September 17 - Data Security
Sign-up today for your complimentary subscription to the State Net Capitol Journal to stay up-to-date on the latest news from America’s statehouses.
Editor: Rich Ehisen
Associate Editor: Korey Clark
Editorial Advisor: Lou Cannon
Contributing Editor: Mary Anne Peck
Graphic Design: Vanessa Perez Design
Ideas and suggestions are always welcome. Please let us know how we can improve your newsletter! We welcome your feedback.
State Net Sign-on Page
State Net Product Page
HomeSpotlight Story | Bird’s Eye View | Budget & Taxes | Politics & Leadership | Governors | Hot Issues | Once Around the Statehouse Lightly
As SNCJ’s Rich Ehisen reported last week, some of the issues likely to receive the most attention from state lawmakers next year are those that are already familiar, such as health care, the opioid epidemic and sexual harassment. Here are several more issues that generally fall in that same category.
Cybersecurity/Election Security: Forty-two states have introduced over 240 bills and resolutions and enacted or adopted 24 related to cybersecurity this year, according to analysis of LexisNexis State Net legislative data by the National Conference of State Legislatures. Those numbers are up significantly from the 28 states, 104 introductions and 24 enactments or adoptions in 2016 and the 25 states, 66 introductions and 20 enactments or adoptions in 2015.
That trend was likely to continue in 2018 even before the Equifax data breach began grabbing national headlines in September. But in the immediate aftermath of those reports, New York Gov. Andrew Cuomo (D) directed his state’s Department of Financial Services (DFS) to issue new regulations requiring credit reporting agencies to register with the state each year and giving the superintendent of the DFS the power to deny or revoke a credit bureau’s authorization to operate for failing to comply with state laws.
At least five states - Illinois, Kentucky, Michigan, New Hampshire and New York - also introduced bills, or prefiled measures for next year, apparently prompted by the Equifax breach. The measures include New York SB 6879, which would require credit reporting agencies to automatically place a freeze on consumer credit files affected by a breach, and SB 6880, which would require any business that uses computerized data including private information to disclose breaches of its system within 15 days of discovering them unless directed otherwise by law enforcement, as well as measures providing for free credit freezes in Illinois (HB 4095 and SB 2230) and Michigan (HB 5055).
With the Equifax breach continuing to find its way into the national news - and new reports of cybersecurity incidents coming with increasing frequency - more legislation dealing with credit bureaus specifically and cybersecurity in general is undoubtedly on the way.
Ongoing reports about Russian hackers’ targeting of numerous states’ voter registration systems leading up to the 2016 elections also promises to have some of those states scrambling to secure their systems as well as replace their paperless electronic voting machines - considered to be particularly vulnerable to hacking - ahead of next year’s contests. The elections board in Virginia, one of the states targeted in 2016, decided last month not to allow the 12 counties in the state that still have such machines to continue using them. Georgia lawmakers are also considering doing away with their state’s paperless voting machines, and the state initiated a pilot program this year to try out a new voting system with a verifiable paper trail.
Other Election Issues: This year Alabama Gov. Kay Ivey (R) signed legislation (SB 108) banning crossover voting, casting ballots in one party’s primary and then voting in another party’s primary runoff; Texas Gov. Greg Abott (R) signed HB 658 essentially turning nursing homes and similar facilities with five or more residents who request absentee ballots into temporary polling places, overseen by election judges representing each party; California Gov. Jerry Brown (D) signed a bill (SB 568) shifting the state’s primary elections from June to March; and Kansas, Maryland, Texas and Virginia considered bills to require proof of citizenship, such as a passport or birth certificate, to register to vote. With elections next year that will determine partisan control of 87 state legislative chambers, 36 governor’s offices and the U.S. Congress, other election-related measures will surely be considered.
Self-Driving Cars: Since Nevada became the first state to authorize the operation of autonomous, or self-driving, cars in 2011, 20 other states have enacted legislation and governors in five states have issued executive orders related to such vehicles, according to the National Conference of State Legislatures. The number of states that have introduced bills related to self-driving cars by NCSL’s count, meanwhile, has risen from six in 2012 to nine in 2013, 12 in 2014, 16 in 2015, 20 in 2016 and 33 in 2017.
