COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:4599H.03C Bill No.:HCS for HB 2418 Subject:Economic Development; Department of Economic Development Type:Original Date:April 11, 2022Bill Summary:This proposal modifies the Missouri One Start Program.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025General Revenue
Fund*
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Total Estimated Net
Effect on General
Revenue
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
*Oversight notes that Section 620.803, allows for a new type of service within the Missouri One Start
Program – ‘recruitment services’ provided by the Missouri employers. Oversight assumes the amount
could reach the $250,000 threshold in GR transfers into the Missouri One Start Job Development Fund.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025MISSOURI ONE START
COMMUNITY COLLEGE NEW
JOB TRAINING FUND (0563)
$0
(Unknown) $0
MISSOURI ONE START
COMMUNITY COLLEGE NEW
JOB RETENTION TRAINING
FUND (717)
$0
(Unknown) $0
MISSOURI ONE START
COMMUNITY COLLEGE
TRAINING FUND
$0UnknownUnknownMISSOURI ONE START JOB
DEVELOPMENT FUND (0600)*
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
Total Estimated Net Effect on
Other State Funds
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
*Oversight notes that Section 620.803 allows for a new type of tax credit for the Recruitment Services
provided by the Missouri employers. The Development Fund is the only fund receiving money from GR.
Numbers within parentheses: () indicate costs or losses. L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Local Government$0$0$0 L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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FISCAL ANALYSIS
ASSUMPTION
In response to the previous version of the bill, officials from the Department of Revenue
(DOR) assumed the proposal stops the Missouri One Start Community College New Jobs
Training Fund and the Missouri One Start Community College Job Retention Training Fund and
replaces them with the Missouri One Start Community College Training Fund. This fund will
receive both the new and retained job credits. DOR is required to develop new forms for the
reporting of these credits. The creation of the new form is estimated at $10,000.
Oversight notes DOR is provided with core funding to handle a certain amount of activity each
year. Oversight assumes DOR could absorb the costs related to this proposal. If multiple bills
pass which require additional staffing and duties at substantial costs, DOR could request funding
through the appropriation process.
Officials from the Office of Administration – Budget & Planning (B&P) assume if more
projects utilize the training programs, these projects could also apply for other tax credits. If
more tax credits are issued, there could be an unknown decrease in General Revenue.
Conversely, to the extent, this proposal encourages other economic activity, General and Total
State Revenue may be impacted, but B&P cannot estimate the induced revenues.
In response to the previous version of the bill, officials from the Department of Economic
Development (DED) assumed the proposal will have no fiscal impact on their organization.
Oversight, through e-mail conversation with DED in response to the similar proposal, received
additional information with explanation as follows:
Section 620.803, RSMo, adds the definition of “recruitment services” to the Missouri One Start
Job Development Fund program. This is a service currently offered with the funds appropriated
to Missouri One Start to assist companies with their hiring needs. Adding the recruitment
definition solidifies this service as a core component of the Missouri One Start program. This
will not be an increase in funds to the program, but rather an additional core service offered
within the funds appropriated to Missouri One Start. This program is funded through a GR
transfer to the Missouri One Start Job Development Fund.
Section 620.809, RSMo, creates a new Fund, the “Missouri One Start Community College
Training Fund” that will start July 1, 2023. This fund will combine two current funds, the MOS
Community College New Jobs Training Program (NJTP) and the MOS Community College Job
Retention Training Program (JRTP) into one new training fund. The eligibility criteria for the
NJTP and JRTP will remain the same. With appropriation authority for one combined fund
instead of two separate appropriations–one for new jobs training projects and one for retained
jobs training projects–Missouri One Start will have flexibility as between the two types of
projects in any fiscal year. The source of the funds will remain unchanged. It comes from L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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diverting a portion of the employer withholdings taxes (roughly 2%) on the new/retained jobs
approved within the training projects. DOR diverts the withholding taxes into the respective
fund. DED, pursuant to appropriations, pays the diverted funds to the company’s designated
training account established by the community college. The local community college will
reimburse approved training expenditures to the company from the designated account.
