AIM Opposes $45 million Tax Increase on Missouri EMPLOYERS

This week, the Senate Small Business, Insurance and Industry Committee, chaired by Senator Scott Rupp (R-St. Charles), voted “do pass” legislation that would increase the surcharge paid by employers into Missouri’s Second Injury Fund (SIF). Senate Bills 420 and 430 both increase the surcharge of Missouri’s SIF to lengthen the fund’s ability to pay claims resulting from non-work related injuries.

Associated Industries of Missouri (AIM) President Ray McCarty has been working with the bills’ sponsor, Senate President Pro Tem Rob Mayer (R-Dexter), and House members to stress opposition to fee increases to maintain a fund that has been broken for years.

“AIM adamantly opposes this tax increase on Missouri employers to support a broken system that currently allows employees to be compensated for non-work related injuries,” said AIM President Ray McCarty. “We support eliminating the fund without any increased surcharges or tax increases. Employers should only have to pay for work-related injuries, which is the original purpose of the Workers’ Compensation Law.”

The Missouri Second Injury Fund was created post World War II to provide additional assistance to wounded veterans who suffered a second injury in the workplace. Over the years, Missouri’s courts and policy-makers have expanded those injuries to allow individuals with non-work related injuries to make claims against the Second Injury Fund. The State Treasurer is the administrator of the fund, but the Attorney General is charged with defending the fund in the best interest of taxpayers. 

AIM distributed a Legislative ALERT to all Senators and House members in regards to Senate Bills 420 & 430 and House Bill 893, sponsored by Rep. Todd Richardson. The ALERT stressed AIM opposition to the tax increase and urged the policy-makers’ support of any reforms without a cost increase to Missouri business.

AIM President McCarty finished, “This year, the buzz words around the Capitol are ‘job-creation.’ Supporting a tax increase is counter-productive to the goal of helping business and supporting job growth and retention.”

House Completes work on budget

This week, the House approved all budget bills totaling $23.2 billion, and sent them to the Senate for consideration.  Debate erupted in the House surrounding an amendment offered by Rep. Jamilah Nasheed (D-St. Louis) to strip $500,000 from the budget related to the Governor’s air travel and send that money to K-12 education to address school drop-outs.  The amendment was supported by Budget Chairman Ryan Silvey (R-Kansas City) and was approved 118 – 37.

census forces congressional representative out of job

The House Redistricting Committee met this week to discuss the first attempt at the new lines for Congressional districts and the State House and Senate districts. Representative John Diehl, who also chairs the House Rules Committee introduced new state lines this week that put Congressman Russ Carnahan and William Lacy Clay in the same district.

Senate debates tax credit reform to great length

This week the Senate took up for Perfection Senate Bill 280 sponsored by Sen. Purgason (R-Howell).  Sen. Purgason offered substitute language which differs from the Committee’s original recommendation in that it changes the title of the bill to relating to tax incentives and:

1)      Removes Section 147.010 (capping and phase-out the corporate franchise tax) from this bill;

2)     Removes the provisions reducing tax credits under the Residential Treatment Agency tax credit program from fifty percent to thirty-five percent;

3)     Removes the provisions repealing the wine and grape producer tax credit and replaces them with provisions that cap the program at $200,000 per year and prohibit the authorization of credits after August 28, 2014;

4)     Adds a provision to the transition rule for Historic Preservation Tax Credits requiring applicants to notify the department of changes in ownership of subject property;

5)     Replaces language contained in the compete Missouri program which would have prohibited the authorization of tax credits under the existing six programs with language that would prohibit approval of new projects under such programs;

6)     Modifies the recapture language contained in the low-income housing tax credit provisions;

7)     Removes the transfer charge provisions contained in various social/contribution tax credits;

8)     Eliminates per taxpayer limits on tax credits for social/contribution tax credits;

9)     Social/Contribution tax credits will now be equal to fifty percent for up to the first one thousand dollars donated or contributed and thirty-five percent for any amount over one thousand dollars; and

10) Prohibits more than five million dollars in Brownfield tax credits from being authorized each fiscal year for projects which receive benefits under the Distressed Areas Land Assemblage Program.

