The Missouri Legislature 2014:
New Laws Passed, Priorities
That Failed, What to Expect
Going Forward
Kelvin Simmons
Princi...
May 20, 2014 2
2014 Legislative Priorities
A Political Year: 163 members of the House are up for re-election and 17 member...
May 20, 2014 3
2014: Other Top Legislative Priorities
• (1) Transportation Tax (HJR 68 / SJR 48) *Will Pass
• (2) Criminal...
May 20, 2014 4
2014 Legislative Priority: The Missouri House and Senate
Tax Cuts (SB 509)
Senator Sponsor: Sen. Will Kraus...
May 20, 2014 5
2014 Budget Priority: The Governor - Increased Funding for Education
• Status: Budget/Appropriation bills s...
May 20, 2014 6
2014 Legislative Priority – The Missouri Senate
Student School Transfer Bill (SB 493)
Senate Sponsor: Sen. ...
May 20, 2014 7
2014 Legislative Priority – The Missouri House
Discontinuing The Economic Border War: (HB 1646)
House Spons...
May 20, 2014 8
2014 Legislative Priorities
Medicaid Expansion (HB 1901)
House Sponsor: Rep. Noel Torpey Senate Sponsor: Se...
May 20, 2014 9
2014 Legislative Priority - The House
Right to Work (HB 1770)
House Sponsor: Rep. Eric Burlison Senate Spon...
May 20, 2014 10
2014 Legislative Priorities
Transportation Tax (HJR 68 – SJR 48 )
House Sponsor: Rep. Dave Hinson Senate S...
May 20, 2014 11
2014 Legislative Priorities
Criminal Code Changes (SB 491)
Senate Sponsor: Sens. Bob Dixon and Jolie Justu...
May 20, 2014 12
2014 Legislative Priorities
Limiting Unemployment Benefits (SB 510)
Senate Sponsor: Sen. Will Kraus House ...
May 20, 2014 13
2014 Legislative Priorities
Federal Gun Nullification Law (HB 1439)
House Sponsor: Rep. Doug Funderburk Se...
May 20, 2014 14
2014 Legislative Priorities
Paycheck Protection (HB 1617)
House Sponsor: Rep. Holly Rehder Senate Sponsor:...
May 20, 2014 15
2014 Legislative Priorities
Revenue Bonds for Capitol Improvement *(SCR 39)
Senate Sponsor: Sen. Michael P...
May 20, 2014 16
2014 Legislative Priorities
Normandy School District Funding (HB 14)
House Sponsor: Rick Stream
• Status: ...
May 20, 2014 17
2014 Legislative Priorities
Minimum Wage Increase (SB 531)
Senate Sponsor: Sen. Jamilah Nasheed
• Status: ...
May 20, 2014 18
2014 Legislative Priorities
Economic Development Tax Credit Reform (HB 1501)
House Sponsor: Rep. Ann Zerr ...
May 20, 2014 19
2014: Other Bills of Interest
• (1) Voter ID (HJR 47) *Will Fail
• (2) Innovation Campus Tax Credit (HB 14...
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The Missouri Legislature 2014 "New Laws Passed, Priorities That Failed, What To Expect Going Forward"

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The Missouri Legislature 2014 "New Laws Passed, Priorities That Failed, What To Expect Going Forward"

  1. 1. The Missouri Legislature 2014: New Laws Passed, Priorities That Failed, What to Expect Going Forward Kelvin Simmons Principal, Kansas City Dentons +1 816 460 2571 kelvin.simmons@dentons.com CLE Seminar for In-House Counsel May 20, 2014 Kansas City, MO
  2. 2. May 20, 2014 2 2014 Legislative Priorities A Political Year: 163 members of the House are up for re-election and 17 members of the Senate are up for re-election • The Leaders • House Speaker Tim Jones (R-Eureka) • Discontinuing Missouri/Kansas Economic Border War (HB 1646), Right to Work (HB 1099) and Tax Cuts (HB 1253) • Senate President Pro Tem Tom Dempsey (R-St. Charles) • Education: Student Transfer Fix (SB 493), Tax cuts (SB 509) • Governor Jay Nixon (D) • Budget: Increased Funding for Education (HB 2&3), Medicaid Expansion (HB 1901), Bonding for Capital Improvements
  3. 3. May 20, 2014 3 2014: Other Top Legislative Priorities • (1) Transportation Tax (HJR 68 / SJR 48) *Will Pass • (2) Criminal Code Changes (SB 491) Passed • (3) Unemployment Benefits (SB 510) Passed • (4) Federal Gun Nullification (HB 1439) *Will Pass • (5) Paycheck Protection (HB 1617) *Will Fail • (6) **Revenue Bonds for Capitol Improvement (SCR 39) *Will Fail • (7) Normandy School District Funding (HB 2014: Supplemental Funding) Passed • (8) Minimum Wage Increase (SB 531) Failed • (9) Economic Development: Tax Credit Reform (HB 1498) Failed • *Prediction as of May 6, 2014. These bills could move to being passed in the remaining days of the session. • ** The legislature did approve a strategic bond offering in House Bill 5 to build a new Fulton State Mental Hospital.
