The Senate and Assembly met this week for what is likely the last floor votes of the 2017-18 session. Although the Assembly had said they were finished in February, Senate changes to priority issues led the Assembly to meet in extraordinary session on Thursday. In the extraordinary session, the Assembly passed gun safety legislation outside of what passed the Senate, and it is unclear whether the Senate will return to take up the controversial bill.

 

Senate Session

The Senate session on March 20 began with a several-hour delay while the Republican Senate and Assembly caucuses finalized compromises on several key issues including juvenile justice reform, the child tax rebate and sales tax holiday, and school safety.

On the child tax rebate and sales tax holiday, the Senate passed its own bill (SB 798) that narrowed the Assembly’s version, but still included the $100 per child credit and a one-time, two-day sales tax holiday the first weekend in August of 2018. The sales tax holiday exempts from sales taxes purchases of 1) clothing priced up to $75, 2) personal computers priced up to $750, 3) school computer supplies priced up to $250, and 4) school supplies priced up to $75.

Despite initial reluctance from the Republican Senate caucus, the Senate ultimately decided to pass a version of the juvenile justice bill (AB 953) restoring much of the legislation passed by the Assembly. The Senate plan closes Lincoln Hills, establishes a new facility for the more serious offenders, and includes the county run model for secured residential care centers for children and youth. The bill includes a study committee to make recommendations throughout the process.

On school safety, the Senate passed a substitute amendment to a bill already on the calendar (AB 843). The Senate’s plan mirrors most of Gov. Scott Walker’s proposal, including establishing an Office of School Safety in the Department of Justice and funding $100 million in school safety grants. The Senate version does not allow school safety officers as an eligible expense under the grant program and removes the privacy exemption in Walker’s plan for law enforcement access to school surveillance footage.

The Senate also passed an amended version of AB 773, a bill that would lower litigation costs for businesses by modernizing Wisconsin’s civil procedures for discovery and class actions. The Senate amendment to the bill, which first passed the Assembly on a bipartisan voice vote, would eliminate the provisions limiting discovery of electronically stored information.

The Senate also concurred in a long list of bills that now await Walker’s signature.

On AB 259, which updates the Wisconsin tax code to certain provisions in the Internal Revenue Code, Sen. Janis Ringhand (D-Evansville) introduced an amendment related to property tax assessments based on comparable sales, or what municipalities are calling the “dark store loophole.” While leadership ruled the amendment not germane, Senate Majority Leader Scott Fitzgerald (R-Juneau) said there would be an upcoming legislative study committee on the issue. The Senate then concurred in AB 259, as amended by the Assembly.

Other notable bills that will be signed into law include: occupation credential fee waivers for low-income individuals and veterans, apprenticeship participation for high schoolers, a $6.8 million talent attraction initiative, and this session’s two opioid abuse treatment and prevention bills.

 

Assembly Extraordinary Session

In the extraordinary session on Thursday, March 22, the Assembly took up and passed a short list of bills that had been amended by the Senate on Tuesday. The following bills were concurred in and sent to Gov. Scott Walker for signature:

• AB 953, the juvenile corrections bill.
• AB 773, related to civil litigation reform.
• SB 798, the child tax rebate and sales tax holiday.

The bulk of the Assembly session focused on gun control and school safety proposals. After lots of debate on both sides of the aisle, the Assembly passed the Senate version of the school safety proposal (AB 843). That bill, which contains the school safety measures proposed by Walker, now heads to his desk for signature.

However, the Assembly also passed a substitute amendment to one of the original school safety bills (AB 1031) that expands background checks, creates a school safety hotline, and changes victim compensation statutes. The Assembly also passed AB 1033, which allows a privacy exemption in for law enforcement access to school surveillance footage. The bill was part of Walker’s original school safety plan but was removed in the Senate proposal. It is still unclear whether the Senate will reconvene to take up AB 1031 and 1033.

In the last week, Gov. Scott Walker signed several major bills into law. On Wednesday, Feb. 21, in Milwaukee, the governor signed the Leading on Lead Act into law as Act 136. The Act allows water utilities to provide financial assistance to replace water laterals on private property containing lead. The law requires a municipal ordinance to be passed authorizing the financial assistance and Public Service Commission approval and provides various parameters for a grant or loan under the program. Act 136 will be a valuable tool for communities to utilize as part of the effort to eliminate lead pipes in Wisconsin. The Environmental Protection Agency estimates that at least 176,000 lead service lines connect homes to the municipal water mains.

On Tuesday, Feb. 27, the governor signed his Wisconsin Health Care Stability Plan into law as Act 138. The governor announced this plan a month ago in his State of the State address in order to keep premiums down and create more choices for consumers in Wisconsin.

