A Missouri House panel held a hearing Monday on a series of bills that, if enacted, would affect future borrowing by local governments for economic development projects.
Lawmakers submitted the bills in response to the mess surrounding the city of Moberly’s support for a failed artificial-sweetener plant project and its default on $39 million of appropriation-backed bonds after a Chinese-based company abandoned the half-built facility.
The bills would require greater sharing of information on projects by local governments and the state, a public vote for local government-backed bonding for projects, and local governments to obtain some form of insurance that could be tapped to repay future appropriation-backed bonds in the event of a default.
The fiasco that unfolded last year was the subject of recent legislative hearings. A Missouri House committee found that state economic development officials and financial firms failed to conduct adequate due diligence on the project
Moberly last fall informed the trustee on the bonds that it wouldn’t honor its pledge to repay the debt issued to help finance construction of the plant, which was abandoned by Mamtek US Inc.