Medicaid – On May 14, the Missouri General Assembly adjourned for the year without passing the extension of the federal reimbursement allowance (FRA) tax which is a voluntary medical provider tax levied to draw down additional federal matching funds. The FRA tax generates approximately $1.6 billion which is used to draw down an addition $2.8 billion in federal Medicaid dollars. These funds are used in the Medicaid lines of the state appropriations and without the extension of the FRA tax, the budget will not be balanced as passed by the legislature for fiscal year 2022 that begins on July 1. Many expect Governor Mike Parson to call the legislature into special session to address the FRA tax issue, however this may only occur if the Senate Republican leadership can find a path to final passage. During the 2021 regular session, a couple of anti-abortion amendments were added that could jeopardize the federal matching funds. The leadership has been unable to decouple the issues and the Governor is unwilling to call legislators back to Jefferson City until they have a “deal” to allow the bill to pass that is acceptable to all parties involved. Missouri currently has more than $2 billion in unobligated funds on its balance sheet, which is more funds than any time in the state’s history. However, Governor Parson has suggested that if the FRA tax extension is not passed by the end of June, he will be forced to place spending “withholds” on the fiscal year 2022 budget until lawmakers can either find common ground or reshape a balanced budget. We expect more to come on this topic in the weeks ahead.
Re-Districting – Due to delayed U.S Census data, the Missouri General Assembly was unable to fulfil its constitutional duty of redrawing the U.S. Congressional boundaries for the state’s eight districts. The state is expecting to receive new census data in September, and legislators will likely be called into session as soon as the data becomes available. Since the announcement by U.S. Senator Roy Blunt (R-MO) that he will not be seeking re-election in 2022, this has caused many Missouri elected officials to consider a run for higher office. Included in this list are four of Missouri’s eight members of Congress. Rep. Vicky Hartzler (R-Dist. 4), Rep. Billy Long (R-Dist. 7), Rep. Jason Smith (R-Dist.8), and Rep. Ann Wagner (R-Dist. 2) each have been suggested as potential candidates for the Republican nomination. Missouri’s redistricting process will likely pick up some interest by political activists and consultants in the weeks ahead as the field of candidates for U.S. Senate continue to take shape.
Other Issues – Missouri lawmakers have publicly made additional requests to Governor Parson for potential topics to be addressed during a special session but at this time it does not appear the Governor has an interest. Those topics include addressing violent crime and the Kansas City police department, agricultural tax incentives, eminent domain, and election reform.
DNR DIRECTOR CAROL COMER DIES
The Department of Natural Resources Director, Carol Comer, died earlier this week, it was announced Wednesday. Comer came to Missouri to lead DNR in 2017 after serving as Commissioner of the Indiana Department of Environmental Management. Governor Mike Parson was among many state officials releasing statements about Comer, saying, “We are greatly saddened and heartbroken to hear of Director Comer’s passing . . . Carol brought expertise, energy, and an enthusiastic smile to every project, and she will be deeply missed among our cabinet and in the thousands of lives that she touched. She was a dedicated public servant who loved this state, its people, and the great outdoors. We could not have asked for a better advocate for Missouri’s natural resources”.
GOVERNOR SIGNS PDMP BILL TO TRACK PRESCRIPTIONS
On June 7, Governor Mike Parson signed Senate Bill 63 into law, which creates a statewide prescription drug monitoring program in the state of Missouri. Sen. Holly Rehder (R-Scott City) sponsored the bill, representing legislation she has proposed for nearly a decade. SB 63 establishes the Joint Oversight Task Force of Prescription Drug Monitoring, responsible for collecting and maintaining prescriptions and distribution of prescribed controlled substances to patients within the state. The legislation will assist health care professionals in better monitoring the dispensation of opioids and other prescribed controlled substances to their patients. Similar statewide prescription drug monitoring programs have been adopted in every other state in the country to address the opioid epidemic occurring across the U.S. Patient information is protected health information under the Health Insurance Portability and Accountability Act (HIPAA) and will continue to be maintained as such in accordance with federal law. Governor Parson thanked Sen. Rehder and Rep. Travis Smith (R-Dora) for their work on the legislation. “SB 63 will help provide necessary information to health care professionals and empower them to make decisions that better serve their patients and assist in fighting the opioid epidemic in Missouri,” the Governor said.
WAYFAIR – AN EXAMINATION OF SENATE BILL 153
On June 9, Ray McCarty and Chuck Pierce of Associated Industries of Missouri took a deep dive into the details of the recently passed Senate Bill 153, known as the Wayfair bill, discussing the legislation that will establish economic nexus and collection of sales taxes on internet purchases in Missouri and enact many other tax provisions. Sen. Andrew Koenig (R-Manchester) and Rep. J. Eggleston (R-Maysville) were the bill’s major players. Sen. Koenig has continually worked on tax issues in the past. Among the many different issues enacted in SB 153:
Economic Nexus Defined – The bill applies to a seller of $100,000 in gross receipts from taxable sales; calculated on rolling 12-month basis at end of each calendar quarter; once nexus is established, seller is required to collect and remit use tax for at least 12 months.
