By Ray McCarty, rmccarty@aimo.com
March 31, 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.
This week, much attention in the Missouri House was given to passing the state budget. The debate over the budget affected many other issues as some scheduled hearings were canceled. There are five weeks left to complete work on the budget and six weeks left in the 2023 Legislative Session. Attached to every budget bill is language preventing funds from being expended for, "staffing, vendors, consultants, or programs associated with “Diversity, Equity, Inclusion,” or “Diversity, Inclusion, Belonging,” or any other initiative which similarly promotes: 1) the preferential treatment of any individual or group of individuals based upon race, color, religion, sex, gender, sexuality, ethnicity, national origin, or ancestry; 2) the concept that disparities are necessarily tied to oppression; 3) collective guilt ideologies; 4) intersectional or divisive identity activism; or, 5) the limiting of freedom of conscience, thought, or
speech. This does not prohibit the department from following federal and state employment and
anti-discrimination laws." We are unsure the impact this prohibition will have on companies receiving economic development incentives or companies with such policies that contract with the state as consultants or vendors. Press reports indicate the Senate may remove this language.
The Senate worked on many issues that did not directly impact businesses, including initiative petition reform, texting while driving, child custody arrangements, eviction moratoriums and a freeze on seniors' personal property taxes. However, Senate committees held hearings on several bills important to Missouri businesses.
TORT REFORM
Chairman Alex Riley's General Laws Committee was scheduled to vote on many of our tort reform bills this week, but that hearing was canceled due to the budget deliberations on the House floor. The hearing to vote on the following AIM-supported bills has been rescheduled for Tuesday, April 4, at 4:30 p.m.:
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; 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.
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 has been scheduled for a vote next week.
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 the bill was approved by the House and sent to the Senate. The standalone House bill, HB 779 (Bromley), received first round approval in the House. The Senate bill, SB 395 (Bernskoetter), was heard in a Senate committee this week as well. 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 committee last week and referred to a Rules committee this week. A hearing has been posted for next week on this bill and, if approved, the bill will be eligible 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
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.
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 heard by a Senate committee this week. In addition to support by AIM, the Department also testified in support of the bill at the hearing.
Next week, the Senate Progress and Development Committee has scheduled a vote on SB 424 (Washington), a bill that would modify 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. Associated Industries of Missouri was the only business advocacy group appearing in opposition to this bill.
ECONOMIC DEVELOPMENT
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 the House committee this week.
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 received the first of two votes in the House this week. The bill was then referred to a fiscal review committee that is scheduled to vote on the bill next week, at which time it will likely receive its second House vote and advance to the Senate. AIM joined the Missouri Economic Development Council as the only supporters of this legislation.
TAXES
HB 154 (Thomas) is AIM's bill that would exempt brain cancer treatment devices and other durable medical equipment from sales and use taxes. This week, the bill 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.
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 referred to the House Insurance Policy Committee this week and a hearing is scheduled for April 5.
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 this week.
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 this week. AIM was the only statewide business advocacy organization that supported the 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 this week and now moves to 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.
IMMIGRATION
A well-meaning but deeply flawed bill seeking to reduce employment of illegal immigrants, HB 188 (Murphy), was passed by a second House committee this week. AIM opposed the underlying bill because it would require all employers to use the EVerify system (ironically, the EVerify system was down while the hearing was taking place). The EVerify system is used by most employers that employ people on a regular basis but, as AIM pointed out, the system is burdensome for employers that rarely hire new employees, requiring online education and testing before use. But the Committee, instead of removing the onerous provision, actually made the bill worse by adding strict enforcement of the EVerify provision including loss of licenses, permits, exemptions, etc., until the employer files an affidavit that they will comply with the requirement, has terminated all illegal aliens, and will not knowingly employ illegal aliens. Of course, employing illegal aliens is already a violation of federal law, but the bill goes even further by extending license suspensions for hiring illegal aliens from two weeks to 120 days and makes subsequent violations a class D felony! The bill will next be debated by the full House. AIM remains opposed to the bill as written.
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 lobbyist Trent Watson who provided additional information for this report, David Overfelt who helps AIM cover hearings, and Chuck Pierce who serves as one of the top tax experts in the Missouri Capitol. We are all working hard for you.