2007 Final Legislation Affecting MEDC

Note: Unless otherwise indicated, the Governor has not yet signed or vetoed this legislation. The Governor has until July 14 to sign or veto legislation, and if not vetoed by that date, these bills would automatically become law.

HCS HB 184 – CHILDREN’S SERVICES PROTECTION ACT

• Prevents sales taxes levied for Children Services Protection from being diverted to TIF projects after August 28, 2007.

SS HB 205 – TOURISM

• Authorizes local transient guest taxes for Pemiscot County, the City of Sullivan, and part of the Sullivan C-II School District in Franklin County.

• Allows additional cities and counties to form theater, cultural arts and entertainment districts that are currently allowed only in St. Charles County.

• Extends the Division of Tourism Supplemental Revenue Fund expiration date to June 30, 2015.

SS SCS HCS HB 327 – ECONOMIC DEVELOPMENT

• TIF provisions:

• Any municipality in St. Louis County, St. Charles County, or Jefferson County to establish a county TIF commission similar to St. Louis County’s current TIF commission to approve TIF projects in those areas;

• Prohibits any new TIF projects in “greenfields” in St. Louis City or County, or in St. Charles, Jefferson or Franklin counties;

• Prohibits any new TIF in a 100-year flood plain (including the "flood plain" as currently designated by FEMA or as amended in the future by FEMA).

• Hunting Heritage Protection Act;

• Land Assemblage Tax Credit – allows a developer to receive a tax credit equal to 50% of the acquisition costs and 100% of the interest on financing used to assemble large tracts of land of at least 75 acres in certain areas. The credit is capped at $12 million per year with a cumulative cap of $100 million;

• Small Business Investment Tax Credit revisions;

• Disabled person home modification tax credit;

• Civil War Site Preservation Tax Credit;

• Maternity Homes Tax Credit cap increase from $2 million to $3 million;

• Qualified Beef Tax Credit with an annual cap of $10 million and cumulative cap of $30 million;

• Equity Investment Tax Credit of up to $15 million annually;

• Film Production Tax Credit changes and increasing the annual cap from $1.5 to $10.5 million;

• Enhanced Enterprise Zone annual cap raised from $7 million to $25 million and other technical changes to the program;

• Missouri Homestead Preservation Act changes in exemption limit;

• Tax incentives for alternative fuel sellers and consumers;

• Motor fuel tax exemptions for public transit and school buses;

• Sales tax exemptions for common carriers used in intrastate commerce;

• Rebuttable presumption that auto manufacturers meet the 25% recycled raw material requirement of the Electrical Energy Direct Pay exemption, eliminating current requirements that require them to prove entitlement to such exemption every year (all current auto manufacturers already qualify for the exemption) ;

• Sales tax exemption for agricultural biotechnology and plant genomics utility and other purchases and for utilities used in pharmaceutical research and development;

• State and local sales tax exemption for all manufacturing inputs;

• Sales tax exemption for aviation jet fuel used for transoceanic flights;

• Eliminates “nexus” for out-of-state companies (including Internet retailers) that own or control a distribution or data processing center in Missouri, allowing such companies to avoid sales and use tax collection requirements and ensuring there is no income tax liability or franchise tax liability for such out-of-state companies. Currently, such out-of-state companies would be required to collect and remit sales or use taxes on sales made to Missouri customers;

• Vocational School Districts are authorized for several counties;

• New Jobs Training Program expiration is extended for an additional 10 years;

• Family Development Account program changes;

• Transportation Development District changes;

• Establishes a Regional Railroad Authority in all Missouri cities and counties;

• Workforce Investment Board is established and the Missouri Training and Employment Council is eliminated;

• Quality Jobs Program changes and increases in tax credit annual cap from $12 million to $30 million;

• Small Business and Entrepreneurial Growth Act allowing small businesses to retain withholding tax if they are adding a certain number of jobs, do not otherwise qualify for Quality Jobs, and pay at least 85% of the county average wage; and,

• Decriminalization of ticket scalping.

