June 23, 2021

Legislative Bulletin

2021 Missouri legislative update

The 2021 Missouri legislative session is over. There was much concern and uncertainty going into January with the COVID-19 pandemic still in force. Legislators and all interested participants were excited to start a new session after the abbreviated one in 2020. As the closing bell sounded on Friday, May 14th per the Missouri Constitution, it can be said that the session was a success for businesses and residents alike. For the construction industry, it was a good year, as well. Some workforce development initiatives passed (like additional A+ Program funding), along with COVID-19 business liability protections and an increased state gas tax to provide much-needed additional funds for Missouri’s roads and bridges. In addition, several detrimental bills did not pass.

Continuing into 2021, COVID-19 has been the biggest issue, of course. Your Builders’ Association staff (along with our AGC of America colleagues working on the national level) worked hard at the beginning of the pandemic to make sure the construction industry was considered essential and could continue working. At all levels of government, that effort was successful. As the recovery plan was carried out this year through vaccination phases, the construction industry was not named in the documents, though. Builders’ Association government relations staff spearheaded a statewide construction association coalition that persuaded the governor and his COVID-19 team to specifically include the industry in the state vaccination plan. State Health Director Dr. Randall Williams placed our industry into Phase 2 in his health directive of March 12.

As mentioned above, several bills passed that have put to rest issues the state has been discussing a long time. The first example is transportation funding, specifically for road and bridge repair. SB 262 will add 2.5 cents to a gallon of gas in Missouri each year until it reaches 12.5 cents higher in 2025. This will equate to over $500 million extra in funding for the state each year after the full increase is in effect. The legislature also passed a prescription drug monitoring plan. Missouri was the only state in the nation without such a system meant to help counteract opioid abuse. That effort started nine years ago. The governor asked for COVID-19 business liability protections to be the first bill that crossed his desk; it was the last bill to be truly agreed to by the legislature in the waning hour of session. Last, the so-called Wayfair fix was finally passed, which now allows for internet purchases to be taxed and levels the field for small businesses in the state.

The session will probably be remembered, though, for what did not get passed. After Missouri voters passed Medicaid expansion, legislators separated the expansion dollars out of the budget and then the legislature did not pass it. Along the same vein, the normally passed Federal Reimbursement Allowance (FRA) which allows for billions in federal funds was not passed. Both issues will have to be dealt with now in a special session.

Bills that were consequential to the construction industry also were filed. Some saw action, while others were parked in committee. Those bills included subjects like prevailing wage, the A+ Program, statewide contractor certifications and licensing (roofing and mechanical), Right-To-Work, low-income housing tax credits, and workforce development.

With the main session over, attention now will be paid to the special sessions that lay ahead on topics discussed above and possibly others. Redistricting also is an important effort that will kick off later this year. Every ten years following completion of the United States census, the redrawing of legislative district boundaries occurs throughout the country at all levels of government. Census numbers are coming in late this year; lawmakers don’t expect to work on the new boundaries until September.

Below are summaries of the top legislative efforts this session and the significant issues faced by the regional construction industry.

Top issues in the legislature this session

COVID-19: The number one priority of the governor and legislature remained the vaccination of Missourians and the reopening of all businesses across the state. It now has been slightly more than one year since the pandemic was declared. From the beginning, your association worked hard to ensure the industry was considered essential in the health directives issued around the state. Now in June, vaccine supplies are widely available, but demand has slipped with roughly 43% of Missourians vaccinated with at least one dose. The state Recovery Plan has been deployed throughout the first months of 2021. Due to efforts of The Builders’ Association, the construction industry was placed into Phase 2 of the vaccination plan. All construction sector workers have been eligible for shots since March.

Medicaid expansion: DID NOT PASS Missouri voters passed Medicaid expansion in 2020. The legislature then was called upon this session to implement an expansion plan and fund it. Surprising most people, House budget Chair Cody Smith (R- Carthage) pulled out the $1.6 billion for the expansion and placed it in a separate appropriations bill HB 20, which separated the expansion from the rest of the state’s budget. The individual bill then came to a committee vote and it was voted down. This meant that Medicaid expansion was not in the House budget. All eyes then turned to the Senate to see if they would place the $1.6 billion into their version of the state budget. Eventually that effort failed, as well, and Medicaid expansion did not pass this session. The governor, after the session concluded, decided he did not have the authority to move forward with expansion. A lawsuit now has been filed in Cole County Circuit Court to reconcile this issue. A special legislative session looms ahead.

