HCS HB 327 -- JOB DEVELOPMENT

SPONSOR:  Richard

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Job Creation and Economic Development by a vote of 12 to 0.

This substitute changes the laws regarding the Quality Jobs
Program, the Enhanced Enterprise Zone Program, and the New Jobs
Training Program.

QUALITY JOBS PROGRAM

In its main provisions, the substitute:

(1)  Eliminates the cap on the amount of tax credits that can be
issued in a calendar year for the program.  Currently, the cap is
$12 million per year;

(2)  Allows tax credits to offset taxes due from financial
institutions under Chapter 148, RSMo.  Currently, the credits can
only be used to offset state income taxes imposed by Chapter 143;

(3)  Changes the definition of "withholding tax" to a computation
using a schedule determined by the Department of Economic
Development based on average wages.  Currently, the definition is
the state tax imposed by Sections 143.191 - 143.265;

(4)  Allows the calendar year's maximum amount of quality jobs
tax credits issued to a qualifying company that participates in
both the Quality Jobs Program and the New Job Training Program to
be increased by an amount equivalent to the withholding tax
retained by that company under the New Job Training Program if
the combined benefits do not exceed the projected state benefits
of the project;

(5)  Requires that if the calendar year's annual maximum amount
of quality jobs tax credits issued to any qualified company is
increased by $1 million, the number of new jobs must exceed 500.
Currently, this increase in tax credits can occur by receiving
the approval of the department and the Quality Jobs Advisory Task
Force;

(6)  Specifies the method in which the county average wage will
be calculated when a qualified company relocates employees from
one county to another;

(7)  Revises the definition of "full-time employee" from an
employee who works an average of 35 hours per week to an employee
of the qualified company that is scheduled to work an average of
35 hours per week, but leaves the remaining requirements of the
definition unchanged;

(8)  Changes the calculation of "new direct local revenue" so
that local earnings taxes are excluded;

(9)  Specifies that no jobs created before the notice of intent
will be considered new jobs;

(10)  Specifies the method in which new payroll will be
calculated;

(11)  Adds educational services, religious organizations, public
administration, and utilities regardless of whether or not they
are regulated by the Missouri Public Service Commission to the
list of entities which are prohibited from being qualified
companies;

(12)  Allows qualified companies to retain withholding taxes once
the minimum number of new jobs has been attained and the county
average wage has been exceeded; and

(13)  Requires the department to verify through the Department of
Revenue that the tax credit applicant does not owe any delinquent
taxes, interest, or penalties and to verify through the
Department of Insurance, Financial Institutions, and Professional
Registration that the applicant does not owe any delinquent
insurance taxes prior to issuing any tax credits.  The amount of
tax credits issued will be reduced by any tax delinquency.

ENHANCED ENTERPRISE ZONE PROGRAM

In its main provisions, the substitute:

(1)  Eliminates the cap on the amount of tax credits that can be
issued in a calendar year for the program.  Currently, the cap is
$7 million per year;

(2)  Changes the definition of an "employee" to a person employed
by the enhanced business enterprise that is scheduled to work an
average of at least 1,000 hours per year.  Health insurance must
be offered to employees at all times and must be partially paid
by the employer.  Currently, the definition of an "employee" as
includes full-time, part-time, and seasonal employees;

(3)  Adds educational services, religious organizations, public
administration, and hospitals, to the list of entities which are
prohibited from being enhanced business enterprises.  However,
headquarters or administrative offices which would otherwise be
excluded may qualify for benefits if the offices serve a
multi-state territory;

(4)  Allows speculative industrial or warehouse buildings
constructed by a public entity, or a private entity if the land
is leased by a public entity, to be exempt from ad valorem taxes,
upon the approval of the governing authority.  If the speculative
building is owned by a private entity, the exemption cannot
exceed two years.  If it is owned or leased by a public entity,
the exemption cannot exceed five years.  Currently, only enhanced
business enterprises can be exempt from these taxes; and

(5)  Requires the department to verify through the Department of
Revenue that the tax credit applicant does not owe any delinquent
taxes, interest, or penalties and to verify through the
Department of Insurance, Financial Institutions, and Professional
Registration that the applicant does not owe any delinquent
insurance taxes prior to issuing any tax credits.  The amount of
tax credits issued will be reduced by any tax delinquency.

NEW JOBS TRAINING PROGRAM

In its main provisions, the substitute:

(1)  Allows community college districts to sell certificates
until July 1, 2018.  Currently, they cannot sell certificates
after July 1, 2008; and

(2)  Extends the program until July 1, 2028.  Currently, it will
expire on July 1, 2018.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $64,005
to Unknown in FY 2008, $65,280 to Unknown in FY 2009, and $66,919
to Unknown in FY 2010.  No impact on Other State Funds in
FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that it is of vital importance that
the caps on tax credits for the Quality Jobs and Enhanced
Enterprise Zone programs be eliminated.  Eliminating the caps
will create a frictionless environment in which to create new
jobs and increase economic development.  Leaving the caps in
place will create uncertainty and risk for businesses, which will
only encourage them to look to other states for relocation
incentives.  Quality Jobs is an incredibly successful program and
eliminating the caps will only make it more successful.  These
are programs that benefit the entire state, not just the cities.

Testifying for the bill were Representative Richard; Department
of Economic Development; Associated Industries of Missouri;
Taxpayers Research Institute of Missouri; Missouri Economic
Development Council; St. Louis Regional Chamber and Growth
Association; Cape Girardeau Area Chamber of Commerce; Benjamin
Jones, America's Heartland Economic Partnership; Rodney Crim,
City of St. Louis; Rodney Crim, St. Louis Development
Corporation; Missouri Chamber of Commerce and Industry; Roy
Hunter; Brent Derossett, Duck Creek Technologies; City of Joplin;
Joplin Chamber of Commerce; Montgomery City Growth; Eaglepicher
Technology; Springfield Area Chamber of Commerce; Monsanto
Company; Economic Development Corporation of Kansas City,
Missouri; George Walley, Northeast Missouri Development; St.
Louis Community College; Greater Kansas City Chamber of Commerce;
Metropolitan Community College; Missouri Association for
Community Action; Johnson County Economic Development
Corporation; and Missouri Community College Association.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:18 am