Governor Greitens signs Corlew’s expert witness bill

Governor Eric Greitens has signed HB 153, sponsored by Rep. Kevin Corlew, that will allow Missouri to join most other states and federal courts in the way they evaluate whether a person testifying in court is an expert or not. The governor signed the bill earlier today at Midland Transport in Jefferson City, MO.

Similar legislation was passed last year and vetoed by Governor Jay Nixon. This bill is different because it will not apply in work comp cases or other cases that do not involve a jury. In reality, the new standard really would have little or no impact in these cases anyway because the judge decides whether the testimony is credible under existing law and the new law expected to be signed today.

Associated Industries of Missouri has long supported correcting the standard in Missouri.

“Missouri’s low standard of evaluating experts in state court is why plaintiffs’ attorneys try to move cases into Missouri state courts,” said Ray McCarty, president and CEO of Associated Industries of Missouri. “The proposed standard works in most other states and is used in federal courts in Missouri. This is a commonsense bill and we applaud the sponsor, Rep. Kevin Corlew, the House and Senate leadership that made this a priority, and Governor Eric Greitens for making this a priority and signing the legislation,” said McCarty.

Click here for the AP story.

The U.S. Chamber Institute for Legal Reform issued a statement supporting signature of the bill. Associated Industries of Missouri is a proud member of the U.S. Chamber of Commerce. You may read the statement here.

AIM opposes legislation setting up new protected class

While it makes good business sense for employers to enact policies prohibiting discrimination against employees on the basis of their sexual orientation, Associated Industries of Missouri does not believe the state needs new laws that establish a special class under the Missouri Human Rights Act.

That was the message delivered by AIM president Ray McCarty Thursday during a committee hearing on HB 1930 , sponsored by Rep. Kevin Engler (R-Farmington). The bill would prohibit discrimination based on sexual orientation or gender identification.

The bill also codifies the very low “contributing factor” standard for all discrimination cases. AIM endorses the “motivating factor” standard used in the federal human rights act. Although the words, “motivating factor” are used in the bill, the words describe the contributing factor standard.

“We know many of our employers have policies that protect employees against discrimination on the basis of their sexual orientation, and we never want employers to improperly discriminate against any employee,” said McCarty. “But having a company policy is very different than creating a new protected class in statute that will invite an entirely new line of lawsuits against employers.”

The bill received a hearing in the House Workforce Development and Workplace Safety Committee, but the committee did not take immediate action on the bill.

Missouri/Kansas Border War – “Truce” bill may be unconstitutional

January 3, 2014 – Much has been written about the so-called “border war” between Missouri and Kansas, and whether or not tax incentives should be used to attract businesses from one state to the other.  The conversation often involves incentives in the Kansas City metropolitan area, where only State Line Road divides the two states.

Political leaders and economic development officials on the Missouri side of the border have called for an end to such incentives.  Kansas Governor Brownback has recently indicated he may be willing to engage in discussions calling a truce in the border war.  Missouri Governor Nixon in a recent speech decried incentives that are used to simply move jobs across the state line and pledged to support legislation to end the use of incentives, if Kansas will do the same.

A little over a year ago, Governor Brownback made it clear in an interview with KMBC-TV that his successful effort to reform income taxes in Kansas were not on the table for discussion in any truce, but he left the door open to discuss special incentives.

Last session, Associated Industries of Missouri worked hard to pass a broad-based tax cut bill that would have helped every Missouri taxpayer, including all employer taxpayers in Missouri.  That bill, HB 253 sponsored by Rep. T.J. Berry (R-38, Kearney), was vetoed by Governor Nixon and the Missouri House of Representatives failed to override his veto.  As a result, Missouri does not have a tax structure that is able to compete with the reformed Kansas tax system, especially when it comes to high growth, highly profitable small and mid-sized employers who pay no Kansas income taxes.

Senator Ryan Silvey (R-Kansas City) filed SB 635 to be considered in the 2014 Missouri legislative session that starts Wednesday.  The bill seeks to codify the truce in Missouri law, contingent on passage of a similar law in Kansas.   The bill would deny tax incentives to employers that move jobs from four border counties in Kansas to any of four border counties in Missouri.  Employers moving the same types of jobs from another county in Kansas or anywhere else to Missouri would still be eligible for benefits, but those moving from the Kansas counties of Douglas, Johnson, Miami or Wyandotte would be barred from receiving incentives for those jobs.

