NFIB Keeping Eye on Executive Actions Bringing Dead Bills Back to Life

Date: March 15, 2019

"There is almost no scenario under which a tax increase could be avoided if this boondoggle becomes law"

State Director Patrick Connor reports from Olympia on the small-business agenda for the legislative week ending March 14

Week 9 saw the demise of dozens of bills as a result of Wednesday’s House of Origin cut-off. Of the 93 bills NFIB has been tracking, which received a public hearing or other action, roughly 60 percent appear to be dead. That number is somewhat fluid as a few House bills that failed to advance before the March 1 fiscal committee cut-off and were technically dead for the year, have appeared on the House Finance Committee calendar for executive action.

Keep in mind that legislation “necessary to implement the budget” (NTIB) is exempt from the usual deadlines. There is no set list of those bills, at least not until each chamber releases its budget proposal. Even then, new bills can be introduced or “dead” bills resurrected if they are part of the negotiated budget agreement.

In a bit of a departure from our usual format, this week’s update lists the bills of interest to small business, known to still be alive, along with NFIB’s current position on the legislation. Our position may be subject to change, typically due to amendments made as the bills continue through the legislative process.

Environment
  • House Bill 1110 – Low Carbon Fuel Standard. The bill would require reductions in the carbon intensity of gasoline and diesel, which are expected to reduce performance and increase prices. NFIB is opposed.
  • HB 1112 – Banning hydrofluorocarbons. Small businesses needing to install or replace commercial refrigeration or air conditioning units would likely see substantial price increases due to a reduced supply of allowed equipment and lack of qualified technicians. NFIB supports the HVAC-R and grocer association requests for a two-year extension of the implementation date to ensure an adequate supply of safe, effective equipment and appropriately trained professional installers. Without such an amendment, NFIB is opposed.
  • Senate Bill 5116 – Green energy mandate. Hydroelectric generation would continue to be insufficiently counted towards targets. Requirements for carbon-neutral or non-emitting power supplies, along with increased emphasis on transportation system electrification, will drive up electricity costs for consumers, including small businesses. NFIB is opposed.
  • SB 5077, limiting the availability of plastic straws, and SB 5323, banning plastic bags – Both bills would allow a patchwork of inconsistent local ordinances along with new state restrictions or prohibitions on the use of these products. While NFIB has concerns about the adverse impact on consumers and some small businesses, we have deferred to the retail, restaurant, and grocery trade associations whose members are directly impacted by the proposals.
Health Care
  • HB 1087 – Long-Term Care Benefit. The bill, which has bipartisan support, would authorize a new state insurance program, eventually providing qualifying individuals with a $36,500 lifetime benefit to pay for various medical and personal assistance services, primarily for aging and disabled individuals. Proponents have amended the bill to address many of our objections; however, NFIB will not endorse a payroll tax to fund the program.
  • HB 1523 and SB 5526 – Standard benefit design health plans. Both bills would add standard benefit design health plans to the state’s Health Benefit Exchange while continuing to allow traditional health insurance policies to be offered. Individuals and families purchasing health insurance through the Exchange who have chronic conditions requiring expensive medical or pharmaceutical treatment would benefit from standard-design plans that shift a portion of cost-sharing (deductibles, co-payments, co-insurance) into the monthly premium. Individuals and families using the Exchange with low or less intensive medical needs would still have access to lower premium, higher deductible plans. NFIB supports the bills.
  • HB 1776 and SB 5741 – All Payer Claims Database. These bills would shift agency oversight from the governor’s Office of Financial Management to the Health Care Authority, providing federal funding opportunities and aligning the program with an agency experienced in health care data analysis and purchasing. Under new leadership, the APCD will be better positioned to help “… businesses and individuals to optimize their health care purchasing strategies, while promoting competition in the marketplace to further increase quality and cost efficiency.” NFIB supports the bills.
  • SB 5822 – Universal health care. The bill authorizes a task force to develop a plan for the Legislature to establish a publicly funded, privately provided universal health care system. NFIB is opposed.
  • SB 5887 – Streamlining prior authorization. The bill is largely a technical correction to fully implement last year’s successful legislation allowing individuals whose health insurance policies include chiropractic, massage, physical, or other therapeutic treatments to access a subset of those covered visits (generally six of 12) without prior approval from their health insurer. These treatments allow workers suffering minor aches, pains, strains, or sprains, to get rapid treatment and return to work, typically without missing a full day or more on the job. NFIB supports the bill.
Labor
  • HB 1056 – Domestic violence task force. The bill names NFIB to a task force that would “identify the role of the workplace in helping curb domestic violence.” The bill was amended at our request to give the task force more time to complete its work. As introduced, the task force would have had about four months to study the topic and issue a final report. NFIB is neutral on the bill.
  • HB 1450 and SB 5478 – Limiting noncompete agreements. Both bills have been scaled back but would limit the use of non-compete agreements in the workplace. The House version would permit non-competes if the term is 18 months or less, and the affected worker earns at least twice the state average wage, or about $124,000 annually. If the agreement is with an independent contractor, that contractor would need to earn nearly a quarter million dollars annually for the contract to be enforceable. The Senate bill has a $100,000 salary threshold for an employee, and $250,000 threshold for an independent contractor, both subject to annual inflationary adjustment. The term would also be limited to 18 months. The Senate bill would allow a franchisee to poach employees from the franchisor or other franchisees. It would also bar employers in most cases from enforcing policies prohibiting second jobs or self-employment if the affected worker earns less than twice the state minimum wage (or $56,160 in 2020) from that employer. NFIB has concerns about both bills.
  • HB 1575 and SB 5295 – Collective bargaining. Both bills effectively seek to limit the applicability of the US Supreme Court’s Janus decision. The House bill would allow card check to unionize workers, voice recordings or electronic authorization for union dues deductions, and waive liability for pre-Janus dues-related payroll deductions, but limit workers’ ability to opt-out of payroll deduction or union membership. The scope of the Senate bill appears to have narrowed as a result of amendment, but would limit employers’ rights when it comes to unionization if they contract to do work for the state Department of Social and Health Services. NFIB opposes both bills.
  • SB 5740 – Retirement savings payroll-deduction requirement. The bill would require auto-enrollment of workers not already participating in an approved retirement program, into a state-managed retirement program. Workers would be allowed to opt-out. We appreciate the sponsor’s consideration of our objections, and his adoption of amendments limiting the applicability of the program to firms with five or more employees that have been in business for five or more years. NFIB still has some concerns about the bill.
Tax & Fiscal