  4. 4. May 20, 2014 4 2014 Legislative Priority: The Missouri House and Senate Tax Cuts (SB 509) Senator Sponsor: Sen. Will Kraus House Sponsor: Rep. TJ Berry • Status: Passed • Vetoed by the Governor on May 1st. • The Senate overrode the Governor’s veto on May 5th (23 for and 8 against) • The House overrode the Governor’s veto on May 6th (109 for and 46 against) • The bill is similar to a bill vetoed by the Governor in 2013 (HB 253). • The bill is considered to be a $620M dollar tax cut. • The bill would gradually cut the top personal income tax rate from 6% to 5.5%. The cut would take effect in increments of 0.10 percentage points over five years. • The bill would also phase in a 25% deduction for business income reported on individual tax returns. • No reductions would go into effect unless the state’s revenue collected in the previous year exceeded the amount of revenue in any one of the three prior years by at least $150 million. • The bill would allow an additional $500 personal income tax deduction for individuals earning less than $20,000. • None of the provisions of the bill would take effect until 2017. The soonest the full effect of the tax cut would take effect is 2022.
  5. 5. May 20, 2014 5 2014 Budget Priority: The Governor - Increased Funding for Education • Status: Budget/Appropriation bills sent to the Governor on May 9th • The Legislature and the Governor fail to reach a Consensus Revenue Estimate (CRE) • The Governor says 5% growth in state revenue • The Missouri House and Senate say 4% growth in state revenue • The Governor promises $278M more for increased education funding. • The Legislature gave $115M and agrees to a total of $278M if state revenues are collected above 4% growth. The Legislature also introduces a new two tiered budgeting system for education. It includes the creation of a new surplus revenue fund for the purpose of funding education through general revenue and holding money in a fund to determine if the appropriate projected revenues have been reached. • The Senate grants a 3% increase for all higher education institutions but blocks public colleges and universities from offering in state tuition to students living in the U.S. illegally. • The Budget does not include additional money for Medicaid expansion as requested by the Governor. • *The final Budget is approved at $26.4B • The Governor must sign all budget bills or line item veto them by June. The new state fiscal year begins on July 1, 2014.
  6. 6. May 20, 2014 6 2014 Legislative Priority – The Missouri Senate Student School Transfer Bill (SB 493) Senate Sponsor: Sen. David Pearce House Sponsor: Rep. Rick Stream • Status: *Passed in both chambers. Its waiting conference committee results • Predication: The bill will Pass and the Governor will veto the bill due to vouchers. • The issue emanates from a small one sentence provision in a 1993 law (SB380) which allows unaccredited school district students to have the option of transferring to an accredited school district. The sending districts must pay both tuition and transportation costs for the student. • The issue was litigated in St. Louis and went to the Missouri Supreme Court which upheld the transfer provision in July 2013. Transfers began in St. Louis with the Normandy and Riverview Garden School Districts. Over 3000 students (20%) in both districts began to transfer in August of 2013. It created a financial crisis for the Normandy school district. • SB 493 seeks to fix the transfer crisis but also adds other provisions unrelated to the transfer fix. Items such as using public dollars going to private schools (vouchers) are hugely controversial. Governor Nixon has expressed he will veto the bill if vouchers are a part of the bill. • The largest unaccredited school district in Missouri is the Kansas City School District. Its future could be determined by the passage of the bill. Kansas City has scored high enough on its MSIP 5 scores to be rated as provisionally accredited but DESE has not awarded the provisionally accreditation status. If the status was awarded, the Kansas City School District would not be subject to the transfer law. • *As of May 6, 2014
  7. 7. May 20, 2014 7 2014 Legislative Priority – The Missouri House Discontinuing The Economic Border War: (HB 1646) House Sponsor: Speaker Rep. Tim Jones Senate Sponsor: Sen. Ryan Silvey • Status: The bill was perfected in the House. *It was waiting for floor debate in the Senate • Prediction: The Bill will pass. The Governor will sign. He has been very supportive of stopping the border war. • The Bill ends both States of Kansas and Missouri from incentivizing companies in Metro KC area from relocating across the state line to poach business from each other. • The Bill would bar Missouri from offering tax breaks to businesses in Wyandotte, Johnson, Douglas and Miami counties as a means to lure them to Missouri. • The legislation would only go into effect provided that Kansas stops offering incentives to businesses in Jackson, Clay, Platte, and Cass counties in Missouri. • *As of May 6, 2014
