Washington Legislative Update – January 16, 2024

Fast-paced 60-day legislative session kicks off with record number of bills introduced, priorities staged for advancement, and six citizen initiatives in the background
This year’s legislative session began on Monday with opening ceremonies, an iteration of caucus priorities, and on the House side, passage of a handful of unrelated bills from last session over to the Senate. This year’s “short session” lasts until March 7th. Already, a record number of new bills have been introduced, with 932 in the system at the end of the first week. For the first few weeks, legislators are almost exclusively in policy and fiscal committees for public hearings and voting on bills. The first major deadline of the session is January 31st, at which point bills must receive a vote out of their policy committee, followed by the same deadline for bills in fiscal and transportation committees on February 5th. A new dynamic for legislators and advocates alike is six pending citizen initiatives to the Legislature, taking direct aim at key Democratic priorities in tax, environmental, public safety, and education policy.    Key updates from this week and into next week include:
The six citizen initiatives to the Legislature for which petitioners were circulating last year have now been provisionally certified to the Legislature by the Secretary of State. Over 400,000 signatures were turned in on each of the initiatives, which are being verified now for final certification. Under the Washington State Constitution, even provisionally certified initiatives are to take precedence over all non-appropriation measures, creating an interesting dynamic for both chambers. Substantively, the initiatives are I-2117, which would repeal the state’s Climate Commitment Act, the state’s “cap-and-invest” carbon auction policy for emitting industries; I-2081, a “Parent’s Bill of Rights,” concerning parental involvement and notification about curriculum and other elements of the K-12 public school system; I-2109, repealing the state’s tax on capital gains; I-2124, allowing opt-out of the state’s long term care insurance program; I-2113, regarding the legal standard under which law enforcement may engage in vehicular pursuit of suspects; and I-2111, prohibiting the state and local governments from adopting an income tax. Certified initiatives to the Legislature compel the body to either adopt the initiative as proposed, reject (or ignore) the initiative, in which case it goes to the voters at the fall general election, or approve an alternative to the initiative, in which case both the original and alternative proposals appear on the general election ballot. Because it is not always clear what legislation on a topic subject to initiative may be considered an official alternative to the initiative (and placed on the ballot), it is generally expected that the existence of the initiatives will chill most lawmaking on the subjects they cover. 

Governor Inslee & Leadership Priorities
As described in Governor Inslee’s State of the State address on Wednesday, and leadership remarks during Monday’s opening ceremonies, majority Democratic priorities for the session are focused on increasing behavior health services, addressing homelessness and treatment for substance abuse disorder, improving child care access, passing a series of climate-related proposals funded by the Governor’s budget, and proposing a constitutional amendment on reproductive rights in Washington. Republican leaders in response emphasized their interest in tackling homelessness, the escalating cost of living in Washington, and students who are struggling or underperforming in school.

Artificial Intelligence
SB 5838 (Nguyen, D-West Seattle), and HB 1934 (Couture, R-Allyn), are Attorney General request bills to establish a bi-partisan, 42-member task force to meet and discuss issues related to AI use and development, and appropriate governmental response, with an initial report to the Legislature in December, 2025. The Senate version was heard in committee on Tuesday, with the House companion scheduled for hearing this coming Friday. Industry reaction to the proposal, led principally by the Association of Washington Business and the two primary technology industry associations, has been generally positive but with concerns over properly defining AI, not chilling innovation in this space, and the large size of the task force. It is widely expected this will be the primary legislative activity on AI this session. Nevertheless, HB 1951 (Shavers, D-Oak Harbor) proposes a much more substantive measure to regulate AI development and deployment and ban “algorithmic discrimination” with enforcement by the Attorney General through the Consumer Protection Act and private litigants through the state’s Law Against Discrimination. This measure, which has attracted widespread industry opposition, is also receiving a public hearing this coming Friday. Other new proposals on AI include HB 1999 (Orwall, D-Des Moines) and SB 5962 (Mullet, D-Issaquah), to crack down on the use of AI in creating fake sexually explicit images, and SB 5957 (Boehnke, R-Kennewick). Rep. Orwall’s bill is set for hearing this coming Tuesday. Finally, Governor Inslee is rumored to be considering issuing an Executive Order on AI use, procurement, and development of AI, aligning with a similar order issued by California Governor Gavin Newsome last fall. 
Tax & Fiscal Policy
Last month, Governor Inslee announced his supplemental budget proposals for the remainder of the biennium, proposing additional spending around behavioral health, opioid and fentanyl addiction, housing, and homelessness but relying on forecasted additional revenue collections rather than any new tax proposals. Once the next quarterly revenue forecast is released in February, the House and Senate will release their respective supplemental budgets proposals, and negotiate differences by the end of session. On the tax front, HB 2276 (Berg, D-Mill Creek) dropped on Tuesday, proposing a 1 percent real estate transfer tax for property sales above $3 million, in addition to the 3 percent Real Estate Excise Tax on such transactions. The tax is estimated to raise $283 million per biennium to fund affordable housing construction. It is up for hearing in the House Finance Committee this coming Thursday. 

