Ann Kelley’s Capitol Connection

August 24, 2023

What’s Going on in the Capitol

Dozens of new laws are set to take effect at the end of August, with the work of the Missouri Legislature in the 2023 legislative session finally coming to fruition. Several new laws and provisions are set to become law on August 28, ranging from tax relief for senior citizens, extending healthcare coverages, removing financial barriers in the adoption process, combatting the opioid epidemic, simplifying the state’s vehicle sales tax, increasing public safety, and preparing Missouri’s workforce for the future. Here is a look at some of the bills passed this session.

Attracting Economic Activity to Missouri

SB 94 was passed by the Missouri legislature to attract entertainment acts and companies to the Show-Me State in an effort to generate revenue and ensure that Missouri is getting a piece of the pie when it comes to movies, TV, music, and theater acts looking for locations.

One portion of SB 94, dubbed the “Show MO Act,” will establish tax credits for film projects starting at 20 percent of specified costs, with opportunities for additional credits as other criteria are met. The bill would allow film productions additional credits when at least half of filming is done in Missouri; at least 15% takes place in rural or blighted areas; at least three of a project’s departments hire a Missourian ready to advance in their field; or the project positively portrays the state or something in it. The film tax incentives would expire at the end of 2029 unless the legislature votes to extend them.

Another piece of the bill deals with the music industry and its search for rehearsal spaces and tour expenses. This piece authorizes tax credits for 30% of tour or rehearsal expenses, capped at $1 million if expenses are less than $4 million. No taxpayer could get a credit greater than $2 million for expenses between $4 and $8 million; nor greater than $3 million for expenses exceeding $8 million. Combined credits are limited to $8 million per fiscal year. The tour and rehearsal credits would expire at the end of 2030 unless extended.

Simplifying Vehicle Sale Tax

SB 398 simply states that licensed motor vehicle dealers would collect and remit sales tax on all motor vehicles sold. Vehicle sales tax is the only sales tax not collected at the point of sale, so this change puts Missouri in line with the other 47 states who require dealerships to collect the vehicle sales tax. The way the process will work is that when you go into the dealership, you will do all of your paperwork. You will leave with a temporary tag, but that will start the ball rolling for the Department of Revenue to issue your plates and you will receive them in the mail.

An Update on the Drought in Missouri

Despite recent widespread rains bringing some much-needed relief, Missouri is still suffering under serious drought conditions. According to the Missouri Drought Assessment Committee, nearly 92% of Missouri is experiencing drought conditions.

While speaking at the Missouri State Fair, Governor Parson, alongside other lawmakers, spoke about the drought, and urged the U.S. House and Senate committees who are in the process of drafting a new federal farm bill to consider the drought conditions facing farmers and producers. The current federal farm bill is set to expire at the end of September, and Congress passes a new version every five years to set the nation’s policy concerning food, farming, conservation, and nutrition programs.

Many farmers started this year with depleted hay reserves due to the drought last year, and the state has worked to provide solutions to ensure emergency hay and water are available for our farmers and producers.

In June, the Governor announced the availability of emergency hay and water through the use of boat ramps at 25 Missouri state parks and 36 Department of Conservation areas are open for farmers to collect water, while nearly 700 acres were made available for haying at 17 state parks.

To date, 13 state parks and historic sites have contracted a total of 537 acres for hay. Four parks still have a total of 140 acres available for haying: Wallace, Route 66 and Bryant Creek state parks, and Battle of Island Mound State Historic Site. In addition, the Department of Transportation is offering special overwidth hauling permits at no charge to help farmers and ranchers move hay.

Livestock producers affected by drought may be able to defer gains on livestock sold to the next tax year or until livestock that were sold are replaced. Provisions in the Internal Revenue Service Tax Code give relief to those affected by weather-related sales of livestock on forms 1033(e) or 451(g). The State of Missouri is coupled with that tax policy, and Missourians can make similar claims on the Schedule F form for state tax purposes. Producers should first consult their financial advisors to see if these provisions would be beneficial for their specific operations.

Veto Session Just Around the Corner

Every year, the Missouri Legislature passes new laws with the intent of bettering our state, improving programs, and cutting red tape. The legislature’s power to pass new laws comes with checks and balances, one of which is the power granted to the executive branch to veto legislation passed by the Missouri General Assembly. In the event of a veto by the Governor, Missouri’s lawmakers get the chance override those vetoes, if they so choose, each September.

The Governor vetoed 201 line-item vetoes to the FY 2024 operating budget, adding up to $555.3 million. A few of the items vetoed include:

•$28 million for some Interstate 44 improvements

•$25 million of $50 million assigned for Close the Gap grants to help families with tutoring, summer learning and other educational opportunities

•$15 million of $30 million designated to help victims of crime

•$15 million for a University of Missouri program that trains K-12 public schools about prosocial education

•$6.8 million in rural health behavioral crisis center expansions

•$5 million of $10 million proposed for autism research

•$3.7 million of $13.1 million in prevention and intervention to help at-risk youth

•$2.5 million to study turning Highway 36 into Interstate 72

•$2 million to help with National Guard recruitment

•$1.8 million of $3.3 million designated for an electromagnetic brain treatment to help veterans and first responders with depression, post-traumatic stress disorder, and substance use disorder

Governor Parson also vetoed one legislative bill, SB 189, which deals with public safety and crime prevention measures, many of which had broad support from both the legislature and the executive branch, such as Blair's Law, Max's Law, increased penalties for violent repeat offenders and gun crimes, and strengthening the public defender system.

The Governor cited the following provisions included in the bill as the reasons for his decision to veto:

· Section 610.140 - could allow criminals convicted of sexual offenses, including sexual exploitation of a minor or the promotion of child pornography, to have their records expunged and be removed from the sex offender registry. The provisions also include changes to how expungement requests are evaluated but fails to detail specific standards of proof for the court to consider.

· Section 650.058 - expands the qualifications for restitution from those who are exonerated based on DNA evidence to those who were later determined to be innocent through a habeas corpus proceeding and those whose convictions are set aside per a prosecutor’s motion to vacate the judgment. The change also increases the restitution amount by more than 75 percent for eligible individuals. This provision requires the State to pay the expanded and increased restitution requirements; however, Governor Parson does not believe every taxpayer across the State should be responsible for prosecutorial errors made at the local level.

In vetoing SB 189, Parson said the “unintended consequences unfortunately outweigh the good,” and despite the fact that improving public safety is a cornerstone of his administration, he could not sign the bill with the provisions as they are were written.

This year, the legislature’s annual veto session is scheduled for September 13, and Missouri lawmakers will have the decision to make as to whether to override those vetoes.