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I get the question and why the correct answer is correct but I'm curious as to how you're supposed to figure out that sentence 2 of the stimulus is the conclusion. To me it seems like either sentence 1 or sentence 2 of the stimulus could be the conclusion, since there are no conclusion indicator words like "therefore" etc. present anywhere.

Because of the relationship between the statements. Either sentence could theoretically have been a conclusion in a given argument, but based on the way that sentence is structured, you can "add" the first and third sentences to produce the second as a conclusion (sort of, anyway, since it's a missing assumption). Adding the second to the third doesn't give you the first in anywhere near the same way.

Stimulus:

If legislators want to do X, they must do Y. Legislators fail to do X.

Remember, the conclusion in a necessary question is usually connected to the rest of the stimulus in some loose way. You want to find where the conclusion can connect with the support to find the gaping hole that's left to fill with the assumption.

Right when I saw the conditional and the 2nd sentence being 1/2 of the contrapositive of the conditional, I knew that the 2nd sentence was the conclusion right off the bat. Plus the 1st sentence is not the conclusion because the 3rd sentence doesn't really support it, but the 2nd sentence. You get a feel for the conclusion by reading how the stimulus "flows" (in a sense).