NEW JERSEY Gov. Phil Murphy (D) signs a trio of transgender rights bills: SB 478, which allows Garden State residents to amend their birth certificate without proof of having undergone a sex-change operation; SB 493, which allows a person's changed gender identity to be reflected on death certificates; and SB 705, which will create a 17-member task force charged with assessing the legal and societal barriers for transgender individuals, particularly in the areas of health care, education, housing and criminal justice (NORTHJERSEY.COM).
Alabama Gov. Robert Bentley (R) announced he is creating a seven-member advisory council on gambling to try to resolve ongoing disagreements with lawmakers over electronic bingo and other issues. The governor said the Alabama Advisory Council on Gaming will review state and local gambling laws as well as those in other states, with the goal of issuing recommendations to him and lawmakers for consideration during the 2017 legislative session. Bentley said he hopes the council will give legislative leaders “a fresh perspective” after a rancorous summer that saw ongoing disputes in the legislature over Heart of Dixie bingo casinos and the rejection of his proposal to create a state lottery. (TUSCALOOSA NEWS, BIRMINGHAM NEWS)
Gov. Rick Snyder (R) announces the Wolverine State will recognize over 300 same-sex marriages performed in 2014 during a time period when a court had lifted the state’s ban on those unions. Snyder said the state would not appeal the decision rendered by U.S. District Judge Mark A. Goldsmith in January (HUFFINGTON POST).
-- Compiled by RICH EHISEN
ILLINOIS Gov. Bruce Rauner (R) signs HB 4843, which makes it a crime to import, sell, buy or trade any ivory or rhino horn within the Prairie State. (ILLINOIS GOVERNOR’S OFFICE)
In a statement issued last week, NEVADA Gov. Steve Sisolak (D) said he would sign legislation (AB 456) on his desk that will incrementally raise the Silver State minimum wage to $12 per hour by July, 2024. The governor said he would also sign SB 312, a measure that will require employers with at least 50 employees to offer workers up to five days of paid leave a year. The law would not apply to part-time, seasonal or on-call workers. (NEVADA GOVERNOR’S OFFICE, LAS VEGAS REVIEW-JOURNAL)
The NEW HAMPSHIRE Legislature overrode Gov. Chris Sununu’s (R) veto of a bill (HB 455) abolishing capital punishment. The Granite State becomes the 21st to abolish the death penalty. (NPR, LEXISNEXIS STATE NET)
In the wake of another mass shooting – this one ending with 12 people plus the shooter dead and three more critically injured in a May attack in Virginia Beach – VIRGINIA Gov. Ralph Northam (D) called a special session to focus on new gun control measures in the Old Dominion. His proposals to lawmakers will include imposing universal background checks; requiring people to report lost or stolen firearms; limiting handgun purchases to one a month; and a ban on assault weapons and related devices, including sound suppressors like the one used by the Virginia Beach gunman. (NEW YORK TIMES, CBS NEWS)
ILLINOIS Gov. J.B. Pritzker (D) has yet to take a stance on HB 3343, a bill that would allow Supplemental Nutrition Assistance Program (SNAP) recipients to obtain discounted meals from participating restaurants. Similar programs have recently been enacted in ARIZONA, MARYLAND and RHODE ISLAND, and in some CALIFORNIA counties. The measure passed with large margins in both legislative chambers, but Pritzker has not indicated if he will sign it into law. (CHICAGO TRIBUNE, GOVERNING)
A NEW JERSEY legislative panel released a report last week excoriating Gov. Phil Murphy (D) and his administration for its handling of a rape accusation against one of the governor’s top staffers. The panel, commissioned to examine how Murphy’s office handled the 2017 accusation, determined that senior officials in his administration were “more concerned with avoiding negative publicity than following proper protocols and getting to the truth of the matter.” (NJ.COM, PHILADELPHIA INQUIRER)
The NORTH CAROLINA House upheld Gov. Roy Cooper’s (D) veto of SB 359, a bill that would have required medical professionals to provide life-saving care to infants who survive an abortion and to report instances of such births. It was the first veto issued by Cooper to be upheld by Tar Heel State lawmakers. (NEWS & OBSERVER [RALEIGH])
The LOS ANGELES City Council unanimously approves a statute that makes the City of Angeles the first to require companies that have contracts with the city to disclose under affidavit any contracts or sponsorships they or their subsidiaries have with the National Rifle Association. The NRA has vowed to challenge the ordinance in court (LOS ANGELES TIMES).
