Chamber Legislative Report – 4/7/19

Apr 08, 2019  -  Business

What’s Happening

 

There are only three weeks left in the regular session and the scramble has begun to get out on time (and the rumors of special session have started).  Last Friday, the House passed their Operating, Capital and Transportation versions over to the Senate.  This week, the Senate passed their versions of the operating and transportation budgets back over to the House and now the fun begins as budget negotiators for each budget work to reconcile the differences.   The Senate version of the operating budget picked up some Republican votes because the underlying spending did not require any tax increases. Wednesday marked the cut off for bills to be out of their opposite house policy committees.  The fiscal committees now have until Tuesday, April 9th to move bills that spend money on to the floor of their opposite house – unless they are referenced in one of budget versions making them “Necessary to Implement the Budget” or NTIB.

 

This week and last week also marked hearings for the first bills in the wave of bills from the House raising revenue to fund their version of the budget.  HB 2158, which raises the B&O tax for certain service businesses to fund workforce training, apprenticeship and career connected learning programs, had a hearing last Friday.  On Thursday, the House Finance Committee heard HB 2156, which creates a 9.9% capital gains tax on certain earnings over $100,000 for single filers and $200,000 for joint filers.  The bill also creates a graduated real estate excise tax which would lower the rate for low value property by create a graduated increase for properties valued over $1 million.  The money from this tax increase would fund K-12 educaton and behavioral health programs.  The House budget depends on these revenue increases to balance.

 

The Senate will be hearing SB 5961 on Monday, April 8th.  This bill will create an 8.9% capital gains tax on earnings above $250,000.  This money would fund off budget programs such as a “Working Families Tax Credit,” small business tax reductions, and removal of sales tax for diapers and OTC medication.  As stated above, the spending side of this bill is not included in the operating budget that passed the Senate.  It is not known if the votes exist to pass any of the revenue packages in either house.  Regardless, if a capital gains tax passes, it is likely to end up being challenged in court.

 

The Senate Ways and Means Committee also passed (at 1:30 in the morning on Wednesday) a controversial bill to increase the property tax levy lid (SB 5313) Many believe this will force the state back into an education funding system that will favor richer school districts over poor – and will force the state back into the same situation that led to the McCleary battles.  As the bill was being worked on – and to get votes for the budget that passed just before – two amendments passed that were opposed by the Washington Education Association.  One amendment would limit the collective bargaining ability for teachers and the second would allow charter schools to collect Levy Equalization funds.   It is uncertain what the outcome of this bill will be on the Senate floor.  The House Appropriations Committee passed their version (HB 2140) on Saturday evening without these two provisions.

 

 

 

This week’s SSCCLC priorities:

 

HB 2132 – Tolling Authorization for the Puget Sound Gateway and 405:  This bill is up for a vote in the House Transportation Committee.  Many legislators, particularly Republicans, are reluctant to approve tolling authorization.  We need to keep up the grassroots push on legislators to pass this bill.  Without it the final pieces of funding for the Gateway project will not be available.

 

E2SSB 5327 – Career Connected Learning:  We need to keep encouraging legislators to pass this bill using existing funds, not a B&O tax surcharge or other new revenue.  The dollars to connect career and technical learning in our communities is available this year and should be utilized.  The economic benefit of this bill will be clearly seen in the future of our state.

ESB 5334 – Condo Liability/Common Interest Ownership:  In one of the first housing victories this year, ESB 5334 passed the Senate and is now on its way to the Governor’s desk.  This bill modifies the implied warranties for construction of a condominium under the Washington Uniform Common Interest Ownership Act (WUCIOA) by removing the requirement that the condominium be constructed in accordance with all laws and instead requiring the building be constructed in accordance with applicable building codes.  Requires a purchaser to prove an alleged breach of warranty has or will cause physical damage, materially impairs the performance of some function, or presents an unreasonable safety risk.

