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Land assemblage passes with larger tax credit bill

Property owned by developer Paul McKee, Jr. in north St. Louis.
(Steve Patterson).
Property owned by developer Paul McKee, Jr. in north St. Louis.

By Maria Hickey, KWMU

St. Louis, MO. –

To see how St. Louis area representatives voted on the tax credit bill (which passed 129-20), click here.

The so-called Distressed Areas Land Assemblage Tax Credit passed Thursday as part of the economic development bill on a vote of 129-20.

Democratic Representative Rodney Hubbard, whose district includes much of an area that would likely be affected, voted in favor of the bill.

Hubbard spoke on the House floor on Thursday.

"I just want to let all members of the St. Louis delegation know that the St. Louis American, one of the oldest African-American newspapers in the state has come out in support land assemblage," Hubbard said.

(Click here to read the St. Louis American editorial.)

Hubbard was successful earlier this week in getting the legislation amended to require local government approval before a developer could get the credit.

But efforts by other lawmakers to lower the number of acres were unsuccessful.

Democratic Representative Jeannette Mott-Oxford tried to amend the bill to lessen the number of acres to 30 and to prevent tax credits from covering city fines

Those efforts were ruled out of order by the House Speaker.

"I'm disappointed that I didn't get to offer something that would have done some simple things . not allowed anyone to collect fines that they pay the city for mowing their grass or trimming their weeds or boarding up an abandoned building from this tax credit," she said. "It's ridiculous for tax credits to go for something like that."

Critics have said that developer Paul McKee Junior would be the direct beneficiary of the legislation. He's bought more than 500 parcels of land in north St. Louis.

Overall the bill, which now moves to the state senate, creates as much as $66 million in new tax credits for businesses and developers. The legislation also legalizes ticket scalping.

Lawmakers are convened in special session at the call of Blunt, who last month vetoed a broader economic development bill that he claimed could have cost up to $200 million while awarding tax breaks to some questionable causes.

The slimmed down bill expands tax credits for businesses that add jobs with at least average wages and health benefits, those that locate in economically distressed areas and movie makers who shoot scenes in Missouri. It also creates news tax credits for cattle ranchers, entrepreneurial investors and redevelopers who buy up large swaths of land in impoverished areas.

The constitution gives governors authority to set the agenda for special sessions, requiring them to "state specifically each matter on which action is deemed necessary." Blunt did so in great detail.

For example, his special session proclamation stipulated that the new tax credit for assembling land should apply to projects of at least 75 acres, of which the developer acquired 50 acres, and where 80% of the total area is impoverished. Blunt's call further specifies that the developer seeking the tax credits can do no more than 75% of the work, with other developers doing the rest. And it limits the tax credits to $10 million annually, or $95 million over time.

When Democrats tried to change some of those details, Republicans ruled the amendments out of order and barred debate. The constitution says lawmakers can act only on subjects "specially designated" in the governor's special session proclamation.

Rep. Leonard "Jonas" Hughes, D-Kansas City, had sought to expand the land assemblage tax credits to more developers by lowering the minimum acreage to 20 instead of 75.

Rep. Jeanette Mott Oxford, D-St. Louis, had sought to cap the total acreage eligibility at 30 acres, with a minimum requirement that a developer had acquired two of those acres. Her amendment also would have required tax credit applicants to host at least three public meetings in the project area to review their plans, among other things.

As Republican House leaders ruled those amendments went beyond Blunt's proclamation, House Assistant Minority Leader Paul LeVota questioned whether Blunt's detailed proclamation itself was unconstitutional by infringing on legislative prerogative.

"This is a joke," declared LeVota, D-Independence.

Added Oxford: "The governor is dictating what we must legislate."

Jessica Robinson, a spokeswoman for Blunt, said the governor had simply fulfilled his constitutional requirement to "state specifically" each matter for lawmakers to consider. Blunt was pleased with the bill's passage, she said.

Although it might have appeared to onlookers that Republicans were just following Blunt's desires, legislative leaders had a significant role in shaping the terms of the governor's special session call, said House Speaker Rod Jetton, R-Marble Hill.

"I guess you could say we ceded some power away," Jetton said, "but when you're in a special session and the governor drafts a very narrow call, it does somewhat limit the Legislature's ability to delve into other areas."

Republican House leaders allowed debate and votes on just two of the 11 proposed Democratic amendments.

The House defeated 86-62 an amendment that would have removed the land assemblage tax credit from the bill. It defeated 99-51 an amendment that would have stricken everything but three of the bill's provisions, two of which expand existing tax credits to businesses.

Bill sponsor Rep. Ron Richard defended the land assemblage tax credit against assertions that it would primarily benefit St. Louis area developer Paul McKee, who has amassed hundreds of parcels of land, hired lobbyists and contributed money to Blunt, Lt. Gov. Peter Kinder and other Republican and Democratic politicians.

Richard praised McKee for backing a creative proposal and argued that he might not even have enough land to qualify for the tax credits.

"No one in 30 years has had the ability to put tracts together for development. This is going to be a tool for new direction," said Richard, R-Joplin, chairman of the House Job Creation and Economic Development Committee. "This is going to work, and it's going to work well."

Other lawmakers touted additional parts of the bill.

Rep. David Pearce, R-Warrensburg, praised an expansion of the tax credits available to Missouri film makers from the current $1.5 million to $4.5 million annually. He said 36 other states offer similar incentives.

"Basically, if we don't provide tax credits for producers, these films will not be made in the state of Missouri," Pearce said.

Rep. Charlie Schlottach, R-Owensville, praised a proposal offering up to $3 million annually in tax credits to beef producers. Missouri is No. 2 nationally behind Texas in beef cows, he said, and the tax credits could create jobs by enticing farmers to keep their cattle in Missouri longer instead of sending them to out-of-state feed lots.

(photo credit on home page: eco-absence.org)