Mo. Rev. Stat. § 620.3505

Current with changes from the 2024 Legislative Session

Section 620.3505 - Definitions

As used in sections 620.3500 to 620.3530, the following terms shall mean:

(1)"Affiliate", an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with another entity. An entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over day-to-day operations of the controlled entity by contract or by law;

(2)"Affiliate capital", capital raised by the rural investor directly or indirectly from sources, including leverage sources, directors, members, employees, officers, and affiliates of the rural investor, other than the amount invested by the allocatee claiming the tax credits in exchange for such allocation of tax credits;

(3)"Agribusiness", a business that produces or provides any goods or services produced in this state normally used by farmers, ranchers, or producers and harvesters of aquatic products in their business operations, or to improve the welfare or livelihood of such persons, or is involved in the processing and marketing of agricultural products, farm supplies, and input suppliers, or is engaged in agribusiness as defined by the United States Department of Agriculture, or if not engaged in such industries, the department determines that such investment will be beneficial to the rural area and the economic growth of the state;

(4)"Applicable percentage", zero percent for the initial credit allowance date and the second credit allowance date, and fifteen percent for the next four credit allowance dates;

(5)"Base employment", the total number of qualified employees receiving taxable wages from the eligible business in the tax year preceding the date of the initial capital investment;

(6)"Base payroll", the total amount of taxable wages paid by the eligible business to qualified employees in the tax year preceding the date of the initial capital investment;

(7)"Base revenue", the total net revenue earned by the eligible business in the tax year preceding the date of the initial capital investment;

(8)"Base taxable sales", the taxable sales of the eligible business in the tax year preceding the date of the initial investment;

(9)"Capital investment", any equity investment in a rural fund by a rural investor which:

(a) Is acquired after August 28, 2024, at its original issuance solely in exchange for cash;

(b) Has one hundred percent of its cash purchase price used by the rural fund to make qualified investments in eligible businesses located in this state by the third credit allowance date; and

(c) Is designated by the rural fund as a capital investment under sections 620.3500 to 620.3530 and is certified by the department under the provisions of section 620.3510. This shall include any capital investment that does not meet the provisions of subdivision (1) of subsection 1 of section 620.3510 if such investment was a capital investment in the hands of a prior holder;

(10)"Credit allowance date", the anniversary of the initial credit allowance date;

(11)"Department", the Missouri department of economic development;

(12)"Eligible business", a business that, at the time of the initial qualified investment in the business:

(a) Has fewer than two hundred fifty employees;

(b) Has its principal business operations in this state;

(c) Is not an alien, foreign entity or foreign-owned entity, or a foreign government; and

(d) Is engaged in North American Industry Classification System (NAICS) Sectors 11, 21, 22, 31-33, 48-49, 62, or 811, or, if not engaged in such industries, the department determines that such investment will be beneficial to the rural area and economic growth of the state.

Any business which is classified as an eligible business at the time of the initial investment in such business by a rural fund shall remain classified as an eligible business and may receive follow-on investments from any rural fund, and such follow-on investments shall be qualified investments even though such business may not meet paragraph (a) of this subdivision at the time of such investments;

(13)"Full-time employee", an employee of an eligible business who is scheduled to work an average of at least thirty-five hours per week for a twelve-month period;

(14)"Initial credit allowance date", the date on which the department certifies a rural fund's capital investment;

(15)"Leverage source", third-party capital raised as debt from a depository institution;

(16)"Maintained job", the number of qualified employees at the eligible business at or below base employment;

(17)"Maintained payroll", the total taxable wages paid by the eligible business to qualified employees at or below base payroll;

(18)"Maintained revenue", the total revenue earned by the eligible business at or below base revenue;

(19)"Maintained taxable sales", the total taxable sales of the eligible business at or below base taxable sales;

(20)"New jobs", the number of qualified employees at the eligible business less the eligible business' base employment;

(21)"New payroll", the amount of taxable wages paid to qualified employees at the eligible business less the eligible business' base payroll;

(22)"New revenue", the total revenue earned by the eligible business less the eligible business' base revenue;

(23)"New taxable sales", the total taxable sales of the eligible business less the eligible business' base taxable sales;

(24)"Principal business operations", the location where at least sixty percent of a business's employees work or where employees who are paid at least sixty percent of such business's payroll work. A business that has agreed to relocate employees using the proceeds of a qualified investment to establish its principal business operations in a new location shall be deemed to have its principal business operations in such new location if it satisfied the requirements of this subdivision no later than one hundred eighty days after receiving a qualified investment;

(25)"Purchase price", the amount paid to the rural fund that issues a capital investment which shall not exceed the amount of capital investment authority certified under the provisions of section 620.3510;

(26)"Qualified employee", an employee of an eligible business who is scheduled to work an average of at least thirty-five hours per week for a twelve-month period or meets the customary practices accepted by that industry as full time;

(27)"Qualified investment", any investment in an eligible business or any loan to an eligible business with a stated maturity date of at least one year after the date of issuance, excluding revolving lines of credit and senior secured debt unless the chief executive or similar officer of the eligible business certifies that the eligible business sought and was denied similar financing from a depository institution, by a rural fund; provided that, with respect to any one eligible business, the maximum amount of investments made in such business by one or more rural funds, on a collective basis with all of the business's affiliates, with the proceeds of capital investments shall be the greater of twenty percent of the rural fund's capital investment authority or six million five hundred thousand dollars, exclusive of investments made with repaid or redeemed investments or interest or profits realized thereon;

(28)"Rural area", any area of this state that is set out in the United States Department of Agriculture census places map as published by the United States Department of Agriculture with a census place population of less than fifty thousand inhabitants;

(29)"Rural fund", an entity certified by the department under the provisions of section 620.3510;

(30)"Rural investor", an entity that makes a capital investment in a rural fund, provided that such entity is not an alien, foreign entity or foreign-owned entity, or a foreign government;

(31)"Senior secured debt", any loan that is secured by a first mortgage on real estate with a loan-to-value ratio of less than eighty percent;

(32)"State sharing ratio", the ratio determined by taking the sum of the actual and projected direct and indirect state and local tax revenue projected over a period of at least ten subsequent years, as shown on the most recent revenue impact assessment submitted by the rural fund as required in subdivision (5) of subsection 1 of section 620.3530, divided by the amount of tax credit equity contributed by the investors of the rural investor in exchange for the tax credits authorized pursuant to sections 620.3500 to 620.3530;

(33)"State tax liability", any liability incurred by any entity subject to the state income tax imposed under chapter 143, excluding withholding tax imposed under sections 143.191 to 143.265, or an insurance company paying an annual tax on its gross premium receipts, including retaliatory tax, or other financial institution paying taxes to the state or any political subdivision of the state under the provisions of chapter 148, or an express company which pays an annual tax on its gross receipts in this state;

(34)"Taxable sales", taxable sales as reported to the Missouri department of revenue, calculated as set forth in sections 144.010 to 144.525;

(35)"Third-party capital", the difference between the rural fund's capital investment and the sum of the amount invested by the allocatee claiming the tax credits and the affiliate capital.

§ 620.3505, RSMo

Added by 2024 Mo. Laws, SB 802,s A, eff. 8/28/2024.