Washington Legislative Update - Week 10

Revenue packages roll out, budget proposals are incoming, and policy committees start moving bills.

On Friday, the Legislature wrapped up its tenth week of action, with five more weeks to go until adjournment on April 27^th. So far, there have been a combined 2,414 bills and resolutions introduced between the House and Senate, and as of the March 12^th house or origin cutoff, 534 bills have passed out of their first chamber and continue moving. The next deadline for bills is April 2^nd to clear the opposite house policy committee, followed by April 8^th for fiscal committees. Budgets, and bills necessary to implement them, are exempt from these deadlines. Budgets will take center stage starting next week.

Top updates and issues from the tenth week, and coming activity, include:

Budget & Taxes
On Tuesday, lawmakers received their official pre-budget revenue forecast, which projected an overall decline in expected revenue collections of $845 million over the next four years – adding to an already projected $12 billion, now $13 billion, deficit over that period. On Thursday, Senate Democrats held a press conference announcing their proposals to generate $21 billion in new taxes over the next four years, partly offset by a $3.25 billion reduction in the state portion of the retail sales tax. House Democrats followed on Friday with their own list of proposals, which would generate just over $13 billion through 2029.

On the Senate side, the proposals would impose a one percent tax on certain financial assets held by individuals with more than $50 million of such assets, like cash, investments, and business ownership interests (SB 5797); remove the one percent cap on property tax increases, replacing it instead with Consumer Price Index inflation plus population growth in a given jurisdiction (SB 5798); impose a five percent payroll tax on employers with $7 million or more in annual payroll for employees paid above the Social Security Tax cap, currently $176,100 per year, with a partial credit for employers already subject to the Seattle “JumpStart” payroll tax (SB 5796); and repeal multiple preferential B&O tax rates across multiple industries, including transportation, agriculture, healthcare, energy, non-profits, and insurance agents and producers (SB 5794). The Senate package also proposed to reduce the state portion of the sales tax from 6.5 percent to 6 percent (SB 5795).

For their part, House Democrats propose a one percent B&O tax surcharge on businesses with taxable income over $250 million and a rate increase from 1.2 percent to 1.9 percent for financial institutions with annual net income of $1 billion or more (HB 2045); replicate the Senate assets tax, albeit at a 0.8 percent rate and an exemption for the first $50 million of assets taxed (HB 2046); and replicates the Senate property tax lid lift, but at a 3 percent cap (HB 2049).

The operating budget proposals these revenue packages undergird are scheduled to come out on Monday on both sides, with public hearings Tuesday, executive sessions on Thursday, and floor debate Saturday on the Senate side and the following Monday on the House side.         

Transportation, Capital Budget & Construction
The House and Senate transportation budgets for the biennium are also expected to drop Monday, with public hearings set in both Transportation Committees on Tuesday. On the House side, Transportation Chair Jake Fey (D-Tacoma) has dropped a placeholder revenue bill, HB 2043, which is also set for a hearing Tuesday afternoon with details possibly available as early as Monday. The traditionally less controversial capital budget plans are expected after operating and transportation budgets are moved. In bill action, HB 1970, streamlining contracting options for the Department of Transportation, is still awaiting a hearing in the Senate Transportation Committee. HB 1173, originally requiring prevailing wages on private sector “high hazard” workplaces, like oil refineries, and now amended to regulate apprenticeships at such sites, was heard in the Senate Labor & Commerce Committee on Tuesday and is scheduled for a committee vote this coming Friday. SB 5360 on environmental crimes awaits a committee vote in the House Energy & Environment Committee, while industry partners continue to press legislators on the bill’s disconcerting expansion of criminal sanctions for mere accidents and ordinary negligence.  

Business Regulations
SB 5729, removing building official review authority for stamped plans on land use decisions, was heard in the House Local Government Committee on Tuesday, but is not presently scheduled for a committee vote. HB 1217, the residential rent control bill, was heard on Wednesday in the Senate Housing Committee and is scheduled for a committee vote this coming Wednesday.

