Washington Legislative Update for February 28, 2022

Policy Committees Hit February 24 Deadline for Approval of Bills—Fiscal Committees to Complete Work on Monday, February 28

With just 12 days remaining in the 60-day 2022 Legislative Session, policy committees in the House and Senate reached the February 24 deadline for the approval of bills on Thursday, and have completed their work for this year.  Fiscal committees met on Friday, February 25, and are holding extended hearings on Saturday, February 26.  The fiscal committees face a cutoff deadline on Monday, February 28 to take action on bills that have been referred for the consideration of fiscal notes.  The result of these quick deadlines is that dozens of bills will receive no further consideration this year. 

After Monday’s fiscal committee deadline, legislators will have until 5:00 p.m. on Friday, March 4 to pass measures off of the floors of the House and Senate that originated in the opposite House.  Budget bills, and measures necessary to implement the budget, are exempt from the cut-off timelines.  The 2022 Legislative Session is scheduled to adjourn on Thursday, March 10. 

Senate Passes Supplemental Budget Plan

On the heels of a favorable revenue forecast, the Washington State Senate approved a supplemental budget plan late on Friday, February 25.  The bill passed on a partisan basis, with no Republican votes in support of the measure.  It now goes to the House for consideration. 

The Senate Supplemental Budget plan (ESSB 5693) adds about $5.8 billion in new spending to the two-year 2021-2023 budget that was passed by legislators last April, amounting to a revised two-year budget of $63.4 billion—a 21% increase over the prior biennial budget.  In the House, budget writers released their own proposal (SHB 1816), calling for $6.2 billion in new spending, for a total revised budget for the biennium of $65 billion.  Senate and House negotiators will begin meeting to find a final agreement on the supplemental budget in coming days.

House Appropriations Committee Considers Senate-Passed Prejudgment Interest Measure

On Friday, February 25, the House Appropriations Committee held a hearing to consider an amended version of E2SSB 5155—a measure that was introduced in the Senate by Senator Patty Kuderer (D, 45^th Legislative District).  The House Civil Rights and Judiciary Committee previously considered the bill at a hearing on Friday, February 18.  On February 22, the House Civil Rights & Judiciary Committee adopted a striking amendment to the bill, stripping Senate-passed exemptions from the bill for public entities and medical malpractice claims.

As passed by the Senate, E2SSB 5155 would establish prejudgment interest on most actions accruing from the date of the cause of action, but it was amended in committee last year to provide that interest on judgments involving medical malpractice claims runs from the date of the entry of judgment, and not from the date that the cause of action accrued.  Thus, the Senate-passed bill excluded medical malpractice claims from prejudgment interest, and it also exempted public entities from the bill. 

At Friday’s hearing before the House Appropriations Committee, a long line of local government entities, including cities, counties, school districts, and others testified in opposition to the bill.  The Washington State Medical Association, Washington State Hospital Association, Washington Defense Trial Lawyers, insurers, and other defense-oriented stakeholders also testified in opposition to the bill, noting its adverse impact on defendants, and the increased costs that are associated with the measure.  The bill has been scheduled for a possible vote of the House Appropriations Committee on Monday, February 28.

House and Senate Negotiators in Discussion on Data Privacy Bill

Senator Reuven Carlyle (D, 36^th District) and Representative Vandana Slatter (D, 48^th District) have initiated discussions in an effort to find common ground on legislation dealing with data privacy.  On Thursday, February 24, draft amendments for SB 5062 and HB 1850 were released by Senator Carlyle and Representative Slatter.  Their discussions contemplate both bills running in connection with each other.  Responses from business and other stakeholder have not been positive. 

Here are the tentative outlines of the two proposals:

Proposed Striking Amendment to SB 5062 (Carlyle’s Data Privacy Bill, which is currently in the Senate Rules Committee)

• Outlines consumer rights related to accessing, correcting and deleting data.
• Applies to legal entities that conduct business targeted to Washington residents and :
  • Control or process personal data of more than 100,000 consumers during a calendar year; or
  • Derive over 25% of gross revenue from the sale of personal data and process or control the data of over 25,000 consumers. 
• Retains language from previous versions of the bill to specify that the provisions of the bill do not apply to information that meets multiple definitions, including all of the categories of health care information that were in last year’s bill. 
• Provides sole Attorney General enforcement under the Consumer Protection Act, except for the enforcement provisions provided in the proposed substitute to P2SHB 1850.
  • Provides a 30-day cure period.
  • Specifies no action may be taken by the AG after the Commission created in HB 1850 has issued a decision for the same violation. 
• Requires a controller or processor that meets the jurisdictional scope of the bill and is subject to the requirements of the bill to register with and pay an annual registration fee to the Commission established in P2SHB 1850.

