SCS HCS HB 2 -- MANUFACTURING JOBS ACT

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 with
a National American Industry Classification System (NAICS) code
of 33611 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 commits to
make a capital investment of at least $50,000 per retained job at
the facility for the modification or expansion of the manufacture
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 for the
manufacture of an existing product; and

(d)  Continues to manufacture these goods at the facility for the
withholding period in which the company receives benefits under
the act;

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

(a)  Attests to the Department of Economic Development that it
derives more than 10% of its total annual sales revenue from
sales to a qualified manufacturing company;

(b)  Adds five or more new jobs;

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

(d)  Provides health insurance for all full-time jobs 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 that provides a notice of intent to receive
benefits under the act.  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
full-time jobs at the facility for 10 years if it manufactures a
new product or to retain 50% of withholding taxes from full-time
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 qualifications 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 act for any one qualified manufacturing company to $10
million per year and limits the aggregate amount of retained
withholding taxes authorized under the act 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 under the
provisions of the act.  The other state programs include, but are
not limited to:

(a)  New Jobs Training Program (Sections 178.892 - 178.896);

(b)  Job Retention Program (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 qualified manufacturing company or
qualified supplier that is awarded benefits under this act 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 act
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
immediately cease retaining any withholding taxes with respect to
jobs at the facility, repay all withholding tax previously
retained plus interest of 5% per year, and forfeit all rights to
retain withholding taxes 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 taxes one
time for up to three years at the company's request;

(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 immediately cease
retaining any withholding taxes with respect to jobs at the
facility and will forfeit all rights to retain withholding taxes
for the remainder of the withholding period; and

(13)  Requires the department to submit an annual report prior to
March 1 to the General Assembly with information regarding 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.

The bill becomes effective only upon approval by the Governor of
House Bill 1 from the First Extraordinary Session of the Second
Regular Session of the 95th General Assembly.

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