JEFFERSON CITY - Missouri economic development officials may soon have to deal with stricter due diligence standards while investigating projects if legislation filed Monday passes through the General Assembly.
Rep. Jay Barnes, R-Jefferson City, who filed the bills, said the legislation serves the purpose of trying to prevent the failure of future economic development projects. The legislation largely follows recommendations put forth by the House Government Oversight Committee. The recommendations include mandating higher standards of due diligence from the Department of Economic Development and local economic development officials while looking into future projects.
"This legislation is aimed at ensuring adequate oversight by DED and private bond industry professionals so they actually do their due diligence," Barnes said.
The legislation would require:
As the chairman to the House committee, Barnes led the House's review of the project, which collapsed after Mamtek U.S. Inc., failed to make a $39 million bond payment to the city of Moberly, which has since said it will default on the bond. The city's credit rating was also downgraded by Standard & Poor's 500 index. State legislators officially closed their investigations into the financial collapse of Mamtek last week when House and Senate committees released their findings and recommendations on the artificial sweetener project.
In its report, the House committee suggested the DED focus on working with Moberly in order to help the city recover from the project failure. Barnes said he was not sure this could be put into law, but the DED had been doing a better job recently of working with Moberly officials in overcoming the impact of Mamtek.
Barnes, who sponsored five of the seven bills, said he does not know when the House will take up the bills but plans to continue to move as fast as possible on the legislation. Sen. Jim Lembke, R-St. Louis County, led the Senate's investigation into Mamtek and has yet to introduce legislation to the Senate chamber.