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Name Change for China Hub Bill

Jessie Turnure KMOX Capitol Bureau
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Officials celebrate the arrival of the first flight of China Cargo Airlines at Lambert-St. Louis International Airport in St. Louis on September 23, 2011. UPI/Bill Greenblatt

Officials celebrate the arrival of the first flight of China Cargo Airlines at Lambert-St. Louis International Airport in St. Louis on September 23, 2011. UPI/Bill Greenblatt

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JEFFERSON CITY, Mo. (KMOX) - As the fifth week of the special session reaches its midpoint, the long-debated China cargo hub bill, once named Aerotropolis has become the “Missouri Export Act.” That’s the name now given to the bill for which Gov. Jay Nixon called Missouri lawmakers into a special session.

Rep. John Diehl, R-St. Louis, said the only surviving piece of the original China hub provision is $60 million in tax credits for companies that facilitate exports. Diehl has been one of the leading legislative advocates for the proposal.  Even with the latest name change, he acknowledged it was an uphill fight.

“The whole bill has serious issues and is in serious jeopardy,” Diehl  said. “I’m not optimistic that it gets resolved during the special  session.”

Since its beginning, the China hub bill has faced stiff opposition.  The Senate stripped $300 million from the governor’s original plan that was designed to provide tax breaks for developers of warehouses and other  infrastructure facilities for a cargo hub — leaving just the $60 million in tax breaks for businesses assisting cargo shipments, called freight forwarders.

At the time of Senate passage of its version, St. Louis Mayor Francis  Slay said that without tax breaks for infrastructure developers, the  measure was insufficient to attract a Chinese cargo airline to St.  Louis.

The version drafted by House leaders adopts the Senate approach of stripping out the tax breaks for infrastructure developers.  The draft was circulated on the eve of a scheduled Wednesday session of the House Economic Development Committee to vote on the plan.

On the first day of the special session on Sept. 6, the China hub bill began as the centerpiece of the economic development initiatives the Missouri legislature would consider to build a bridge between the U.S. and the fastest growing economy in the world, China.

Like the Senate version, the latest House plan for the China hub is limited to tax breaks for businesses that forward freight for exports to China, but not imports from the country.

Proponents argue the China hub bill will create more jobs for Missourians. According to the Bureau of Labor Statistics, Missouri ranked third-worst in job losses in 2010 with more than 55,000 Missourians unemployed since 2009. The state also has a higher unemployment rate than all but three bordering states, Illinois, Tennessee and Kentucky.The House version would eliminate Senate-passed “sunsets” in various tax credits for other activities including renovation of historic buildings and low-income housing.

Many senators have argued that as part of a package that includes tax breaks for China hub businesses, there needs to be cutbacks in other tax breaks.

Two weeks ago, Senate President Pro Tem Rob Mayer warned that any bill from the House that did not include those sunsets would be “dead on arrival” in the Senate.

The House Economic Development Committee will convene Wednesday at 2 p.m. to consider the bill.

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