2007 Legislative Session Status Update

(March 16, 2007) The Legislature has adjourned for Spring Break, giving us a chance to assess the success of our legislative priorities so far in the 2007 Legislative Session, and the Missouri Economic Development Council is pleased with the progress! MEDC salutes all sponsors of our legislation and all Representatives and Senators that have supported our legislation this year. This is a brief synopsis of the status of legislation. You may find more information on these issues in earlier posts below and also in the “Blog Archive”, or you may click the link for each bill.

Our highest priority bills contain increases in the tax credit limits for the Missouri Quality Jobs and Enhanced Enterprise Zone programs and an extension of the New Jobs Training Program. The senate version of the legislation also contains a land assemblage tax credit. The House version of the bill removes the tax credit limits altogether. HCS HB 327, sponsored by Rep. Ron Richard, has already passed the House and has received a hearing in Senate committee. The committee is expected to take action on the bill soon after legislators return from break. The Senate version of the bill, SB 282, sponsored by Sen. John Griesheimer, is on the Senate Informal Perfection Calendar, meaning it could be debated at any time. The Senate version boosts the tax credit limits to $50 million for Quality Jobs and $25 million. Please contact your Senators and let them know one of these bills must pass to keep these most valuable programs alive. You may also let them know that a recent study by the Taxpayers Research Institute of Missouri shows the program creates a positive impact on state tax revenues because each state dollar invested produces an average of $3.18 in additional state tax revenue. For a copy of the report and a breakdown of projects in each county, you may visit www.motaxpayers.com and click on the “Reports” tab. The report was presented to the Senate Committee on Economic Development, Tourism and Local Government last week and has also been distributed to all senators.

Another high priority bill is the Missouri Economic Development Code, HB 741, sponsored by Rep. David Pearce. The bill was heard and approved by the House committee and has been referred to the House Rules Committee, a necessary step before full House debate. If approved by the Rules Committee, the bill would be eligible for debate on its own, or it may be combined with another economic development related bill.

Rounding out our top legislative priorities is our sales tax exemption for cities involved in Chapter 100 projects. HB 130, sponsored by Rep. Shannon Cooper, has been approved by the House Ways and Means Committee, and will likely be combined with several other tax issues in a larger tax bill following the legislative break.

The Missouri Regional Economic Development Districts bill, HB 688, sponsored by Rep. Darrell Pollock, was heard in the House committee and was approved as part of a committee substitute for HB 624, sponsored by Rep. Larry Wilson. The bill has also been referred to the House Rules Committee.

The Small Business Growth Act, HCS HB 365, 804 & 805 remains on the House Perfection calendar and contains MEDC’s Quality Jobs Lite legislation allowing smaller employers to reap benefits similar to the Quality Jobs program when adding new employees. The committee substitute also contains two other tax credits designed to stimulate investments in small businesses: the Small Business Investment Tax Credit and Missouri Technology Corporation Tax Credit. The bill may be debated by the full House after they return from the break.

As we noted in earlier posts, HB 131, sponsored by Rep. Shannon Cooper, would allow economic developers to promote Missouri as a “manufacturing-friendly” state by eliminating the sales tax on all manufacturing inputs. All utilities, chemicals, materials, machinery and equipment used in manufacturing and research and development would be exempted by the bill. The bill carries a relatively small price tag because most of these items are already exempted, but the bill eliminates the uncertainty faced by manufacturers due differences in interpretation of the current law by tax collectors and taxpayers. The bill would put Missouri on equal footing with other states, such as Kansas, that already exempt all manufacturing inputs from sales tax. The bill is scheduled for debate by the House soon after they return from break. A similar bill, SB 585, sponsored by Sen. Jason Crowell, has been referred to committee in the Senate.

Other bills of interest and their current status:

ADDITIONAL BILLS OF INTEREST 2007 SESSION
Bill Number(s)	Description	Status
HB 74	Allows Rural Empowerment Zones in counties with 16,000 or fewer inhabitants	PASSED HOUSE - AWAITING COMMITTEE REFERRAL IN SENATE
HB 360	Provides additional film production tax credits	HOUSE PERFECTION CALENDAR
HB 448	Tax credit for state sales tax paid on Missouri manufactured automobile purchased in Missouri	HOUSE PERFECTION CALENDAR
HB 768	Sales tax exemption for contractors performing contracts with MoDOT	HOUSE PERFECTION CALENDAR
HB 995	Tax credits for donations to regional economic development organizations	REFERRED TO HOUSE COMMITTEE
HB 1000	Eliminates the Corporation Income Tax for the first five years of a new manufacturer’s existence in Missouri	HOUSE COMMITTEE HEARING COMPLETED
SB 20	Tax increment financing law revision	SENATE PERFECTION CALENDAR
SB 199	Sales tax exemption for contractors performing contracts with MoDOT	PASSED SENATE - AWAITING COMMITTEE REFERRAL IN HOUSE
SB 376	Extends the sunset date for the Division of Tourism Supplemental Revenue Fund	PASSED SENATE – REFERRED TO HOUSE COMMITTEE
SB 389	Includes the Lewis & Clark Discovery Initiative (financed through the sale of MOHELA assets)	SENATE INFORMAL PERFECTION CALENDAR
SB 400	Provides additional film production tax credits	SENATE PERFECTION CALENDAR
SJR 22	Constitutional amendment to allow tax relief for economic development purposes	REFERRED TO SENATE COMMITTEE

You may also find additional bills of interest by clicking here. For more information on this or other economic development legislation, please contact Ray McCarty, MEDC Legislative Consultant, at raythetaxman@earthlink.net.