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Overruled: Lawmakers address Missouri’s job-killing legal climate

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Giving unfair treatment. Charging more than necessary. Forcing one person to pay another person’s bill. These are all great ways to lose business.

Yet for years, this is exactly how businesses have been treated inside Missouri courtrooms. As a result, the state has earned a reputation for having one of the worst legal climates in the nation. A “Judicial Hellhole” is what the American Tort Reform Association called our state. The U.S. Chamber Institute for Legal Reform said Missouri’s legal climate ranked 42 in the nation, down from 34 in 2012.

There’s no doubt that Missouri is losing business as this reputation hurts our ability to attract jobs and investment.

At the beginning of the 2016 Legislative Session, the Missouri Chamber of Commerce and Industry sounded the alarm about this situation. Lawmakers have responded by passing important reforms that should provide greater balance in the state’s courtrooms.

“I can give you a long list of reasons why Missouri is one of the best places in the country to do business. The problem is our state’s positives evaporate once a company is pulled into a legal dispute. There’s no other way to say it, our courts today are unfair, costly, job-killers,” said Daniel P. Mehan, Missouri Chamber president and CEO. “The reforms passed in 2016 are a positive step forward and, should they be signed into law, will help repair our national reputation and signal that it’s safe to do business in Missouri.”

This progress includes changes to Missouri’s expert witness standards. Senate Bill 591, sponsored by Sen. Mike Parson, a Republican from Bolivar, requires that people who testify as expert witnesses must actually have expert knowledge of the topic. This will bring greater credibility to the testimony that influences outcomes in Missouri court cases. The bill was handled in the House by Rep. Kevin Corlew, a Republican from Kansas City.

Another important bill passed by the legislature would clarify that in injury lawsuits, plaintiffs can only recover the costs of the actual medical expenses they incurred. Sponsored by Sen. Ed Emery, a Republican from Lamar, Senate Bill 847 helps prevent out-of-proportion judgements. It was handled in the House by Rep. Joe Don McGaugh, a Republican from Carrolton.

In passing these bills, the General Assembly made progress toward fixing an important issue identified by business leaders in Missouri 2030, a strategic plan for growth created by the Missouri Chamber. Addressing our unbalanced judicial system helps make Missouri more competitive for business growth opportunities.

“These are not easy issues to pass and it took strong leadership in the House of Representatives and Senate to shepherd these reforms through the legislative process,” said Mehan. “That said, it’s likely these bills will be vetoed by Gov. Jay Nixon. If that happens, it will take another major effort to override the vetoes and pass these bills into law. We desperately need this to happen. Missouri can no longer be a state where one branch of government is acting in a hostile manner toward the business community and job creators.”

Growing jobs

Beyond the legal climate reforms, lawmakers also made strong progress by passing a number of bills intended to protect Missouri jobs, spur growth and lessen the regulatory burden.

Encouraging ESOPs: House Bill 2030 provides special tax benefits to business owners who decide to sell company stock to their employees through employee stock ownership plans, often called ESOPs. This arrangement helps ensure Missouri companies stay locally held. The bill was sponsored by Rep. Denny Hoskins, a Republican from Warrensburg, and handled in the Senate by Sen. Ryan Silvey, a Republican from Kansas City.

Providing affordable workers’ compensation rates: Senate Bill 700 helps employers keep workers’ compensation rates low by changing the way the law caps the amount of out-of-pocket expenses employers can pay for workplace injuries. This helps suppress workers’ compensation rates by allowing employers to use their insurance less often. The bill was sponsored by Sen. Dave Schatz, a Republican from Sullivan, and handled in the House by Rep. Dean Dohrman, a Republican from LaMonte.

Attracting conventions: Conventions are big business in Missouri, filling hotels and generating tourism dollars. House Bill 1698, the Meet in Missouri Act, creates new incentives to attract more large conventions that draw out-of-state residents. The bill was sponsored by Rep. Caleb Rowden, a Republican from Columbia, and handled in the Senate by Sen. David Sater, a Republican from Mt. Vernon.

