The 2019 regular session of the West Virginia Legislature concluded at midnight on March 9, 2019. During the 60-day session, the House of Delegates introduced 1,142 bills, while the Senate introduced 681. A total of 294 bills completed legislative action before the final gavel fell.
Since the Legislature adjourned sine die
, the Governor now has until midnight on March 27 to act upon those bills. In West Virginia, there is no pocket veto, so if the Governor does not approve a bill, it will become law without his signature. If he does veto a bill, the Legislature will not be able to override because it has already adjourned.
In order to better track the fate of some of the legislation we previously reported to you, we have arranged the bills into the following general categories: West Virginia Budget, Courts and Tort Reform, Insurance, Healthcare, Education, Consumer Finance, and Government.
WEST VIRGINIA BUDGET
Governor Jim Justice signed Enrolled House Bill 2020
, the FY2020 budget bill, on Thursday, March 14 without fanfare. This is the second year in a row where the Legislature completed action on the budget without the need for an extended session. HB 2020 also represents the second consecutive budget bill signed by the Governor after allowing the budget to go into law without his signature during his first year in office. HB 2020 represents a $4.6 billion spending plan from the general revenue fund. Although Governor Justice has not acted on the individual tax cut bills yet, the budget reflects tax reductions for social security income and severance tax cuts for steam coal and limestone. Both the House and Senate provided $10 million for the higher education tuition assistance program, spread out among the two-year and four-year colleges and universities. The budget bill provides a pay raise for most state employees, plus an additional $105 million to shore up the Public Employees Insurance Agency. It provides funding for “Jim’s Dream,” the Governor’s proposal for drug addiction treatment and workforce training. The state budget establishes a $67 million line item for educators’ pay raises, but doesn’t yet appropriate any money in anticipation of the special session to resolve these and other education reform issues later this spring.
COURTS and TORT REFORM
The creation of an Intermediate Court of Appeals has been an enduring interest of the business community, and this year it looked like it might attain that goal when this bill was introduced by the Governor. However, after passing out of the Senate by the slimmest margin possible, 17-16, it went to the House where it was never heard from again. If enacted, this bill would have created an Intermediate Court of Appeals to hear appeals from all administrative, civil and workers' compensation cases. The ICA would have been composed of a three-judge panel and appeals from its decisions to the Supreme Court would have been by petition, instead of right. In the waning days of the session, once it was clear the House wasn't going to act, the Senate Judiciary attempted to amend the contents of SB 266 into HB 2164
, which was then under consideration. That bill had the distinction of being the first to complete action in one chamber this session and provided simply that all appeals to the Supreme Court are a matter of right and every party must have the opportunity to be heard and obtain a written decision on the merits of the case. The attempt failed on a tie vote causing both bills to die.
The Governor has already approved this bill, and it becomes effective on April 29, 2019. The bill standardizes the types of documents exempt from disclosure outside of the peer review process at healthcare facilities. Further, the bill extends those confidentiality protections to hiring, firing and credentialing decisions made by such boards.
This bill was enacted by the Legislature and has been presented to the Governor. Briefly stated, it updates the statutory qualifications for any individual submitting a pre-suit screening certificate of merit in a medical malpractice action. Such a person must provide an opinion to a reasonable degree of medical probability, be licensed by a state board, engaged in the medical field relating to the claimant's injuries or conditions, and devote 60 percent of his professional time to the active clinical practice of medicine or the teaching of medicine in such field.
The Legislature enacted this bill which provides that in a medical professional liability action alleging inappropriate staffing or supervision, a provider is accorded a conclusive presumption that the staffing level of a particular unit is appropriate upon proof of compliance with applicable state or federal laws. Moreover, upon presentation of such proof, the provider is also accorded a rebuttable presumption that there was adequate supervision to prevent falls or injuries. Conversely, if there is proof the staffing level was less than that required by such law, there is a rebuttable presumption of inadequate supervision and that such was a contributory cause to the injuries alleged in the case.
