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PIACT 2016 legislative wrap-up
Resource kit 06006
By Sarah Coli, Esq.
The 2016 Connecticut legislative session came to a close on May 4, 2016. But that did not put an end to the ongoing negotiations to modify last year's $40 billion, two-year budget. The Legislature met in special session, on May 12 and 13, to vote on a proposed budget agreement created by Gov. Dannel Malloy and the Legislature’s democratic majority leader. After weeks of negotiations, Gov. Malloy and the Legislature were able to come to a tentative $19.76 billion dollar budget agreement that saw both sides take budget cuts for their respective priorities. The agreement, which was crafted for the fiscal year beginning on July 1, 2016, cuts overall spending by more than $630 million below levels in the preliminary 2016-17 budget. However, the state is still expected to finish the current fiscal year between $259 million and $280 million in deficit. This last-minute scramble to approve the budget occupied the attention of the Legislature, leaving a number of insurance- and small-business-related bills watched by PIACT dead on the Legislature floor. PIA monitored and lobbied on behalf of a number of bills, which are detailed below:
Liquor liability
H.B.5446, An Act Requiring Certain Liquor Permittees to Procure and Maintain Liquor Liability Insurance, was raised by the Insurance and Real Estate Committee in March. The bill, which was sponsored by PIACT, sought to require establishments serving alcoholic beverages to carry a mandatory liquor liability policy. PIACT past President Robert Shanley provided testimony in favor of the bill on March 3rd. However, the bill failed to be brought to a committee vote, thus killing the bill for this session.
Ride hailing
H.B.5523 passed the House on April 30, 2016, but died on the Senate calendar. The insurance requirements in the bill were as follows: a driver must be covered under an insurance policy, which recognizes that drivers are participating in ride hailing, at all times they are connected to a Transportation Network Co. Period 1 coverage (i.e., when application, or “app” is on, but driver has not responded to a hail), must have at least $50,000 coverage for personal injury or death of one person; $100,000 coverage for personal injury or death of more than one person; $25,000 property damage coverage; and the state minimum of uninsured/underinsured motorist coverage. The bill mandates that when the driver responds to a hail to the passenger’s departure from the car, the driver must be covered by a policy that provides at least $1 million for death, bodily injury and property damage on account of any accident and uninsured and legally required underinsured motorist coverage. This version of the bill differs from last year's, which required the TNC policy to provide first-dollar coverage should the driver’s first-party coverage lapse or otherwise neglects to fully satisfy the insurance requirements. This year’s version allowed the insurance requirements to be met by either an automobile insurance policy maintained by the TNC or one maintained by the TNC driver.
While the bill did not pass this session, it is almost certain that regulating TNC businesses will be revisited next year, and the structure and details of this year’s bill are likely to carry into next year’s version.
Crumbling foundations
H.B.5522, An Act Concerning Homeowners Insurance Policies and Coverage for the Peril of Collapse, sought to change the definition of “collapse” to include losses caused by decay of a building or any part of a building, that is hidden from view, or defective materials or construction methods used in the construction or renovation of a building or any part of a building. The Insurance and Real Estate Committee held a public hearing on March 7 to hear testimony both in support and opposition to the proposal. Present at the hearing were several homeowners who have experienced the obstacles of filing a claim for a crumbling foundation. On March 15, the committee, in a close 10-9 vote, issued a joint favorable report and sent the bill to the House floor. However, it died on the House calendar. It is unclear if this issue will be raised again next session.
A lighter companion bill, H.B.5180, An Act Concerning Concrete Foundations, was passed by both the House and the Senate, and was signed by the governor on May 25, 2016. The bill exempts complaints made to the Department of Consumer Protection from freedom-of-information requests for seven years in an effort to encourage more participation with the agency’s ongoing investigation. It also provides temporary property tax relief for owners of homes with faulty foundations by requiring towns to reassess the value of homes with reported foundation issues to reflect the current value of the home and for the new assessment to stand for up to five years.
Paid family medical leave
S.B.221, An Act Concerning Paid Family and Medical Leave, was issued a joint favorable report by the Labor and Public Employees committee on March 10, 2016. The public hearing held on March 4 saw over 100 pieces of written testimony and more than 70 people signed up to present testimony. One of the concerns with this bill was its changes to the current family leave law. These changes included decreasing the number of employees required to be considered a covered employer from 75 to 2. The bill also changed a covered employee from one who has worked for at least 12 months to any employee who earned $2,325. Another significant change was the amount of time provided by the law and the application of employer-provided paid time off. The bill provided for 12 weeks of leave for a 12-month period, which reduced the current allowance of 16 weeks during a 24-month period. The bill also eliminated an employer’s ability to require an employee to exhaust their employer-provided PTO before using state family leave. Therefore, the Family Medical Leave Compensation leave would have been in addition to any PTO the employee may have accrued. Employees may have opted to use their PTO during their leave, but could not be required to exhaust the time before using FMLC leave.
The final expansion proposed by the bill is to the family members for whom an employee may request FLMC leave. It expanded family members covered under the act to include the employee’s siblings, grandparents and grandchildren, including those related by marriage.
With a projected start-up cost of $4.7 million in salaries and fringe costs, as well as $7.7 million for information technology, the cost to implement the proposed FMLC program would have been a significant hit to the 2017 budget. The proposal, just like the bills from the House, is effectively dead for this session. They could be raised in new legislation in January, at the beginning of the 2017 session. 6/16
