Missouri Works Program620.2000-620.2020 RSMO

Effective August 28, 2013

Presenters: Sallie Hemenway and Amanda Watts

PURPOSE OF THE MISSOURI WORKS PROGRAM

To facilitate the creation of quality jobs through targeted business projects for both expansion and recruitment.

Missouri Works Overview Program includes:

Five “new job” categories for participating businesses (Rural Works, Zone Works, Statewide Works, Mega Works 120, and Mega Works 140);

One “retention of jobs” category for existing Missouri businesses;

Benefits made up of retaining state withholding taxes and/or refundable state tax credits;

Both “statutory” and “discretionary” benefits; Replaces former Missouri Quality Jobs program,

Rebuilding Tax Credit program, Enhanced Enterprise Tax Credit program and Development Tax Credit program.

Funding Availability

State Withholdings - there is no annual program limit on the retained state withholding taxes.

Refundable/Sellable Tax Credits – (job creation projects only): $116 million program limit for FY16 forward.

Proposal from DED/Partnership versus

Direct Application from Company

MO Works may be incorporated into a DED or Missouri Partnership incentive proposal, or;

MO Works may be accessed by a company submitting a “Notice Of Intent (NOI)”;

DED has 5 days to respond to the proposal request and 30 days to respond to a direct NOI.

Important Eligibility Dates

Announcement May Occur

Investment May Occur Jobs May be Hired

Company Receives Proposal

After Date Proposal Sent from DED

Date Proposal Sent from DED (Investment will only count as new investment after the proposal has been accepted by the company.)

After NOI received by DED

Company Applies Directly (NOI)

After NOI Approval

After NOI Approval After NOI received by DED

Unique Characteristics Discretionary component adds new

considerationsLeast amount necessary to make the project

occur;Benefit shall not exceed projected fiscal net to

the state;Ability to negotiate;Standard criteria for adding discretionary

benefits;Performance agreements.

But/for requirement

Who can participate?

Eligible Applicants

For-Profit and Non-Profit businesses Headquarters, administrative or

research and development offices of otherwise excluded businesses that serve a multi-state area

Ineligible Applicants Gambling establishments Store front consumer-based retail trade establishments Food and drink places Public utilities Educational services Religious Organizations Ethanol distillation or production Biodiesel production Healthcare and social services Businesses that are delinquent in payment of any non-

protested taxes or other payments (state, federal, local) Businesses that have filed for or have publicly announced their

intention to file for bankruptcy, unless certain requirements are met

New Job Creation Project Benefits

Program Min. New Jobs

Min. New Private Capital

Inv.

Min. Avg. Wage

Health Ins. Offered &

Paid at Least 50%

Benefits

Zone Works(Note 1)

2 $100,000 80% of County Avg. Wage

Yes Retention of WH, 5 or 6 years (Note 3)

Rural Works(Note 2)

2 $100,000 90% of County Avg. Wage

Yes Retention of WH, 5 or 6 years (Note 3)

Statewide Works

10 N/A 90% of County Avg. Wage

Yes Retention of WH, 5 or 6 years

(Notes 3 & 4)

Mega Works 120 100 N/A 120% of County Avg. Wage

Yes 6% of new payroll, 5 or 6 years (Notes 3 & 4)

Mega Works 140 100 N/A 140% of County Avg. Wage

Yes 7% of new payroll, 5 or 6 years (Notes 3 & 4)

Note 1: Project facility must be located in an Enhanced Enterprise Zone.Note 2: Project facility must be located in a “rural” county, which would NOT include Boone, Buchanan, Clay, Greene, Jackson, St. Charles, and St. Louis City and County.Note 3: Benefit period is 5 years, or 6 years for existing Missouri companies (those that have been operational in Missouri for at least 10 years).Note 4: Companies may be proposed discretionary incentives of up to a maximum of 9% of new payroll if certain criteria are met.

Zone Works Criteria Located in an Enhanced Enterprise Zone. Minimum of 2 new jobs within 2 years of the date of the NOI

approval. 2 new jobs and “project facility base employment” must be

maintained throughout the duration of the 5 or 6 year benefit period. Minimum of $100,000 in new private capital investment within 2

years of the date of the NOI approval. Average wage of the new jobs must be at least 80% of the county

average wage. Statutory benefit is the retention of the state withholding tax on the

new jobs for a period of 5 years if the company has been in business in the State of Missouri less than 10 years or 6 years if the company has been in business in the State of Missouri more than 10 years.

Rural Works Criteria Located in a “rural” county, which would NOT include Boone,

Buchanan, Clay, Greene, Jackson, St. Charles, and St. Louis City and County.

Minimum of 2 new jobs within 2 years of the date of the NOI approval.

2 new jobs and “project facility base employment” must be maintained throughout the duration of the 5 or 6 year benefit period.

