund 126
that issues a capital investment, which shall not exceed the 127
amount of capital investment authority certified under the 128
provisions of section 620. 3510; 129
(26) "Qualified employee", an employee of an eligible 130
business who is scheduled to work an average of at least 131
thirty-five hours per week for a twelve -month period or 132
meets the customary practices accepted by that industry as 133
full time; 134
(27) "Qualified investment", any investment in an 135
eligible business or any loan to an eligible business with a 136
stated maturity date of at least one year after the date of 137
issuance, excluding revolving lines of credit and senior 138
secured debt unless t he chief executive or similar officer 139
of the eligible business certifies that the eligible 140
business sought and was denied similar financing from a 141
depository institution, by a rural fund; provided, however 142
that with respect to any one eligible business , the maximum 143
amount of investments made in such business by one or more 144
rural funds, on a collective basis with all of the 145
business's affiliates, with the proceeds of capital 146
investments shall be the greater of twenty percent of the 147
rural fund's capital investment authority or six million 148
five hundred thousand dollars, exclusive of investments made 149
with repaid or redeemed investments or interest or profits 150
realized thereon; 151
(28) "Rural area", any area of this state that is set 152
out in the United States Department of Agriculture census 153 SCS HB 2170 26
places map as published by the United States Department of 154
Agriculture with a census place population of fewer than 155
fifty thousand inhabitants; 156
(29) "Rural fund", an entity certified by the 157
department under the provisions of section 620.3510; 158
(30) "Rural investor", an entity that makes a capital 159
investment in a rural fund, provided that such entity is not 160
an alien, foreign entity or foreign -owned entity, or a 161
foreign government; 162
(31) "Senior secured debt", any loan that is secured 163
by a first mortgage on real estate with a loan -to-value 164
ratio of less than eighty percent; 165
(32) "State sharing ratio", the ratio determined by 166
taking the sum of the actual and projected direct and 167
indirect state and local tax revenue projected over a period 168
of at least ten subsequent years, as shown on the most 169
recent revenue impact assessment submitted by the rural fund 170
as required in subdivision (5) of subsection 1 of section 171
620.3530, divided by th e amount of tax credit equity 172
contributed by the investors of the rural investor in 173
exchange for the tax credits authorized under sections 174
620.3500 to 620.3530; 175
(33) "State tax liability", any liability incurred by 176
any entity subject to the state income tax imposed under 177
chapter 143, excluding withholding tax imposed under 178
sections 143.191 to 143.265, or an insurance company paying 179
an annual tax on its gross premium receipts, including 180
retaliatory tax, or other financial institution paying tax es 181
to the state or any political subdivision of the state under 182
the provisions of chapter 148, or an express company that 183
pays an annual tax on its gross receipts in this state; 184 SCS HB 2170 27
(34) "Taxable sales", taxable sales as reported to the 185
Missouri department of revenue, calculated as set forth in 186
sections 144.010 to 144.525; 187
(35) "Third-party capital", the difference between the 188
rural fund's capital investment and the sum of the amount 189
invested by the allocatee claiming the tax credits and the 190
affiliate capital. 191
620.3510. 1. A rural fund that seeks to have an 1
equity investment certified as a capital investment eligible 2
for credits authorized under the provisions of sections 3
620.3500 to 620.3530 shall apply to the departm ent. The 4
department shall begin accepting applications within ninety 5
days of the effective date of sections 620.3500 to 6
620.3530. The application shall include: 7
(1) The amount of capital investment requested; 8
(2) A copy of the applicant's, or an affiliate of the 9
applicant's, license as a rural business investment company 10
under 7 U.S.C. Section 2009cc or as a small business 11
investment company under 15 U.S.C. Section 681 and a 12
certificate executed by an executive officer of the 13
applicant attesting that such license remains in effect and 14
has not been revoked; 15
(3) Evidence that, as of the date the application is 16
submitted, the applicant or affiliates of the applicant have 17
invested: 18
(a) At least one hundred million dollars in nonpublic 19
companies located in counties within the United States with 20
