COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1418H.03I Bill No.:HB 770 Subject:State Employees; Boards, Commissions, Committees, and Councils Type:Original Date:January 26, 2023Bill Summary:This proposal prohibits use of environmental, social justice, or governance
scores or metrics.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 1418H.03I
Bill No. HB 770
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0$0$0 L.R. No. 1418H.03I
Bill No. HB 770
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FISCAL ANALYSIS
ASSUMPTION
In response to a similar proposal from this year (SB 50), officials from the Office of
Administration - Facilities Management, Design and Construction (OA-FMDC) stated this
bill could have an unknown fiscal impact on the State’s contract costs and ability to obtain
necessary goods and services, in addition to the costs to OA- Purchasing and OA-FMDC to
implement a process to ensure that contractors are complying with this requirement. Many
corporations and businesses that the State does business with likely consider at least one factor
identified in the definition of “environmental, social, and governance score” when hiring
subcontractors, such as the subcontractor’s use of raw materials, environmental policies, wages
and/or working hours. Prohibiting firms that consider such factors from competing for contracts
with the State of Missouri will likely reduce the number of viable vendors competing for public
contracts. A reduced competition pool will probably lead to increased prices from vendors, and
may also lead to inferior quality of performance or complete inability to obtain certain products
or services.
OA-FMDC stated additional fiscal impact could also result if OA-FMDC’s assumption is
incorrect that compliance with this bill can be achieved with a self-certification/attestation form.
If this bill were interpreted to require OA-FMDC to take steps to investigate contractor’s
compliance with this requirement, the impact would be higher.
Oversight assumes an increase in cost due to a potential reduction in vendors is speculative and
will not reflect a fiscal impact as a result
OA-FMDC assumed that it would ensure compliance with this bill by requiring contractors to
complete a self-certification/attestation form. This would require time by OA-FMDC staff to
create the form and amend bid documents and templates to include this new requirement. OA-
FMDC assumes this would take approximately 100 hours of staff time at $40.00 per hour. OA-
FMDC has approximately 275 existing contracts that would need to be amended to include this
requirement. OA assumes that it would take at least one hour per contract to complete this task.
This bill would also cause an increase in the number of contracts that would need to be rebid if
existing vendors refuse to comply. Therefore, OA-FMDC estimates the total fiscal impact of this
bill to be $40,000. At this time, it is believed that the additional staff time and resources can be
absorbed by OA-FMDC. However, if there are multiple pieces of legislation passed where OA-
FMDC has responded that the costs can be absorbed, OA-FMDC would need to reevaluate to see
if additional staff and associated expenses would then be required.
OA-FDMC assume the fiscal impact of this proposal can be absorbed. Oversight does not have
any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note
for OA-FMDC. L.R. No. 1418H.03I
Bill No. HB 770
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Officials from the Department of Corrections (DOC) state this proposal creates new provisions
prohibiting discrimination against businesses based on environmental, social, and governance
scores.
This legislation appears to limit the DOC’s ability to score bidders based on their composite
materials and institutional security, and could increase the possibility for litigation against the
department if a bidder does not agree with the scoring process.
DOC states that the Missouri Vocational Enterprises uses some raw materials containing various
levels of recycled content for some product lines. Since the recycled content may vary from one
product supplier to another, this could potentially create a negative impact if the evaluation was
considered “preferential treatment based on an environmental, social, and governance score.”
It is unknown if, and when, a business would disagree with the procurement process. Therefore,
this legislation could cause an unknown impact to the department.
Oversight assumes because the potential for litigation is speculative, the DOC or any
governmental agency that lets bids, will not incur significant costs related to this proposal.
Officials from the Attorney General’s Office, the Department of Commerce and Insurance,
the Department of Economic Development, the Department of Elementary and Secondary
Education, the Department of Higher Education and Workforce Development, the
Department of Health and Senior Services, the Department of Mental Health, the
Department of Natural Resources, the Department of Labor and Industrial Relations, the
Department of Revenue, the Department of Public Safety (Office of the Director, Missouri
Highway Patrol Capitol Police, Alcohol & Tobacco Control Fire Safety, Gaming
Commission, Missouri National Guard, State Emergency Management Agency and
Veterans Commission), the Department of Social Services, the Joint Committee on
Administrative Rules, the Joint Committee on Public Employee Retirement, the Missouri
Lottery Commission, the Missouri Consolidated Health Care Plan, the Department of
Agriculturethe Missouri Department of Conservation, the Missouri Ethics Commission,
the Missouri House of Representatives, the Department of Transportation, the Office of
Prosecution Services, the Office of Administration (Administrative Hearing Commission
and Budget and Planning), the Office of the State Courts Administrator, the Office of the
State Auditor, the Missouri Senate, the Office of the State Public Defender, and the State
Tax Commission each assume the proposal will have no fiscal impact on their respective
organizations.
Oversight notes that the above mentioned agencies have stated the proposal would not have a
direct fiscal impact on their organization. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact on the fiscal note for these agencies.
In response to a similar proposal from this year (SB 50), officials from the cities: Kansas City
and Springfield L.R. No. 1418H.03I
Bill No. HB 770
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organizations. Oversight does not have any information to the contrary. Therefore, Oversight
will reflect a zero impact in the fiscal note for these agencies.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other cities and counties were requested to respond to this proposed legislation but did
not. A listing of political subdivisions included in the Missouri Legislative Information System
(MOLIS) database is available upon request.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal. L.R. No. 1418H.03I
Bill No. HB 770
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FISCAL DESCRIPTION
This act prohibits any public entity from discriminating against or giving preferential treatment
to any bidder, offeror, contractor, or subcontractor, when engaged in procuring or letting
contracts for any purpose, based on an environmental, social and governance score, as defined in
the act.
The act also prohibits any limited liability company or corporation from being discriminated
against or given preferential treatment based on an environmental, social and governance score,
as defined in the act.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration
Department of Commerce and Insurance
Department of Economic Development
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Department of Health and Senior Services
Department of Mental Health
Department of Natural Resources
Department of Corrections
Department of Labor and Industrial Relations
Department of Revenue
Department of Public Safety
Office of the Director
Division of Alcohol and Tobacco Control
Capitol Police
Fire Safety
Missouri Gaming Commission
Missouri Highway Patrol
Missouri National Guard
State Emergency Management Agency
Missouri Veterans Commission
Department of Social Services
Joint Committee on Public Employee Retirement
Joint Committee on Administrative Rules
Missouri Lottery Commission
Legislative Research
Oversight Division L.R. No. 1418H.03I
Bill No. HB 770
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Local Government Employees Retirement System
Missouri Consolidated Health Care Plan
Missouri Department of Agriculture
Missouri Department of Conservation
Missouri Ethics Commission
Missouri House of Representatives
Missouri Department of Transportation
Missouri State Employee's Retirement System
MoDOT & Patrol Employees’ Retirement System
Missouri Office of Prosecution Services
Office of Administration
Facilities Management, Design and Construction
Office of the State Courts Administrator
Office of the State Auditor
Missouri Senate
Office of the Secretary of State
Office of the State Public Defender
Public Schools and Education Employee Retirement Systems
State Tax Commission
Kansas City
O’Fallon
Springfield
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 26, 2023January 26, 2023