Budget & Taxes (Economic Development)

SB 1668 - This act establishes the "Missouri Innovation, Public Safety, and Accountability Act". The act authorizes a city to submit an innovation district master plan to the Department of Economic Development for the establishment of an innovation district. The master plan shall include the geographic boundaries, identification of vacant or underutilized property, public safety and infrastructure priorities, a general strategy for surplus or incremental state revenues, and high-level projections of anticipated housing units, jobs, business, and population impacts. The Department's authority to approve or deny an application shall be limited to determining whether the geographic boundaries are reasonable. All other application information shall be considered informational and not subject to approval, modification, or denial by the Department. The Department shall adopt and administer a single, standardized master scorecard to evaluate incentives for projects located within an innovation district. The scorecard shall establish uniform criteria, provide predictability and transparency, rank projects based on measurable outcomes, establish intermediate incentive tiers for projects that do not meet full eligibility, and assign project applications to incentive tiers based on the master scorecard. The scorecard shall include categories as described in the act. An application for incentives shall be approved or denied by a reviewing authority within forty-five calendar days. Failure to issue a determination shall result in approval of the application. (Section 620.6000) A city establishing an innovation district shall establish a fast track permitting process for projects located within the district, including the designation of a single, empowered point of contact that is authorized to coordinate reviews and issue binding determinations on behalf of all relevant departments, agencies, and offices. The city shall waive, reduce, or defer discretionary, duplicative, or extraordinary permit and development fees for projects within the district. For properties not subject to an existing tax increment financing plan or property tax abatement, fifty percent of the incremental increase in real property tax revenues generated after designation shall be deposited into the innovation district's public safety fund. The city shall adopt policies providing building code flexibility for adaptive reuse projects, as described in the act. The Department shall prepare and submit a biennial written report to the General Assembly summarizing the performance of the innovation district program, as described in the act. (Section 620.6003) The act establishes the "Rural Missouri Development Fund" for the purpose of supporting economic development, infrastructure, housing, workforce development, and related community-building activities in rural and smaller communities in the state. Any municipality in the top five percent of assessed valuation in the state and that has an innovation district shall deposit ten percent of new property tax revenues into the Rural Missouri Development Fund. Such funds shall be awarded to rural and smaller municipalities, and regional development organizations. The moneys shall be used for rural education, public infrastructure improvements, public safety, housing development, workforce development, and health care community service facilities. (Section 620.6006) The act establishes the "Innovation District Public Safety Fund", which shall be composed of fifty percent of net new state tax receipts generated in the innovation district. Moneys in the fund shall be used for capital or operating expenditures related to public safety and public realm improvements within the district. A project sponsor may apply to the Department for a construction-phase withholding advance. If the application meets all technical requirements, the Department shall disburse the construction-phase withholding advance. (Section 620.6009) For all tax years beginning on or after January 1, 2027, any person who is not a resident of this state and that establishes a primary residence within an innovation zone shall be eligible for an income tax exclusion. (Section 620.2012) The act authorizes an employer to enter into a withholding agreement with the Department for the retention of a portion of withholding taxes of employees located within an innovation district. The Department may establish aggregate or annual program caps by rule to manage fiscal exposure. Retained withholdings shall be used solely for qualifying reinvestment expenditures, as defined in the act. (Section 620.2015) For all tax years beginning on or after January 1, 2027, the act authorizes an eligible employer to claim a tax credit in an amount equal to $5,000 per eligible employee for relocation expenses incurred in moving such employee from out of the state into an innovation zone. (Section 620.2018) For all tax years beginning on or after January 1, 2027, the act authorizes a taxpayer to claim a tax credit in an amount equal to twenty-five percent of conversion expenditures incurred for converting nonresidential property into residential property. The tax credit may be claimed against the taxpayer's income tax liability or sales tax liability. (Section 620.2021) The act authorizes a city to establish a Missouri Opportunity Zone, which shall be conterminous with the innovation district boundaries. A taxpayer may elect to defer payment of state income taxes if such income tax liability is invested in a qualified Missouri Opportunity Zone investment, as defined in the act. This act shall sunset on August 28, 2036, unless reauthorized by the General Assembly. This act is substantially similar to provisions in SS#2/SCS/HCS/HBs 3231 & 2531 (2026). JOSH NORBERG

HB 3395 extends Missouri's Downtown Economic Stimulus Act (MODESA) to support existing and new downtown redevelopment projects. It allows developers to expand approved projects beyond original boundaries (including noncontiguous areas outside central business districts), extends project obligation terms to 35 years, and increases tax benefits: up to 85% of new income tax revenue from jobs in the project area, plus 85% of new sales tax revenue. This directly affects developers, municipalities with "expansion authorities," and state tax revenue streams by modifying how economic development incentives are applied. The bill removes requirements like proving a project "could not be financed without incentives" and allows reimbursement for costs incurred before approval.

