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NewsBook:  Missouri Government News for the Week of October 10, 2011

Missouri Secretary of State, Robin Carnahan, is criticizing Republican lawmakers for their plan to cancel next year's presidential primary elections.

Carnahan, a Democrat, calls the idea "wrong-headed." She says eliminating the primary would not allow ordinary Missourians to voice their presidential preferences.

The Missouri GOP suggests that they will use a caucus process to pick its delegates for the national nominating convention.

Republican supporters say the cancellation could save the state somewhere between six to eight million dollars.

The Senate will discuss the legislation next week during special session at the Capitol building.

A member of the state Department of Economic Development signed off on tax-exempt bonds funding the failed Mamtek facility, the department official told the Committee on Governmental Accountability on Tuesday.  

The committee's meeting continued its investigation into Missouri government's role in the deal with China-based company Mamtek and other economic development projects.

Missouri senators questioned Gov. Jay Nixon's economic development department officials on why it put its stamp of approval on tax-exempt bonds funding the Mamtek project, which sapped funds from the city of Moberly's reserve fund when Mamtek defaulted on its bond payment and backed out of the deal.

The committee heard testimonies to figure out if and when the visas for Chinese investors, also called EB-5 visas, and tax-exempt bonds that were offered by Mamtek can be used effectively for funding economic development projects.

Sen. Kurt Schaefer, R-Columbia, asked Sallie Hemenway and Chris Pieper from the Department of Economic Development what they did to ensure due diligence before giving Mamtek tax-exempt bonds. They said they would supply that information with other requested documents in the near future.

"As we get the documentation that we requested from the department that we would see some level of confirmation that was done. And I think based on today, we're not really sure until we see those documents," Schaefer said.

The Department of Economic Development puts a stamp of approval on tax-exempt bonds, and Hemenway said she was the one who signed off on the status for use to fund the failed Mamtek project in Moberly.

The two witnesses said they originally gave the tax-exempt status to Mamtek based mostly on a readiness to close on the deal, although they also considered the potential for job creation and investment.

Schaefer said he is concerned that if they're defaulted on, tax-exempt bonds could create heightened scrutiny on municipal bonds coming out of Missouri in the future. He said he has talked to professionals who would argue that the default has already lowered Missouri's bond rating.       

Following a Republican caucus Tuesday afternoon, Senate President Pro Tem Rob Mayer, R-Dexter, says the House and Senate will conference on Monday to attempt to work out their differences.

There is much debate surrounding termination dates around the China hub bill. Without these termination dates, Mayer says the Senate will not pass any bill.

Mayer also says the Senate will take up a bill to terminate presidential primary voting in Missouri in an effort to save the state $6 to $8 million. Mayer says that money would be better served in education or health care, and that the primary process is meaningless.

Senate leaders said they would begin conference committee meetings next week when, regardless of whether a consensus is reached, Mayer said he expects the special session to end.

Ameren Missouri met with officials from every Missouri electricity provider Tuesday about ways to meet certain federal energy regulations from the Environmental Protection Agency, including limits to air pollution between states..

Warren Wood, the vice president of Ameren Missouri, said the creation of Ameren's desired new nuclear power plant in Callaway County wasn't on the table at the meeting. But Wood said the fight to create the power plant -- known as Callaway Two -- is not over.

"There's a great deal of interest in economic development, jobs, reliable, affordable power for the future, and I think the subject of Callaway Two is going to come up because it's an important option for the future," Wood said.

A law prohibiting public financing of ongoing energy construction projects has been the main obstacle to Callaway Two's creation. An amendment to a jobs bill repealing this law died in the Missouri House last week.

Bacteria from Colorado cantaloupe has infected a fourth person with listeria in Missouri, the state Department of Health and Senior Services confirmed Tuesday.

The most recent victim is in northwest Missouri, state officials said in a news release. Three other cases have been reported in eastern and southwestern regions of the state.

So far, all those infected in Missouri have been hospitalized and one, an unidentified 94-year-old, died from the infected fruit.

All cantaloupes from Jensen Farms of Holly, Colo., have already been recalled.

However, health officials urged consumers to look out for any fruit from the farm shipped between July 29 and Sept. 10. 

Last Week

The Missouri Department of Transportation has cut nearly 700 jobs and plans to eliminate 500 more by March 2013.

