JEFFERSON CITY — This past fall, the halls of Missouri's Capitol were filled with discussion of the failed Mamtek factory that never produced a single granule of a low-calorie sweetener despite a $39 million bond issue by the rural town of Moberly and a state pledge of millions in additional incentives.
Two legislative committees were launched to investigate what went wrong in Missouri's economic development efforts.
Now heading into the final week of their annual session, Missouri lawmakers will be considering whether to send Gov. Jay Nixon legislation aimed at preventing similar failures in the future.
The legislation, which already has passed the House and is pending in the Senate, would require state and local officials to share information they have about companies that seek tax incentives — even if that information suggests that the company is having problems. It would require the state to develop a rating system for economic development projects that are pitched to communities, and it would require a conflict-of-interest policy for contracts with outside consultants.
Startup companies would also be required to have a third party verify any financial information they submit to the state. Also, local governments that back their bonds with the promise of future appropriations would also be required to hear public testimony on the bond issuance, unless they already have policies in place that reflect "best practices for prudent use of debt," either as part of their charter or through a local ballot initiative.
The House's version of the bill had only granted the "best practices" exception on public hearings to political subdivisions with more than 300,000 people. A Senate committee changed that provision this past week to grant the exception to subdivisions of any size that have "best practices" measures already in place.
The legislation still leaves out several other, more controversial legislative proposals that were floated earlier in the year, such as requiring local governments to purchase bond insurance and mandating that all bond issues be put to a public vote.
But even the provisions that stayed in the bill have drawn criticism, including from Rep. Randy Asbury, whose district includes Moberly.
"I don't think there was anything in the bill that would preclude a Mamtek situation from happening," said Asbury, R-Higbee. "Companies fail every day."
Many of the provisions in the legislation arose from a House investigatory committee led by Rep. Jay Barnes, R-Jefferson City.
"There is no perfect legislative fix to human foibles," Barnes said. "But this bill would certainly make it less likely that the Mamtek scenario would play out anywhere else."
The bill could be changed further in the Senate, and the House would also have to back those changes next week if the measure is to go to Nixon, who had promoted the potential for the Mamtek project to create 600 jobs.
Even if the bill doesn't pass, Barnes said the state Department of Economic Development should be able to make the changes in his bill on its own.
The state budget approved this past week even gives the department an additional $50,000 to hire a "due diligence officer."
"I think the department should do all of this on its own and I think it is ridiculous that the department hasn't done this already," Barnes said.
A department spokesman declined to comment about whether the department could or would make any changes in light of the Mamtek failure.