Upcoming Events

 

Appropriations (House) - HHR A, JLOB - 4/8 @ 9:00am

 

·      E2SSB 5116 - Exec Session - Supporting Washington's clean energy economy and transitioning to a clean, affordable, and reliable energy future. (Concerns/High)

·      2SSB 5489 - Exec Session - Establishing a healthy environment for all by addressing environmental health disparities. (Oppose/High)

·      ESSB 5526 - Exec Session - Increasing the availability of quality, affordable health coverage in the individual market. (Concerns/Medium)

 

Transportation (House) - HHR B, JLOB - 4/8 @ 10:00am

 

·      HB 2132 - Exec Session - Addressing the completion of the planned construction of various facilities, by advancing construction, issuing bonds, and tolling portions of Interstate 405, state route number 167, and state route number 509. (Support/High)

 

Ways & Means (Senate) - SHR 4, - 4/8 @ 1:30pm

 

·      SB 5961 - Public Hearing - Improving the equity and sustainability of Washington's tax structure. (Hearing is on the Proposed Substitute.) (Oppose/High)

·      SB 5998 - Public Hearing - Establishing a graduated real estate excise tax. (Oppose/High)

·      SB 5997 - Public Hearing - Eliminating or narrowing certain tax preferences to increase state revenue for essential public services. (Oppose/High)

·      SB 5996 - Public Hearing - Funding fire prevention and suppression activities. (Oppose/High)

·      SB 5999 - Public Hearing - Making expenditures from the budget stabilization account for public employer unfunded actuarially accrued liabilities. (Neutral/High)

·      E2SHB 1523 - Exec Session - Increasing the availability of quality, affordable health coverage in the individual market. (Concerns/Medium)

 


 

High Priority Bills

Bill Details

Status

Sponsor

Position


2SHB 1087 (SSB 5331)

Long-term services & support

S Ways & Means

Jinkins

Concerns

Concerning long-term services and supports. Puts in place a new 0.58 percent payroll tax on all employees to fund this program.

Establishes a long-term services and supports (LTSS) trust program (trust program) that provides up to $36,500 in lifetime benefits for eligible beneficiaries to apply to the cost of their long-term care. Assesses a 0.58 percent premium on an employee's wages to fund the trust program. Requires the Health Care Authority, Department of Social and Health Services, the Employment Security Department, and a newly established LTSS Trust Commission to work together to administer the program.


SHB 1102 (SSB 5134)

Capital budget 2019-2021

S 2nd Reading

Tharinger

Support

Concerning the capital budget.


ESHB 1109 (SB 5153)

Operating budget

S Passed 3rd

Ormsby

Neutral

Making 2019-2021 biennium operating appropriations.

Makes 2019-2021 biennium operating appropriations.


E2SHB 1110 (SB 5412)

Greenhouse gas/transp. fuels

S Transportation

Fitzgibbon

Oppose

Reducing the greenhouse gas emissions associated with transportation fuels.


ESHB 1160 (SSB 5214)

Transportation budget

S Passed 3rd

Fey

Support

Making transportation appropriations for the 2019-2021 fiscal biennium.


E3SHB 1257 (2SSB 5293)

Energy efficiency

S Ways & Means

Doglio

Concerns

Concerning energy efficiency.

Brief Summary of Bill Requires the Department of Commerce (Commerce) to establish a State Energy Performance Standard for covered commercial buildings by November 1, 2020. Requires Commerce to establish a State Energy Performance Standard Early Adoption Incentive Program. Requires the State Building Code Council to develop rules for electric vehicle infrastructure that require electric vehicle charging capability at all new buildings that provide on-site parking. Establishes energy benchmarking requirements for covered commercial buildings. Establishes a natural gas conservation standard. Authorizes a gas company to propose a renewable natural gas program. Requires each gas company to offer by tariff a voluntary renewable natural gas service available to all customers.


2SHB 1424 (SB 5069)

CTE course equivalencies

S Ways & Means

Steele

Support

Concerning access to state career and technical course equivalencies.


E2SHB 1923

Urban residential building

S Ways & Means

Fitzgibbon

 

Increasing urban residential building capacity.


HB 1948 (SSB 5862)

Warehousing & manuf. jobs

H Rules R

Entenman

Support

Supporting warehousing and manufacturing job centers.

This is the answer to issues dealing with a lack of streamlined sales tax mitigation funds.


HB 2132

Construction completion

H Trans

Fey

Support

Addressing the completion of the planned construction of various facilities, by advancing construction, issuing bonds, and tolling portions of Interstate 405, state route number 167, and state route number 509.


