The Missouri General Assembly is spending this week in recess, marking the traditional halfway point in the legislative session.
Beginning next week, the House and Senate reconvene for the “homestretch” of the 2016 session which will adjourn at 6:00 p.m. May 13. Over the next seven weeks, activity at the State Capitol becomes progressively more frenzied as legislators and interest groups push for their legislation to make it across the finish line, and on to Governor Nixon’s desk by the end of the session.
Workers’ Compensation Retaliation
Associated Industries of Missouri has several pieces of legislation that it’s keeping a close eye on, none more so than a Senate bill on the discharge of employees following a workers’ compensation claim. This legislation was rated as a top priority by AIM members.
The legislation SB 876, sponsored by Sen. Dave Schatz, is in response to a recent court decision that held the lower standard of proof used in other discrimination cases, the “contributing factor” standard, should apply to work comp retaliation cases too. This act changes that standard to a “motivating factor” standard.
Ray McCarty, president and CEO of Associated Industries of Missouri (AIM), gave testimony in support of the bill during a hearing by the Senate Small Business, Insurance and Industry Committee.
The committee has not yet taken action on the bill.
Tort Reform and Business Environment
Sen. Gary Romine also sponsors the annual attempt, supported by AIM, to bring the state’s human rights law in line with federal law by changing the standard of proving discrimination to a “motivating factor.” Missouri courts have recently moved the standard to a “contributing factor”, which prevents the fair application of the law and unreasonably shifts the burden of proof from the plaintiff to the defendant employer.
Senate Bill 745 would bring Missouri back in line with many neighboring states which currently have a competitive advantage due to Missouri court’s liberal interpretation of the discrimination standard. The bill received a hearing in a Senate committee on February 2nd, but has not moved since. This legislation is also a top priority for AIM members.
One piece of legislation that deals with human resources that AIM is working against is Senate Bill 653, sponsored by St. Louis Democrat Sen. Joe Keaveny. The bill would allow employers to be sued for alleged discrimination against employees on the basis of sexual orientation and gender identity. AIM opposes the bill because it creates a new line of potential lawsuits against employers for a new class of discrimination cases.
SB 653 received a hearing in a committee chaired by Keaveny in January, but hasn’t been taken up since. It still could come back to life in the waning days of the legislative session as it has in the past, so we will keep a close eye on this bill and let you know of any new developments.
Other much-discussed topics before the session included raising the minimum wage and efforts to prevent potential employers from asking job seekers about their criminal backgrounds. Both those issues were filed in several bills, mostly by Democratic lawmakers. So far, there has been no movement on any of those bills.
So much talk before the start of the legislative session centered around transportation funding and how the state was going to fund needed road projects both now and into the future. Legislation sponsored by Senator Doug Libla (Senate Bill 623) that would raise the state’s gas tax by one and one-half cents per gallon and three and one-half cents per gallon for diesel fuel, seemed to get off to a flying start in the Senate, passing a committee vote within the first week of the session.
In the meantime, the state’s Transportation Commission announced that it would spend down its reserves to match federal money that will enable MoDOT to do some maintenance projects over the next couple of years. That announcement seemed to stop the momentum of any discussion of MoDOT funding at the State Capitol for the session. We all know that the topic has not been settled, and that the funding issue will raise its head again in the near future. But for now, it appears that lawmakers have kicked the proverbial can down the road on transportation for this session.
AIM recently had to take action when some Republican members of a House committee voted to scuttle a piece of priority legislation. Following hard work by AIM and others, the Missouri House’s Civil and Criminal Proceedings Committee reversed course , reviving SB847, and voting it “Do Pass” with the help of three Republicans who originally voted to defeat the bill. The bill, sponsored by Sen. Ed Emery, allows plaintiffs to seek reimbursement for the actual amount paid for medical services – not the amount that is initially billed but never paid. This legislation is also referred to as “collateral source” legislation.
Earlier this month, Republican House members Rep. Andrew McDaniel, Rep. Galen Higdon, Rep. Allen Andrews and Rep. Nick Marshall all joined with Democrats on the committee to kill the bill. Only quick thinking by committee chair Rep. Joe Don McGaugh, who voted “No” to be able to bring the bill up again for reconsideration, kept the bill from being defeated for this session.
AIM president Ray McCarty wrote an article on the Republicans who voted “No”, and when McGaugh brought the bill up again before the committee, Reps. McDaniel, Higdon and Andrews all voted “Yes” to pass the bill out of committee by an 8-3 margin. Rep. Marshall, an attorney, continued his opposition with a “No” vote.
The bill will now be assigned to a House Select Committee for final action before moving on to the floor of the House for debate and a final vote. SB 847 passed the Senate on a 25-7 vote.