  8. 8. May 20, 2014 8 2014 Legislative Priorities Medicaid Expansion (HB 1901) House Sponsor: Rep. Noel Torpey Senate Sponsor: Sen. Paul Levota • Status: Failed • This was one of Governor Nixon’s main legislative and budget priorities. Governor Nixon used quite a bit of political capital to move Missouri forward on Medicaid expansion. Former Missouri US Senator Kit Bond was utilized as a lobbyist to help with the passage of the bill, but nothing moved the State Senate from the position of saying no to Medicaid expansion. There were protest, demonstrations and arrests at the Capitol regarding this issue during debate. • The House Government Oversight and Accountability Committee held numerous meetings on the bill, but it never quite got any traction to send the bill to the full House for debate and a vote. • The bill would have expanded Medicaid eligibility to residents who earn up to 138% of the federal poverty rate. • There were several members of the Senate who vowed to filibuster any proposals regarding Medicaid expansion. Those Senators included Sens. Kurt Schaefer, Brad Lager and John Lamping. A lot of the opposition was based on opposition to the Affordable Care Act (ACA) or as some would say, “Obamacare.” Others believed the state could not afford the continuation of care after the federal money ran out. • Senator Ryan Silvey did propose a plan in the Senate, but it did not pass get to the floor for passage. • Organizations in support of Medicaid expansion included: The Missouri Chamber of Commerce, religious groups and the Missouri Hospital Association.
  9. 9. May 20, 2014 9 2014 Legislative Priority - The House Right to Work (HB 1770) House Sponsor: Rep. Eric Burlison Senate Sponsor: No Senate Sponsor • Status: *Failed • Prediction: The bill will fail to get to the Senate in time and will die this session. •The bill was one of the top priority bills for Speaker of the House, Tim Jones. •The bill was perfected in the House (78 – 68). The bill is still four votes shy of the 82 required votes to be Third read by the House. This was not a bill the Senate found to be a priority for this session. There has been a tremendous lobby effort by organized labor to kill this bill. It was one of the top priorities for organized labor across the state. At one time during the legislative session over 3000 members lobbied at the state Capitol to defeat this bill. •The bill stipulates that “no business may enter into exclusive contracts with labor organizations, and that no business or organizations may require the payment of dues or membership in a union as a condition of employment.” •It is not expected to pass in the Senate even if it were to pass in the House. •*As of May 6, 2014
  10. 10. May 20, 2014 10 2014 Legislative Priorities Transportation Tax (HJR 68 – SJR 48 ) House Sponsor: Rep. Dave Hinson Senate Sponsor: Sen. Mike Kehoe • Status: *Third read and passed in both the House and the Senate • Prediction: The bill will not pass in the Senate. Some Senators will see a contradiction in passing a tax cut (SB 509) and then asking for a tax increase. It is so late in the session it could die due to timing. There were key Senators that filibustered the bill last year because they were concerned about a substantial tax increase. We will have to see if the passage of SB 509 removes their concern. Due to the override of the tax bill (SB 509), Democrats moved to opposing the bill. • The House Joint Resolution (HJR) imposes a temporary three-quarters of one cent sales and use tax for transportation purposes. • Upon approval by both chambers, the bill would bypass the Governor and be submitted to the voters for approval. • The tax would be a temporary tax to improve the state highway system, city streets, county roads and the state transportation system. • * As of May 6, 2014
  11. 11. May 20, 2014 11 2014 Legislative Priorities Criminal Code Changes (SB 491) Senate Sponsor: Sens. Bob Dixon and Jolie Justus House Sponsor: Rep. Stanley Cox • Status: Passed • Prediction: The Governor will reluctantly sign the bill. • The 1,100 page bill would overhaul Missouri’s criminal laws and make a substantial change in how the state would handle drug offenders. The bill was heavily endorsed by the Missouri Bar committee of prosecutors and public defenders. • The bill would alter some of the following sections in the Criminal Code: creates new felony and misdemeanor classes, changes privileged communications for clergy in their ministerial capacity regarding elder and vulnerable person abuse, modifies the definition of a dangerous felony, deals with repeat offenders, repeals several assault offenses, alters current law on property crimes, deals with leaving the scene of a crime and many more categories. • The bill was also a bi partisan bill and was supported by a large margin (140 Yes - 15 No & 28 Yes - 2 No) The Governor had indicated his displeasure with the bill stating, "it was too large." He even indicated he could possibly veto the bill. The bill has been worked on by numerous organizations across the state. Local Kansas City lawyer and Senator Jolie Justus expressed surprise the Governor did not embrace the bill as it was originally written. • “It's time for us to get smart on crime,” said Senate Judiciary Committee Chairman Bob Dixon, R-Springfield.
