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Key economic legislation fails in special session

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Two months after Gov. Jay Nixon called on Jefferson City lawmakers to convene for a special legislative session, the extra meetings adjourned without a key economic development initiative ever reaching his desk.

Senate Bill 8, the centerpiece of the Made in Missouri Jobs Package and its $360 million in tax breaks for the development of an air cargo transport hub with China in St. Louis, failed for the second time this year.

China Hub
SB 8, aka the China Hub bill, included Compete Missouri, a program of incentives designed to attract and retain business, update job training programs and increase the effectiveness of business development initiatives. House and Senate debates became prickly with regard to tax-credit sunsets.

George Connor, Missouri State University’s political science department director, said he thinks House and Senate leaders underestimated their differences before the governor called a special session.

“The real issue here is that House and Senate leadership didn’t get their members on board,” Connor said.

Rep. Melissa Leach, R-Springfield, said she supports tax credit reform and sided with Senate members who felt sunsets were reasonable.

“I believe as a legislature acting wisely inside the form of a Republic-government paradigm, we could easily do tax-credit sunset reviews without them getting caught up in political gamesmanship,” she said.

Connor said while differences in attitudes about the limits on tax credits were a key issue, they weren’t the only issue.

He said many were opposed to the specific credits written for developers tied to China Hub plans, and the failure by Hong Kong-based Mamtek to finish building a sweetener plant in Moberly, which was set to receive $17 million in state tax credits and other incentives, soured many legislators on the use of state tax credits.   

Scott Holste, press secretary for Nixon, said it was disappointing that House and Senate leaders couldn’t resolve their differences and work together to create jobs.

“When the General Assembly works together on economic development issues, as they did during last year’s special session, it can carry tremendous benefits and make a big difference for our state. That was clearly demonstrated through the announcement last month that Ford was investing more than $1 billion in Missouri,” Holste said in an e-mail. “The inability of the House and the Senate during this year’s special session to resolve their differences deprives us of additional economic development tools.”

In the 2010 special session, legislators passed the Manufacturing Jobs Act, which was designed to save jobs at the Ford Motor Co.’s Claycomo assembly plant. Last month, Ford announced it would be investing $1.1 billion and creating some 16,000 jobs.

MOSIRA
The only piece of the Made in Missouri Jobs Package to survive this year’s extra session – which was reported to cost taxpayers as much as $280,000 – was the Missouri Science and Innovation Reinvestment Act.

The impact of the initiative, which offers tax credits for science-based and technological companies, is unclear, however, because it was passed with a contingency clause that states SB 8 also had to be approved for the act to take effect.
Missouri Department of Economic Development spokesman John Fougere said the department is moving forward under the assumption that the credits passed in Senate Bill 7, or MOSIRA, would be valid.

“Contingency clauses contained in legislation have been voided in the past, and ultimately a court may have to determine the effect, if any, of the contingency clause contained in Senate Bill 7. With the signing of the bill, the state will initiate steps toward implementation of Senate Bill 7,” Fougere said in an e-mail.

Under MOSIRA, increases in tax revenues from a select group of research and development companies would be captured and redistributed by the Missouri Technology Corp. through loans and other means to companies with an emphasis on biotechnology and life sciences.

Allen Kunkel, director of Missouri State’s Jordan Valley Innovation Center, said university officials had actively promoted the bill for a couple of years. JVIC is designed to enable local companies to bring new technologies to the marketplace.

He said MOSIRA could benefit JVIC tenants such as Mercy Research and Development, Brewer Science and Crosslink by providing access to new state funds.

“It’s good for Missouri State. It’s good for the Springfield region, and its good for local businesses,” Kunkel said.

Kunkel expects MTC, a public-private partnership created by the General Assembly and based in Jefferson City, to define its programs and application process in the next year.

Leach said she opposed MOSIRA, saying it allows MTC to provide funding to companies that would conduct stem-cell research.

Leach said she is a proponent of broad-based tax reform and feels it shouldn’t be the government’s job to pick winners and losers, which is why she was opposed to the China Hub bill.

“We need to have a broader discussion on tax reform in general,” Leach said.[[In-content Ad]]

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