MoDOT jobs are not guaranteed, according to the Missouri Highways and Transportation Commission chair Grace Nichols.

"If somebody comes along that has more skills than you have, than they get your job. It's not that they're picking on certain areas. It's state wide. Every job is available to other workers throughout the state...No one is safe," Nichols said.

Only MoDOT maintenance workers are not at risk of losing their jobs, according to Nichols.

"They're the ones that do all the hard work for MoDOT and so we didn't want to cut any of those positions because [the public] needs those people. We need the other [employees] too, but it's not quite the crisis situation as the maintenance workers are," Nichols said.

Some MoDOT employees have switched positions or have left the department since June after a five-year plan was implemented due to budget cuts, according to Nichols. 

The Southeast Missourian published an article saying there has been no progress on the Dickerson case after 8 months.

According to Stoddard County Prosecuting Attourney Russ Oliver -- it’s because Nixon’s Department of Economic Development is not giving him the details he needs to develop the case.

The Dickerson case from last December involved $2 million economic development dollars for Cape Girardeau.

Gov. Jay Nixon then announced the $2 million dollars through the Watch Me Smile Vision and Dental cooperative.

A week later, the Department of Economic Development revoked the funding after learning that Dickerson had lied about his criminal record on the state aid application.

The Republican Party also released a statement saying Nixon is being reckless with taxpayer dollars.

This statement references a few failed economic development deals -- including Mamtek and Weaver Dickerson’s Cape Girardeau Medical Clinic.

According the statement, Missouri Republicans are not happy with Nixon and claim he should be doing his homework before promising Missouri’s taxpayer dollars to questionable projects.

After the Missouri Senate launched an investigation into Mamtek's default, the Senate Governmental Accountability Committee was told Wi-Fi Sensors, Inc., a developer and manufacturer of high-technology wireless sensors in Kirksville, also missed its first payment on their state loan.

The chair of the Senate committee, Kim Lembke, R-St. Louis County, said Mamtek's default brought its attention to Wi-Fi Sensors' financial trouble.

"There has been a renewed focus on it in the light of what is going on in Moberly with this Mamtek," said Lembke. "We are having a closer look and applying more scrutiny to the different tax credit programs that we have in our tool box here in Missouri."

The company had a promise of 40 jobs and over $4 million in private investments, but now the door of the company has been shut with no jobs being created.

The committee launched the investigation Thursday by requesting necessary documents from the Department of Economic Development. Lembke said he didn't know how long the investigation will take and it depends on what the Department of Economic Development comes up with.

Sen. Joseph Keaveny, D-St. Louis City, said he was concerned about the chilling effects of the investigations.

"If there are long drawn-out hearings with a lot of fingers pointing, the fact could be to deter this type of businesses from locating in the state of Missouri," Keaveny said.

The House passed their version of the China Hub bill this afternoon. Since many changes were made, the Senate now has to decide what they are going to do with the bill.

The two options the Senate has includes bringing the entire Senate back to Jefferson City or conferencing the bill with the House.

Senate Majority Floor Leader Tom Dempsey says the Senate is waiting to figure out their next step.

"We're waiting to see what the House does and if they are to pass a bill, what it looks like, prior to us deciding how to proceed," said Dempsey.

St. Louis senator Jim Lembke reacted to the House bill by saying that it has no chance of passing in the Senate.

"If a bill comes out of the House and it doesn't include sunsets on low incomes and historics, I don't give that bill much hope in the Senate," said Lembke.

Senator Rob Mayer says the Republican Caucus will meet Tuesday to figure out what to do next.

"We'll determine how we want to move forward and get a chance to speak to House leadership about going to conference and what items we might be able to compromise on," said Mayer.

Mayer added that he was disappointed at some of the pieces of the Senate's bill that failed to pass in the house.

"At a first glace on the House version that they passed today, it seems that the many of the reasonable tax credit reform provisions that the Senate had in our bill to protect tax payers failed to survive in the House, I was disappointed to see that," said Mayer.

With Missouri General Assembly's special session already on life support, the central China cargo hub legislation was dealt another blow as the state House of Representative's took up the issue in a committee meeting, and one lawmaker declared the bill dead.

Rather than accepting debate or amendments on the divisive bill, the chair of the House Economic Development Committee shut down all talk and called for an immediate vote on the bill.