  12. 12. May 20, 2014 12 2014 Legislative Priorities Limiting Unemployment Benefits (SB 510) Senate Sponsor: Sen. Will Kraus House Sponsor: Rep. Mike Cierpiot • Status: Passed • Prediction: The Governor vetoes the bill. Members of his party have declared the bill anti worker. • The bill would allow Missouri residents to collect unemployment benefits for 20 weeks only when the state’s average unemployment rate is at least 9 percent. • The maximum duration of jobless benefits would decrease one week for each one-half percentage point drop in the unemployment rate, and bottom out at 13 weeks when the state’s jobless rate is less than 6 percent. • The bill has been predicted to make Missouri’s jobless benefits timespan one of the shortest in the nation. Florida and North Carolina both have linked the duration of jobless benefits to the unemployment rate with the potential for their payments to halt after 12 weeks. • During the first quarter of 2014, the average state unemployment rate was between 6% and 6.5%. That would equate to 14 weeks of jobless benefits under the bill. • It passed in the House 107-45, and it cleared the Senate 22-9. • Rep. Jay Barnes stated, “As the economy is better, the need for unemployment benefits decreases and so too should those benefits.”
  13. 13. May 20, 2014 13 2014 Legislative Priorities Federal Gun Nullification Law (HB 1439) House Sponsor: Rep. Doug Funderburk Senate Sponsor: Sen. Brian Nieves • Status: Passed in the House & Senate (110 – 41) – (23 -8) • *A late amendment was placed on the bill in the Senate on 5/6/2014. The House refused to accept and has asked for a conference to work out the difference. • Prediction: If the bill is *TAFP, the Governor vetoes the bill. • The bill established the Second Amendment Preservation Act and changes the laws regarding firearms. The Governor vetoed a similar bill last year. • The bill would bar federal workers from some state careers for enforcing such policies. Federal agents who knowingly enforce those laws could face civil penalties stemming from lawsuits filed by Missouri residents who think their gun rights were infringed. Those workers would also be banned from future careers in state or local enforcement. • Both the Mayors of Kansas City and St. Louis testified against the bill. • Opponents contend the measure is unconstitutional because courts have ruled that states cannot nullify federal gun laws. They also said the bill could undermine cooperation between federal and local officials. • Senator Brian Nieves said, “We want to cause a reason for law enforcement to have a healthy pause before they might infringe on the Second Amendment rights of Missouri citizens.” • *TAFP = Totally Agreed and Finally Passed
  14. 14. May 20, 2014 14 2014 Legislative Priorities Paycheck Protection (HB 1617) House Sponsor: Rep. Holly Rehder Senate Sponsor: Sen. Dan Brown • Status: Passed in the House (83 – 70). *Waiting for final Senate floor action. Prediction: It fails and does not go on to the ballot. • Proponents of this bill call it “paycheck protection” and opponents call it “paycheck deception." • The bill requires member of public employee unions, such as state workers and teachers, to submit written permission annually for any dues or fees to be deducted from their paychecks. • All first responders, such as firefighters and EMTs would be exempt from the provisions of the bill. • The way the bill is constructed, it would bypass the Governor and go straight to the vote of the people. • The Secretary of State would have the responsibility of writing the ballot language. • *As of May 6, 2014
  15. 15. May 20, 2014 15 2014 Legislative Priorities Revenue Bonds for Capitol Improvement *(SCR 39) Senate Sponsor: Sen. Michael Parson House Sponsor: Rep. Caleb Rowen • Status: Passed in the Senate *Awaiting Action in the House • Prediction: It Fails for lack of time. • This concurrent resolution authorizes the issuance of revenue bonds ($600M) for certain state and university projects and pledges the State to make future appropriations to repay the full cost of bonds for such purposes. • There is bipartisan agreement among legislators and Gov. Jay Nixon about the need to replace old buildings such as the Fulton State Hospital. But the Senate legislation assumes a longer bond repayment period than a proposal from House leaders and goes further by also allowing bonding for improvements at other state facilities. • The legislation only authorizes the State Board of Public Buildings to issue the bonds. • "We have an obligation to the taxpayers of the State of Missouri to take care of state buildings, to maintain them," said Sen. Mike Parson, R-Bolivar, who is sponsoring the legislation. • "We'll be putting our children and grandchildren in debt that they will eventually have to pay off. I don't like the idea of that," said Sen. Rob Schaaf, R-St. Joseph, who had held up the legislation. "That said, the bill does have good intentions." • The Fulton State Hospital project was approved through the State budget process. Bonds will be issued. It is predicted to cost $210M. • *As of May 6, 2014
