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Lobbyist Report – 2018

ACEC Missouri
WEEKLY LOBBYIST REPORT
February 19, 2018

 

WEEKLY OVERVIEW

For the second week in a row, the issue of electric ratemaking reform dominated the Missouri Senate. Senate decorum and civility was virtually non-existent last week as yet another filibuster by opponents of a bill that is being pushed by the three electric company monopolies. The bill (SB 564) proposes numerous changes to the ratemaking process administered by the Public Service Commission. As several senators exchanged insults and raised voices, Senator Gary Romine (R-Farmington), the leader of the opposition, announced that a pathway for additional changes to the bill had been cleared with House and Senate leadership. The announcement immediately halted further debate and paved the way for the Senate to Third Read and pass SB 564 and send it to the House for consideration. Once the logjam on that measure broke, the Senate proceeded to Third Read several other Senate bills that had been awaiting action for the past couple of weeks.

 

IN THE NEWS

  • Newspapers reported that investigators associated with St. Louis Circuit Attorney Kim Gardner’s investigation into allegations against Governor Eric Greitens have visited at least two legislative offices in the state capitol last week. Reports are that investigators stopped by Senator Maria Chappelle-Nadal’s office (D-St. Louis) but that she was out of the office. They also talked with State Representative Nate Walker (R-Kirksville) who told the press that the interrogation went beyond discussions of the Governor’s infidelity. The investigation launched last month surrounded a claim that Greitens had taken a non-consensual picture of the woman involved in the affair and threatened to release the picture if she talked about the affair.
  • The Missouri Municipal League held its annual legislative conference in Jefferson City. Among the top priorities of the League is an effort to increase fuel taxes to fund Missouri’s transportation needs. Rep. Kevin Corlew (R-Kansas City) told the audience that he believes there are enough votes in the House to send a gas and diesel tax increase measure to the Senate for consideration. Rep. Corlew was Chairman of the 21st Century Transportation Task Force that held numerous meetings over the interim months and recommended that the General Assembly pass a measure to allow voters to vote on a ten-cent gasoline tax and a twelve-cent diesel fuel tax increase.  Such a measure, if approved by voters would result in an additional $430 million annually to meet transportation needs.
  • The Springfield News Leader ran a story about Spence Jackson, the communications director and right-hand man of former Missouri State Auditor Tom Schweich. Spence committed suicide one month after his boss and friend Auditor Schweich took his own life. The story focused on how Schweich’s campaign treasurer dispersed funds from the campaign account. Refunds were made to various campaign contributors totaling hundreds of thousands of dollars. Mid 2016, the paperwork was filed with the Missouri Ethics Commission to dissolve the campaign fund. The final financial activity recorded a charitable donation of $34,551.50 made payable to the Missouri State University Spence Jackson Memorial Scholarship.
  • Charles lawmaker Phil Christofanelli sponsored HB 1858 which would require the Missouri Department of Revenue to create an interactive map that will show the boundaries of the state’s more than 2,200 special taxing districts. Christofanelli stated that at the least shoppers should know where the taxes are being levied. Special taxing districts are generally created by local governments or neighborhood groups to fund specific services and improvements, such as additional security patrols and fire protection. TIF districts can divert a portion of sales and property taxes to pay for development costs. The special taxing districts can push up sales taxes considerably. The East-West Gateway Council of Governments reported in 2016 that there were 158 Community Improvement Districts in the city of St. Louis and in Franklin, Jefferson, St. Charles and St. Louis counties in Missouri.

 

SENATE FLOOR ACTION

RATE CASE MODERNIZATION ACT:  The Senate Third Read and Passed SS#4 SB 564, sponsored by Sen. Ed Emery (R-Lamar).  This act modifies provisions relating to public utilities.  Its main provisions include:

  • Rate Adjustments Outside of General Rate Proceedings
  • Complaint Procedure
  • Property Tax and Certain O&M Expense Deferral
  • Plant-In-Service Accounting
  • 5-Year Capital Investment Plan
  • Discounted Electric Rates
  • Contractor Pre-Qualification Process
  • Rate Base Increase Regulatory Liability and Limitations

This bill was Third Read and Passed by a vote of 25 yeas and 6 noes. This bill has been reported to the House and First Read.

