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-SECOND REGULAR SESSION
-HOUSE BILL NO. 1998
-103RD GENERAL ASSEMBL Y
-INTRODUCED BY REPRESENT A TIVE MEIRA TH.
-5053H.01I JOSEPH ENGLER, Chief Clerk
-AN ACT
-T o amend chapters 160 and 173, RSMo, by adding thereto two new sections relating to state
-funding of educational institutions.
-Be it enacted by the General Assembly of the state of Missouri, as follows:
-Section A. Chapters 160 and 173, RSMo, are amended by adding thereto two new
-2 sections, to be known as sections 160.2560 and 173.2560, to read as follows:
-160.2560. 1. This section shall be known and may be cited as the "Defunding
-2 Diversity , Equity , and Inclusion in Elementary and Secondary Education Act".
-3 2. As used in this section, the following terms mean:
-4 (1) "Department", the state department of elementary and secondary education;
-5 (2) "Diversity , equity , and inclusion" or "DEI", any educational pr ogram,
-6 course, initiative, or curriculum designed to pr omote, teach, or enfor ce principles
-7 r elated to diversity , equity , and inclusion. DEI includes, but is not limited to, training,
-8 workshops, curriculum materials, student grou ps, and any other pr ogram or event
-9 r elated to such subjects;
-10 (3) "Educational institution", each public school and school district in this state;
-11 (4) "State funding", any financial support, grants, or allocations pr ovided by the
-12 state of Missouri to an educational institution, including federal funds passed thr ough
-13 the state.
-14 3. (1) No educational institution shall use state funding for the implementation,
-15 teaching, or support of DEI pr ograms or initiatives.
-EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
-intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
-16 (2) (a) An educational institution that uses state funding for activities rela ted to
-17 DEI shall ret urn the amount of state funding used for such activities to the state
-18 tr easury .
-19 (b) In addition to the repa yment of state funding, the offending educational
-20 institution shall lose all state funding for the fiscal year in which the violation occurs.
-21 (c) The state shall also withhold any futur e state funding to the offending
-22 educational institution until the violation is recti fied to the satisfaction of the
-23 department.
-24 4. (1) The department shall establish pr ocedur es to monitor the use of state
-25 funding in educational institutions and ensure compliance with this section.
-26 (2) Any res ident, taxpayer , or employee of an educational institution may file a
-27 complaint with the department if such individual believes an educational institution has
-28 violated this section.
-29 (3) The department shall issue an annual report detailing the enforcem ent of this
-30 section. Such rep ort shall include the number of violations and the total amount of state
-31 funding recov ered.
-173.2560. 1. This section shall be known and may be cited as the "Defunding
-2 Diversity , Equity , and Inclusion in Higher Education Act".
-3 2. As used in this section, the following terms mean:
-4 (1) "Department", the state department of higher education and workfor ce
-5 development;
-6 (2) "Diversity , equity , and inclusion" or "DEI", any educational pr ogram,
-7 course, initiative, or curriculum designed to pr omote, teach, or enfor ce principles
-8 r elated to diversity , equity , and inclusion. DEI includes, but is not limited to, training,
-9 workshops, curriculum materials, student grou ps, and any other pr ogram or event
-10 r elated to such subjects;
-11 (3) "Educational institution", a public postsecondary educational institution
-12 governed or supervised by a:
-13 (a) Board erecte d under chapter 172, 174, 175, or 178;
-14 (b) Board of trustees of a community college; or
-15 (c) State board for any other technical school;
-16 (4) "State funding", any financial support, grants, or allocations pr ovided by the
-17 state of Missouri to an educational institution, including federal funds passed thr ough
-18 the state.
-19 3. (1) No educational institution shall use state funding for the implementation,
-20 teaching, or support of DEI pr ograms or initiatives.
-HB 1998 2
-21 (2) (a) An educational institution that uses state funding for activities rela ted to
-22 DEI shall ret urn the amount of state funding used for such activities to the state
-23 tr easury .
-24 (b) In addition to the repa yment of state funding, the offending educational
-25 institution shall lose all state funding for the fiscal year in which the violation occurs.
-26 (c) The state shall also withhold any futur e state funding to the offending
-27 educational institution until the violation is recti fied to the satisfaction of the
-28 department.
-29 4. (1) The department shall establish pr ocedur es to monitor the use of state
-30 funding in educational institutions and ensure compliance with this section.
-31 (2) Any res ident of the state or employee of an educational institution may file a
-32 complaint with the department if such individual believes an educational institution has
-33 violated this section.
-34 (3) The department shall issue an annual report detailing the enforcem ent of this
-35 section. Such rep ort shall include the number of violations and the total amount of state
-36 funding recov ered.
-✔
-HB 1998 3
+COMMITTEE ON LEGISLATIVE RESEARCH
+OVERSIGHT DIVISION
+
+FISCAL NOTE
+
+ L.R. No.: 5053H.01I
+ Bill No.: HB 1998
+ Subject: Education, Elementary and Secondary; Higher Education; Department of
+Elementary and Secondary Education; Department of Higher Education and
+Workforce Development
+ Type: Original
+ Date: January 27, 2026
+
+Bill Summary: This proposal prohibits educational institutions from using state funding for
+diversity, equity, and inclusion purposes.
