INVEST IN MISSOURI Legislation Introduced

Treasurer Zweifel Makes Announcement in Springfield and Joplin

JEFFERSON CITY – State Treasurer Clint Zweifel was in Springfield, Mo., and Joplin, Mo., today to announce that State Rep. Tim Flook, R-Liberty, had filed legislation to make INVEST IN MISSOURI law. The legislation would significantly increase community investment, taxpayer return and job creation in Missouri, all with no new spending or new programs. The legislation would enact proposals championed by Treasurer Zweifel as part of his INVEST IN MISSOURI initiative.

Once law, the INVEST IN MISSOURI legislation would remove the statutory interest-rate cap that restricts the amount of return taxpayers earn when their money is invested with community banks as state time deposits.

“We are introducing competition into the market for state deposits and doing what is best for taxpayers by removing this outdated cap,” Rep. Flook said. “State taxpayers deserve a fair return on their money, and this legislation gives them that.”

Missouri statute currently ties Missouri time deposits, similar to a 6-month certificate of deposit, to the return of U.S. Treasury securities maturing over a similar period. That yield has been as low as 0.20 percent of late. Removing the restrictive cap would allow the state to receive a yield closer to the rates offered by banks to an individual, business or other government entity in Missouri. The market rate would be about 2 percent, resulting in increased returns to taxpayers.

“INVEST IN MISSOURI is the responsible action to take for taxpayers and community banks,” Treasurer Zweifel said. “We are one of two states in the nation, and the State Government is the only government entity in Missouri, which restricts the interest rate taxpayers receive when their funds are invested in community banks. Without this archaic restriction, my office can immediately place another $250 million in Missouri community banks because of better rates and return $10 million to taxpayers’ investments.”

The INVEST IN MISSOURI legislation also expands eligibility guidelines for the Missouri Linked Deposit Program and streamlines its application process. The Linked Deposit Program is designed to place state funds with community banks at below-market rates so the community bank can issue loans to borrowers at a reduced rate. Loan savings are usually 2 to 3 percent to the borrower. The program’s $720 million statutory cap is only about 30-percent utilized. Expanded eligibility guidelines would open up the state’s small business, job creation, agriculture and alternative energy programs to more businesses and farmers, and also creates a local government assistance linked deposit as a result of the legislation.

“It is essential we allow existing economic development programs to work harder for Missouri small businesses,” Rep. Flook said.

“Streamlining and expanding the Missouri Linked Deposit Program makes common sense. It allows us to encourage job creation, while investing in the new economy, and without creating new programs.”
The legislation has not been assigned to committee in the House. Treasurer Zweifel said Sen. David Pearce, R-Warrensburg, has filed Senate Bill 542 regarding the Missouri Linked Deposit Program.

“This is a bipartisan issue that is receiving bipartisan support, and I look forward to working with Treasurer Zweifel to see INVEST IN MISSOURI become law,” Rep. Flook said.

“INVEST IN MISSOURI is timely legislation that brings real ideas to the table, and I believe that Speaker Richards and the legislature have set a tone to make this happen,” Treasurer Zweifel said. “Legislators have the responsibility to make fiscally sounds decisions with taxpayers’ money. This legislation fulfills that, all while enhancing our economic toolbox in a bipartisan fashion.”

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