COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0363S.05P Bill No.:Perfected SS for SCS for SB Nos. 3 & 69 Subject:Economic Development; Department of Economic Development; Administrative
Rules
Type:Original Date:February 1, 2023Bill Summary:This proposal modifies provisions relating to the promotion of business
development.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026General Revenue
Fund*
Could exceed
($369,054)
Could Exceed
($372,145)
Could Exceed
($378,500)
Total Estimated Net
Effect on General
Revenue
Could exceed
($369,054)
Could Exceed
($372,145)
Could Exceed
($378,500)
*Oversight notes that this proposal provides for waiving of regulations (depending upon sandbox
participants) potentially resulting in a loss to general revenue, various state funds, and to local
political subdivisions. Additionally, this proposal may require additional FTE for DED under
Section (s) 620.3800 "Office of Entrepreneurship", and 620.3900 Regulatory Sandbox Act.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Various State Funds $0 or (Unknown) $0 or (Unknown)$0 or (Unknown)Total Estimated Net
Effect on Other State
Funds
$0 or (Unknown) $0 or (Unknown)$0 or (Unknown)
Numbers within parentheses: () indicate costs or losses. L.R. No. 0363S.05P
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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 2026General Revenue
Fund 3 FTE 3 FTE3 FTE
Total Estimated Net
Effect on FTE3 FTE 3 FTE3 FTE
☒ 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 or (Unknown)$0 or (Unknown)$0 or (Unknown) L.R. No. 0363S.05P
Bill No. Perfected SS for SCS for SB Nos. 3 & 69
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FISCAL ANALYSIS
ASSUMPTION
Oversight was unable to receive some of the agency responses in a timely manner due to the
short fiscal note request time. Oversight has presented this fiscal note on the best current
information that we have or on prior year information regarding a similar bill. Upon the receipt
of agency responses, Oversight will review to determine if an updated fiscal note should be
prepared and seek approval to publish a new fiscal note.
In response to the previous version of the bill, officials from the Department of Economic
Development (DED) assumed:
620.3800. Creates within DED the "Office of Entrepreneurship".
DED is responsible for administering the “Office of Entrepreneurship” and shall employ an
individual to promote policies and initiatives to support the growth of entrepreneurship in the
state. The Office of Entrepreneurship is also responsible for preparing a report for the general
assembly making recommendations on improving access and resources for new Missouri
businesses that have been in operation for less than three years. DED will need 1.0 FTE to
administer the Office of Entrepreneurship.
Section 620.3900 creates the Regulatory Sandbox Act.
Section 620.3905.1 states that the regulatory relief office will be administered by a sandbox
program director. DED has estimated personal service costs by taking a mid-range salary of a
typical Program Director (Designated Principal Assistant) at DED who oversees an office but
does not supervise staff. DED also believes additional review (e.g., reviews of state laws) would
require a legal counsel FTE. If DED determines that additional staff are needed to administer the
sandbox program, DED will request additional FTE through the normal budget process.
Oversight notes that DED assumes the proposal will have a direct fiscal impact on their
organization. Oversight does not have any information to the contrary. Therefore, Oversight
will reflect DED’s FTE costs for a Division Program Director at $80,000 and a Legal Counsel at
$62,508 annually to fulfill compliance under Section 620.3900 and 1 FTE Economic
Development Specialist at $74,666 annually under Section 620.3800, in the fiscal note.
Officials from the Office of Administration – Budget & Planning note:
Section 34.159 creates Right to Start Act L.R. No. 0363S.05P
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This section shall be known as the "Right-to-Start Act" which requires the commissioner of the
office of administration to file a report with the general assembly no later than June 30, 2025,
and annually thereafter that includes the number of contracts, percentage of the number of
contracts, total dollar amount of all contracts, and percentage of the total dollar amount awarded
to businesses, including minority-owned businesses that have been in operation for less than
three years. This section will not impact TSR or the calculation under Article X, Section 18(e).
Sections 620.3800 Office of Entrepreneurship
This section would create the “Office of Entrepreneurship” under DED. This section will not
impact TSR or the calculation under Article X, Section 18(e).