HB 2140

K-12 education funding

H Approps

Sullivan

Concerns

Levy Lid Lif

Enrichment Levies. Beginning in the 2020 calendar year, the proposed substitute changes the enrichment levy limit for school districts from the lesser of $2,500 per pupil or $1.50 per $1,000 of assessed property value to either 20 percent of the state and federal levy base in the prior school year or the lesser of $3,000 per pupil or $1.50 per $1,000 of assessed property value. Local Effort Assistance. Beginning in the 2020 calendar year, the proposed substitute bill changes the local effort assistance funding formula for school districts from $1,500 per pupil for eligible districts to a formula that equalizes districts up to 10 percent of the state and federal levy base in the prior year for districts with less than 70 percent of students eligible for free and reduced priced meals. Districts with 70 percent or more eligible for free and reduced-priced meals are equalized up to 12 percent of the state and federal levy base.


HB 2156

Taxes on asset sales, profit

H Finance

Jinkins

Oppose

Enacts a 9.9% capital gains tax on gains above $100,000 for individuals and $200,000 for joint filers. Spends the money on K-12 education and behavioral health programs. Also includes a graduated real estate income tax.


HB 2157

Tax structure

H Finance

Tarleton

Neutral

Updating the Washington tax structure to address the needs of Washingtonians.


HB 2158

Workforce education

H Finance

Hansen

Oppose

Imposes a .3 surcharge on some service businesses and increases the B&O for some tech companies to 2.0% to create a workforce education investment to train Washington students for Washington jobs.

While the projects funded are ones supported by business (apprenticeship programs, career connected learning, etc...) the increase in the B&O taxes is opposed by most.


HB 2159

Budget stabilization account

H Approps

Ormsby

 

Making expenditures from the budget stabilization account for declared catastrophic events.


ESB 5008 (HB 1690)

Short subdivisions

H Rules R

Palumbo

 

Concerning short subdivisions.

Revises the definition of "short subdivision" for purposes of chapter 58.17 RCW (plats--subdivisions--dedications).


E2SSB 5116 (2SHB 1211)

Clean energy

H Approps

Carlyle

Concerns

Supporting Washington's clean energy economy and transitioning to a clean, affordable, and reliable energy future. There are significant concerns over the resulting cost increase for electricity as a result of this bill. Several "off ramps" have been included in the bill to measure economic impact.

Requires electric utilities to be completely carbon neutral by 2030 and to be using only 100% renewable energy sources by 2045. Restricts use of natural gas but only for electrical generation, not for home heating.


2SSB 5313

K-12 education

S Rules 2

Wellman

 

Raises the property tax levy lid for school districts.

Brief Summary of Second Substitute Bill ?--Allows a district to levy at the lesser of $2.50 per $1,000 of assessed value or $2,500 per pupil for school districts with fewer than 40,000 FTE students. -- Allows a district to levy at the lesser of $2.50 per $1,000 of assessed value or $3,000 per pupil for school districts with 40,000 FTE students or more. ?-- Provides local effort assistance to school districts that do not generate an enrichment levy of at least $1,500 per student when levying at a rate of $1.50 per $1,000 of assessed value. ?-- Provides that districts that are eligible for local effort assistance (LEA) but do not levy $1.50 receive LEA in proportion to the lesser of $1.50 or the school district's actual levy. ?-- Bases the definition of inflation on the implicit price deflator for personal consumption expenditures. -- Limits growth in supplemental contracts for teacher salaries. --?Provides enrichment funding for charter schools based on the local enrichment levy collected by school districts.


E2SSB 5327 (SHB 1336)

Career connected learning

H Approps

Wellman

Support

Expanding career connected learning opportunities.


ESB 5334 (HB 1306)

Common interest ownership

H Passed 3rd

Pedersen

Support

Concerning the Washington uniform common interest ownership act. - reduces liability for contractors who build condominiums

SB 5334 - DIGEST Modifies the uniform common interest ownership act regarding condominium liability and makes technical corrections to certain statutes.


2SSB 5489

Environ. health disparities

H Approps

Salda?a

Oppose

Establishing a healthy environment for all by creating a definition of environmental justice, directing agencies to address environmental health disparities, and creating a task force.

