By Ray McCarty, rmccarty@aimo.com
April 6, 2023 - We want to update you, our business members, on our legislative activity for the last week, representing the business position on some important legislation. If you have any questions or would like to learn more about any of these issues, please contact me at the email address above. Of course, we are doing much more than is reflected in this article, but this article is a good high-level review. By the way, if your business is not yet a member of Associated Industries of Missouri (AIM), please consider joining and supporting our efforts.
The Missouri House and Missouri Senate began hearing bills from the other chamber in committees this week (Senate bills were heard in House committees and vice versa). Normally, the spring break is a natural halfway point in a session and that signals a shift in the work of each chamber to begin working on the other's bills. While that process is beginning, each chamber is still working on their own bills in committee and in floor debate.
TORT AND LEGAL REFORM
Chairman Alex Riley's General Laws Committee passed five of our tort reform bills Tuesday evening and the bills will now advance to a second House committee for a final vote before moving to the House floor:
HB 272 (Riley) Reduces the statute of limitations for personal injury claims from Missouri's extraordinarily long five years to two years (a top tort reform priority for AIM);
HB 273 (Riley) Ensures only actual costs may be recovered in the cost recovery phase of a lawsuit;
HB 274 (Riley) Requires plaintiffs to disclose eligibility for asbestos trust fund claims in lawsuits against third parties;
HB 628 (Christofanelli) Establishes the "Consumer Legal Funding Model Act" a framework for litigation funding reform (a committee amendment added earned wage access provisions from HB 759 into the bill); and,
HB 1009 (Hardwick) Clarifies original intent of previous legislation that insurers should be given opportunity to adequately review claims before the plaintiff may move forward with a claim in excess of policy limits because the insurer allegedly acted in bad faith.
AIM is a member of the Missouri Civil Justice Reform Coalition, led by Rich Aubuchon, along with many other businesses and organizations. SB 117 (Luetkemeyer), a simple bill to change the statute of limitations from five years to two years like many other states, has been stalled in the Missouri Senate due to a filibuster by Sen. Bill Eigel and several other senators. The Coalition is running social media ads, paid for by the Coalition, about the situation which you may view here:
AIM also supported HB 941 (Baker) that would provide performance reviews and establish terms for administrative law judges that hear worker's compensation cases. The Missouri Dept. of Labor joined AIM and another statewide business organization in supporting the bill. The Missouri Assn. of Trial Attorneys opposed the bill in the hearing. Representatives of the Mo. Organization of Defense Lawyers indicated after the hearing they were not supportive of the bill because of the difficulty in finding quality people to serve in that role. The bill was heard this week but no action was taken on the bill.
MISSOURI EMPLOYERS MUTUAL PRIVATIZATION
SB 181 (Crawford) would allow Missouri Employers Mutual Insurance Company (MEM) to be a private company, a change from its current quasi-governmental status. The change is necessary to allow MEM to write workers' compensation policies for companies with operations in Missouri and other states. Current restrictions prevent MEM from writing such policies. AIM is fully supportive of this change. The bill was heard in the House Insurance Policy Committee on April 5 and is scheduled to receive a vote April 12.
ENVIRONMENTAL ISSUES
HB 1020 (Hovis) prevents creative miners from dodging mine inspection fees by claiming the mineral they are mining is not the same mineral that appears in the statutory inspection fee schedule. AIM supports this bill because the cost of mine inspection should fall on all mines of a particular mineral (or its equivalent) equally. At issue is a claim by some granite miners that they are actually mining a chemically identical mineral to granite, but because that mineral is not listed, they are not subject to the mine inspection fees. The bill would apply the fees to all chemically equivalent minerals and allow the Labor and Industrial Relations Commission to authorize fees for new chemically equivalent minerals in the future. However, inspection fees for new minerals that are not chemically equivalent to minerals already in the schedule would require passage of a bill. AIM was the only business group to support the bill. The Mo. Dept. of Labor and Industrial Relations supported the bill and the Mo. Dept. of Natural Resources provided informational testimony. The bill advanced from committee this week and will face another committee vote before moving to the full House for debate.