Sections 620.3900 to 620.3930 Regulatory Sandbox Act and Regulatory Relief Office
An applicant shall remit to the regulatory relief office an application fee of three hundred dollars
per application for each innovative offering. It is not specified in the bill where this money will
be deposited, therefore B&P assumes it will be GR. This will have an unknown positive impact
on GR and TSR.
Section 536.300 has been modified removing a requirement that a small business impact
statement be submitted prior to submitting proposed rules and a reference to sections 536.300 to
536.310.
This bill would also provide that during the demonstration period, a sandbox participant shall not
be subject to the enforcement of state laws or regulations identified in the written agreement
between the regulatory relief office and the sandbox participant. There is not enough information
on what laws or regulations may be waived or what impact such a waiver might have on TSR.
Sections 536.300, 536.303, 536.305, 536.310, 536.315, 536.323, 536.325, and 536.328, which
refers to small businesses and the "Small Business Regulatory Fairness Board" are repealed.
Oversight notes that an applicant shall remit to the regulatory relief office an application fee of
$300 per application for each innovative offering. Therefore, Oversight will reflect a potential
positive fiscal impact on State Funds for this application fee.
Oversight, for the purpose of this fiscal note, retrieved average patent filings in the State of
Missouri to estimate how many entrepreneurs would potentially be participating in this pool.
According to the U.S. Patent and Trademark Office – Patent Technology Monitoring Data
(PTMT) there were on average 868 patents filed by Missourians annually from FY 2000 to FY
2015.
Oversight notes that the proposal assesses a $300 fee that must be paid in order to participate in
this program. Oversight assumes that the fee structure could potentially result in additional L.R. No. 0363S.05P
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revenue of $260,400 ($300 x 868 potential innovative entrepreneurs). Therefore, for purpose of
this fiscal note, Oversight will reflect a positive unknown amount to the General Revenue Fund
Oversight assumes that the fee paid to participate will be remitted to GR for purpose of this
fiscal note, and as shown above the amounts collected could reach the $250,000 threshold.
In response to the previous version of the bill, officials from the Office of Administration (OA)
noted:
This bill also requires OA to file a report annually with the General Assembly about the number
of contracts awarded to contractors who have been in business for less than 3 years. It is
unknown from the bill language if this applies to contracts awarded after the bill goes into effect
or if this will apply to all contracts that were in place even before the bill goes into effect. The
answer to this questions helps us to understand the fiscal impact to the Division of Purchasing
(DOP). If the answer is that this would apply to all contracts that were in place even before the
bill goes into effect, this will require OA-Purchasing to examine each of its awarded contractors
to determine how long they have been in business and to track such information in order to
create the report. OA-Purchasing estimates that this will take approximately 1 hour per awarded
contract. OA-Purchasing has over 2,000 contracts, they estimate that one hour per contract to
obtain the information and log so for a total of $43,269.23 (2000 hours x $21.63 per hour).
For any newly awarded contracts after the bill goes into effect, OA-Purchasing assumes it will
also need to update its bid/contract forms in order to gather necessary information from
contractors and update its internal policies and procedures to sets standards about how this
determination will be made. OA-Purchasing estimates that it will take approximately 200 hours
of initial work to develop and implement these changes at a cost of (200 x $38.20 per hour)
$7,640 and then 200 hours each year thereafter to track and maintain the information for the
annual report to the General Assembly .
However, clarity is needed on the following items to determine level of fiscal impact:
1. Does this apply only to contracts awarded under Chapter 34 authority by the Office of
Administration, Division of Purchasing or does this also apply to all departments making
purchases under Chapter 34 authority including those purchases under the no bid limit or within
the departments delegated procurement authority? Each department retains records for their
purchases rather than OA having those records.
2. Is the age of the company only relevant at time of contracting or if the contract continues for
multiple years and the contractor becomes more than 3 years old, does the OA stop counting
them as a 3 or less years old contractor for reporting purposes?
3. Is the age of the company determined by their Articles of Incorporation on file with SOS?
DOP - This bill appears to establish the Office of Entrepreneurship within the Department of
Economic Development. It is assumed that the Office of Administration -Division of Personnel's L.R. No. 0363S.05P
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team members would be required to provide assistance in establishing the new division.