The effect of the law will be to deny a tax benefit to employers moving from these counties to Missouri, while allowing similarly situated employers moving from other locations to enjoy the benefit.

Many question the goal of such legislation.  Is it a good idea to lay down your arms when you are losing a battle?  Assuming this is a good idea, is it constitutional?  Can a law be enacted that denies a tax benefit to some out-of-state employers while giving tax breaks to competitors moving from other areas?  Wouldn’t such a law be discriminatory?

To find the answers, I turned to the AIM Tax Committee.  The AIM Tax Committee is comprised of more than 100 of the finest tax practitioners, tax lawyers, and accountants in Missouri.  It turns out many believe such a law would have constitutional problems and could be voided by the courts.

Members of the AIM Tax Committee that responded to the inquiry overwhelmingly agreed such a law would raise serious constitutional questions, especially with regard to the Commerce Clause or constitutional provisions guaranteeing equal protection.  The Equal Protection Clause is part of the Fourteenth Amendment to the United States Constitution. The clause, which took effect in 1868, provides that no state shall deny to any person within its jurisdiction the equal protection of the laws. The Commerce Clause, found in  Article I, Section 8, Clause 3 of the United States Constitution states,”[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes.”

Prominent tax attorney and former Missouri Director of Revenue Janette Lohman with the law firm of Thompson Coburn LLP responded the law “…might be facially void under the Commerce Clause.”  She continues, “Accordingly, it might even be a violation of the Missouri Constitution, Article X, Section 3, because they would not be treating similarly situated taxpayers in the same manner.  That is, a company that relocated here from Illinois could qualify but a company that relocated here from one of the four counties in Kansas could not?”

Jeffrey Dardick, State and Local Tax Partner at PricewaterhouseCoopers agreed with Lohman.  In a detailed response, Dardick analyzed recent court cases involving state laws that allegedly violated the Commerce Clause of the United States Constitution.    The “negative” or “dormant” Commerce Clause implicitly limits a state’s right to tax interstate commerce, according to a ruling issued by the U.S. Court of Appeals for the Sixth Circuit in Cuno v. DaimlerChrysler, Inc.  In that case, the Court ruled “discrimination” means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.  You may read Dardick’s full analysis and summaries of several interesting cases by clicking here.

Kevin Boyer, Partner at Ernst and Young, questions whether the law would be found to be in violation of the Commerce Clause.  “In this situation, the state’s taxing methodology is not changing based on where a company is located, just the amount of incentives available are changing, and I’m not sure that can be challenged under the Commerce Clause,” said Boyer.

Ray McCarty, president of Associated Industries of Missouri said, “At Associated Industries of Missouri, we believe we should use all tools at our disposal to attract and retain quality Missouri employers and the jobs they create.  We believe the best solution is a taxpayer-friendly tax structure that benefits all existing employers as well as the new ones we want to attract.”  One AIM Tax Committee member put it this way: “Business relocation is based on a variety of issues. Immediate tax incentives are just part of that. The long term tax structure is also a large part of that decision.”

As to whether the concept of a truce is worth pursuing, another member said, “I think Missouri would welcome a western Illinois business relocating to St. Louis.  I can’t imagine why the western side of the state would be offended by a relocation from eastern Kansas.”  And one member from a prominent accounting firm in the Kansas City area said, “As someone who is in the trenches of this situation, I find this bill silly as well.  I think Missouri is pushing for this because they continue to lose out to Kansas and have for years.”

Any tax professional employed by any AIM member company may be a part of AIM’s Tax Committee.  The goal of the group is to share ideas, stay informed on all issues affecting employer tax liability, and to weigh in on new issues.  We conduct regular meetings with state tax officials to resolve problems quickly and before they become major problems.  To join AIM’s tax committee, contact Ray McCarty at 573-634-2246 or send an email to rmccarty@aimo.com indicating your interest in joining the tax committee.

Missouri Senate OK’s Work Comp/Second Injury Fund Bill

The Missouri Senate last night gave first round approval to Senate Bill 1, a bill that addresses the Missouri Second Injury Fund.  The bill contains important reforms for the Second Injury Fund that have long been a priority of Associated Industries of Missouri.

