In anticipation of the 2020 legislative session which began on January 8, below is a list of probable issues that will face members of the Missouri Senate and the Missouri House of Representatives.
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1. State Budget: Approving the annual state budget is the most important duty of the Missouri General Assembly, and building the FY 2020-2021 budget, which goes into effect July 1, will be closely watched. Gov. Mike Parson (R) in June, without any line-item vetoes, signed the state’s current $30 billion budget. As of early January 2020, monthly net general revenue collections for the 2019-2020 fiscal year decreased 5.86 percent, from $233.3 million in December 2018 to $219.6 million in December 2019. In early January, net general revenue collections for FY 19-20 year-to-date had increased 4.59 percent from $4.54 billion a year earlier to $4.75 billion this year. While state tax revenue currently appears to be better than a year ago, the Department of Revenue’s tax withholding tables distributed to employers were incorrect at the time and were updated in Spring 2019. Consequently, some tax analysts are saying the current receipts’ cushion may be misleading. Time will tell. As of this date, there has not been an agreement on the consensus revenue estimate (CRE) by all the parties. The CRE is used to build the FY 21 budget. We will monitor and alert if conditions require action by the Governor on the current budget.
2. Medicaid Expansion: Accessibility and affordability to healthcare are a top challenge in Missouri. To date, 37 states, including Washington, DC, have adopted Medicaid expansion. Missouri is one of 14 states that has not. Medicaid expansion is likely to appear on the ballot in Missouri in November 2020 as an initiative petition constitutional amendment. Gov. Parson said in early December that he would expand Medicaid if that’s what Missouri voters say they want. The proposed ballot measure would require Missouri state government to provide Medicaid for persons less than 65 years old whose incomes are equal to or below 138 percent of the official poverty line as set forth in the Affordable Care Act. If the state expands Medicaid, as many as 200,000 Missourians may get new coverage. A growing coalition of doctors, nurses, patients, business executives, hospitals, and healthcare supporters are backing the collection of signatures for the ballot issue. 172,000 signatures are needed to place the question on the November 2020 ballot. This effort is in addition to the transformation changes taking place at MoHealthnet by the current Director. How to cover the increase in the cost of such an expansion is sure to generate a lot of interest.
3. Initiative Petition Reform: A repeat is expected of the 2019 legislative session when nearly a dozen bills were introduced to reform Missouri’s initiative petition laws. On one hand, the initiative petition process is a way for citizens to hold elected officials accountable. On the flip side, currently it only takes a simple majority vote of the people to change the Missouri Constitution. That means if voter turnout is only 30 percent, then it would take only 15 percent of voters to change the state’s constitution. Several bills in the Senate and the House have been pre-filed for consideration in 2020 in what is sure to be a controversial issue. Through early December, 141 initiative petitions had been filed with the Missouri Secretary of State’s office, and 64 of those initiative petitions had been approved to circulate for signature-gathering.
4. Workforce and Economic Development: With the support and boosting by Governor Parson, workforce and economic development are expected to again be high-priority issues in 2020. Partnering with the General Assembly in 2019, Governor Parson and legislators succeeded in approving a package of workforce and economic development laws designed to make Missouri the “Best in the Midwest.” The package approved in 2019 includes:
• Missouri Fast Track: Fills workforce gaps through financial aid for adult learners pursuing education and training in high demand industries
• Missouri One Start: Improves Missouri’s workforce programs that help businesses recruit, onboard, and train large numbers of job applicants during major expansions
• Missouri Works – Deal Closing Fund: Gives Missouri a negotiating tool to close deals with companies by granting tax credits earlier in a business expansion, and includes a claw back provision
• Automotive Economic Development Tools: Helps retain automotive jobs by granting $5 million in tax credits annually to automotive manufacturers that invest $500 million or more in plant upgrades and agree to retain current workers.
5. Gaming, Video Lottery Terminals, Sports Betting: After an interim House Committee on Gambling chewed on the issue of illegal gaming machines popping up across Missouri, legislation dealing with lottery terminals, gaming, betting on sporting events and other related issues are bound to be on the front burner in 2020. The Missouri Gaming Commission reported in the fall it had received more than 80 complaints this year identifying at least 200 possibly illegal slot machines and other gaming devices across the state. (The number of illegal machines arguably is in the thousands.) Missouri Lottery officials, casino operators and some business operators are complaining that the spread of the “grey machines” is hurting their revenues. Thousands of the machines can be found in truck stops, gas stations and clubs, and their appearances began about the same time Missouri legislators initiated discussions on whether to allow Illinois-style video gambling outside of casinos. Options include stricter enforcement, legalizing the machines by requiring licensure or maintaining the status quo. Legal betting on sporting events will be another issue in 2020. Issues about where to allow it (current casinos or internet-based) and who regulates it will be among the issues discussed.