Another priority piece of legislation is Senate Bill 591, legislation that establishes what constitutes an expert witness at a trial. The bill would make the Missouri standard the same as the federal standard, which is used in all other states outside of Missouri.
The bill sailed through the Senate with only minor changes. But fighting a headwind caused by defense attorneys and judges, the bill’s progress has slowed. It has been on the calendar of the House Select Committee on the Judiciary for nearly a month. Associated Industries would like to see this common sense piece of legislation taken up and passed by the committee, and then sent to the House floor for its final passage.
An AIM-supported bill that would allow enforcement of arbitration agreements between employers and at-will employees is also making progress. House Bill 1718, sponsored by Rep. Kevin Corlew passed out of the Select Committee on Labor on a 7-3 vote in February and it currently is on the House calendar for floor debate. Companion legislation to this House measure, Senate Bill 746 sponsored by Sen. Gary Romine, has been voted “Do Pass” by a Senate committee, but the bill has not been placed on a calendar for debate as of yet.
Legislation tied to health care favored by AIM is moving quickly, and appears on track, in several cases, to pass both the House and Senate. Legislation that allows pharmacists to fill a prescription for a biologic product with a less expensive interchangeable biological product if the prescribing physician and patient okay the substitution is the subject of two bills. Senate Bill 875 sponsored by Sen. Kurt Schaefer has passed the Senate and is now awaiting a hearing in a House committee. Likewise, similar House legislation, HB 1366 & 1878 sponsored by Rep. Tila Hubrecht has passed the House and is now awaiting a hearing in a Senate committee.
Legislation that requires the state Department of Health and Senior Services to update its list of communicable or infectious diseases that must be reported by hospitals and ambulatory care centers is well on its way to passage in two bills. Senate Bill 579 sponsored by Sen. Rob Schaaf has passed the Senate and awaits a House committee hearing. House Bill 1855, sponsored by Rep. Sue Allen likewise easily passed the House and is now in the Senate.
And the Senate has passed a bill that adds certain medical equipment to the state’s tax exempt roles.
Senate Bill 794 sponsored by Sen. Wayne Wallingford (R-Cape Girardeau) mandates that all sales, rentals, repairs, and parts of durable medical equipment, prosthetic devices, and orthopedic devices will be exempt from state sales and use taxes. Also included in the sales and use tax exemption under the bill will be parts for certain types of health care equipment and an exemption for devices used to control brain tumors.
The bill now awaits action in the House.
Another key piece of legislation is House Bill 1389, the Missouri Infrastructure Investment Act, sponsored by Rep. Nick King. The bill would reward infrastructure investment by manufacturers and their suppliers by expanding the current Auto Manufacturing Jobs Act to all manufacturing industries.
The bill has passed through a House committee and a House select committee. It is currently on the calendar to be debated in the House sometime in the near future. We will continue to monitor the situation closely and let you know whenever there is progress.
A companion piece to that bill that is also very important has not begun to move in the Missouri House. That is House Bill 1391 . It extends the life of the Auto Manufacturing Jobs Act for another two years. The program is set to expire in October of this year. With the provisions of the act being used several times a year to expand Missouri’s booming automotive manufacturing sector of the economy, AIM cannot see any reason to let the program die. It is essential for the legislature to move to renew the Auto Manufacturing Jobs Act for at least another two years.
Right to Work
Other issues that drew much discussion and attention before the start of the session have also faded into the background. Right to Work legislation was a talking point of most Republican lawmakers before the start of the session, and several bills dealing with unions and dues and who should pay them and who should have a choice in paying them were filed in the session’s early days. But leaders in the House and Senate quickly put the issue to bed, saying neither chamber would be able to muster a veto proof majority for any legislation that dealt with private sector unions. The Right to Work movement in Missouri will likely have to wait for a Republican governor or a true veto-proof majority on labor issues.
One bill that deals with union dues that may achieve veto override status is HB 1891 sponsored by Republican Representative Holly Rehder. It prohibits any public employee from being required to pay dues or other fees to a labor organization. The bill passed the House and Senate with veto-proof majorities, but with Democratic members voting for the bill. Whether or not those Democrats would vote to override a governor of their own party is highly questionable, and some House Republicans are said to not like some changes made to the language of the bill in the Senate, meaning those Republicans may not vote for an override. Either way, it’s expected the veto override will come up shortly after lawmakers return from spring break.
As usual, tax bills are a key focus of AIM during the legislative session.
HB 1582, sponsored by Rep. Mike Kelley, helps small businesses by eliminating about 20,000 withholding tax returns each year. The bill raises the amount of withholding tax that may be collected without filing a quarterly return from $20 per quarter to $100 per quarter. These businesses would be able to file an annual withholding tax return under the bill, instead of quarterly returns. The bill was passed by the House by a vote of 153-0 and now moves to the Senate for further consideration.