Keeping costs low: Senate Bill 823 stops the State of Missouri from taxing internet access and prevents the judiciary from eroding an important tax exemption that benefits Missouri employers. The bill was sponsored by Sen. Will Kraus, a Republican from Lee’s Summit, and handled in the House by Rep. Anne Zerr, a Republican from St. Charles.

Bringing back the Big Government Get off my Back Act: House Bill 1870 reinstates the provisions of the Big Government Get off my Back Act, which had expired. The bill provides protections against new federal mandates and gives a tax incentive to small businesses that provide good paying, full-time jobs. The bill was sponsored by Rep. Hoskins and handled in the Senate by Sen. David Pearce, a Republican from Warrensburg.

Allowing biosimilars: Senate Bill 875 helps create a competitive free marketplace for medication in Missouri. It allows pharmacists to provide more affordable biosimilar options to their patients who require biologic medications. This bill will help contain health care costs for individuals and employers who provide health care benefits for their workers. It was sponsored by Sen. Kurt Schaefer, a Republican from Columbia, and handled in the House by Rep. Tila Hubrecht a Republican from Dexter.

Easier tax payment: House Bill 1582 is a simple idea to make life easier for small businesses. Instead of having to file quarterly withholding tax returns, small businesses could now do this annually. The bill was sponsored by Rep. Mike Kelley, a Republican from Lamar, and handled in the Senate by Sen. Kraus.

“When we can help make it easier for businesses to come to Missouri and grow here, the end result is more jobs and better opportunity. While we work on these types of bills every year, it’s important to remember that this work doesn’t end,” said Mehan. “The market for job growth opportunities is always changing. Missouri needs to continue to push to get ahead and attract the growth that will sustain our economy. I’d like to thank our leaders in the General Assembly for continuing their focus on keeping Missouri competitive.”

Improving education

The legislature also passed bills aimed at ensuring Missourians are prepared for the jobs available today — a need that is also at the forefront of Missouri 2030.

Supporting career and technical education: Senate Bill 620 would create a new technical education certificate that Missouri students can earn alongside their high school diplomas. The certificate would help provide students with the necessary technical employability skills to be prepared for an entry-level career in a technical field or additional training in a technical field. The bill was sponsored by Sen. Gary Romine, a Republican from Farmington and handled in the House by Rep. Kathy Swan, a Republican from Cape Girardeau.

Preventing remediation: An amendment added onto Senate Bill 638 requires school districts to develop a system to identify and council students who are at risk of not being ready for college level work or entry-level career positions. This would help address concerns by many business leaders that the state’s high school graduates are not prepared to enter the workforce. The bill was sponsored by Sen. Jeanie Riddle, a Republican from Fulton, and handled in the House by Rep. Swan.

Engaging in civics: House Bill 1646 would ensure Missouri students have the knowledge they need to understand government and engage in civics. The bill would require all high school students to pass a test similar to the civics portion of the United States Naturalization test that immigrants take. The bill was sponsored by Rep. Swan and handled in the Senate by Sen. Riddle.

“There is nothing more important than the work we do to ensure Missourians are ready for tomorrow,” said Mehan. “In recent years, the Missouri Chamber has greatly expanded our efforts in this area in response to employer concerns. Our programs like Dream It. Do It. and Show-Me Scholars directly address the need to improve our workforce. We thank our lawmakers for showing leadership in this area.”

Uniting for progress

Unifying the business community is an important part of Missouri 2030. Research conducted during the development of the Missouri 2030 strategic plan revealed that political divisiveness impedes progress.

We saw that play out when Senate Joint Resolution 39 began advancing through the process and garnering national headlines. The negative attention attracted by the resolution threatened to harm Missouri’s economy. In addition, the business community was concerned about the resolution’s goal of creating new constitutional protections for certain employees who refuse to do their jobs.

When the business community united against this effort, the resolution lost momentum and could not pass a key committee vote.

“While SJR 39 caused a lot of concern this session, it ended up being an exercise in uniting our diverse business community behind a shared goal,” said Mehan. “This showed that when the business community stands together, we can help chart the agenda for our state’s future. In Missouri 2030, we have the right agenda to move our state forward. Now, with the threat of SJR 39 in the past, we are working to again unite businesses and stakeholders behind the positive goals in our Missouri 2030 plan. We’ve already proven that together we can make a difference.”

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