All MEDC Priorities Still Alive with 3 Weeks To Go!

(April 27, 2007) With three weeks to go in the 2007 legislative session, lawmakers continue to make economic development legislation a priority. The MEDC's proposal to allow regional economic development districts and to allow voluntary financing arrangements for initial development of property have cleared the House and are awaiting debate in the Senate. House Bill 741, sponsored by Rep. David Pearce and Rep. Darrell Pollock and handled in the Senate by Senator Chris Koster, provides local economic developers with these important tools. We will be meeting to finalize strategy for the bill early next week.

House Bill 327, the omnibus economic development bill, will have a conference committee meeting next week. We have been working closely with the bill sponsor, Rep. Ron Richard, and the bill's Senate handler, Senator John Griesheimer, on details of various parts of the bill. The Senate version of the bill contained several undesirable provisions, including a change in the "nexus" standard proposed by one business group that would allow out-of-state companies to unfairly compete with Missouri businesses without incurring tax liability in the state. Objections from other business groups and state officials have led to the removal of this unfair provision from the final deliberations. The final legislation will be determined by the conference committee and must be approved by both the House and Senate. As presently drafted, the annual cap on the Quality Jobs program would increase from $12 million to $30 million and the annual tax credit limit on the Enhanced Enterprise Zone program would increase from $7 million to $25 million. Our small business development legislation originally sponsored by Rep. Doug Ervin is also contained in HB 327. And a provision that would allow Missouri to better compete for manufacturing jobs by exempting from sales tax all utilities and other inputs used in manufacturing is also included. A similar exemption exists in Kansas and several other states. That exemption may also be found in SB 30 (sponsored by Senator Gary Nodler and handled in the House by Rep. Bryan Stevenson) and HB 131 (sponsored by Rep. Shannon Cooper and handled in the Senate by Senator Jason Crowell).

MEDC's exemption for local governments that are participating in Chapter 100 arrangements was included in a committee substitute for SB 582 by Rep. Mike Sutherland. The bill was approved by the House committee and will now be sent to the House floor for further debate. The bill is sponsored by Sen. Wes Shoemyer.

The MEDC thanks the sponsors and handlers of these pieces of legislation for their hard work and for making economic development a true priority of the 2007 legislative session.

Chapter 100 and Manufacturing Inputs Sales Tax Exemptions Advance

(April 20, 2007) The Missouri House debated and approved Senate Bill 30, a bill that now contains MEDC's priority legislation that would exempt cities from sales tax liability for leases and sales made under Chapter 100 arrangements and the exemption of manufacturing inputs we have discussed extensively in other articles on this blog. SB 30 will now return to the Senate and will then be sent to a conference committee to strike a compromise. After a compromise has been reached, the Senate and the House must approve the compromise bill. But for now, this is a victory and the issue is alive with four more weeks of the legislative session to go. Sen. Gary Nodler is the sponsor of the bill in the Senate and Rep. Bryan Stevenson is handling the bill in the House.

MEDC continues to work with Rep. Ron Richard, Sen. John Griesheimer, the Missouri Department of Economic Development, and others on the compromise language for House Bill 327. The bill is now the omnibus economic development bill containing Quality Jobs, Enhanced Enterprise Zones, and the manufacturing utility sales and use tax exemption.

Also this week, the Senate Committee on Ways and Means heard House Bill 131, containing the manufacturing inputs sales tax exemption and the Chapter 100 sales tax exemption. That bill is sponsored by Rep. Shannon Cooper and will be handled in the Senate by Sen. Jason Crowell. The bill is also in good position for passage this session.

Please contact your legislators and let them know you support SB 30, HB 327 and HB 131! If you need to find your legislator, please use the "Legislator Lookup" link at the upper right hand corner of this page.

MEDCode and Regional Economic Development District Bill Moves Forward

(April 18, 2007) The Senate Committee on Economic Development, Tourism and Local Government today held a hearing and approved HB 741. The bill contains both the Missouri Economic Development Code and the Regional Economic Development District authorization.

There were no amendments and the bill was approved on a unanimous vote. Thanks to Randy Allen, President of Jefferson City Chamber of Commerce and MEDC Public Policy Chairman, for appearing in person at the hearing and to those writing letters of support: Shellby Hendee, Development Director, City of Cameron and Kathy Morgan, Economic Development Director, City of Albany.

The bill will now be considered by the full Senate. The MEDC thanks sponsors Rep. David Pearce, Rep. Darrell Pollock, and Senate handler Sen. Chris Koster, for their support of this legislation.

In other action, the Senate Ways and Means Committee today heard testimony on HB 131 which contains a sales tax exemption for manufacturing inputs and a sales tax exemption for cities leasing or selling property acquired through Chapter 100 projects. The Committee took no action on the bill at today's hearing. HB 131, sponsored by Rep. Shannon Cooper will be handled in the Senate by Senator Jason Crowell.

