Missouri Senate Newsroom

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FOR IMMEDIATE RELEASE:    July 14, 2010

(Updated July 15, 2010)

 

 
Special Session Comes to a Close
Governor Signs Regular Session Bills, Manufacturing Jobs Act
 
 

 

JEFFERSON CITY—The special session that brought lawmakers back to Jefferson City as of June 24 ended Wednesday, July 14, after the General Assembly passed the two bills the governor called on members to send to his desk. 

The first issue involved state employee pension reform. House Bill 1, which was handled in the Senate by Sen. Jason Crowell (R-Cape Girardeau), will modify the retirement system for any person who becomes a state employee on or after Jan. 1, 2011. The changes will not affect current state employees.

Members of the new system established under HB 1 will be required to contribute 4 percent of their pay to the retirement system and work for the state for at least 10 years to gain ownership of their benefits. For regular retirement eligibility under the new plan, employees need to reach age 67 and have at least 10 years of service, or reach age 55 with the sum of their age and service equaling at least 90 (current employees must be 62 with five years of service or have a combined age and service of 80 years).

House Bill 1 is anticipated to save $660 million over the next 10 years. The bill passed the Senate on a 25-5 vote.

The changes to the pension system were called for in part to offset the costs of the other special session measure—House Bill 2, handled in the Senate by Sen. Luann Ridgeway (R-Smithville), which establishes the Manufacturing Jobs Act. This bill will provide tax incentives for qualified auto suppliers or manufacturing facilities that create or retain Missouri jobs, and though it could apply to similar companies, is aimed at enticing the Ford Motor Company to manufacture a new product line at its existing automotive assembly plant in Claycomo.

Under the bill, the total amount of withholding taxes that can be retained by any one company is $10 million a year, while the total amount of tax incentives available is capped at $15 million each year for 10 years. The qualified company also needs to meet a specific set of requirements to receive the tax incentives.

For auto manufacturers, if they are manufacturing a new product in Missouri, the company must make a capital investment of at least $75,000 per full-time employee within two years from the date the company begins retaining withholding taxes. For the modification or expansion of an existing product, manufacturers must commit to making a capital investment of at least $50,000 per retained job within two years from the company retaining withholding taxes.

For Missouri auto suppliers to qualify for the tax incentive, they must derive more than 10 percent of their total annual revenues from sales to a qualified manufacturing company; add five or more new jobs; pay wages for new jobs that are equal to or exceed the lower of the county average wage or the industry average wage for Missouri—but are not less than 60 percent of the statewide average wage; and provide health insurance to employees and pay at least 50 percent of the insurance premiums.

Qualified manufacturing companies that manufacture a new product may retain 100 percent of the withholding taxes from retained jobs for 10 years, while those that modify or expand on an existing product may retain 50 percent of the withholding taxes from retained jobs for seven years.

Likewise, qualified suppliers may retain 100 percent of the withholding taxes from new jobs for three years if they pay a certain wage. However, if a qualified supplier pays wages for the new jobs that are equal to or greater than 120 percent of the county average wage, it can retain 100 percent of the withholding taxes for new jobs for five years.

Companies that qualify are prohibited from simultaneously receiving benefits from multiple tax incentive programs. In the Senate, the HB 2 passed by a vote of 20-7.

The governor signed HB 2 on July 15 in a ceremony near the Claycomo plant. Upon receiving the governor’s signature, both bills will take effect within 90 days of the end of the special session, or Oct. 12.

In other legislative news, the governor on July 14 signed the ethics bill, SB 844, sponsored by Senate President Pro Tem Charlie Shields (R-St. Joseph), which creates stronger ethical standards for Missouri government. One of the main provisions allows the Missouri Ethics Commission to independently investigate ethics violations without an outside complaint being filed.

The bill also requires contributions of more than $500 to incumbent officials and their challengers during legislative session be electronically reported within 48 hours; states that a statewide elected official is guilty of the crime of “bribery of a public servant” if he or she makes offers or promises of paid employment to any other statewide elected official in exchange for the legislator's official vote; and limits the transferring of contributions among most committees. The bill takes effect Aug. 28.

Senate Bill 733, sponsored by Sen. David Pearce (R-Warrensburg), was also signed on Wednesday by the governor. The college scholarship bill equalizes Access Missouri scholarships for public and private universities and makes changes to Bright Flight scholarship requirements. Most of the provisions in the bill take effect Aug. 28.

July 14 was the deadline for the governor to sign or veto the measures passed during the 2010 regular session. Bills that are not acted upon will automatically become law on their effective dates.

For more information about the Missouri Senate, visit www.senate.mo.gov. To contact the Senate Newsroom, call (573) 751-3824 or e-mail newsroom@senate.mo.gov

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