Campaign Finance
HB 1885 (Mena, D-Tacoma) and its companion, SB 5832 (Nguyen, D-West Seattle), would prohibit campaign contributions by corporations that are “foreign-influenced,” and defines a “foreign-influenced corporation” as a for-profit corporation or limited liability company in which a single foreign investor has 1 percent or more of the company’s ownership interests, or multiple foreign investors collectively have 5 percent or more of the company’s ownership interests. This would effectively eliminate publicly traded companies and many privately held companies doing business in Washington from participating in political giving. The House version was heard in the State Government and Tribal Relations Committee on Tuesday and is scheduled for a vote this coming Friday.

Business Regulation
In addition to addressing artificial intelligence, this session has seen an early uptick in business regulation proposals across a diverse mix of industries. HB 1889 (Walen, D-Bellevue) addresses professional licensing and immigration status, allowing individuals to seek professional licenses in a vast array of occupations without regard to immigration status. It received a public hearing in the House Consumer Protection & Business Committee on Tuesday and is scheduled for a committee vote this coming Tuesday. A holdover from last session, HB 1648 (Reeves, D-Federal Way) would implement new regulations on the sale and resale of tickets to sporting and other events. It is set for public hearing this coming Tuesday. Rep. Reeves is also seeking legislation, HB 2149, to regulate the collection and sharing or sale of consumer personal information at the point of sale. It is set for hearing this coming Friday. SB 6081 (Kuderer, D-Bellevue) would require all consumer contracts to be written in plain language, while SB 5855 (MacEwan, R-Shelton) would require plain language summaries for business policies or consumer agreements that are presented in an electronic format, such as terms of service. The latter is set for a hearing this coming Friday. Legislators are addressing minors and alcohol, with HB 2260 (Waters, R-Stevenson) expanding civil penalties for the sale of alcohol to minors, and SB 6122 (Conway, D-Tacoma) proposing a regulatory framework for third party alcohol delivery from retail establishments. The former is set for hearing this coming Thursday. SB 5988 (Trudeau, D-Tacoma) and its companion, HB 2095 (Alvarado, D-West Seattle), comprise a “gift card accountability” proposal aimed at making it easier to cash out small gift card balances and collect balances on abandoned gift cards through the state’s unclaimed property program. Finally, HB 2072 (Farivar, D-Seattle) is a request from the Attorney General to increase civil penalties under the Consumer Protection Act for antitrust conduct to three times the illegal gain or loss avoided as a result of anticompetitive behavior. It was heard Wednesday in the House Civil Rights & Judiciary Committee and is set for a committee vote this coming Friday.
Labor & Employment
Along with business regulation, labor and employment regulation remains active. SB 5924 (Kuderer, D-Bellevue) is an updated effort to provide a private right of action to employees to enforce rights to obtain a copy of personnel records. It was heard in the Senate Labor Committee on Thursday. HB 1905 (Mena, D-Tacoma) and SB 5894 (Nobles, D-Tacoma) adds protected classes under the state’s Law Against Discrimination to the Washington Equal Pay and Opportunity Act, giving rise to a new administrative penalty process and private right of action under that statute for unlawful discrimination. Rep. Mena’s bill was heard on Wednesday and is set for a vote this coming Friday, while Sen. Nobles’ companion is set for hearing this coming Monday. HB 1991 (Fosse, D-Everett) and SB 5793 (Saldana, D-Seattle) would expand reasons for leave under the state’s paid sick leave requirements, and is set for hearing on the Senate side Monday and House side Wednesday. HB 1940 (Fosse, D-Everett) and SB 5778 (Keiser, D-Des Moines) bans “captive audience” meetings about political (primarily addressing unionization) and religious topics in the workplace and provides anti-retaliation protections for workers who refuse to attend such employer meetings; both companions were heard in their respective committees this past week, and are set for a vote this week. SB 6074 (Saldana, D-Seattle) would require Transportation Network Companies to provide drivers with enhanced death benefits; it is not yet scheduled for a hearing. SB 5935 (Stanford, D-Bothell) would add additional restrictions on employer-employee non-compete agreements, and is set for hearing this coming Thursday. On the positive side, HB 2349 (Stonier, D-Vancouver) and SB 6241 (Randall, D-Port Orchard) would address a rash of “gotcha” lawsuits targeting employers under the state’s job posting salary transparency law by limiting relief to actual job applicants and providing a right to cure deficiencies before suit. Both are awaiting public hearing.  

