Establishes the Missouri Innovation, Public Safety, and Accountability Act

SECOND REGULAR SESSION
SENATE BILL NO. 1668
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR GREGORY (21).
7173S.01I KRISTINA MARTIN, Secretary
AN ACT
To amend chapter 620, RSMo, by adding thereto nine new sections relating to downtown
redevelopment incentives.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 620, RSMo, is amended by adding thereto 1
nine new sections, to be known as sections 620.6000, 620.6003, 2
620.6006, 620.6009, 620.6012, 620.6015, 620.6018, 620.6021, and 3
620.6024, to read as follows:4
620.6000. 1. Sections 620.6000 to 620.6024 shall be 1
known and may be cited as the "Missouri Innovation, Public 2
Safety, and Accountability Act". 3
2. As used in sections 620.6000 to 620.6024, the 4
following terms mean: 5
(1) "Application", a written submission by a project 6
sponsor seeking one or more economic development incentives 7
authorized under sections 620.6000 to 620.6024 for a project 8
located within an innovation district, consisting of: 9
(a) A description of the proposed project; 10
(b) Documentation sufficient to demonstrate 11
eligibility for the incentives sought; and 12
(c) Information necessary to evaluate the project 13
under the master scorecard. An application shall be deemed 14
submitted upon delivery in the form prescribed by rule and 15
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shall not be deemed incomplete except for failure to provide 16
information expressly required by such rule; 17
(2) "City", any incorporated city, town, or 18
municipality organized under the laws of the state of 19
Missouri; 20
(3) "Department", the Missouri department of economic 21
development; 22
(4) "Executive branch", the chief executive officer of 23
a participating city and any department, agency, or officer 24
acting under the authority of such chief executive officer, 25
consistent with the city's form of government to administer, 26
oversee, and carry out the responsibilities of an innovation 27
district authorized under sections 620.6000 to 620.6024; 28
(5) "Innovation district", a locally designated 29
geographic area within a participating city that overlays 30
its historic downtown, central business district, or 31
Missouri main street district, as applicable; 32
(6) "Innovation district master plan", a locally 33
prepared plan submitted by the executive branch to the 34
department under sections 620.6000 to 620.6024, identifying 35
district boundaries, existing conditions, and reinvestment 36
priorities within the innovation district; 37
(7) "Main street district", an accredited, associated, 38
or affiliated main street district of the Missouri main 39
street program created under sections 251.470 to 251.485; 40
(8) "Master scorecard", the framework established 41
under sections 620.6000 to 620.6024 for evaluating project- 42
level development incentives within an innovation district; 43
(9) "Participating city", a city that has voluntarily 44
elected to establish an innovation district and is eligible 45
to participate in programs authorized under sections 46
620.6000 to 620.6024; 47
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(10) "Reviewing authority", the local governing body, 48
commission, board, or state agency authorized by law to 49
approve or administer an incentive for which an application 50
is submitted. 51
3. There is hereby established the "Innovation 52
District Program", a framework through which cities may 53
qualify for state-authorized economic incentives. 54
4. No city shall be required to establish an 55
innovation district. A city that elects to participate 56
shall do so in partnership with the state and in accordance 57
with the requirements of sections 620.6000 to 620.6024 and 58
applicable rules promulgated by the department. 59
5. Nothing in sections 620.6000 to 620.6024 shall be 60
construed to supersede local authority over land use, 61
zoning, or building codes. 62
6. (1) A city may apply to the department for 63
designation of an innovation district by submitting an 64
innovation district master plan for approval under the 65
requirements of this section. 66
(2) No local legislative act, ordinance, or resolution 67
shall be required as a prerequisite to designation of an 68
innovation district under this section. 69
(3) Upon approval of the innovation district master 70
plan by the department, the innovation district shall be 71
deemed designated for purposes of sections 620.6000 to 72
620.6024. 73
(4) The executive branch shall: 74
(a) Prepare and submit the innovation district master 75
plan; 76
(b) Coordinate with the department and local reviewing 77
authorities regarding district-level implementation; 78
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(c) Provide oversight of district-level reinvestment 79
mechanisms authorized under sections 620.6000 to 620.6024; 80
and 81
(d) Perform such other functions as may be necessary 82
to carry out the purposes of the innovation district program. 83
7. An innovation district master plan submitted to the 84
department shall include: 85
(1) The proposed innovation district geographic 86
boundaries; 87
(2) Identification of vacant or underutilized property 88
for the purpose of demonstrating where and how incentives 89
authorized under sections 620.6000 to 620.6024 are expected 90
to be deployed and the impact such incentives are intended 91
to have; 92
(3) Public safety and infrastructure priorities; 93
(4) A general strategy for surplus or incremental 94
state revenues captured under sections 620.6000 to 620.6024; 95
and 96
(5) High-level projections of anticipated housing 97
units, jobs, business, and population impacts. 98
8. A city shall not be permitted more than one 99
innovation district and the department shall not consider 100
multiple proposals from a city. 101
9. The department's approval authority shall be 102
limited to determining whether the proposed innovation 103
district boundaries are reasonable in geography and are 104
generally consistent with this section. All other 105
information required to be included in the master plan shall 106
be informational in nature and shall not be subject to 107
discretionary approval, modification, or denial by the 108
department. The department shall approve the innovation 109
district master plan within forty-five calendar days of 110
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receipt of a complete application. Failure to act within 111
this period shall constitute automatic approval, provided 112
the submitted plan satisfies all applicable requirements. 113
10. (1) Upon designation of an innovation district, 114
the following state-administered incentives shall be made 115
available within the district, subject to the terms of 116
sections 620.6000 to 620.6024 and administered by the 117
applicable state agency: 118
(a) Missouri income tax exemption; 119
(b) Missouri opportunity zone; 120
(c) Office-to-residential tax credit; 121
(d) State sales tax reinvestment and withholdings 122
reinvestment, where authorized; and 123
(e) Any other incentive expressly authorized by state 124
law to be administered by a state agency within an 125
innovation district. 126
(2) Upon designation of an innovation district, the 127
following locally administered incentives may be made 128
available within the district, subject to the terms of 129
sections 620.6000 to 620.6024 and administered by the 130
applicable local governing body: 131
(a) Property tax abatement; and 132
(b) Tax increment financing. 133
(3) Eligibility for incentives within an innovation 134
district shall be determined on a project-by-project basis. 135
(4) Upon designation of an innovation district, the 136
incentives under sections 620.6000 to 620.6024 shall apply 137
within the district to otherwise eligible projects by 138
operation of law. No ordinance, resolution, policy, or 139
practice adopted by a participating city shall have the 140
effect of limiting, suspending, conditioning, or rendering 141
unavailable any such incentives within the district. 142
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11. (1) The department shall adopt and administer a 143
single, standardized master scorecard to evaluate incentives 144
for projects located within an innovation district. A 145
participating city and the department shall apply the master 146
scorecard uniformly and exclusively and shall not adopt, 147
substitute, supplement, or modify alternative scoring 148
criteria for such projects. 149
(2) The master scorecard shall apply only to the 150
following incentives authorized under state law and 151
administered or approved at the local or state level: 152
(a) Property tax abatement; 153
(b) Tax increment financing; and 154
(c) The office-to-residential tax credit. 155
(3) The master scorecard shall: 156
(a) Establish uniform criteria for evaluating project- 157
level incentives within the innovation district; 158
(b) Provide predictability and transparency regarding 159
baseline incentive eligibility; 160
(c) Rank projects based on measurable outcome; 161
(d) Establish intermediate incentive tiers for 162
projects scoring below the department's threshold for full 163
eligibility; and 164
(e) Assign project applications to incentive tiers 165
based on their normalized score, as established by rule of 166
the department. 167
(4) A project that achieves a normalized score of one 168
hundred points shall be entitled to the most favorable 169
incentive package available under state law for each 170
incentive governed by the master scorecard, subject only to 171
statutory limitations applicable to such incentive. 172
(5) Nothing in sections 620.6000 to 620.6024 shall be 173
construed to prohibit or limit a local governing authority 174
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from awarding additional or enhanced local or locally 175
administered incentives beyond those indicated by a 176
project's score. 177
(6) Nothing in sections 620.6000 to 620.6024 shall be 178
construed to authorize the reduction, abatement, diversion, 179
or impairment of any existing revenues of the participating 180
city. Any property tax abatement or tax increment financing 181
incentive evaluated under the master scorecard shall apply 182
solely to net new assessed value, net new tax increment, or 183
net new property tax revenues. 184
(7) Any denial, limitation, reduction, or conditioning 185
of an incentive governed by this section that is based on 186
criteria inconsistent with the master scorecard or sections 187
620.6000 to 620.6024 shall be invalid, and the applicant 188
shall be entitled to administrative and judicial remedies as 189
provided by law. 190
12. (1) The master scorecard shall evaluate projects 191
based on the following categories for purposes of 192
determining incentive tiers: 193
(a) Housing activation, rehabilitation, and creation; 194
(b) Affordability; 195
(c) Ground-floor activation and tenant improvements; 196
(d) Community improvements and neighborhood 197
connectivity; 198
(e) Historic preservation; 199
(f) Access, mobility, and infrastructure; 200
(g) Family-oriented design; 201
(h) Resident amenities and quality of life features; 202
(i) Economic impact and stabilization; 203
(j) Workforce practices, procurement, and stewardship. 204
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The department shall assign point values to each category by 205
rule, consistent with this section. Applicability of 206
categories shall be determined under criteria established by 207
rule and shall not be subject to applicant election. 208
(2) No scoring category shall be weighed or applied in 209
a manner that: 210
(a) Accounts for a disproportionate share of the total 211
score; 212
(b) Causes the category to function as a mandatory 213
prerequisite for approval; or 214