Wayfair: PASSED In 2018, the U.S. Supreme Court ruled 5-4 in South Dakota v. Wayfair that states could collect sales tax on internet purchases even if the business did not have a storefront in the state. Missouri was one of two states that have a sales tax, but do not collect on internet purchases. Legislators have tried since the ruling to pass legislation allowing for the collection of the tax. Even though it would put local businesses on a level playing field with internet retailers, it has not passed because certain lawmakers have wanted the extra revenue to be offset with tax breaks. This session a compromise was finally reached with SB 153. The legislation now will allow the state to impose a sales tax on online purchases. The bill also included multiple other tax provision changes, including TIF, community improvement districts, local use taxes, and a further reduction in individual income tax rates. This “Wayfair fix” was a priority for the governor this year.

State gas tax increase: PASSED As everyone knows, the state’s highways and bridges are in gross disrepair in many areas of the state. Lawmakers have been looking for solutions for a few years now. Back in November 2018, Missouri voters voted down Proposition D, which would have increased the gas tax by 10 cents over four years (for transportation revenue of $288 million annually). Missouri’s gas tax is set at 17 cents/gallon, the second lowest in the nation behind Alaska’s. This session, Senate President Pro Tem Dave Schatz (R-Sullivan) led the effort to fix our road and bridge problem (estimated at $825 million in unfunded annual high-priority improvements). He introduced SB 262, which would enact an additional tax on motor fuel, beginning with 2.5 cents in October 2021, and increasing by 2.5 cents in each fiscal year until reaching an additional 12.5 cents per gallon on July 1, 2025. One provision makes the tax refundable; it allows a rebate if motorists file receipts (and keep those records for three years). It originally had a referendum clause that would have sent the issue to the voters of the state again, but that was removed. The legislation passed the last week of the session. It now resides on the governor’s desk. He is expected to sign it. The Missouri gas tax has not increased since 1996.

Adding another wrinkle to this saga now, an organization called the Americans For Prosperity has filed a petition with the Missouri Secretary of State’s office to place the issue on the Nov. 8, 2022, ballot. They will need to gather a lot of signatures statewide. Staff will continue monitoring this to see what transpires.

PDMP: PASSED The prescription drug monitoring program finally passed this session in SB 63. Senator Holly Rehder (R-Sikeston) has worked on this legislation for the last 9 years (8 years in the House). Missouri was the last state to initiate a statewide program, which allows pharmacies and physicians to monitor a database of patient prescription history. This program allows for counteracting drug abuse, particularly opioids. Lacking a statewide program, St. Louis County created its own version that has covered 85% of the state.

COVID-19 business liability: PASSED To get businesses throughout the state reopened and operating at full throttle, the governor and some legislators called for COVID-19 liability protections. After the issue failed to get passed in the special session this past fall, Senator Tony Luetkemeyer (R-Kansas City) filed SB 51 at the beginning of session. The bill states that no individual or entity engaged in businesses, services, activities, or accommodations shall be liable in any COVID-19 exposure action, as defined in the act, unless the plaintiff can prove by clear and convincing evidence that: (1) The individual or entity engaged in recklessness or willful misconduct that caused an actual exposure to COVID-19; and (2) The actual exposure caused personal injury to the plaintiff.

Additionally, no religious organization, as defined in the act, shall be liable in any COVID-19 exposure action, unless the plaintiff can prove intentional misconduct. There also are medical and product liability protections in the legislation. This legislation was called by the governor in his state of the state address in January to be the first bill passed by the legislature this session. Instead, it was the final bill truly agreed and passed by the legislature this session.

Education reform: PASSED A major push from conservative lawmakers this session has been on education reform. Lawmakers eventually passed HB 349, which creates Empowerment Scholarship Accounts (ESAs). Essentially, businesses and individuals can donate money to this educational program and receive a 50% tax credit. Any Missouri student living in a town of at least 30,000 people can use the money to attend private schools.