Chairwoman Anne Zerr, R-St. Charles, specifically blocked an amendment that would add sunsets, or time limits, on several tax credits in the bill, such as the historical preservation and elderly low-income housing credits. The Missouri Senate has already made it clear to the House that it does not intend to pass legislation without the sunsets on tax credits.

Zerr obstructed Rep. Jamiliah Nasheed, D-St. Louis City, from offering her amendment to add the sunsets. In a phone interview from her car, which she bolted to after the meeting adjourned, Nasheed said, "I had an amendment to offer, and that amendment was not allowed in committee. I felt like if we're going to run this government like China, then there's no need for me to be there."

Nasheed said the bill is effectively dead.

The Economic Development Committee passed the bill 21-4. Zerr said the House plans to debate the bill on the chamber floor when it meets Thursday at 9 a.m. The House Democratic leader said his party would caucus to discuss getting the bill reassigned to committee in which members would be allowed to participate.

The Missouri Senate is the fourth entity to begin investigating the failed attempt at creating jobs in Moberly, the Chinese sucralose manufacturer, Mamtek.

The company recently defaulted on it's first payment to the city of Moberly, Moberly dedicated $39 million in industrial development bonds to the project, which recently abandoned construction of their facility and laid off employees.

Standard and Poor recently downgrading the city's credit rating, the committee intends to discuss what will happen if Moberly cannot make up for the missing money. Residents of Moberly have already been affected by the change with heightened costs for loans and municipal bonds, said Sen. Kurt Schaefer, R-Columbia.

The Government Accountability Committee intends to investigate Department of Economic Development procedures to determine if there are enough safeguards in place to protect taxpayer dollars, Lembke said. The committee also wants to know how much the DED recommendation influenced the local government's decision to invest.

"It is important for us to look through the process that's in place currently in the Department of Economic Development, in their due diligence to make sure that all the T's are crossed and all the I's are dotted in the protection of all the communities in the state," Lembke said. "And that is the purpose of this committee."


Educational publisher Scholastic will close its Moberly packaging center, leaving 135 workers unemployed.

Scholastic Vice President Kyle Good said the decision to close the center is the result of the company's decision to discontinue operation of its "Back to Basics" toy business.

The center will be closed early next year, and the company will consolidate the work in its Jefferson City facility. Good said the company will add 90 permanent and seasonal jobs at the Jefferson City location and give its Moberly workers priority to apply for them.

Good also said they have a wonderful relationship with the Moberly community and they are disappointed to have to leave.

With the loss of 600 promised jobs at the Mamtek artificial sweetener factory, the town of Moberly has lost more 700 jobs within three weeks. The town's unemployment rate is at more than 10 percent now.

A legislative group pushed forward Tuesday with work to make improvements in Missouri's corrections system, starting with lowering the system's costs, improving public safety and altering policy options.

Lawmakers in Missouri Working Group on Sentencing and Corrections cited material that showed Missouri's prison population grew rapidly from 1990 to 2000. During the past five years, prison populations have slowed to a growth of 1 percent annually although spending is up 30 percent from 2000.

"I think we can improve our systems by quite a bit," said co-chairman Rep. Chris Kelly, D-Columbia.

Kelly also said he thinks other states are doing a much better job with corrections. Currently, Missouri's maximum probation sentence is five years, which is longer than most states. There is no direct correlation between long probations, high incarcerations and lower crime in the streets.

The committee members said they hope to create a bill by November and present it in legislature in January.

Two state legislators say they think adding a multibillion dollar nuclear power plant in Callaway County is exactly what the China Hub bill needs to pass.

Representative Chris Kelly says he will propose the amendment.

The provision would let AmerenUE charge customers for the financing costs of building a second nuclear power plant.

It is currently illegal in Missouri to charge customers for the plant's financing costs before construction is complete.

Kelly says this plant would create twenty times more jobs than the China Hub at Lambert International Airport.

According to Ameren Missouri Communications Executive, Mike Cleary, the construction could cost anywhere between six and eight billion dollars, depending on what technology is used during construction.

Kelly says he hopes to put the issue on the ballot this April so that voters rights are not ignored.

A spokesman for the governor’s office, Scott Holste, would not comment on the issue.