Labor & Employment
SB 5041, providing 12 weeks of unemployment insurance benefits to workers on strike, was heard Tuesday in the House Labor & Workplace Standards Committee, and was voted out of committee on Friday, after several Republican-backed amendments were voted down. The committee also moved SB 5463, creating new obligations and penalties on private employers who self-insure for workers’ compensation for violations of “good faith and fair dealing” in handling workers’ claims. This Tuesday, the committee will hear SB 5525, requiring employers with 50 or more employees to provide 60 days’ notice of business closure or large layoffs, with a committee vote scheduled for Friday. On Tuesday, the Senate Labor & Commerce Committee heard HB 1875, giving workers the right to use accrued paid sick leave to prepare for or attend proceedings related to their immigration status, and moved the bill out of committee on Friday. On Monday, the committee is set to hear HB 1213, substantially expanding coverage and access to the state’s paid family and medical leave insurance program, with a committee vote scheduled for Friday. HB 1308, giving workers a private right of action to enforce rights to request and review personnel records is also set for a committee hearing Monday and vote on Friday. HB 1402, prohibiting an employer from requiring applicants to have a valid drivers’ license when advertising a position, with a new private right of action, has idled in the Senate committee, but a similar prohibition in SB 5501, without the private right of action, was voted out of the House committee on Friday and continues to move.

Insurance
In the life and disability space, SB 5141, excusing disability income insurance carriers from single case filings for experience-rated groups, was unanimously voted out of the House Consumer Protection & Business Committee on Tuesday, while its House companion, HB 1230, was heard in the Senate Business, Financial Services & Trade Committee on Thursday. The latter has not been scheduled for a vote, indicating the Senate bill may be the vehicle. SB 5351, which started as a comprehensive regulation on dental insurers, including a minimum dental loss ration requirement, was heard in its now agreed-to form, addressing same day procedures, credit card reimbursement payments, and a DLR and out-of-network study, was heard by the House Health Care Committee on Wednesday and is set for a committee vote this Tuesday.

In property and casualty, SB 5108, expanding options for the financial backing of service contracts, was unanimously voted out of the House Consumer Protection & Business Committee on Tuesday and is in the House Rules Committee. Its companion, HB 1006, has been heard in the Senate committee but is not yet scheduled for a vote. SB 5331, providing authority for the Commissioner to order restitution and levy $10,000 per violation fines on insurers, was heard in the House committee Wednesday, and is now scheduled for a committee vote this Wednesday, at which the insurance trades hope to place an aggregate cap on fines and distinction between willful and non-willful violations. SB 5589, ordering a study of the use of credit history and credit-based insurance scores and other rating factors in underwriting personal lines, will not move this year. SB 5721, requiring an auto repair appraisal policy term and creating an appraisal process for disputes over repair and total loss appraisals, has not been scheduled for a hearing, but discussions continue whether a compromise can be achieved to remove the proposal’s one-sided fee-shifting provision charging insurers with costs and attorneys’ fees if the appraisal process leads to a $500 or more increase in the determined loss.  Other insurance bills moving include HB 1539, creating a wildfire mitigation working group, which was voted out of the Senate Agriculture & Natural Resources Committee on Thursday, and HB 1516, creating a study of insurance options for affordable housing units, which was heard in the Senate Business, Financial Services & Trade Committee on Wednesday, but so far without a vote scheduled.

Financial Services
HB 1285, requiring financial literacy education in high school graduation standards, is still waiting for a hearing to be scheduled in the Senate Early Learning & K-12 Education Committee. With the April 2^nd cutoff deadline looming, this may be a signal the bill is done for the session. SB 5328, creating a regulatory framework for companies to provide Earned Wage Access services, also appears unlikely to move forward after an industry-opposed “poison pill” amendment was adopted upon Senate passage. It has not been set for hearing in the House Consumer Protection & Business Committee.

Civil Justice & Liability
HB 1403, providing new warranty options and liability protections for condominium builders and developers to promote affordable housing units was heard in the Senate Housing Committee on Friday and is scheduled for a vote this Wednesday. SB 5408, providing notice and a right to cure allegedly defective job postings prior to suit is now set for a public hearing this Tuesday, but with no committee vote presently scheduled, faces an uphill climb to continue moving.

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