Committee Approves MEDC Priority for Further Discussion

December 5, 2007 - The Joint Committee on Tax Policy has completed their review of the feasibility of one of MEDC's priority legislative proposals.

Senator Brad Lager (R-12, Maryville) made the motion for the committee to approve further discussion and review of the proposal by the Missouri General Assembly, which was approved by a voice vote of the committee. Two committee members made suggestions for improvements to the legislation which will be made:

• The name will change from the Missouri Economic Development Code to the Missouri Voluntary Developer Agreement Law to more accurately reflect the purpose of the law; and,
• A section stating the new law would override other statutes will be removed.

The 2008 Legislative Session begins January 9.

MEDC 2008 Legislative Priorities

CLICK HERE FOR PRINTABLE PDF VERSION

1. Missouri Voluntary Developer Agreement Law – Codifying the existing practice of taxing districts voluntarily applying a portion of new tax revenues resulting from a project to help provide infrastructure in support of the project;

2. Small Business & Entrepreneurial Growth Act – Providing a mechanism allowing small employers that are adding employees to retain withholding tax on new employees, partially offsetting the increased costs imposed by government when employees are added (workers’ compensation, unemployment insurance, etc.) ;

3. Regional Economic Development Districts – Cleanup of language (blight, etc.)

4. Economic Development Organization Tax Credit - Allowing a tax credit for donations made to state and regional economic development organizations;

5. Investment-based Incentives – Providing tax incentives for significant infrastructure investments made by private companies to enhance retention of jobs in state and to recognize that such improvements are beneficial even though jobs are not necessarily created;

6. School District Bonding Capacity - Support effort by school districts to include properties which have received tax abatement under Chapter 100 in their assessed valuation when determining school district bonding capacity.

7. Retention Incentives – Explore retention incentives, provided objective may be established to determine whether a company’s threat to leave is sincere;

8. Innovation and Entrepreneurial Activity – Work with DED and Innovation Centers on research and development;

9. Funding for Training & Development in Rural Areas – Explore revolving loan fund or other means for funding training and development;

10. Angel Investing and Venture Capital – Explore ways to encourage angel investing and venture capital investment in Missouri, particularly when the ideas have been developed in Missouri and are at risk of being commercialized elsewhere;

11. Transportation Funding – Monitor transportation funding enhancement (tax increase) proposals in legislature and through initiative petition process;

12. SBDC Funding – MEDC considers SBDC funding a priority and will assist the SBDC with securing state funding through the appropriations process;

13. RPC Funding – MEDC supports regional planning commission funding in the appropriations process;

14. Job Training Funding – MEDC supports restoring and enhancing job training moneys that have been reduced in the appropriations process;

15. Quality Jobs Enhancement – Definition of “county average wage” prevents some counties that have high unemployment rates from using the program because average wage of those that are employed is relatively high. Explore solutions over the next several legislative sessions for presentation in future sessions to this and other issues that need to be addressed with the Quality Jobs Program;

16. Port Authority Funding – MEDC supports port authority funding;

17. Rural Empowerment Zones – Expand the application of rural empowerment zones which allow income tax abatement for new businesses locating in such zones as designated by DED;

18. Flood Plain TIF – Revisit tax increment financing prohibition in flood plains in light of amended definition of flood plains under consideration by U.S. Corps of Engineers;

19. Post-secondary Education Incentives – Develop incentives to encourage employees to seek and attain post-secondary education, possibly through incentives for employers that give time off to employees to pursue education opportunities or incentives to encourage recruitment and retention of qualified and talented employees;

Rep. David Pearce and MEDC Legislative Consultant Testify on MEDCode

The Joint Committee on Tax Policy heard testimony from Representative David Pearce and MEDC Legislative Consultant Ray McCarty on Thursday regarding the Missouri Economic Development Code.

The MEDCode is a legislative priority of the MEDC for the upcoming session. The program would allow economic developers to continue arranging voluntary agreements between local taxing districts and site developers to use a portion of new tax revenues derived from new developments for public infrastructure necessary to support such development projects.

Rep. Pearce presented the concept to the committee and explained that he has carried the bill for the last two years and, although it has met with no resistance from any group and there seems to be little controversy about it, the bill has not passed due to confusion with Tax Increment Financing (TIF) programs. TIF programs have been closely scrutinized in recent years and TIF reform could have ended all similar arrangements, including those that are completely voluntary.

McCarty echoed Rep. Pearce's comments and explained the difference between involuntary contributions under TIF plans and voluntary contributions under the MEDCode. Click here for Missourinet coverage of the hearing, including sound clips.

The Joint Committee on Tax Policy must report its findings on the feasibility of the MEDCode by December 31, 2007.