Creates a task force to recommend how best to incorporate environmental justice principles into how state agencies discharge their responsibilities. Declares that the legislature establishes that state agencies will use all practicable means and measures to promote environmental justice and fair treatment, to ensure implementation and adherence to state policies of fostering and promoting the general welfare by assuring the people of this state have a safe and healthful environment and serving as trustee of the environment for succeeding generations. Requires the state agencies that are represented on the task force, after issuance of the task force report, to adopt rules as recommended in the report. Authorizes the state agencies to adopt interim guidelines and practices before the adoption of rules. Requires the department of ecology to adopt rules implementing the task force recommendations to provide uniform rules and guidelines to state agencies serving on the task force.


SB 5961

WA tax structure

S Ways & Means

Salda?a

Oppose

Capital Gains Tax bill -- enacts an 8.9% capital gains tax on earnings above $250,000. Spends the money on small business tax reductions, an increase in the working families tax credit and elimination of sales tax for diapers and OTC medications.


SB 5970

Transportation funding bonds

S Rules 2

Hobbs

Neutral

Authorizing bonds for transportation funding.


SSB 5971

Transportation funding

S Ways & Means

Hobbs

Concerns

Concerning transportation funding.


SSB 5972

Additive trans funding

S Rules 2

Hobbs

Concerns

Concerning additive transportation funding and appropriations.


SB 5991

Grad. real estate excise tax

S Ways & Means

Rolfes

Concerns

Increasing funding for education by establishing a graduated real estate excise tax.


SB 5994

Business and occupation tax

S Ways & Means

Palumbo

Concerns

Concerning business and occupation tax simplification and relief -- increases the B&O rates for retailing, wholesaling and manufacturing. But also increases deductions for small business.


SB 5996

Fires/prevent, suppress

S Ways & Means

Van De Wege

Oppose

Brief Summary of Bill Increases property and casualty insurance premiums from 2.0 to 2.52 percent. Allocates the revenue raised to the new Wildfire Prevention and Suppression Account. ?Prioritizes expenditures from the Wildfire Prevention and Suppression account in the following order: (1) emergency fire fighting, (2) preparedness, (3) fire suppression activities of agencies other than DNR, (4) fire prevention, and (5) forest health activities.

Increases business and contractor insurance premiums.


SB 5997

Tax preferences

S Ways & Means

Rolfes

Oppose

Eliminating or narrowing certain tax preferences to increase state revenue for essential public services.


SB 5998

Grad. real estate excise tax

S Ways & Means

Nguyen

Oppose

Establishing a graduated real estate excise tax.


SB 5999

Unfunded actuarial liability

S Ways & Means

Braun

Neutral

Making expenditures from the budget stabilization account for public employer unfunded actuarially accrued liabilities.


SB 6007

Cigarette tax

S Ways & Means

Keiser

Neutral

Increasing the tax on cigarettes.


Medium Priority Bills

Bill Details

Status

Sponsor

Position


EHB 1219 (SB 5195)

Real estate taxes/housing

S 2nd Reading

Walen

Concerns

Providing cities and counties authority to use real estate excise taxes to support affordable housing and homelessness projects.

HB 1219 - DIGEST Authorizes the use of real estate excise taxes, by cities and counties, to support affordable housing and homelessness projects.


SHB 1377 (SSB 5358)

Housing dev./religious orgs.

S Rules 2

Walen

 

Concerning affordable housing development on religious organization property.


SHB 1399 (SSB 5449)

Paid family & medical leave

Del to Gov

Robinson

Neutral

Concerning paid family and medical leave.

Modifies and reorganizes certain statutes in the family and medical leave program.


SHB 1403

Municipal B&O tax apportion.

S Rules 2

Frame

Support

Simplifying the administration of municipal business and occupation tax apportionment.


SHB 1406 (SB 5646)

Affordable housing/sales tax

S Ways & Means

Robinson

 

Encouraging investments in affordable and supportive housing.


ESHB 1450 (ESSB 5478)

Noncompetition covenants

S Rules 2

Stanford

Concerns

Concerning restraints on persons engaging in lawful professions, trades, or businesses.


