By Ray McCarty and Matthew Smith
March 7, 2025 - Here is a quick recap of some of our activities on your behalf this week.
Proposition A - Minimum Wage and Paid Sick/Domestic Violence Leave Revisions (AIM supports)
By now you know Associated Industries of Missouri has joined other business groups in supporting bills aimed at reducing the burden on employers due to the passage of Proposition A. This week, we took another step in the legislative process when two House committees approved HCS#2 HB 567, 546, 758 & 958 (Gallick).
The revised bill would allow the next minimum wage hike to continue to be effective 1/1/26, but would remove the automatic inflation adjustment to the minimum wage, and remove all provisions related to paid sick leave and paid domestic violence leave. In addition, an exemption for public employers would be eliminated. An emergency clause was also added, meaning if 2/3 of the Senators and Representatives vote in favor, the bill would be effective upon its passage by the General Assembly and signature by Governor Kehoe. The bill is now on the House Perfection Calendar and we hope the bill will be passed by the House of Representatives before they adjourn for Spring Break March 13.
The Missouri Supreme Court will also hear oral arguments in our challenge of the ballot election, Raymond McCarty, et al. vs. Missouri Secretary of State, et al., Case #SC100876, on March 12 at 9:00 a.m.
Elimination of Local Manufacturing Exemption (AIM opposes)
AIM stopped the attack by some local governments on the state and local sales and use tax exemption for manufacturing inputs with a vote this week! See full article HERE.
Eliminating the Capital Gains Tax and Other Individual and Corporation Income Tax Cuts (AIM supports)
Associated Industries of Missouri supports reducing the corporation and individual income taxes. This week, the Missouri House perfected HCS HB 798 (Warwick) that cuts taxes in several ways:
A flat individual income tax rate of 4.7% is established (various rates for income levels less than $9,000 are eliminated) and triggers are in place that could reduce that percentage by as much as 1% over 10 years if supported by growth in general revenue;
Combined reporting is established, taxing income based on the combined income of joint filers (there is no advantage to continuing to separate income of the two filers if the tax rate is a flat rate);
Corporation Income Tax rate would be reduced from 4% to 3.75%;
100% of capital gains would be deductible when calculating Missouri taxable income; and,
The standard deduction is increased to the allowable federal deduction plus $4,000.
The bill faces one more vote before moving to the Senate.
Utility Legislation (AIM supports)
This was a busy week in the field of utility taxes and rates.
The State Tax Commission this week modified the form used by county assessors when determining depreciation of pipes that transport liquid and gas products, including water, sewage and natural gas. The Commission clarified that pipes placed in service prior to and including 1/1/2024 would be depreciated using a 20-year MACRS depreciation schedule with a minimum value of 20% of original cost and pipes placed in service on or after 1/2/2024 would be depreciated using a 50-year straight line depreciation method with a minimum value of 5% of original cost. This is important because the amount of property taxes paid on these pipes are paid by customers of the utilities. This is a big victory for Missouri ratepayers and we credit the leadership of State Tax Commission Chairman Gary Romine, Commissioner Greg Razer, and Commissioner Debbi McGinnis for establishing these reasonable standards.
Also, Associated Industries of Missouri testified in support of HB 1059 (Banderman), which would require county assessors to use the 20-year depreciation method. Some counties in Missouri have abandoned this schedule and attempted to raise taxes levied on these pipes. This bill also includes provisions that provide additional ways for gas corporations to lower rates paid by their customers.
HB 949 (Simmons) allows utility companies to utilize a "future test year" for rate proceedings. Currently, utility companies use past expenses to determine rates for the future. This would allow utility companies to estimate future costs and incorporate those into rates. Consumers are protected as the language requires utility companies to reimburse ratepayers if the actual costs are less than originally estimated. The Public Service Commission (PSC) has the ability to prevent a utility company from utilizing the future test year if they deem it would be harmful to consumers. Because of consumer protections found in the bill, AIM supports this bill.
Protecting Innovators Against Frivolous Litigation (AIM supports)
HB 918 (Black) establishes protection for businesses and innovators by requiring that in any civil action for personal injury, death, or property damage caused by a product, the plaintiff must prove that the defendant designed, manufactured, sold or leased the actual product that caused the injury. This bill seeks to protect those who have been sued because of an alleged injury from a “knock-off” product. Businesses and innovators should not be on the hook for a product they had no part of manufacturing. We believe that this bill, like all other tort reform bills in the Missouri legislature, is a commonsense solution. The bill advanced from the House committee this week.
Preventing Double Recovery in Civil Damages (AIM supports)
HB 952 (Overcast) seeks to increase fairness in the courts by requiring amounts paid by a plaintiff's insurance to be offset against amounts that a plaintiff may recover in the cost recovery part of the trial. For example, if the total amount a plaintiff had to pay was $100,000, but the plaintiff's insurance had already paid the plaintiff $20,000, then the total recovery would be $80,000. This bill provides plaintiffs will be made whole, but not double compensated. The bill was approved by the House committee this week.
Supporting Common Sense Collateral Source Rule (AIM supports)
HB 69 (Overcast) would allow admissibility of evidence of the actual cost (and discounts) of medical care or treatment rendered and potential cost of future treatment, but would prevent introduction of evidence of costs billed but never due or paid. Juries should know the actual cost and reimbursements that need to be recovered in the cost recovery part of civil suits. This bill enhances transparency in civil suits, provides additional fairness in court proceedings, and ensures injured parties are made whole, but not unjustly enriched in the cost recovery part of the trial. Extra damages would not be impacted by the changes.
Settlement Demands, Anchoring, Collateral Source (AIM supports)
SB 312 (Trent) seeks to close a loophole exploited by plaintiffs' attorneys after we passed legislation allowing insurance companies sufficient time to review settlement demands. SB 268 (Trent) contains the same provisions and also includes language preventing plaintiffs' attorneys from attempting to establish the value of non-economic damages (anchoring), collateral source language similar to HB 69 above, and other provisions. Both bills were heard in the Senate General Laws Committee this week.
Protecting Businesses from Burdensome Local Regulations (AIM supports)
Associated Industries of Missouri testified in support of HB 627 (Mayhew) which protects industries when they are filing for permits with the Mo. Department of Natural Resources (MDNR.) This bill prohibits the cancellation of permits for projects if local codes, ordinances, or orders are enacted following the filing of an application. Industries applying for permits for projects that are essential to Missouri already deal with regulations from the various federal, state and local governments. They should not have the rug pulled out from under them during the permitting process because a local government decides to cancel the project using a local ordinance.
We intend to provide these legislative updates to you on a weekly basis on Fridays as we track the progress of these and other bills affecting Missouri businesses.
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