Proposed Second Substitute House Bill 1850 (Slatter’s Bill, Currently in House Appropriations)

• Establishes a Washington State Data Privacy Commission, with administrative enforcement authority to implement and enforce the provisions of SB 5062. 
• The Commission has the authority to:
  • Review and investigate consumer complaints, or complaints initiated on its own, of alleged violations of SB 5062;
  • Establish and collect an annual fee on controllers and processors; and
  • Subpoena witnesses, compel their attendance, administer oaths and require by subpoena the production of any books, papers, records, or other items material to the performance of the Commission’s duties. 
• Beginning January 1, 2024, every controller or processor must file a statement showing its gross operating revenue from intrastate operations the preceding calendar year and pay to the Commission a fee equal to 0.1% of intrastate gross operating revenue. 
• The Commission may set fees that do not exceed $10 million annually and may establish tiers of entities based on intrastate annual gross revenue and specific rates for each tier.

Business groups and others have expressed opposition to the private right of action in the package, and many groups have expressed concern about the new fees (taxes) included in the Slatter proposal.  Informal indications are that the Carlyle/Slatter package is also being heavily criticized by the ACLU, plaintiff lawyers, and Attorney General Bob Ferguson, for not providing sufficient consumer protections.  With only 12 days remaining in the 2022 Legislative Session, time is running short for an agreement to be found on the issue. 

Senate Committee Considers and Approves House-Passed Service Contract Bill

On Thursday, February 24, the Senate Business, Financial Services & Trade Committee unanimously approved HB 1704—a measure that would allow registered service contract providers to demonstrate financial responsibility with a “default CLIP” rather than a “first dollar CLIP”.  The bill would also allow a registered service contract provider to use multiple CLIP’s to demonstrate financial responsibility.  The bill was previously approved by the House without a dissenting vote, and by the House Consumer Protection & Business Committee.  The bill has been referred to the Senate Rules Committee, where it is available to be pulled to the Senate floor for consideration by the full Senate.

The bill was introduced by Representative Steve Kirby (D, 29^th District) together with Representative Brandon Vick (R, 18^th District) and Representative Cindy Ryu (D, 32^nd District).  Representative Kirby is the Chair of the House Consumer Protection & Business Committee, and Representative Vick is the Ranking Republican on the committee. 

At the hearing for the bill before the Senate Business, Financial Services and Trade Committee, the Service Contract Industry Council testified in support of the measure, noting that the bill would fully maintain consumer protections, but that it would allow greater flexibility for service contract providers to cost-effectively provide service contract products to consumers in Washington state.  The SCIC also pointed to data indicating that the bill would more closely align Washington’s requirements with provisions in most other states.  The Washington Retail Association, APCIA, and CNA all signed in to show support for the measure. 

The OIC testified in opposition to the bill, arguing that the measure would reduce consumer protections and delay timely payment of service contract benefits to consumers.  Despite the OIC’s opposition, the measure was approved by the Senate committee without a dissenting vote. 

OIC Prepares Legislative Proposals

Insurance Commissioner Mike Kreidler has prepared a package of legislative proposals that he intends to submit to the 2022 Legislature.  A link to the OIC’s legislative priorities can be found at https://www.insurance.wa.gov/legislative-priorities .

The OIC’s request bills include:

• Updates to the Balance Billing Protection Act (HB 1688/SB 5618 Protecting consumers from charges for out-of-network health care services).  Insurance Commissioner Kreidler is proposing legislation to align state and federal law, while preserving critical consumer protections in Washington’s Balance Billing Protection Act.
• Washington Life and Disability Insurance Guaranty Association (SB 5508 Concerning the insurance guaranty fund).   The OIC’s proposal expands the Washington State Life and Disability Guaranty Association membership, adding HMO’s and Health Care Service Contractors to the membership of the WLDGA to provide for larger assessment capacity.  The measure also provides equitable distributions of assessments, in order to protect Washington state insurance policyholders.
• A proposal to prohibit property and casualty insurers from using credit-based insurance scoring in personal lines of insurance. See SB 5010;
• Insurance Data Security.  Insurance Commissioner Kriedler previously suggested they would seek legislation to enact the NAIC cybersecurity model act. 

Legislature Approves Cut-Off Resolution for the Consideration of Bills

The House and Senate have approved SCR 8404—a cut-off resolution establishing dates for the consideration of bills.  The cut-off dates that are included in this resolution are as follows:

February 3—the last day for committees in the House of origin to take action on bills;

February 7—the last day for Fiscal committees in the House of origin to take action on bills;

February 15—the last day for the House of origin to take action on bills;

February 24—the last day for committees in the opposite House to take action on bills;

February 28—the last day for Fiscal committees in the opposite House to take action on bills;

March 4—the last day for the opposite House to take action on bills (except exempt bills and bills passed by both Houses in different forms);

March 10—the last day of the 2022 Regular Legislative Session