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EXPLANATION-Matter enclosed in bold-faced brackets [thus] in this bill is not enacted
and is intended to be omitted in the law.
SECOND REGULAR SESSION
[TRULY AGREED TO AND FINALLY PASSED]
SENATE SUBSTITUTE FOR
SENATE BILL NO. 1553
103RD GENERAL ASSEMBLY
2026
6232S.02T
AN ACT
To repeal section 144.054, RSMo, and to enact in lieu thereof two new sections relating to
incentives for producing certain critical materials and pharmaceuticals.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Section 144.054, RSMo, is repealed and two new 1
sections enacted in lieu thereof, to be known as sections 2
144.054 and 620.1641, to read as follows:3
144.054. 1. As used in this section, the following 1
terms mean: 2
(1) "Critical materials", metal or metal complexes 3
included on the list of critical materials as published by 4
the United States Department of the Interior that serve an 5
essential function in key energy, defense, and consumer 6
product technologies and have a high risk of supply chain 7
disruption; 8
(2) "Critical pharmaceuticals", pharmaceutical active 9
ingredients, key starting materials, or essential finished 10
pharmaceuticals identified as critical to national security 11
or public health and having a high risk of supply chain 12
disruption as included on the list published by the United 13
States Food and Drug Administration; 14
(3) "Nuclear security enterprise", the same meaning as 15
defined in 50 U.S.C. Section 2501, inclusive of buildings, 16
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structures, and infrastructure constructed for use as a 17
defense nuclear facility as defined in 50 U.S.C. Section 18
2501; 19
[(2)] (4) "Processing", any mode of treatment, act, or 20
series of acts performed upon materials to transform or 21
reduce them to a different state or thing, including 22
treatment necessary to maintain or preserve such processing 23
by the producer at the production facility; 24
[(3)] (5) "Producing", includes, but is not limited 25
to, the production of, including the production and 26
transmission of, telecommunication services; 27
[(4)] (6) "Product", includes, but is not limited to, 28
telecommunications services, critical materials, and 29
critical pharmaceuticals; 30
[(5)] (7) "Recovered materials", those materials which 31
have been diverted or removed from the solid waste stream 32
for sale, use, reuse, or recycling, whether or not they 33
require subsequent separation and processing. 34
2. In addition to all other exemptions granted under 35
this chapter, there is hereby specifically exempted from the 36
provisions of this chapter and the local sales tax law as 37
defined in section 32.085 and from the computation of the 38
tax levied, assessed, or payable under this chapter and the 39
local sales tax law as defined in section 32.085, electrical 40
energy and gas, whether natural, artificial, or propane, 41
water, coal, and energy sources, chemicals, machinery, 42
equipment, and materials used or consumed in the 43
manufacturing, processing, compounding, mining, or producing 44
of any product, or used or consumed in the processing of 45
recovered materials, or used in research and development 46
related to manufacturing, processing, compounding, mining, 47
or producing any product. The construction and application 48
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of this subsection as expressed by the Missouri supreme 49
court in DST Systems, Inc. v. Director of Revenue, 43 S.W.3d 50
799 (Mo. banc 2001); Southwestern Bell Tel. Co. v. Director 51
of Revenue, 78 S.W.3d 763 (Mo. banc 2002); and Southwestern 52
Bell Tel. Co. v. Director of Revenue, 182 S.W.3d 226 (Mo. 53
banc 2005), is hereby affirmed. 54
3. In addition to all other exemptions granted under 55
this chapter, there is hereby specifically exempted from the 56
provisions of this chapter and the local sales tax law as 57
defined in section 32.085, and from the computation of the 58
tax levied, assessed, or payable under this chapter and the 59
local sales tax law as defined in section 32.085, all 60
utilities, machinery, and equipment used or consumed 61
directly in television or radio broadcasting and all sales 62
and purchases of tangible personal property, utilities, 63
services, or any other transaction that would otherwise be 64
subject to the state or local sales or use tax when such 65
sales are made to or purchases are made by a contractor for 66
use in fulfillment of any obligation under a defense 67
contract with the United States government, and all sales 68
and leases of tangible personal property by any county, 69
city, incorporated town, or village, provided such sale or 70
