ALL MEDC PRIORITY LEGISLATION HAS RECEIVED INITIAL APPROVAL IN THE MISSOURI HOUSE!!!

(Wednesday, April 4, 2007) Thanks to the commitment of leadership in the House, all of the Missouri Economic Development Council’s legislative priority issues have received initial approval in the Missouri House! This is an extraordinary accomplishment given the number of priority issues and the complexity of some of our issues. The MEDC thanks the sponsors of each of the bills and leadership for devoting considerable floor time to our economic development legislation so far this session. Leading the charge in the House: Rep. Ron Richard, Rep. David Pearce, Rep. Darrell Pollock, Rep. Larry Wilson, Rep. Doug Ervin, Rep. Shannon Cooper, Rep. Bryan Stevenson, Rep. Steve Hobbs, and the leadership of the House (Speaker of the House Rod Jetton, Speaker Pro Tem Carl Bearden, and Majority Floor Leader Tom Dempsey).

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 bill passed the House with a complete removal of the tax credit limits. The Senate committee changed the tax credit limits to $30 million for Quality Jobs and $25 million for Enhanced Enterprise Zones. The Senate Committee Substitute for HCS HB 327, sponsored by Rep. Ron Richard, has been approved by the Senate committee and the bill is on the Senate calendar. The Senate committee’s 134 page version of the bill includes several additional issues: disabled tax credit for home modification, new markets tax credits, film production tax credits, a vocational school taxing district for southeast Missouri, and transferability of all tax credits. The Senate version of the bill, SB 282, sponsored by Sen. John Griesheimer, is on the Senate Informal Perfection Calendar, and chances for passage dwindle with each passing day. The Senate version boosts the tax credit limits to $50 million for Quality Jobs and $25 million for Enhanced Enterprise Zones. 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 and has also been distributed to all senators.

Two more priority issues, the Missouri Economic Development Code, HB 741, sponsored by Rep. David Pearce and the Missouri Regional Economic Development District bill, HB 688, sponsored by Rep. Darrell Pollock, were combined during House floor debate. The bill received initial House approval on April 4, 2007.

The Missouri Regional Economic Development Districts bill was also heard in the House committee and was approved as part of a committee substitute for HB 624, sponsored by Rep. Larry Wilson. This bill has also been cleared for debate by the full House.

Another top legislative priority 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. We added this language to HB 131, also sponsored by Rep. Shannon Cooper, and it has now received initial House approval and awaits a final House vote (see more below).

The Small Business Growth Act, HCS HB 365, 804 & 805 received initial House approval this week. The bill, sponsored by Rep. Doug Ervin, 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 now faces one additional vote and then it will be sent to the Senate for further debate.

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 has now received initial approval in the House and should receive a final vote this week. A similar bill, SB 585, sponsored by Sen. Jason Crowell, was heard in the Senate committee this week. The manufacturing inputs exemption has also been added to HB 327 (Quality Jobs and Enhanced Enterprise Zones), SB 706, and HB 1089 (a bill dealing with nexus) and is likely to be added to many more bills as the session progresses.

Following is a brief synopsis of the status of MEDC supported or tracked 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.

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 – REFERRED TO SENATE COMMITTEE
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 INITIALLY APPROVED
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	CLEARED FOR FULL HOUSE DEBATE
HB 1000	Eliminates the Corporation Income Tax for the first five years of a new manufacturer’s existence in Missouri	PASSED HOUSE COMMITTEE – REFERRED TO RULES COMMITTEE
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 – PASSED HOUSE COMMITTEE – REFERRED TO RULES 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 INFORMAL 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.