(c) Has the practical effect of requiring a specific 215
policy outcome as a condition of receiving an incentive 216
governed by this section. 217
Participation in, or compliance with, any scoring category 218
including, but not limited to, affordability, prevailing 219
wage practices, or minority or women-owned business 220
participation shall be voluntary and encouraged only through 221
scoring and not as a requirement. 222
13. (1) The reviewing authority shall issue a written 223
determination approving or denying an application for 224
incentives under sections 620.6000 to 620.6024 within forty- 225
five calendar days. 226
(2) Failure of a reviewing authority to issue a 227
written determination within the applicable review period 228
shall result in deemed approval of the application. 229
(3) If a reviewing authority fails to issue the 230
required ministerial confirmation of a deemed approval, the 231
department shall, upon request of the applicant, issue a 232
written certification of deemed approval within forty-five 233
calendar days. Failure of the department to issue such 234
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certification within the prescribed period shall not impair 235
the effectiveness of the deemed approval. 236
620.6003. 1. In order to maintain designation as an 1
innovation district, a participating city shall, within six 2
months of designation, adopt, establish, or designate the 3
policies, processes, and authorities set forth in this 4
section and shall thereafter maintain such commitment on an 5
ongoing basis. 6
2. A participating city shall establish a fast-track 7
permitting process or "One-Stop Shop" for projects located 8
within an innovation district, which shall include 9
designation of a single, empowered point of contact, either 10
an individual or a designated group, within local 11
government, authorized to coordinate reviews and issue 12
binding determinations on behalf of all relevant 13
departments, agencies, and offices exercising permitting, 14
entitlement, inspection, or approval authority over the 15
project including, but not limited to, zoning, planning, 16
permitting, and building, fire, and life safety. 17
3. (1) The participating city shall provide: 18
(a) A clear and accessible application process; 19
(b) Coordinated interdepartmental review; and 20
(c) Issuance of an approval or denial within forty- 21
five calendar days of submission of a complete application. 22
(2) If a complete application is not approved or 23
denied within forty-five calendar days of submission, the 24
application shall be deemed approved by operation of law, 25
provided that the proposed project does not violate 26
applicable zoning requirements or life safety and fire 27
safety codes. 28
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(3) Nothing in this subsection shall be construed to 29
waive or diminish compliance with zoning, structural, fire 30
safety, or life safety requirements. 31
4. (1) A participating city shall adopt a policy to 32
waive, reduce, or defer discretionary, duplicative, or 33
extraordinary permit and development fees for projects 34
located within the innovation district. 35
(2) Such policy shall not require waiver of fees 36
necessary to support the baseline health, staffing, and 37
operation of the building department or other reviewing 38
agencies, and may distinguish between essential operational 39
fees and discretionary or incremental charges. 40
5. (1) Any property subject to an existing tax 41
increment financing plan or tax abatement agreement at the 42
time of innovation district designation shall continue to be 43
governed by the terms of such existing agreement, and 44
nothing in sections 620.6000 to 620.6024 shall be construed 45
to impair, modify, or terminate such agreement. 46
(2) For properties within an innovation district that 47
are not subject to an existing project-specific tax 48
increment financing plan or property tax abatement 49
agreement, fifty percent of the incremental increase in real 50
property tax revenues generated after designation shall be 51
treated as tax increment for purposes of deposit into the 52
applicable innovation district public safety fund, 53
established under section 620.6009. The reallocation of 54
such funds shall be determined by the executive branch under 55
sections 620.6000 to 620.6024. 56
(3) For new development or redevelopment projects 57
within an innovation district that are not subject to an 58
existing agreement, a project may elect, at the time of 59
project approval, whether to: 60
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(a) Commence a project-specific tax increment 61
financing plan for the maximum term authorized by law; 62
(b) Commence a property-specific property tax 63
abatement for the maximum term authorized by law; or 64
(c) Proceed without either incentive. 65
Such election shall be voluntary and shall be made in 66
accordance with the incentive tier determined under the 67
master scorecard. 68
6. (1) A participating city shall adopt policies 69
providing building code flexibility for adaptive reuse 70
projects within an innovation district. Such policies shall: 71
(a) Permit performance-based compliance pathways, 72
particularly with respect to energy code requirements; 73
(b) Recognize the environmental and economic benefits 74
of embodied carbon savings associated with adaptive reuse; 75
and 76
(c) Maintain compliance with structural integrity, 77
fire safety, and life safety standards. 78
(2) Nothing in this subsection shall be construed to 79
require adoption of any specific building or energy code 80
standard. 81
7. (1) If the department determines that a 82
participating city has failed to adopt or maintain one or 83
more requirements of this section, the department shall 84
provide written notice of such noncompliance. 85
(2) The participating city shall have ninety calendar 86
days from receipt of such notice to cure the noncompliance. 87
(3) If the noncompliance is not cured within ninety 88
calendar days, the department may suspend the participating 89
city's innovation district designation until such time as 90
compliance is restored. 91
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(4) Any suspension or revocation of innovation 92
district designation under this section shall apply 93
prospectively only and shall not: 94
(a) Impair, modify, or terminate any incentive, 95
agreement, approval, or benefit previously awarded; 96
(b) Affect the validity or enforceability of any 97
incentive, agreement, approval, or benefit previously 98
awarded; or 99
(c) Give rise to any claim for damages against an 100
applicant arising solely from the suspension or revocation 101
of district designation. 102
(5) Projects that have received approval or entered 103
into binding agreements in reliance on innovation district 104
designation prior to notice of noncompliance shall be 105
permitted to proceed in accordance with the terms of such 106
approvals or agreements. 107
8. (1) The department shall prepare and submit a 108
biennial written report to the general assembly summarizing 109
the status, performance, and outcomes of the innovation 110
district program. The purpose of the report is to provide 111
transparency, accountability, and aggregate evaluation 112
regarding the implementation and performance of innovation 113
districts and the incentives authorized under sections 114
620.6000 to 620.6024. The report shall be informational in 115
nature and shall not be used to impose additional approval 116
requirements, conditions, or penalties on any innovation 117
district or approved projects. 118
(2) Information included in the report shall be 119
presented in aggregate or summary form, by district and 120
statewide where appropriate, and shall not disclose 121
confidential taxpayer information or identify individual 122
projects unless otherwise required by law. 123
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(3) The report shall include, to the extent reasonably 124
available, the following categories of information: 125
(a) The number of innovation districts designated and 126
the communities participating during the reporting period; 127
(b) The number and types of projects approved within 128
innovation districts and the distribution of incentive tiers 129
authorized under the master scorecard; 130
(c) Aggregate counts of housing, commercial, or mixed- 131
use activation, and other redevelopment occurring within 132
innovation districts; 133
(d) Aggregate counts of employment impacts, including 134
net new or retained employment where such data is available; 135
(e) A summary of public safety, infrastructure, or 136
other public investment activities undertaken within 137
innovation districts under sections 620.6000 to 620.6024; and 138
(f) Any observations or recommendations the department 139
determines may assist the general assembly in evaluating the 140
effectiveness of the program. 141
9. The department may retain, subject to 142
appropriation, a limited portion of net new state revenues 143
generated under sections 620.6000 to 620.6024 solely for the 144
administration of the innovation district program. Such 145
retained amounts shall be derived exclusively from net new 146
economic activity attributable to innovation districts and 147
shall not reduce or impair any existing state or local 148
revenues. No application, participation, or administrative 149
fees shall be imposed under sections 620.6000 to 620.6024. 150
10. The department shall promulgate such rules and 151
regulations as are necessary to implement and administer 152
sections 620.6000 to 620.6024, provided that such rules are 153
consistent with and reasonably necessary to carry out the 154
purposes, structure, and operative provisions of sections 155
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620.6000 to 620.6024. Any rule or portion of a rule, as 156
that term is defined in section 536.010, that is created 157
under the authority delegated in sections 620.6000 to 158
620.6024 shall become effective only if it complies with and 159
is subject to all of the provisions of chapter 536 and, if 160
applicable, section 536.028. This section and chapter 536 161
are nonseverable and if any of the powers vested with the 162
general assembly pursuant to chapter 536 to review, to delay 163
the effective date, or to disapprove and annul a rule are 164
subsequently held unconstitutional, then the grant of 165
rulemaking authority and any rule proposed or adopted after 166
August 28, 2026, shall be invalid and void. 167
11. Under section 23.253 of the Missouri sunset act: 168
(1) The provisions of the new program authorized under 169
sections 620.6000 to 620.6024 shall sunset ten years after 170
the effective date of sections 620.6000 to 620.6024 unless 171
reauthorized by an act of the general assembly; and 172
(2) Sections 620.6000 to 620.6024 shall terminate on 173
September first of the calendar year immediately following 174
the calendar year in which the program authorized under 175
sections 620.6000 to 620.6024 is sunset. 176
620.6006. 1. There is hereby established the "Rural 1
Missouri Development Fund", to be administered by the 2
department of economic development, for the purpose of 3
supporting economic development, infrastructure, housing, 4
workforce development, and related community-building 5
activities in rural and smaller communities throughout the 6
state. 7
2. (1) For purposes of this section, a "contributing 8
community" means a municipality that: 9
(a) Has designated one or more innovation districts 10
under sections 620.6000 to 620.6024; and 11
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(b) Has a total certified assessed valuation that 12
ranks within the highest five percent of all Missouri 13
municipalities statewide, as most recently determined by the 14
