April 7, 2021

Legislative Bulletin

2021 Missouri midway point legislative update

The 2021 Missouri legislative session has reached the unofficial halfway point. There has been movement on important pieces of legislation, but much more work is still ahead in the last eight weeks.

Throughout 2020 and continuing into 2021, the COVID-19 pandemic has been the biggest issue, of course. Builders’ staff (along with our AGC of America colleagues working on the national level) worked hard to make sure the construction industry was considered essential and could continue working. At all levels of government, that effort was successful. However, as the recovery plan was implemented, the construction industry was not named in Missouri’s vaccination phases. The 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 the construction industry into Phase 2 in his March 12 health directive.

The biggest political news recently was the announcement that U.S. Sen. Roy Blunt will not run for reelection in 2022. Several candidates in both parties are weighing their options. Republican Attorney General Eric Schmidt has already thrown his hat in the ring, as has former Governor Eric Greitens. Lieutenant Governor Mike Kehoe and Secretary of State Jay Ashcroft have declined to run (both eyeing the next governor’s race). A few current congressional members are looking at the race. On the Democratic side, former state Sen. Scott Sifton has announced his candidacy.

Several bills consequential to Missouri are moving through the legislative process. They include topics around COVID-19 business liability protection, transportation funding (raising the state gas tax), taxing online sales (the Wayfair legislation), Medicaid expansion, other tort reform, and workforce development.

Bills consequential to the construction industry also have been filed. Some are seeing action, while others are parked in committee. Those bills include 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.

The only constitutional requirement for lawmakers is passing a balanced state budget. The budget work has been on schedule in the house (where the process starts) and will be sent to the senate in April. Lawmakers must complete their budget work by Friday, May 7. Through the new federal rescue plan passed by Congress, Missouri is set to receive more than $2.5 billion in COVID-19 relief. These funds should come to the state soon, and legislators will need to add that money to the budget process so funds can be appropriated and used.

Every 10 years, following completion of the U.S. 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.

The last day of session is Friday, May 14. A lot of work remains. With the end of session in sight, the horse trading will begin between legislators trying to get their priority issues passed. The budget and Medicaid expansion will take the lion’s share of the time remaining. The senate filibuster season also will be in full force. Staff will be monitoring bills closely as we enter the final stretch.

Below are summaries of the top issues facing lawmakers this session and the significant issues facing the regional construction industry with a prognosis of their chances to become law in Missouri.

Top issues in the legislature this session

COVID-19: The number one priority of the governor and legislature remains the vaccination of Missourians and the reopening of all businesses across the state. It now has been one year since the pandemic was declared. Vaccine supplies continue to increase weekly. The governor moved the state into Phase 2 of the recovery plan on Monday, March 29. Due to efforts of The Builders’ Association, the construction industry was placed into Phase 2; all construction sector workers are now eligible.

Medicaid expansion: Missouri voters passed Medicaid expansion in 2020. The legislature now must implement an expansion plan and fund it. 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. This surprised lawmakers; it separated the expansion from the rest of the state’s budget. Then the bill came to a committee vote and it was voted down. This means Medicaid expansion is not in the House budget. The senate will now have the decision to place the $1.6 billion into their version of the state budget or risk probable lawsuits. This issue, along with the overall state budget, will be the centerpiece issue for the rest of the session.

Wayfair: In 2018, the U.S. Supreme Court ruled in the Wayfair case that states could collect sales tax on internet purchases even if they did not have a storefront in the state. Missouri is 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 has been reached with HB 554. It will allow the state to impose a sales tax on online purchases and will reduce the top rate of income tax from 5.4% to 5.1% by 0.1% per year. This has been a priority of the governor. It will now be up to the senate to pass. Its chances of passage this time look good.

State gas tax: 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. 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, has led the effort to fix the road and bridge problem (estimated at $800 million). He introduced SB 262, which will 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 allows the tax to be refundable; it allows a rebate if motorists file receipts (and keep those records for three years). The legislation passed in the senate on March 11. It originally had a referendum clause that would have sent the issue to the voters of the state again, but that was removed. It now resides in the house. Its chances of passage appear to be good right now.

COVID-19 business liability: To get businesses throughout the state reopened and fully operational, the governor and some legislators called for COVID-19 liability protections. After the issue failed to pass in the special session this past fall, Sen. 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 are also medical and product liability protections in the legislation. SB 51 passed in the senate on Feb. 23 and is moving along swiftly in the house. Its chances of passage look good.