The legislation has addressed a range of issues, including insurance requirements for operating autonomous vehicles, privacy of collected vehicle data, vehicle cybersecurity, and “platooning,” the coordinated operation of a group of self-driving cars traveling in the same lane using vehicle-to-vehicle communication. In general, though, the enacted measures have provided for the testing and operation of cars with autonomous technology on public roads under certain conditions, although a few only authorized studies of such vehicles. Of particular note, a few of the recent enactments have dealt with “fully autonomous” vehicles, and at least one, Nevada’s AB 69, chaptered in June, allowed the operation of such vehicles on state roadways without a human operator present. The requirement that a licensed driver be at the wheel had been one of the main points of contention with the autonomous vehicle deployment regulations proposed by California’s Department of Motor Vehicles in 2015, in accordance with legislation passed by the state in 2012 (SB 1298).
The potential for self-driving vehicles to reduce accidents and traffic fatalities, lower greenhouse gas emissions, improve mobility and provide a new revenue stream to help offset dwindling gas tax revenues, is likely to keep state legislatures green-lighting their operation.
Transportation/Infrastructure Funding: In the absence of an increase in the federal excise tax on gasoline since 1993, states haven’t been able to rely on Washington to help them cover the financial burden of maintaining and improving their deteriorating roads and infrastructure. On the campaign trail President Trump repeatedly promised to spend $1 trillion over 10 years to rebuild the nation’s infrastructure. But a few months after he took office, the White House released a framework for that promised $1 trillion infrastructure investment plan calling for an outlay of just $200 billion in federal funding to “incentivize additional non-Federal funding,” including private-sector investment.
Trump has since expressed a lack of confidence in that plan, but states haven’t been waiting around for congressional action on the issue. At least 15, including six governed by Republicans - Arkansas, Indiana, Oklahoma, South Carolina, Tennessee and Utah - considered raising gas taxes or other fees to pay for much needed road repairs this year, according to Bloomberg. In April California passed SB 1, providing $52 billion in transportation funding over the next decade primarily by raising taxes on both gasoline and diesel fuel. In August Oregon Gov. Kate Brown (D) signed a 10-year, $5.3 billion transportation funding bill (HB 2017) that, among other things, increases gas taxes, imposes taxes on the sale of cars and bicycles, and levies a new payroll tax. Georgia, Idaho, Iowa, Nebraska and New Jersey have also raised their gas taxes in the last few years. And it’s likely other states will do the same. As Carl Davis, research director for the progressive Institute on Taxation and Economic Policy, told Stateline last year, “There are still 20 states that have waited a decade or more since last raising their gas tax rates.”
Pending U.S. Supreme Court Decisions: The U.S. Supreme Court is considering several major cases in its current term that could have big implications for states.
Gill v. Whitford, No. 16-1161, concerns the redistricting plan for the Wisconsin Assembly drawn by that state’s Republican majority after the 2010 Census. Last year a three-judge panel of the U.S. District Court for the Western District of Wisconsin ruled 2-1 that the plan was “an unconstitutional political gerrymander.” The state appealed that decision to the Supreme Court. The high court has never ruled against partisan gerrymandering, but the last time it heard a case dealing with the issue - in 2004 with Vieth v. Jubelirer - Justice Anthony Kennedy wrote in a concurring opinion that courts could provide relief from partisan gerrymandering if they had a “workable standard” for determining when a gerrymander imposed too great a “burden on representational rights.” The plaintiffs in Gill v. Whitford are seeking to establish such a standard: a new method of measuring how votes translate into victories known as the “efficiency gap.” Whether or not they succeed will likely depend on what Justice Kennedy decides, given that four of the justices appear committed to the belief that partisan gerrymanders aren’t a matter for the courts, while four others seem just as convinced that they are. A ruling upholding Wisconsin’s map would likely encourage more aggressive gerrymanders, although probably not until after the 2020 Census. A decision affirming a constitutional limit to partisan gerrymandering, however, would undoubtedly spur legal challenges to other legislative and congressional remaps in the more immediate future and could eventually lead to shifts in the partisan composition of some legislative bodies.
In another voting rights case, Husted v. A. Philip Randolph Institute, No. 16-980, the justices will weigh the constitutionality of Ohio’s efforts to clean up its voter rolls by purging inactive voters. The plaintiffs argue that federal law explicitly prohibits states from removing registered voters for failing to vote. But in a reversal from the Obama administration, the Trump administration has filed a brief with the court in support of Ohio’s position. And at least a dozen other states also purge inactive voters from their registration lists.