The fiscal impact of this bill is determined by the total number of hours estimated (10 hours)
multiplied by the average salary of Division of Personnel team members ($30.40) plus the added
cost to update MoCareers, the State's centralized application platform ($300.00). Therefore, the
total fiscal impact would be $604.00.
Oversight notes that OA assumed the proposal will require additional workforce to prepare
annual reports with the General Assembly on contracts awarded to new businesses under Section
34.195. Officials from the OA assume the proposal will have a fiscal impact on their
organization. Oversight does not have any information to the contrary. Therefore, Oversight will
reflect OA’s estimated impact in the fiscal note.
Officials from the Department of Commerce and Insurance (DCI) assume Section(s) 34.195,
536.300, 620.3800 will have no fiscal impact on their organization. However, Section(s)
620.3900 to 620.3930 could have potential Unknown fiscal impact on DCI depending on the
number of businesses and individuals that would request to participate in the Sandbox Program.
Oversight assumes DCI is provided with core funding to handle a certain amount of activity
each year. Oversight assumes DCI could absorb the costs related to this proposal. If multiple
bills pass which require additional staffing and duties at substantial costs, DCI could request
funding through the appropriation process.
Officials from the Department of Revenue (DOR) note:
Section 34.195 Right to Start
This proposal requires the Commissioner of the Office of Administration to file a report about
new businesses and state contracts. This will not fiscally impact DOR.
Section 536.300 Administrative Rules
This removes the requirement to file a small business impact statement with DED on the day
administrative rules are filed with JCAR. This will not have a fiscal impact on DOR.
Section 620.3800 Office of Entrepreneurship
This will not fiscally impact DOR.
Sections 620.3900 – 620.3930 Regulatory Sandbox
The proposal would create a new government entity, the “regulatory relief office,” which may
enter into agreements to essentially waive the requirements of Missouri’s statutes and regulations
on certain participating businesses. This office is allowed to make suggestions as to which state L.R. No. 0363S.05P
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laws and regulations are burdensome, but does not define burdensome. This is concerning for
DOR as most people would consider taxes burdensome. Depending on the laws waived this
could result in increased costs to DOR for tracking these participants and changes to their
individual income tax system. These computer changes are estimated at $7,193.
The proposal directs the regulatory relief office to consult with applicable agencies, regarding the
acceptance of the applicant in the sandbox and the agreement of rules to be waived. The agencies
are asked to notify the office if the applicable agency has previously investigated, sanctioned, or
pursued legal action against the applicant. The office is allowed to enter into agreement with the
applicant to participate in the sandbox and have rules waived. The proposed legislation prohibits
these agreements from exempting an applicant “from any income, property, or sales tax liability
unless such applicant otherwise qualifies for an exemption from such tax.” This may requires
DOR to provide information on their relationships with a participating business to the regulatory
relief office. Some of this information is currently protected under DOR's confidentially laws.
At this time, DOR is unable to determine if there is additional costs from this provision.
This proposal says that the sandbox agreement cannot exempt an applicant from income,
property or sales tax liability. Property tax is handled by the State Tax Commission. DOR has
numerous other tax types besides the income tax and sales tax exempted under this proposal.
Examples include, withholding tax, tire and battery fee taxes, use taxes, marijuana taxes and
more that do not appear protected under this proposal. Allowing participants in the program to
not pay taxes will result in a loss of state and local revenue.
This proposal gives the regulatory relief office authority to waive state law and regulations.
DOR is concerned this would result in filing deadlines being moved or changes for some filers
and not others, or payments being waived. This would result in a negative fiscal impact to state
and local revenue.
At this time, DOR is unable to estimate an exact fiscal impact from this proposal. DOR could
possibly need additional FTE to work with the regulatory relief office depending on the number
of participants, as well as have losses to state and local revenue if participants are allowed to not
pay taxes.
In response to the similar proposal, SB 69 – 2023, officials from the Department of Labor and
Industrial Relations (DOLIR) assumed the proposal under the Regulatory Sandbox Act
provisions 620.3900 and specifically under 620.3915.5 (3) and .6 proposes requirements for
applicable agencies to review applications and a timeframe to complete reporting regarding an
application for participation in the Regulatory Sandbox program. Unknown impact however,
there appears to be an impact to agencies that would be required to meeting the reporting
requirements of this legislation.