 

HOUSE FLOOR ACTION

PSC APPEALS PROCESS:  The House Third Read and Passed with 140 ayes and 2 noes HB 1691, sponsored by Rep. Rocky Miller (R-Lake Ozark).  This bill requires appellants of Public Service Commission rules or orders to file their appeals with the appellate court with competent jurisdiction, and then provides that notices of appeal must then be served upon the commission and all interested parties pursuant to Section 386.515, RSMo.  Currently, appeals are filed with the commission and later forwarded to the proper appellate court.

The bill has been reported to the Senate and First Read.

 

COMMITTEE ACTION LAST WEEK

TAX REFORM: The Senate Ways and Means Committee met in Executive Session and voted SCS SB 617, 611 & 667 sponsored by Senator Bill Eigel (R-St. Charles) Do Pass by a vote of 5 yeas and 2 noes.

The SCS modifies several provisions relating to taxation including:

  • Lowers the income tax rate to 5.25% for all taxable income over $8,000. In each subsequent calendar year, the rates of tax for each remaining income bracket shall be reduced by 0.1% if net general revenue collections in the fiscal year exceed the net general revenue collections from any of the three previous fiscal years by $150M.
  • Establishes the Earned Income Tax Credit, a tax credit to be applied to a taxpayer’s Missouri income tax liability after all reductions for other credits for which the taxpayer is eligible have been applied.
  • Reduces the corporate tax rate from 6.25% to 4.25% and removes the deductibility of federal taxes paid.
  • Maintains the allocable share corporate income tax provisions that were in SB 939.
  • Increases the State’s motor fuel tax by 2 cents a gallon for three years for a total of a 6-cent increase.
  • Implements the streamlined sales and use tax agreement.

This bill is currently on the Senate Calendar – Senate Bills for Perfection.

EMERGENCY BRIDGE REPAIR AND REPLACEMENT FUND:  The House Transportation Committee conducted a hearing on HB 2153, sponsored by Rep. Bart Korman (R-High Hill). This bill creates the “Emergency Bridge Repair and Replacement Fund,” which consists of $100 million per year appropriated from General Revenue to the Department of Transportation for accelerated bridge replacements or immediate repairs to bridges in critical disrepair.

Rep. Korman told the committee that this bill is unique because the general revenue funding may only be used for emergency bridge repair. Speaking in favor of the bill were Mark Rhoads on behalf of ACEC/MO, Lisa LeMaster on behalf of MODOT, and a representative of the Missouri Limestone Association. Mr. Rhoads told the committee that this bill does not solve Missouri’s transportation funding problem, but that represents progress in addressing a critical need. Ms. LeMaster said that there are currently over 400 bridges in endangered conditions with around 80 in critical need of repair. There was no opposition and the committee took no action on the measure.

PREVAILING WAGE:  The House Committee on Economic Development met in executive session to vote “do pass” HB 1729, sponsored by Rep. Jeff Justus (R-Branson). This bill repeals Missouri’s prevailing wage law. Currently, contractors and subcontractors working on public works projects are required to pay employees the prevailing wage for the particular locality in which the project is being completed. This bill changes the law to require contractors and subcontractors to pay employees state or federal minimum wage, whichever is higher.

A substitute was adopted which combined HBs 1729, 1436, and 1621.

ELECTRIC UTILITY RATEMAKING:  The House Utilities Committee conducted a three-hour hearing on HB 2265, sponsored by Rep. T.J. Berry (R-Kearney). Key provisions of the bill include:

  • Provisions relating to decoupling (pertains to Empire District);
  • Surveillance monitoring;
  • Public Service Commission complaint process;
  • Provisions relating to the federal tax reform impact on investor-owned utilities;
  • Provisions relating to plant-in-service accounting relating to depreciation on equipment and plants;
  • PSC authority to authorize pilot projects involving new technologies;
  • Provisions relating new business economic development rates;
  • Rate caps for Ameren, KCP&L and Empire District;
  • Requirements relating to large scale solar investment and solar rebates for consumers;
  • A 5-year sunset with the ability for the PSC to extend the sunset another 5 years.