Under Act 138, Wisconsin will establish a $200 million state-based reinsurance program. Implementation of the program requires the Office of the Commissioner of Insurance (OCI) to seek a 1332 waiver from the federal government. OCI has already begun working with a consultant to develop the waiver. It is expected the state will fund roughly 25 percent of the cost, with the federal government supporting the remaining 75 percent. For 2019 and depending on federal approval, OCI would set the payment parameters for the program so that the government would provide coinsurance payments for 50 to 80 percent of the cost for claims that are between $50,000 – $250,000.

In his press release, the governor stated that, “the reinsurance program is estimated to lower health care premiums for those in the individual market by 13 percent in 2019 and by 12 percent in 2020.”

Rounding out his week of major bill signings, on Feb. 28, the governor signed SB 781 into law as Act 139. Act 139 prohibits an injured employee from filing an action in tort against third parties regardless of whether the employee makes a claim for compensation under the Worker’s Compensation Act against his or her employer.

The law reverses a  Wisconsin Court of Appeals, Dist. III decision (Ehr v. West Bend Mutual Ins. Co.) that significantly altered the Worker’s Compensation Act. The court ruled that the estate of a deceased employee could sue the employee’s temporary employer for an action in tort instead of filing a worker’s compensation claim under the Act. Specifically, the court ruled that the “exclusive remedy” provision under the Worker’s Compensation Act, “does not bar a temporary employee from bringing tort claims against his or her temporary employer.” The decision runs counter to how the Worker’s Compensation Act has been interpreted for many years. The exclusive remedy provision provides that an employee may only receive benefits from worker’s compensation for the injury. By ruling that the exclusive remedy did not apply in this case, the employee was able to sue his employer rather than submit a claim under worker’s compensation.

The Senate Committee on Judiciary and Public Safety held a hearing on Jan. 30 on a bill that would reform Wisconsin’s civil liability statutes to lower litigation costs for Wisconsin businesses and government. SB 645, authored by Sens. Tom Tiffany (R-Hazelhurst) and David Craig (R-Big Bend) and Reps. Mark Born (R-Beaver Dam) and John Nygren (R-Marinette), would further improve Wisconsin’s litigation climate by making changes to discovery and class action statutes, among other reforms.

The bill’s authors began the hearing by emphasizing their goal to draft legislation that makes Wisconsin consistent with federal rules and other states’ procedures and maintains fairness in Wisconsin’s civil justice system.

A wide variety of groups testified in support of the bill. The National Federation of Independent Business, Wisconsin Chapter, and the American Tort Reform Association (ATRA) focused on the costs savings for businesses small and large that could be affected by the debilitating costs of discovery. According to ATRA’s testimony, from 2006 to 2008, the average company paid average discovery costs per case of $600,000 to $3 million. Under the bill’s reforms, they said, businesses will be able to settle based on the merits of the cases, not simply in fear of paying these massive discovery costs.

Wisconsin Manufacturers and Commerce’s (WMC) testimony also emphasized the importance of lowering litigation costs for Wisconsin businesses. WMC highlighted the provision of the bill that prohibits the Department of Revenue (DOR) from hiring third-party audit firms on a contingency fee basis for unclaimed property audits. DOR testified for information only, expressing concerns that this provision could increase costs and make it difficult to hire auditors, but WMC testimony assured legislators that contingency fee arrangement bans have been implemented in other states and would not prohibit audits from taking place in Wisconsin.

The Wisconsin Defense Counsel (WDC) later testified in support of the bill’s provisions regarding discovery and lawsuit lending. The bill’s limit on discovery of electronically stored information would reduce overburdensome discovery requests, and its proportionality requirements would prevent unnecessary “fishing expeditions.” WDC also noted that regulating lawsuit lending makes Wisconsin’s civil liability procedures fairer by protecting consumers and ensuring transparency in civil cases.

The U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) testified on the class action portions of the bill. The bill would make class action statutes more fair and efficient by requiring the type and scope of injury of the representative class members be typical of the type and scope of injury being alleged by the absent class members, thus precluding “no-injury” class actions. The bill also requires class members be verifiable by reliable and feasible means and would provide for interlocutory appeal of class certification. ILR said these changes would make Wisconsin’s civil justice system fairer and less costly.

The Wisconsin Builders Association testified in support of the bill’s provisions related to statute of repose. The revised limits will bring consistency among Wisconsin liability laws and align Wisconsin better with other states that have significantly lower limits. These lower time limits will promote efficiency and reduce burdens and costs on the state and businesses forced to investigate distant claims.