Expenditure Table by Fund
FY
NJTP
Appropriation
Authority
NJTP Expended
JRTP Appropriation
AuthorityJRTP Expended
17$16M$4,379,900.75$10M$6,028,757.0218$16M$5,600,210.89$10M$3,520,566.2019$16M$4,714,604.03$10M$2,780,863.3720$16M$3,674,337.44$11M$2,905,596.5021$16M$7,153,984.97$11M$6,795,308.91
Oversight notes Section 620.803.1 states: The department, specified as DED under the proposal
language, shall establish a "Missouri One Start Program" to assist companies with recruitment
services. Furthermore, Section 620.806.3 states: Funds in the Missouri One Start Job
Development Fund shall be appropriated, for recruitment services.
Oversight notes that the “recruitment services” allows employers to receive potentially more
credits paid by the Missouri One Start Development Fund. Missouri One Start Development fund
receives funds directly from the general revenue fund. Therefore, Oversight will reflect a range
from $0 (no additional employees are being recruited beyond the current recruitment levels
already being paid for) to Unknown reduction to the GR (additional employees are being
recruited beyond current levels and more GR funds are being transferred into the Job
Development Fund where less money collected through withholding are now being diverted to
the Missouri One Start Development Fund).
Oversight notes that average expenditure per worker, from Missouri One Start Job Development
Fund, totaled $322.52 ($7,108,352/22,040) in FY 2017- FY 2019 period. Additionally, there
were more than 22,040 workers helped throughout the same period. Oversight notes it would
take only 775 existing or additional workers to reach $250,000 in spending due to the new
Recruitment Program participation. Therefore, it is probable that the GR will have an additional
expenditure that reaches over the $250,000 threshold.
Oversight notes that the Missouri One Start Community College Training Fund is replacing
Missouri One Start Community College New Jobs Training Fund and the Missouri One Start
Community College Job Retention Training Fund.
Oversight notes the proposal specifies the Missouri One Start Community College New Jobs
Training Fund and the Missouri One Start Community College Job Retention Training Fund both
shall receive withholding credits from DOR until June 30, 2023. All the unobligated credits L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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received on and after July 1, 2023, shall be transferred to the new fund, Missouri One Start
Community College Training Fund, created by the proposal. Therefore, Oversight will show an
unknown positive amount impact to the Missouri One Start Community College Training Fund
beginning FY 2024 and forward.
Lastly, will show Unknown amount (unobligated funds) being transferred from
Missouri One Start Community College New Jobs Training Fund and the Missouri One Start
Community College Job Retention Training Fund into the Missouri One Start Community
College Training Fund beginning FY 2024.
For informational purpose, Oversight included all actual expenditures under all three programs
below:
Source: https://oa.mo.gov/sites/default/files/FY_2021_DED_Budget_Request_Gov_Rec.pdf
Oversight excluded FY 2020 and 2021 due to the COVID-19 participations (fluctuations) within
any of the programs under the proposal.
Officials from the Office of Administration, the Office of Administration – Administrative
Hearing Commission, the Department of Higher Education and Workforce Development,
the Missouri Department of Transportation the Department of Elementary and Secondary
Education each assume the proposal will have no fiscal impact on their organizations.
F
Y 2017
F
Y 2018
F
Y 2019
M
issouri One Start Job Development
F
und (0600)
A
ctual Expenditures
1
1,175,945
$
4
,497,242
$
5
,651,870
$
C
ompanies Assisted
3
28
$
1
48
$
1
97
$
W
orkers Trained
3
1,003
1
6,666
1
8,451
M
issouri One Start Community College
N
ew Jobs Training Program (0563)
A
ctual Expenditures
4
,379,901
$
5
,600,211
$
4
,714,604
$
C
ompanies Assisted
1
5
1
6
1
2
W
orkers Trained
4
,923
5
,990
5
,720
A
nnual Cap
1
6,000,000
$
1
6,000,000
$
1
60,000,000
$
M
issouri One Start Community College
J
ob Retention Training Program (717)
A
ctual Expenditures
9
,028,757
$
3
,520,566
$
2
,780,863
$
C
ompanies Assisted
1
7
9 1
2
W
orkers Trained
6
,212
3
,957
4
,634
A
nnual Cap
1
0,000,000
$
1
0,000,000
$
1
0,000,000
$
L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero
impact in the fiscal note for these agencies.