SS HCS HB 741 – REGIONAL ECONOMIC DEVELOPMENT DISTRICTS

• TIF provisions:

• Any municipality in St. Louis County, St. Charles County or Jefferson County to establish a county TIF commission similar to St. Louis County’s current TIF commission and requires municipalities in these counties and Franklin County to receive approval from the county TIF commission for TIF projects after January 1, 2008;

• Requires 2/3 majority vote of a city’s governing body to overturn a TIF commission’s disapproval of a TIF project beginning January 1, 2008;

• Requires the Joint Committee on Tax Policy to study the Missouri Economic Development Code as proposed by the MEDC that would allow voluntary participation by local taxing districts in an incremental financing plan, and to have the results of that study reported to the General Assembly by December 31, 2007 (provisions authorizing the Missouri Economic Development Code were removed from the bill);

• Allows locally owned small businesses in some rural communities to participate in the linked deposit program;

• Disabled person home modification tax credit;

• Makes changes to the Missouri Qualified Biodiesel Producer Incentive Fund program to allow the use of non-Missouri feedstock and other changes;

• Allows local governments to establish Regional Economic Development Districts and to finance projects in such districts with locally imposed sales taxes or TIF and requires reports to be made available to the public annually on the use of district funds;

• Establishes the Rice Certification Committee to control the production, transportation and receipt of rice products in Missouri and to encourage the development of new types of Missouri rice.

SCS HCS HB 795 – LOCAL ECONOMIC DEVELOPMENT

• Allows some cities and counties to impose transient guest taxes;

• Allows additional cities and counties to form theater, cultural arts and entertainment districts that are currently allowed only in St. Charles County.

CCS HCS SS SCS SB 22 – LOCAL GOVERNMENT

• Changes statute authorizing creation of Neighborhood Improvement Districts;

• Authorizes transient guest taxes in certain cities and counties and allows cities with a population of less than 7,500 to transfer 40% of tourism tax revenues to their general revenue fund ;

• Provides for an audit of tax collection and expenditures for tourism purposes in political subdivisions that do not currently have such audit procedures;

• Allows merger of certain Community Improvement Districts and makes other changes to the law authorizing such districts;

• Allows additional cities and counties to form theater, cultural arts and entertainment districts that are currently allowed only in St. Charles County;

• Revises the “Kansas and Missouri Regional Investment District Compact” to become the “Missouri Regional Investment District Compact” if Kansas has not enacted their part of the compact by August 28, 2007;

• Allows the City of Joplin to enact a local sales tax for the benefit of nonprofit museums and nonprofit organizations that operate or promote historic sites;

• Authorizes TIF in flood plains in the City of St. Charles in certain circumstances;

• Requires all affected taxing entities in Boone County to receive notice and PILOTs in industrial development project plans approved after May 15, 2005;

• Provides a sales tax exemption for contractors fulfilling contracts with MoDOT;

• Changes provisions regarding Transportation Development Districts;

CCS HCS SB 30 – TAX PROVISIONS

• Prevents sales taxes levied for Children Services Protection from being diverted to TIF projects after August 28, 2007;

• Authorizes additional transient guest taxes in certain counties and cities;

• Sales tax exemptions for common carriers used in intrastate commerce;

• Sales tax exemption for agricultural biotechnology and plant genomics utility and other purchases and for utilities used in pharmaceutical research and development;

• State sales tax exemption for all manufacturing inputs;

• Sales tax exemption for sales and leases made by cities and counties under a Chapter 100 arrangement, provided such exemption is approved by the Department of Economic Development;

• Family Development Account program changes;

CCS HCS SB 81 – LOCAL ECONOMIC DEVELOPMENT

• Allows some cities and counties to impose transient guest taxes;

• Allows additional cities and counties to form theater, cultural arts and entertainment districts that are currently allowed only in St. Charles County.

SS SCS SB 225 – HUNTING HERITAGE and TIF IN FLOOD PLAINS

• Establishes a protected area in 100 year flood plains of the Missouri and Mississippi rivers, protecting hunting in such areas with some exceptions;

• Prohibits new TIF projects in 100 year flood plains of the Missouri and Mississippi rivers except:

• Projects that improve flood or drainage protection; and

• Renewable fuel production facility projects as long as no other new development results from the project;
• Flood plain is area designated as such by FEMA and any change in the flood plain as determined by FEMA.

CCS SB 233 – LOCAL TAXES

• Prevents sales taxes levied for Children Services Protection from being diverted to TIF projects after August 28, 2007

• Authorizes the City of Gladstone to impose a local transient guest tax;

• Requires disbursement of excess funds in industrial development projects in Boone County to all affected taxing entities.

CCS HCS SB 376 – TOURISM SUPPLEMENTAL REVENUE (Signed 5/3/07)

• Extends the expiration date on the Division of Tourism Supplemental Revenue Fund to June 30, 2015

SS#6 SCS SB 389 – HIGHER EDUCATION (Signed 5/23/07)

• Establishes the Lewis and Clark Discovery Initiative, authorizing the transfer of assets from the Missouri Higher Education Loan Authority (MOHELA) to the Lewis and Clark Discovery Fund for:

• Construction of capital projects at public colleges and universities;

• The Missouri Technology Corporation to assist in the commercialization of technologies developed at these institutions;

• Additional scholarship programs;

• Allows public colleges and universities to increase tuition up to the annual change in the Consumer Price Index and provides that institutions that raise tuition above this limit must remit 5% of its state appropriation to the General Revenue Fund with certain exceptions, subject to final decision by the Coordinating Board of Higher Education.