Quality Jobs and Enhanced Enterprise Zone Bill Continues to Advance

(April 16, 2007) A key committee in the Missouri Senate today gave its approval to allow HB 327 to advance. The Missouri Senate followed suit and approved the final motion on the bill. As anticipated, the House refused to concur in the Senate position and asked the Senate for a conference on the legislation, which was granted. The contents of the bill will now be determined by a conference committee made up of five Senators and five Representatives. Once they have reached consensus, the compromise bill must be approved again by both the House and the Senate. The Senate conferees are: Senators Griesheimer, Koster, Crowell, Callahan, and Kennedy. The House conferees have yet to be appointed (probably sometime tomorrow).

This is the first of our priority bills to reach this stage in the process this year and we are very thankful to Rep. Ron Richard and Sen. John Griesheimer and leadership in the House and Senate for continuing to make this legislation a priority.

For more information on the bill, click here.

Senate Committee to Hear MEDC Priority Legislation

The Senate Economic Development, Tourism and Local Government Committee will hear MEDC's priority legislation HB 741, containing both the Missouri Economic Development Code and the Regional Economic Development District legislation on Wednesday, April 18, at 1:30 p.m. in the Senate Lounge (3^rd floor, West side of the Capitol). We want to be respectful of the committee’s time and ask MEDC members to send written testimony to me to give to the committee on behalf of your organization. This will put your organization on record in support of the bill without having to make the trip to Jefferson City. The committee likes written testimony because it helps shorten the hearings. You should send written testimony to me at RayTheTaxman@earthlink.net by Tuesday, April 17, at 5:00 p.m. Please address the written testimony to:

Sen. John Griesheimer
Chairman of the Senate Economic Development, Tourism and Local Government Committee
State Capitol Building, Room 227
Jefferson City, MO 65101

The key points to hit in any testimony is that the MEDCode is a development tool that is similar to tax increment financing except that it is completely voluntary and flexible for all taxing districts. Taxing districts that want to participate may contribute any portion of any tax or none at all. It simply formalizes a process we already use to provide public infrastructure for projects. For the regional economic development districts, the bill allows us to form regional districts for regional economic development purposes and projects and allows the districts to impose a local sales tax or use other local financing to support the district’s projects. The regional economic development districts would receive NO state tax support – it is entirely a local tool.

MEDC wishes to thank Rep. David Pearce and Rep. Darrell Pollock for sponsoring the legislation and Senator Chris Koster for handling the bill in the Senate.

Senate Gives Initial Approval to Quality Jobs and Enhanced Enterprise Zone Legislation

(April 13, 2007) On Wednesday evening, after considering 30 amendments, the Missouri Senate passed the Missouri Quality Jobs and Enhanced Enterprise Zone legislation. Nearly all of the 30 amendments were adopted and included such things as alternative fuels tax incentives, tax credits for home renovation to provide accessibility to disabled persons -- even a provision allowing hunting in flood plains. While many of the amendments will not survive the final conference negotiations, there is no shortage of good ideas in the bill. Ultimately, negotiators will determine the content of the final bill.



The bill includes a Land Assemblage Tax Credit for redevelopment of urban areas and increases the Quality Jobs tax credit limit to $30 million. The Enhanced Enterprise Zone tax credit limit would be increased to $25 million. The bill also contains a provision that would exempt all manufacturing inputs from sales and use taxes, making Missouri competitive with states like Kansas that already offer such an exemption. A report was just released on the impact of the manufacturing inputs sales tax exemption which you may view by visiting www.motaxpayers.com and selecting the "Reports" tab on the left side of the screen. You will also find a report showing the state receives $3.18 in taxes for each tax dollar invested in the Missouri Quality Jobs program at the same location.



The Senate Governmental Accountability and Fiscal Oversight Committee must review and approve the bill before it faces a final vote in the Senate. If approved, the bill will be returned to the House where it is expected the bill will be sent to "conference" for further negotiations. Rep. Ron Richard and Sen. John Griesheimer are leading the charge on this bill in each of their respective chambers and the Missouri Economic Development Council thanks them for their hard work in carrying this important legislation.

House Gives Final Approval to More MEDC Priorities

(April 5, 2007) The Missouri House today gave final approval to HB 741, sponsored by Rep. David Pearce, and HB 131, sponsored by Rep. Shannon Cooper. Both measures will now move to the Senate for further consideration.

HB 741 contains the Missouri Economic Development Code and MEDC's Regional Economic Development District legislation. The Regional Economic Development District legislation was originally sponsored by Rep. Darrell Pollock, who added the provisions to HB 741 during debate on the bill last night. HB 131 contains the sales tax exemption for cities participating in Chapter 100 projects and the exemption of manufacturing inputs from sales and use taxes. The Chapter 100 and manufacturing inputs provisions were also included in a House committee substitute for SB 30 by Rep. Bryan Stevenson, Chairman of the House Tax Reform Committee.

Sen. John Griesheimer and Rep. Ron Richard continue to negotiate and prepare for Senate debate of HB 327, the Missouri Quality Jobs and Enhanced Enterprise Zone legislation, which could be debated as early as next week. Click here for the Senate Committee Substitute language.

The Missouri Economic Development Council thanks all those involved in moving our legislative agenda forward and encourages our members to communicate your support for these bills to your Senator and Representative. If you need contact information for your elected official, you may click on "Legislator Lookup" at right.

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.