Week 9 Legislative Update: Back to Public Hearings and Committee Consideration

By: Boswell Consulting and Brooke Davies Consulting Posted: 03/15/2021

Washington Equitable Access to Credit Act, supporting Community Development Financial Institutions, Clears Big Hurdle

Last week on Tuesday, March 9, the legislature cleared a major hurdle, the House of Origin cutoff, the deadline for bills to move out of the chamber in which they were introduced. (As a reminder, revenue generating bills are deemed “necessary to implement the budget” and are not subject to cutoff deadlines.) One indicator of the difference between this virtual session and the norm is the reduction in the number of bills introduced and ultimately passed out of their house of origin. In the 2019 session, there were a total of approximately 2,200 bills introduced, while there have only been 1,054 bills brought forward in the 2021 session. After Tuesday’s deadline, the House had passed a total of 216 bills and the Senate had passed 200 bills, with 12 bills passing both chambers. For a full list of bills that have been signed by the Governor click here.

The priority areas identified by legislators ahead of this session have dominated the work that has been done to date. Pandemic recovery efforts have included a multitude of proposals dealing with labor issues, the extension of some allowances that were offered on a temporary basis during pandemic, and relief proposals such as the legislation to appropriate $2b in federal aid. Policing reform and social equity issues have also received significant attention, resulting in a number of bills passing both bodies. Climate and transportation proposals have also been a focus, from the proposed low carbon fuel standard to cap-and-invest to Chair Fey’s transportation package funded in part by a carbon tax. The myriad transportation and climate proposals are considered linked by some lawmakers, and there has been talk of a grand bargain that includes a price on carbon, the LCFS, and a transportation revenue package.

The next revenue forecast is scheduled to be released on March 17. All indications point to a forecast that will anticipate strong economic recovery for Washington, potentially hundreds of millions in additional revenue, expected to help the state budget. In addition, the federal relief bill is expected to provide several billion dollars in relief funds for the state, local government, and schools. The House is expected to release their proposed budget on March 22. The Senate will release their version soon after, and then, negotiations will begin in earnest to agree on a final budget for this biennium.

On Thursday, Governor Inslee announced that the “Healthy Washington: Roadmap to Recovery” will be transitioning from a regional approach to a county-by-county process. The governor also announced Phase Three which allows for 50 percent occupancy for indoor spaces that are currently operating at 25 percent, including restaurants, gyms, and movie theaters. It also includes a return for in-person spectators for professional and high school sports, and outdoor group gatherings like high school graduation as long as they include fewer than 400 guests. The entire state will enter phase three on March 22. You can read more here.

The remainder of the week following Tuesday’s cutoff was filled with committee hearings. The Senate is holding hearings on bills that passed the House and the House is hearing bills that passed the Senate. This will continue until the opposite house policy cutoff on March 26.

Economic Recovery and COVID Relief

Washington equitable access to credit act, HB 1015, would direct the Department of Commerce to create a program to award grants to qualified lending institutions to provide access to credit for historically underserved communities. The grants are funded by taxpayers who may receive a B&O tax credit for contributions to the program. The bill passed the House right before the cut off on Tuesday, March 9 with a 95-1 vote.  This legislation will now head to the Senate for further consideration. The Chamber supports this legislation and will be urging the Senate Committee on Business, Financial Services and Trade to hear and advance the bill.

New Revenue

In addition to the anticipated new revenue and federal aid coming to Washington, no fewer than nine proposals to increase or establish new taxes have been introduced. Before the deadline Tuesday, the Senate passed the proposal that would establish a capital gains tax in Washington state. That legislation as well as other revenue proposals are quite controversial. The Senate stripped a controversial emergency clause from the capital gains tax bill. This clause was in the bill to prevent a potential referendum. With the emergency clause gone, the bill will likely head to the ballot if it is passed by the legislature.

Housing Affordability

Legislation sponsored by Senator Mona Das, SB 5287, concerning the multi-family tax exemption (MFTE), has been referred to the House Finance Committee and is scheduled for hearing on Tuesday, March 16. This legislation has been amended throughout the process. While it is still flawed, the legislation has improved enough that the Chamber is planning to sign in pro at the public hearing.

