HCS HB 2393 -- ENHANCED ENTERPRISE ZONES

SPONSOR:  Richard

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Job Creation and Economic Development by a vote of 12 to 0.

This substitute allows a taxpayer to receive an income tax credit
for a mega-project.  The tax credit will be equal to a percentage
of the taxpayer's payroll.  No tax credits for mega-projects can
be approved prior to July 1, 2010, and no more than $40 million
can be issued annually for all mega-projects or to any taxpayer.

A mega-project is any manufacturing or assembling facility
approved by the Department of Economic Development for
construction and operation that is located within an enhanced
enterprise zone and which:

(1)  Projects new capital investment in excess of $300 million
over an eight-year period from the date the project is approved
by the department;

(2)  Projects that the number of new jobs will exceed 1,000 over
an eight-year period from the date the project is approved by the
department;

(3)  Pays an average wage for new jobs that exceeds the county
average wage;

(4)  Offers health insurance to all new employees and pays at
least 50% of the premiums; and

(5)  Provides an acceptable plan to repay the mega-project's tax
credits to the state.

The taxpayer may submit an application to the department for
approval of a mega-project.  The department may approve an
application if certain specified criteria are met.

Upon the application's approval, tax credits will be issued
annually for up to 22 years from the commencement of the
mega-project's commercial operations and may be extended beyond
the life of the enhanced enterprise zone.  Tax credits will be
equal to the following percentages of annual payroll for the new
jobs located at the mega-project:

(1)  80% for the first three years that tax credits are issued
for the mega-project;

(2)  60% for the next two subsequent years;

(3)  50% for the next two subsequent years;

(4)  30% for the next two subsequent years; and

(5)  25% for all subsequent years.

These tax credits may be claimed against income taxes in Chapter
143, RSMo, excluding withholding taxes.  The credits are
redeemable; however, owners of these tax credits are not required
to have any Missouri income tax liability in order to redeem the
credits and receive a refund.  The credits may be sold or
transferred but cannot be carried forward past the year of
issuance.

Taxpayers who are issued these credits must provide an annual
report to the department and cannot also receive tax credits
under the New or Expanded Business Facility Program, Enterprise
Zones Program, Relocating a Business to a Distressed Community
Program, or Quality Jobs Program.  If the department determines
the average wage is below the county average wage or the taxpayer
has not maintained the employee health insurance as required, the
taxpayer will not receive tax credits for that year.

Any action brought in any court contesting the approval of a
mega-project and the issuance of tax credits or the taking of any
other action related to the mega-project must be filed within 90
days of the department's approval of the mega-project.

A taxpayer who is awarded state tax credits for establishing a
new business facility in an enhanced enterprise will be
prohibited from simultaneously receiving tax credits from the
Enhanced Enterprise Zone Program and the Quality Jobs Program for
the same facility.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2009, $0 in FY 2010, and $0 to $40,000,000 in FY 2011.  No
impact on Other State Funds in FY 2009, FY 2010, and FY 2011.

PROPONENTS:  Supporters say that the provisions of the substitute
bill will be the biggest economic development project in Missouri
history.  A Canadian company, Bombardier, is considering building
an assembly plant at the Kansas City International Airport to
manufacture the new C-Series aircraft.  It will bring in more
than 1,000 jobs to the site and thousands more in related
industries.  This is a once-in-a-lifetime opportunity for
Missouri, and the bill is necessary to make it happen.  This
program is unique because it requires Bombardier to pay the state
a fee for each aircraft sold.  This will repay the state's tax
credits, resulting in an overall positive net impact for
Missouri.  However, if Bombardier does not choose Missouri for
its assembly site, the mega-project tax credit will be in place
for future projects.  This tool is vital to Missouri's future
economic development success with large-scale manufacturing
projects.

Testifying for the bill were Representative Richard; Department
of Economic Development; Economic Development Corporation of
Kansas City, Missouri; Mark VanLoh, Kansas City International
Airport-City of Kansas City; Bob Marcusse, Kansas City Area
Development Council; Pete Fullerton, Platte County Economic
Development Council; Greater Kansas City Chamber of Commerce; Dr.
Jackie Snyder; Missouri Chamber of Commerce and Industry; Ted
Allison, St. Joseph Area Chamber of Commerce and Kansas City Area
Development Council; William A. Hall, Kansas City Area
Development Council; St. Louis Community College; Missouri
Community College Association; Taxpayers Research Institute of
Missouri; Associated Industries of Missouri; and Missouri
Economic Development Council.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:12 pm