The Wisconsin Insurance Alliance also testified in support of the bill’s provision adjusting the interest rate insurers must pay on overdue claims. The bill provides that the rate mirror interest rates on general judgments and self-adjust consistent with markets.

Wisconsin Economic Development Corporation and the Department of Justice also submitted testimony in support of the bill.

The State Bar of Wisconsin testified for information only, seeking amendments to the bill’s limits on discovery, adjustment of interest rates on overdue claims, changes to statutes of repose, and definition of consumer lawsuit lending.

Those testifying against the bill, including the Wisconsin Association for Justice and the Alliance for Responsible Consumer Legal Funding, arguing that the changes stray too far from simply federalizing Wisconsin statute. Many said that there is no evidence of discovery abuses in Wisconsin and that state judges consistently keep discovery in check. However, supporters refuted that the bill would give judges guidelines related to discovery and class actions that are currently missing from state statute.

The Assembly Committee on Judiciary held a hearing on the bill on Jan. 4. Reps. Ron Tusler (R-Appleton) and Cody Horlacher (R-Mukwonago) have offered an Assembly Substitute Amendment that would remove the class action provisions of the bill.

Committee votes on the bill have not yet been scheduled.

The Assembly Committee on Judiciary held a hearing Thursday on a bill that would reform Wisconsin’s civil liability statutes to lower litigation costs for Wisconsin businesses and government. AB 773, authored by Reps. Mark Born (R-Beaver Dam) and John Nygren (R-Marinette) and Sens. Tom Tiffany (R-Hazelhurst) and David Craig (R-Big Bend), would further improve Wisconsin’s litigation climate by making changes to discovery and class action statutes, among other reforms.

The bill’s authors began the hearing by emphasizing their goal to draft legislation that makes Wisconsin consistent with federal rules and other states’ procedures and maintains fairness in Wisconsin’s civil justice system.

A wide variety of groups testified in support of the bill. The National Federation of Independent Business, Wisconsin Chapter, and the American Tort Reform Association (ATRA) focused on the costs savings for businesses small and large that could be affected by the debilitating costs of discovery. According to ATRA’s testimony, from 2006 to 2008, the average company paid average discovery costs per case of $600,000 to $3 million. Under the bill’s reforms, they said, businesses will be able to settle based on the merits of the cases, not simply in fear of paying these massive discovery costs. Wisconsin Manufacturers and Commerce’s testimony also emphasized the importance of lowering litigation costs for Wisconsin businesses and improving Wisconsin’s litigation climate to help job creation and economic development.

The Wisconsin Defense Counsel (WDC) later testified in support of the bill’s provisions regarding discovery and lawsuit lending. The bill’s limit on discovery of electronically stored information would reduce overburdensome discovery requests, and its proportionality requirements would prevent unnecessary “fishing expeditions.” WDC also noted that regulating lawsuit lending makes Wisconsin’s civil liability procedures fairer by protecting consumers and ensuring transparency in civil cases.

The Wisconsin Civil Justice Council and the U.S. Chamber of Commerce’s Institute for Legal Reform testified on the class action portions of the bill. The bill would make class action statutes more fair and efficient by requiring the type and scope of injury of the representative class members be typical of the type and scope of injury being alleged by the absent class members, thus precluding “no-injury” class actions. The bill also requires class members be verifiable by reliable and feasible means and would provide for interlocutory appeal of class certification. The groups said these changes would make Wisconsin’s civil justice system fairer and less costly.

The Wisconsin Insurance Alliance also testified in support of the bill’s provision adjusting the interest rate insurers must pay on overdue claims. The bill provides that the rate mirror interest rates on general judgments and self-adjust consistent with markets.

The Department of Revenue (DOR) testified for information only on the bill’s provision prohibiting DOR from using contingency fee arrangements with unclaimed property auditors. DOR expressed concerns that this provision could increase costs and make it difficult to hire auditors, but later testimony assured legislators that contingency fee arrangement bans have been implemented in other states and would not prohibit audits from taking place in Wisconsin.

Those testifying against the bill, including the Wisconsin Association for Justice and the Alliance for Responsible Consumer Legal Funding, argued that the changes stray too far from simply federalizing Wisconsin statute. Many said that there is no evidence of discovery abuses in Wisconsin and that state judges consistently keep discovery in check. However, supporters refuted that the bill would give judges guidelines related to discovery and class actions that are currently missing from state statute.

AB 773 has 23 sponsors in the Assembly and five in the Senate. So far 17 groups have registered in support.

The Senate version of the bill has been referred to the Committee on Judiciary and Public Safety, and no public hearing has been scheduled.