For more detailed information on these bills, including their current status, please consult the actual text of the bills. You may access the text of the bills at: http://house.mo.gov/jointsearch/

House Summaries of Finally Passed Bills Now Available

May 23, 2007 - The Missouri House has published the "Summaries of Truly Agreed To and Finally Passed Bills" for the recently completed 2007 regular legislative session.

This annual publication by the professional staff of House Research has long been respected as an excellent tool for finding information on the legislation that passed during the session. You may even find legislation of interest that you may have previously overlooked. While no summary is perfect 100% of the time, these summaries are carefully assembled and usually very reliable.

To access this valuable publication, click here.

Chapter 100 Sales Tax Exemption

May 22, 2007 - You may access a copy of SB 30, containing the Chapter 100 sales tax exemption for cities, by clicking here. You will find the exemption on page 31, lines 38-42. The bill also contains the manufacturing inputs sales tax exemption supported by MEDC on pages 30-31.

The exemption would be provided on a case-by-case basis as approved by DED. The bill will be presented to Governor Blunt for signature and, if signed, it would be effective August 28, 2007.

Regional Economic Development District Bill Survives

May 18, 2007 - After the smoke cleared from last night's late night legislative sessions, we found the tax increment financing provisions added by Sen. Tim Green were not ornerous after all. In fact, they only added an effective date to language already passed in HB 327 that is currently awaiting the Governor's decision to sign or veto.

The regional economic development district portion of our MEDCode bill, HB 741, survived the Senate revisions and was taken up and passed today by the Missouri House. We applaud the efforts of Rep. David Pearce and Rep. Darrell Pollock, who championed this bill. We remain disappointed that the MEDCode was not approved this year, but, as Rep. Pearce stated on the House floor when passing the bill, we will try this legislation again next year.

The legislative session ends at 6:00 p.m. today.

MEDCode and Regional ED Bill Gutted By Senate...

May 17, 2007 - Our Senate handler of the MEDCode and Regional Economic Development District bill, Senator Chris Koster, was finally recognized to take up our bill in the Senate shortly before midnight, the night before the end of the 2007 session. The debate concluded around 2:10 a.m. on the last day of session.

In the continuing effort to retaliate for the way the House passed HB 327, senators drastically amended the bill. Senator Chuck Gross removed the entire original MEDCode language from the bill and replaced it with language authorizing the Joint Committee on Tax Policy to study whether or not to allow voluntary tax increment financing programs. Senator Tim Green used the bill to add some tax increment financing language. Senator Brad Lager removed the regional economic development tax credit language (originally championed by Rep. Steve Hobbs). The Senate also added a Rice Advisory Council, biodiesel producer incentive changes, and a linked deposit program for small, locally owned businesses. This complete “oil change” of the bill is simply ridiculous, but not rare this session.

The original MEDCode bill has been completely removed from the bill. The regional economic development district language is still pretty much intact.

We thank our sponsors for their hard work on the bill. We will try again next year to allow economic developers specific authority to continue establishing voluntary developer agreements as we do today.

Legislature Finally Passes Manufacturing Inputs and Chapter 100 Sales Tax Exemptions!

May 16, 2007 - The Missouri legislature today gave final passage today to SB 30, a bill that contains our Chapter 100 sales tax exemption and a state sales tax exemption for manufacturing inputs. The bill will now go to Governor Blunt for signature.

The Chapter 100 sales tax exemption will exempt from state and local sales taxes all sales and leases made by cities under Chapter 100 arrangements, provided DED approves such exemption on a case-by-case basis.

The manufacturing inputs sales tax exemption helps us be competitive with other states when competing for manufacturing operations. This exemption is limited to the state sales tax only, so local sales taxes will continue to apply. But the exemption covers nearly all manufacturing inputs, including machinery, equipment, electricity, gas and other energy sources and chemicals used or consumed in manufacturing, mining, processing, compounding or producing of any product.

