July 9, 2015 – Weekly Capitol Update

GOVERNOR VETOES TWO FINANCIAL SERVICES MEASURES

Gov. Jay Nixon on July 7 vetoed legislation that sought a big increase in the fee lenders may charge consumers for installment loans. He also rejected a separate bill he said would have allowed out-of-state trust companies to operate in Missouri under rules more favorable to those that apply to Missouri-based trust companies.

The fee lenders could charge for installment loans had been 5 percent of a loan’s principal up to $75 until the Republican-controlled General Assembly in 2013 overrode Nixon’s veto of legislation bumping the fee to its current rate of 10 percent of the principal up to $75. SB 345 passed earlier this year sought to increase the fee again, this time to 10 percent of the principal up to $100.

“Allowing lenders to gouge consumers with higher fees is not the way to move Missouri forward,” Nixon said in a news release. “This bill would have made it harder for Missouri families to make ends meet and should not become law.”

The other vetoed bill, HB 1098, would have lowered the capital requirements for out-of-state trust companies seeking to do business in Missouri below what is required for Missouri-based companies. In his veto message, Nixon called the bill “a step backwards for Missouri.”

Both the Senate and House of Representatives originally approved SB 345 and HB 1098 by wide margins, easily surpassing the 109 House votes and 23 Senate votes needed for a veto override. SB 345 passed 31-3 in the Senate and 116-35 in the House, while HB 1098 was approved on votes of 34-0 in the Senate and 137-4 in the House. Lawmakers will have the chance to overrule Nixon during the annual veto session that begins Sept. 16.

 

NIXON SPIKES PENSION BILL OVER ‘ABSURD’ REQUIREMENT

Gov. Jay Nixon on July 7 vetoed a bill due to what he called an “absurd requirement” that a spot on the Board of Trustees of the Public School Retirement System of St. Louis be reserved for teacher or administrator from a charter school in Kansas City. That requirement in HB 629 apparently is the result of a drafting error since it was supposed to ensure a position on the board for a St. Louis charter school representative.

“While presumably unintended, the consequence of this language is clear and cannot become law,” Nixon said in his veto message. Nixon noted that under existing law charter school teachers in St. Louis and Kansas City already are eligible to seek election to the board of trustees of their local pension system, although no positions are specifically reserved for charter representatives.

HB 629 also included provisions making various changes to the Kansas City police and public school retirement systems, including a requirement that the Board of Trustees of the Public School Retirement System of Kansas City include a teacher or administrator from a Kansas City charter school. It passed without a dissenting vote in either the House of Representatives or the Senate.

 

GOVERNOR ISSUES EXECUTIVE ORDER ON GAY MARRIAGE

Gov. Jay Nixon on July 7 issued an executive order directing all executive branch state agencies “to immediately take all necessary measures to ensure compliance” with the U.S. Supreme Court’s June 26 ruling that same-sex couples have a right to marry under the federal Constitution.

In 2004, Missouri voters overwhelmingly ratified a state constitutional amendment stating that “marriage shall exist only between a man and a woman.” The measure passed with 70.1 percent support. However, the U.S. Supreme Court’s 5-4 ruling in Obergefell v. Hodges rendered same-sex marriage bans in Missouri and other states unenforceable.

On the same day Nixon issued his order, lobbyist Kerry Messer and other representatives of various evangelical Christian groups voluntarily dismissed a lawsuit they had filed in January 2014 challenging the constitutionality of an earlier executive order Nixon had issued directing the Missouri Department of Revenue to accept jointly filed tax returns from same-sex couples who had been legally married in other states. That case had remained on hold in Cole County Circuit Court pending the U.S. Supreme Court’s ruling in Obergefell.

 

NO NEW HIGHWAY CONSTRUCTION FOR NEXT FIVE YEARS

The Missouri Highways and Transportation Commission on July 1 approved a five-year highway construction plan that for the first time in history includes no expansion projects. Instead, the state Department of Transportation will focus its dwindling resources on basic maintenance of major thoroughfares.

Starting in 2017, MoDOT expects its construction budget to drop to about $325 million a year, roughly $160 million less than the $485 million annually it takes to adequately maintain the entire state system. As a result, MoDOT plans to fully maintain only about 8,000 miles to Missouri’s 34,000 state highway system. The remaining highways, which consist mostly of supplementary roads, will receive only limited maintenance.

Missouri voters last August rejected a proposed ¾-cent transportation sales tax that would have generated an estimated $534 million a year for transportation projects. The measure, Amendment 7, received just 40.8 percent of the vote. During the 2015 legislative session, the Senate debated a 2-cent increase in the state’s 17-cent-per-gallon fuel tax, but the bill didn’t advance to the House of Representatives.