The bill would ensure coverage for “occupational diseases” under WC, but establishes special enhanced benefits for 10 diseases at around $156,000.  The bill then socializes the cost by paying the claims from Missouri’s Second Injury Fund.  The bill also allows mesothelioma victims an additional benefit of about $450,000 (total of $600,000), also paid from the Second Injury Fund.  To pay for these benefits, an additional Second Injury Fund surcharge with no limit will be assessed against every Missouri employer.  AIM will continue to work for positive changes in this part of the bill, including establishment of a reasonable cap on the amount of surcharge that may be assessed.

The Second Injury Fund would be reformed by eliminating permanent partial disability claims.  These claims currently cause an absurd result in that workers that are more than 100% disabled are still able to work.  Eliminating the permanent partial disability claims will end this illogical practice.  Permanent total disability claims that are the result of a previous work related injury, that are related to military service, or that are aggravated or accelerated by a previous injury would still be allowed.  Other claims that are currently allowed against the Second Injury Fund for non-work related injuries or conditions would no longer be allowed under the bill.  The interest rate on pending claims would be nearly cut in half, and other reforms that AIM has advocated would be implemented under the bill.

The Missouri Senate will take one additional vote on the bill before advancing it to the Missouri House, possibly later this week.

Associated Industries of Missouri Congratulates ATK on Selection to Continue Operating Lake City Army Ammunition Plant in Independence

INITIAL CONTRACTS COVER SEVEN-YEAR PERIOD

ATK BUILDS ON PROVEN OPERATIONAL SUCCESS AT LCAAP

ARLINGTON, Va., Oct. 1, 2012 /PRNewswire/ — ATK (NYSE: ATK) announced today that it has been notified by the U.S. Army that it was selected for both the production of ammunition and continued operation and maintenance of the Lake City Army Ammunition Plant (LCAAP) in Independence, Mo.  The initial contracts period is seven years, and if all award terms are exercised, the contracts would cover a 10-year period.

“ATK is proud to continue our collaboration with the U.S. Army, building on more than a decade of direct operational experience, to assure the continued health and vitality of the small-caliber ammunition enterprise,” said Mark DeYoung, President and CEO. “Our vision for Lake City reasserts our commitment to deliver safe, affordable solutions that ensure LCAAP remains the most responsive military industrial asset in the world.”

“We are honored with the responsibility to continue operating this key military industrial base capability. ATK is committed to the future success of our warfighters by optimizing and sustaining LCAAP,” said Mike Kahn, President of ATK Defense. “We are fully committed to delivering to our customer a lean, scalable and sustainable operation that will serve our nation for years to come.”

ATK is an aerospace, defense, and commercial products company with operations in 21 states, Puerto Rico, and internationally. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved.  Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions.  ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

SOURCE ATK

Blunt Supports Blocking a Costly EPA Regulation – McCaskill Supports Obama’s EPA Regulation

June 20 – As we told you last Friday, the Senate was expected to vote today on S.J. Res 37, a measure that would void the EPA’s Utility MACT regulation.  A vote for the measure would have sent the EPA back to the drawing board to come up with a regulation that would be attainable.  A vote against the resolution is a vote to support the Obama Administration’s EPA regulation that will, by the EPA’s own estimates, drive up utility costs for Missourians between 2.8% in eastern Missouri and 6.3% in western Missouri.  Labor groups, consumer groups and employer organizations all supported the resolution and oppose the regulation.  Environmental groups are, of course, in favor of the Obama regulation and opposed S.J. Res. 37.

Well, the vote was taken today.  Senator Roy Blunt voted in favor of the resolution that would have voided the EPA regulation and blocked increased utility bills due to the regulation.  Senator Claire McCaskill sided with the Obama Administration in voting against the resolution (a vote FOR the EPA’s regulation).  The resolution failed on a vote of 46 in favor, 53 opposed, and one abstaining.  Click here for the vote.

Press reports indicate Senator McCaskill may support another measure that will delay implementation of the regulation.  As we pointed out in our blog article last week, delayed implementation simply “kicks the can down the road” and Missouri energy consumers will still see the same increased electricity costs – those costs will just be delayed.  And although the EPA has estimated a 2.8% to 6.3% increase in rates, these estimates are likely VERY conservative.