Education reform: A major push from conservative lawmakers this session has been on education reform. SB 55 is a 96-page document that includes myriad provisions. It has been hotly debated on the senate floor and now sits on the informal calendar (which means it sits there until it is brought up). Supporters say they want to fund students and not systems. Provisions include allowing charter schools to operate in any district or municipality with a population greater than 30,000 people, the creation of a Missouri Empowerment Scholarship Account (with a new board to oversee it), prohibiting school districts from participating with any statewide activities association that prevents or discourages home-schooled students from engaging, and getting students back to in-person learning. This is contentious legislation. Senate Majority Leader Caleb Rowden, R-Columbia, is pushing this reform and hopes to move SB 55 soon. We will see if it can get passed in the senate and move to the house for their deliberations.

Construction industry bills of interest

Low-income housing tax credits: 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 of people on the waitlist for affordable housing grew. Sen. Dan Hegeman, R- Cosby, has filed a bill the last two years attempting to place a cap on the number of credits authorized each year. This session he has filed SB 85. The proposal states the cap will 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 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 it has stalled since then. Staff will be monitoring this bill as the session continues to see if it is brought back up or the language is added to another bill that is moving through the process.

Roofing contractor registration: Rep. Robert Sauls, D-Independence, filed HB 1215 this session, just like he did last year. This legislation adds provisions relating to registration certificates for roofing contractors. The bill requires 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 their roofing contractor business if they 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. Sen. Doug Beck, D- Affton, filed a similar bill with SB 326. Both pieces of legislation are not advancing this session.

Mechanical contractor licensing: 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 will 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 will 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 will 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 will not apply to service work or installation of chimney sweeps, outdoor cooking appliances, outdoor fire pits and outdoor gas lanterns. This bill has had a hearing and sits on the senate informal calendar to be brought up for debate.

A+ Program: In 2019, the A+ Program was expanded to, among other changes, establish a procedure for reimbursing 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. With high hopes for at least a good chunk of that funding being added to the final budget, legislators have turned their attention to programmatic changes.

Three bills have been filed this session in the house. HB 98 lowers the residency requirements even further for students to become eligible for an A+ grant from two years to one year. It was filed by Rep. Mark Sharp, D- Kansas City. Since it has not even been assigned to a committee, its chances of passage are not good. 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 A+ reimbursement be made before any other sources are applied toward educational costs. This bill also has not been assigned to a committee, and it appears dead for this session. Last, HB 1395, also filed by Windham, provides a payment of up to $500 per semester to eligible students who qualify for the A+ scholarship, but use federal funds for qualified expenses rather than the A+ reimbursement. This bill also appears dead 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 and who 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.

HB 733: Workforce diploma program
Sponsored by Rep. Jon Patterson, R-Lee’s Summit, this bill establishes 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 caps costs at $7,000 per student and funding for the program is subject to appropriations. Bill language also requires 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 has passed the house and now awaits action in the senate.

HB 581: “21st Century Missouri Education Task Force”
Filed by Rep. Louis Riggs, R- Hannibal, this proposal establishes the "21st Century Missouri Education Task Force." The stated mission of the task force is to: (1) evaluate the condition of the state's public education system, including the standardized testing system; (2) study successful educational models 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 it serves the educational needs of Missouri's citizens moving forward into the 21st 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 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 passed in committee recently, but still has a long way to go in the process.

HB 101: "School innovation team" and a "school innovation waiver"
This bill, filed by Rep. Brad Pollitt, R- Sedalia, modifies provisions governing workforce development in elementary and secondary education. It provides a definition for a "school innovation team" and for a "school innovation waiver" and allows 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 has passed in committee and now has been sent to the Rules Committee.

HB 896: Minimum requirements for career & technical education certificates
Sponsored by Rep. Rusty Black, R- Chillicothe, this bill requires 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 will match workforce needs with appropriate educational resources. Each local school district will 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 bill has passed out of the Workforce Development and Rules Committees and now awaits an action to send it to the full house.

SB 265 and SB 285: State innovation waiver plan
SB 265 was filed by Sen. Karla Eslinger, R-Wasola, and SB 285 was filed separately by Lauren Arthur, D- Kansas City. Under the legislation, any school intervention team, meaning a group of people 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 has had a hearing and passed out of committee.

Right-To-Work: Four Right-To-Work bills have been filed this session (two in the senate and two in the house). The bills are 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 have been discussed in a committee hearing, but none of them appear to have any legs.

Prevailing Wage: In 2018, the Missouri General Assembly passed legislation significantly altering 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 have been four bills filed. HB 89, filed by Rep. Jered Taylor, R-Republic, totally repeals prevailing wage. HB 1267, filed by Rep. Kurtis Gregory, R- Marshall, exempts 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 Sen. Rick Brattin, R-Harrisonville. This proposal modifies the newest changes to prevailing wage so only the public works contracting minimum wage is required to be paid to workers. Finally, SB 557, filed by Sen. Denny Hoskins, R- Warrensburg, is identical to HB 1267 above. The two senate bills did get assigned to committee (General Laws), but staff does not anticipate any more movement on these bills this session.

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.

Download a PDF of the bulletin.