Minimum of $100,000 in new private capital investment within 2 years of the date of the NOI approval.

Average wage of the new jobs must be at least 90% of the county average wage.

Statutory benefit is the retention of the state withholding tax on the new jobs for a period of 5 years if the company has been in business in the State of Missouri less than 10 years or 6 years if the company has been in business in the State of Missouri more than 10 years.

Statewide Works Projects Minimum of 10 new jobs within 2 years of the date of the

NOI approval. 10 new jobs and “project facility base employment” must be

maintained throughout the duration of the 5 or 6 year benefit period.

Average wage of the new jobs must be at least 90% of the county average wage.

Statutory benefit is the retention of the state withholding tax on the new jobs for a period of 5 years if the company has been in business in the State of Missouri less than 10 years or 6 years if the company has been in business in the State of Missouri more than 10 years.

May be proposed additional discretionary incentives.

Mega Works 120 Minimum of 100 new jobs within 2 years of the date of the

NOI approval. 100 new jobs and “project facility base employment” must be

maintained throughout the duration of the 5 or 6 year benefit period.

Average wage of the new jobs must be at least 120% of the county average wage.

Statutory benefit to the company will be 6% of new payroll in a combination of retention of withholdings and tax credits.

The benefit is for a period of 5 years if the company has been in business in the State of Missouri less than 10 years or 6 years if the company has been in business in the State of Missouri more than 10 years.

May be proposed additional discretionary incentives.

Mega Works 140 Company must create a minimum of 100 new jobs within 2

years of the date of the NOI approval. 100 new jobs and “project facility base employment” must be

maintained throughout the duration of the 5 or 6 year benefit period.

Average wage of the new jobs must be at least 140% of the county average wage.

Statutory benefit to the company will be 7% of new payroll in a combination of retention of withholdings and tax credits.

The benefit is for a period of 5 years if the company has been in business in the State of Missouri less than 10 years or 6 years if the company has been in business in the State of Missouri more than 10 years.

May be proposed additional discretionary incentives.

Discretionary BenefitsAdditional discretionary benefits may be offered to a company

through a proposal for Statewide, Mega 120 and Mega 140 Works projects prior to submitting the Notice of Intent.

The criteria for consideration for discretionary benefits include: The least amount necessary to obtain the company’s

commitment The overall size (number of jobs, payroll, new capital

investment) and quality (average wages, growth potential of the company, multiplier effect of the industry) of the project

The financial stability and creditworthiness of the company The level of economic distress of the project area The competitiveness of alternative locations The percent of local incentives committed to the project

But/For

Prior to the receipt of a DED proposal or approval of a notice of intent, none of the following can have occurred or the NOI will be denied:

Significant, project-specific site work at the project facility.

Purchased machinery or equipment related to the project.

Publicly announced its intention to make new capital investment at the project facility.

Additional Requirements A business cannot simultaneously receive benefits for

the same capital investment or the same jobs for the following programs:

Rebuilding CommunitiesDevelopment Tax CreditEnhanced Enterprise ZoneMissouri Quality JobsMissouri Manufacturing Jobs

Special conditions apply when Missouri Works is used at the same time as other programs that affect state withholding taxes such as Missouri Training, State TIF and MODESA.

Program Agreements

MO Works provides for actual agreements to be executed between the Company and DED;

The Agreement is executed upon approval of the first NOI;

The Agreement shall specify, at a minimum:The committed number of new jobs, new payroll, and

new capital investment;The term of the benefits;The term of required reporting;The date or time period during which the tax credits shall

be issued.

Program Agreements - continued

Claw-back provisions as may be required by the department including;○ A material misrepresentation in the application;○ A bankruptcy;○ A relocation outside of the state;○ Dropping below the minimum job threshold;○ Dropping below the committed jobs (or a

percentage thereof) and payroll during benefit term;

○ Failing to comply with the reporting requirements;○ Failing to provide required capital investment.

Clawbacks Clawbacks may:

Include only a portion of a benefit;Include the whole benefit;Eliminate the discretionary component of a

benefit;Apply annually versus the full term.

Clawbacks are designed to:Encourage realistic estimates.

Clawbacks are not designed to:Eliminate competitiveness;Penalize natural business shifts.

Multiple NOI’s There is no limit on the number of NOI’s a

company can submit. Program benefits can occur concurrently

for multiple NOI’s. The benefits per NOI will be for a different

set of new jobs.

Program Contact Information

Amanda Watts - 573-522-2790 or amanda.watts@ded.mo.gov

Melody Worley - 573-751-9048 or melody.worley@ded.mo.gov

Greg Havener - 573-526-3285 or greg.havener@ded.mo.gov

To find the Project Manager for your community:

http://ded.mo.gov/docs/default-document-library/projectmngrsarea1_15.pdf?sfvrsn=2