The clock ran out on this bill while the two chambers were trying to reconcile differences between their respective versions. If enacted, it would have reformed the law relating to judgments for future medical monitoring by clarifying plaintiffs must first prove that (1) future medical surveillance and screenings are directly related to a presently existing and diagnosable physical disease and (2) such existing physical disease was caused by the defendant’s conduct. Lastly, the bill required such payments be made by defendants into a fund administered by the court and available to be drawn upon by plaintiffs, but only after they have actually obtained the surveillance or screenings. Remaining balance of moneys would have been returned to the defendants.
The purpose of this bill was to ensure that where no candidate for Supreme Court justice received more than 40 percent of the votes cast, a run-off election would be held between the top two vote getters. If this bill had been in place for the last two Supreme Court elections, there would have been a run-off in each. Even though it advanced out of House Judiciary early in the session, it stalled on second reading there and never went further.
The Legislature eliminated the taxation on annuity considerations collected by a life insurer for taxable years after January 1, 2021. West Virginia was one of only seven states that still taxed annuities. With the recent shift away from defined benefit pensions, annuities play an increasingly significant role in retirement security for people of all income levels, and the enactment of this bill provides them with needed tax relief.
This bipartisan bill sponsored by all three physicians in the Senate never advanced out of committee. If enacted, it would have reinstated 5 percent award for a diagnosis of occupational pneumoconiosis without measureable impairment and added a new provision granting a 25 percent permanent partial disability award for a diagnosis of massive fibrosis or complicated pneumoconiosis without impairment.
The Governor approved this bill which mandates insurance companies respond to prior authorization requests within seven days for non-urgent requests and two days where a delay could jeopardize life or health of the patient. Among other requirements previously reported, the bill requires insurance companies and MCOs to develop the necessary forms and portals and commence accepting such electronic requests by July 1, 2020.
The Legislature enacted this bill which prescribes the minimum standard of valuation for health insurance contracts. The legislation was needed for West Virginia to remain accredited with the National Association of Insurance Commissioners.
The Legislature enacted this bill which requires that the settlement value for a motor vehicle total loss claim must also include the 5 percent consumer sales tax. This bill permits uniformity in taxation following the repeal of the 5 percent excise tax on vehicles.
The Legislature enacted the Corporate Governance Annual Disclosure Act so that West Virginia could remain accredited with the National Association of Insurance Commissioners. This bill requires insurers writing more than $500 million, or insurance groups writing more than $1 billion, in annual premiums to maintain an internal audit function providing independent, objective, and reasonable assurance to the insurer’s or insurance group’s audit committee regarding the insurer’s governance, risk management, and internal controls.
The Legislature also enacted this bill in order to remain accredited with the National Association of Insurance Commissioners. It provides authority to a designated state insurance commissioner to act as a group-wide supervisor for an internationally active insurance group. For a holding company group to be considered an internationally active insurance group, it must meet various criteria, including premiums written in at least three countries, at least 10 percent of premiums written outside the United States, and total assets greater than $50 billion or total premiums greater than $10 billion.
After advancing out of House Banking & Insurance Committee, this bill stalled in House Judiciary where it died. The purpose of this bill was to clarify that if a policyholder has other insurance or other sources of remuneration for a loss covered by the mine subsidence insurance, the Mine Subsidence Insurance Fund is only liable for the portion of the loss which the other insurance or other source of remuneration would not cover.
West Virginia took a significant step forward in the implementation of its Medical Cannabis Act of 2017 by enacting this bipartisan bill that provides for the establishment of banking services for the medical cannabis industry. In short, this bill authorizes the State Treasurer to seek bids from qualified financial institutions to provide the banking services required to operate the medical cannabis permit and payment systems.
In a further attempt to encourage the development of the medical cannabis industry in West Virginia, the Legislature also enacted this bill whose purpose is to encourage investment in the medical cannabis infrastructure by increasing the number of permits allowed for growers, processers and dispensaries, while also removing limitations on the vertical integration of those entities. The bill further clarified some of the standards imposed on physicians for certifying medical cannabis to their patients.