6. Tort Reform: Punitive damages was a topic for heated discussion in the Senate and the House in 2019, and it’s expected to return in 2020. Legislation was proposed a year ago in Senate Bill 65 (Sen. Bill White, R-Joplin), establishing that punitive damages would only be awarded if there is “clear and convincing” evidence of intentional harm. Supporters of the legislation said current punitive damages law harms businesses, particularly small businesses. Opponents of last year’s legislation say the bill helped companies instead of helping people. Other tort reform measures in 2020 could include statute of repose, arbitration, asbestos transparency, Missouri Merchandising Practices Act reform, and trial lawyer advertising.
7. Vaping: Two deaths in Missouri associated with vaping and vaping-related illnesses affecting more than 35 Missourians are expected to fuel conversation in the 2020 General Assembly. Governor Parson signed an executive order in October, regarding the use of vaping devices among youth in Missouri. Despite laws prohibiting the use of vaping devices by individuals under the age of 18, the Missouri Student Survey has reported increased use of such devices by middle school and high school students every year since 2014. A “Clear the Air” youth vaping awareness campaign has begun, bringing attention to the risks of using electronic cigarettes and vaping products. Suggestions have been voiced that Governor Parson should lead a campaign proposing a Missouri vaping tax. It is unclear if any legislative action will be pursued.
8. Medical Marijuana: With Missouri’s medical marijuana program kicking into gear in 2020, the Department of Health and Senior Services (DHSS) is beginning to issue medical marijuana facility licenses. Medical marijuana facility license issuance is expected to occur on the following approximate schedule: (a) Testing facilities: Dec. 19, 2019; (b) Transportation facilities: Dec. 23, 2019; (c) Cultivation facilities: Dec. 26, 2019; (d) Infused Products Manufacturing facilities: Jan. 10, 2020; (e) Dispensary facilities: Jan. 24, 2020; and (f) Seed to Sale: Jan. 31, 2020. The state received more than $13 million in nonrefundable fees from 2,163 marijuana business applications filed by at least 700 different groups. Missouri will issue just 60 licenses to grow marijuana, 86 to make marijuana-infused products and 192 to open dispensaries (a maximum of 24 in each of Missouri’s eight congressional districts). Wise Health Solutions, a Nevada group, was hired by the DHSS to evaluate applications in a blind process and then issue licenses to the top scorers. When decisions are announced on which facility license applications are selected, it is unlikely that everyone will be pleased with the decision-making. Various marijuana bills have been filed with the General Assembly, and discussion regarding initiative petitions and the recreational use of marijuana are starting to occur. Senate Bill 610 (Sen. David Sater, R-Cassville) has been filed, providing that an employer (including a public governmental body) may refuse to accommodate the use of marijuana on its premises for any use described in the Missouri Constitution, and an employer may institute a random drug-testing policy. Receipt of a positive drug test for marijuana may be considered grounds for dismissal in the case of an employee or, in the case of a prospective employee, refusal of employment.
9. Rural Broadband: According to the Missouri Department of Economic Development, there is a critical need for broadband availability in Missouri. Currently, the DED says almost 20 percent of Missourians (more than 1.2 million citizens) do not have access to high-speed internet. In 2019, the Missouri House, the Missouri Senate and Governor Parson worked to appropriate $5 million for the Missouri Broadband Grant Program. The focus of the program is to provide state resources that help providers, communities, counties and regions to invest in building broadband infrastructure in unserved and underserved areas of Missouri. Grant applications are due by Jan. 7, 2020, with grant awards announced on March 5. More funding activity for this topic can be expected in 2020.
10. Personal Data Protection: As businesses move toward a more internet reliant form of commerce, the presence of personal data has made consumers more susceptible to breaches and hacking to steal personal data and money. On January 1, 2020, California becomes the first state to enact a data privacy law that empowers its residents with ownership over their personal information and changes the way companies handle personal information across the U.S. and the rest of the world. The new California privacy law might very well become the de facto standard for data rights across the U.S., not only because it is the very first of its kind, but because California is the largest state with 40 million residents. A business in, for instance, Missouri, will be required to comply with the California law if it buys, receives, sells, or shares the personal information of at least 50,000 California residents, households or devices annually. Many U.S. companies will need to seek compliance with the new law, even if they are located outside of California. Missouri legislation introduced, but not approved, in 2019 would have required Missouri businesses to provide notice of a breach of security to affected consumers within 30 days of the discovery of the breach. Current law requires the notice of a security breach to be made “without unreasonable delay.” Some have suggested this may be an area of legislation that needs a national solution, rather than state-by-state laws affecting businesses that cross state lines.