In response to the previous version of the bill, officials from the Missouri Department of
Agriculture (MDA) defer to the OA for the potential fiscal impact of this proposal. L.R. No. 0363S.05P
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Oversight notes that in response to the similar proposal, SB 69 – 2023, officials from the MDA
noted the proposal, specifically Section 620.3905 (3) 2 could result in a loss of fee funds to the
Missouri Department of Agriculture. If fees are not required to be paid in accordance with
current regulations, guidelines, and policies, the fee-fund revenue to the Department could
substantially decrease. The fee funds support many FTE within MDA, in accordance with their
respective divisions and the fees associated with such; the loss of fee funds could result in the
need for reductions in staff due to unavailability of funding. This loss in fee-fund revenue will
result in a need for general revenue to support these necessary positions across the state of
Missouri.
In response to the previous version of the bill, officials from the Missouri Department of
Conservation (MDC) assumed the proposal will have an unknown fiscal impact on their
organization.
Oversight notes that the Conservation Sales Tax funds are derived from one-eighth of one
percent sales and use tax pursuant to Article IV Section 43 (a) of the Missouri Constitution, thus
MDC’s sales taxes are constitutional mandates. Additionally, Oversight notes the Park, Soil, and
Water Sales Tax funds are derived from the one-tenth of one percent sales and use tax pursuant
to Article IV Section 47 (a) thus DNR’s sales taxes are constitutional mandates.
Oversight notes officials from the DOR, the DOLIR, the MDA, B&P, DCI, and the MDC each
assume the proposal would allow for selected companies, who participate in the Sandbox
program, to receive relief from various taxes, which would have an effect on General Revenue
and Other State Funds.Additionally, the DOR assumes the need for additional FTE to ensure
compliance with this proposal. Oversight does not have any information to the contrary.
Therefore, Oversight will reflect a potential ($0 or) unknown negative impact to the General
Revenue and Other State Funds, as a result of reduction in a various tax revenues and potential
FTE costs for various state agencies, in the fiscal note.
Oversight notes that there are few examples of various agency costs in similar Sandbox
proposals filed in the States of Utah, Ohio, Nebraska, Nevada, and the Arizona. Each fiscal note
addresses the difficulty of projecting any costs associated with the proposals. However, a recent
fiscal note submitted to the Nebraska Legislature for consideration of similar bill LB 1127
(Nebraska Sandbox proposal - 2022) from various agencies claiming costs associated with the
proposal, are provided in the Table 1.
Oversight notes that the Missouri Sandbox proposal requires, among other duties, the
Administrator to:
L.R. No. 0363S.05P
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being of consumers
agencies and other states
Oversight notes that there are many other duties required from the Sandbox Office under this
proposal. Therefore, it is probable that the agencies tasked with the regulatory implementation of
this program, such as DOR or DED, will need additional FTE in order to provide the regulatory
framework and compliance procedures for this Act.
Oversight notes that Missouri population is at least 3 times greater (6.6M – Missouri population
/ 1.94M –Nebraska Population) than that of Nebraska, thus the costs could potentially reach a
higher level of expenditure in Missouri. Therefore, for purpose of this fiscal note, Oversight will
note an unknown negative impact to the General Revenue and Other State Funds, which could
potentially exceed $250,000 in various FTE and forgone tax revenue costs to various state funds
in the fiscal note.
Table 1.
In response to the similar version of the proposal, HB 2587 – 2022, officials from the Office of
the Governor (GOV) assumed the proposal adds to the governor’s current load of appointment
duties. Individually, additional requirements should not fiscally impact the Office of the
Governor. However, the cumulative impact of additional appointment duties across all enacted
legislation may require additional resources for the Office of the Governor.