Thanks to those of you that heeded our call to contact Senator McCaskill’s office about this critical vote.  Senator McCaskill’s vote today means all Missouri energy consumers, including Missouri employers, will face higher utility bills thanks to this burdensome EPA regulation issued by the Obama Administration.

Nolte’s and AIM’s Broad Based Tax Relief Bill Set For Senate Hearing

Following a meeting this afternoon between Senate Ways and Means Chairman Chuck Purgason, Representative Jerry Nolte and I, Senator Purgason posted a hearing of his committee for tomorrow on HB 1639, the Broad Based Tax Relief Act of 2012.

In the meeting, Senator Purgason indicated his willingness to move the part of the bill forward that would reduce the tax burden of EVERY Missouri employer by 50% over five years.

“Associated Industries of Missouri applauds both Senator Purgason and Representative Nolte for their leadership in providing real tax relief for employers – employers that will be free to use the additional money to create jobs and invest in their businesses, improving the Missouri economy,” said AIM President Ray McCarty.

Click here for a video that explains the bill.  The legislative session ends Friday at 6:00 p.m.

Busy Week in Missouri’s Capitol With 3 Weeks Left

April 27 – The legislature has just three weeks to resolve differences and pass several important issues.  And while the clock continues to “tick”, progress was made on several fronts this week.

The Missouri Senate passed their version of the 2013 state budget, following lengthy filibusters and unusual recesses that allowed senators to rewrite certain parts of the budget (click here for more details).  The budget has been reported to the Missouri House.  The House could simply pass the Senate versions of the bills, although I don’t believe this has happened in recent memory.  More likely, the House and Senate will appoint “conference committees” to work out the differences between the House and Senate versions of the budget bills.  Some items that were funded exactly the same in both budgets are normally excluded from future changes, although these items may be changed by special motions made in both chambers.  The budget must be approved by May 11.

The Missouri House this week passed HB 1403, a bill that would address two issues in worker’s compensation and reform the Second Injury Fund.  The bill may be used as a vehicle for compromise legislation we are developing now on all three issues.  Associated Industries of Missouri is joining other business advocacy groups in a united effort to negotiate a compromise with trial attorneys, organized labor and Governor Jay Nixon’s office.  “Employees and employers benefit from the no-fault worker’s compensation system,” said Ray McCarty, president of Associated Industries of Missouri.  “Beginning in 1919, Associated Industries engaged labor and trial attorneys in negotiations that led to passage of Missouri’s first worker’s compensation law in 1925.  Recently, the worker’s compensation system in Missouri has been turned on its ear by lawsuits,” McCarty continued.

Occupational diseases have always been covered by worker’s compensation insurance – that is until trial attorneys got involved.  These trial attorneys victimized employers with multimillion dollar lawsuits in civil court by claiming the 2005 revision of the worker’s compensation law was not meant to cover occupational diseases.  Trial attorneys have also been filing lawsuits against fellow employees on behalf of employees injured in workplace accidents.  At the same time, the trial attorneys have expanded coverage of lifestyle conditions and non-work related injuries that cause more to be paid from the state’s bankrupt Second Injury Fund.  The Missouri legislature passed bills earlier this session that would have corrected two of these issues (co-employee liability and occupational diseases) and Governor Nixon promptly vetoed the legislation.

The bill was also heard and approved by the Senate Committee on Small Business and Insurance, after removing the Second Injury Fund provisions.  The bill is on the Senate calendar, awaiting full Senate debate.

Governor Nixon also vetoed employer supported legislation that would have updated Missouri’s law to comply with federal standards currently in place for workplace discrimination claims.  The House this week passed a bill that addresses one part of this legislation: a law that would provide protection for whistleblowers that are notifying authorities of actual wrongdoing by their employer.  Associated Industries of Missouri continues to work hard to pass this legislation and hope Governor Nixon will sign the bill if we are successful in getting it to his desk.  Amendments added in the House would apply the new whistleblower protections to all employers except state and local government.

Both the House and Senate will soon begin wo work on bills that originated in the other chamber.  The 2012 regular legislative session ends at 6:00 p.m. on May 18.