Officials from the University of Missouri System and the Missouri State University both
assume the proposal will have no fiscal impact on their organizations. Oversight does not have
any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note
for those agencies.
Officials from the City of Kansas City and the City of Springfield both assume the proposal
will have no fiscal impact on their organization. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for those cities.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor. L.R. No. 4599H.03C
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FISCAL IMPACT – State GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025GENERAL REVENUE FUND Cost – 620.806.3 - new ‘Recruitment
Program’ – revenues being diverted
into the Missouri One Start
Development Fund (p.3)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
THE GENERAL REVENUE FUND
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
MISSOURI ONE START
COMMUNITY COLLEGE NEW
JOB TRAINING FUND (0563)
Revenue Decline – 620.809.4-
Unobligated funds flowing to the new
fund (p.3,4)
$0
(Unknown) $0
ESTIMATED NET EFFECT ON
THE MISSOURI ONE START
COMMUNITY COLLEGE FUND
$0(Unknown)$0
MISSOURI ONE START
COMMUNITY COLLEGE NEW
JOB RETENTION TRAINING
FUND (717)
Revenue Decline – 620.809.4
Unobligated fund flowing to the new
fund (p.3,4)
$0(Unknown) $0
ESTIMATED NET EFFECT ON
THE MISSOURI ONE START
COMMUNITY COLLEGE JOB
RETENTION TRAINIING FUND
$0(Unknown)$0
MISSOURI ONE START JOB
DEVELOPMENT FUND (0600) L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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Revenue Gain – 620.806.3 – payment
for the Recruitment Program from GR
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
ESTIMATED NET EFFECT ON
THE MISSOURI ONE START JOB
DEVELOPMENT FUND
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
MISSOURI ONE START
COMMUNITY COLLEGE
TRAINING FUND
Revenue Gain – 620.809.3- Money
flowing from both funds (p.3)
$0UnknownUnknownNET ESTIMATED EFFECT ON
THE MISSOURI ONE START
COMMUNITY COLLEGE
TRAINING FUND
$0UnknownUnknown
FISCAL IMPACT – Local GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025$0$0$0
FISCAL IMPACT – Small Business
Some of the small businesses would be allow to obtain tax credits associated with training, new
job creation, and recruitment, and as a result of this proposal.
FISCAL DESCRIPTION
This bill assists companies with recruitment services which is defined as the promotion of
workforce opportunities in Missouri.
The Department of Economic Development (department) is to establish guidelines and develop
an application form for a local education agency to submit on behalf of a qualified company who
is applying for benefits. The department may provide financial assistance for training projects
through the Missouri one start program from the Missouri One Start Job Development Fund to
qualified companies. The department is responsible to administer the recruitment services, while
the financial assistance for training projects is administered by a local education agency. L.R. No. 4599H.03C
Bill No. HCS for HB 2418
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The department will disburse the funds from the "Missouri One Start Community College New
Jobs Training Fund" through June 30, 2023 into the special funds established by the community
college districts for training projects and the funds are used to pay for the training project costs.
Any unobligated funds on July 1, 2023 are transferred to the "Missouri One Start Community
College Training Fund" which has been created by this bill.
The Department of Revenue shall develop the forms to apply the credits to the funds for all new
and retained jobs credits. Beginning July 1, 2023, reimbursements made by all qualified
companies to the Missouri One Start Community College Training Fund shall be no less than all
allocations made by the department to all community college districts for all projects. A qualified
company's training project may include both new jobs and retained jobs.
The bill deletes the "Missouri One Start Job Training Joint Legislative Oversight Committee".
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Economic Development
Higher Education and Workforce Development
Office of Administration – Administrative Hearing Commission
Office of Administration – Budget & Planning
Missouri Department of Transportation
Department of Elementary and Secondary Education
Department of Revenue
University of Missouri System
Missouri State University
City of Kansas City
City of Springfield
Julie MorffRoss StropeDirectorAssistant DirectorApril 11, 2022April 11, 2022