After bipartisan passage in the Senate, the House Health Committee defeated what was commonly referred to as the T-21 bill. As introduced, it would have raised the legal age for the purchase of tobacco, as well as e-cigarette, products to 21. The Senate Judiciary Committee later carved out an exemption for active duty military personnel and further amended it in order to include all of the provisions of SB 81
. That bill would have made it a secondary traffic offense to smoke in a car with an individual under the age of 17 present. So, both bills, T-21 and the smoking prohibition in cars, rolled into one were voted down by the House Health Committee.
The Legislature made access to West Virginia’s two-year community and technical colleges easier for high school students by reducing the cost in what is called “last-dollar-in” funding, which would pay tuition costs not already covered by scholarships or grants or other funding. Among other things, the bill would call for the creation of advanced career education programs through partnerships between public secondary schools and community and technical colleges for the purpose establishing clear and efficient pathways that begin in high school and lead to obtaining advanced certifications and associate degrees.
The Senate failed to force the House, and the teachers and school service personnel, to accept an omnibus education bill that included pay raises for their members, but also such controversial reforms as charter schools and education savings accounts. As you may recall from our earlier reporting, this bill triggered a two-day work stoppage in 54 of the 55 counties and a successful motion in the House to postpone indefinitely. Its death in that chamber essentially foretold the fate of HB 2730
, the stand-alone pay raise bill, in the Senate. That bill was introduced for the Governor and would have provided a pay raise for teachers, school service personnel and state police, but contained no other provisions relating to educational reform. The Senate refused to advance that bill and it failed too. The failure of both bills prompted Governor Justice to call a special session for "education betterment," which will commence in earnest after the stakeholders have conducted a listening tour across the state.
The other education related bill that stoked some controversy is the Campus Self Defense Act, otherwise known as the "campus carry bill." The bill would have required colleges to allow those licensed to carry a concealed deadly weapon to do so on campus and in campus buildings, though it exempted certain areas such as events in campus sports arenas with more than 1,500 seats, campus daycare centers, campus police headquarters, and private events. While the bill advanced out of the House, it was shot down in Senate Judiciary.
This seemingly non-controversial bill would have established the Underwood-Smith scholarship program for qualified students in the areas of mathematics, science and special education. Despite passing the House unanimously, it failed to advance in the Senate.
This bill's stated purpose was to bring the West Virginia Consumer Credit and Protection Act into conformity with the federal Fair Debt Collection Practices Act by limiting the amount a consumer may recover in an action against a creditor to actual damages and a civil penalty of $1,000 per case, instead of violation. This bill failed to advance out of Senate Judiciary.
In its fourth attempt at passage, this bill was finally enacted by the Legislature this session. Among other things, its purpose was to adjust the threshold amounts for consumer loans made by regulated consumer lenders. The bill maintained the maximum finance charges applicable to the three levels, but adjusted upward the brackets to which those charges could be applied on these non-revolving loans.
The Legislature made the Municipal Home Rule Pilot program a permanent fixture on the West Virginia municipal landscape, striking a provision that would have allowed voters to call for a referendum within 45 days of any home rule law passed by a city council. The other bipartisan amendment strikes a provision requiring voters to approve any bond sales that would use the local sales tax for revenue. SB 4 continues all existing plans and ordinances home rule cities have in place, but requires updates to any sections affected by the new law. Beginning July 1, 2019, the Home Rule Board will accept up to four applications per year from Class IV municipalities – population under 2,000 – that wish to join. Also effective July 1, 2019, all participants must pay a $2,000 annual assessment into a Home Rule Board Operations Fund for operation and administration of the board until the fund reaches $200,000.
