The next 60-day regular session of the West Virginia Legislature commences on Wednesday, January 9, 2019. While much of the nation seemed transfixed by the recent electoral changes, the most significant political change in the West Virginia Legislature actually preceded the 2018 general election. Indeed, the House of Delegates elected a new Speaker, Roger Hanshaw (R-Clay), in August 2018 to replace Tim Armstead who resigned to accept an appointment to the Supreme Court of Appeals. Overall, however, the election only yielded minor changes to the composition of both chambers, with the GOP still in the majority. In the House of Delegates, the Democrats picked up five seats with the Republicans maintaining a 59-41 majority. In the Senate, the Republicans sustained a net loss of only two seats, leaving them with a 20-14 majority.
There were three major leadership changes in the Senate, the most significant of which caused by the defeat of the Majority Leader, Senator Ryan Ferns (R-Ohio). In his place, President Mitch Carmichael (R-Jackson) appointed Senator Tom Takubo (R-Kanawha), a pulmonary physician who had previously been the Chairman of the Committee on Health and Human Resources. President Carmichael appointed Senator Mike Maroney (R-Marshall), a radiologist, to succeed Takubo as Chairman. The remaining committee leaders stayed the same with the exception of the Education and Government Organization committees. Senator Patricia Rucker (R-Jefferson) replaced Senator Kenny Mann (R-Monroe) as the Chair of the Education Committee after Senator Mann became Vice Chairman of the Committee on Finance. With the defeat of Senator Ed Gaunch (R-Kanawha), the former Vice Chairman of the Finance Committee, Greg Boso (R-Nicholas), takes Gaunch's place as Chairman of the Committee on Government Organization.
As with any change in the position of Speaker of the House of Delegates, there are usually major shakeups in the majority party leadership as the new Speaker assembles his own leadership team. Most notably, the new House Majority Leader will be Delegate Amy Summers (R-Taylor), the first female Majority Leader in the state's history. She will be joined by Delegate Paul Espinosa (R-Jefferson), who was named the Majority Whip, and Delegate Darryl Cowles (R-Morgan) as Speaker Pro Tempore. There were several other significant changes to the committee leadership. Delegate Eric Householder (R-Berkeley) takes over as Chairman of the Committee on Finance, Delegate Danny Hamrick (R-Harrison) assumed the role of Chairman of the Committee on Education, and former Finance Chairman Delegate Eric Nelson (R-Kanawha) became the Chair of Banking. Retaining their committee chairs were Delegate John Shott (R-Mercer) at Judiciary, Delegate Joe Ellington (R-Mercer) at Health and Human Resources, Delegate Steve Westfall (R-Jackson) at Insurance, and Delegate Bill Anderson (R-Wood) at Energy.
Governor Justice's State of the State Address
For the first time since Fiscal Year 2012, the state budget is running a true budget surplus. This will allow the Governor and legislative leaders greater flexibility as they both prepare, consider, and enact the Fiscal Year 2020 state budget. The Governor already has promised $100 million will be dedicated to the long-term fiscal health of the Public Employees Insurance Agency ("PEIA"). Governor Justice also has promised an additional 5 percent pay raise for teachers and school service personnel in the next fiscal year to go along with the 5percent across the board raise enacted after the 2018 work stoppage. The Governor is also likely to call for legislative implementation of some or all of the recommendations from the PEIA Task Force and the Blue Ribbon Commission on Four-Year Colleges and Universities.
There are also rumors from the Justice administration that the Governor may attempt another stab at tax reform in 2019. This may include potential changes to the personal income tax, consumer sales and use tax, and severance taxes. The Governor is also likely to endorse the previous higher education proposal from Senate President Carmichael that would provide "last dollar in" tuition funding for West Virginia residents who wish to attend one of the state's community and technical colleges. Finally, the Justice Administration is also exploring changes to the overall structure of state government within the Executive Branch to enact certain administrative and policy-making efficiencies where the same currently may not exist.
As with previous sessions, many of the major bills to be considered will be ones from the previous session(s), though perhaps with updated or more palatable provisions to ensure passage this year. Here is a brief preview of what we expect to see from Governor Justice in his State of the State Address as well as in the areas of Public Health, Business, and Environmental.
A bill providing for the regulation of prior authorizations by insurance companies will be taken up again. Governor Justice vetoed last year's bill over a technical defect. Screening certificates of merit, the statutory prerequisite for the filing of medical liability lawsuits, will be refined so as to require higher standards of proof pre-suit, thus making frivolous lawsuits less likely. While the legislature enacted the omnibus Opioid Reduction Act of 2018 with the express purpose of reducing opioid addiction rates, it is clear a cleanup bill will have to address some internal inconsistencies and correct some unintended consequences of that legislation. Similarly, the Medical Cannabis Act of 2017 must be revised to address certain open-ended issues, such as banking and permitting, and its implementation most likely will be postponed until after the original July 2019 start date. One can expect the Legislature to revisit and finally abolish the Certificate of Need program that sets certain requirements for healthcare facilities. Other public health bills of interest may include prohibition of smoking in vehicles when minors are present, an increase in the sugary beverage tax, and a physician exemption to West Virginia's vaccination laws.
Speaker Hanshaw has previously announced the Legislature will consider a proposed constitutional amendment providing for the phase out of the inventory tax on equipment and machinery, a proposal strongly favored by businesses and West Virginia manufacturers. A bill to create an Intermediate Court of Appeals may gain more traction after a year of tumultuous change at the Supreme Court of Appeals. Such a court could provide for greater certainty and speed in the resolution of appellate matters.
The West Virginia Department of Environmental Protection ("WVDEP") has proposed changing its water quality standards to delay adoption of certain human health criteria, a move that is certain to be opposed by certain environmental groups. Senator John Unger (D-Berkeley) and Senator Patricia Rucker (R-Jefferson) have indicated they might introduce legislation to amend environmental statutes to require public hearings for all permits issued by WVDEP.
The government relations team at Spilman will be tracking and reporting further on these and other bills and major developments during the legislative session that may impact your business interests in West Virginia.