a population of fewer than fifty thousand according to the 21
2020 decennial census of the United States; and 22
(b) At least thirty million dollars in nonpublic 23
companies located in Missouri; 24 SCS HB 2170 28
(4) A business plan that includes a revenue impact 25
assessment projecting state and local tax revenue to be 26
generated by the applicant's proposed qualified investments, 27
prepared by a nationally recognized, third -party, 28
independent economic forecasting firm engaged by the 29
applicant, using a dynamic economic forecasting model that 30
analyzes the applicant's business plan in yearly increments 31
over the ten years following the date the application is 32
submitted to the department. Such plan shall include an 33
estimate of the new and maintained jobs, new and maintained 34
payroll, new and maintained revenue, and new and maintained 35
taxable sales in this state as a result of the applicant's 36
qualified investments; and 37
(5) A nonrefundable application fee of five thousand 38
dollars payable to the department. 39
2. Within sixty days after the receipt of a completed 40
application, the department shall approve or deny the 41
application in full or in part. The department shall deny 42
the application if: 43
(1) The applicant does not satisfy all of the criteria 44
provided under subsection 1 of this section; 45
(2) The revenue impact assessment submitted with the 46
application does not demonstrate that the applicant's 47
business plan will result in a positive fiscal impact on 48
this state over a ten -year period that exceeds the 49
cumulative amount of tax credits that would be issued to the 50
applicant if the application were approved; or 51
(3) The department has already approved the maximum 52
amount of capital investment authority under section 53
620.3515. 54
3. If the department denies any part of an 55
application, it shall inform the applicant of the grounds 56 SCS HB 2170 29
for such denial. If the applicant provides any additional 57
information required by the d epartment or otherwise 58
completes its application within fifteen days of the notice 59
of denial, the application shall be considered complete as 60
of the original date of resubmission. If the applicant 61
fails to provide the information or fails to complete its 62
application within the fifteen -day period, the application 63
shall remain denied and shall be resubmitted in full with a 64
new submission date and a new application fee. 65
4. Upon approval of an application, the department 66
shall certify the propose d equity investment as a capital 67
investment eligible for credits under sections 620.3500 to 68
620.3530, subject to the limitations contained in section 69
620.3515. The department shall provide written notice of 70
the certification to the applicant, which sh all include the 71
amount of the applicant's capital investment authority. The 72
department shall certify capital investments in the order 73
that the applications are received by the department. 74
Applications received on the same day shall be deemed to 75
have been received simultaneously. For applications that 76
are complete and received on the same day, the department 77
shall certify applications in proportionate percentages 78
based upon the ratio of the amount of capital investment 79
authority requested in an a pplication to the total amount of 80
capital investment authority requested in all applications. 81
620.3515. 1. The department shall certify capital 1
investment authority under the provisions of sections 2
620.3500 to 620.3530 in amounts th at would authorize not 3
more than sixteen million dollars in state tax credits to be 4
claimed against state tax liability in any calendar year, 5
excluding any credit amounts carried forward as provided 6
under subsection 1 of section 620.3520. Within ninety days 7 SCS HB 2170 30
of the applicant receiving notice of certification the rural 8
fund shall issue the capital investment to, and receive cash 9
in the amount of the certified amount from, a rural 10
investor. At least ten percent of the rural investor's 11
capital investment shall be composed of affiliate capital. 12
The rural fund shall provide the department with evidence of 13
the receipt of the cash investment within ninety -five days 14
of the applicant receiving notice of certification. Such 15
evidence shall include detai ls of the third-party capital 16
raised, including from any leverage source. 17
2. If a rural fund does not receive the cash 18
investment and issue the capital investment within such time 19
period following receipt of the certification notice, the 20
certification shall lapse and the rural fund shall not issue 21
the capital investment without reapplying to the department 22
