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Missouri lawmakers pass rural incentives bill as special session draws to a close

Missouri lawmakers wrapped up their special session Tuesday when the state Senate overwhelmingly approved a $40 million package of incentives targeting rural economic projects.

The bill, passed 26-3, creates tax credits for fuel retailers to sell gas and diesel with higher blends of biofuels and to establish urban farms. It extends the life of incentives to support small meat processors and tax credits for banks to make loans for small farms.

The bill was previously passed in the Missouri House and now heads to Gov. Mike Parson for his signature. Final action on the other bill of the special session, an income tax cut, was completed last week.

“These are important wins for Missourians and Missouri Republicans,” Senate President Pro Tem Dave Schatz, R-Sullivan, said at a news conference following the vote.

The rural incentives bill mirrors legislation passed during this year’s regular session but vetoed by Parson because it put a two-year sunset on the programs. The bill approved Tuesday extends the incentives for six years.

The only speed bump on the way to quick passage Tuesday was when Sen. Mike Moon, R-Ash Grove, tried to amend the bill to block farms and companies owned by foreign nationals from participating in the incentive programs. His amendment was ruled out of order, but Moon said action is needed to protect Missouri farms from further encroachment.

“I think there are farmers just like me, just like the senator from Dunklin (Jason Bean), who would agree that this is an opportunity to protect the farmers we have now,” Moon said.

Until 2013, Missouri banned ownership of farmland by foreign nationals or corporations. It has become a political issue this year as Missouri Attorney General Eric Schmitt has become a target for attacks because of his votes as a state senator to lift the ban, both from opponents in the Republican Senate primary and Democratic candidate Trudy Busch Valentine as the general election approaches.

At a news conference, Bean said the issue of foreign ownership will be on the agenda when lawmakers return in January.

“We are going to talk about that next session,” he said.

The rural incentives bill includes three tax credits to promote biofuels and several other tax incentives. Among them are:

  • A 5-cents-per-gallon credit to retailers selling E15 gas, which is 15% ethanol instead of the 10% blend sold by most stations. The program would be capped at $5 million annually.
  • A credit of 2 cents per gallon or 5 cents per gallon for retailers that sell diesel with a biodiesel blend. The amount of the credit, capped at $16 million annually, is based on whether the blend is more or less than 10% biodiesel. The credit is refundable, which means that if retailers’ credits exceed their taxes, they will receive the difference from the state.
  • A refundable credit of 2 cents per gallon to biodiesel producers, capped at $4 million annually. Biodiesel is generally made from soy or other seed oil, but it can also be made from waste oil from plants or animals.
  • A credit of $5 a ton, up to $6 million annually, for sawmills to convert wood waste – chips and sawdust – into energy. This credit expired June 30, 2020.
  • A credit of up to 25% of the cost for modernizing or expanding a meat processing facility, capped at $2 million annually.
  • A new credit of up to $25,000 for each farm and $200,000 total to establish “urban farms” in communities of 50,000 people or more.

The rural incentives bill passed narrowly in the MIssouri House as Republican leaders made tactical mistakes that upset Democrats. But the only votes against it in the state Senate were from Republicans.

Senate Democratic Leader John Rizzo of Independence noted that much of the bill is renewal of programs that had expired recently. 

“It maintains the status quo,” Rizzo said, “which in my opinion is what they need and what they were asking for.

This article by Rudi Keller is published by permission of The Missouri Independent.

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