Missouri state tax commission or the department of revenue. 15
(2) No municipality that does not meet both criteria 16
in subdivision (1) of this subsection shall be required to 17
contribute to the rural Missouri development fund. 18
3. (1) Each contributing community shall annually 19
contribute to the rural Missouri development fund an amount 20
equal to ten percent of net new property tax revenues 21
actually received by such communities that are generated 22
within its innovation district above the applicable baseline. 23
(2) For purposes of this section, "net new property 24
tax revenues actually received" means property tax revenues 25
collected and retained by the community that are 26
attributable to increases in assessed valuation occurring 27
upon designation of the innovation district. 28
(3) "Net new property tax revenues actually received" 29
shall not include: 30
(a) Any property tax revenues abated, exempted, or 31
otherwise forgone under a property tax abatement agreement; 32
or 33
(b) Any property tax increment captured, pledged, or 34
otherwise dedicated under a tax increment financing plan. 35
(4) Contributions under this section shall be derived 36
solely from collected incremental revenues and shall not 37
reduce or impair any existing property tax revenues, nor any 38
revenue subject to abatement or tax increment financing. 39
4. (1) Moneys in the rural Missouri development fund 40
may be awarded to: 41
(a) Rural municipalities; 42
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(b) Smaller municipalities not meeting the definition 43
of a contributing community; or 44
(c) Local or regional development organizations, 45
community development corporations, or similar entities 46
applying on behalf of or in coordination with such 47
communities. 48
(2) Receipt of funds under this section shall not 49
require a community to establish an innovation district. 50
5. Funds awarded under this section may be used for 51
the following purposes including, but not limited to: 52
(1) Rural education; 53
(2) Public infrastructure improvements or public 54
safety; 55
(3) Housing development, rehabilitation, or 56
stabilization; 57
(4) Workforce development or training; 58
(5) Health care or community service facilities; and 59
(6) Other economic purposes consistent with the intent 60
of sections 620.6000 to 620.6024. 61
6. (1) The department of economic development shall 62
administer the rural Missouri development fund and shall 63
establish an application process for eligible recipients. 64
(2) In administering the fund, the department shall 65
consider: 66
(a) Project readiness; 67
(b) Demonstrated community need; and 68
(c) Alignment with the purposes of this section. 69
7. One percent of the revenue collected from the net 70
new property tax generated by a contributing community shall 71
be deposited into the fund for the department to be used 72
toward administrative fees to administer this section. 73
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8. The department shall promulgate such rules and 74
regulations as are necessary to implement and administer 75
this section. Any rule or portion of a rule, as that term 76
is defined in section 536.010, that is created under the 77
authority delegated in this section shall become effective 78
only if it complies with and is subject to all of the 79
provisions of chapter 536 and, if applicable, section 80
536.028. This section and chapter 536 are nonseverable and 81
if any of the powers vested with the general assembly 82
pursuant to chapter 536 to review, to delay the effective 83
date, or to disapprove and annul a rule are subsequently 84
held unconstitutional, then the grant of rulemaking 85
authority and any rule proposed or adopted after August 28, 86
2026, shall be invalid and void. 87
620.6009. 1. There is hereby established the 1
"Innovation District Public Safety Fund" for the purpose of 2
reinvesting a portion of net new state economic activity 3
generated within an innovation district into public safety, 4
public infrastructure, and related improvements that support 5
sustained district vitality. 6
2. (1) Subject to the exclusions set forth in this 7
section, the innovation district public safety fund shall 8
receive fifty percent of incremental state tax receipts 9
generated within a designated innovation district that would 10
otherwise be deposited into the state general revenue fund. 11
(2) For purposes of this section, "incremental state 12
tax receipts" means: 13
(a) State sales tax revenues attributable to 14
transactions occurring within the innovation district, in 15
excess of the applicable baseline under subsection 3 of this 16
section; and 17
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(b) State income tax withholdings attributable to 18
wages paid for employment occurring within the innovation 19
district, in excess of the applicable baseline under 20
subsection 3 of this section. 21
No other state taxes shall be subject to recapture under 22
this section unless expressly authorized by law. 23
3. The baseline for determining incremental state tax 24
receipts shall be established by the administrator based on 25
actual state sales tax and state withholding tax collections 26
within the innovation district during the twelve months 27
immediately preceding designation of the district. The 28
baseline shall remain fixed for the purposes of calculating 29
incremental receipts under this section. 30
4. (1) This section shall not apply to any geographic 31
area located within: 32
(a) A district designated as a super tax increment 33
financing district, whether such a district exists at the 34
time of innovation district designation or is created 35
thereafter; or 36
(b) A district designated under the Missouri Downtown 37
Economic Stimulus Authority Act (MODESA), whether such a 38
district exists at the time of innovation district 39
designation or is created thereafter. 40
(2) Incremental state tax receipts generated within 41
excluded geographic areas shall not be subject to recapture 42
under this section. 43
(3) Excluded geographic areas shall not receive, 44
directly or indirectly, or benefit from moneys remitted to 45
or expended from the innovation district public safety fund, 46
including funding for public safety, infrastructure, or 47
public realm improvements. 48
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5. (1) Moneys remitted under this section shall be 49
deposited into a dedicated local fund or account established 50
by the participating city for the applicable innovation 51
district. 52
(2) The innovation district board shall have authority 53
to allocate and direct the use of such moneys, subject to 54
the eligible uses set forth in sections 620.6000 to 620.6024 55
and consistent with the innovation district master plan. 56
(3) Moneys remitted under this section shall be used 57
solely for the benefit of the innovation district from which 58
such revenues were generated. 59
(4) All moneys remitted and expended under this 60
section shall remain subject to generally applicable state 61
and local accounting, auditing, and public finance laws. 62
6. (1) Moneys remitted from the innovation district 63
public safety fund may be used for capital or operating 64
expenditures related to public safety and public realm 65
improvements within the innovation district, including but 66
not limited to: 67
(a) Police services and law enforcement staffing; 68
(b) Lighting, cameras, and surveillance systems; 69
(c) Wayfinding and signage; 70
(d) Sidewalks, streets, crosswalks, and traffic- 71
calming improvements; 72
(e) Landscaping, trees, and plazas; 73
(f) Stabilization, remediation, demolition, or 74
redevelopment preparation of real property; 75
(g) Maintenance or operations directly related to 76
public safety or district infrastructure; 77
(h) Other public safety or public infrastructure 78
improvements consistent with the purposes of this section. 79
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(2) The use of innovation district public safety fund 80
moneys for police services shall be limited to sworn law 81
enforcement officers or duly authorized law enforcement 82
agencies and shall not include private security or non-law- 83
enforcement personnel acting in a public safety capacity. 84
Moneys remitted under this section shall supplement and not 85
supplant existing public safety funding obligations of the 86
participating city. 87
7. (1) A project sponsor may apply to the department 88
of economic development for a construction-phase withholding 89
for a project located within an innovation district, 90
provided that: 91
(a) The project has received all required local 92
approvals; and 93
(b) The project has total hard construction costs of 94
not less than five million dollars. 95
(2) An application for a construction-phase 96
withholding advance shall be submitted to the department 97
after project approval and prior to project stabilization, 98
in such form and manner as prescribed by rule. 99
(3) The department shall authorize a construction- 100
phase withholding advance upon demonstration by the project 101
sponsor that: 102
(a) The project is located within a designated 103
innovation district; 104
(b) The project will generate construction-phase 105
employment occurring within the district; and 106
(c) The project is reasonably projected to generate 107
state income tax withholdings attributable to construction- 108
phase employment above the applicable baseline. 109
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The department's review shall be limited to verification of 110
eligibility and projected withholding amounts and shall not 111
include discretionary policy evaluation. 112
(4) The amount of a construction-phase withholding 113
advance authorized under this section shall not exceed 114
twenty-five percent of the projected state income tax 115
withholdings attributable to construction-phase employment 116
generated by the project above the applicable baseline. In 117
no event shall a project sponsor receive construction-phase 118
withholding advances exceeding twenty-five percent of actual 119
construction-phase withholdings generated by the project. 120
Construction-phase withholding advances shall not be 121
eligible for use as qualifying reinvestment expenditures 122
under section 620.6015. 123
8. An authorized construction-phase withholding 124
advance shall not be disbursed until the project sponsor 125
demonstrates to the department that: 126
(1) Construction has commenced; and 127
(2) Not less than ten percent of the total hard 128
construction costs have been incurred. 129
Upon satisfaction of such requirements, the department shall 130
disburse the approved advance within forty-five calendar 131
days, as a lump sum. 132
9. The department shall approve or deny an application 133
for a construction-phase withholding advance within forty- 134
five calendar days of receipt of a complete application. 135
Failure to act within such period shall result in deemed 136
approval of the application as submitted. 137
10. For purposes of this section, "construction-phase 138
employment" means employment primarily engaged in 139
construction, demolition, rehabilitation, or related 140
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activities associated with an approved development project 141
and occurring prior to project stabilization. Construction- 142
phase employment shall not include permanent or stabilized 143
employment. 144
11. (1) Following completion of construction, the 145
department shall verify the actual amount of state income 146
tax withholdings attributable to construction-phase 147
employment generated by the project above the applicable 148
baseline. 149
(2) If twenty-five percent of the actual construction- 150
