2019 Missouri legislative update after the midpoint of the session



The 2019 legislative session in Missouri has been quite a different session from last year. In 2018, several specific construction industry-related issues were front and center—cutting low-income housing and historic preservation tax credits, pushing for Right-To-Work, and making changes to prevailing wage. This year has been less hectic. Caps on low-income housing tax credits have resurfaced, but numerous workforce development proposals have been introduced.

Other issues on the legislature’s agenda include tort reform, abortion restrictions, education reform, a prescription drug monitoring program, criminal justice reform, and completing the state’s now $30 billion budget.

Three weeks now remain in the 2019 session. Much work remains on the bills below and your government relations team will be working hard to further educate lawmakers and affect legislation.

Below are detailed summaries of the significant issues facing the regional construction industry with a prognosis of their chances to become law in Missouri.

TAX CREDIT CAPS BEING PROPOSED AGAIN

As has been the case for the last several sessions, tax credits are on the hot seat again. Last year, the historic preservation tax credit program incurred many constricting changes, including the lowering of its cap. This year the low-income housing tax credit program is under fire. We’ll see what happens in these final weeks.

A few legislators over the past decade have wanted to lower the tax credits available to developers because officials did not like seeing the huge expenditure each year during the budget process. Staff at The Builders’ Association, working with other organizations in the state, continue working to educate legislators on the positive economic results these programs can have. Just look at what the historic preservation tax credit program has done to downtown Kansas City; the program is a major reason why such a revitalization has occurred.

For tax credits universally, two legislators this year are trying to place constraints on their growth. Representative Deb Lavender has filed HB 1018. This bill specifies that all new and existing tax credits shall be approved by the General Assembly as part of the normal budget process. This kind of legislation would severely handicap projects statewide. Representative Kathryn Swan filed the same legislation in House Bill 227, which was withdrawn in mid-February.

Representative Jeffrey Messenger filed another restrictive piece of tax credit legislation. HB 1243 would place a sunset on all tax credits that do not currently contain a sunset provision. All three of these bills have been non-starters in the House this session.

The Senate has seen two tax credit bills filed, both of which pertain to the low-income housing tax program. Senator Dan Hegeman, now for the second year, has filed a bill to cap the tax credits allowed each year. SB 28, as now amended, places an aggregate cap on the amount of state low-income housing tax credits that may be authorized in a fiscal year. Such cap shall be 72.5% 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 28 has had the most attention paid to it. It has passed the Senate and has been first and second read in the House. It is awaiting a committee assignment. The bill has stalled since it was introduced in the House.

The other low-income housing tax credit bill in the Senate is SB 269 filed by Senator Bill Eigel. This act places a cap of $130 million on the aggregate amount of tax credits that may be authorized in a given fiscal year under the Missouri low-income housing tax credit program. The proposal was referred to the Senate general laws committee in early February, but has not had a hearing.

For the remainder of the session, SB 28 is the bill to watch. Staff will continue to be involved with this legislation and also keep an eye out for any amendments to other bills.

WORKFORCE DEVELOPMENT A MAJOR FOCUS THIS SESSION

Workforce development has seen the most attention of any issue this year. As everybody knows, businesses in most industries now have problems finding qualified workers. Governor Parson made workforce development a priority in his state of the state address earlier this year.

Taking the Governor’s lead, legislators filed several workforce bills this session. Rep. Derek Grier filed HB 469. The bill, as perfected, modifies provisions relating to the Missouri Works Training Program and changes the name of the program to the Missouri One Start Program. Among other changes, the bill allows the department to contract with other entities, including businesses, industries, other state agencies, and political subdivisions of the state for the purpose of implementing a training project under the program. In addition, upon appropriation of funds to the Missouri One Start Job Development Fund, this bill allows a local education agency to petition the department to utilize the fund to create or improve training facilities, equipment, staff, expertise, programming, and administration. The department also may award moneys from the fund for reimbursement of training project costs and services as it deems necessary. This bill gives the department the discretion to determine the appropriate amount of funds to allocate to a training project from the Missouri One Start Community College New Jobs and Retained Jobs Training funds. This legislation has passed in the House and nearly passed in the Senate.

Rep. Grier also field HB 470 which, as perfected, creates the "Expanded Workforce Access Act of 2019." Beginning January 1, 2020, licensing authorities are required to grant a license to any applicant that has completed the 8th grade, completed a federally-approved apprenticeship program, and passed any necessary examination. The passing score for any examination cannot be higher than the passing score required for any non-apprenticeship license, and there cannot be an examination required for an apprenticeship license if there isn't one required for a non-apprenticeship license. For some types of apprenticeships, the number of working hours required cannot be more than the number of educational hours required for a non-apprenticeship license. This proposal also is moving through the legislative process. It has passed the House and has just passed in committee in the Senate.