lease is authorized under chapter 100, and such transaction 71
is certified for sales tax exemption by the department of 72
economic development, and tangible personal property used 73
for railroad infrastructure brought into this state for 74
processing, fabrication, or other modification for use 75
outside the state in the regular course of business. 76
4. In addition to all other exemptions granted under 77
this chapter, there is hereby specifically exempted from the 78
provisions of this chapter and the local sales tax law as 79
defined in section 32.085, and from the computation of the 80
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tax levied, assessed, or payable under this chapter and the 81
local sales tax law as defined in section 32.085, all sales 82
and purchases of tangible personal property, utilities, 83
services, or any other transaction that would otherwise be 84
subject to the state or local sales or use tax when such 85
sales are made to or purchases are made by a private partner 86
for use in completing a project under sections 227.600 to 87
227.669. 88
5. In addition to all other exemptions granted under 89
this chapter, there is hereby specifically exempted from the 90
provisions of this chapter and the local sales tax law as 91
defined in section 32.085, and from the computation of the 92
tax levied, assessed, or payable under this chapter and the 93
local sales tax law as defined in section 32.085, all 94
materials, manufactured goods, machinery and parts, 95
electrical energy and gas, whether natural, artificial or 96
propane, water, coal and other energy sources, chemicals, 97
soaps, detergents, cleaning and sanitizing agents, and other 98
ingredients and materials inserted by commercial or 99
industrial laundries to treat, clean, and sanitize textiles 100
in facilities which process at least five hundred pounds of 101
textiles per hour and at least sixty thousand pounds per 102
week. 103
6. In addition to all other exemptions granted 104
pursuant to this chapter, there is hereby exempted from the 105
provisions of and the computation of the tax levied, 106
assessed, or payable pursuant to this chapter and the local 107
sales tax law as defined in section 32.085, all sales and 108
purchases of tangible personal property, building materials, 109
equipment, fixtures, manufactured goods, machinery, and 110
parts for the purposes of constructing all or any portion of 111
a nuclear security enterprise located in any city with more 112
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than four hundred thousand inhabitants and located in more 113
than one county. This subsection shall expire on August 28, 114
2034. 115
620.1641. 1. This section shall be known and may be 1
cited as the "Missouri Defense and Energy Independence Act". 2
2. As used in this section, the following terms mean: 3
(1) "Critical materials", metal or metal complexes 4
included on the list of critical materials as published by 5
the United States Department of the Interior that serve an 6
essential function in key energy, defense, and consumer 7
product technologies and have a high risk of supply chain 8
disruption; 9
(2) "Critical pharmaceuticals", pharmaceutical active 10
ingredients, key starting materials, or essential finished 11
pharmaceuticals identified as critical to national security 12
or public health and having a high risk of supply chain 13
disruption as included on the list published by the United 14
States Food and Drug Administration; 15
(3) "Department", the Missouri department of economic 16
development; 17
(4) "Missouri development finance board" or "MDFB", 18
the Missouri development finance board established under 19
section 100.265; 20
(5) "Notice of intent", a form developed by the 21
department and available online, completed by the qualified 22
company, and submitted to the department stating the 23
qualified company's intent to request tax credits under this 24
section as provided in subsection 5 of this section; 25
(6) "Project facility", the building or buildings used 26
by a qualified company at which critical materials or 27
critical pharmaceuticals will be produced or processed; 28
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(7) "Qualified company", a firm, partnership, joint 29
venture, association, private or public corporation 30
regardless of whether organized for profit, or headquarters 31
of such entity registered to do business in Missouri, that 32
is a nontraditional defense contractor, as such term is 33
defined in 10 U.S.C. Section 3014, as amended, and that 34
incurs qualified project costs. "Qualified company" shall 35
not include any company headquartered in a country 36