Also in L.A., the Council announces it will bar the sale of genuine fur products within city boundaries. West Hollywood, Berkeley and San Francisco also ban fur sales. The measure takes effect on Jan 1, 2021 (COURTHOUSE NEWS SERVICE).
The UTAH Senate approves SB 34, which would require Beehive State cities to take state-approved steps aimed at encouraging affordable housing to be eligible to receive state investment funds. It moves to the House (SALT LAKE TRIBUNE).
The ARKANSAS Supreme Court rules that the city of FAYETTEVILLE can’t enforce an ordinance banning discrimination based on sexual orientation or gender identity. The court said it has already ruled that the measure violates a state law aimed at preventing local protections for LGBT people (ASSOCIATED PRESS).
The NEW YORK CITY Department of Health and Mental Hygiene orders Big Apple restaurants under its jurisdiction not to sell food products containing the cannabis derivative cannabidiol, or CBD. The agency said CBD has not been determined to be safe to eat (NEW YORK TIMES).
The KEY WEST, FLORIDA City Commission bans the sale within city limits of sunscreens that contain the ingredients oxybenzone and octinoxate. The ban will go into effect on Jan. 1, 2021. Scientists say the two chemicals cause severe harm to sensitive coral reefs (FLORIDA KEYS KEYNOTER).
State and local tax collections increased by 9.4 percent and 8.9 percent, respectively, in the final quarter of 2017, roughly three times the average quarterly growth rate for the last year, according to a report by the Rockefeller Institute of Government. State and local governments took in over $439 billion in tax revenue in the last three months of 2017, compared to $401 billion in the final three months of 2016, the report said.
The Institute attributed the tax revenue bump to a surge of high-income taxpayers prepaying their state and local income and property taxes to take advantage of the state and local tax (SALT) deduction, which was capped at $10,000, beginning on January 1, 2018, by the Tax Cuts and Jobs Act, passed by Congress and signed into law by President Trump in December 2017. (HILL, ROCKEFELLER INSTITUTE OF GOVERNMENT)
In an effort to combat the ongoing opioid abuse epidemic, health insurer BlueCross BlueShield announces it will stop covering OxyContin prescriptions in TENNESSEE. BlueCross BlueShield of Tennessee reps say the company will instead encourage doctors to prescribe two other painkillers engineered to be more difficult to abuse (TENNESSEAN [NASHVILLE]).
CALIFORNIA Gov. Jerry Brown (D) signs AB 595, which requires health insurers seeking to merge to first obtain permission from the state Department of Managed Health Care, which will have the power to block the transaction (MODERN HEALTHCARE). CALIFORNIA Gov. Jerry Brown (D) signs AB 2760, legislation that requires high-risk patients be prescribed the overdose reversal drug naloxone when receiving prescriptions for opioids. The measure goes into effect in January (EUREKA TIMES-STANDARD).
NEW YORK Gov. Andrew Cuomo (D) signs AB 6823, which relieves Empire State prosecutors from having to prove force, fraud or coercion was used to involve a minor in prostitution. (NEW YORK POST)
The NEW YORK Assembly and Senate approve AB 2572, which would bar the state from granting permits for drilling or oil or gas exploration in offshore areas controlled by the state. It moves to Gov. Andrew Cuomo (D), who has said he will sign it into law (U.S. NEWS & WORLD REPORT, LEXISNEXIS STATE NET).
NEW JERSEY Lt. Gov. Sheila Oliver (D) signs AB 1414, a bill that mandates the state Board of Education include financial literacy instruction in the curriculum for sixth- through eighth-grade students in public schools across the Garden State. Oliver signed the bill while Gov. Phil Murphy (D) was out of state (NJ.COM).
MASSACHUSETTS Gov. Charlie Baker (R) signs SB 2374, which allows Bay State schools to incorporate personal financial literacy standards into existing mathematics, social science, technology, business, or other curricula (STATE HOUSE NEWS SERVICE [BOSTON]).