for certification. Lapsed certifications shall revert to 23
the department and shall be reissued pro rata to applicants 24
whose capital investm ent allocations were reduced during the 25
immediately preceding application cycle in accordance with 26
the application process provided under subsection 4 of 27
section 620.3510. Any lapsed certification not reissued 28
within the same calendar year as the laps ed certification 29
was issued shall not be reissued. 30
3. A rural fund, before making a qualified investment, 31
may request from the department a written opinion as to 32
whether the business in which it proposes to invest is an 33
eligible business. Such request shall be on a form 34
developed by the department to be completed by the eligible 35
business and the rural fund. If the department fails to 36
notify the rural fund of its determination by the twentieth 37
business day following its receipt of the complet ed form and 38
all information necessary to form its opinion, the business 39 SCS HB 2170 31
in which the rural fund proposes to invest shall be deemed 40
an eligible business. 41
620.3520. 1. Upon making a capital investment in a 1
rural fund, a rural investo r shall have a vested right to 2
earn a tax credit that will be issued by the department that 3
may be used against such entity's state tax liability that 4
may be utilized on each credit allowance date of such 5
capital investment in an amount equal to the ap plicable 6
percentage for such credit allowance date multiplied by the 7
purchase price paid to the rural fund for the capital 8
investment. The amount of the credit claimed by a rural 9
investor shall not exceed the amount of such entity's state 10
tax liability for the tax year for which the credit is 11
claimed. Any amount of credit that a rural investor is 12
prohibited from claiming in a tax year as a result of this 13
section may be carried forward for use in any of the five 14
subsequent tax years but shall not be carried back to prior 15
tax years. A rural investor claiming a credit under the 16
provisions of sections 620.3500 to 620.3530 shall not incur 17
any additional tax that may arise as a result of claiming 18
such credit. 19
2. No credit claimed under the pr ovisions of sections 20
620.3500 to 620.3530 shall be refundable or sellable on the 21
open market. Credits earned by or allocated to a 22
partnership, limited liability company, or S -corporation may 23
be allocated to the partners, members, or shareholders of 24
such entity for their direct use in accordance with the 25
provisions of any agreement among such partners, members, or 26
shareholders, and a rural fund shall notify the department 27
of the names of the entities that are eligible to utilize 28
credits pursuant to an allocation of credits or a change in 29
allocation of credits, or due to a transfer of a capital 30 SCS HB 2170 32
investment upon such allocation, change, or transfer. Such 31
allocation shall not be considered a sale for the purposes 32
of this section. 33
3. The department may recapture credits from a 34
taxpayer that claimed a credit authorized under this section 35
if: 36
(1) A rural fund does not invest sixty percent of its 37
capital investment authority in qualified investments in 38
this state within two years of the credit allowance date, 39
and one hundred percent of its capital investment authority 40
in qualified investments in this state within three years of 41
the credit allowance date, provided that at least seventy 42
percent of such initial qualified investments shal l be made 43
in eligible businesses located in rural areas or eligible 44
businesses that are also agribusinesses. In no event shall 45
more than thirty percent of such initial qualified 46
investments be made in eligible businesses located outside 47
of a rural area; 48
(2) A rural fund fails to maintain qualified 49
investments equal to ninety percent of its capital 50
investment authority from the third until the sixth credit 51
allowance date with seventy percent of such investments 52
maintained in eligible business es located in rural areas or 53
eligible businesses that are also agribusinesses, provided 54
that in no event shall more than thirty percent of such 55
qualified investments be made in eligible businesses located 56
outside of a rural area. For each year the rur al fund fails 57
to maintain such investments, the department may recapture 58
an amount of such year's allowed credits equal to the 59
percentage difference between ninety percent of a rural 60
fund's capital investment authority and the actual amount of 61
qualified investments maintained for such year. For the 62 SCS HB 2170 33
purposes of this subdivision, a qualified investment is 63
