BUILD (Business Use Incentives for Large-scale Development)
PURPOSE
Provides a financial incentive for the location or expansion of large business projects. The incentives are designed to reduce necessary infrastructure and equipment expenses if a project can demonstrate a need for funding.
AUTHORIZATION
Sections 100.700 to 100.850, RSMo
ELIGIBLE AREAS
Statewide.
ELIGIBLE APPLICANTS
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Manufacturing, processing, assembly, research and development, agricultural processing or services in interstate commerce which will invest a minimum of $15 million in capital improvements for a project and create at least 100 new jobs within three years.
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Office projects (regional, national or international headquarters, telecommunications operations, computer operations, insurance companies or credit card billing and processing centers) are also eligible if the capital improvements exceed $10 million and at least 500 new jobs are created within three years (200 jobs if in a "distressed community" - §135.530, RSMo).
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Ineligible: Retail, health or professional services, intra-state relocations or replacement facilities.
PROGRAM BENEFITS/ELIGIBLE USES
The bonds may be used to finance public or private infrastructure to support the project, or the new capital improvements of the business at the project location. Bond proceeds may not be used for working capital, inventory or other operating costs of the business or another entity.
This tax credit can be applied to:
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Ch. 143 - Income tax, excluding withholding tax
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Ch. 148 - Bank Tax, Insurance Premium Tax, Other Financial Institution Tax
This credit's special attributes
FUNDING LIMITS
The amount of bonds to be issued will be determined by The Missouri Department of Economic Development (DED) and the Missouri Development Finance Board (MDFB) based on the need for funding to initiate the project, and limited to the state's economic benefit. The minimum bond issue is about $500,000.
APPLICATION/APPROVAL PROCEDURE
The business must submit an application to DED and MDFB for review. There are no application deadlines. DED and MDFB will review on a case-by-case basis.
SPECIAL PROGRAM REQUIREMENTS
The following conditions must be met for a project to be approved.
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Sale of Bonds: The bonds must be sold on the basis of the business' credit. The options are: (a) the business purchases a bank letter of credit or bond insurance; (b) the business has an investment bond rating; (c) the business arranges for a private placement purchase of the bonds; or (d) the business purchases the bonds.
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Cooperative Effort: The political subdivisions benefiting from the project or other local entities must commit significant local incentives relative to their economic benefit compared to the state. Such incentives may include tax abatement, discounted utility fees or others, to the extent allowed by law.
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"But For" Test: The company may not start the project prior to the approval of the program. This would include any public announcement, construction or receipt of new machinery or equipment at the project site related to the new project. DED and the Missouri Development Finance Board (MDFB) must determine that the program is a material factor in the company's decision to initiate the project, and this is certified by the business.
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Competition: The program must verify that at least one other state is being considered for the project.
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Positive State Economic Impact: The amount of new direct and indirect state taxes over an 8 to 15 year period, as calculated by DED, must exceed the total amount of incentives provided by the state.
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Requirements: New full-time (35+ hours per week) jobs in a new or expanding business (not including identical jobs filled by recalled workers, replacement jobs or jobs which previously existed in the business) are considered to be "new jobs". The business or a related taxpayer cannot have employed them during the preceding twelve months. The wages for such employees must be above the average wage for the area.
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Report: On a regular basis as determined by MDFB/DED, the business must report the number of new jobs; the total amount of salaries and wages paid to eligible employees.
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"Clawbacks": In the event the business does not fulfill the commitments made regarding the number of new jobs or capital investment, the tax credits will be reduced proportionately. In the event the business relocates or reduces the operation below the minimum standards for new jobs or capital investment prior to the term of the bonds, the tax credits received prior to that time must be repaid in full.
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Bond Purchase: Since the MDFB cannot guarantee the bonds, the business will likely have to either purchase the bonds or provide for a bank letter of credit or bond insurance to sell the bonds.
CONTACT
Missouri Department of Economic Development
Division of Business and Community Services
Finance Management Team
301 West High Street, Room 770
P.O. Box 118
Jefferson City, MO 65102
Phone: 573-751-4539 Fax: 573-522-4322
Email: dedfin@ded.mo.gov
Missouri Development Finance Board
Governor's Office Building
200 Madison Street, Suite 1000
P.O. Box 567
Jefferson City, MO 65102
Phone: 573-751-8479 Fax: 573-526-4418
Additional Resources
Additional information about programs and services provided by MDFB can be found at www.mdfb.org.
To e-mail this web page attach the following URL: http://go.missouridevelopment.org/build
Business and Community Services
301 W. High Street, Rooms 720, 770 Jefferson City, Missouri 65102
Tel: 1-866-647-3633 Fax: 1-573-751-7384 Email: missouridevelopment@ded.mo.gov |