Marketplace Facilitators Defined – Facilitates a retail sale by a marketplace seller by listing or advertising for sale by the marketplace seller, in any forum, tangible personal property or services that are subject to tax under this chapter; and, Either directly or indirectly through agreements or arrangements with third parties collects payment from the purchaser and transmits all or part of the payment to the marketplace seller; and Provisions follow guidelines in Multi-State Tax Commission recommendations.
Tax Administration – The Department of Revenue will establish a use tax map; and sellers will be protected from penalties if they are a result of errors in the DOR database.
Changes tax filing threshold levels: Monthly changed to $500 per calendar month for prior year; Quarterly changed to more than $200 per quarter to less than $500 per month; Annual filer increased to less than $200 per quarter.
Local Use Tax Provisions – The bill makes changes to ballot language; Establishes formula for use tax distribution in St. Louis County; Requires all jurisdictions with an existing local use tax to publish a notice by November 2021 that certain purchases will become subject to taxation. (The jurisdictions must tell their citizens that they’re going to pay taxes on internet sales.)
Collection of Wayfair tax begins in January 2023. The bill reduces the income tax rate by 0.10 percent in 2024; Suspends SB 509 cut for 2024 but adds two additional 0.10 percent reductions when triggers are met; Establishes the Missouri Working Family Tax Credit. Credit is non-refundable and tied to Federal Earned Income Tax Credit. Begins at 10 percent and increases to 20 percent based on same triggers as tax cuts.
Video service provider fees (local governments charge telecom companies and cable companies to bury cable in rights-of-way)
The bill provides a phased-in reduction of franchise fees from 2023 to 2027; Changes how the fee is collected; Establishes a task force to review management of local government right of way.
Community Improvement District and Tax Increment Financing changes
Changes to petition for formation; Creates reporting requirement to State Auditor; Establishes procedures for districts with nobody living in district; Establishes bidding requirements. TIF Changes: New definition of “blight”; Study requirements; Prohibits projects in flood plains; Adjusts formula funding.
Other tax changes
Property Tax assessment on historic aircraft; Deductibility of CARES act credits on individual returns; Allows store front consumer-based retail trade establishments in third- or fourth-class counties to be included in Missouri Works program.
Effective Dates of SB 153 if signed by Gov. Parson:
Wayfair Provisions – Jan. 1, 2023
CARES act credits – emergency clause
Video Service Provider fees – Aug. 28, 2023
All other provisions – Aug. 28, 2021
OMNIBUS TAX BILL – SENATE BILL 226 (Koenig, R-Manchester) (also passed)
Among this bill’s provisions: Exemption from local property taxes if a business is closed due to local health order; State deduction for federally disallowed business expenses of licensed medical marijuana businesses; Changes to sales tax filing thresholds (same as in SB 153); Sales tax retention for entertainment venues; Sales tax exemption for certain durable medical devices; Clarifies that a retailer that loses inventory due to theft or spoilage is not required to pay sales tax on the lost items.
GOVERNOR SIGNS BILL LIMITING AG FACILITIES INSPECTIONS
On Thursday, Governor Mike Parson signed House Bill 574 (Haden, R-Mexico). The bill specifies that the Missouri Department of Agriculture, the Missouri Department of Natural Resources, the county sheriff for the county in which the facility is located, the U.S. Department of Agriculture, and any other federal or Missouri state agency with statutory or regulatory authority shall have exclusive authority to inspect the grounds or facilities in Missouri for producing eggs, milk, or other dairy products, the raising of livestock or poultry. The bill shall not apply to facilities used for raising dogs or other animals that are not used to produce any food product. No person or entity shall inspect such grounds or facilities to enforce or carry out the laws of Missouri or any other state unless specifically requested by the owner of the grounds or facilities, or pursuant to a search warrant lawfully issued by a court. The new law shall not apply to: 1. Inspections performed in charter counties or the city of St. Louis; 2. Inspections performed on any further processing component of any production agriculture farm; or 3. Certain searches carried out by Department of Conservation agents and other law enforcement officers.
COVID LIABILITY PROTECTION IN MISSOURI
On June 9, Associated Industries of Missouri guided viewers through Senate Bill 51 & 42 (Luetkemeyer, R-Parkville), the bill establishing limited protection for persons and businesses from COVID liability lawsuits in Missouri. The Missouri House of Representatives passed the bill on the last day of the legislative session, May 14, 2021. The Senate had passed the bill a couple of months earlier. If signed by the Governor, the bill will go into effect Aug. 28, 2021.