Also on Tuesday, SSB 5160 sponsored by Senator Kuderer will be heard in the Housing, Human Services & Veterans committee.  This legislation addresses landlord-tenant relations by providing certain tenant protections during and after public health emergencies, providing for legal representation in eviction cases, and authorizing landlord access to state rental assistance programs.  Executive action is scheduled for Friday, March 19

Legislation sponsored by Rep. Ryu, HB 1070, which would modify allowed uses of local tax revenue for affordable housing and related services to include the acquisition and construction of affordable housing and facilities, was heard in the Senate Housing & Local Government committee on Wednesday, March 10. The Chamber supports this legislation and signed in pro at the hearing last week. Executive action is scheduled for Tuesday, March 16.  The bill would make changes to support King County’s Health through Housing program. 

The Senate Housing & Local Government held a public hearing on HB 1236 on Thursday, March 11. This legislation is sponsored by Representative Macri and is known as the “just cause” bill. The official title of the legislation is an act relating to protecting residential tenants from the beginning to end of their tenancies by penalizing the inclusion of unlawful lease provisions and limiting the reasons for eviction, refusal to continue, and termination. The bill has been scheduled for executive action on March 18.

Tax Increment Financing

Legislation authorizing local governments to designate tax increment financing areas and to use increased local property tax collections to fund public improvements, HB 1189, had a public hearing on Thursday, March 11 in the Senate Committee on Business, Financial Services & Trade. The legislation was introduced in both chambers, but it only passed out of the House, meaning the house bill will now be the vehicle for the legislation moving forward. In the public hearing there were concerns brought forward from some of the larger Ports including Tacoma and Seattle. We have yet to see executive action scheduled for this bill. 

Employment and Workplace Legislation

Legislation concerning qualifications for unemployment insurance when an individual voluntarily leaves work, HB 1486, did not make it out of the House before the cutoff. This legislation would have increased the voluntary quit section of the statute. A similar piece of legislation is moving through the Senate, SSB 5064, also did not make it out of the Senate and is unlikely to move forward this session. 

Legislation expanding coverage of Washington’s Paid Family Leave program, SSB 5097, is scheduled for public hearing this week on Tuesday, March 16 in the House Labor & Workplace Standards Committee, with executive session scheduled for later in the week on Friday, March 19. This legislation expands the definition of family member, for purposes of Washington’s Paid Family Leave program, to include any individual who regularly resides in the employee's home.

Legislation establishing health emergency labor standards, SB 5115, was heard in the House Labor & Workforce Development Committee on Friday, March 12. We anticipate executive action on Wednesday, March 17. This legislation creates an occupational disease presumption for frontline employees during a public health emergency for the purposes of workers' compensation.

Legislation sponsored by Rep. Chopp that targets business that use 1099 contractors, SHB 1474, did not make it out of the House before the cut off and will not move forward this session. The bill would have given the Employment Security Department the authority to impose stiff penalties on business.

Legislation concerning unemployment insurance claim adjudicators, SB 5193, had a public hearing on Wednesday, March 10 in the House Labor & Workplace Standards Committee and is scheduled for executive action on Wednesday, March 17.

Police Reform

This week on Tuesday, March 16, the Senate Law & Justice Committee will hear HB 1310, which is legislation concerning permissible uses of force by law enforcement and correctional officers sponsored by Rep. Jesse Johnson. Current law allows police to complete an arrest by any means necessary. HB 1310 sets the expectation that de-escalation should be an officer’s first approach and that deadly force should only be a truly necessary, last resort.  Executive session is scheduled for Thursday, March 18.

Senator Jamie Pedersen’s SB 5051 modifies the priorities and composition of the Criminal Justice Training Commission (CJTC) and expands the background investigation requirements for persons applying for peace officer, reserve officer, and corrections officer positions. After passing out of the Senate, a public hearing was held on Thursday March 11 in the House Public Safety Committee and is currently 0scheduled for executive action on Thursday, March 18.

Legislation concerning an officer's duty to intervene when witnessing a fellow peace officer engaging in the use of excessive force, SB 5066, was heard in the House Public Safety Committee on Friday, March 12. Executive action scheduled for Thursday, March 18. 

HB 1054 from Representative Jesse Johnson was heard in the Senate Law & Justice Committee on Thursday, March 11.  The bill establishes requirements for tactics and equipment used by peace officers, prohibiting chokeholds and neck restraints, use of dogs during arrest, and tear gas and certain types of military equipment.  Executive action is scheduled for Thursday, March 18.