HB 1435, sponsored by Rep. Andrew Koenig, is legislation drafted by AIM’s Tax Committee members that allows businesses to receive sales/use tax refunds when they have paid the taxes directly to DOR, removes the ability of vendors to veto refunds and reduces the waiting period for refund processing. The bill passed the House by a vote of 151-0 and also moves to the Senate for further consideration.
Both bills are awaiting hearings in the Senate Ways and Means Committee.
Two pieces of Senate legislation that would prohibit political subdivisions from participating in class action lawsuits against taxpayers on tax issues are also on the move. The House Select Committee on Judiciary, chaired by Rep. Robert Cornejo, advanced companion House bills that accomplish the same purpose.
The bills, SB 1003 and SB 1004, both sponsored by Senator Bob Onder, and HB 2242 and HB 2243, sponsored by Rep. Robert Cornejo, are supported by Associated Industries of Missouri. The bills are targeted at political subdivisions that file class action lawsuits over locally imposed taxes, often at the request of contingency fee law firms. In recent years, such suits have involved local gross receipts taxes, which vary widely from one another in tax base, tax rate, and collection procedure based on the locally adopted ordinance or order. One bill addresses Missouri statute and the other changes Missouri Supreme Court rules.
The bills are now awaiting debate on the House and Senate floors.
Senate Bill 784, a bill sponsored by Senator Bob Onder and promoted by Associated Industries of Missouri, was approved by the Senate Ways and Means Committee on a 7-2 vote, with only Senators Sifton and Schupp voting against the measure.
The bill would clarify the existing sales and use tax exemption for materials used to generate electricity should also be allowed for materials used to transmit and distribute electricity. The bill results in a savings to the state because it would block refund claims that could be filed and the exemption would apply prospectively only to state sales and use taxes under the bill. Consumers will benefit because taxes are added to rates paid for electricity.
The bill now moves to the full Senate for consideration.
The Missouri Department of Revenue has recommended requiring W-2 data to be sent electronically by employers with more than 250 employees. They brought their plan to Associated Industries of Missouri prior to the start of the legislative session and our AIM Tax Committee made suggestions for changes, all of which were made. AIM supports the bill requiring the electronic filing of W-2 data as set forth in the bill.
The bill is an effort to crack down on around $40 million in individual income tax fraud and mirrors the IRS electronic filing requirement. Only businesses with more than 250 employees would be subject to the requirement. Such businesses already must file the data electronically with the IRS. Exceptions allowed from the electronic filing at the federal level would also be allowed at the state level.
An AIM-supported constitutional amendment passed by voters in 2014 was put into use for the first time in recent days.
The Missouri House voted last week to release nearly $1 million for education and health care programs the governor had restricted, invoking for the first time a constitutional power lawmakers gained less than two years ago.
AIM supported the authorizing legislation that was approved by the voters and allows the legislature to review the Governor’s withholdings. Lawmakers voted to release $575,000 for the Missouri Scholars and Fine Arts academies, two summer programs for gifted students. They also voted to release $350,000 for a program that helps people with traumatic brain injuries get rehabilitative services. The measures now heads to the Senate.
The Missouri Constitution allows the governor to slow or restrict spending if revenues are falling short. But Republicans contend that Democratic Gov. Jay Nixon, who has blocked billions of dollars of budgeted spending over his two terms, has used spending restrictions as political leverage against lawmakers. Nixon has said those restrictions were necessary to balance the budget.
In 2014, voters approved an amendment that allows the legislature to reverse those restrictions with a two-thirds majority vote.
AIM also is active on a couple of environmental bills that are moving in the legislature.
House Bill 2187 is one of several pieces of legislation that would force the Department of Natural Resources to auction off park land it purchased using mine reclamation funds. It passed the House early in February.
Since 2009, the state and federal governments have reached settlements with mining companies totaling a little more than $49-million to be put toward the clean-up of lands, mostly in southeast Missouri, effected by mining activities.
The Department of Natural Resources diverted about $11 million of that money to purchase land for a new state park in Oregon County, near the Arkansas border. The park land is not a former mining site. Governor Nixon was a proponent of the diversion for the state park.
Legislation sponsored by Rep. Robert Ross forces DNR to sell that land at auction with the proceeds going to mining land reclamation.
HB2187 recently received a “Do Pass” vote in a Senate committee and could be headed on its way to the Senate floor for debate.
House Bill 1804 , sponsored by Rep. Rocky Miller, requires the Comprehensive State Energy Plan implemented by the Division of Energy be reviewed and updated if necessary by the division by January 1, 2017, and biennially thereafter. The division must review the plan to ensure it meets specified criteria.