SB 1694 extends Missouri's Downtown Economic Stimulus Act (MODESA) to support existing downtown redevelopment projects approved before 2013. It allows developers to modify project areas (including noncontiguous zones outside central business districts), extend project timelines to 35 years, and use tax increments (up to 85% of state income tax and sales tax revenue) to fund development costs. The bill directly affects developers of approved projects, municipalities with designated development areas, and the state through new tax increment financing mechanisms. Key changes include removing requirements for new applications, eliminating displacement percentage rules, and enabling expanded project areas without new approval.

HB 3268 creates a tax credit for Missouri businesses or organizations that provide specific services to homeless individuals. Eligible entities must be certified by the Department of Economic Development as providers of employment services, direct employment (at minimum wage for 28+ hours/week), or housing (rented/leased at income-based rates). Certified providers can claim up to $10,000 annually against their state income tax, with a total annual cap of $1 million across all credits. The program expires December 31, 2032, unless renewed by the legislature.

SB 1688 extends Missouri's Downtown Economic Stimulus Act (MODESA) to allow existing approved development projects (like those in Kansas City and St. Louis) to expand their incentives. It authorizes up to 85% of new state income and sales tax revenue generated in designated development areas to fund project costs, and extends project timelines to 35 years for tax obligations and payments in lieu of taxes. The bill removes previous requirements like displacement percentage limits and proof that projects couldn't be financed without state incentives. This directly affects developers and municipalities with approved MODESA projects that were previously unable to secure new approvals after 2013.

HB 3231 establishes Missouri's "Innovation District Program," allowing cities to voluntarily designate specific downtown or main street areas as innovation districts to access state economic development incentives. Participating cities must submit a master plan outlining district boundaries, infrastructure needs, and how incentives will be used, which the state must approve within 45 days. The bill provides standardized state tax breaks (like income tax exemptions and opportunity zones) and local incentives (such as property tax abatements) for qualifying projects within designated districts, evaluated using a uniform "master scorecard." It ensures these incentives apply automatically to eligible projects without local restrictions but explicitly states cities cannot be forced to join and local zoning authority remains intact.

HB 3329 restructures how Missouri administers four economic development funds: the Industrial Development and Reserve Fund, Industrial Development Guarantee Fund, Export Finance Fund, and Jobs Now Fund. It specifies eligible funding sources (like state appropriations, bond proceeds, grants, and repayments), requires funds to be kept separate from state treasury money, and mandates that $12 million annually be allocated to the Jobs Now Fund from increased state revenue. The bill directly affects businesses applying for loans or grants through these funds and economic development agencies managing them. Key provisions include rules for fund investments, separate account creation, and the board’s authority to issue revenue bonds and manage disbursements under sections 100.250-100.297.

HB 3214 creates "Manufacturing Opportunity Zones" in Missouri for large manufacturing developments requiring access to transportation and essential utilities like electricity, gas, and water. It exempts qualifying manufacturing companies (with NAICS codes 31-33 that own property in Missouri) from state corporate income tax starting in 2027, establishes a fast-track permitting process for projects in these zones, and creates a dedicated utility fund financed by a 1% user fee on utilities to improve infrastructure. The bill also introduces a small business loan guarantee program (up to 90% total guarantee) to support manufacturing and technology companies investing in these zones.

SB 1553 authorizes financial incentives, such as tax credits or grants, for companies producing specific critical materials (e.g., minerals for clean energy technology) and certain pharmaceuticals. It directly affects domestic manufacturers in these sectors by potentially lowering production costs through government support. The bill's key mechanism is creating these targeted financial benefits to encourage increased domestic manufacturing capacity. Currently pending in the Senate Economic and Workforce Development Committee after initial readings.

HB 2799 creates Missouri's Small Business Property Crime Prevention Grant Program, providing financial assistance to small businesses (defined as for-profit entities with fewer than 50 employees) for security improvements and repairs after property crimes. The program awards grants of up to $1,000 per fiscal year for physical security upgrades like surveillance systems, access controls, or storefront redesigns, or to cover repair costs from property crimes. Applications require detailed security needs and cost breakdowns, with grants distributed based on severity of needs and feasibility, administered by the Department of Economic Development from a dedicated state fund. The program expires automatically in 2034 unless renewed by the legislature.