Senate to discuss Economic Development Bill

JEFFERSON CITY - The Missouri Senate will convene Wednesday to discuss a statewide economic development bill. The bill includes a variety of provisions, primarily dealing with tax credits for businesses and developers.

Gov. Matt Blunt, called for a special legislative session after rejecting a more expensive economic development bill during the last session.

In his veto message, Blunt said he feared the extra business tax credits would be "consumed by jobs that are less desirable than the high quality jobs the program was intended to encourage." Blunt has stressed that a renewed effort by the legislature is needed to expand the program in a responsible manner.

The jobs program, set up in 2005 through the Quality Jobs Act, is designed to promote job creation by allowing certain businesses to qualify for a tax break for creating jobs that pay above a certain level and provide health coverage.

If approved and signed into law by the governor, the new development bill would expand the maximum tax credit by $28 million, as well as give preference to businesses located within disaster areas.

Other provisions in the bill include:

Ticket Scalping - One section of the bill, sponsored by Sen. Matt Bartle, R-Lee's Summit, would repeal a state law that bans the reselling of athletic tickets at a higher price than their original value. It would also prevent cities and counties from passing laws of their own regarding ticket scalping. St. Louis currently has a similar law in place. Although the provision would allow ticket scalping, it would allow local ordinances governing ticket-sale fraud.
Qualified Beef Tax Credit - This provision would also establish a tax credit for the sale of cattle weighing over 450 pounds. The credit would be equal to 10 cents per pound above the weight requirement for an initial sale of the animal. If the animal were resold, it would be worth a credit of 10 cents for each pound greater than the animal's weight at the first qualifying sale. Animals born after Aug. 28, 2008 that have been raised and finished by Missouri taxpayers would be the first to qualify.
Tax Increment Financing (TIF) - The bill would place broader restrictions on providing tax breaks for real estate developers in the St. Louis area. TIF projects increase the value of property in order to redevelop nearby land, often as part of a community improvement initiative. Sen. John Griesheimer, R-Washington and the project's sponsor, stressed that TIFs should be used as a redevelopment tool rather than a development tool and pointed to the town of Eureka as an example of misuse. Eureka, Griesheimer said, annexed unincorporated pasture land and then used TIF to develop the land for residential use. While the project did provide new residences, nearby school districts have had a hard time coping with the extra students. The new bill will prohibit TIF use in "Greenfield" areas that are located outside of a city's limits until the land has been annexed for a period of ten years. It would also create a TIF county commission in Franklin County, similar to ones already required in Jefferson, St. Charles, and St. Louis Counties, that would approve and oversee projects.
Film Production Tax Credit - The proposal would increase the tax credits given to film companies that spend more than $300,000 producing a film in Missouri. The tax credit would be increased by $3 million - 200 percent more than the current amount allotted to the program. The existing credit provides companies with a tax credit worth up to 50% of their total expenditures in the state.
Enhanced Enterprise Zone - The bill would increase the annual tax credit cap by $7 million for the Enhanced Enterprise Zone program and tightens the criteria for which businesses qualify for the credit. The Enhanced Enterprise Zone program was established to encourage job growth and investment in certain areas, as defined by the Department of Economic Development. Businesses are prohibited from receiving tax credits from both the Enhanced Enterprise Zone program and the Quality Jobs Program.