AIM for Good Business Issue Articles
Ray McCarty, 3/10/2011
LEGISLATIVE UPDATE MARCH 10, 2011
Associated Industries of Missouri continues to represent Missouri businesses in the debate of issues that are important to employers in the Missouri Capitol. Here are some highlights from action this week:
HOT OFF THE PRESS: EMPLOYMENT LAW REFORM PASSES SENATE
The Missouri Senate passed an employment law reform bill today that brings sanity to Missouri’s discrimination and whistle blower laws. If approved by the House and Governor Nixon, the legislation would make Missouri’s employment law more uniform with the provisions of the federal Human Rights Act. Senate Bill 188 removes personal liability for supervisors, requires that discrimination be “a motivating factor” in the decision to dismiss an employee when an employee claims discrimination, and provides that a dismissed employee that claims whistle blower status must be “blowing the whistle” on an actual illegal activity of the employer (not just something he/she believes is illegal). The legislation has been promoted by Associated Industries of Missouri for several years and we congratulate Sen. Brad Lager and the Missouri Senate for passing this historic legislation. The Missouri House has already passed a very similar bill, and will now consider the Senate bill.
CLARIFICATION OF THE MANUFACTURING INPUTS SALES/USE TAX EXEMPTION
In 2007, AIM drafted and was successful in passing an exemption from sales and use taxes for all utilities, machinery, equipment, chemicals, and other items used in manufacturing, mining, producing, processing and compounding of any product. The exemption was intended to be broadly interpreted and the initial interpretation of the Missouri Department of Revenue was that the exemption covered all inputs in these processes. Since then, the Department has issued letter rulings and taken positions in audits that limit the application of the exemption. House Bill 740, sponsored by Representative Doug Funderburk, would clarify that the exemption should also apply to testing, installing, calibrating, maintaining, and repairing such equipment. As the original group that worked for two years to pass this exemption, AIM strongly supports this legislation.
FRANCHISE TAX CUT
Senate Bill 19, sponsored by Senator Eric Schmitt and handled in the House by Representative Jerry Nolte, was heard in a House Committee this week. AIM strongly supports the bill that would cap the franchise tax liability for companies at 2010 levels and phase-out the tax over five years. The bill was approved by the Committee and will now move to the House floor for debate.
SECOND INJURY FUND
Associated Industries of Missouri met this week with other business leaders about the future of the Second Injury Fund. “AIM members do not support increasing the surcharge that is used to fund claims against the Second Injury Fund, but will support reforms to the Fund that limit payments from the Fund,” said Ray McCarty, President and CEO of AIM. At the meeting, one business group suggested allowing the Missouri Department of Labor several years to repay loans from an administrative fund to pay claims as a short term solution to the insolvency of the Second Injury Fund. While borrowing from the administrative fund for cash flow purposes is allowed under current law, extending the length of time to a number of years would create a debt that would be due from the Second Injury Fund to the administrative fund. Creating a longer term debt in the Second Injury Fund only lends credibility to the argument that employers are responsible for payment of claims from the Fund, and lays the groundwork for an increase in the surcharge – a tax increase on all Missouri employers. AIM opposes any plan that increases taxes on employers, especially if that tax increase will be used to pay claims for non-work related injuries. “AIM supports reforms to the system, including limiting claims to only work-related injuries, eliminating the Second Injury Fund altogether, or simply allowing the Fund to remain insolvent, eliminating the incentive for creative attorneys to sue the Fund,” said McCarty.
AIM continues to work with senators and other business leaders to find language that is acceptable that will make sure “occupational disease” continues to be covered under the Workers’ Compensation system in Missouri. A judge recently opined that occupational diseases were not covered under workers’ compensation unless the disease was the result of an injury in the workplace. Most occupational diseases develop over time and are not the result of a particular injury.
During debate of the bill (Senate Bill 8) in the Senate, several senators have expressed concern over occupational diseases that result from worker exposure to toxic materials. We continue to negotiate with senators to find acceptable resolution to this issue; however, some senators are holding fast to language that would increase workers’ compensation premiums. Such language is unacceptable to the business community. We ask senators to simply fix the present problem by clarifying occupational diseases are covered within the workers compensation system.
“ANY WILLING PROVIDER”
A proposal, sponsored by Senator Rob Schaaf, a doctor, and backed primarily by doctors, that would allow any doctor to participate in any insurance carrier’s program, was heard this week in a Senate committee. AIM President/CEO Ray McCarty testified against the bill, Senate Bill 111, because it would eliminate any incentive for doctors to negotiate rates for health care with insurance companies. “Most employees are insured through a plan that is provided by employers,” said McCarty. “Because Missouri employers pay a large portion of the premiums for employees’ insurance, we must oppose proposals that increase costs, including the ‘any willing provider’ provisions of this bill.” No action was taken by the committee.
NUCLEAR ENERGY SURCHARGE
A proposal that would assess a charge against power companies that generate electricity from nuclear energy was opposed this week by Associated Industries of Missouri. The surcharge would be passed on to rate payers through their utility bills and would be used to provide additional money for school districts that are located within 10 miles of a nuclear power plant. “AIM opposes any proposal that would increase utility rates paid by Missouri employers,” said McCarty. AIM was the only statewide employer advocacy group to take a stand on the bill at the hearing.
PRESCRIPTIONS REQUIRED FOR PSEUDOEPHEDRINE
AIM opposed well-intentioned legislation that would have created a hardship for individuals and retailers by requiring a prescription for pseudoephedrine. The bill was filed to help stem the manufacture of methamphetamine and is heavily supported by law enforcement. But AIM pointed out to the committee that a previous measure that requires an on-line registration system to be used by pharmacists when customers purchase pseudoephedrine products had not been allowed to work. The registration system, funded by the pharmaceutical industry has only been in effect for two months. “It is our position that this registration system should be allowed to fully work before creating additional burdens on consumers and retailers,” said McCarty.
EARLY SITE PERMIT FOR A SECOND MISSOURI NUCLEAR FACILITY
A hearing was held this week on four bills that would allow an early site permit for a second nuclear facility in Missouri. The bills contain various provisions that attempt to balance the needs of utilities to recover costs associated with the permit with cost controls and oversight provisions that are favored by industrial energy users.
“COMPETE MISSOURI” & “COMPETE MISSOURI TRAINING”
Legislation supported by Governor Jay Nixon and many legislative leaders would combine six economic development programs and three training programs into two programs was debated this week in the House. AIM supports the legislation that would standardize definitions and program requirements and combine limits on tax credits provided by the programs. The measure would allow Missouri to provide benefits to companies up front, rather than requiring the company to wait for years before they may enjoy the benefits of the credit – a move that is necessary to allow Missouri to compete for expansion of Missouri facilities and new employers. Combination of the training programs would also provide greater flexibility and make the programs more useful for Missouri employers.