Foreclosure Bill on Move in Missouri; Some Notices Eliminated in Kentucky

A bill that would allow mortgage trustees in Missouri to publish foreclosure notices on websites rather than newspapers picked up momentum yesterday afternoon when it received a favorable vote in the House Legislative Oversight Committee. The next step is the House floor.

SB 909 is widely believed to be an effort by trustees in this nonjudicial foreclosure state to profit off the notices they are required to publish before auctioning delinquent properties to the highest bidders. Two of the largest trustee law firms in Missouri have been the primary proponents of the legislation.

The public notice provisions of SB 909 are identical to HB 1651 and SB 877, companion bills that had been stuck in committee despite “do pass” votes earlier this year. Last month, HB 1651 sponsor Rep. Robert Cornejo added his public notice language to SB 909, which modifies rules pertaining to trusts and allows fiduciaries to access the electronic records of their account holders. Rep. Cornejo then held a vote on the amended bill in the House General Laws Committee, which he chairs. The committee passed the bill on April 17 by a vote of 8-3. The margin yesterday in the Oversight Committee was 8-1.

The Missouri Press Association remains optimistic that the bill can be stopped in the Senate if it is approved by the House. Missouri’s session is scheduled to adjourn in three weeks.

As if public notice advocates needed any other reminders never to rest when lawmakers are in session, the Kentucky legislature eliminated a number of different types of newspaper notice at the last possible moment before it adjourned last month. The new law allows school districts in the state to publish annual financial statements and report cards on their websites instead of newspapers. It also authorizes counties and cities over 90,000 in population to bypass newspapers by publishing audits, ordinances and bid solicitations on their own websites.

The provisions that ultimately passed were originally added to the state budget bill earlier this year by their primary sponsor, State Sen. Chris McDaniel. In late March, Sen. McDaniel began amending and shuttling the language eliminating newspaper-notice requirements between the budget bill and another revenue measure like so many games of gut-and-go and three-card monte. The public notice language finally ended up in HB 366, a former sewer bill which by then had morphed into legislation revising the state’s tax code and raising almost $400 million in new revenue. The 296-page bill passed both the House and Senate by relatively slim margins on April 2 even though legislators had less than five hours to read it. All Democrats opposed the measure but GOP majorities in both chambers voted for it.

Republican Gov. Matt Bevin said the bill would violate his no-new-taxes pledge so he vetoed it the following week. It only takes a simple majority to override a governor’s veto in Kentucky, and both chambers nullified Bevin’s action a few days later.

Sen. McDaniel has introduced public notice legislation every year since he was elected in 2013. According to Kentucky Press Association Executive Director David Thompson, McDaniel said he was frustrated that local government units in his home district of Kenton County were required by state law to publish their notices in the highest-circulation, most expensive newspaper in the county, regardless of its circulation patterns. The 90,000-population threshold for cities and counties was designed to address that issue while limiting opposition among legislators in smaller towns that support newspaper notice. As a result of the threshold, only newspapers in eight of 120 counties in the state are likely to lose audit, ordinance and bid solicitation notices under the new law.

By contrast, the provision allowing school districts to publish financial statements and report cards on their websites affects the entire state. But it returns newspapers to a status quo they lived with for over a decade after similar language had first been included in the state budget in 2002. Gov. Bevin vetoed that provision in 2016 at the same time he vetoed another budget measure that would have allowed all public agencies in the state to move most of their public notices to government websites. The override of the governor’s latest veto puts the relaxation of school-district notice requirements back on the books.