Speaking in favor of the bill were representatives of the Missouri Energy Development Association, Ameren, KCP&L, Empire District, Jefferson City Chamber of Commerce, Missouri Chamber of Commerce, Missouri for Balanced Energy Future, and Empire Liberty Utilities. Supporters contend that the bill will result in lower and more stable electric rates for consumers, enhance the reliability of service, improve and make more resilient the electric grid, and allow for deployment of rapidly developing technologies. They emphasized that the bill will result in lower rates and that the federal tax benefits would be returned to consumers.  David Woodsmall, Midwest Energy Consumers Group, led the opposition to the bill telling the committee that the bill does not benefit consumers and is one-sided in favor of IOU’s. He told the committee that:

  • The bill removes discretion of the PSC by mandating that they approve filings by utilities;
  • The bill creates a number of deferral mechanisms (increases in property taxes, increases in cyber-security costs, deferral of carrying costs and depreciation associated with increased investment) for utility companies and provides no incentive for the companies to manage costs and permits costs to be passed on to consumers;
  • The bill does not return federal tax breaks to consumers.
  • The three-year moratorium on new rate cases is meaningless because of certain timetables;
  • The rate caps in the bill are compounded annually. If a utility files a rate case in the fifth year, it can get a 16% rate increase in that rate case in year five.

Others testifying in opposition included representatives of Missouri Industrial Energy Consumers, AARP, Consumer Council of Missouri and Praxair. The consumer groups testified that residential customers would bear the brunt of increased rates. The committee took no action on the bill.  Note:  Leadership and key members of the Senate and House are in negotiations on this bill.

CLEAN WATER LAW:  The House Committee on Conservation and Natural Resources met in executive session to vote “do pass” 9-0 HB 1973, sponsored by Rep. John Wiemann (R-O’Fallon). For purposes of the Missouri Clean Water Law, this bill changes the definitions of “discharge,” “water contaminant,” “water contaminant source,” and “waters of the state.” Currently, it is unlawful for any person to place, cause, or permit to be placed any water contaminant in a location where it is reasonably certain to cause pollution of any waters of the state. This bill makes it is unlawful for any person to place, cause, or permit to be placed any water contaminant in a location where it causes such pollution.

A substitute was adopted which changed the requirement regarding point source pollution location from having to be “reasonably” likely as the source to “demonstrably” likely as the source. The sponsor stated he is continuing to work with DNR to find compromise language regarding permitting authority and will likely offer another amendment on the floor.

PETROLEUM STORAGE TANK INSURANCE:  The Senate Committee on Commerce, Consumer Protection, Energy, and Environment conducted a public hearing on SB 961, sponsored by Sen. Mike Cunningham (R-Marshfield). Currently, the Petroleum Storage Tank Insurance Fund is set to expire on December 31, 2020, after which claims made prior to such date may continue to be paid. This act extends such expiration to December 31, 2030.

Testifying in support was Missouri Petroleum Marketers and Convenience Store Association, two of the Petroleum Storage Insurance Tank Fund board members, and the Missouri Petroleum Council. There was no testimony in opposition and the committee took no further action on the measure.

 

FILED BILLS OF INTEREST

HB 2447Korman, Bart(R) – Modifies provisions for construction of new facilities by utility companies.

HB 2449Redmon, Craig(R) – Modifies provisions for construction of new facilities by utility companies.

HB 2453Austin, Kevin(R) – Changes the laws regarding surety bonds for public work contracts.

HB 2479Pietzman, Randy(R) – Allows a Department of Natural Resources permittee to use the least expensive design option to meet any environmental standard if the plan meets all other permit requirements.

HB 2482Korman, Bart(R) – Allows the department of transportation to, by rule, adjust certain transportation fees by the percentage of inflationary increase or decrease.

HB 2483Korman, Bart(R) – Establishes a “miles driven” fee to be paid at the time of registration of a motor vehicle with a model year of 2020 and later.

HB 2484Korman, Bart(R) – Establishes the I-70 Regional Transportation District.

HB 2485Korman, Bart(R) – Changes the law regarding motor vehicle decal fees.

HJR 83Messenger, Jeff(R) – Proposes a constitutional amendment to direct increased funding from motor vehicle registration fee adjustments for inflation to a farm to market fund, a port development fund, the state road bond fund, and the highway patrol.

HJR 84Korman, Bart(R) – Proposes a constitutional amendment to authorize a four-tenths percent sales and use tax whose revenues will be dedicated to state highway uses.

 

UPCOMING COMMITTEE HEARINGS

House-Rules-Administrative Oversight
MONDAY – 02/19/18
5:00 PM or Upon Adj., whichever is later, HR 6

Executive Session:
HB 1947 – Alferman, Justin – Changes the law regarding sale of water or wastewater systems in fourth class cities.
HB 1953 – Neely, James – Requires the Department of Health and Senior Services to develop and disseminate information regarding the bone marrow registry.
HB 2088 – Frederick, Keith – Prohibits covenants not to compete.
HB 2231 – Ross, Robert – Removes the requirement that land surveyors submit letters of reference in order to be licensed.
HB 2239 – Mathews, Kirk – Modifies provisions relating to electrical contractors.
Executive session may be held on any matter referred to the committee.

