HB 2 -- Manufacturing Jobs Act

Sponsor:  Nolte

This bill establishes the Manufacturing Jobs Act which provides
incentives for qualified manufacturing companies and qualified
suppliers that create or retain Missouri jobs.  In its main
provisions, the bill:

(1)  Defines "qualified manufacturing company" as a business
that:

(a)  Manufactures goods at a facility in Missouri;

(b)  Makes a capital investment of at least $75,000 per retained
job at the facility for the manufacture of a new product within
two years of beginning to retain withholding taxes or makes a
capital investment of at least $50,000 per retained job at the
facility for the modification or expansion of an existing product
within two years of beginning to retain withholding taxes;

(c)  Manufactures a new product or has commenced making capital
improvements to the facility to manufacture a new product or
modifies or expands the manufacture of an existing product or has
commenced making capital improvements to the facility to
manufacture an existing product; and

(d)  Continues to manufacture these goods for the withholding
period in which the company may receive benefits under this
program;

(2)  Defines "qualified supplier" as a company that:

(a)  Derives more than 10% of its total annual revenues from
sales to a qualified manufacturing company;

(b)  Adds five or more new jobs;

(c)  Pays wages for new jobs that are equal to or exceed the
county average wage for Missouri as determined by the Department
of Economic Development using the National American Industry
Classification System (NAICS) industry classifications but are
not less than 60% of the statewide average wage; and

(d)  Provides health insurance to employees and pays at least 50%
of the insurance premiums;

(3)  Requires the department to respond with an approval or
rejection within 30 days to a qualified manufacturing company or
qualified supplier who provides a notice of intent to receive
benefits under this program.  Failure of the department to
respond will result in the notice of intent being deemed
approved;

(4)  Allows a qualified manufacturing company beginning
January 1, 2012, upon approval of a notice of intent by the
department, to retain 100% of the withholding taxes from retained
jobs for 10 years if it manufactures a new product or to retain
50% of withholding taxes from retained jobs for seven years if it
modifies or expands the manufacture of an existing product;

(5)  Allows a qualified manufacturing company to remain eligible
to participate in the Missouri Quality Jobs Program for any new
jobs for which it does not retain withholding taxes if it meets
the other requirements for that program but prohibits a qualified
manufacturing company from simultaneously receiving benefits
from:

(a)  Business use incentives for large-scale developments
(Sections 100.700 - 100.850, RSMo);

(b)  New or expanded business facilities (Sections 135.100 -
135.150);

(c)  Enterprise zones (Sections 135.200 - 135.286);

(d)  Relocation of a business to a distressed community (Section
135.535); or

(e)  Rural empowerment zones (Sections 135.900 - 135.906);

(6)  Allows a qualified supplier, upon approval of a notice of
intent by the department, to retain 100% of the withholding taxes
from new jobs for three years.  If the qualified supplier pays
wages for the new jobs that are equal to or greater than 120% of
the county average wage for Missouri as determined by the
department using NAICS industry classifications, it can retain
the withholding taxes for five years.  A qualified supplier is
prohibited from simultaneously receiving benefits from:

(a)  Business use incentives for large-scale developments
(Sections 100.700 - 100.850);

(b)  New or expanded business facilities (Sections 135.100 -
135.150);

(c)  Enterprise zones (Sections 135.200 - 135.286);

(d)  Relocation of a business to a distressed community (Section
135.535);

(e)  Rural empowerment zones (Sections 135.900 - 135.906);

(f)  Enhanced enterprise zones (Sections 135.950 - 135.970); or

(g)  Missouri Quality Jobs Program (Section 620.1881);

(7)  Limits the amount of retained withholding taxes authorized
under the program for any one qualified manufacturing company to
$10 million per year and limits the aggregate amount of retained
withholding taxes authorized under the program to $15 million per
year;

(8)  Specifies that if a qualified manufacturing company is
utilizing withholding taxes from jobs at the facility for any
other state program, the taxes will first be credited to the
other state program before beginning to accrue to this program.
The other state programs include, but are not limited to:

(a)  New jobs training (Sections 178.892 - 178.896);

(b)  Job retention (Sections 178.760 - 178.764);

(c)  Real Property Tax Increment Allocation Redevelopment Act
(Sections 99.800 - 99.865); or

(d)  Missouri Downtown and Rural Economic Stimulus Act (Sections
99.915 - 99.980);

(9)  Specifies that any taxpayer who is awarded benefits under
this program and knowingly hires individuals who are not allowed
to work legally in the United States will immediately forfeit
these benefits and repay the state an amount equal to any
withholding taxes already retained;

(10)  Specifies that taxpayers awarded benefits under the program
will not be required to obtain affidavits from subcontractors
regarding the employment of illegal immigrants;

(11)  Requires a qualified manufacturing company that fails to
make the required capital investment within two years to cease
retaining any withholding tax with respect to jobs at the
facility, repay all withholding tax previously retained with
interest of 5% per year, and forfeit all rights to retain
withholding tax for the remainder of the withholding period.  If
the failure to make the capital investment is due to economic
conditions beyond the company's control, the department director
may suspend the right to retain withholding tax one time for up
to three years;

(12)  Requires a qualified manufacturing company that
discontinues the manufacturing of a new product without replacing
it with a subsequent or additional new product manufactured at
the facility during the withholding period to cease retaining any
withholding tax with respect to jobs at the facility and to
forfeit all rights to retain withholding tax for the remainder of
the withholding period; and

(13)  Requires the department to submit an annual report by
March 1 to the General Assembly with information on the
participating companies and suppliers, the amount of benefits
provided, the estimated net state fiscal impact, and the number
of new and retained jobs.

The provisions of the bill will expire six years from the
effective date.

Missouri House of Representatives
95th General Assembly, 1st Special Session
Last Updated August 13, 2010 at 9:52 am