Legislative Update: September 20, 2011
A Legislative Update 2011 Special Session from the Alliance for Investment, Jobs and Preservation in Missouri.
Economic Development Bill - No Action taken by House Committee - House and Senate miles apart on Eco Devo bill
The House Committee on Economic Development chaired by Rep Anne Zerr R- St. Charles, held a hearing last night on Senate Bill 8 which was passed out of the Senate last week 25-9. The hearing which lasted 6.5 hours was started by Senator Rob Mayer who presented SB 8 to the committee. This bill was a major change from the economic development bill that was discussed and developed as the compromise language worked on by Rep John Diehl and Senator Eric Schmitt. The compromise was highly publicized as the Senate and House leadership flew around the state to tout the bill. Most of the press has been focused on the Aerotropolis component of the bill which was originally a $360 million tax credit program that was paired down to $60 million ($6 million/year for 10yrs). Other pieces of the bill include tax credits for new data centers, amateur athletic events, business retention, developmental disability care providers and Compete Missouri. Compete Missouri is a priority of Governor Nixon and the Dept of Economic Development. They combine 6 different tax credit programs into one program that gives DED the discretion to move the credits between the programs and establishes an upfront fund for business attraction.
Proponents of the bill included Mayor Slay, KC mayor's office, Missouri Chamber, RCGA, KC Chamber, AIM and other business organizations. They each focused on specific programs within Senate Bill 8.
Senate Bill 8 also pushes for "tax credit reform" which actually means cutting the caps on some credits (historic and low income housing and brownfield credits) along with establishing sunsets of 7years. They eliminate a few credits and place sunsets on the remaining credits. Historic tax credit caps are set at 80 million for large projects and 10 million for small projects (under $275k in credits) residential (non income producing capped at $125k); these figures are the same as was included in the compromise. The Major Change in HTC bill language was the removal of the DED program administrative streamlining language. The top priority of the historic revitalization industry is to keep the project pipeline open and efficient. The language requires 75% of qualified tax credits to be issued within 45 days from submission of the final application. DED then has 150 days to determine the amount that is qualified of the remaining 25% to be issued to the applicant. A third party independent appeals process was also stripped from the Senate version of the economic development bill. These were the critical elements that were essential to remain in any economic development bill.
Opponents to this provision of the bill included Alliance for Investment Jobs and Preservation, Missouri Preservation and the Missouri Realtors Association.
We testified against SB 8 and objected to the stripping of the DED streamlining language. We presented the positive economic impact on jobs (over 40,000) and private investment (over $6 billion) in over 65 communities across the state. There was a strong argument against the need for sunsets on the program which enables one Senator to terminate the program. We also pointed out the problems as a result of capping the small projects at 10 million which comprises 70-75% of the projects each year.
The House Committee Chair Anne Zerr has indicated that they will have a House Committee Substitute that will be based on HB4 which is the basic language that was worked through on the compromise. They will review the bill, make committee changes and then they must vote it out of committee before it proceeds to the Rules Committee and then to the House floor for debate. AIJP has submitted technical language changes to the Chair.
The House has demonstrated strong support for our positions on the historic tax credits and we encourage you to contact your legislators and make your voice heard on this critical issue.
THE ALLIANCE FOR INVESTMENT, JOBS & PRESERVATION IN MISSOURI
We urge you to contact your senator and let them know you oppose this bill! Landmarks has and now it's your turn! Not sure who your senator is? You can find it here.