Late spate of business bills awaits governor's signature

Missouri Chamber of Commerce officials characterized the 2008 session as a “strong one” for homegrown businesses, as well as out-of-state companies – such as Canada-based aircraft manufacturer Bombardier Aerospace – scouting the Show-Me State for expanded operations.

Bombardier’s interest in Kansas City as the possible site of a new jet manufacturing plant that would employ 2,000 people prompted lawmakers to craft legislation that could help Missouri land such “mega-projects” in the future. If signed into law, House Bill 2393 would provide major employers such as Bombardier up to $240 million in state tax credits during an eight-year period. The bill also includes safeguards to ensure the credits are repaid to the state with interest.

Springfield has rarely been in a position to negotiate a deal that would create more than 1,000 jobs, but the tools are now in place should a Bombardier ever come knocking, said Greg Williams, senior vice president of economic development at the Springfield Area Chamber of Commerce.

Tax credits expanded

For now, though, Springfield’s blue chips on the recruitment front amount to three statewide tax-credit programs: Enhanced Enterprise Zone, Missouri Quality Jobs and Neighborhood Assistance. And, to Williams’ delight, the legislature significantly expanded all three programs before the session ended May 16.

Lawmakers passed two nearly identical economic development bills increasing the annual cap on tax credits to $24 million from $14 million for the Enhanced Enterprise Zone Program; $60 million from $40 million for the Missouri Quality Jobs Program; and $6 million from $4 million for the Neighborhood Assistance Program.

The higher cap on enhanced enterprise zone credits is “huge” for Springfield’s economic development efforts, Williams said, adding that the provision may prevent an unnamed company from relocating to Iowa. The company, which employs about 120 at an average annual wage of $60,000, is preparing for a $12 million expansion that would create 50 new jobs, Williams said.

“We are in a much stronger position now to capture this expansion project,” he said.

Companies located in Springfield’s enhanced enterprise zone, which encompasses the city’s two Partnership Industrial Centers, are eligible for 50 percent real estate tax abatement for 10 years, Williams said. The minimum investment is $100,000, and the expansion must create at least two new jobs.

Companies then sell the tax credits on the secondary market, where they typically bring about 90 percent of par value, Williams said. The recouped money can then be redirected into the expansion project, he added.

Workers’ comp

Legislators also addressed a recent Missouri Supreme Court ruling regarding payouts from the state’s Second Injury Fund to dependents of deceased claimants.

In January 2007, the court ruled that Annette Schoemehl, of Camden County, was entitled to her late husband’s permanent total disability benefits even though his death wasn’t directly linked to an on-the-job knee injury he sustained while employed by Cruiser Country Inc.

In 2007 and again this year, the Missouri Chamber of Commerce pressed lawmakers to draft a legislative fix reversing the court’s decision. Their answer – one chamber officials view as incomplete – came in the form of House Bill 1883, which was amended to include language that says disability payments to dependents will stop when claimants die.

In August, a PricewaterhouseCoopers actuarial review of the fund forecasted a negative balance by 2009. The review also found that the rate of payouts since the Schoemehl decision had increased, but that the drain was not a significant factor in the fund’s impending insolvency.

In the last week of the session, the House adopted an amendment by Rep. Steve Hunter, R-Joplin, that would have exempted small businesses from paying into the fund, but the proposal didn’t receive a Senate vote.

Springfield attorney Bill Placzek, who handles workers’ compensation cases, said that businesses should actually be paying a little more into the fund to keep it intact for disabled veterans and injured workers.

“I think the Second Injury Fund is definitely necessary because it protects employers and it also assists disabled veterans and handicapped people … to make sure that if they are hurt on job, they’re not going to be put on the welfare rolls,” Placzek said.

Telecommunications

Another bill approved by lawmakers seeks to deregulate the wired phone industry and increase statewide competition among telecommunications companies.

House Bill 1779 removes the Missouri Public Service Commission’s requirement that phone companies answer customer calls to their business offices or repair bureaus within 15 seconds. The change applies to traditional and Voice-over-Internet Protocol, or VoIP, phone carriers, which are required to register with the commission and subject to access charges under the legislation.

HB 1779 also alters price-cap rules. If at least 55 percent of a carrier’s access lines are in markets deemed competitive – markets with at least two wired competitors and at least one wireless competitor – then that company could be considered competitive statewide, and rural price caps would be eased.

The bill had the support of incumbent local exchange companies, or ILECs, such as Texas-based AT&T and Louisiana-based CenturyTel Inc., which serves many of the smaller communities around Springfield, including Ozark, Branson and Marshfield. CenturyTel spokesman Don Neely said customers should benefit from the increased competition.

“The bottom line is that in a competitive marketplace, the competition alone is going to have a positive effect on rates and services,” he said. “Because if you’re in an area where there’s competition, you’re going to have to be competitive in your pricing and your product offerings to maintain your customer base. … You have to bring more to the table.”

The bill’s sponsor, Rep. Ed Emery, R-Lamar, said he’s hopeful the increased competition will lead to better service offerings – namely broadband high-speed Internet – in rural markets. Emery also noted that consumers are protected from steep price increases in the bill, which allows price-cap regulated companies facing competition to raise basic local rates up to the average rate for similar services at no more than $2 per month for four years.