Senator Wayne Wallingford has filed SB 184. The bill is substantially similar to HB 469 mentioned above. SB 184 has passed the Senate and is awaiting a committee hearing in the House. It looks like HB 469 will get to the Governor’s desk on this subject matter.

Senator Eric Burlison also has filed workforce legislation. Senate bill 318 is identical to HB 470 talked about above and is its companion bill. SB 318 sits on the informal calendar in the Senate. The lack of activity on this bill shows that HB 470 will be the vehicle for these proposed workforce development changes.

With these changes set up for passage and other proposals, like the A+ Program changes below, the 2019 session should provide some new workforce tools for employers and employees alike.

A+ SCHOOLS PROGRAM HOPEFULLY TO SEE CHANGES

The Builders’ Association has enjoyed seeing such a concerted effort in state government to positively effect workforce development throughout Missouri. Your association has been working with Senator Lauren Arthur to make changes to Missouri’s A+ Schools Program to allow high school students the opportunity to further utilize the program. This will assist in our efforts to build construction industry partnerships with Kansas City area school districts.

SB 205, filed by Senator Arthur, and as amended, modifies the A+ Schools program by adding a requirement that high schools in the program shall demonstrate a commitment to ensure that all students earn credits towards any type of college degree while in high school. The Department of Higher Education shall 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.

Currently, to be eligible for the program, a student must have attended a high school in Missouri for at least three years prior to graduation. This act provides that the student must have attended a high school in the state for at least two years.

The Department shall, under this act, distribute reimbursements first to community college or vocational or technical school students, then to any dual-credit or dual-enrollment students, on the basis of financial need.

Other similar bills have been filed in the House. Representative Ann Kelley filed HB 221 and Representative Noel Shull filed HB 454. Both of these proposals expand the A+ program to students earning specified college credit in high school. Eligible high school students may receive A+ reimbursement for the cost of tuition, books, and fees for any dual-credit or dual-enrollment course offered in association with a public community college or vocational or technical school. The bill also changes the eligibility requirement for the A+ program by reducing the requirement that a student attend high school in Missouri from three years to two years.

Also filed were HB 498 (Rep. Kevin Windham) and HB 732 (Rep. Don Mayhew). These bills are different from the bills above. Currently, A+ funding disbursements to colleges take place after other sources of funding; federal, private, or other state sources. These bills require that A+ reimbursement be made before any other sources are applied toward educational costs.

Budget issues are a concern this session. Changes to the A+ Program as addressed above, particularly in SB 205, will require extra funding. Estimates state the changes will cost up to $17 million. With such a large fiscal note, it will be hard for this to pass this year as written. As an alternate plan, staff has suggested to Senator Arthur that she place in new language to just provide for authorization of these changes and make it subject to appropriation later. This would allow us to go in next year and work with our friends on the appropriation committees to put some funding in the budget.

Staff will continue working on this important proposal and will hopefully have some new language placed in law soon.

OTHER BILLS OF INTEREST

Right-To-Work: Three Senate bills and one House bill has been filed this session that again propose to make Missouri a Right-To-Work state. Last August, statewide voters overwhelmingly overturned the state’s Right-To Work law signed into law by then-Governor Eric Greitens. Right-To-Work laws prevent unions from requiring employees to pay union dues even if those employees don't want to be part of the union. With the issue decided by Missouri voters, legislators have left these bills alone this year. HB 259 was filed by Representative Jered Taylor. SB 63 and SJR 30 were filed by Senator Eric Burlison. SB 240 was filed by Senator Bill White.

Prevailing Wage: Last year, the Missouri General Assembly passed legislation that significantly altered the state’s prevailing wage law. The changes were made in HB 1729. With the new legislation passed, prevailing wage as an issue was taken off the table for now. Senator Bill White from southwest Missouri filed a bill this year anyway to further change the prevailing wage law. SB 239 permits the governing body of any political subdivision to elect to not be subject to the prevailing wage requirements by passing an ordinance, order, or resolution to that effect. Upon passing such an ordinance, order, or resolution, the governing body shall notify the Department of Labor and Industrial Relations. This bill was referred to committee in early February and has not had a hearing. We do not see it going anywhere this year.

Prompt Pay: HB 91, filed again this year by Rep. Alan Green (D-St. Louis), shortens the time for payment. Specifically, the bill provides that when a contractor performs according to the provisions of a contract, the owner or owner's representative shall pay the contractor within 15 days of receipt of any payment request based upon work completed or service provided under the contract. A subcontractor who has performed according to the provisions of a subcontract with a contractor or another subcontractor shall be paid within 10 days of receipt by the contractor or other subcontractor of any periodic or final payment. Payments may be withheld under certain specified conditions. In any action to enforce a claim under this bill, the prevailing party may recover interest and reasonable attorney fees. The provisions of this bill do not apply to improvements to real property of 12 or fewer residential units, or to contracts entered into prior to August 28, 2019. This bill has not been assigned to a committee in the house and chances are that it will not be assigned by session’s end.



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.