Under the bill, there are three types of actions possible:
1) COVID-19 Exposure Action
No person or entity engaged in businesses, services, activities, or accommodations shall be liable in any COVID-19 exposure action, as defined, unless the plaintiff can prove (1) The person or entity engages in recklessness or willful misconduct that caused an actual exposure to COVID-19; and (2) The actual exposure caused personal injury to the plaintiff. Also, no religious organization, as defined, (church, synagogue, mosque) shall be liable in any COVID-19 exposure action, unless the plaintiff can prove intentional misconduct.
A further protection for businesses is to post and maintain signs in a clearly visible location at the entrance of the premises or provides written notice containing the warning notice. (Churches, religious organizations are not required to post or maintain such a sign.)
The sign’s notice says:
“WARNING: Under Missouri law, any individual entering the premises or engaging the services of the business waives all civil liability against the individual or entity for any damages based on inherent risks associated with an exposure or potential exposure to COVID-19, except for recklessness or willful misconduct.”
An important point of the bill: Additionally, nothing in this provision shall require a person or entity to establish a written or published policy addressing the spread of COVID-19, including any policy requiring or mandating vaccination or requiring proof of vaccination.
Statute of Limitation: The bill states COVID-19 exposure action shall not be commenced in any Missouri court later than two years after the date of the actual, alleged, feared, or potential exposure to COVID-19.
2) COVID-19 Medical Liability Action
A health care provider shall not be liable in a COVID-19 medical liability action, unless the plaintiff can prove recklessness or willful misconduct by the health care provider and that the personal injury was caused by such recklessness or willful misconduct.
An elective procedure that is delayed for good cause shall not be considered recklessness or willful misconduct. (Many hospitals postponed or delayed elective procedures during the pandemic.)
Health Care Provider is defined to include physician, hospital, health maintenance organization, ambulatory surgical center, long-term care facility, dentist, registered or licensed practical nurse, optometrist, podiatrist, pharmacists, chiropractor, professional physical therapist, psychologist, etc.
A COVID-19 medical liability action may not be commenced in any Missouri court later than one year after the date of the discovery of the alleged harm, damage, breach, or tort unless tolled for proof of fraud, intentional concealment, or the presence of a foreign body which has no therapeutic or diagnostic purpose of effect.
3) COVID-19 Products Liability Action
No person or entity who designs, manufactures, imports, distributes, labels, packages, leases, sells, or donates a covered product shall be liable in a COVID-19 products liability action, if the person or entity: 1. Does not make the covered product in the ordinary course of business; 2. Does make the covered product in the ordinary course of business and the emergency required the product to be modified during manufacture outside the ordinary course of business, or 3. If the covered product is used differently from its recommended purpose and used in response to the COVID-19 emergency. “Covered product” is defined as a pandemic or epidemic product, drug, biological product or device.
A COVID-19 products liability action shall not be commenced later than two years after the date of the alleged harm, damage, breach, or tory unless tolled for proof of fraude or intentional concealment.
Punitive Damages may be awarded in any COVID-19 related action, but shall not exceed an amount in excess of nine times the amount of compensatory damages.
Application of this Act
All provisions of this act expire four years after the effective date of this act.
The bill creates a new cause of action and replaces any such common law cause of action.
Also, the bill preempts and supersedes any state law related to the recovery for personal injuries covered under a COVID-19 related action unless the provisions of state law impose stricter limits on damages or liability for personal injury. The provisions of this bill shall not expand any liability or limit any defense otherwise available.
SPECIAL INTERIM COMMITTEE ON BROADBAND DEVELOPMENT
The House Special Interim Committee on Broadband Development met Thursday afternoon for an organizational meeting. During committee discussion, Committee Chairman, Louis Riggs (R-Hannibal) informed committee members the intent of the committee is to study current broadband availability in the State of Missouri, and evaluate what steps the state needs to take to expand and implement high speed broadband. Due to the pandemic, there is a critical need for broadband availability in Missouri. The committee’s main goals are to evaluate access, speed, and affordability to provide enhancements to businesses, agriculture, healthcare, education, and workforce development priorities. In an effort to consider all testimony, the committee adopted the motion for remote testimony.
Additionally, the committee heard a presentation from Tim Arbeiter with the MO Department of Economic Development, regarding broadband in Missouri. The Department provided committee members with statistical data comparing the State of Missouri with other states regarding broadband development, availability and speed. To date, the State of Missouri is ranked 32nd and has utilized over $824 million between State and Federal funds for broadband development.
The Department has submitted an application for federal funds through the CARES Act to help with economic resiliency, to help with counties that are most effected by the pandemic and need help with broadband implementation. The Department is waiting for approval before determining what counties will have access to funds. Lastly, the Department informed committee members with current department efforts to provide awareness to Missouri residents of a federal affordability program, to supply up to $50 a month for families in need.
The committee plans to meet once a month between now and December to hear public testimony, consider recommendations, and will supply a report with appropriation requests by the end of 2021. The committee is looking at July 19 or 20th for the next meeting.