Another case on the court’s docket is Carpenter v. United States, No. 16-402, concerning the privacy of customer data held by cellphone companies. In 2013 Timothy Carpenter was convicted of participating in a series of robberies based in part on evidence provided by location data from his cellphone. Carpenter appealed his conviction on the grounds that prosecutors had failed to obtain a search warrant for his cell phone records, violating the Fourth Amendment’s prohibition against unreasonable searches and seizures. The appeals panel rejected Carpenter’s argument, reasoning that his Fourth Amendment right had not been violated because there is no “expectation of privacy” with location information cellphone users knowingly expose to their service providers. But in recent years the Supreme Court has ruled that a warrant is required to search a cellphone (Riley v. California) and that the use of a GPS device to track an individual’s movements constitutes a search entitled to Fourth Amendment protection (United States v. Jones). And as the Economist reported after oral arguments in Carpenter last month, six of the justices seemed at least inclined to “widen the Fourth Amendment umbrella for the digital age.”
In Epic Systems Corp. v. Lewis, No. 16-258, the justices will decide whether employers can use arbitration clauses in employment contracts to prevent their workers from banding together to sue them over workplace issues. The court has shown a preference for contracts that provide for the resolution of disputes through arbitration rather than litigation. It has also sanctioned class-action waivers in the arbitration provisions of consumer contracts, like those used by cell phone and car rental companies. The question is whether those inclinations will extend to employment contracts. The plaintiffs in the case argue that employment contracts are different because the National Labor Relations Act protects “concerted activities” by workers.
In another workers’ rights case, Janus v. American Federation of State, County and Municipal Employees, No. 16-1466, the court will decide whether government workers who opt out of joining unions can be forced to support the unions’ collective bargaining efforts. If the court says no, millions of public workers spread across 20 states could opt out of making those payments, sapping unions’ power.
In Christie v. National Collegiate Athletic Association, No. 16-476, the justices will weigh the constitutionality of the Professional and Amateur Sports Protection Act of 1992, prohibiting state-sponsored sports gambling, except for the sports wagering legalized in Nevada and a few other states before the federal law was passed. In 2014 New Jersey, which is not one of the exempted states, passed SB 2460, allowing sports wagering at casinos and horse racetracks in the state. Last year the U.S. Court of Appeals for the Third District struck down that law on the grounds that it violated the Professional and Amateur Sports Protection Act. And earlier this year the Supreme Court agreed to hear an appeal of that decision, which Gov. Chris Christie (R) took to be “a very good sign for sports betting having a future in New Jersey,” according to the New York Times. Connecticut, Mississippi and Pennsylvania have all passed legislation this year that would allow sports betting within their borders as well if there’s a change in federal law permitting it, according to the Legal Sports Report. And with sports betting now nearly a $5-billion-a-year industry in Nevada, more states will undoubtedly do the same if the court strikes down the federal ban. That outcome seems entirely possible given the line of questioning from a majority of the justices during oral arguments in the case this month.
One of the most controversial cases before the court this term is Masterpiece Cakeshop v. Colorado Civil Rights Commission, No. 16-111, concerning a baker who refused to make a wedding cake for a same-sex couple on the grounds that it would go against his Christian beliefs. That action violated a law passed by the state in 2008 banning discrimination on the basis of sexual orientation by any business “offering services, facilities, privileges, advantages, or accommodations to the public.” As of 2016 22 states had such laws, according to the National Conference of State Legislatures. Which way the court will go in the case is difficult to predict. As the New York Times reported, it has consistently ruled in favor of gay rights in recent decades and declared a constitutional right for gay couples to marry in 2015 with Obergefell v. Hodges. But it has also shown consideration for business owners’ religious principles, as in Burwell v. Hobby Lobby in 2014, when it ruled that some companies did not have to comply with a federal regulation mandating that employers provide free contraceptive coverage for their female workers.
In addition to the cases already on the docket, the court could also decide to hear a case from South Dakota revolving around a law passed there in 2016, requiring out-of-state retailers to collect sales taxes on purchases from customers located in the state. The law was actually intended to provoke a legal challenge with the ultimate aim of overturning the U.S. Supreme Court’s 1992 ruling in Quill Corp. v. North Dakota, barring states from requiring retailers without an in-state physical presence to collect and remit sales taxes. Justice Kennedy invited that challenge in 2015, writing in a concurring opinion in Direct Marketing Association v. Brohl, “The legal system should find an appropriate case for this Court to reexamine Quill...” He noted that e-commerce sales had grown dramatically in the 25 years since that ruling. A study by the NCSL and the University of Tennessee estimated that in 2012 states collectively missed out on $23.26 billion in sales taxes as a result of the Quill decision.