+
+FISCAL SUMMARY
+
+ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
+FUND AFFECTED FY 2027 FY 2028 FY 2029
+General Revenue*
+($148,080) to
+Unknown
+($174,704) to
+Unknown
+($177,871) to
+Unknown
+
+Total Estimated Net
+Effect on General
+Revenue
+($148,080) to
+Unknown
+($174,704) to
+Unknown
+($177,871) to
+Unknown
+*Oversight notes the unknown revenue is from educational institutions with DEI violations
+having to repay state funding and having current and subsequent funding suspended until the
+DEI violation has been corrected which could exceed the $250,000 threshold.
+
+ESTIMATED NET EFFECT ON OTHER STATE FUNDS
+FUND AFFECTED FY 2027 FY 2028 FY 2029
+Colleges and
+Universities*
+
+$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)
+*Oversight reflects the impact to educational institutions with DEI violations having to repay
+state funding and having current and subsequent funding suspended until the DEI violation has
+been corrected which could exceed the $250,000 threshold.
+
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 2 of 7
+January 27, 2026
+MR:LR:OD
+Numbers within parentheses: () indicate costs or losses.
+ESTIMATED NET EFFECT ON FEDERAL FUNDS
+FUND AFFECTED FY 2027 FY 2028 FY 2029
+
+Total Estimated Net
+Effect on All
+Federal Funds $0 $0 $0
+
+ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)
+FUND AFFECTED FY 2027 FY 2028 FY 2029
+General Revenue  1 FTE 1 FTE 1 FTE
+
+Total Estimated Net
+Effect on FTE 1 FTE 1 FTE 1 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 FUNDS
+FUND AFFECTED FY 2027 FY 2028 FY 2029
+
+Local Government* $0 or (Unknown) $0 or (Unknown) $0 or (Unknown)
+* Oversight reflects the impact to educational institutions with DEI violations having to repay
+state funding and having current and subsequent funding suspended until the DEI violation has
+been corrected.
+
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 3 of 7
+January 27, 2026
+MR:LR:OD
+FISCAL ANALYSIS
+
+ASSUMPTION
+
+§160.2560 – Defunding Diversity, Equity, and Inclusion in Elementary and Secondary Education
+Act
+
+Officials from the Department of Elementary and Secondary Education (DESE) state that
+§§160.2560 and 173.2560 would require the department to monitor spending to ensure no state
+funds are used for the implementation, teaching, or support of diversity, equity, and inclusion
+(DEI) programs or initiatives. The monitoring of spending and programs would require an FTE
+coordinator along with associated salary, expenses and equipment. This individual would be
+responsible for ensuring violations did not occur and if/when they did would work with the local
+education agencies (LEA’s) to rectify the violation. In addition, they would respond to
+complaints and develop/submit the report as outlined.
+
+Currently payments can be withheld from districts that violate the guidelines as written however
+DESE cannot estimate the potential savings to the state as it is unknown how many, if any,
+violations would occur.
+
+Oversight does not have any information to the contrary. Therefore, Oversight will show the
+estimated impact of 1 FTE and a $0 or unknown potential savings provided by DESE in the
+fiscal note.
+
+Officials from High Point R-III state that the proposed legislation would have a fiscal impact
+but did not provide any additional information.
+
+Oversight notes that this provision may cause educational institutions that use state funding for
+the implementation, teaching or support of DEI programs to have to repay the state funding and
+also have current and subsequent funding suspended until the DEI violation has been corrected.
+Oversight will range the fiscal impact to school districts from $0 (no DEI violation) to an
+unknown cost for DEI violations in the fiscal note.
+
+§173.2560 - Defunding Diversity, Equity, and Inclusion in Higher Education Act
+
+Officials from the Department of Higher Education and Workforce Development (DHEWD)
+assume the proposal will have no fiscal impact on their organization.
+
+Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero
+impact in the fiscal note for this agency.
+
+Officials from the University of Central Missouri state that the fiscal impact is Unknown but
+likely negative. The types of programs, courses, curriculum or initiatives intended to be regulated
+are not defined in the current bill language.  Universities are required by federal law (American
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 4 of 7
+January 27, 2026
+MR:LR:OD
+with Disabilities Act) and State of Missouri law (Missouri Human Rights Act) to provide
+"equitable" access to university programs for students, employees and visitors with disabilities,
+which necessitates training of employees that engage with students, employees and visitors.
+
+Failure to properly administer these laws could result in the loss of federal funds and/or levying
+fines.  Further, Title IX (federal) provisions require the equitable treatment of male and female
+athletes, which includes training for senior administrators and coaches regarding use of funds
+and the impact of decision-making on gender equity; an inability to train could result in loss of
+federal funds and/or fines for failure to comply.
+
+Finally, the current bill language does not extend protections for traditional classroom
+instruction, which seemingly prohibits discussion of important concepts such as the ADA,
+Missouri Human Rights Act and Title IX, nor are there protections for institutions when faculty
+are acting on their own and engaged in free speech.  These limitations could lead to claims
+against the institution that are de facto baseless but are costly to defend.
