| Capitol Briefing for the Month of December 2012 | |
| Preparations Continue for Upcoming Legislative Session | |
| Prefiled bills available to public; panels release reports | |
JEFFERSON CITY—In December, lawmakers continued preparing for the upcoming legislative session, which begins on Jan. 9. Many legislators prefiled bills earlier this month. Committees also met throughout the last month of the interim, and the Missouri Tax Credit Review Commission released its updated report on the state’s various tax credit programs. Prefiled Bills Lawmakers are allowed to prefile legislation as early as July 1. However, as bills aren’t assigned numbers until Dec. 1, most members wait until the last month of the year to prefile their measures for the next session. More than 95 measures—Senate bills and resolutions—have already been filed for the 2013 legislative session. Second Injury Fund Missouri’s Second Injury Fund (SIF) compensates injured workers when a current work-injury combines with a previous disability to create an increased, combined disability. SIFs were created as a way to encourage employers to hire workers with disabilities by shielding them from the increased liability. Missouri’s SIF was established by lawmakers in 1943. The SIF is funded by a surcharge employers pay on workers’ compensation insurance premiums. This surcharge rate was periodically adjusted to cover the SIF’s yearly costs. By 2005, however, the SIF had a surplus of $25 million. The General Assembly passed legislation that year permanently capping the surcharge rate at 3 percent. Now, seven years later, the SIF is underfunded to the point of insolvency, due in large part to high unemployment rates stemming from the 2008 recession. As unemployment rose, workers’ compensation premiums fell, bringing in less revenue for the fund. The SIF collected around $40 million in 2011; the total cost of the program that year was $77 million. According to Missouri Attorney General Chris Koster, the total liability against the Second Injury Fund—including around 28,000 pending claims as of October 2012—exceeds $100 million. Senator Scott T. Rupp, R-Wentzville, prefiled legislation in December to fix the ongoing SIF shortfall. Senate Bill 1 modifies the laws regarding the SIF. Under the bill, the surcharge rate which funds the SIF could be increased to 4.5 percent in the instance of a shortfall, and up to 6 percent if agreed to by the Second Injury Fund Commission, which would be composed of the governor, attorney general, President Pro Tem of the Senate and Speaker of the House. The legislation also requires an actuarial study of the fund every year, versus the previous study held every three years, among other provisions. Ethics Legislation In 2010, Missouri lawmakers approved ethics legislation that required public reporting of campaign contributions more than $500 within a limited time frame and strengthened the Missouri Ethics Commission’s ability to investigate complaints. The law, however, was tossed out by the Missouri Supreme Court earlier this year for violating the single subject provision law that requires acts within a bill to be connected. With that law now invalidated, Missouri is one of only four states without limits on campaign contributions, according to the National Conference of State Legislators. This month, lawmakers signaled their intent to address ethics reform in the upcoming session with a handful of prefiled bills. Senate Bill 4, sponsored by Sen. Brad Lager, R-Savannah, bars members of the General Assembly from acting as paid political consultants. The bill also imposes a two year “cooling-off period” before members of the Legislature can become lobbyists. If approved, the measure would implement stricter limits on ex-lawmakers becoming lobbyists than those that exist at the federal level, where congressional rules only prohibit retired legislators from lobbying former colleagues for one year. Senator-elect Scott Sifton, D-St. Louis, who will be sworn in on the first day of session on Jan. 9, 2013, has also prefiled legislation to strengthen Missouri’s ethics laws. Senate Bill 38 bans all lobbyists’ gifts to members of the Missouri Legislature and their family, employees and staff. The bill also prohibits lawmakers from reimbursing lobbyists for gifts with campaign funds. Tax Reform Missouri lawmakers have indicated economic development will be one of their top priorities during the 2013 session. As part of that goal, Sen. Eric Schmitt, R-Glendale, prefiled Senate Bill 11 in December, a measure aimed at making Missouri’s business climate more welcoming to new and existing companies. The bill would create a tax deduction for business income, beginning at 10 percent in 2013. The act would be fully phased in at 50 percent by 2017, and would apply to all businesses reporting income on individual returns, such as sole proprietorships, S corporations, limited liability corporations (LLCs) and limited liability partnerships (LLPs). During the same five-year period, the corporate income tax rate would also be reduced by 50 percent. Senator Schmitt, who chairs the Senate Jobs, Economic Development and Local Government Committee, sponsored a similar measure in 2012. The session ended, however, before the bill was approved by the General Assembly. Seatbelt Fine Traffic fatalities in Missouri have been on the decline in recent years, falling from 1,257 in 2005 to 782 in 2011. That trend may be coming to