phase withholdings equals or exceeds the amount of the 151
construction-phase withholding advance disbursed to the 152
project, no further action shall be required. 153
(3) If twenty-five percent of the actual construction- 154
phase withholdings is less than the amount of the 155
construction-phase withholding advance disbursed, the excess 156
shall be repaid by the project sponsor or offset against 157
future allocations, as determined by rule. 158
12. All incremental state tax receipts attributable to 159
construction-phase employment not subject to an approved 160
construction-phase withholding advance shall be allocated 161
for the benefit of the applicable innovation district and 162
controlled by the innovation district board in accordance 163
with sections 620.6000 to 620.6024. 164
13. The department of economic development shall 165
promulgate all rules necessary to implement this section, 166
provided that such rules are consistent with and reasonably 167
necessary to carry out the purposes, structure, and 168
operative provisions of sections 620.6000 to 620.6024. In 169
promulgating such rules, the department shall consult with 170
the department of revenue to the extent necessary for the 171
administration of this section. Any rule or portion of a 172
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rule, as that term is defined in section 536.010, that is 173
created under the authority delegated in this section shall 174
become effective only if it complies with and is subject to 175
all of the provisions of chapter 536 and, if applicable, 176
section 536.028. This section and chapter 536 are 177
nonseverable and if any of the powers vested with the 178
general assembly pursuant to chapter 536 to review, to delay 179
the effective date, or to disapprove and annul a rule are 180
subsequently held unconstitutional, then the grant of 181
rulemaking authority and any rule proposed or adopted after 182
August 28, 2026, shall be invalid and void. 183
620.6012. 1. This section establishes an income tax 1
abatement incentive for qualifying individuals establishing 2
residency within an innovation district. 3
2. As used in this section, the following terms mean: 4
(1) "Primary residence", a dwelling unit within an 5
innovation district that the individual occupies as the 6
individual's principal place of residence for Missouri 7
income tax purposes, whether such dwelling unit is owned or 8
leased by the individual; 9
(2) "Qualified new resident", an individual who: 10
(a) Was not a resident of the state of Missouri for 11
state income tax purposes during the most recent tax year 12
preceding the tax year for which the exclusion is claimed; 13
and 14
(b) Establishes a primary residence within an 15
innovation district and is a resident of the state of 16
Missouri for state income tax purposes during the tax year 17
for which the exclusion is claimed. 18
3. For all tax years beginning on or after January 1, 19
2027, the income tax exclusion authorized by this section 20
shall apply for each tax year in which the individual 21
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remains a resident of the state of Missouri for income tax 22
purposes and maintains a primary residence within an 23
innovation district. The exclusion shall not apply for any 24
tax year in which either condition is not satisfied. 25
4. Nothing in this section shall be construed to 26
require that a qualified new resident occupy a primary 27
residence within an innovation district for any minimum 28
number of days or months during a tax year, provided the 29
individual otherwise qualifies as a Missouri resident for 30
income tax purposes and maintains such residence as the 31
individual's primary residence. 32
5. Any reduction in tax as a result of such exclusion 33
shall be fully recaptured by the department of revenue for 34
the tax year in which eligibility is lost if the qualified 35
new resident no longer meets the requirements provided under 36
this section. The amount required to be recaptured shall be 37
deemed an underpayment of tax and shall be due and payable 38
on the tax return that is due immediately following the loss 39
of residency. 40
6. Notwithstanding any other limitation contained in 41
the laws of this state, collection of any taxes deemed to be 42
an underpayment by this section shall be allowed for a 43
innovation district of three years following the due date of 44
the recaptured taxes. 45
7. An individual who was a resident of the state of 46
Missouri for income tax purposes during the most recent tax 47
year preceding the tax year for which the exclusion is 48
claimed shall not be eligible for the exclusion authorized 49
by this section. 50
8. The department of economic development shall 51
promulgate all rules necessary to implement this section, 52
provided that such rules are consistent with and reasonably 53
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necessary to carry out the purposes, structure, and 54
operative provisions of sections 620.6000 to 620.6024. In 55
promulgating such rules, the department shall consult with 56
the department of revenue to the extent necessary for the 57
administration of this section. Any rule or portion of a 58
rule, as that term is defined in section 536.010, that is 59
created under the authority delegated in this section shall 60
become effective only if it complies with and is subject to 61
all of the provisions of chapter 536 and, if applicable, 62
section 536.028. This section and chapter 536 are 63
nonseverable and if any of the powers vested with the 64
general assembly pursuant to chapter 536 to review, to delay 65
the effective date, or to disapprove and annul a rule are 66
subsequently held unconstitutional, then the grant of 67
rulemaking authority and any rule proposed or adopted after 68
August 28, 2026, shall be invalid and void. 69
9. Under section 23.253 of the Missouri sunset act: 70
(1) The provisions of the new program authorized under 71
this section shall sunset ten years after the effective date 72
of this section unless reauthorized by an act of the general 73
assembly; and 74
(2) This section shall terminate on September first of 75
the calendar year immediately following the calendar year in 76
which the program authorized under this section is sunset. 77
620.6015. 1. This section establishes an employer 1
retention and reinvestment withholding incentive for 2
retention of jobs and reinvestment by businesses 3
establishing a continuous presence in an innovation district. 4
2. As used in this section, the following terms mean: 5
(1) "Baseline payroll", the employer's average 6
quarterly gross payroll attributable to the innovation 7
district location for the four consecutive calendar quarters 8
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immediately preceding approval of a withholding agreement 9
under this section, or such alternative baseline as may be 10
established for a newly locating or expanding employer under 11
a withholding agreement; 12
(2) "Eligible employee", an employee whose primary 13
work location is physically located within the innovation 14
district and who performs services on-site at such location 15
on a regular basis; 16
(3) "Eligible employer", an employer that operates a 17
business within an innovation district and that satisfies 18
the requirements of this section. An eligible employer 19
shall not include an employer that relocates, consolidates, 20
or transfers business operations from a location outside the 21
innovation district to a location within the district if 22
such relocation results in a material reduction of payroll 23
at the originating location; 24
(4) "Material reduction of payroll", a reduction of 25
more than five percent in the employer's aggregate gross 26
payroll attributable to the originating location, as 27
compared to the applicable baseline payroll; 28
(5) "Qualifying reinvestment expenditures" or "QREs", 29
documented expenditures incurred by an eligible employer for 30
capital improvements or other investments at or for the 31
benefit of the innovation district location, including but 32
not limited to: security and safety improvements, including 33
security officers, lighting, cameras, and access control; 34
building systems improvements; tenant improvements; public 35
infrastructure improvements; life-safety systems; code 36
compliance; accessibility improvements; or other 37
expenditures approved by the department that are consistent 38
with the purposes of this section, provided that such 39
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expenditures supplement and do not supplant ordinary 40
operating expenses; 41
(6) "Withholding agreement", a written agreement 42
entered into between an eligible employer and the department 43
of economic development under this section that specifies: 44
(a) The amount and duration of the withholding benefit; 45
(b) The method by which the withholding benefit is 46
delivered, whether as a credit or authorized retention of 47
withholdings; 48
(c) The qualifying reinvestment expenditures to be 49
undertaken by the employer, demonstrating that the QREs 50
supplant existing operating or capital expenditures; 51
(d) Payroll baseline and maintenance requirements; 52
(e) Reporting, verification, audit, notice, and cure 53
requirements; and 54
(f) Any other terms necessary to carry out the 55
purposes of this section; 56
(7) "Withholding benefit", the state income tax 57
withholdings attributable to eligible employees that an 58
eligible employer is authorized to receive, either through a 59
credit or through authorized retention of such withholdings, 60
which may be carried forward under a withholding agreement 61
under this section; 62
(8) "Withholding tax credit", a nonrefundable credit 63
against the employer's liability otherwise due under chapter 64
143, equal to all or a portion of the withholding benefit 65
authorized under a withholding agreement under this section, 66
which may be carried forward in accordance with this section. 67
3. An eligible employer may, but shall not be required 68
to, apply to enter into a withholding agreement with the 69
department of economic development under this section. For 70
all tax years beginning on or after January 1, 2027, an 71
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eligible employer that enters into a withholding agreement 72
may receive a withholding benefit attributable to eligible 73
employees. The withholding benefit may be delivered either 74
as a withholding tax credit or as authorized retention of 75
state income tax withholdings, as specified in the 76
withholding agreement. The method of delivery shall not 77
affect the amount of the withholding benefit authorized 78
under this section. 79
4. (1) Applications for a withholding agreement may 80
be submitted at any time. The department of economic 81
development shall approve or deny any application for a 82
withholding agreement within forty-five calendar days of 83
receipt of a complete application. The department shall 84
approve a withholding agreement unless it determines that: 85
(a) The applicant does not meet the eligibility 86
requirements of this section; or 87
(b) The applicant is not in good standing with the 88
department of economic development or the department of 89
revenue with respect to tax compliance or reporting 90
obligations. 91
(2) Any denial shall be issued in writing and shall 92
state the specific grounds for denial. Failure of the 93
department to approve or deny an application within forty- 94
five calendar days shall result in approval of the 95
application as submitted. 96
5. The withholding benefit authorized under this 97
section shall not exceed three percent of the aggregate 98
gross wages paid to eligible employees at the innovation 99
district location during a tax year. The withholding 100