A
GENCY
F
Y 2023
F
Y 2024
D
epartment of Economic Development
5
20,380.00
$
6
41,930.00
$
D
epartment of Banking and Finance
2
23,025.00
$
2
15,325.00
$
B
oard of Engineers and Architects
3
,300.00
$
3
,300.00
$
D
epartment of Environment and Energy
2
02,371.00
$
2
02,371.00
$
D
epartment of Agriculture
7
7,500.00
$
7
7,500.00
$
L
iquor Control Commission NFI NFI
N
o Fiscal Impact
N
o Fiscal Impact
M
otor Vehicle Industry Licensing Board No discernable impact No discernable impact
N
o Discernable impact
N
o Discernable impact
N
ebraska State Electrical Division Indeterminable Indeterminable
I
ndeterminable
I
ndeterminable
B
oard of Barber Examiners Indeterminable Indeterminable
I
ndeterminable
I
ndeterminable
A
ttorney General NFI NFI
N
o Fiscal Impact
N
o Fiscal Impact
N
ebraska Real Estate Commission Negligible to significant Negligible to significant
N
egligible to Significant
N
egligible to Significant
S
upreme Court NFI NFI
N
o Fiscal Impact
N
o Fiscal Impact
D
epartment of Labor NFI NFI
N
o Fiscal Impact
N
o Fiscal Impact
D
epartment of Administrative Services
7
1,200.00
$
7
7,000.00
$
D
epartment of Insurance
1
68,900.00
$
1
73,317.00
$
T
otal
1
,127,776.00
$
1
,217,426.00
$
F
TE total
9
.5
1
0.5 L.R. No. 0363S.05P
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In response to the previous version of the bill, officials from the Missouri State Senate assumed
the proposal will have a negative fiscal impact to the senate contingent appropriation to
reimburse 2 senators for travel to meetings of the General Regulatory Sandbox Program
Advisory Committee. Details are in the attached analysis. In summary, it will cost approximately
$281.60 per meeting.
Oversight notes the Missouri State Senate assumes no fiscal responsibility for the other
committee members.
Oversight notes that the Missouri State Senate assumed the proposal will have a direct fiscal
impact on their organization. Oversight assumes the impact to the SEN will not be material and
therefore, will no reflect a negative fiscal impact in the fiscal note.
Bill as whole:
Senate Amendment(s) I and II offer language clarification in Section 620.3915 and Section
34.195 and will not fiscally affect the overall cost stemming from the proposal.
Officials from the Attorney General’s Office, the
Education, the Department of Mental Health, the Department of Natural Resources, the
Department of Corrections, the Missouri Department of
Transportation, the Office of the State Public Defender, the Department of Public Safety
(the Highway Patrol, the Gaming Commission, the Director’s Office, and the State
Emergency Management Agency), the Missouri House of Representatives, the Office of the
State Auditor, the Joint Committee on Public Employee Retirement, the Office of
Legislative Research, the Office of Legislative Oversight, the Missouri Lottery, the Missouri
Consolidated Health Care Plan, the Missouri Higher Education Loan Authority, the Office
of the State Auditor, the Missouri State Employee's Retirement System, the State Tax
Commission, and the Joint Committee on Education each assume the proposal will have no
fiscal impact on their respective organizations. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for these organizations.
In response to a previous version of the bill, officials from the Department of Higher
Education and Workforce Development, the Department of Public Safety (the Capitol
Police, the Alcohol & Tobacco Control, the Fire Safety Missouri National Guard, and
the Veterans Commission), the Missouri Ethic Commission, the
Employees’ Retirement System, the Office of Administration - Administrative Hearing
Commission, the Office of Governor, each assumed the proposal will have no fiscal impact on
their respective organizations. Oversight does not have any information to the contrary.
Therefore, Oversight will reflect a zero impact in the fiscal note for these organizations.
In response to a previous version of the bill, officials from the City of Kansas City, the City of
Jefferson, the City of O’Fallon, and the City of Springfield each assumed this proposal would L.R. No. 0363S.05P
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not have a direct fiscal impact on their respective organizations. Oversight does not have any
information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for
these local political subdivisions.
Officials from the Metropolitan St. Louis Sewer District – 7B Sewer, the South River
Drainage District – 7D Levee, and the Little Blue Valley Sewer District – 7B Sewer each
assume this proposal would not have a direct fiscal impact on their respective organizations.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect a
zero impact in the fiscal note for these local political subdivisions.
Oversight notes many counties and cities assess sales or use taxes on the sale of goods in
Missouri. The tax remitted to various local political subdivisions serves the local political
subdivisions needs. DOR assumes the companies could receive relief from various taxes. DOR
noted that the bill forbids exemption from income tax, sales taxes or property taxes. However,
the local political subdivisions impose other taxes. Therefore, Oversight will note a potential
unknown negative impact to the local political subdivision funds in the fiscal note, depending
upon sandbox participants and applications.
