As promised in the last issue of SNCJ - and in keeping with our year-end tradition - here is part two of our annual forecast of issues we expect to figure prominently on state legislative agendas in the coming year.

Election Reform - With a highly contentious presidential race coming in 2020, election issues promise to occupy the attention of many state lawmakers. The focus in states where Republicans control the legislature and governor’s office is likely to be on restricting access to the ballot box by those who are ineligible to vote, through such measures as tightening voter ID requirements, reducing early voting periods and purging inactive voters from registration rolls.

The focus in states where Democrats control the levers of government will likely be on increasing voter access by expanding early voting periods, implementing automatic voter registration and restoring voting rights for former felons, among other things.

That applies to the newly blue state of Virginia, where Democrats - who won control of the House and Senate in November - signaled their intention to make voter access a priority next year. States where control of the government is split between Democrats and Republicans, meanwhile, could see horse trading like that which occurred in Pennsylvania this year. Other election matters bound to be addressed in 2020 include voting system security, primary election date changes, ranked-choice voting, “faithless electors” and the National Popular Vote Interstate Compact.

Redistricting - The U.S. Census Bureau is conducting its once-a-decade headcount of American households next year. So state lawmakers will be occupying themselves first with making sure that count is conducted in a way that is most beneficial for their respective states and then - in states where redistricting isn’t done by an independent commission - with drawing new legislative and congressional boundaries. Given the U.S. Supreme Court’s ruling in June that refereeing partisanship in the drawing of political districts is “beyond the reach of the federal courts,” the upcoming redistricting cycle could be particularly divisive. A potential push by some states to draw legislative boundaries based on the population of legal citizens rather than total population could also touch off a legal battle that could end up at the Supreme Court.

Mobile 5G - Federal, state and local governments have been at odds recently over how the next generation of wireless technology, 5G, should be deployed and where regulatory authority over it should reside. Prior to 2019, 21 states had passed laws streamlining regulations to facilitate the deployment of the technology, some of which barred local governments from negotiating their own deals with wireless providers or imposed restrictions on such agreements, such as caps on municipal right-of-way fees for small-cell installations, according to the National Conference of State Legislatures. And NCSL reported that as of July at least 23 states had introduced 5G and small-cell legislation in 2019.

But in September 2018 the Federal Communication Commission approved a declaratory ruling and order preempting both state laws and local ordinances that conflicted with its provisions, which include time limits for processing applications for small-cell installations and limits on application and ROW fees. San Jose, California and dozens of other cities and counties sued to block the FCC’s order, and their petitions were consolidated into a case now before the U.S. Court of Appeals for the Ninth Circuit (City of San Jose v. FCC). If the local governments prevail and the Supreme Court doesn’t overturn the Ninth’s decision, there may be more state 5G legislation preempting local authority.

AI - Artificial intelligence is revolutionizing the way we live and work. At the same time, it is threatening to disrupt the job market, increase inequality and diminish privacy. Still, there’s been relatively little government regulation targeting AI specifically, with the exception of autonomous vehicle technology, which legislatures in 29 states and governors in 11 have addressed, according to NCSL.

At least 10 states have also introduced legislation this year dealing specifically with AI, according to LexisNexis State Net’s legislative tracking system. Most of those measures concerned study commissions or task forces, but at least one, Illinois HB 2557, enacted in August, will require employers who use AI to analyze applicant interviews to notify applicants of that fact.

At least 10 states have also introduced legislation directly addressing facial recognition technology. And although AI is currently subject to existing cybersecurity, privacy and other regulations that aren’t specific to AI, there will undoubtedly be more legislation impacting AI directly and indirectly as the technology continues to develop.

Marketplace Laws - States may be making changes to their state marketplace facilitator laws next year to address industry concerns about inconsistencies among them. NCSL has been working on model legislation and the Multistate Tax Commission has drafted a white paper to assist states in making their laws more uniform. Specific issues for states to address include the variation among gross sales thresholds for marketplace sellers to opt out of having marketplace facilitators collect taxes for them and inconsistencies among marketplace definitions, with some including food delivery services and others not, and some applying only to sales of tangible personal property, while others also include sales of services.

Short-Term Rentals - In June the mayor of Honolulu, Hawaii signed Bill 89, imposing some of the toughest regulations on the island of Oahu’s vacation rental industry in decades. The new law will allow the permitting of nearly twice as many owner-occupied, bed-and-breakfast type rentals as currently allowed on the island but allow no rentals of entire homes, although rentals in resort areas like Waikiki will be exempt from the law.

It remains to be seen whether the passage of such restrictions in one of the top U.S. vacation destinations will spur similar efforts elsewhere. But a bill (HB 2001) prefiled for Arizona’s 2020 session would allow municipalities to crack down on problem short-term vacation rentals through sites like Airbnb and VRBO. The state enacted protections for short-term rentals in 2016 to promote growth of the “sharing economy,” but disruptive weekend parties at such properties have been a growing problem in cities and towns across the state.

Transportation/Infrastructure Funding - Since 2013, 31 states have enacted legislation to increase their gas taxes, and five states did so this year, according to NCSL. While that still leaves room for gas tax hikes - the usual go-to for transportation funding - in other states, with the diminishing returns they’ll provide over the long term as gas-powered vehicles continue to become more fuel efficient and electric vehicles become more prevalent, states may look more toward alternatives.

This year Arkansas Gov. Asa Hutchinson (R) proposed a plan to provide $300 million a year in funding for the state’s roads and highways, most of which would come from a permanent extension of the half-percent state sales tax for highways approved by the state’s voters in 2012. And Connecticut Gov. Ned Lamont (D) and state lawmakers have been debating all year whether to start tolling drivers to help pay for the upkeep of that state’s roads and bridges.

Insurance Fraud - According to Deloitte’s “2019 Insurance Regulatory Outlook,” insurance fraud has reached “epidemic” proportions, costing insurance companies and their policyholders tens of billions of dollars each year. State lawmakers have taken measures in recent years to combat the problem, but this year they stepped up their efforts even more.

The Coalition Against Insurance Fraud’s government affairs quarterly, the Advocate, reported in April that more insurance fraud-related legislation was filed in the first three months of 2019 - 150 bills in 39 states - than in all of 2018. As of May, 26 bills dealing with insurance fraud had already been enacted, according to the Coalition and LexisNexis State Net’s legislative tracking system. The enactments include assignment of benefits (AOB) reforms; prohibitions on the misrepresentation of caller ID information, or “spoofing;” and licensing requirements for public adjusters. With state lawmakers evidently agreeing with the insurance industry that fraud is a problem, more fraud-related legislation is likely next year.

Blockchain/Crypto Development - During this year’s tax season, as part of an effort to attract blockchain-based businesses to the state, Ohio gave companies that operate there the option of paying their taxes with bitcoin. Only a handful of businesses took the state up on its offer, including the Utah-based home furnishings company Overstock, which has let its customers pay in bitcoin and other cryptocurrencies since 2014. Other states, including Georgia and Illinois, considered legislation in 2018 to allow cryptocurrency tax payments, but those measures failed. Things could be different next year, however, if there’s another headline-grabbing surge in the price of bitcoin like there was at the end of 2017.

                                                                                                                                                                                                                                                                                                                                  -- By KOREY CLARK 


States Focusing in on AI

This year bills or resolutions dealing specifically with “artificial intelligence” were introduced in at least 10 states, six of which enacted or adopted such measures, according to LexisNexis State Net’s legislative tracking system. Most of the measures concern study commissions or task forces, but at least one, Illinois HB 2557, enacted in August, will require employers who use AI to analyze applicant interviews to notify applicants of that fact.