We wish to thank Rep. Shannon Cooper who championed these issues all the way through the legislative process, Senator Gary Nodler who worked hard to successfully pass the bill in the Missouri Senate, Senator Jason Crowell who worked extremely hard with me on the manufacturing inputs exemption for the last two years, and Rep. Bryan Stevenson that advanced and handled the bill in the Missouri House. These four legislators helped us greatly and we appreciate their support and efforts on our behalf. We also thank the other legislators that put our need to pass this legislation and to remain competitive ahead of their personal and political concerns and allowed us to get the bill through the legislature.

Missouri Economic Development Omnibus Bill Passed by Legislature

May 11, 2007 - Yesterday, the Missouri House, led by House Job Creation and Economic Development Chairman Rep. Ron Richard, voted to accept ALL Senate amendments and finally pass the omnibus economic development bill. The bill contains an increase in the tax credit limits for the Missouri Quality Jobs program (from $12 million to $30 million) and Enhanced Enterprise Zone program (from $7 million to $25 million), a ten-year extension of the New Jobs Training program, and many, many, many more provisions. The bill is 163 pages plus 53 pages of amendments - altogether 216 pages!

Although there are some problems with language that was included in the bill, the bill will be presented to Governor Blunt for signature, following the ceremonial signing of the bill by the Speaker of the House and the Senate President Pro Tem.

We applaud the efforts of Rep. Richard, Sen. John Griesheimer, and leadership of the House and Senate in passing this bill. You may download the final bill by clicking on the following link:

LINKS TO THE FINAL BILL:
Truly Agreed and Finally Passed HB 327

Motion Made on Quality Jobs and Enhanced Enterprise Zones

May 9, 2007 - Senator John Griesheimer made a motion that was approved by the full Senate, to send HB 327, the Quality Jobs and Enhanced Enterprise Zone bill, back to conference. This demonstrates some progress on the legislation that had been stalled since last week.

Even though the motion is essentially the same motion that was rejected by the House last week, the House will again have an opportunity to accept the invitation to further meet and discuss the bill. We will continue to work with the House and Senate conferees to try to work out differences so the bill may be passed by the House and Senate before the 2007 Legislative Session ends on May 18.

SB 30 Includes Chapter 100 Sales Tax Exemption

May 8, 2007 - After much discussion and negotiation with legislative leaders and the administration, we developed compromise language that allows the Department of Economic Development to approve an exemption from sales tax for Chapter 100 projects.

A MEDC legislative priority, the original proposal would have exempted all sales and leases by the municipality to a business under a Chapter 100 arrangement from sales tax. The compromise language allows the same exemption, but only if approved by DED. This language accomplishes the MEDC's goal and preserves accountability that was sought by the administration.

The Conference Committee for SB 30, led by Senator Gary Nodler and Rep. Bryan Stevenson, approved the substitute bill today. The bill must now be approved by the full Senate and then the full House.

Major Economic Development Bill Needs Your Help

May 8, 2007 - PLEASE contact your legislators and let them know you support HB 327, the Quality Jobs and Enhanced Enterprise Zone bill. We need to let them know the importance of this legislation to your local communities. If you do not know your legislator, you may use the "Legislator Lookup" function at right.

Your contact with your local legislator could be the contact that makes the difference in breaking the log jam on this bill. Thank you for your help!

Quality Jobs Bill Update

(May 2, 2007) The Quality Jobs bill, HB 327, was passed by the Missouri House, but the conference committee substitute did not fare so well in the Senate.

Sen. John Griesheimer made a motion to adopt the substitute, but that motion was debated at great length, primarily from Sen. Brad Lager, over some of the provisions in the bill, particularly a provision allowing a tax credit for the assembly of large tracts of land for redevelopment in the City of St. Louis. Sen. Griesheimer eventually withdrew his motion and made a motion to send the bill back to the House with a request to grant the Senate further conference.

The House, led by Rep. Ron Richard, refused to grant further conference. House Speaker Rod Jetton echoed the motion by Rep. Richard to send the bill back to the Senate to take up and pass the substitute. That motion was approved overwhelmingly.

If the Senate refuses to take up and pass the substitute, the bill will die. We hope all parties can resolve their differences and pass the increased tax credit limits for the Quality Jobs and Enhanced Enterprise Zone programs, as well as the manufacturing inputs exemption, and other valuable parts of the bill. The Legislature will adjourn May 18.

Your Support Needed on HB 327!

(May 1, 2007) Please call and email your senator and representative and let them know the importance of the Quality Jobs and Enhanced Enterprise Zone bill, HB 327. The most recent version of the bill would boost the tax credit limits to $50 million for Quality Jobs and $25 million for the Enhanced Enterprise Zones. You need to express your support for the bill if it is to survive with these higher tax credit limits.

If you do not know your legislator's contact information, please click the "Legislator Lookup" link at right.