E2SHB 1523 (ESSB 5526)

Individual health ins market

S Ways & Means

Cody

Concerns

Increasing the availability of quality, affordable health coverage in the individual market.


HB 1568 (SB 5570)

Port district worker dev.

S Rules 2

Chapman

Support

Concerning port district worker development and occupational training programs.

Authorizes port districts to contract with nonprofit corporations and private and public entities that provide certain training systems and promote workforce diversity. Requires ports that are seeking to engage in certain activities or contracts to, by resolution, declare that port-related workforce development provides a substantial public benefit consistent with the port commission's economic development goals and with ongoing worker training initiatives in place in the port district.


ESHB 1696

Wage and salary information

S Rules 2

Dolan

Concerns

Concerning wage and salary information. -- primary reason for bill was to ensure that employers could not require applicants to disclose prior salary history on both new hires and promotions.

Needs amendment to remove requirements for posting salary ranges for all new job postings or promotions. Many employers negotiate salaries in these situations and do not have set ranges.


SHB 1798 (SB 5870)

Short-term rentals

S Rules 2

Ryu

 

Concerning short-term rentals.


HB 1841 (SB 5877)

Crew size on certain trains

S Rules 2

Riccelli

Concerns

Establishing minimum crew size on certain trains.

Establishes minimum crew size requirements for freight and passenger trains and trains carrying hazardous materials. Creates exceptions to the requirements and increases monetary penalties for violations.


SHB 2042

Green transportation

H Finance

Fey

Concerns

Advancing green transportation adoption.


HB 2135

Transportation revenue

H Approps

Shea

 

Using existing revenue sources for transportation purposes.


HB 2148 (SB 5989)

Data centers tax preference

H Finance

Springer

Support

Providing a tax preference for rural and nonrural data centers.

There is concern in the business community on this one because it includes a requirement for payment of prevailing wages and a union-neutrality agreement in order to get the tax incentive.


ESSB 5383

Tiny houses

H Rules R

Zeiger

 

Concerning tiny houses.


ESSB 5478 (ESHB 1450)

Noncompetition covenants

H 2nd Reading

Liias

Concerns

Concerning restraints on persons engaging in lawful professions, trades, or businesses.

This bill would make it illegal to have non-competition agreements with anyone making less than $100,000 per year. Non-solicitation and non-disclosure/confidentiality agreements are still allowed.


ESSB 5526 (E2SHB 1523)

Individual health ins market

H Approps

Frockt

Concerns

Brief Summary of Engrossed Substitute Bill (As Amended by Committee) ?Requires the Washington Health Benefit Exchange to develop standardized health plans. ?Requires the Health Care Authority to contract with health carriers to offer standardized qualified health plans. ?Requires the Health Care Authority to develop a plan for premium subsidies for individuals purchasing coverage on the Washington Health Benefit Exchange. ?Requires the Insurance Commissioner to submit an annual report on the number of health plans available per county on the individual market.


SSB 5739 (HB 1790)

Housing/urban growth areas

H Finance

Sheldon

 

Promoting affordable housing in unincorporated areas of rural counties within urban growth areas.


ESSB 5746 (SHB 1834)

Low-income homeownership

H Cap Budget

Salda?a

 

Providing for adequate provisions for low-income homeownership opportunities.

SB 5746-S - DIGEST Requires at least thirteen percent of housing trust fund grants and loans in any funding cycle under the housing assistance program to be used to benefit homeownership projects for households at or below eighty percent of the area median family income. Authorizes the department of commerce to provide down payment or closing cost assistance to a wider range of first-time home buyers. Establishes a target of thirteen percent of affordable housing program funds in any funding cycle for homeownership projects.


ESSB 5812 (SHB 1797)

Accessory dwelling units

H Rules R

Palumbo

 

Concerning local governments planning and zoning for accessory dwelling units.


SB 5989 (HB 2148)

Data centers tax preference

S Ways & Means

Palumbo

 

Providing a tax preference for rural and nonrural data centers.


SJR 8210

B&O tax increase approval

S Ways & Means

Palumbo

Support

Amending the Constitution to require a supermajority vote of the legislature or voter approval to increase state business and occupation taxes.


Monitoring Bills

No bills.

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