benefit may be authorized for an innovation district not to 101
exceed ten years, as specified in the withholding 102
agreement. A withholding tax credit issued under this 103
SB 1668 29
section shall be nonrefundable and may be carried forward in 104
accordance with the terms of the withholding agreement. The 105
department may establish aggregate or annual program caps by 106
rule to manage fiscal exposure. 107
6. A withholding agreement shall provide that the 108
withholding benefit is requested and authorized on a 109
quarterly basis, based on state income tax withholdings 110
attributable to covered employees during the applicable 111
calendar quarter. The department of economic development 112
may authorize a withholding agreement to permit requests on 113
a semi-annual basis, if determined appropriate based on the 114
size or nature of the employer and provided that such 115
authorization does not impart verification or compliance. 116
In no event shall a withholding agreement authorize 117
automatic retention or crediting of withholdings beyond the 118
applicable request period without review and verification as 119
required by this section. 120
7. Any withholding benefit received under this section 121
shall be used solely for qualifying reinvestment 122
expenditures. In no event shall the total amount of 123
withholding benefit received by an eligible employer exceed 124
the total amount of qualifying reinvestment expenditures 125
actually incurred and paid under the withholding agreement. 126
8. To receive and retain a withholding benefit under 127
this section, an eligible employer shall: 128
(1) Operate within an innovation district; 129
(2) Demonstrate a commitment to remain at the 130
innovation district location for not less than five years; 131
(3) Complete qualifying reinvestment expenditures 132
under the withholding agreement; 133
(4) Maintain not less than ninety-five percent of 134
baseline payroll, subject to notice and cure; and 135
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(5) Submit any other information reasonably requested 136
by the department. 137
9. (1) An employer receiving a withholding benefit 138
shall submit to the department of economic development, on a 139
quarterly basis, a certification of: 140
(a) State income tax withholdings attributable to 141
eligible employees; 142
(b) Compliance with payroll maintenance requirements; 143
and 144
(c) Qualifying reinvestment expenditures incurred to 145
date. 146
(2) If the department determines that an employer is 147
not in compliance, the department shall provide written 148
notice of noncompliance. The employer shall have thirty 149
calendar days from receipt of such notice to cure the 150
noncompliance or submit a cure plan acceptable to the 151
department. If the employer fails to cure within the 152
applicable innovation district, the withholding agreement 153
may be suspended or terminated, and any excess withholding 154
benefit shall be subject to recapture as provided in the 155
agreement. 156
10. The department may authorize a withholding 157
agreement for an employer that is newly locating or 158
expanding within an innovation district, provided that 159
baseline payroll is established under the withholding 160
agreement following a reasonable ramp-up innovation district. 161
11. The department of economic development may audit 162
QREs and withholding benefit usage. Any amount determined 163
to have been improperly claimed or retained shall be repaid 164
to the state or offset against future withholding benefits, 165
as provided in the withholding agreement. 166
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12. An employer may participate in the incentive 167
authorized under this section concurrently with 168
participation in the Missouri one start program under 169
sections 620.800 to 620.809, the Missouri quality jobs act 170
under sections 620.1875 to 620.1890, or the state economic 171
development programs, provided that each program's statutory 172
requirements are independently satisfied. Participation 173
under this section shall not disqualify an employer from 174
other incentives, nor shall benefits under this section be 175
aggregated for purposes of determining eligibility or 176
leverage under other programs expressly required by law. 177
The withholding tax credit under the Missouri one start 178
program under sections 620.800 to 620.809 or the Missouri 179
quality jobs act under sections 620.1875 to 620.1890 shall 180
be collected and disbursed prior to the collection and 181
disbursement of the withholding benefits under the 182
provisions of this section. 183
13. Tax credits issued under the provisions of this 184
section shall not be refundable. No tax credit claimed 185
under this section shall be assigned, transferred, sold, or 186
otherwise conveyed. 187
14. The department of economic development, in 188
coordination with the department of revenue, shall 189
promulgate all necessary rules and regulations for the 190
administration of this section. Any rule or portion of a 191
rule, as that term is defined in section 536.010, that is 192
created under the authority delegated in this section shall 193
become effective only if it complies with and is subject to 194
all of the provisions of chapter 536 and, if applicable, 195
section 536.028. This section and chapter 536 are 196
nonseverable and if any of the powers vested with the 197
general assembly pursuant to chapter 536 to review, to delay 198
SB 1668 32
the effective date, or to disapprove and annul a rule are 199
subsequently held unconstitutional, then the grant of 200
rulemaking authority and any rule proposed or adopted after 201
August 28, 2026, shall be invalid and void. 202
15. Under section 23.253 of the Missouri sunset act: 203
(1) The provisions of the new program authorized under 204
this section shall sunset ten years after the effective date 205
of this section unless reauthorized by an act of the general 206
assembly; 207
(2) This section shall terminate on September first of 208
the calendar year immediately following the calendar year in 209
which the program authorized under this section is sunset; 210
and 211
(3) Nothing in this subsection shall prevent a 212
taxpayer from claiming a tax credit properly issued before 213
this program was sunset in a tax year after the program is 214
sunset. 215
620.6018. 1. This section establishes an employer 1
relocation withholding tax credit incentive. 2
2. As used in this section, the following terms mean: 3
(1) "Eligible employee", an individual who: 4
(a) Relocates from a location outside the state of 5
Missouri to accept employment with an eligible employer; 6
(b) Establishes a primary residence within an 7
innovation district or a location within ten miles of an 8
innovation district, measured in a straight-line distance, 9
provided such residence is located within the state of 10
Missouri; and 11
(c) Earns annual wages of at least seventy thousand 12
dollars; 13
(2) "Eligible employer", a business entity that: 14
SB 1668 33
(a) Was not conducting business operations within the 15
state of Missouri prior to establishing operations within an 16
innovation district; and 17
(b) Establishes a business location within an 18
innovation district; 19
(3) "Eligible relocation expenses", includes 20
reasonable and necessary, one-time costs incurred in 21
connection with an eligible employee's relocation to the 22
state of Missouri, which may include: 23
(a) Moving and transportation expenses for household 24
goods and personal effects; 25
(b) Travel expenses associated with the relocation; 26
(c) Temporary housing expenses incurred during the 27
relocation period; and 28
(d) Relocation-related professional services, as 29
further defined by rule of the department of economic 30
development; 31
(4) "Primary residence", a dwelling unit located 32
within the geographic area described in paragraph (b) of 33
subdivision (1) of this subsection that the eligible 34
employee occupies as the employee's principal place of 35
residence for Missouri income tax purposes, whether owned or 36
leased, and that the employee intends to use as such 37
residence during the period required under this section; 38
(5) "State tax credit", a credit against the tax 39
otherwise due under chapter 143 or 148. 40
3. For all tax years beginning on or after January 1, 41
2027, an eligible employer shall be allowed to claim a tax 42
credit against the employer's state tax liability in an 43
amount up to five thousand dollars per tax year per eligible 44
employee for eligible relocation expenses incurred on behalf 45
of such employees. 46
SB 1668 34
4. An eligible employer applying for a state tax 47
credit under the provisions of this section shall follow the 48
application procedures established under section 620.6000 49
and any additional requirements established by the 50
department of economic development. If the employer meets 51
all criteria required under the provisions of this section 52
and section 620.6000 and approval is granted by the 53
department of economic development, the department shall 54
issue a tax credit certificate in the appropriate amount. 55
5. Tax credits issued under the provisions of this 56
section shall be refundable. Tax credits claimed under this 57
section may be carried forward to subsequent tax years up to 58
five years. No tax credit claimed under this section shall 59
be assigned, transferred, sold, or otherwise conveyed. 60
6. State tax credits claimed by an employer under this 61
section shall be recaptured by the department of revenue if 62
the eligible employee relocates to another residence that no 63
longer meets the requirements provided under this section 64
within twelve consecutive months after the state tax credit 65
is claimed. Any amount required to be recaptured shall be 66
due and payable on the tax return that is due immediately 67
following the employee's relocation. 68
7. The department of economic development, in 69
coordination with the department of revenue, shall 70
promulgate all necessary rules and regulations for the 71
administration of this section. Any rule or portion of a 72
rule, as that term is defined in section 536.010, that is 73
created under the authority delegated in this section shall 74
become effective only if it complies with and is subject to 75
all of the provisions of chapter 536 and, if applicable, 76
section 536.028. This section and chapter 536 are 77
nonseverable and if any of the powers vested with the 78
SB 1668 35
general assembly pursuant to chapter 536 to review, to delay 79
the effective date, or to disapprove and annul a rule are 80
subsequently held unconstitutional, then the grant of 81
rulemaking authority and any rule proposed or adopted after 82
August 28, 2026, shall be invalid and void. 83
8. Under section 23.253 of the Missouri sunset act: 84
(1) The provisions of the new program authorized under 85
this section shall sunset ten years after the effective date 86
of this section unless reauthorized by an act of the general 87
assembly; 88
(2) This section shall terminate on September first of 89
the calendar year immediately following the calendar year in 90
which the program authorized under this section is sunset; 91
and 92
(3) Nothing in this subsection shall prevent a 93
taxpayer from claiming a tax credit properly issued before 94
this program was sunset in a tax year after the program is 95
sunset. 96
620.6021. 1. This section establishes an office-to- 1
residential conversion tax credit incentive. 2
2. As used in this section, the following terms mean: 3
(1) "Department", the Missouri department of economic 4
development; 5
(2) "Innovation District", the program created under 6
section 620.6000; 7
(3) "Qualified conversion expenditures", any amount 8
properly chargeable to a capital account. The term 9