considered maintained even if the qualified investment was 64
sold or repaid so long as the rural fund reinvests an amount 65
equal to the capital retur ned or recovered by the rural fund 66
from the original investment, exclusive of any profits 67
realized, in other qualified investments in this state 68
within twelve months of the receipt of such capital. 69
Amounts received periodically by a rural fund shall b e 70
treated as continually invested in qualified investments if 71
the amounts are reinvested in one or more qualified 72
investments by the end of the following calendar year. A 73
rural fund shall not be required to reinvest capital 74
returned from qualified in vestments after the fifth credit 75
allowance date, and such qualified investments shall be 76
considered held continuously by the rural fund through the 77
sixth credit allowance date; 78
(3) A rural fund, before exiting the program in 79
accordance with secti ons 620.3500 to 620.3530 or prior to 80
thirty days after the sixth credit allowance date, whichever 81
is earlier, makes a distribution or payment that results in 82
the rural fund having less than one hundred percent of its 83
capital investment authority invest ed in qualified 84
investments in this state or held in cash or other 85
marketable securities, provided a rural fund shall be 86
permitted to make distributions in amounts necessary for the 87
principal and interest payments due to the leverage source; 88
or 89
(4) A rural fund violates the provisions of section 90
620.3525, in which case the department may recapture an 91
amount equal to the amount of the rural fund's capital 92
investment authority found to be in violation of such 93
provisions. 94 SCS HB 2170 34
For the purposes of mee ting and maintaining the objectives 95
established for investment in subdivisions (1) and (2) of 96
this subsection, a rural fund's qualified investments shall 97
be multiplied by a factor of one and one -quarter in counties 98
with fewer than thirty thousand in po pulation and more than 99
thirteen thousand in population and shall be multiplied by a 100
factor of one and one -half in counties with a population of 101
thirteen thousand or fewer according to the most recent 102
decennial census. 103
4. No recapture shall occur until a rural fund has 104
been given notice of noncompliance and afforded six months 105
from the date of such notice to cure the noncompliance. 106
620.3525. No eligible business that receives a 1
qualified investment under the provisions of sec tions 2
620.3500 to 620.3530, or any affiliates of such eligible 3
businesses, shall directly or indirectly: 4
(1) Own or have the right to acquire an ownership 5
interest in a rural fund or member or affiliate of a rural 6
fund including, but not limited to, a holder of a capital 7
investment issued by the rural fund; or 8
(2) Loan to or invest in a rural fund or member or 9
affiliate of a rural fund, including, but not limited to, a 10
holder of a capital investment issued by a rural fund, where 11
the proceeds of such loan or investment are directly or 12
indirectly used to fund or refinance the purchase of a 13
capital investment under sections 620.3500 to 620.3530. 14
620.3530. 1. Rural funds shall submit a report to the 1
department within the first fifteen business days after the 2
second and third credit allowance date. The report 3
following the second credit allowance date shall provide 4
documentation as to the investment of sixty percent of the 5
purchase price of such capital investment i n qualified 6 SCS HB 2170 35
investments. The report following the third credit 7
allowance date shall provide documentation as to the 8
investment of one hundred percent of the purchase price of 9
such capital investment in qualified investments. For all 10
subsequent years, rural funds shall submit an annual report 11
to the department within ninety days of the beginning of the 12
calendar year during the compliance period. Unless 13
previously reported pursuant to this subsection, such 14
reports shall also include: 15
(1) The name and location of each eligible business 16
receiving a qualified investment; 17
(2) Bank statements of such rural fund evidencing each 18
qualified investment; 19
(3) A copy of the written opinion of the department, 20
as provided in subsection 3 of s ection 620.3515, or evidence 21
that such business was an eligible business at the time of 22
such qualified investment, as applicable; 23
(4) The total number of new jobs, maintained jobs, new 24
payroll, maintained payroll, new revenue, and maintained 25
revenue by each eligible business receiving a qualified 26
investment from a rural fund; 27
(5) A revenue impact assessment projecting state and 28