  16. 16. May 20, 2014 16 2014 Legislative Priorities Normandy School District Funding (HB 14) House Sponsor: Rick Stream • Status: Passed • Supplemental Budget Bill • Missouri lawmakers authorized up to $2 million of state aid to help the financially strapped, unaccredited St. Louis-area school system remain open through the remainder of the school year. • The state rescue for the Normandy School District was included in a $327 million budget bill given final approval by the House and Senate that covers unanticipated state expenses for the fiscal year that ends June 30. It now needs only the signature of Gov. Jay Nixon. • Lawmakers approved the additional spending for the 2014 budget on the same day that the Senate Appropriations Committee worked on a separate budget plan for the 2015 fiscal year that starts this July. • The Normandy School District is financially strained, in part, because of a state law that requires unaccredited school districts to pay for the costs of students who chose to transfer to other nearby school districts. • The state Department of Elementary and Secondary Education has projected that Normandy could finish the year with about $63,000, which wouldn’t leave much room for unexpected costs. • Story by David Lieb - Associated Press (April 9, 2014)
  17. 17. May 20, 2014 17 2014 Legislative Priorities Minimum Wage Increase (SB 531) Senate Sponsor: Sen. Jamilah Nasheed • Status: Failed • SB 531 would have raised Missouri’s minimum wage to $10 an hour in 2015. • The state’s minimum wage currently stands at $7.50 an hour, which is 25 cents more than the federal minimum wage. • The bill actually was passed by the Senate Small Business Industry and Insurance Committee but failed to advance any further.
  18. 18. May 20, 2014 18 2014 Legislative Priorities Economic Development Tax Credit Reform (HB 1501) House Sponsor: Rep. Ann Zerr Senate Sponsor: Sen. Eric Schmitt • Status: Failed • HB 1501 would have: • Created state and local sales and use tax exemptions for data storage centers and allowed municipalities to enter into loan agreements, or sell, lease, or mortgage municipal property for a technology business facility project; • Reauthorized the Distressed Areas Land Assemblage tax credit with a $48 million cap; • Created the Missouri Angel Investment Incentive Act to encourage individuals to provide seed-capital financing for emerging Missouri businesses engaged in the development, implementation, and commercialization of innovative technologies, products, and services; • Established the Missouri Export Incentive Act to encourage foreign trade through Missouri's international airports; • The bill would also have reduced the cap on Historic tax credits from $140 million to $90 million for projects over $275,000 and $20 million for projects under $275,000, placed an initial cap of $130 million on Low Income Housing tax credits and phased it down to $110 million by 2019, and prohibited these two programs from being used on the same redevelopment project. • Several years have gone by without reform of these credits. There is a strong development lobby which pressures the Legislature to not reform the credits.
  19. 19. May 20, 2014 19 2014: Other Bills of Interest • (1) Voter ID (HJR 47) *Will Fail • (2) Innovation Campus Tax Credit (HB 1459) Passed • (3) Angel Investment Tax Credit (SB 698) Failed • (4) Oral Chemotherapy Medications (SB 668) Passed - Signed by the Governor • (5) Telecommunications (SB 649, 650, 651& 653) Passed - Signed by the Governor • (6) Nursing Mothers & Jury Duty (HB 1320) Passed - Signed by the Governor • (7) Tax Increment Financing Reform (SB 774) * Will Fail • (8) Changing Presidential Primary (SB 892) * Will Pass • (9) Hemp oil use for patients with epilepsy (HB 2238) Passed • (10) Balanced Budget (HB 1-14) Passed • *Prediction as of May 6, 2014
  20. 20. © 2014 Dentons Dentons is an international legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see dentons.com for Legal Notices. Thank you! Kelvin Simmons Dentons US LLP 4520 Main Street, Suite 1100 Kansas City, MO 64111 USA

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