"qualified conversion expenditures" shall not include: 10
(a) The cost of acquisition; 11
(b) Any expenditure attributable to the enlargement of 12
an existing building; or 13
(c) Tax-exempt properties; 14
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(4) "Qualified converted building", any building and 15
its structural components if: 16
(a) Prior to conversion, such building was 17
nonresidential real property, as defined in 26 U.S.C. 18
Section 168(e)(2)(B), as amended, that was leased, or 19
available for lease, to office tenants, or utilized for 20
office purposes by the owner-occupant; 21
(b) Such building has been substantially converted 22
from an office use to a predominantly residential use, 23
defined as more than fifty percent of the gross square 24
footage of the building, and may also include retail, or 25
other commercial use, and may also include accessory on-site 26
or required off-site parking; 27
(c) Such building was initially placed in service at 28
least twenty-five years before the beginning of the 29
conversion; and 30
(d) Such building was vacant or blighted and has been 31
substantially converted from office use to residential or 32
mixed-use; 33
(5) "Substantially converted", qualified conversion 34
expenditures incurred during the twenty-four-month period 35
preceding final approval of tax credits that in total are 36
greater than: 37
(a) The adjusted basis of such building and its 38
structural components, as determined as of the beginning of 39
the first day of such twenty-four-month period, or of the 40
holding period of the building, whichever is later; or 41
(b) Fifteen thousand dollars if the property is 42
located in a qualified Missouri main street district, or 43
five hundred thousand dollars if the property is not located 44
in a qualified Missouri main street district. In the case 45
of any conversion that may reasonably be expected to be 46
SB 1668 37
completed in phases set forth in architectural plans and 47
specifications completed before the conversion begins, 48
qualified conversion expenditures shall be totaled for the 49
sixty-month period preceding final approval of tax credits 50
rather than the twenty-four-month period preceding such 51
final approval; 52
(6) "Tax credit", the office-to-residential conversion 53
tax credit authorized by this section, which may be applied, 54
at the election of the taxpayer, against: 55
(a) The taxpayer's liability under chapter 143; or 56
(b) The taxpayer's liability for state sales and use 57
taxes under chapter 144; 58
(7) "Upper-floor housing", any housing that is 59
attached to or contained in the same building as commercial 60
property, whether located on the ground floor behind the 61
traditional storefront or on other floors of the property. 62
3. (1) For all tax years beginning on or after 63
January 1, 2027, the department shall issue a taxpayer a tax 64
credit up to twenty-five percent of qualified conversion 65
expenditures with respect to a qualified converted building 66
or upper-floor housing located in a qualified innovation 67
district. If the amount of such tax credit exceeds the 68
taxpayer's state tax liability for the year in which tax 69
credits are issued, the amount that exceeds the state tax 70
liability may be carried back to any of the three preceding 71
tax years or carried forward for credit against state tax 72
liability for the succeeding ten tax years, or until the 73
full credit is used, whichever occurs first. 74
(2) Tax credits authorized under this section may be 75
transferred, sold, or assigned, and shall retain the same 76
attributes as in the hands of the assignor. Tax credits may 77
be transferred multiple times. In order to transfer a tax 78
SB 1668 38
credit authorized under this section, the assignor and 79
assignee shall complete and submit a tax credit transfer 80
form provided by the department of revenue. Such transfers 81
may be facilitated through an intermediary entity as 82
permitted by law without affecting the nature or attributes 83
of the tax credit. 84
(3) Tax credits authorized for a partnership, a 85
limited liability company taxed as a partnership, or 86
multiple owners of property shall be passed through to the 87
partners, members, or owners respectively pro rata, or under 88
an executed agreement among the partners, members, or owners 89
documenting an alternate distribution method. 90
(4) The assignee of a tax credit may use the acquired 91
tax credits to offset up to one hundred percent of the 92
taxpayer's state tax liability. The assignor shall perfect 93
such transfer by notifying the department in writing within 94
thirty calendar days following the effective date of the 95
transfer and shall provide any information as may reasonably 96
be required by the department. 97
4. (1) For all tax years beginning on or after 98
January 1, 2027, the department shall issue a taxpayer a tax 99
credit up to thirty percent of qualified conversion 100
expenditures with respect to upper-floor housing located in 101
a qualified Missouri main street district. If the amount of 102
such tax credit exceeds the taxpayer's state tax liability 103
for the year in which tax credits are issued, the amount 104
that exceeds the state tax liability may be carried back to 105
any of the three preceding tax years or carried forward for 106
credit against state tax liability for the succeeding ten 107
tax years, or until the full credit is used, whichever 108
occurs first. 109
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(2) Tax credits authorized under this section may be 110
transferred, sold, or assigned, and shall retain the same 111
attributes as in the hands of the assignor. Tax credits may 112
be transferred multiple times. In order to transfer a tax 113
credit authorized under this section, the assignor and 114
assignee shall complete and submit a tax credit transfer 115
form provided by the department of revenue. Such transfers 116
may be facilitated through an intermediary entity as 117
permitted by law without affecting the nature or attributes 118
of the tax credit. 119
(3) Tax credits authorized for a partnership, a 120
limited liability company taxed as a partnership, or 121
multiple owners of property shall be passed through to the 122
partners, members, or owners respectively pro rata, or under 123
an executed agreement among the partners, members, or owners 124
documenting an alternate distribution method. 125
(4) The assignee of a tax credit may use the acquired 126
tax credits to offset up to one hundred percent of the 127
taxpayer's state tax liability. The assignor shall perfect 128
such transfer by notifying the department in writing within 129
thirty calendar days following the effective date of the 130
transfer and shall provide any information as may be 131
required by the department. 132
5. (1) The total amount of tax credits authorized 133
under this section shall not exceed fifty million dollars in 134
any fiscal year. 135
(2) Fifty percent of the maximum amount of tax credits 136
available to be authorized to taxpayers in a fiscal year 137
under this section shall be authorized solely for structures 138
of more than seven hundred fifty thousand gross square 139
feet. If the total amount of such reserved tax credits has 140
been authorized, structures of more than seven hundred fifty 141
SB 1668 40
thousand gross square feet may receive tax credits from the 142
remaining unreserved amount of tax credits. If the total 143
amount of reserved tax credits has not been authorized by 144
the department, structures of less than seven hundred fifty 145
thousand gross square feet may be authorized to receive tax 146
credits from such reserved amount. The total amount of tax 147
credits for a structure of more than seven hundred fifty 148
thousand gross square feet may be allocated to the annual 149
limits provided in this section over a period of up to ten 150
years if: 151
(a) The project otherwise meets all the requirements 152
of this section and section 620.6000; and 153
(b) The project meets the ten percent incurred costs 154
test under this section within thirty-six months after an 155
award is authorized. 156
Nothing in this subsection shall be construed to require 157
allocation over multiple tax years where sufficient annual 158
capacity exists. 159
(3) Twenty-five percent of the maximum amount of tax 160
credits available to be authorized to taxpayers in a fiscal 161
year under this section shall be authorized solely for upper- 162
floor housing projects located in a qualified Missouri main 163
street district. If the total amount of such reserved tax 164
credits have been authorized, upper-floor housing projects 165
located in a qualified Missouri main street district may 166
receive tax credits from the remaining unreserved amount of 167
tax credits. If the total amount of reserved tax credits 168
has not been authorized by the department, projects not 169
located in a qualified Missouri main street district may be 170
authorized tax credits from such reserved amount. 171
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(4) If the maximum amount of tax credits allowed in 172
any fiscal year, as provided under this section, is 173
authorized, the maximum amount of tax credits allowed under 174
this section shall be adjusted by the percentage increase in 175
the Consumer Price Index for All Urban Consumers, or its 176
successor index, as such index is defined and officially 177
reported by the United States Department of Labor, or its 178
successor agency, beginning in the fiscal year following any 179
fiscal year in which the full annual cap is authorized. 180
Only one such adjustment shall be made for each instance in 181
which the provisions of this subsection apply. The 182
department shall publish such adjusted amount. 183
6. In the event the department authorizes tax credits 184
equal to the total amount available under this section, or 185
sufficient that when totaled with all other approvals, the 186
amount available under this section is exhausted, all 187
taxpayers with applications then awaiting approval or 188
thereafter submitted for approval shall be notified by the 189
department that no additional approvals shall be granted 190
during the fiscal year and shall be notified of the priority 191
given to such taxpayer's application then awaiting 192
approval. Such applications shall be kept on file by the 193
department and shall be considered for approval for tax 194
credits in the order established in this section in the 195
event that additional tax credits become available due to 196
the rescission of approvals, or when a new fiscal year's 197
allocation of tax credits becomes available for approval. 198
7. (1) To obtain approval for tax credits under this 199
section, a taxpayer shall submit to the department an 200
application for preliminary approval for tax credit 201
authorization. The department shall have sixty calendar 202
days to review the application and shall notify the 203
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applicant in writing within thirty calendar days of the 204
decision of whether the application has been authorized for 205
tax credits. Each application for approval, including any 206
applications received for supplemental allocations of tax 207
credits, as provided under this section, shall be authorized 208
for tax credits in the order of submission. 209
(2) Each application shall be reviewed by the 210
department for approval. In order to receive approval, an 211
application shall include: 212
(a) Proof of ownership or site control. Proof of 213
ownership shall include evidence that the taxpayer is the 214
fee simple owner of the eligible property, such as a 215
warranty deed or a closing statement. Proof of site control 216
may be evidenced by a leasehold interest or an option to 217