11. Low-Income Housing Tax Credits, Film Tax Credits, Historic Preservation Tax Credits: Tax credits are sure to be on the front burner in 2020. Work by legislators to reform the low-income housing tax credit, a program that’s been on pause for some two years, is expected. Governor Parson appears supportive of restarting the program. Critics say the program wastes the state’s money. Supporters say the program creates housing for the poor, elderly and disabled. Missouri had a film tax credit that expired in 2013. A House bill in 2019 proposed reinstating the tax credit in hopes of bringing film projects back to Missouri. The proposal would have set a 20 percent tax credit for qualifying in-state expenses and a 10 percent tax credit for qualifying out-of-state expenses. Missouri’s film tax credit was 35 percent until 2013. The Historic Preservation Tax Credit program, providing tax credits for eligible buildings, seems to be an appropriations’ target nearly every legislative session. Stay tuned.
12. St. Louis Airport Management: The City of St. Louis owns and operates St. Louis Lambert International Airport. The St. Louis Airport Authority is the city department that manages the daily operations. A working group has been meeting for months with many consultants, trying to study if a private operator could improve the airport and improve regional economic development, and provide a stream of cash to the city. Recently, 18 companies and groups submitted qualifications to the working group regarding bidding on a possible long-term lease of the airport. Legislation, both pro and con on the issue, could be hot topics in 2020.
13. Tax Reform: A House interim committee met during the summer and fall, discussing possible legislation dealing with taxing online purchases. The State of Missouri collects a state sales tax on purchases (not all online purchases), plus 1,456 additional local sales taxes are levied by 2,361 different jurisdictions. The committee focused on a 2018 U.S. Supreme Court case, the Wayfair decision, that challenged South Dakota’s application of its sales tax to internet retailers who sell into South Dakota but have no property or employees in the state. Currently, 45 states in the U.S. have sales taxes. Since the Wayfair decision, all but two states, Missouri and Florida, have enacted either a sales tax or a use tax for online purchases. A possible plan, according to House committee chair Rep. J. Eggleston, would be to pass a “Wayfair-esque” use tax, managed by the Missouri Department of Revenue, where the use tax is approved by local voters; amend the use tax filing threshold from the current $2,000 annual purchases to $1; improve the use tax language to help both state and local tax collections; and offset increases in use tax collections by reducing the state income tax rate with two-year adjustments for accuracy. Whether the legislature will attempt in 2020 to collect sales taxes or use taxes on online purchases remains to be seen, but it likely will be a significant legislative issue.
14. Criminal Justice Reform: Critics say Missouri’s criminal justice system is designed to keep people in jail, while it should be designed to keep people out. Missouri has the eighth-highest incarceration rate in the U.S., the fastest growing female prison population in the nation, and spends more than $725 million each year on corrections. Governor Parson signed legislation in July to eliminate mandatory minimum sentences for some nonviolent offenses and to prohibit added prison time as punishment for people who can’t pay jail board bills. This, in addition to the criminal statutes rewrite of a few years ago, has started to trend the prison population lower. While it’s possible that Missouri will need to build two more prisons in 2021, the current plan is to continue with the reform efforts. Proposed legislation on such topics as racial profiling, civil asset forfeiture, sentencing guidelines for certain nonviolent offenders, and helping incarcerated people reacclimate back into society, and avoid repeat offenses, are on the way in 2020.
15. Biodiesel: Biodiesel is a renewable, biodegradable fuel manufactured domestically from vegetable oils, animal fats, or recycled restaurant grease. Biodiesel meets both the biomass-based diesel and overall advanced biofuel requirement of Renewable Fuel Standards. Senate Bill 568, recently filed by Sen. Denny Hoskins (R-Warrensburg), would require that all diesel fuel sold or offered for sale in Missouri for use in internal combustion engines shall contain at least 5 percent biodiesel fuel oil by volume beginning April 2, 2022; 10 percent biodiesel fuel by volume beginning April 1, 2023; and 20 percent biodiesel fuel by volume beginning April 1, 2024. The minimum content levels shall be in effect primarily during the months of April through October. The state Division of Energy would monitor wholesale diesel prices in Missouri in case price disparities would create economic hardship to the state.