The NEW MEXICO House approves HB 29, which would allow local communities to impose curfews on teenagers under age 16. The measure moves to the Senate (KRQE.COM [ALBUQUERQUE]).
The U.S. Immigration and Customs Enforcement agency publishes new rules that allow international students earning degrees in science, technology, engineering and mathematics fields in the United States to be eligible to stay in America for three years of on-the-job training (NEW YORK TIMES).
Editor: Rich Ehisen Associate Editor: Korey Clark Contributing Editor: Mary Peck, David Giusti Editorial Advisor: Lou Cannon Correspondents: Richard Cox (CA), Lauren Davis (MA), Steve Karas (CA) and Ben Livingood (PA), Cathy Santsche (CA), Dena Blodgett (CA) Graphic Design: Vanessa Perez Design
OHIO Gov. John Kasich (R) signs HB 101, which authorizes Buckeye State pharmacists to substitute cheaper but equivalent alternatives to the brand-name product EpiPen, which is used to counter severe allergic reactions to bee stings, peanuts, medication, and other allergens (TOLEDO BLADE).
With wildfires burning the state down amidst the usual end-of-session jamming through bills that really ought to have had a lot more deliberation, California lawmakers can point to at least one epic accomplishment: surfing is now the official state sport. That’s right, Gov. Jerry Brown inked his name to a measure that gives riding the waves its due as “an iconic California sport.” At least the bill acknowledges that surfing actually originated in Hawaii, making it like most other things in this state – an import from somewhere else.
-- By RICH EHISEN
The SAN ANTONIO City Council unanimously approves a six-month pilot program regulating electric scooters. Riders will be required to use sidewalks or roads, but will be barred from roadways where the speed limit is over 35 mph. Scooter companies will also be required to employ a local fleet manager and pay a singular $500 vendor fee and an additional $10 per scooter levy (EXPRESS NEWS [SAN ANTONIO]).
The 5th U.S. Circuit Court of Appeals upholds a LOUISIANA law that requires doctors who perform abortions to have admitting privileges at a local hospital (REUTERS).
CALIFORNIA Gov. Jerry Brown (D) signs AB 2989, which changes state law to require helmets for electric scooter riders only if they are under 18. It takes effect Jan. 1 (CURBED LOS ANGELES).
CALIFORNIA Gov. Jerry Brown (D) signs SB 1108, which makes the Golden State the first to bar work requirements as a condition of Medicaid eligibility (LEXISNEXIS STATE NET).
CALIFORNIA Gov. Jerry Brown (D) vetoes AB 2888, which would have expanded the range of people who can petition the courts for an order removing firearms from those thought to be dangerous to include teachers, college professors, employers and co-workers. Current law allows only family members and law enforcement to see those orders (CALIFORNIA GOVERNOR’S OFFICE).
NEW JERSEY Gov. Chris Christie (R) signs AB 261, which bars the installation and sale of wheel weights containing lead or mercury and prohibits the sale of new motor vehicles equipped with wheel weights containing lead or mercury (NEW JERSEY GOVERNOR’S OFFICE).
CALIFORNIA Gov. Jerry Brown (D) signs SB 1139, which bars the denial of applicants to Golden State medical schools based solely on their immigration status. The law also ensures that all medical students are eligible to apply for scholarships, regardless of their citizenship status (LEXISNEXIS STATE NET).
According to Census Bureau data, there were about 7.5 million full-time equivalent state and local government employees, not including those who work in education, nationwide last year. That’s 3 percent fewer than there were before the Great Recession began forcing states and localities to implement hiring freezes and leave vacancies unfilled. Factoring in population growth, non-education government employment is down 11 percent at the state level and 8 percent at the local level 10 years after the official start of the recession, raising the question of whether staffing levels will ever return to pre-recession levels.
Several factors have contributed to the weak public-sector workforce growth, including sluggish income, property and sales tax collections, and rising pension and health-care costs, particularly Medicaid.
“There’s a crowding out effect,” said John Hicks, executive director of the National Association of State Budget Officers (NASBO). “The rest of the government has been living with flat or declining [spending levels].”