acquire such an interest. If the taxpayer is in the process 218
of acquiring fee simple ownership, proof of site control 219
shall include an executed sales contract or an executed 220
option to purchase the eligible property; 221
(b) Floor plans of the existing structure, 222
architectural plans and, where applicable, plans of the 223
proposed conversion of the structure, as well as proposed 224
additions; 225
(c) The estimated cost of conversion, the anticipated 226
total costs of the project, the actual basis of the 227
property, as shown by proof of actual acquisition costs, the 228
anticipated total labor costs, the estimated project start 229
date, and the estimated project completion date; 230
(d) Proof that the property is an eligible property; 231
(e) A copy of all land use and building approvals 232
reasonably necessary for the commencement of the project; and 233
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(f) Any other information that the department may 234
reasonably require to review the project for approval to 235
determine compliance with the requirements of this section. 236
8. Only the property for which a property address is 237
provided in the application shall be reviewed for approval. 238
Once selected for review, a taxpayer shall not be permitted 239
to request the review of another property for approval in 240
the place of the property contained in such application. 241
Any disapproved application shall be removed from the review 242
process. If an application is removed from the review 243
process, the department shall notify the taxpayer in writing 244
of the decision to remove such application. The taxpayer 245
may subsequently submit a revised application. For the 246
purposes of determining the order of submission and 247
authorization of credits, the revised application shall be 248
considered a new application. 249
9. The department shall use the innovation district 250
master scorecard under sections 620.6000 to 620.6024 for the 251
approval of the proposed project and to determine the credit 252
amount. The applicant shall receive a score of at least 253
fifty points to qualify for the lowest tier of incentive, 254
which is a ten percent credit. 255
10. If the department determines that the application 256
meets the requirements of this section and section 620.6000 257
to receive an authorization of tax credits, the taxpayer 258
shall be notified in writing within forty-five days of the 259
approval for an amount of tax credits equal to the amounts 260
provided in this section, subject to the provisions of 261
section 620.6000, unless approval of such credits would 262
cause the total aggregate amount of tax credits approved 263
under this section for all projects in the applicable tax 264
year to exceed the annual limitation established herein. 265
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Tax credits approved under this section shall be approved 266
and administered independently of any other state tax credit 267
program and shall not be aggregated or evaluated in 268
combination with other state tax credits for purposes of 269
determining eligibility, scoring, leverage ratios, or 270
maximum award limitations under such other programs. Such 271
approvals shall be granted to applications in the order of 272
priority established under this section and shall require 273
full compliance thereafter with all other requirements of 274
law as a condition to any claim for such tax credits. 275
11. Following approval of an application, the identity 276
of the taxpayer contained in such application shall not be 277
modified except: 278
(1) The taxpayer may add partners, members, or 279
shareholders as part of the ownership structure, so long as 280
the principal remains the same; provided, however, that 281
subsequent to the commencement of renovation and the 282
expenditure of at least ten percent of the proposed 283
rehabilitation budget, removal of the principal for failure 284
to perform duties and the appointment of a new principal 285
thereafter shall not constitute a change of the principal; or 286
(2) Where the ownership of the project is changed due 287
to a foreclosure, deed in lieu of a foreclosure or voluntary 288
conveyance, or a transfer in bankruptcy. 289
12. Upon approval of a tax credit application, a 290
taxpayer shall: 291
(1) Submit within one hundred twenty days from the 292
date of the award of such credits, evidence of the capacity 293
of the applicant to finance the costs and expenses for the 294
conversion of the eligible property in the form of a line of 295
credit or letter of commitment subject to the lender's 296
termination for a material adverse change impacting the 297
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extension of credit. If the department determines that a 298
taxpayer has failed to comply with the requirements of this 299
subdivision, the department shall notify the applicant of 300
such failure and the applicant shall have a thirty-day 301
period from the date of such notice to submit additional 302
evidence to remedy the failure; and 303
(2) Commence conversion within twelve months of the 304
date of issuance of the letter from the department granting 305
the approval for tax credits. For the purposes of this 306
subsection, "commence conversion" shall mean that, as of the 307
date in which actual physical work, contemplated by the 308
architectural plans submitted with the application, has 309
begun, the taxpayer has incurred no less than ten percent of 310
the estimated hard construction costs provided in the 311
application. Taxpayers with approval of a project shall 312
submit evidence of compliance with the provisions of this 313
subsection. If the department determines that a taxpayer 314
has failed to comply with the requirements of this 315
subdivision, the department shall provide the taxpayer 316
written notice of noncompliance. The taxpayer shall have 317
thirty calendar days from receipt of such notice to respond 318
in writing to the department and demonstrate that conversion 319
has commenced, substantial steps toward commencement have 320
been taken, or good cause exists for the delay. Upon a 321
showing of good cause, including delays beyond the 322
taxpayer's reasonable control, the department shall grant a 323
cure period of not less than ninety calendar days to allow 324
commencement of conversion. Tax credits approved under this 325
section shall be rescinded only if the taxpayer fails to 326
commence conversion within the applicable period following 327
written notice and opportunity to cure. Rescinded tax 328
credits shall be included in the total amount of tax credits 329
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from which approvals may be granted. In such a case, the 330
applicant may submit a new application for the project. 331
13. To claim a tax credit authorized under this 332
section, a taxpayer with approval shall apply for final 333
approval and issuance of tax credits from the department, 334
which shall determine the final amount of qualified 335
conversion expenditures and whether the project meets the 336
requirements of this section. A taxpayer shall submit to 337
the department a final application demonstrating: 338
(1) That the taxpayer has substantially converted a 339
qualified converted building or upper-floor housing; 340
(2) Satisfactory evidence of any qualified conversion 341
expenditures for the structure, as determined by the 342
department; and 343
(3) Any other information reasonably requested by the 344
department to verify qualified conversion expenditures or 345
compliance with the requirements of this section or section 346
620.6000. 347
14. For financial institutions, tax credits authorized 348
under this section shall be deemed to be redevelopment tax 349
credits for the purposes of sections 135.800 to 135.830. 350
The approval of all applications and the issuing of 351
certificates of eligible tax credits to taxpayers shall be 352
performed by the department. The department shall inform a 353
taxpayer of final approval by letter and shall issue to the 354
taxpayer tax credit certificates. The taxpayer shall attach 355
the certificate to all Missouri tax returns on which the 356
credit is claimed. 357
15. (1) The department shall issue seventy-five 358
percent of the approved tax credits under this section 359
within forty-five calendar days of receiving all required 360
final application materials. Within ninety calendar days of 361
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receiving all required final application materials, the 362
department shall make a final determination of costs and 363
issue the remaining twenty-five percent of approved tax 364
credits, or request repayment from the applicant if the 365
final determination results in an over-issuance of tax 366
credits. In the event the amount of qualified conversion 367
expenditures incurred by a taxpayer would result in the 368
issuance of an amount of tax credits in excess of the amount 369
authorized under this section, such taxpayer may apply to 370
the department for issuance of tax credits in an amount 371
equal to such excess. Applications for issuance of tax 372
credits in excess of the amount provided under a taxpayer's 373
application shall be made on a form prescribed by the 374
department. Such applications shall be subject to all 375
provisions regarding priority provided under this section. 376
(2) For tax credits authorized under this section, the 377
applicant may submit to the department an application for 378
the issuance of tax credits annually prior to final 379
completion of the project. Upon approval of the annual 380
application for issuance, the department shall issue eighty 381
percent of the amount of tax credits that would result from 382
the qualified conversion expenditures, provided the total 383
amount of credits issued to date does not exceed the total 384
amount of credits authorized for the project to date. Any 385
remaining authorized tax credits shall be issued upon the 386
final approval of the project. The department shall issue 387
eighty percent of the approved credits within forty-five 388
calendar days of receiving all required application 389
materials. Within ninety calendar days of receiving all 390
required application materials, the department shall make a 391
final determination of costs and issue any remaining 392
authorized tax credits upon the final completion of the 393
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phased project, or request repayment if an over-issuance of 394
credits is determined. 395
16. No taxpayer shall be issued tax credits for 396
qualified conversion expenditures on a qualified converted 397
building within twenty-seven years of a previous issuance of 398
tax credits under this section on such qualified converted 399
buildings. 400
17. The department, in coordination with the 401
department of revenue, shall promulgate all necessary rules 402
and regulations to administer the provisions of this 403
section. Any rule or portion of a rule, as that term is 404
defined in section 536.010, that is created under the 405
authority delegated in this section shall become effective 406
only if it complies with and is subject to all of the 407
provisions of chapter 536 and, if applicable, section 408
536.028. This section and chapter 536 are nonseverable and 409
if any of the powers vested with the general assembly 410
pursuant to chapter 536 to review, to delay the effective 411
date, or to disapprove and annul a rule are subsequently 412
held unconstitutional, then the grant of rulemaking 413
authority and any rule proposed or adopted after August 28, 414
2026, shall be invalid and void. 415
18. Under section 23.253 of the Missouri sunset act: 416
(1) The provisions of the new program authorized under 417
