Washington Legislative Update - Week 13

With two weeks remaining, lawmakers are on the floor debating bills and, in the background, negotiating the budgets

Legislators cleared their most recent cutoff deadline on Tuesday, for non-budget bills to move from the opposite-house fiscal committee. This Wednesday, April 16^th, is the opposite-house floor cutoff. From there, expect long days and nights on the floor while lawmakers meet in caucus, consider and debate amendments to their bills made in the other chamber, and budget negotiators continue hammering out spending and tax plans. Not much new information issued this week about the budget and taxes, but a major announcement is expected this week on new revenue sources to address the state’s spending gap. With no apparent majority support for any of the previously announced tax proposals in their original configuration, the hunt has been on for more sources of revenue to tap.  

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

Budget & Taxes

This week was the calm before the storm in budget and tax work, as very little public information came out about progress toward a budget deal or the menu of new revenue options the majority will ultimately pursue. Major announcements in both regards are expected this coming week. The two parties sparred in dueling press availabilities on Tuesday  (Republicans here, Democrats here), principally over SB 5797 and HB 2046, the property tax lid lift, but also about budget and revenue philosophy in general. The House Finance Committee plans to vote the property tax bill out of committee on Friday, along with HB 2068, increasing taxes on tobacco and non-tobacco nicotine products. Novel taxing ideas continue to trickle out this week, such as the introduction of HB 2071, which would impose a $1 per user excise tax on online dating platforms, and HB 2075, increasing the existing tax on high-THC concentration cannabis products. The Association of Washington Business has circulated this useful spreadsheet outlining all revenue bills introduced to date, as well as rumored proposals such as a new sales tax on services.   

Transportation

In a similar vein, transportation budget discussions went behind closed doors the past week, as House and Senate leaders continue to iron out differences between their already-passed budgets. On Tuesday, the Senate Transportation Committee took action on SB 5734, providing bonding authority for the I-5 bridge replacement between Washington and Oregon, adding an additional $900 million in capacity before voting the bill out of committee. Also continuing to factor in is SB 5804, authorizing issuance of up to $5 billion in bonds for fish passage projects, offset by new and increased taxes on light and power utilities. That bill moved out of the Ways & Means Committee on Tuesday, April 8th.           

Capital Budget & Construction

In the capital budget, with the Senate having already unanimously passed its $7.2 billion biennial plan, and supporting bonds, the focus is on the House to pass their version. Although it was pulled to the floor on Tuesday, the body has yet to bring it up for a vote. It is expected to pass off the floor this coming week setting the stage for the two chambers to come to agreement.  In bill action, HB 1970, streamlining contracting options for the Department of Transportation, was voted out of the Senate Transportation Committee on Tuesday and is in the Senate Rules Committee. SB 5061, the prevailing wage escalator bill, was referred to the House Capital Budget Committee on Tuesday, but did not meet the fiscal committee cutoff. HB 1183 on building code and development regulation reform, was voted out of the Senate Ways & Means Committee on Monday and is in the Senate Rules Committee.  SB 5360 on environmental crimes, died in the House Appropriations Committee at fiscal cutoff, after concerns about the criminalization of unintentional accidents prevailed. HB 1217, imposing rent control on residential units, passed the Senate Thursday evening 29-20, with heavily debated amendments adopted lifting the cap from 7 percent to 10 percent plus inflation, and exempting single family homes not owned by a corporation.

Labor & Employment

SB 5041, providing unemployment insurance benefits to workers on strike, passed off the House floor 52-43 Saturday, after a contentious floor debate that saw almost two-dozen mostly Republican amendments brought up and voted down. Critically, a Democrat-led amendment to cap the amount of UI benefits at four weeks, as opposed to the twelve weeks in the bill, was adopted. The business community has a fight on its hands to keep this four week limit in the bill as it goes to conference between the House and Senate . SB 5463, creating new obligations and penalties on private employers who self-insure for workers’ compensation, passed the House on a 64-32 vote, with a bi-partisan amendment adopted limiting the “three strikes decertification” penalty. SB 5525, requiring employers with 50 or more employees to provide 60 days’ notice of business closure or large layoffs, passed the House 59-38 on Wednesday with a minor amendment. HB 1213, substantially expanding coverage and access to the state’s paid family and medical leave insurance program for workers of smaller employers, was pulled from the House Rules Committee on Friday and has until the 16^th to get off the floor. HB 1308, giving workers a private right of action to enforce rights to request and review personnel records, passed the Senate 32-17 on Wednesday, with an amendment adopted to clarify the employee records subject to the requirement. It goes back to the House for concurrence. Also on Wednesday, the House passed SB 5501, prohibiting employers from posting job solicitations that require applicants to have a valid drivers’ license, on a 61-36 vote, sending it to the Governor.

Insurance

In property and casualty, HB 1006, expanding options for the financial backing of service contracts, was delivered to the Governor for signature on Friday, and will be up for signing this week. Work continues on the budget provisos that revived SB 5589, ordering a study of the use of credit history and credit-based insurance scores and other rating factors in underwriting personal lines, to remove the provisos from the final negotiated budget or change it to less biased and less expensive design. SB 5721, requiring an auto repair appraisal policy term and creating an appraisal process for disputes over repair and total loss appraisals, is before the House with an agreed-to amendment was struck between the repair shops, plaintiffs’ lawyers, and insurers to allow the appraisal clause mandate but without controversial “loser pays” fee-shifting provisions. However, the bill’s sponsor, Rep. Strom Peterson, D-Edmonds, is attempting to build support for a floor amendment that would re-insert the “loser pays” provision against the wishes of all three parties to the agreement.  HB 1539, creating a wildfire mitigation working group, is awaiting delivery to the Governor for signature, while HB 1516, creating a study of insurance options for affordable housing units, was pulled from the Senate Rules Committee on Wednesday.

In life and disability, SB 5141, excusing disability income insurance carriers from single case filings for experience-rated groups, was signed into law by Governor Ferguson on Tuesday, and goes into effect July 26. SB 5351, addressing dental insurance benefits, passed the House unanimously on Friday. SB 5219, adopting recommendations of the Long Term Services & Supports Commission related to state-run long term care insurance and supplemental products, also passed the House on Friday, with amendments that will send it back to the Senate for concurrence.

Financial Services

Most bills impacting the financial services industry have died at a cutoff, with most remaining action here around the impact of potential tax bills that may arise in the last two weeks. Although not directly tied to the budget situation, HB 2025, which creates a new B&O tax rate for credit card payment processors, and allows a deduction for processing companies on the fees they pass through, was voted out of the House Appropriations Committee on Wednesday and is in the House Rules Committee.

Civil Justice & Liability

HB 1403, providing new warranty options and liability protections for condominium builders and developers to promote affordable housing units passed the Senate 47-1 on Wednesday, with a minor amendment that will send it back to the House for concurrence. Discussions continue on an attempt to fix SB 5408, originally providing notice and a right to cure allegedly defective job postings prior to an employer being sued, but amended to its current form that strips the notice and opportunity to correct. Any agreement to advance the bill will have to get off the floor by the cutoff on the 16^th.   

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