Oversight assumes the removal of sections 536.303, 536.310, 536.315, 536.323, 536.325, and
536.328 could result in a savings to state agencies, including the Department of Economic
Development. Oversight will reflect this potential savings as $0 or Unknown to the General
Revenue Fund.
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. L.R. No. 0363S.05P
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FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUE FUNDRevenue Gain – $300 Fee Paid to
participate in the program (p.3)
§620.3915.2
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
Savings – various state agencies for
removal of Sections 536.303 – 536.328
related to the Small Business
Regulatory Fairness Board
$0 or
Unknown
$0 or
Unknown
$0 or
Unknown
Cost – Reduction in Revenues – various
tax not paid (p.4)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Cost – DOR– FTE necessary to comply
with the proposal (p.5)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
Costs – DED 2 FTE for Section
620.3905 & 1 FTE for Section
620.3800 p. 3
Personnel Service($180,977)($221,515)($225,946) Fringe Benefits($106,668)($129,627)($131,284) Expense & Equipment($30,500)($13,363)($13,630)Total Costs - ($318,145)($364,505)($370,860)FTE Change3 FTE3 FTE3 FTECost – OA – Section 34.195 (additional
workforce needed to comply with this
section p. 5
($50,909)($7,640)($7,640)
ESTIMATED NET EFFECT ON
THE GENERAL REVENUE FUND
Could exceed
($369,054)
Could Exceed
($372,145)
Could Exceed
($378,500)
Estimated Net FTE Change on General
Revenue
3 FTE3 FTE3 FTE L.R. No. 0363S.05P
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OTHER STATE FUNDS Loss of Revenues - to various State
Funds – various tax or fees not paid
OA, MDC, DCI, MDA (p.5)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
NET EFFECT ON THE OTHER
STATE FUNDS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
Loss of Revenues - to various local
funds –various tax not paid (p.7)
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
NET EFFECT ON THE LOCAL
POLITICAL SUBDIVISIONS
$0 or
(Unknown)
$0 or
(Unknown)
$0 or
(Unknown)
FISCAL IMPACT – Small Business
Small businesses, who will participate in the Sandbox program, will be able to receive potential
tax and/or fee reductions and regulation exemptions.
FISCAL DESCRIPTION
RIGHT-TO-START ACT
By no later than June 30, 2025, and annually thereafter, this act requires the Commissioner of
Administration to file a report with the General Assembly that includes information on contracts
awarded to businesses that have been in operation for less than three years, as described in the
act.
This act also requires the Commissioner of Administration, in conjunction with the Office of
Entrepreneurship, which is established by the act, to file a report with the General Assembly L.R. No. 0363S.05P
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making recommendations on improving access and resources for new Missouri businesses that
have been in operation for less than three years, including minority-owned businesses. (Section
34.195)
This provision is identical to a provision in HCS/SS/SB 807 (2022), SS/HCS/HB 2587 (2022),
and HCS/HB 1590 (2022).
OFFICE OF ENTREPRENEURSHIP
This act creates the Office of Entrepreneurship within the Department of Economic
Development. The Office shall employ an individual to promote policies and initiatives to
support the growth of entrepreneurship, including minority entrepreneurship, in this state.
(Section 620.3800)
This provision is identical to a provision in HCS/SS/SB 807 (2022), SS/HCS/HB 2587 (2022),
and HCS/HB 1590 (2022).
REGULATORY SANDBOX ACT
This act establishes the "Regulatory Sandbox Act", which creates the Regulatory Relief Office
within the Department of Economic Development. The Regulatory Relief Office shall administer
the provisions of the act with the purpose of identifying state laws or regulations that could
potentially be waived or suspended for participating businesses during a two-year period in
which the participating business demonstrates an innovative product offering to consumers.
The Regulatory Relief Office shall maintain a web page on the Department's website that invites
residents and businesses to make suggestions regarding laws and regulations that could be
modified or eliminated to reduce the regulatory burden of residents and businesses in the state.