this section shall sunset ten years after the effective date 418
of this section unless reauthorized by an act of the general 419
assembly; 420
(2) This section shall terminate on September first of 421
the calendar year immediately following the calendar year in 422
which the program authorized under this section is sunset; 423
and 424
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(3) The provisions of this subsection shall not be 425
construed to limit or in any way impair: 426
(a) A taxpayer's ability to complete a project and 427
receive authorization for tax credits for any project for 428
which the taxpayer has submitted an initial application on 429
or before the date the program authorized under this section 430
expires; or 431
(b) The department of revenue's ability to redeem tax 432
credits authorized on or before the date the program 433
authorized under this section expires, or a taxpayer's 434
ability to redeem such tax credits. 435
620.6024. 1. This section establishes a "Missouri 1
Opportunity Zone", an overlay of the innovation district, to 2
encourage long-term private investment in innovation 3
districts by allowing the deferral and potential exclusion 4
of Missouri income tax liabilities when such amounts are 5
reinvested into qualifying property or businesses located 6
within such districts. 7
2. For purposes of this section, the following terms 8
mean: 9
(1) "Equity investment", an ownership interest in an 10
operating business or investment property, whether held 11
directly or indirectly, including as a general partner, 12
limited partner, member, or shareholder, that is subject to 13
the risks of the enterprise and does not constitute 14
indebtedness or a loan obligation; 15
(2) "Inclusion event", any event that terminates or 16
partially terminates deferral under this section, as set 17
forth in subsection 4 of this section; 18
(3) "Innovation district", a district designated under 19
sections 620.6000 to 620.6024; 20
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(4) "Investment property", real property located 21
within a Missouri opportunity zone that is acquired, held, 22
or improved for purposes of commercial, residential, or 23
mixed-use investment, whether or not such property is income- 24
producing or cash-flowing at the time of acquisition, and 25
that is not treated as an operating business for purposes of 26
this section; 27
(5) "Missouri income tax liability", Missouri income 28
tax otherwise due under chapter 143 for a tax year; 29
(6) "Missouri opportunity zone", any innovation 30
district designated under sections 620.6000 to 620.6024 31
within which private capital investment is encouraged 32
through the deferral and potential exclusion of Missouri 33
income tax liabilities when such liabilities are reinvested 34
into qualifying property or operating businesses located 35
within such district; 36
(7) "Operating business", a trade or business that is 37
located within and conducts a substantial portion of its 38
active trade or business operations within a Missouri 39
opportunity zone, including the production of income through 40
the provision of goods or services, employment or personnel, 41
or leasing of space as part of an active business enterprise; 42
(8) "Qualified Missouri opportunity zone fund", an 43
entity organized for the purpose of investing in one or more 44
qualified Missouri opportunity zone investments, 45
substantially all of the assets of which consist of such 46
investments, as measured on the last day of the first six- 47
month period of the fund's tax year and the last day of the 48
fund's tax year, and that is certified or otherwise approved 49
by the department of economic development in accordance with 50
rules promulgated under this section. Use of a qualified 51
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Missouri opportunity zone fund shall be permitted but not 52
required; 53
(9) "Qualified Missouri opportunity zone investment", 54
an equity investment in: 55
(a) Investment property located within a Missouri 56
opportunity zone; or 57
(b) An operating business that is located within and 58
conducts a substantial portion of its active trade or 59
business operations within a Missouri opportunity zone; 60
(10) "Taxpayer", a person subject to Missouri income 61
tax under chapter 143, including income reported on a pass- 62
through basis by an owner, partner, or member of a 63
partnership, limited liability company, or S corporation. 64
The term "taxpayer" shall not include any entity subject to 65
Missouri corporate income tax, including any C corporation. 66
3. (1) A taxpayer may elect to defer payment of 67
Missouri income tax otherwise due for a tax year if the 68
amount of such Missouri income tax liability is invested, in 69
the manner prescribed by this section, into a qualified 70
Missouri opportunity zone investment. 71
(2) The deferral authorized by this subsection shall 72
apply to ordinary Missouri income tax liabilities. 73
(3) Eligibility under this section shall not be 74
conditioned on the residency of the taxpayer, provided that 75
the deferral authorized by this section shall apply only for 76
tax years in which the taxpayer remains subject to Missouri 77
income tax under chapter 143. 78
(4) The election to defer Missouri income tax under 79
this section may be made with respect to all or any portion 80
of a taxpayer's Missouri income tax liability for a tax 81
year, in the manner prescribed by the department of revenue. 82
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4. To qualify for deferral under this section, a 83
taxpayer shall make a qualified Missouri opportunity zone 84
investment not later than one hundred eighty days after the 85
close of the tax year for which the Missouri income tax 86
liability is otherwise due. 87
5. The deferral of Missouri income tax under this 88
section shall continue until the earliest occurrence of an 89
inclusion event, including: 90
(1) The sale, exchange, or other disposition of the 91
qualified Missouri opportunity zone investment; 92
(2) When the investment ceases to qualify as a 93
qualified Missouri opportunity zone investment; 94
(3) Ten years from the date of the qualified Missouri 95
opportunity zone investment; 96
(4) In the case of an operating business, the failure 97
to commence substantial active trade or business operations 98
within twenty-four months of the initial qualified Missouri 99
opportunity zone investment, as determined by the department 100
of economic development; or 101
(5) (a) In the case of investment property, failure 102
to satisfy the requirements of paragraph (b) of this 103
subdivision. 104
(b) A qualified Missouri opportunity zone investment 105
in investment property shall continue to qualify for 106
deferral under this section so long as one or more of the 107
following conditions is satisfied: 108
a. The investment property is placed into active 109
commercial or residential use, including leasing, occupancy, 110
or other income-producing operation, within thirty months 111
following the qualified Missouri opportunity zone 112
investment; or 113
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b. Within thirty months of the date of the initial 114
qualified Missouri opportunity zone investment in the 115
investment property, the taxpayer, either directly or 116
through one or more affiliated entities, invests an amount 117
equal to or greater than the adjusted basis of the property, 118
excluding land, in improvements that materially enhance the 119
value, utility, or productive use of the property. For 120
purposes of this subparagraph, the required investment 121
amount may be satisfied through any combination of capital 122
contributions, including amounts attributable to Missouri 123
income tax deferred under this section and other cash or 124
equity contributions invested in the property. Debt 125
financing shall not be treated as an equity investment for 126
purposes of satisfying this test. 127
6. In the case of a qualified Missouri opportunity 128
zone investment, if such operating business or investment 129
property generates net income attributable to the investment 130
during any tax year prior to an inclusion event or the 131
expiration of the deferral period, the amount of Missouri 132
income tax previously deferred under this section shall be 133
included in Missouri taxable income for such tax year in an 134
amount equal to the net income so generated, and any 135
remaining deferred amount shall continue to be deferred in 136
accordance with this section. 137
7. If a taxpayer holds a qualified Missouri 138
opportunity investment for a period of not less than ten 139
years, any gain attributable to such investment and 140
recognized for Missouri income tax purposes upon disposition 141
shall be excluded from Missouri taxable income. 142
8. The Missouri opportunity zone program shall operate 143
independently of federal opportunity zone law. 144
Participation in, qualification for, or designation as a 145
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federal opportunity zone shall not be required to qualify 146
for benefits under this section. 147
9. The department of revenue and the department of 148
economic development may adopt rules to coordinate benefits 149
under this section with other state tax incentives to 150
prevent the deferral or exclusion of the same Missouri 151
income tax liability from being claimed more than once. 152
10. Notwithstanding the repeal, expiration, or 153
nonrenewal of this section, any taxpayer that has made a 154
qualified Missouri opportunity zone investment prior to such 155
repeal, expiration, or nonrenewal shall remain eligible for 156
the deferral and exclusion benefits provided under this 157
section with respect to such investment, subject to the 158
terms and conditions in effect at the time the investment 159
was made. 160
11. The department of revenue, in consultation with 161
the department of economic development, shall administer 162
this section and may require reasonable documentation to 163
verify: 164
(1) The amount of Missouri income tax deferred; 165
(2) The nature and location of the qualified Missouri 166
opportunity zone investment; and 167
(3) Compliance with the investment timing, active use, 168
capital deployment, holding period, and inclusion-event 169
requirements of this section. 170
12. The department of economic development shall 171
promulgate rules to implement this section. Such rules 172
shall be consistent with and reasonably necessary to carry 173
out the purposes, structure, and operative provisions of 174
this section, including the encouragement of long-term, 175
productive investment within Missouri opportunity zones and 176
the prevention of tax deferral without meaningful economic 177
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activity. Rules promulgated under this subsection shall not 178
expand or restrict eligibility, alter the nature of 179
qualifying investments, or modify the deferral, inclusion, 180
or exclusion mechanics established by this section. Any 181
rule or portion of a rule, as that term is defined in 182
section 536.010, that is created under the authority 183
delegated in this section shall become effective only if it 184
complies with and is subject to all of the provisions of 185
chapter 536 and, if applicable, section 536.028. This 186
section and chapter 536 are nonseverable and if any of the 187
powers vested with the general assembly pursuant to chapter 188
536 to review, to delay the effective date, or to disapprove 189
and annul a rule are subsequently held unconstitutional, 190
then the grant of rulemaking authority and any rule proposed 191
or adopted after August 28, 2026, shall be invalid and void. 192
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