end, however. According to the Missouri Highway Patrol, traffic fatalities in 2012 are set to exceed those in 2011, the first time figures have increased from the previous year in nearly a decade. Of those who died from traffic fatalities this year, more than 60 percent were not wearing seatbelts. In an effort to get more Missourian’s to buckle up, Sen. Joseph Keaveny, D-St. Louis, prefiled Senate Bill 62 in December to increase the fine for seatbelt violations from $10 to $50. However, the bill does not go so far as to create a primary seatbelt law in Missouri, which would allow law enforcement to stop drivers solely for not wearing a seatbelt. Benevolent Tax Credits During the 2011 special session, the Missouri Senate approved legislation that would have drastically reformed Missouri’s tax credit system. Among the provisions, the bill would have sunset, capped and eliminated a number of tax credit programs. The move was intended to rein in the continuing growth of the incentives, whose redemptions cost the state more than $500 million in Fiscal Year 2011. The legislation passed by the Senate was projected to save taxpayers nearly $1 billion over the next 15 years. The measure ultimately died in the House. Since then, tax credit reform measures have been filed in both chambers, but few have seen more than slight progress towards passage, including legislation debated during the 2012 session to extend the expiration date of what are known as benevolent tax credits. These tax credits are often issued for charitable contributions to places such as food pantries or pregnancy resource centers. Despite broad support, the bill was not passed before the end of session. Lawmakers indicate they will address tax credit reform during the 2013 session, including extending the sunset on certain benevolent tax credit programs and reauthorizing those that have expired. Senate Bill 15, sponsored by Sen. Ron Richard, R-Joplin, modifies provisions regarding certain benevolent tax credits. Specifically, the bill extends the sunset on the Public Safety Officer Surviving Spouse tax credit and reauthorizes the Children in Crisis, Food Pantry and Pregnancy Resource Center tax credits, among others. Click here to listen to “This Week in the Missouri Senate” from Dec. 6, 2012. The program reviews prefiled legislation, including Senate Bill 20, another measure to restore and extend Missouri’s benevolent tax credit programs. Voter ID To prevent voter fraud, Sen. Will Kraus, R-Lee’s Summit, prefiled Senate Bill 27, which would establish photo identification requirements for voting in Missouri. Under the bill, Missourians would be required to present a photo ID to vote. Valid forms of identification include a non-expired Missouri driver’s license; a non-expired or non-expiring Missouri non-driver’s license; any identification containing a photograph issued by the Missouri National Guard, the U.S. Armed Forces or the U.S. Department of Veterans Affairs; or a document issued by the United States or the state of Missouri that contains the name of the voter, the most recent signature in the individual’s voter registration records, a photograph, and an expiration date. Senate Bill 27 is the most recent attempt by Missouri lawmakers to establish a photo ID requirement for voting in Missouri. In 2006, the General Assembly passed a measure creating similar standards for voting. However, the law was thrown out by the Missouri Supreme Court. The Legislature approved another voter ID bill in 2011; the legislation was ultimately vetoed by the governor. Thirty states require voters present ID at the polls. Of those, 12 require some sort of photo identification. Current Missouri law is more relaxed; voters can use a non-photo ID to verify their identity, such as bank statements, utility bills and government checks. Prevailing Wage Laws The prevailing wage is the hourly rate paid to a contractor for a public works project, similar to the minimum wage, but specific to an occupation. This wage is supposed to be figured using data from the county where the project is to be done. But, if no data has been submitted for a county, the system uses collective bargaining agreements from surrounding major metro areas. Critics of the system say this can lead to inflated rates in more rural counties, where the cost of living is less than the metro areas. This year, Sen. Dan Brown, R-Rolla, prefiled Senate Bill 30, which repeals all of Missouri’s prevailing wage laws. If approved, Missouri would join 18 other states that do not have prevailing wage laws. According to the U.S. Bureau of Labor Statistics, eight of those states never had prevailing wages laws, nine repealed them in the 1980s and one had its law invalidated by a court decision in the mid-1990s. Senator Brown’s bill goes much farther than recent attempts to reform the prevailing wage system. Senate President Pro Tem Robert Mayer, R-Dexter, sponsored a bill during the 2012 session that would have changed how Missouri calculates the prevailing wage for a given area. The measure did not receive approval before the end of the legislative session, however. Fifth State Building Bond Senator Kurt Schaefer, R-Columbia, prefiled a constitutional amendment in December that, if approved by voters, would allow the Board of Fund Commissioners to issue nearly $1 billion in bonds. Under Senate Joint Resolution 3, up to $250 million of the bond proceeds would go towards constructing state buildings, facilities