The substitute removed the two year sunset of: the Examination Fee Tax offset; the Missouri Health Insurance Pool Tax offset; and the Missouri Life and Health Insurance Guaranty Tax offset.

The full Senate debated this bill for three hours and then the bill was laid over on the Perfection Calendar. Before the legislation however, the Senate also debated Senate Bill 203 (Sen. Schmitt, R-St. Louis) that would provide a tax credit for attracting major sporting events to the state. In total, the Senate spent roughly five hours of debate on tax credits.

House passes transparency measures

The House took up and gave final approval to House Bill 475.  HCS HB 475, sponsored by 
Representative Doug Funderburk, changes the laws regarding health care quality data 
standardization and transparency and establishes criteria for programs of insurers to compare
 the quality and cost efficiency of health care providers.  An amendment was offered by 
Representative Caleb Jones and adopted. The amendment changes the date health plans must 
be compliant from August 28, 2011 to January 1, 2012.  Supporters applauded the transparency 
and consumer protections.  Although we have no position on this bill, AIM has a longstanding 
position in favor of transparency as long as the transparency provisions apply throughout the 
entire health care and insurance industries. Opponents expressed concerns relating to the cost 
of the bill given the current budget crisis.  The House then voted 144-11.  This legislation has 
been reported to the Senate and First Read.  

HOUSE COMMITTEE APPROVES MEASURE TO COMPLY WITH FEDERAL HEALTH CARE LAW

On March 31, the House Health Insurance Policy Committee held a vote to reconsider their original adoption of House Bill 609 sponsored by Rep. Molendorp (R) for placement upon the Federal Mandate Calendar.  This bill establishes the Show-Me Health Insurance Exchange.  The new language establishes an exchange for individuals and small business to purchase health insurance.  The bill also contains language regarding exclusion of supplemental policies.  Federal funding is provided for the first year of the exchange and health insurance issuers are assessed a fee thereafter for administrative, capital costs and expenses. 

The committee voted the bill “do pass” with a federal mandate recommendation by a vote of 8 to 0.

AIM’S MANUFACTURING JOBS ACT MOVES THROUGH HOUSE RULES COMMITTEE AND NOW TO HOUSE FLOOR

This week the House Rules Committee voted to pass House Bill 264 sponsored by Rep. Nolte (R-Gladstone). This bill changes the laws regarding the Manufacturing Jobs Act which provides incentives for qualified manufacturing companies and qualified suppliers that create or retain Missouri jobs. Currently, under the act, a "qualified manufacturing company" is defined as a business with a National American Industry Classification System (NAICS) code of 33611 (automotive manufacturing).  A business with this code is allowed, under certain conditions, to retain 100% of the withholding taxes from full-time jobs at the manufacturing facility for 10 years if it manufactures a new product.  The bill revises the definition of "qualified manufacturing company" by  removing the NAICS code of 33611 and specifies that, beginning January 1, 2012, a business without a NAICS code of 33611 is allowed, under specified conditions, to retain 50% of the  withholding taxes from full-time jobs at a facility for 10 years if it manufactures a new product.

SENATE COMMITTEE CONSIDERS FIXES TO MISSOURI MINIMUM WAGE LAW

The Senate Committee on Small Business, Industry and Industrial Relations held a 
hearing on House Bill 61 sponsored by Rep. Nolte (R-Clay). The bill prohibits the 
Missouri minimum wage from exceeding the federal minimum wage and specifies 
that every employer must pay each employee who receives compensation in the form 
of gratuities a wage of $3.63 per hour unless otherwise provided by law. Testifying in 
support were Associated Industries of Missouri, NFIB, Missouri Restaurant Association, 
Missouri Chamber of Commerce, Associated Builders and Contractors and St. Louis RCGA. 
Testifying in opposition were the Baptist Convention, two small business owners, a 
restaurant server, Missouri Catholic Conference and Service Employees International Union.