+
+Officials from the University of Missouri System state that the University of Missouri has
+reviewed this proposed legislation and does not anticipate a significant financial impact.
+
+Oversight notes that this provision may cause educational institutions that use state funding for
+the implementation, teaching or support of DEI programs to have to repay the state funding and
+also have current and subsequent funding suspended until the DEI violation has been corrected.
+Oversight will range the fiscal impact to community colleges, colleges, and universities from $0
+(no DEI violation) to an unknown cost for DEI violations that could exceed the $250,000.
+
+Responses regarding the proposed legislation as a whole
+
+Officials from the Office of the State Treasurer (STO) state that there is no identifiable impact
+on STO. Oversight will not reflect a fiscal impact to the organization in the fiscal note.
+
+Officials from the Northwest Missouri State University assume the proposal will have no fiscal
+impact on their organization. Oversight does not have any information to the contrary.
+Therefore, Oversight will reflect a zero impact in the fiscal note for this agency.
+
+Oversight only reflects the responses that we have received from state agencies and political
+subdivisions; however, other local agencies were requested to respond to this proposed
+legislation but did not. Upon the receipt of additional responses, Oversight will review to
+determine if an updated fiscal note should be prepared and seek the necessary approval to
+publish a new fiscal note. A general listing of political subdivisions included in our database is
+available upon request.
+
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 5 of 7
+January 27, 2026
+MR:LR:OD
+
+FISCAL IMPACT – State Government FY 2027
+(10 Mo.)
+FY 2028 FY 2029
+GENERAL REVENUE
+
+Savings – (§§160.2560 & 173.2560)
+State funding recovered from
+educational institutions that violate DEI
+guidelines. p.3-4 $0 or Unknown $0 or Unknown $0 or Unknown
+
+Cost - DESE (§160.2560) p.3
+   Personnel Service ($84,084) ($102,919) ($104,977)
+   Fringe Benefits ($47,432) ($57,730) ($58,558)
+   Expense & Equipment ($16,564) ($14,055) ($14,336)
+Total Cost – DESE ($148,080) ($174,704) ($177,871)
+   FTE Change - DESE 1 FTE 1 FTE 1 FTE
+
+ESTIMATED NET EFFECT TO
+GENERAL REVENUE
+($148,080) to
+Unknown
+($174,704) to
+Unknown
+($177,871) to
+Unknown
+
+COLLEGES AND UNIVERSITIES
+
+Cost – (§173.2560) State funding
+suspension and repayment from schools
+that have a DEI violation. p.3-4
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+
+ESTIMATED NET EFFECT ON
+COLLEGES AND UNIVERSITIES
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 6 of 7
+January 27, 2026
+MR:LR:OD
+FISCAL IMPACT – Local Government FY 2027
+(10 Mo.)
+FY 2028 FY 2029
+LOCAL POLITICIAL
+SUBDIVISIONS
+
+Cost – School Districts (§160.2560)
+State funding suspension and
+repayment from schools that have a
+DEI violation. p.3
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+
+Cost – Community Colleges
+(§173.2560) State funding suspension
+and repayment from schools that have a
+DEI violation. p.3-4
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+$0 or
+(Unknown)
+
+ESTIMATED NET EFFECT ON
+LOCAL POLITICIAL
+SUBDIVISIONS
+$0 or
+(Unknown)
+
+$0 or
+(Unknown)
+
+$0 or
+(Unknown)
+
+FISCAL IMPACT – Small Business
+
+No direct fiscal impact on small businesses would be expected as a result of this proposal.
+
+FISCAL DESCRIPTION
+
+This bill creates the "Defunding Diversity, Equity, and Inclusion in Elementary and Secondary
+Education Act" and the "Defunding Diversity, Equity, and Inclusion in Higher Education Act".
+The bill provides definitions for "Diversity, Equity, and Inclusion" or "DEI" and requires that
+educational institutions no longer use state funding for the implementation, teaching, or support
+of DEI programs or initiatives.
+
+The bill requires any educational institution that uses state funding for a prohibited program to
+repay the funding. Offending institutions will also have funding suspended in the current fiscal
+year and in subsequent years until the DEI violation is fixed.
+
+The bill requires that the Department of Higher Education and Workforce Development and the
+Department of Elementary and Secondary Education issue an annual report on the number of
+violations and the amount of state funding recovered due to DEI violations.
+This legislation is not federally mandated, would not duplicate any other program and would not
+require additional capital improvements or rental space.
+
+L.R. No. 5053H.01I
+Bill No. HB 1998
+Page 7 of 7
+January 27, 2026
+MR:LR:OD
+Jessica Harris
+Assistant Director
+January 27, 2026
+Julie Morff
+Director
+January 27, 2026
+SOURCES OF INFORMATION
+
+Department of Elementary and Secondary Education
+Department of Higher Education and Workforce Development
+Office of the State Treasurer
+University of Missouri System
+High Point R-III
+Northwest Missouri State University
+University of Central Missouri