The official summary of the bill reads: The bill creates the "Missouri Empowerment Scholarship Accounts Program" and specifies that any taxpayer may claim a tax credit, not to exceed 50% of the taxpayer's state tax liability, for any qualifying contribution to an educational assistance organization. The cumulative amount of tax credits issued in any one calendar year begins at $50 million and may be adjusted by the state treasurer annually based upon inflation with a maximum cap of $75 million. A qualified student may receive a grant to be deposited in the student's Missouri Empowerment Scholarship Account if he or she is a resident of Missouri and resides in any county with a charter form of government or any city with at least 30,000 inhabitants, and has an IEP or has attended a public school as specified in the bill, is entering Kindergarten or first grade, or is attending school for the first time. Missouri Empowerment Scholarship Accounts are renewable on an annual basis. Moneys deposited into the account shall be used for specified services and fees, but may not be payments to any person related within the third degree of consanguinity to the qualified student. If a qualified student withdraws from the program, is disqualified from the program, or graduates, the student's account shall be closed and remaining funds shall be returned to the EAO for redistribution to other qualified students.

Construction industry bills of interest

Low-income housing tax credits: DID NOT PASS This tax credit program has been under fire for a few years but is now coming back alive. Former Governor Eric Greitens closed the program down for three years by zeroing out the state’s contribution. Current Governor Mike Parson revived the program in the fall of 2020 as the number grew of people on the waitlist for affordable housing. Senator Dan Hegeman (R- Cosby) filed a bill the last two years attempting to place a cap on the amount of credits authorized each year. This session he filed SB 85. The proposal states the cap shall be 70% of the amount of federal low-income housing tax credits allocated to the state. This act also reduces the limit on tax credits authorized for projects financed through tax-exempt bonds from $6 million to $4 million. To the extent that such limit is not reached in a fiscal year, the amount not authorized may, for such fiscal year only, be added to the amount of tax credits that may be authorized for projects not financed through tax-exempt bond issuance. SB 85 had a hearing in early February, but then stalled. It died in the process.

Roofing contractor registration: DID NOT PASS Rep. Robert Sauls (D-Independence) filed HB 1215 this session, just like he did last year. This legislation added provisions relating to registration certificates for roofing contractors. The bill required roofing contractors to obtain a registration certificate to engage in the business of a roofing contractor, subject to civil penalty. A roofing contractor could not bring any claim, action, suit, or proceeding related to his or her roofing contractor business if he or she did not have a registration certificate. A person working under the direct supervision of a roofing contractor as an employee, day laborer, or contract laborer would not have been required to be certified. Senator Doug Beck (D- Affton) filed a similar bill with SB 326. Both pieces of legislation stalled early and eventually died.

Mechanical contractor licensing: DID NOT PASS The Missouri Statewide Mechanical Contractor Licensing Act, SB 11, was filed this year by Senate President Pro Tem Dave Schatz. Under this act, the statewide mechanical license for mechanical contractors shall be regulated by the Division of Professional Registration, within the Department of Commerce and Insurance. This act creates the Office of Mechanical Contractors within the Division, to carry out the provisions of this act. Applicants for a statewide mechanical license must meet certain criteria set forth in the act. A corporation, firm, institution, organization, company, or representative seeking to engage in mechanical contracting, is required to employ at least one license holder. A statewide licensed mechanical contractor may represent only one entity at a time. Political subdivisions may establish their own local mechanical contractor's license, but shall recognize a statewide license in lieu of a local license for the purposes of performing contracting work or obtaining permits to perform work within such political subdivision. Mechanical contractor licenses shall expire on a renewal date established by the Division. Any person who knowingly violates the provisions of this act is guilty of a Class B misdemeanor. The provisions of this act shall not apply to service work or installation of chimney sweeps, outdoor cooking appliances, outdoor fire pits, and outdoor gas lanterns. This bill had a hearing and then stalled in April.