identified by the United States Director of National 37
Intelligence as a country that poses a risk to the national 38
security of the United States in at least one of the three 39
most recent annual threat assessments of the U.S. 40
intelligence community issued pursuant to Section 108B, 41
federal National Security Act of 1947 (50 U.S.C. Section 42
3043b); 43
(8) "Qualified project costs": 44
(a) Costs incurred by a qualified company for the 45
construction, expansion, or conversion of facilities and 46
acquisition of equipment for the production of critical 47
materials or critical pharmaceuticals, including, but not 48
limited to: 49
a. Site preparation; 50
b. Building construction or renovation; 51
c. Machinery and equipment acquisition and 52
installation, including any specialized manufacturing 53
equipment; 54
d. Utility infrastructure; and 55
e. Environmental compliance systems; 56
(b) "Qualified project costs" shall not include any 57
costs incurred by a qualified company utilizing a contractor 58
unless: 59
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a. Such contractor is selected through an open bidding 60
process and is headquartered in Missouri and for whom at 61
least eighty-five percent of the workforce used for any work 62
performed by the contractor for a qualified company reside 63
within Missouri; and 64
b. Such contractor maintains an existing United States 65
Department of Labor registered apprenticeship program; 66
(9) "State tax liability", any liability incurred by a 67
taxpayer pursuant to the provisions of chapter 143 or 68
chapter 148, exclusive of the provisions relating to the 69
withholding of tax as provided for in sections 143.191 to 70
143.265 and related provisions; 71
(10) "Tax credit", a credit against the tax otherwise 72
due under chapter 143 or chapter 148, excluding withholding 73
tax imposed under sections 143.191 to 143.265. 74
3. (1) For all tax years beginning on or after 75
January 1, 2027, the department may award a qualified 76
company tax credits for qualified project costs incurred by 77
the qualified company on or after January 1, 2027, provided 78
that no tax credit shall be authorized for any qualified 79
company that incurs less than five million dollars in 80
qualified project costs. The amount of the tax credit shall 81
be equal to: 82
(a) For qualified companies that incur qualified 83
project costs of at least five million dollars, but less 84
that fifteen million dollars, twenty percent of such 85
qualified project costs; and 86
(b) For qualified companies that incur qualified 87
project costs of at least fifteen million dollars, twenty- 88
five percent of qualified project costs. 89
(2) Tax credits authorized by this section shall not 90
be refundable, but may be carried forward for ten subsequent 91
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tax years or until the full amount of the tax credit has 92
been redeemed, whichever occurs first. 93
(3) Tax credits authorized by this section may be 94
transferred, sold, or otherwise assigned by filing a 95
notarized endorsement thereof with the department that names 96
the transferee, the amount of tax credit transferred, and 97
the value received for the credit, as well as any other 98
information reasonably requested by the department. For a 99
qualified company with flow-through tax treatment to its 100
members, partners, or shareholders, the tax credit shall be 101
allowed to members, partners, or shareholders in proportion 102
to their share of ownership on the last day of the qualified 103
company's tax period. 104
4. The cumulative amount of tax credits that may be 105
authorized pursuant to this section shall not exceed forty 106
million dollars in any fiscal year. If the amount of tax 107
credits applied for in a fiscal year exceeds forty million 108
dollars, tax credits shall be allowed based on the order in 109
which they are claimed. 110
5. A qualified company seeking tax credits authorized 111
by this section shall submit a notice of intent to the 112
department. Upon approval of a notice of intent to receive 113
tax credits under this section, the department and the 114
qualified company shall enter into a written agreement, 115
which shall specify, at a minimum: 116
(1) The types and amounts of critical materials that 117
will be produced or processed at the project facility, along 118
with any supporting information from the federal Department 119
of the Interior, Department of Energy, or Department of 120
Defense indicating a shortage or threat to supply of such 121
critical materials; 122
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(2) The types and amounts of critical pharmaceuticals 123