Also this week, AIM's top environmental priority that would extend the current fee setting process, prevent the reversion of fees to decade-old levels, and prevent the Missouri Department of Natural Resources from using guidance documents in punitive actions advanced in both the House and Senate. Rep. Bob Bromley added the language to HB 631 (Houx) along with language regarding earthen basins (see below) and that bill is awaiting committee referral in the Senate. The standalone House bill, HB 779 (Bromley), was approved by the House this week and sent to the Senate. The Senate bill, SB 395 (Bernskoetter), has been heard in a Senate committee but no action occurred this week. As was the case in the House, AIM was the only statewide general business advocacy group to support the Senate bill in the hearing.
A bill to clarify permits are not required for earthen basins also advanced this week. HCS HBs 1207 & 622 (Cook) was approved by a House Rules committee this week and the bill is now on the calendar for debate by the full House. Associated Industries of Missouri was again the only statewide business advocacy organization to testify in support of this language that helps protect quarries from a potential misinterpretation of the current law and associated fees.
HUMAN RESOURCES
The Senate Progress and Development Committee approved an amended version of SB 424 (Washington), a bill that originally would have modified the definition of "race" in the Missouri Human Rights Act to include hair styles and textures. AIM pointed out modifying the definition of "race" in this manner would likely lead to lawsuits against employers and suggested removing this provision, noting it was removed from the House companion bill. The bill was amended to remove the provision from SB 424 and the bill was then approved by the committee. Associated Industries of Missouri was the only business advocacy group appearing in opposition to the original bill and now does not oppose the bill since the problematic provision was removed.
A bill to provide limited liability to an employer hiring ex-offenders was heard in a House committee this week. HB 720 (Riley) would give employers more confidence when hiring such employees which I pointed out is necessary to break the cycle for some of these former inmates. If the ex-offenders are unable to secure gainful employment, they are more likely to continue their life of crime. I noted there are several programs to help incarcerated individuals enhance their skills and learn trades, but without liability protection for the employer, the ex-offenders may face difficulty securing a good job. The bill was heard by the committee, but no vote was taken.
SB 521 (Crawford) represents an agreement negotiated by AIM with the Missouri Dept. of Labor and Industrial Relations to extend the Second Injury Fund Supplemental Surcharge until 2026, but with a reduced maximum surcharge of 1% rather than the current 2.5% (which we negotiated down from 3% a couple years ago). We also support a provision in the bill allowing the Department to set the surcharge at the nearest quarter percent, rather than the current full percent, which will allow the Department to more accurately set the surcharge at an appropriate level. The bill was approved by the Senate Insurance and Banking Committee this week. The bill may be debated by the full Senate in the near future.
SB 60 (Razer) would allow smaller employers to be sued for discrimination based on sexual orientation and gender identity. AIM was the only statewide business advocacy group to testify against this bill that could affect approximately 20% of Missouri businesses that have more than six and less than 15 employees and potentially move cases against all employers from federal to state courts. See our full article on the topic HERE. There was no action on the bill this week.
ECONOMIC DEVELOPMENT
Incentives to help businesses convert to producing certain chemicals, gases, metals and minerals to help reduce foreign dependence on such items are contained in HB 1298 (McMullen) that was heard by the House Economic Development Committee this week. The "Missouri Defense and Energy Independence Act" received support from university officials, AIM and Jost Chemical Company of St. Louis. Doug Jost appeared in support on behalf of the company and provided excellent testimony regarding the way such incentives could be used to help Missouri and America reduce reliance on foreign sources of key chemicals necessary for domestic chip production, recycling and reuse of lithium from lithium batteries, and many other processes. The Sierra Club filed opposing testimony against the bill. No action was taken by the committee at the hearing.
Bills to revive Missouri's film tax credit and establish a new rehearsal facility tax credit advanced this week. AIM believes these incentives will help Missouri establish permanent industries that provide support to film makers (sound, lighting, set construction, etc.) and will attract many professional performers to use the rehearsal credit to test lighting and sound and to rehearse at a facility like the Gateway Studios and Production Services facility in Chesterfield, MO. The rehearsal credit requires performers to conduct at least two concerts in Missouri and would expire if similar incentives in other states expire. HB 675 (Gregory) containing both incentive programs was approved by the House and sent to the Senate this week. SS SCS SB 94, 52, 57,58 & 67 (Hoskins) has already passed the Senate and was heard in the House committee this week. And HB 133 (Hudson) has passed the House and was heard in Senate committee this week.