Twenty-six Southwest Missouri businesses in 16 counties don't know if their public drinking water meets state safety standards Tuesday.

Four restaurants and a child care center are among a list of violators who repeatedly failed to submit mandatory drinking water tests.

The Missouri Department of Natural Resources requires all public water systems to test for bacteria each month to prevent waterborne diseases such as E. coli.

DNR Communications Director Renee Bungart says the department can only assess fines at this time.

Although the China hub bill is facing barriers at the statehouse and Mamtek's default in Moberly is making it worse, Gov. Jay Nixon is still going to China late October.

Nixon spokesman Scott Holste confirmed the governor's October trip to China on a trade mission. The delegation will be meeting with Chinese officials and businesspeople to promote Missouri products.

Holste said the overall goal of the trip is to boost Missouri exports. He said although the United States receives a lot of imports from China, Missouri exports grew significantly in 2010.

As the fifth week of the special session reaches its midpoint, the long-debated Aerotropolis turned China hub bill has become the Missouri Export Act.

Republican Representative John Diehl said the only surviving piece of the China hub provision is $60 million in tax credits for companies that facilitate exports.

Diehl says the bill "will provide taxpayers with significant savings both immediately and in the near future."

On the first day of the special session on Sept. 6, the China hub bill began as the centerpiece of the economic development initiatives the Missouri legislature would consider to build a bridge between the U.S. and the fastest growing economy in the world, China. To make this happen, the original legislation included tax credits on exports and local properties and added incentives for warehouses.

Also, Aerotropolis proposed the tax credits to total $360 million over 15 years.

One of the primary initiatives of the China hub bill was to create more jobs for Missourians to compete in a nation where most states are ahead. According to the Bureau of Labor Statistics, Missouri ranked third-worst in job losses in 2010 with more than 55,000 Missourians unemployed since 2009. The state also has a higher unemployment rate than all but three bordering states, Illinois, Tennessee and Kentucky.

Missouri's budget director reported that state revenue collections are falling far below the original estimates upon which the state's current budget is based.

According to figures released Tuesday by Missouri Budget Director Linda Luebbering, state revenue collections grew by just 1.9 percent for the first three months of the current budget year.

That is far below the four percent increase upon which the current budget is based.  That higher estimate was agreed upon by the administration and legislative budget leaders before adoption of the current budget by the legislature.

Sales tax and income tax collections represent the largest components of state revenue collections.

The revenue collection figures are a factor in a pending lawsuit by Missouri's state auditor against the governor for his action in withholding appropriations to various state agencies including education and higher education.

Missouri's constitution authorizes the governor to withhold funds if state revenue collections fall below the estimate upon which the budget is based.

But Republican Tom Schwiech charges Democrat Jay Nixon announced the budget cuts before the budget year had begun and, thus before there were any figures on how much the state would collect in revenue.

The lawsuit is pending in a Cole County circuit court.

Missouri's treasurer is having a glorified garage sale on Tuesday in Columbia.

Unclaimed items such as coins, stamps and jewelry will be auctioned off by the state treasurer's office at the annual unclaimed property auction. Notable items this year include a baseball and photograph signed by Ozzie Smith, former Cardinal player inducted to the Baseball Hall of Fame in 2002.

Auctions since Zweifel took office have returned $90 million to owners of unclaimed property.

The state constitution requires insurance companies, public agencies and businesses to turn over property to the treasurer if there has been no contact from the client for five years. The $600 million in property maintained by the treasurer includes insurance policy proceeds, unclaimed wages, government refunds, utility deposits, cash, stocks, bonds and the contents of safety deposit boxes sold at auction.

A list of unclaimed property handled by the state treasurer is available at

Zweifel's said he is expecting 200 to 300 people to attend the auction. Last year's auction brought in $105,000, but Zweifel's said he is expecting more due to the rising price of gold.

Items can be previewed Monday night from 6 to 8 p.m. and Tuesday morning from 7 to 9 a.m. The auction will take place 9 a.m. Tuesday at the Hilton Garden Inn in Columbia.

The House and Senate scheduled sessions for later in the week during their technical sessions this morning.

The Senate will convene on Thursday and the House will meet Tuesday for a technical session.

Thursday, October 6 will mark the 30 day point in the legislature's special session. The call gives them 60 days to vote on the issues included in the call.