that will be produced or processed at the project facility, 124
along with any supporting information from the federal Food 125
and Drug Administration, Department of Defense, Department 126
of Veterans Affairs, or Department of Health and Human 127
Services indicating a shortage or threat to supply of such 128
critical pharmaceuticals; 129
(3) The estimated amount of capital investment to be 130
made and the estimated number of new jobs to be created at 131
the project facility; 132
(4) Clawback provisions, as may be required by the 133
department; 134
(5) Financial guarantee provisions as may be required 135
by the department; and 136
(6) Any other provisions the department may require. 137
6. (1) There is hereby created in the state treasury 138
the "Grants for Independence from Foreign Influence Fund", 139
which shall consist of at least ten million dollars 140
appropriated by the general assembly and any gifts, 141
contributions, grants, or bequests received from federal, 142
private, or other sources. The state treasurer shall be 143
custodian of the fund. In accordance with sections 30.170 144
and 30.180, the state treasurer may approve disbursements. 145
The fund shall be a dedicated fund and, upon appropriation, 146
moneys in the fund shall be used solely as provided in 147
subsection 7 of this section. 148
(2) Notwithstanding the provisions of section 33.080 149
to the contrary, any moneys remaining in the fund at the end 150
of the biennium shall not revert to the credit of the 151
general revenue fund. 152
(3) The state treasurer shall invest moneys in the 153
fund in the same manner as other funds are invested. Any 154
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interest and moneys earned on such investments shall be 155
credited to the fund. 156
7. (1) The department shall develop and implement 157
grants for independence from foreign influence as provided 158
in this subsection. 159
(2) The department shall establish procedures for the 160
solicitation, evaluation, and approval of grant applications 161
received from a qualified company. A qualified company may 162
submit a grant application for the award of moneys for 163
qualified project costs incurred by the qualified company as 164
provided in this subsection. 165
(3) The department shall evaluate each application and 166
approve or reject such application. Subject to 167
appropriations, upon approval of an application, the MDFB 168
shall serve as the third-party administrator of the grant 169
funds, and shall disburse the grant award from the grants 170
for independence from foreign influence fund in an amount 171
not to exceed five hundred thousand dollars per grant 172
application. 173
(4) Moneys granted to a qualified company under this 174
section shall be used solely for qualified project costs 175
incurred before the completion of the project facility. 176
8. The department shall promulgate all necessary rules 177
and regulations for the administration of this section 178
including, but not limited to, rules relating to the 179
verification of a qualified company's qualified project 180
costs. Any rule or portion of a rule, as that term is 181
defined in section 536.010, that is created under the 182
authority delegated in this section shall become effective 183
only if it complies with and is subject to all of the 184
provisions of chapter 536 and, if applicable, section 185
536.028. This section and chapter 536 are nonseverable and 186
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if any of the powers vested with the general assembly 187
pursuant to chapter 536 to review, to delay the effective 188
date, or to disapprove and annul a rule are subsequently 189
held unconstitutional, then the grant of rulemaking 190
authority and any rule proposed or adopted after August 28, 191
2026, shall be invalid and void. 192
9. Pursuant to section 23.253 of the Missouri sunset 193
act: 194
(1) The program authorized pursuant to this section 195
shall automatically sunset on December 31, 2036, unless 196
reauthorized by an act of the general assembly; 197
(2) This section shall terminate on September first of 198
the calendar year immediately following the calendar year in 199
which the program authorized pursuant to this section is 200
sunset; and 201
(3) The provisions of this subsection shall not be 202
construed to impair or impede the state's fulfillment of any 203
obligations, including the authorization, issuance, or 204
redemption of tax credits, incurred pursuant to this section 205
prior to the date the program authorized pursuant to this 206
section is sunset. 207
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