House-Financial Institutions
TUESDAY – 02/20/18
12:00 PM or Upon conclusion of morning session, HR 5

Public Hearing:
HB 2419 – Fitzpatrick, Scott – Creates the Missouri Electricity Bill Reduction Assistance Act.
House-Government Efficiency
TUESDAY – 02/20/18
12:00 PM or Upon Morning Adj., whichever is later, HR 6

Public Hearing:
HB 1644 – Sommer, Chrissy – Changes the laws regarding state agencies and departments by requiring the posting of information online that is published physically and making available the online submission of applications, forms, and payments.

House-Transportation
WEDNESDAY – 02/21/18
8:00 AM, HR 5

Executive Session:
HB 2153 – Korman, Bart – Creates the Emergency Bridge Repair and Replacement Fund.

 

CALENDARS

HOUSE:

HOUSE BILLS FOR PERFECTION

HB 1998 – Bondon, Jack – Creates guidelines for reviewing the comprehensive state energy plan.


SENATE
:

THIRD READING OF SENATE BILLS

SB 659 – Hegeman, Dan – Changes the maximum amount of a grant that may be issued by the Department of Natural Resources for financing certain utility projects from $1400 per connection to $3000 per connection.

 

SENATE BILLS FOR PERFECTION

SB 546 – Munzlinger, Brian – Modifies provisions of civil procedure regarding rejoinder, venue, and personal jurisdiction

SB 659 – Hegeman, Dan – Changes the maximum amount of a grant that may be issued by the Department of Natural Resources for financing certain utility projects from $1400 per connection to $3000 per connection.

SB 730(S) – Wallingford, Wayne – Establishes the Rate Case Modernization Act.

SB 598(S) – Riddle, Jeanie – Requires that the Department of Transportation utility corridor be 12 feet wide with the location determined by the State Highways and Transportation Commission.

SB 602(S) – Onder, Bob – Creates new provisions relating to public sector collective bargaining.

SB 705 – Riddle, Jeanie – Allows water and sewer corporations to make an application to the Public Service Commission to approve rate schedules outside of a general rate proceeding.

SB 663(S) – Schatz, Dave – Allows for an appropriation to cooperate with political subdivisions on land clearance projects related to tourism infrastructure facilities.

SB 599 – Schatz, Dave – Modifies the law pertaining to prevailing wage.

SB 555(S) – Brown, Dan – Repeals the law pertaining to prevailing wage.

SB 832(S) – Rowden, Caleb – Modifies provisions relating to tort actions, specifically unlawful merchandising practices, products liability claims, and venue requirements.

SB 727 – Emery, Ed – Requires that the comprehensive state energy plan be reviewed by the Division of Energy by January 1, 2019, and biennially thereafter, and updated if necessary.

SB 596(S) – Riddle, Jeanie – Provides that a person who is injured by a product has 10 years after the sale or lease of the product to bring a suit for damages.

SB 849(S) – Kehoe, Mike – Prohibits public bodies from entering into certain contracts.

SB 617(S) – Eigel, Bill – Modifies several provisions relating to taxation.

 

INFORMAL CALENDAR – SENATE BILLS FOR PERFECTION

SB 546 – Munzlinger, Brian – Modifies provisions of civil procedure regarding joinder and venue.

SB 598(S) – Riddle, Jeanie – Requires that the Department of Transportation utility corridor be 12 feet wide with the location determined by the State Highways and Transportation Commission.

SB 602(S) – Onder, Bob – Creates new provisions relating to public sector collective bargaining.

SB 705 – Riddle, Jeanie – Allows water and sewer corporations to make an application to the Public Service Commission to approve rate schedules outside of a general rate proceeding.

 

MAJOR DATES OF INTEREST

March 2018
1 – Last Day to File Senate Bills (Rule 48)
15 – Last Day to Place Senate Consent Bills on the Senate Calendar (Rule 45)
15 – Spring Break Begins Upon Adjournment
26 – Legislature Will Reconvene

April 2018
2 – Easter Holiday — No Session
12 – Last Day to Place House Consent Bills on the Senate Calendar (Rule 45)

May 2018
11 – Last Day for Floor Action on Appropriation Bills
18 – Last Day of Session (Article III, Section 20(a), Const.)