and projects, with at least $40 million going towards the maintenance of park and park facilities. The bonds would also provide funds for the construction, renovation and rebuilding of higher education institutions. At least 15 percent of the bond proceeds must be allocated to community colleges. Missouri voters last approved the issuance of state bonds in 1982. Those funds were used for improvements to state buildings, parks and other projects. Missouri paid off the bonds earlier this year. Payday Loan Reform Lawmakers have filed legislation every year since 2006 to reform the payday loan industry. Despite some of those bills garnering broad support, none were approved by the General Assembly. An initiative petition to cap payday loan interest rates suffered a similar fate earlier this year when the validity of the signatures collected to get the issue on the ballot was challenged in court. Senator John Lamping, R-St. Louis, is the latest lawmaker to file legislation aimed at reforming the payday loan industry in Missouri. Under Senate Bill 55, payday loan lenders would be prohibited from renewing a loan more than once. Lenders would also not be allowed to issue new loans if consumers have one already outstanding or within one day of a borrower paying a previous loan. The Missouri Division of Finance would be required to develop and administer a statewide compliance system for payday lenders to record each payday loan transaction. Tax Credit Review Commission Issues Updated Report In response to the ballooning price of Missouri’s tax credit programs, the governor created the 27-member Tax Credit Review Commission in 2010 to examine the state’s tax credit programs. The report issued by the commission recommended eliminating a number of programs and reducing others, particularly the state’s two largest tax credits, Low-Income Housing and Historic Preservation. The governor reconvened the commission in September to update its original report on Missouri’s tax credit programs. The governor’s action came on the heels of information released by the Missouri Department of Revenue showing the state spent a record $629 million on tax credit redemptions in Fiscal Year 2012. The commission finished its updated report in early December. The new recommendations include placing a $90 million annual cap on Historic Preservation tax credits and an annual cap of $135 million for Low-Income Housing tax credits. Senator Robin Wright-Jones, D-St. Louis, and Sen. Jolie Justus, D-Kansas City, are members of the panel. Legislative Committees Prepare for Upcoming Session Various legislative committees continued their work in December. Issues discussed ranged from implementing a higher education funding formula in the state to a review of Missouri’s immigration policies. Joint Committee on Child Abuse and Neglect The Joint Committee on Child Abuse and Neglect, chaired by Sen. Schaefer, met in early December at the Missouri Capitol. The panel is tasked with studying and analyzing the state’s child abuse and neglect reporting and investigation system and devising a plan to improve the process for removing a child from the home. The committee will also determine if additional personnel and resources are necessary to adequately protect children and improve their welfare. According to a report issued by Missouri Department of Social Services, there were more than 5,000 incidents and children reported to the Children’s Division in May 2012 regarding suspected abuse and neglect. Senators selected to serve on the panel include Sen. Bob Dixon, R-Springfield; Sen. Rob Schaaf, R-St. Joseph; Sen. Schaefer; Sen. Brian Nieves, R-Washington; Sen. Shalonn “Kiki” Curls, D-Kansas City; Sen. Justus; and Sen. Keaveny. The committee will expire on Jan. 15, 2018. Joint Committee on Education The Joint Committee on Education, chaired by Sen. David Pearce, R-Warrensburg, met in Jefferson City on Dec. 10 to continue its interim work on creating a higher education funding model for Missouri’s public colleges and universities. In recent meetings, the committee examined the effects of implementing a funding formula based partly on performance. The panel released its first preliminary report earlier this month, which included a funding formula that allocates 10 percent of funds to be distributed based on performance indicators, such as retention, completion and student success on various exams. According to testimony heard by committee members, at least 12 states have implemented some form of performance funding for higher education. Other senators serving on the joint committee include Sen. Jane Cunningham, R-Chesterfield; Sen. Nieves; Sen. Rupp; Sen. Schaefer; Sen. Maria Chappelle-Nadal, D-University City; and Sen. Keaveny. Blue Ribbon Panel on Immigration The Blue Ribbon Panel on Immigration, chaired by Sen. Lamping, also met in December. The committee is responsible for studying Missouri’s current immigration policies and making recommendations to strengthen the laws in the state. In recent meetings, members on the panel have discussed the eligibility of public and education benefits for immigrants, as well as proof of citizenship or lawful presence for driving privileges. The panel must issue a report to the General Assembly no later than Jan. 31, 2013. Members of the committee include Sen. Kraus; Sen. Mike Kehoe, R-Jefferson City; Sen. Chappelle-Nadal; and Sen. Curls.
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