Legislative Update: Lawsuit Lending; Building Trades; GOP Workforce Package

The Wisconsin Legislature appears poised to finish its business by March 10, the last regular session day on its 2021-22 calendar. With that, many bills are moving quickly through the legislative process. Here, we review some notable items.

Hearings this week on lawsuit lending reform

A bill (AB 858/SB 842) to reform lawsuit lending in Wisconsin is receiving public hearings in both houses of the Legislature this week. The Assembly Committee on Consumer Protection held a public hearing on the bill on February 16. The Senate Committee on Judiciary and Public Safety scheduled a hearing on the bill for the following day.

Authored by Reps. Tusler (R-Harrison) and McGuire (D-Kenosha) and Sens. Wimberger (R-Green Bay) and Roys (D-Madison), this bill would regulate consumer lawsuit lending in Wisconsin. Lawsuit lending is a form of financing provided to a plaintiff or prospective plaintiff in a civil lawsuit, with the lender purchasing a right to repayment or a contingent share of the plaintiff’s proceeds.

Lawsuit loans often have very high effective interest rates, meaning that even successful borrowers may be on the hook for several times the original loan amount. Critics of the practice argue that the loans can prolong litigation by discouraging plaintiffs from settling. The proposed reforms include capping annual interest rates and fees, prohibiting lenders from making litigation decisions, and requiring all lawsuit lending agreements to include certain consumer protection provisions.

AB 858/SB 842 appeared in our 2022 Legislative Preview. The original draft of 2017 Wisconsin Act 235, a major piece of legislation including significant civil litigation reforms, included provisions to reform lawsuit lending, but the final version did not.

Apprenticeship and commercial plan review proposals

A couple items of interest to the building industry are moving through the Legislature. During a February 9 executive session, the budget-writing Joint Finance Committee voted 11-4 to amend and recommend for passage AB 152/SB 167, which would create an exemption from state plan review requirements for building projects consisting of small, single-story commercial buildings not intended for residential, educational, or high hazard uses and for plumbing plans with at least 16 but no more than 25 fixtures. The bill is supported by construction trade groups with members who have experienced costly delays because of extended review times for relatively simple projects.

On February 10, the Assembly Special Committee on Trade and Supply Chain held an informational hearing featuring employer representatives, and voted 7-2 at an executive session to approve AB 932, which would require the governor to allocate at least $20 million in funds from the American Rescue Plan Act (ARPA) to promote and expand the availability of youth and adult apprenticeship programs. Previously, in December, Gov. Evers (D) vetoed a bill that would have created an individual income tax subtraction for tuition paid for apprenticeship programs (more on that here). Gov. Evers has also vetoed many bills this session seeking to direct funds allocated to Wisconsin under ARPA; the governor has sole authority to direct any discretionary funds.

Republican legislators advance “Stronger Workforce” package

Republicans in the Legislature are working quickly to advance their “Stronger Workforce” package, a group of seven bills intended to get more Wisconsinites into the labor force. The package, coauthored by a variety of legislators, includes a bill that would index the maximum weeks of eligibility for Unemployment Insurance (UI) benefits to the state’s unemployment rate. One bill would prohibit most adults without disabilities or dependents from remaining on the Medical Assistance program if they turn down a job offer. Another would rename the UI program to “reemployment assistance” and add provisions related to work search and drug testing requirements.

In addition to a lengthy press release from Senate Majority Leader Kapenga (R-Delafield), Spectrum News 1 and the Institute for Reforming Government have published detailed summaries of the legislation. The bills are scheduled for floor votes in the Assembly on February 17. The Senate is also expected to take them up soon. The bills passed out of committees in each house along party lines, suggesting a strong possibility that Gov. Evers will veto them.

As we reported here, Senate Majority Leader LeMahieu (R-Oostburg) previewed this package in an interview WisPolitics, saying that the spring agenda would include “changes to the unemployment insurance program and making it easier for people licensed in various jobs by other states to come to Wisconsin and continue their employment.”

Sen. LeMahieu also told the publication that the Senate will not confirm Gov. Evers’ pending appointments to several state oversight boards. Specifically, they plan to defer on his picks for the Natural Resources Board, University of Wisconsin System Board of Regents, and Wisconsin Technical College System Board. If Gov. Evers loses his reelection bid in 2022, his successor would be able to replace those appointments with his or her own choices.

For more coverage of legislative issues in Wisconsin, see these recent articles:

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