This bill would have provided incentives to promote consolidation of local government, but again failed to advance in the House after having passed the Senate unanimously. Such incentives to local governing entities would have included preference for road construction or repair projects, the ability to impose a 1 percent sales tax, free audits by the state Auditor’s Office to recommend additional efficiencies, and, for counties that consolidate, a 10 percent discount on Regional Jail Authority bills for 10 years.
This newly enacted bill will transfer the Medicaid Fraud Unit from the Department of Health & Human Resources to the Attorney General's Office effective October 1, 2019. Its passage marks a victory for Attorney General Patrick Morrissey who has been advocating for this transfer for a couple of years. Since the total state and federal Medicaid spending in West Virginia is just over $3.7 billion, making it the second largest line item in the state budget, Attorney General Morrissey successfully argued his dedicated professional staff of attorneys and investigators were in a better position to pursue larger and more complex fraud cases.
HB 2005 and SB 3
Despite near unanimous approval by the House, the Broadband Expansion Act of 2019 did not advance in the Senate, but the Legislature instead enacted the same provisions in Senate Bill 3, which passed both houses. This legislation had several components including a provision to offer a five-year tax credit to encourage construction of new cell towers, a “Make-Ready Pole Access” section governing access to fiber on certain existing utility poles, and the West Virginia Small Wireless Facilities Deployment Act, which was focused on placing small antenna boxes, called small wireless facilities, in communities to enable 5G broadband access. SB 3 is now awaiting the Governor's signature.
The Legislature significantly reformed the state’s foster care system, which is charged with caring for over 6,700 children. This wide-ranging bill, which, among other things, creates an ombudsman position to investigate foster care complaints, requires assessments of homes on an annual basis to find safety issues, protects custody rights of parents who participate in substance abuse treatment programs, and permits the Department of Health and Human Resources to contract with a managed care organization to oversee health care and social services for foster children.
While this bill drew considerable public comment and wide-spread approval, it was never taken up. The bill sought to make it a misdemeanor to continuously operate a vehicle in the left lane of a multi-lane road when doing so impedes the flow of traffic.
In a further sign of a real liberalization of certain social mores (see discussion about medical cannabis above), the Legislature enacted and the Governor signed into law this bill which removed the restriction on Sunday alcohol sales, except for Easter Sunday and Sundays on which Christmas falls. The bill was effective upon passage on February 19, 2019.
In yet another sign of the liberalization of certain mores, the Legislature continued to promote the growth of the craft brew industry by updating its 2009 law that essentially kick-started this industry and introduced the word “growler” to the beer-drinking world. A growler is a washable ceramic or glass container used for the purchase of craft beer for consumption off premises. This bill now takes the 2009 maximum alcohol by volume limit of 12 percent and boosts it to 15 percent. Furthermore, among other things, the bill eliminates the two-growler-per-customer limit, and increases the maximum permitted growler size from 64 to 128 ounces. At the time of the enactment of the 2009 law, there were a total of three craft breweries in West Virginia. Today, there are almost 30 craft breweries.
This bipartisan bill would have allowed for the current licensees of the state's racetrack casinos to establish a satellite, or secondary, location within the same county without a requirement for a second county-wide referendum. Despite such support, opposition from other business competitors to the racetracks stalled the bill in Senate Finance.
Unlike HB 2901, this gaming bill fared better and was enacted with broad bipartisan support. The bill permits the state’s four licensed racetracks and the Greenbrier Resort to offer interactive wagering games online. Since Governor Justice owns the Greenbrier Resort, there is a strong chance he will permit this bill to become law without his signature, as he did last year with the West Virginia Lottery Sports Wagering Act of 2018.
House Joint Resolution 17
For the second year in a row, the Legislature failed to advance the Joint Resolution necessary to place on the ballot an amendment to the West Virginia Constitution to permit the taxation of certain business inventory, machinery, and equipment personal property to be determined exclusively by law. After passage out of House's Finance, the bill stalled in Judiciary Committee. Thus, West Virginia will, for the time being, remain in the minority of states that uses this form of taxation on inventory.
If you have any questions about this year's legislative session, please contact us