local tax revenue actually generated and projected to be 29
generated from a rural fund's qualified investments, 30
prepared by a nationally recognized, third -party, 31
independent firm engaged by the rural fund, using a dynamic 32
forecasting model that projects the direct and indirect 33
state and local tax revenue for a period of not less than 34
ten years; and 35
(6) Such other information as required by the 36
department. 37 SCS HB 2170 36
2. The program authorized under sections 620.3500 to 38
620.3530 shall be considered a business recruitment tax 39
credit under subdivision (4) of subsection 2 of section 40
135.800, and any rural fund app roved under this program 41
shall be subject to the provisions of sections 135.800 to 42
135.830. 43
3. On or after the sixth anniversary of the initial 44
credit allowance date, a rural fund may apply to the 45
department to exit the program and no longer be s ubject to 46
regulation under the provisions of sections 620.3500 to 47
620.3530. Such request shall be on a form developed by the 48
department to be completed by the rural fund. The 49
department shall respond to the exit application within 50
thirty days of receipt of the completed form. In the 51
department's evaluation of the exit application, the fact 52
that no credits have been recaptured and that the rural fund 53
has not received a notice of recapture that has not been 54
cured under subsection 4 of section 620. 3520 shall be 55
sufficient evidence to prove that the rural fund is eligible 56
for exit. The department shall not unreasonably deny, 57
delay, or withhold its determination of an exit application 58
submitted under this subsection. If the exit application is 59
denied, the notice shall include the reasons for such 60
determination. 61
4. Upon exit from the program in accordance with 62
subsection 3 of this section, in the event the state sharing 63
ratio is less than one, the state shall receive a share of 64
distributions made with respect to the capital investment 65
raised by the rural fund equal to one minus the state 66
sharing ratio multiplied by the amount of tax credit equity 67
contributed by the investors of the rural investor in 68
exchange for the tax credits autho rized under sections 69 SCS HB 2170 37
620.3500 to 620.3530, provided that the rural fund may make 70
distributions to make payments on the leverage source in an 71
amount not to exceed principal and interest owed on the 72
leverage source. A rural fund shall be credited agains t any 73
amounts due to the state pursuant to this subsection an 74
amount equal to the sum of any tax credits recaptured under 75
subsection 3 of section 620.3520 plus any unreturned 76
principal of a qualified investment that the rural fund 77
reasonably determine s is not likely to be repaid. 78
5. Pursuant to section 23.253 of the Missouri sunset 79
act: 80
(1) The program authorized under sections 620.3500 to 81
620.3530 shall expire on August 28, 2030, unless 82
reauthorized by the general assembly; 83
(2) Sections 620.3500 to 620.3530 shall terminate on 84
September first of the calendar year immediately following 85
the calendar year in which the program authorized under 86
sections 620.3500 to 620.3530 is sunset; and 87
(3) If such program is reauthorized, the program 88
authorized under sections 620.3500 to 620.3530 shall 89
automatically sunset six years after the effective date of 90
the reauthorization of sections 620.3500 to 620.3530; and 91
(4) Nothing in this subsection shall preclude a rural 92
fund that has received certified capital investment 93
authority from the department prior to the expiration of 94
sections 620.3500 to 620.3530 from issuing the capital 95
investment pursuant to that authority in accordance with 96
sections 620.3500 to 620.3530. 97
6. The department may adopt such rules, statements of 98
policy, procedures, forms, and guidelines as may be 99
necessary to carry out the provisions of sections 620.3500 100
to 620.3530. Any rule or portion of a rule, as that term is 101 SCS HB 2170 38
defined in section 536.010, that is created under the 102
authority delegated in this section shall become effective 103
only if it complies with and is subject to all of the 104
provisions of chapter 536 and, if applicable, section 105
536.028. This section and chapter 536 are nonseverable and 106
if any of the powers vested with the general assembly 107
pursuant to chapter 536 to review, to delay the effective 108
date, or to disapprove and annul a rule are subsequently 109
held unconstitutional, then the grant of rulemaking 110
authority and any rule proposed or adopted after August 28, 111
2024, shall be invalid and void. 112
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