HB 1143 (Keathley) a bill supported by AIM that allows utility companies to lower gas rates for commercial and industrial customers that are expanding in Missouri was approved by a House committee last week and will face another committee vote before consideration by the full House.
HB 939 (Wilson), a bill that increases the amount of benefit under the Missouri Works program from $6 million to $10 million annually and allows more flexibility in that program was debated and amended on the House floor to include some short-line railroad credits, which appeared to be controversial as the House considered the bill for a final vote. The bill was defeated on the third reading vote. The vote may be reconsidered in the future if the sponsor is able to garner enough support to reopen the bill and remove the problematic provisions. AIM joined the Missouri Economic Development Council as the only supporters of this legislation.
SS SCS SBs 3 & 69 (Hoskins) contains several economic development programs: Right to Start Act (information on state contracts awarded to businesses less than 3 years old), Office of Entrepreneurship, and a Regulatory Sandbox (providing relief from regulation for testing of new ideas and processes). The Small Business Regulatory Fairness Board would be eliminated in the bill as it is no longer active. The bill was heard in a House committee this week and a vote may be taken as early as next week.
TAXES
AIM's bill that would exempt brain cancer treatment devices and other durable medical equipment from sales and use taxes advanced again this week. Today, SS SB 143 (Beck), an omnibus bill containing several tax exemptions and the durable medical equipment exemption, received a second Senate vote and was sent to the House. Last week, HB 154 (Thomas) was referred to the same Senate committee that heard the Senate version of the bill and was one of the first House bills referred to committees in the Senate. While AIM is the only statewide business group in support of the bill, the Missouri Department of Revenue also supports the bill.
SB 344 (Razer) would change the vote to renew the city earnings taxes in Kansas City and St. Louis to every 10 years rather than the current 5 year renewal cycle. An amendment adopted today in a Senate committee would also clearly exclude income earned outside the City of St. Louis from the St. Louis earnings tax. AIM supports the amendment. The bill advanced from the committee on a narrow vote of 4-3 and will next move to the Senate floor for full debate.
TRANSPORTATION
The Missouri Transportation and Development Council (MTD) joined the Missourians for Transportation Investment (MFTI) in a lobby day at the Missouri Capitol yesterday. Improving and expanding Interstate 70 across Missouri has been a top legislative priority for AIM, MFTI and MTD this legislative session.
During the day, participants met with their local state representatives and state senators to stress the need to make generational investments in the corridor using record state surpluses. The group was recognized from the floor of the Senate by Senate President Pro Tem Caleb Rowden and from the floor of the House by Assistant Majority Floor Leader Jamie Burger.
UTILITIES
SB 275 (Trent) and SB 300 (Hoskins) are both supported by AIM. SB 275 was drafted by AIM and would exempt items used by electric utilities in transmitting and distributing electricity to consumers from state and local sales and use taxes. SB 300 exempts the items from only state sales and use taxes. AIM prefers the full exemption in SB 275. Both bills were approved by a Senate committee last week and SB 275 is on the calendar for debate in the Senate.
SB 333 (Trent) is a bill that would allow utilities to include in rates costs for "construction work in progress" (CWIP) if building certain nuclear electricity generation facilities. AIM negotiated language that was presented to the committee as a committee substitute that would ensure the process could only be used for small modular reactors producing less than 300mw and if the facility is not finished and placed in service for any reason, the utility would be required to repay any amounts recovered through rates back to consumers through rate reductions, including interest. Renewable energy sources that were included in the original bill, were also removed in the AIM-negotiated language. The Senate Commerce, Consumer Protection, Energy and Environment Committee heard the bill last week. AIM was the only statewide business advocacy organization that supported the revised bill.
AIM opposes the House version of the CWIP bill, HB 225 (Black) because it would not provide for recovery of costs if the facility is never placed in operation and it would allow the process to be used for nuclear facilities that generate double the amount of power that would be generated by a small modular reactor. HB 225 was passed by the House last week and now awaits committee referral in the Senate. We will work to add the ratepayer protections in SB 333 to HB 225 when the bill is considered by the Senate. AIM was the only statewide business advocacy organization to oppose the bill.
We will continue to update you on key bills as the session progresses. Employees of AIM member businesses may contact us anytime for an update on any issue. We thank our AIM lobbyists Trent Watson, Chuck Pierce and David Overfelt for all their efforts on your behalf. We are all working hard for you.