A+ Program: PASSED In 2019, the A+ Program was expanded to, among other changes, establish a procedure for the reimbursement of the cost of tuition and fees for any dual-credit or dual-enrollment course offered to a student in high school in association with a public community college or vocational or technical school. It also provided that the student must have attended a high school in the state for at least two years (changed from three years). This expansion came with no funding that year; the plan was to apply for funding the next year. Well, the next year was 2020, the year of the pandemic, so nothing happened. In 2021, the governor announced in his state of the state address he wanted a $13 million increase for A+ Program funding; that was placed in his budget. Staff is pleased to announce that the full total was approved in the budget. In addition, Senator Lauren Arthur (D-Kansas City) was successful in adding $5 million to the dual credit/dual enrollment reimbursement she championed in 2019 mentioned above. Consequently, it was a good year for the A+ Program.

DID NOT PASS In addition to the efforts above, three individual A+ Program bills were filed this session in the house. HB 98 lowered the residency requirements even further for students to become eligible for an A+ grant from 2 years to 1 year. It was filed by Rep. Mark Sharp (D- Kansas City). Another proposal, HB 884 was filed by Rep. Kevin Windham (D- Hillsdale). Currently, A+ funding disbursements to colleges take place after other sources of funding; federal, private, or other state sources. This bill requires that A+ reimbursement be made before any other sources are applied toward educational costs. Last, HB 1395, also filed by Rep. Windham, provides a payment of up to $500 per semester to eligible students that qualify for the A+ scholarship, but use federal funds for qualified expenses rather than the A+ reimbursement. All these bills died this session.

Staff continues to watch for A+ Program proposals and changes. It is a good program that assists students attending vocational and technical schools that are looking at a future in the construction industry. This program is an important workforce development tool for the industry.

Various workforce development proposals: Workforce development continues to be a focus in Missouri in the governor’s office and in the General Assembly. It also continues to be a focus for The Builders’ Association. Below are different pieces of legislation that did not make it across the finish line this session, but they give some flavor as to the discussion and topics.

  • HB 733: Workforce diploma program DID NOT PASS
    Sponsored by Representative Jon Patterson (R-Lee’s Summit), this bill established the “Workforce Diploma Program” within the Department of Higher Education and Workforce Development to allow vendors to provide services offering high school credits for degree completion. The language capped costs at $7,000 per student and funding for the program was subject to appropriations. Bill language also required the state board of education to develop a statewide plan for career and technical education certificates and requires the Department of Elementary and Secondary Education to convene work groups to develop written model curriculum frameworks that may be used by districts. This bill passed in the House, but died in the Senate.
  • HB 581: “21st Century Missouri Education Task Force” DID NOT PASS
    Filed by Rep. Louis Riggs (R- Hannibal), this proposal established the "21st Century Missouri Education Task Force." The stated mission of the task force shall be to: (1) evaluate the condition of the state's public education system, including the standardized testing system; (2) study successful educational models in order to identify highly effective teaching strategies; (3) evaluate the state's certificate programs and workforce development efforts, including any efforts to use knowledge models to help guide students into certain employment areas from young ages so that they are able to advance in rewarding careers; (4) evaluate current funding for elementary and secondary education and higher education in Missouri; (5) evaluate whether current education funding in Missouri is sufficient to not only maintain the public education system in its current state but also to ensure that it serves the educational needs of Missouri's citizens moving forward into the twenty-first century; (6) make recommendations regarding the condition of the state's public education system; (7) make recommendations regarding funding of education and workforce development efforts; and (8) make recommendations regarding the use of technology and artificial intelligence to improve student outcomes and to inform future educational needs in relation to workforce development in order to maximize the impact of the Missouri public education system in regards to future employment opportunities including, but not limited to, manufacturing, trades, STEM fields, and agriculture. The bill was passed in committee, but stalled after that.
  • HB 101: "School innovation team" and a "school innovation waiver" DID NOT PASS
    This bill, filed by Rep. Brad Pollitt (R- Sedalia), modified provisions governing workforce development in elementary and secondary education. It provided a definition for a "school innovation team" and for a "school innovation waiver" and allowed school innovation teams to submit a plan to the State Board of Education (SBE) for a state innovation waiver for a variety of purposes as outlined in the bill. Plans submitted to the SBE must include the provision of law for which the waiver is being requested, as well as demonstrate the necessity of the waiver, provide measurable performance targets and goals, and demonstrate support for the plan, along with additional requirements as provided in the bill. School innovation waivers are only effective for three years beginning the school year following the approval and may be renewed. Only one waiver may be in effect per school at a time, and specific restrictions to statutory requirements relating to school start date, teacher certification, teacher tenure, or any requirement imposed by federal law, are applicable. This bill passed in committee and also in the Rules Committee, but it stalled in April.
  • HB 896: Minimum requirements for career & technical education certificates DID NOT PASS
    Sponsored by Rep. Rusty Black (R- Chillicothe), this bill required the State Board of Education, in consultation with the Career and Technical Advisory Council, to develop a statewide plan establishing the minimum requirements for a Career and Technical Education (CTE) Certificate. The statewide plan would match workforce needs with appropriate educational resources. Each local school district shall determine the curriculum, programs of study, and course offerings based on the requirements of the statewide plan. The Department of Elementary and Secondary Education is required to convene work groups from each CTE program area to develop written model curriculum frameworks that may be used by districts. This legislation passed out of the Workforce Development and Rules Committees, but stalled in early March.
  • SB 265 and SB 285: State innovation waiver plan DID NOT PASS
    SB 265 was filed by Senator Karla Eslinger (R-Wasola) and SB 285 was filed separately by Lauren Arthur (D- Kansas City). Under the legislation, any school intervention team, which shall mean a group of persons representing certain schools as set forth in the act, may submit a state innovation waiver plan to the State Board of Education for certain purposes, including improving student readiness for employment, higher education, vocational training, technical training, or any other form of career and job training, increasing the compensation of teachers, or improving the recruitment, retention, training, preparation, or professional development of teachers. Both bills were referred to the Senate Education Committee and Senator Eslinger’s SB 265 had a hearing and passed out of committee.