Governor Blunt Signs Economic Development Bill - Quality Jobs Boost Effective Today!

September 4 - Governor Matt Blunt today signed House Bill 1, sponsored by Representative Ron Richard and Senator John Griesheimer, as MEDC Legislative Consultant Ray McCarty (center) watches. The bill was one of the products of a special session called by Governor Blunt to address job creation and the repair of Missouri's bridges.

The bill contains many economic development provisions, including an increase in the Missouri Quality Jobs annual tax credit limit (from $12 million to $40 million) and a New Markets Tax Credit, both of which are effective today.

The remainder of the bill, including an increase in the Enhanced Enterprise Zone tax credit cap from $7 million to $14 million, will be effective December 3, 2007. A new Land Assemblage Tax Credit is also authorized in the bill, as well as a tax credit for cattle farm operations, ticket scalping provisions, and several other items. The bill also extends the New Jobs Training Tax Credit program expiration by 10 years.

The MEDC worked hard with the staff of the Missouri Department of Economic Development, the Governor's office, Representative Richard and Senator Griesheimer to pass this bill and appreciates Governor Blunt's continuing commitment to the creation of good paying jobs with benefits and for enhancing our economic developers' ability to attract and retain companies that provide such jobs. Since its birth in 2005, the Quality Jobs program has produced more than 12,500 jobs with average annual salaries of $46,856, according to a report by the Taxpayers Research Institute of Missouri (visit www.motaxpayers.com and click on "REPORTS" for a copy of the report). Total annual wages of jobs created with the program are anticipated to exceed $630 million by 2012, according to the report.

ECONOMIC DEVELOPMENT BILL FINALLY PASSED

Thanks to the strong leadership of Rep. Ron Richard and Sen. John Griesheimer, the economic development bill passed the House and is on its way to Governor Matt Blunt's desk.

An emergency clause was added to the bill for the Missouri Quality Jobs cap increase and the New Markets Tax Credit program, meaning those changes will be effective upon the Governor's signature. The remaining parts of the bill will be effective the end of November.

In the final bill, the Quality Jobs program will receive a $28 million boost in annual cap space, the Enhanced Enterprise Zone program will receive a $7 million boost in cap space, the New Jobs Training program will be extended for 10 more years, and several new tax credit programs will be enacted benefiting redevelopment in St. Louis City and beef producers.

Click here for the final version of the bill. The Senate made the following amendments to this language (these changes have been made in the text of the final version of the bill):

SA1 - Griesheimer – Adds an emergency clause for the Missouri Quality Jobs and New Markets Tax Credit programs.

SA1 to SA4 – Griesheimer and SA4 – Bray – The bill stated persons delinquent in the payment of taxes to DOR or the Dept. of Insurance were not eligible for Quality Jobs benefits. This amendment extends that same provision to other delinquent state fees due other agencies.

SA 9 – Green – Developers in the Land Assemblage Tax Credit program must pay prevailing wage.

SA 13 – Shoemyer – Land Assemblage Tax Credit will be subject to the Tax Credit Accountability Act, meaning it must be reviewed after four years and a report issued to the Joint Committee on Tax Policy. This does not affect the sunset date in 2013.

SA 14 – Shoemyer – Clarifies only “reasonable” demolition and maintenance charges will be allowed as reimbursable expenses under the Land Assemblage Tax Credit.

SA 19 – Griesheimer – Removes Franklin County from provision requiring a TIF to be approved by a countywide TIF commission.

Thanks to all MEDC members for the phone calls, emails and personal contacts to ensure passage of the bill. YOU MADE THE DIFFERENCE!

Ray McCarty
MEDC Legislative Consultant
ray@raymccarty.com

SENATE APPROVES ECONOMIC DEVELOPMENT BILL

August 29 - The Missouri Senate today approved the economic development bill, HB 1, sponsored by Representative Ron Richard and handled in the Senate by Senator John Griesheimer.

The Senate debated for more than 10 hours on the bill and added six amendments, none of which appear to be problematic. The bill must now be approved by the House. The House plans to take the bill up at 10:00 a.m. Thursday.

This was an extraordinary outcome and is the direct result of emails and phone calls from MEDC members.

If approved by the House on Thursday, the bill will be sent to the Governor for signature.

Senator Griesheimer Takes Lead on Economic Develoment Bill in Senate

August 27 - Senator John Griesheimer, Chairman of the Senate Economic Development, Tourism and Local Government Committee, held a hearing today on House Bill 1, sponsored by Rep. Ron Richard.

The bill was approved by the Senate committee with only minor changes and will now be sent to the full Senate for further deliberations. The bill will likely be taken up for passage on Wednesday, August 29.