February may have the fewest days, but this month certainly is not short on legislative activity pertinent to the insights community, including comprehensive privacy bills, data security legislation, new taxes on the industry, liability limitation for COVID-19-related exposure, new leadership to oversee the census, and new rules for determining independent contractor status. Changes are also in the works for California A.B. 2257.

Privacy and Data Security

Despite the Insights Association’s entreaties (and those of our members, delivered through our grassroots platform), the Virginia Consumer Data Protection Act (S.B. 1392, H.B. 2307) is likely to be signed into law by the Governor within a week. The comprehensive privacy legislation sports aspects of both CCPA and GDPR and would come into effect on January 1, 2023. On the plus side, we were able to prevent the addition of a private right of action (an approach that could prove overwhelmingly damaging, depending on its contours)

Washington state continues to work toward its own state privacy law, with the Washington Privacy Act (S.B. 5062) already having passed two committees this year after prior incarnations almost became law in 2019 and 2020. The biggest sticking point will continue to be enforcement: the current Senate version is focused on the state Attorney’s General office, but the House (and activist groups) continue to push for private class action lawsuits. The Insights Association has several ongoing asks (including preventing private litigation), but the biggest involves special treatment of marketing research.

The march towards even more conflicting state privacy laws emphasizes the need for the national privacy law we are pursuing with Privacy for America

Meanwhile:

  • New Mexico (S.B. 327) and Arizona (H.B. 2143) are working on legislation that would restrict the ability to conduct marketing research and data analytics with driver and motor vehicle records;
  • The Utah Cybersecurity Affirmative Defense Act (H.B. 80), supported by IA, would provide an affirmative defense against data security breach litigation if a breached company abides by the right data security standards, like ISO 27001; and 
  • Connecticut H.B. 5310 would expand the state’s data security breach notification law, while Massachusetts S.D. 1856 would also, while further requiring a new regime of registration for data brokers (including many insights companies).

Finally, when it comes to compliance, IA shared recommendations for data security from the Irish Data Protection Commissioner and warnings from the U.S. Department of Homeland Security about the risks for insights businesses in dealing with China

Tax

Many potential new state taxes could be in the cards for the insights industry this year:

  • Washington H.B. 1303 would tax the income of companies that sell/share Washingtonians’ personal data, as well as create an extensive registry of such companies;
  • South Carolina H.B. 3392 would impose sales tax on a wide variety of services, explicitly including marketing research and data analytics;
  • Nebraska L.B. 422 would do the same, implicitly including marketing research and data analytics; and
  • West Virginia H.B. 2148 would impose a one-percent tax on the value of West Virginia research subjects' data used, collected, processed, sold or shared.

On the potentially positive side, Pennsylvania H.B. 307 would dramatically reduce the state sales and use tax, as well as exempt some manufacturing marketing research.

COVID-19

Congress is rapidly pushing another $2 trillion of coronavirus relief, none of which would be earmarked for business relief like the Paycheck Protection Program (included in previous laws we supported).

While COVID-19-related exposure liability is unlikely to be tackled at the federal level under unified Democrat control, Missouri is pursuing another coronavirus litigation limiting bill (S.B. 51) supported by IA.

Census

The Senate Commerce Committee approved Governor Gina Raimondo, the Biden Administration's nominee for Commerce Secretary, on February 3. Before that, she had to answer questions about the 2020 Census and the American Community Survey (ACS), since the Census Bureau falls under the Department of Commerce. That took on added importance with the departure on January 20 of Census Bureau Director Steven Dillingham. Acting Director Ron Jarmin, a career Census Bureau scientist, should manage the Bureau just fine, but until a new director is nominated and confirmed, the Commerce Secretary will have a more central political role.

Research Subjects = Independent Contractors

The U.S. Department of Labor has postponed the effective date (which was supposed to be March 8) on new regulations for determining whether someone is an independent contractor or employee by two months to allow for further review (and to potentially allow the new leadership their own crack at retracting or revising the rules). The Insights Association was both pleased at the further clarification of the economic realities test in the new rules as well as extremely disappointed that the Department did not respond to our request to affirmatively clarify that research subjects who receive incentives are independent contractors and not employees.

Speaking of which, IA’s campaign to fix California A.B. 2257 has picked up steam. Legislative staff in Sacramento confirm that the law, which requires California research subjects receiving any kind of incentive for participation to be paid a prorated hourly wage, was intended to help, not hurt, the insights industry.

Our in-depth discussions in Sacramento have gone well so far, facilitated by our contract lobbyist, but powered by explanations and messages about the unintended negative impact that were carefully crafted with the assistance of our A.B. 2257 advocacy working group: MaterialPlus.io, Vital Findings, Quadrant Strategies, Full Circle Research, Branded Research, MarketVision, Public Opinion Strategies, Dynata, Rybbon, Prodege, Schlesinger Group, and Lucid.

Other donors supporting us have included: Rare Patient Voice, Olivetree Insights, Fifth Element Associates, Q-Catalytics, Veridata Insights, Clarion Research, Bauman Research & Consulting, WestGroup, Harmon Research Group, Global Market Research Group, Armature Group, Precision Sample, Charter Oak Field Services, Information Specialists Group, SurveyHealthcare / InCrowd, Beall Group, and FUEL.

Please remember that, to ensure IA’s best chances of success, we launched a separate round of fundraising that still needs your donations. All donors will be recognized in our updates to the membership, and donors of $2,500 or more will join our A.B. 2257 advocacy working group.

IA Membership Matters

The Insights Association, as always, thanks you for your continued membership and support – it makes possible our defense and advancement of the insights industry.

We are always available to answer your questions on these and other legislative/regulatory/legal issues. Please stay safe, sane and prosperous.

This information is not intended and should not be construed as or substituted for legal advice. It is provided for informational purposes only. It is advisable to consult with private counsel on the precise scope and interpretation of any laws/regulation/legislation and their impact on your particular business.