That doesn’t appear likely to change soon. Governors’ proposed budgets for fiscal 2018 call for only a 1 percent increase in general fund spending, the smallest recommended expansion since 2010, according to NASBO’s Fiscal Survey of States. (GOVERNING, NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS)
As part of a plan to address their state’s $2.8 billion budget deficit, members of the Alaska House voted 21-19 in favor of a bill (HB 111) last week that would increase oil production taxes and reduce the state subsidy for new oil drilling.
Rep. Geran Tarr (D), co-chair of the House Resources Committee, said the measure was “one of the four pillars of our fiscal solution,” the others being modest budget cuts, tapping of the Alaska Permanent Fund, and the institution of a state income tax.
It was unclear whether the state’s Senate would approve of HB 111. (JUNEAU EMPIRE, LEXISNEXIS STATE NET)
Being in politics means learning to roll with the punches, but former California Gov. Arnold Schwarzenegger recently had to take that lesson a step further. As the Washington Post reports, Schwarzenegger was signing autographs at his annual Arnold Classic Africa in Johannesburg, South Africa when a man ran at him from behind and launched a drop kick into “The Governator’s” back. Arnold was unhurt and the man was quickly apprehended. Schwarzenegger joked about the incident on social media, saying “I’m just glad the idiot didn’t interrupt my Snapchat.”
Although motor vehicle subscription services - similar to auto leases but with no long-term commitment, the ability to change vehicles periodically and insurance and maintenance bundled in - have only been around for a few years, they’ve been embraced by some automakers, insurers and consumers. But the services face potential roadblocks from state lawmakers and regulators that could keep “subscribing” for a car from becoming as commonplace as “buying” or “leasing” one.
Vehicle subscription services have existed since at least 2014, when Cox Automotive, the Atlanta-based auto auction, financial services and media company that owns Autotrader and Kelley Blue Book, launched Flexdrive, allowing consumers in select cities to obtain a recent model vehicle on a weekly basis via an app. In the years since then, auto manufacturers, dealerships and other providers have started their own subscription services, and there’s now a multitude to choose from, including Care by Volvo, Porsche Passport, Hertz My Car, and Canvas, initiated by Ford but recently acquired by competitor Fair.
Some automakers got off to a rough start with their subscription services, but others appear to be pretty enthusiastic about them. Porsche recently expanded the service it piloted in Atlanta two years ago to four new cities: Las Vegas, Phoenix, San Diego and Toronto. And despite the fact that the $2,100-per-month lower tier of that service, Porsche Passport, is about 20 percent more expensive than leasing a Porsche for three years, 180 people have signed up for it, 80 percent of whom had never owned a Porsche before, according to the Insurance Journal.
“If you engage 80 percent new people that have not engaged with your brand before, that’s certainly worth a lot,” said Klaus Zellmer, president and CEO of Porsche Cars North America.
Automakers like Porsche view subscription services as a way of appealing to a younger demographic used to hailing rides from Uber and streaming movies on Netflix - at a time when U.S. auto sales have plateaued. Passport subscribers, for instance, aren’t locked into a three-year lease, and they’re able to switch car models whenever they want, so they can drive a Panamera sedan during the week and a 911 sports car on the weekend. As Zellmer put it, according to CB Insights: “younger people ‘do not want to engage with a commitment for three years. They want to change their phones; they want to change their TV channels. It’s all about subscriptions.’”
Several insurance companies have also jumped into the market, teaming up with subscription service providers to manage their insurance needs. As of early last year, AAA had partnered with third-party subscription service Gig Car Share; Assurant had partnered with BMW and third-party subscription services Flexdrive, Fair and Carma; Chub ESIS had partnered with Cadillac and General Motors; Hamilton had partnered with Porsche; and Liberty Mutual had partnered with Ford, Volvo and third-party service Turo, according to CB Insights.
A major selling point for insurer MetLife, which joined with Hyundai last year to provide a three-year lease program that included insurance and maintenance, was that it didn’t have to foot the bill for marketing to potential customers for a change.
“There is a lot of marketing and advertising in the insurance industry — it’s one of the most marketed industries across the board,” Kevin Chean, vice president and head of distribution for MetLife Auto & Home, told Auto Finance News. “This program is offered through Hyundai so we’re not offering marketing to promote this program, Hyundai is leveraging their existing marketing program to sell cars and get consumers in the door.”
