Legislation Modifies Missouri’s Business Incentive and Worker Training Programs

By Chris Pieper

Legislation passed by the Missouri General Assembly modifies Missouri’s industry training and business incentive programs.  Senate Bill 68 enacts key components of Governor Parson’s economic development and workforce development agenda.

SB 68 renames the Missouri Works Training Program to the “Missouri One Start Program,” which provides flexible funding for a company’s training costs associated with a new facility, expansion or retraining project.  Companies may utilize industry training funds to offset training costs for new products, new manufacturing processes, technological innovation, and productivity improvement.   Under SB 68, a company is no longer required to retain its current number of employees, instead becoming eligible by maintaining at least one-hundred jobs in the year preceding the application.   Additional changes include granting express authority for the department to claw back benefits where a company fails to maintain new or retained jobs.

SB 68 also modifies the Missouri Works Business Incentive Program, which provides benefits to companies creating jobs and making capital investment.  The legislation provides incentives supporting a potential expansion by General Motors at its Wentzville Assembly Plant.  Non-automotive industry changes to Missouri Works include establishing a “closing fund” of tax credits in an amount not to exceed nine percent of new payroll, subject to a positive net fiscal benefit to the state.  Unlike tax credits awarded under the current program, which are issued over a period of years as new jobs are created, these tax credits are issued within a year of the company’s acceptance of a proposal for benefits, providing the potential for up-front project financing.   An award of tax credits through the closing fund is discretionary based on the department’s consideration of the company’s need, the net fiscal benefit to the state, the overall size and quality of the project, the financial stability and creditworthiness of the company, the level of economic distress in the area, the competitiveness of alternative locations, and the percentage of local incentives committed.  For a company to receive tax credits from the closing fund, the wages for the new jobs must equal or exceed the county average wage, and the company must provide financial guarantees to the department as part of its program agreement.

SB 68 also includes a number of changes intended to encourage minority workforce development.  The legislation requires that a company’s notice of intent for Missouri Works include a detailed plan of good faith efforts to employ minorities and minority contractors commensurate with the percentage of the minority population in the state.   In addition, if the company’s annual report to the department fails to demonstrate good faith efforts to employ minorities and minority contractors, the company is prohibited from receiving tax credits or retaining withholding tax for the balance of the project period.

Chris Pieper’s practice focuses on Regulatory and Government Solutions, Public Finance and Incentives, Real Estate, and Litigation.  Prior to returning to private practice Chris served in Missouri state government, including as Chief of Staff to the Governor, Director and General Counsel of the Missouri Department of Economic Development, Deputy General Counsel for the Missouri Department of Natural Resources, Legislative Director for the Missouri Department of Revenue, and Special Assistant Attorney General.