Right-To-Work: DID NOT PASS Four Right-To-Work bills were filed this session (two in the senate and two in the house). The bills were HB 87 filed by Rep. Jered Taylor (R-Republic), HB 505 field by Rep. Don Rone (R-Portageville), SB 73 filed by Sen. Jason Bean (R-Holcomb), and SB 118 filed by Sen. Eric Burlison (R-Battlefield). SB 118 and HB 87 are strict Right-To-Work bills. The other two, HB 505 and SB 73, authorize individual counties in the state to adopt Right-To-Work measures. Both senate bills were discussed in a committee hearing, but all the legislation eventually died.

Prevailing Wage: DID NOT PASS In 2018, the Missouri General Assembly passed legislation that significantly altered the state’s prevailing wage law. With the new statutes, prevailing wage as an issue was taken off the table for discussion by Senate Pro Tem Dave Schatz. He now has one more year in the Senate, so we are hopeful this topic is not revisited until at least after his tenure. With that backdrop, legislators in certain areas of the state still are compelled to file bills on prevailing wage. This session, there were four bills filed. HB 89, filed by Rep. Jered Taylor (R-Republic), totally repealed prevailing wage. HB 1267, filed by Rep. Kurtis Gregory (R- Marshall), exempted institutions of higher education from paying prevailing wages for certain projects. The bill defines "qualified project" to include demolition or removal, and any project payed from the "Deferred Maintenance Fund.” In the Senate, SB 544 was filed by Senator Rick Brattin (R-Harrisonville). This proposal modified the newest changes to prevailing wage so that only the public works contracting minimum wage is required to be paid to workers. Finally, SB 557 that was filed by Senator Denny Hoskins (R- Warrensburg) is identical to HB 1267 above. The two senate bills did get assigned to committee (General Laws), but all the bills eventually died.

Contact Builders’ with questions

As always, if you have questions about any of the pieces of legislation above, or would like us to look into a bill or issue not listed, please contact Allen Dillingham, government relations director for The Builders’ Association, at 816-595-4121 or [email protected]. We also encourage you to contact your elected representatives on these pieces of legislation and other issues important to you and your business.

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