2023 Session Ends - An early report of important business bills passed
By Ray McCarty, president/CEO, Associated Industries of Missouri (AIM)
May 12, 2023, 4:00 p.m. - Four and one-half months of really hard work boils down to one final day as the 2023 Legislative Session closes today at 6:00 p.m. per the Missouri Constitution.
While we were successful in defeating some bills that would have been bad for business, that is for another article later. Today, we will focus on a few bills that passed in this legislative session that, again this year, put on full display the stark differences not just between parties, but between elected officials within parties, particularly the Republican party.
With less than two days left, one senator hijacked the Senate floor, claiming to want to cut property taxes and decrying some senators who prioritized sports betting. It was a speech we have come to expect in the Missouri Senate, announcing this senator and a few colleagues were true conservatives and if anyone disagreed with them, they must not be as conservative. It was the "outsider candidate" persona we have come to expect in politics. In reality, it seemed like more of a play for the cameras as this particular senator is launching a bid for governor in 2024, and earned media (receiving press coverage without paying for it) is something every political candidate wants - especially when the other candidates vying for the Republican nomination already have a large lead in name recognition. It seemed to be carefully timed, just before the evening television news cycle, with a series of auto-texts announcing parts of his agenda sent at the same time. Because we do not want to grant his apparent wish of boosting his name recognition, we won't print his name here, but we will say many good bills, including those that would have cut expenses for brain cancer patients, reduced rates for all electricity and gas ratepayers, and a slew of other bills beneficial to taxpayers and businesses were killed as a result of his action, wasting precious Senate floor time in the final hours of the session. So the people this senator purported to help with his plan to lower property taxes, actually suffered because other bills that would have reduced costs for them fell victim to his personal political tirade.
This was after the majority of the final week was wasted by another senator who had been absent the week before and was upset that some bills passed without his influence and approval, and other senators who were upset their priorities were not given sufficient attention this session, in their opinion.
Despite all the delay in the Missouri Senate again this session, we were able to pass several bills.
NOTE: This list is not complete because session ends at 6:00 p.m. and we wanted you to have this update today. We will have a more comprehensive list next week as we sift through the language and are sure we know everything that happened.
Perhaps the bill with the greatest long-term impact is the passage of a budget item in HB 4 that would provide funding to rebuild and expand Interstate 70, provide funding for preliminary work on I-44, and funding for rural routes. The appropriation bill provides approximately half of the needed funding from surplus money and the other half would be borrowed as needed. We have been told preliminarily that background work will begin immediately but actual construction won't start for nearly two years. We will continue our discussions with MoDOT and report back to you as they begin moving forward with this massive project. Importantly, because the money funding the project is not coming from the constitutional highway funds, legislators clearly will have control over the use of the money and can help ensure the money is spent for the designated purposes. Of course, as transportation advocates that led the effort to pass this critical infrastructure bill, AIM and MTD and our partners in the Missourians for Transportation Improvement coalition will be watching this project very closely.
SB 138 and HB 202 establish a "Waterways and Ports Trust Fund," a revolving trust fund to consist of moneys appropriated by the General Assembly, providing an 80/20 match for port capital improvement projects. The Fund would expire December 31, 2033 unless extended by the General Assembly.
SB 109 contains AIM language preventing the Missouri Department of Natural Resources from relying on guidance in punitive actions against regulated entities if they object to use of such guidance. Also, the process used to determine fees supporting various MDNR programs would be extended, "earthen basins" would be clearly exempted from requiring a permit, technical corrections are made allowing fair application of mining inspection fees to products similar to granite and other minerals, changes would be made to the makeup of the Industrial Minerals Advisory Council, and provisions regarding flood resiliency are included.
HB 202 and SB 138 allow farmers reporting income on Schedule F to utilize the "business income deduction" - the provision AIM passed in previous years that allows deduction of a percentage of business expenses when computing Missouri taxable income. A capital gains deduction for "beginning farmers" and a deduction for landowners renting to beginning farmers is also included.
SB 20 includes a deduction of capital gains realized when converting a business to an "Employee Stock Ownership Plan" (ESOP).
SB 20 and SB 75 provide a state-run retirement plan option for small employers. Earned wage access services would be regulated by provisions in SB 103 and SB 101. SJR 26 will place before voters a proposal that would exempt property used for childcare from property tax.
A tax credit would be available to companies providing the education necessary to upskill their workforce, and companies providing internships and apprenticeships under HB 417. The bill also makes changes to adult high schools.
Missouri will once again have a film production tax credit, thanks to passage of SB 94. The bill also authorizes a tax credit for rehearsal expenses and tour expenses for live entertainment tours and associated rehearsals conducted within the state.
Missouri Employers Mutual, a semi-private workers' compensation and safety company, would become a fully private company under the provisions of SB 101. AIM fully supports this change as the MEM may currently only write policies for workers' compensation within Missouri, but this change will allow MEM to write policies for companies with locations inside and outside Missouri.
The Second Injury Fund Surcharge is currently up to 2.5% of workers' compensation premiums, with the rate set to be the amount needed to pay claims, rounded to the nearest .5%. SB 24, negotiated by AIM with the Missouri Dept. of Labor and Industrial Relations, lowers the maximum supplemental surcharge to 1%, allows the Department to set the rate in .25% increments, and the surcharge is extended to December 31, 2026, at which time we will reevaluate the needs of the Second Injury Fund. This is a win for employers.
We will provide a more comprehensive list of bills and provisions affecting business next week. I want to take a moment to thank AIM's lobbying team, including Chuck Pierce, Trent Watson and David Overfelt. They are the best lobbying team in the Capitol and we very much appreciate their hard work on your behalf! More next week...