Social Insurance
In unemployment insurance, SB 5777 (Keiser, D-Des Moines) and HB 1893 (Doglio, D-Olympia) would provide UI benefits to striking workers in a lockout. Both were heard this past week and are set for committee votes this coming week. HB 1898 (Schmidt, R-Spokane Valley) would ease the process for granting employers relief from certain benefit charges, at the request of the Employment Security Department. It was heard on Tuesday and voted out of committee Friday. In workers’ compensation, HB 2031 (Abbarno, R-Centralia) would allow county coroners and their staffs to file occupational disease claims for PTSD, and was heard Friday with a vote set this coming Friday. HB 1927 (Bronoske, D-Lakewood) and SB 5932 (Stanford, D-Bothell) would reduce the retroactive period for a worker picking up the three day waiting period for time loss benefits from 14 days to seven days; the House version was heard on Wednesday and is set for a vote this coming Friday. In the long term care insurance program, SB 6072 (Keiser, D-Des Moines) and the similar HB 2272 (Macri, D-Seattle), implement various recommendations of the Long Term Services and Supports Trust Commission, particularly around the issue of creating a regulated supplemental long term care product. Notably, HB 2272 is drafted with a series of clauses specifying that it is not to be construed as an alternative to Initiative 2124, and if it is determined to be an alternative, or if I-2124 passes, it is null and void. Finally, HB 2244 (Reeves, D-Federal Way) and SB 6069 (Mullet, D-Issaquah) would, on request of the State Treasurer, create a state-run auto-IRA program for employees to utilize for retirement savings in the event their employer does not offer a private retirement plan option. Neither bill has been set for hearing yet.  

Sen. Patty Kuderer, D-Bellevue, the front-runner in the race to succeed Insurance Commissioner Mike Kreidler, has introduced a quartet of bills described as consumer protection measures. SB 5797 would increase the fines that can be levied against property and casualty insurers from a $10,000 maximum to $25,000 per violation. SB 5798 would extend cancellation notice requirements for auto and homeowners insurance to 60 days. SB 5806 would extend protections from public disclosure for data provided by insurers to the Commissioner, albeit with some industry concern over exceptions and loopholes in the bill. Finally, SB 5842 would restrict the use of social security numbers by insurers for purposes of determining child support debt. These bills were heard in committee on Thursday. Sen. Kuderer has also proposed SB 5963, requiring firearm owners to maintain certain homeowners insurance coverage. It is not yet set for hearing. Addressing wildfire risk, HB 1899 (Volz, R-Spokane Valley) would allow insureds a choice of building code when rebuilding after a wildfire loss, while HB 2330 (Reeves, D-Federal Way) would establish a wildfire risk mitigation grant program but require significant disclosure and transparency measures around wildfire risk underwriting. Neither bill is scheduled for a hearing yet. HB 2011 (Peterson, D-Edmonds) establishes a referee-style process for addressing disputes over auto repair appraisals and payments. It is scheduled for hearing this coming Tuesday and a committee vote on Friday. HB 1928 (Ryu, D-Shoreline), makes a series of updates to the statutes governing service contracts, product protection guarantees and insurance reimbursement policies. It was heard on Friday in committee with a vote set for this coming Wednesday. Finally, SB 6027 (Stanford, D-Bothell) is the Commissioner’s request to adopt the NAIC model statute on regulating insurance holding companies. It was heard on Thursday in committee and is set for a vote this coming Tuesday. 
Financial Services
Two bills addressing consumer lending were heard on Wednesday in the House Consumer Protection and Business Committee, HB 1874 (Walen, D-Bellevue) and HB 2083 (Ryu, D-Shoreline). Rep. Walen’s bill, styled the “Predatory Loan Protection Act,” and modeled after a similar enactment in Illinois, provides the Department of Financial Institutions with additional enforcement authority under the Consumer Loan Act, expands the definition of “loan” under the Act, and makes loans made by unlicensed lenders unenforceable. It’s scheduled for a vote in committee this coming Friday. Rep. Ryu’s bill, addresses payday lending, capping the APR at 36 percent, modifies the definition of small loan to include advances or credit to be repaid from assets or income, earned or not, and sets forth additional violations for lends under the Check Cashers and Sellers Act. Rep. Ryu’s bill is also set for a committee vote on Friday. Rep. Walen’s HB 1874 has a Senate companion, SB 6025 (Stanford, D-Bothell), which is set for a public hearing in the Business, Financial Services, Gaming & Trade Committee on Tuesday.

Civil Justice & Liability
SB 5059 (Kuderer, D-Bellevue), a holdover from 2023, has been scheduled for a public hearing on Monday afternoon in the Senate Ways & Means Committee, where it died last session. The bill requires that interest on a tort judgment against a defendant begin running from the date the cause of action accrued, as opposed to the current (and typical) rule where interest begins to run upon entry of the judgment. The hearing will be on a proposed amendment to last year’s bill, which carves out claims for sexual abuse of minors, requiring interest on any such judgments run from the date the cause of action or notice of cause of action was filed. This is largely viewed as an accommodation to school districts, who have testified about their concern with such exposure. The proposed amendment also specifies that interest on any future damages component of a judgment would commence upon entry of the judgment. The bill failed to emerge from Ways & Means last session after the committee deadlocked 12-12, with two Democrats joining all ten Republicans on the committee in opposition to the bill. Two other liability bills likely to receive consideration also involve claims of sexual abuse of a minor, with last year’s HB 1618 (Farivar, D-Seattle) eliminating statutes of limitation on such claims both prospectively and retroactively, may advance from the House with a rumored amendment to have only prospective application. A new bill, SB 6046 (Braun, R-Chehalis), would suspend the statute of limitations through 2029 for child sex abuse claims against a defendant organization in bankruptcy, aiming to bolster claims Washington citizens have against the Boy Scouts of America’s bankruptcy estate.  

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