(Section 620.3905)
The Regulatory Relief Office shall be responsible for evaluating and approving or denying
applications to participate in the Sandbox Program. An applicant shall submit an application
along with a $300 application fee to the Regulatory Relief Office, which shall include contact
information and a description of the innovative offering to be demonstrated, including statements
regarding how the innovative offering is subject to licensing, legal prohibition, or other
authorization requirements outside of the Sandbox Program; each law or regulation that the
applicant seeks to have waived or suspended while participating in the Sandbox Program; how
the innovative offering would benefit consumers; and what risks might exist for consumers who
use or purchase the innovative offering, as described in the act.
No later than fifteen business days after the day on which a completed application is received by
the Regulatory Relief Office, the Office shall review the application and refer the application to
each applicable agency, as defined in the act, which regulates the applicant's business. No later
than sixty days after the day on which an applicable agency receives a completed application for L.R. No. 0363S.05P
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review, the applicable agency shall provide a written report to the Sandbox Program director
with the applicable agency's findings, including any identifiable, likely, and significant harm to
the health, safety, or financial well-being of consumers that the relevant law or regulation
protects against, and a recommendation to the Regulatory Relief Office that the applicant either
be admitted or denied entrance into the Sandbox Program. An applicable agency may deny an
application for reasons described in the act. The Regulatory Relief Office shall not approve any
application denied by an applicable agency. (Section 620.3915)
Upon the receipt of a report from all applicable agencies, the Regulatory Relief Office shall
provide the application and associated reports to the General Regulatory Sandbox Program
Advisory Committee, which is created by the act. The Advisory Committee shall be composed of
eleven members, as described in the act. The Advisory Committee shall advise and make
recommendations to the Regulatory Relief Office on whether to approve applications to the
Sandbox Program, and may meet at its own discretion to override a decision of the Regulatory
Relief Office on the admission or denial of an applicant to the Sandbox Program, provided such
override is decided with a two-thirds majority vote of the members of the Advisory Committee,
and further provided that such vote shall be taken within fifteen business days of the Regulatory
Relief Office's decision. Meetings of the Advisory Committee shall not be considered public
meetings for the purposes of the Sunshine Law. (Section 620.3910)
Prior to demonstrating an innovative offering, a sandbox participant shall disclose certain
information to consumers, as described in the act. (Section 620.3925)
At least forty-five days prior to the end of a participant's demonstration period, the participant
shall notify the Regulatory Relief Office that it either intends to exit the Sandbox Program or that
it seeks an extension. The Regulatory Relief Office may grant an extension not to exceed twelve
months, and a participant may seek multiple extensions. If a demonstration includes an
innovative offering that requires ongoing services or duties beyond the two-year demonstration
period, the participant may continue to demonstrate the offering, but shall be subject to all laws
and regulations that were waived or suspended as part of the Sandbox Program.
A sandbox participant shall retain certain records for a period of two years after exiting the
Sandbox Program.
The Regulatory Relief Office shall establish quarterly reporting requirements for each
participant, and each participant shall notify the Regulatory Relief Office and each applicable
agency of any incidents that result in harm to the health, safety, or financial well-being of a
consumer.
No later than forty-five days after a sandbox participant exits the Sandbox Program, such
participant shall submit a written report describing an overview of the demonstration. No later
than thirty days after receiving such report, an applicable agency shall provide a written report to
the Regulatory Relief Office that describes any statutory or regulatory reform the applicable
agency recommends. (Section 620.3930) L.R. No. 0363S.05P
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SMALL BUSINESS REGULATORY FAIRNESS BOARD
Provisions in current law establishing the Small Business Regulatory Fairness Board are
repealed. (Sections 536.303 to 536.315 and sections 536.323 to 536.328)
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
Department of Higher Education and Workforce Development
Department of Mental Health
Department of Natural Resources
Department of Public Safety
Department of Social Services
Missouri Ethic Commission
Missouri Department of Transportation
MODOT – Patrol Employees’ Retirement System
Missouri House of Representatives
Department of Transportation
Office of Administration - Administrative Hearing Commission
Office of Missouri Governor
Office of the State Auditor
Joint Committee on Public Employee Retirement
Office of Legislative Research
Office of Legislative Oversight
Joint Committee on Education
City of Kansas City
Jefferson City
City of O’Fallon
City of Springfield
Julie MorffRoss StropeDirectorAssistant DirectorFebruary 1, 2023February 1, 2023