16. Allowing College Athletes to Benefit Financially: California has enacted the “Fair Pay to Play” Act that will allow collegiate athletes in California, starting in 2023, to receive compensation for their name, image or likeness and also hire agents, without losing their collegiate eligibility. The National Collegiate Athletic Association (NCAA) is opposed to the California bill, predicting dire consequences if the bill is allowed to proceed. In Missouri, the NCAA in November came down hard with penalties on the football, baseball and softball teams of the University of Missouri, Columbia, for infractions involving a tutor and 12 students in 2015. Rep. Nick Schroer (R-O’Fallon) has filed a bill similar to California’s (House Bill 1564), relating to compensation for student athletes. Rep. Wes Rogers (D-Kansas City) has filed another bill (House Bill 1792) on the same topic. The NCAA’s penalties against Missouri, including bowl and post-season bans, along with limits on recruiting and scholarships, are serving as precursors to legislation in Jefferson City squarely aimed at the NCAA.
17. County Financial Statement: Annually in March, Missouri counties of the second, third and fourth classifications are required to publish a detailed statement in a local newspaper of revenues received and disbursements made during the previous calendar year. State law requires first-class counties without charter forms of government to publish a summary financial statement, rather than the more lengthy, detailed statement. Legislation is expected to be filed that would allow summary financial statements to be published in newspapers by individual counties of all classification sizes.
18. Property Taxes, Reassessments: A House interim committee met several times in the summer and fall to compile suggestions for 2020 legislation involving property taxes and property reassessments. Among the ideas for legislation: (a) Require on-site physical inspections of property to be reassessed; (b) The deadline to file county Board of Equalization appeals should be earlier than the current third Monday in June; (c) All assessors should be elected in Missouri. Currently, assessors in St. Louis City and Jackson County are appointed; (d) Not all taxpayers get Hancock Amendment protections. According to the Missouri Constitution since 1995, the Kansas City Public School District is not required to lower its tax levy if property valuation reassessments result in increased tax payments. Some county assessors favor, instead of reassessments every two years, a four-year cycle for reassessments, and providing a “certificate of value” to the assessor’s office when a property is sold would be helpful in the assessment process. Legislation is on the way to address related issues.
19. Education Issues: Education reform and K-12 public school funding generally garner the most attention every year, and we don’t expect the 2020 legislative session to be any different. We expect many of the same issues from the 2019 session to resurface in 2020, including:
• Funding the Foundation Formula: In 2019, public school funding for K-12 education received a $60 million increase. We fully expect the formula to receive full funding this session for the Fiscal Year 2021 state operating budget.
• Public Charter School Expansion: Missouri currently allows public charter schools in the metropolitan school districts of St. Louis City and Kansas City. Legislation has been filed for several years that would expand the districts eligible and create additional safeguards to close poorly performing schools.
• Empowerment Scholarship Accounts: Legislation was debated in 2019 in the Missouri Senate that would allow students to attend a school of their choice through a $50 million tax-credit funded scholarship program.
20. Deregulation of Professional Licensure Laws: Rep. Derek Grier (R-Chesterfield) in 2019 sponsored House Bill 472, relating to professional registration. The bill passed the House in late March, but did not move forward in the Senate. If enacted, a person would not be disqualified from pursuing, practicing, or engaging in any occupation in which a license is required because of a prior conviction of a crime, unless the applicant’s conviction directly relates to the duties and responsibilities for the licensed occupation. A portion of HB 472 would require at least 1,000 hours training for the classification of hairdresser, and 400 of those hours could be applied toward the classification of cosmetologist. Currently, 1,500 hours of training are required for cosmetologists. Currently, 750 hours of training are required for the classification of esthetician. The bill would allow 500 of those hours to apply toward the classification of cosmetologist.
21. Bail Bond Issue on Immediate Release: Legislation may be in the making to modify new rules handed down in July by the Missouri Supreme Court. Under the rules, violent offenders have a warrant issued for their arrest, and likely, a high bond set. But some sheriffs say lower level criminals are getting off way too easily. Some of the new rules require the associate circuit judge to issue a summons instead of a warrant with a bond, if the suspect is not a threat to the victim or to the community. However, some sheriffs are frustrated, saying, for instance, someone could go out into the county, steal thousands of dollars of farm equipment, and instead of getting a warrant issued for their arrest and a high bond set, they’d just get a summons, and then they may or may not ever show up for court. Legislation could be on its way.