In addition, because MetLife was able to offer the programs’ subscribers - a low-risk population of Hyundai customers who qualified for a lease - a fixed three-year rate, the usual underwriting process wasn’t required for each of them, cutting down on labor and paperwork costs.
Auto dealers haven’t been as receptive to subscription services. They’re concerned that they’ll be left out of the new business stream being created by the services and end up having to compete with automakers.
Matthew Haiken, chairman of Volvo’s Retail Advisory Board and a principal at two New Jersey Volvo dealerships, told Automotive News last year that some automakers were only paying dealers $250 to $500 to deliver subscription vehicles, which often require more work than standard deliveries.
“What happens down the road if this takes off and you try to cut our margin, or you try to cut us out completely?” he told Volvo executive management. “We need to be able to protect our margins based on the expense structure that we have in the dealership.”
Dealer concerns contributed to Indiana lawmakers’ decision last year to impose a moratorium on vehicle subscription programs in the state until May 1, 2019 [HB 1195 (2018)].
Language that would have allowed automakers to offer subscription programs only through their dealer networks was also added to a broader dealer franchise bill introduced last year in California, AB 2107 (2017). The provision was later stripped out of the bill after the Alliance of Automobile Manufacturers, which represents a dozen automakers, including Volvo, and the California New Car Dealers Association, which represents 1,300 franchised new car dealers in the state, agreed to talk the matter over further, Brian Maas, president of the California dealer association, told Automotive News. He also said new legislation addressing subscription programs could come as soon as 2019.
So far this year only four states - Indiana, Massachusetts, New Jersey and North Carolina - have introduced bills dealing specifically with vehicle subscriptions, although two of those states enacted measures, according to LexisNexis State Net’s legislative tracking system. Indiana passed HB 1237, extending its ban on vehicle subscription programs to May 1, 2020. And North Carolina enacted SB 557, reducing the alternate highway tax on vehicle subscriptions.
Legislation is still pending in Massachusetts (HB 262 and SB 179) that would require vehicle subscriptions to be “offered through, or in partnership with” auto dealers. There are also several active bills in New Jersey (AB 5461 and AB 3847/AB 4634/AB 4819/SB 2252/SB 2382) that would provide for special license plates to identify subscription vehicles and establish a plug-in electric vehicle rebate program in part to foster “advanced mobility solutions, including vehicle subscription services, respectively.
And more legislation may be on the way. As Larry Dominique, CEO of French automaker PSA’s North American division told Automotive News last year, “The sense that I’m getting from the legal team is we can expect to see more legislative action on this over the next year or two” in a larger number of states.
At the moment, however, the bigger threat to vehicle subscriptions appears to be California regulators. The state’s Department of Motor Vehicles has launched an investigation of Volvo’s Care program. As NBC News reported, the California New Car Dealers Association says the automaker is using the program to cut franchised dealers out of its sales process, in violation of state franchise laws. The dealer group points out that the Volvo booth at the 2018 Los Angeles Auto Show actually had electronic banners proclaiming “Don’t Buy Our Cars,” and “Subscribe, Don’t Buy.”
“Franchise laws exist to protect dealers from this type of behavior,” said Maas, the group’s president.
The group also argues that Volvo is violating California consumer protection laws by rolling vehicle use, insurance and maintenance into a single payment, a central element not only of Volvo Care but of all vehicle subscription services.
In response to the news of the California DMV’s investigation, Volvo issued a statement saying it was “committed to developing Care by Volvo in collaboration with our retailers to offer the flexibility of subscription side-by-side with traditional lease and financing.” NBC News also reported that the company was taking steps to improve delivery of its subscription vehicles.
It isn’t clear whether those actions will satisfy either California auto dealers or regulators. The future of vehicle subscription services could be riding on the DMV’s report on Care, which is due by mid-February.
“A lot of us thought that subscription programs were going to be the way to buy a car,” Joe Phillippi, president of AutoTrends Consulting, told NBC News.
But he also said if the California DMV finds that Volvo is violating the state’s laws, other providers “are going to think twice” about the subscription business model.