We believe specific tax proposals to fund the 2019-21 state operating budget are forthcoming. In the meantime, we are tracking these tax-related bills.

  • HB 1059 and HB 1738 – B&O tax filings. HB 1059 would move the deadline for annual B&O tax filers to April 15 each year, allowing adequate time for these very small businesses to receive IRS Form 1099 from all sources. This should reduce extension requests and late filings, easing the paperwork burden on both small businesses and the Department of Revenue. HB 1738 would index the state B&O filing threshold to inflation, at least maintaining, if not reducing, the number of very small firms obligated to file. NFIB supports both bills.
  • HB 1527 – Working families tax credit. This bill, which appeared dead, popped onto the House Finance Committee’s calendar for executive action next week. It would expand the eligibility and payment amounts to individuals qualifying for an existing, but never funded, program that would issue rebates for assumed sales taxes paid by lower income earners. Basically, the state would send checks to nearly 3.5 million residents annually, totaling more than $1.25 billion dollars per biennium. It would require more than 400 new state employees, and operating costs in excess of $75 million annually, to administer the program. This would put at least a $1.5 billion hole in the state’s two-year operating budget that would grow over time. There is almost no scenario under which a tax increase could be avoided if this boondoggle becomes law. Remember that businesses pay more than 55 percent of taxes collected in this state. This bill a recipe for a massive tax hike on small business. Not surprisingly, NFIB is opposed.
Other
  • SB 5163 – Expanding wrongful death liability. Seattle’s tragic 2015 “Ride the Ducks” accident that killed five and injured at least 60 people, has kept wrongful death lawsuits in the news and on the state’s legislative agenda. The bill would greatly expand the class of people able to file wrongful death lawsuits, significantly increasing liability for businesses, hospitals and other medical providers, local and state governments, and others. The state attorney general’s office has spent tens of millions of dollars defending Washington state just in the Ride the Ducks case under existing law. It must be noted that under our state’s joint and several liability standard, a defendant found one percent at fault could be forced to pay 100 percent of the verdict or settlement, making it near impossible to estimate how much more costly these cases would be to taxpayers – and businesses – if the bill passes. Strangely, the fiscal note for the bill is a paltry $7 million per biennium. That seems unreasonably low, particularly given the state budgets more than a quarter-billion dollars for such lawsuits already. NFIB is opposed.

Committee hearings will continue next week. The next cut-off is April 3. That is the deadline for policy bills to advance from committees in the opposite chamber (House bills must pass Senate committees and vice versa).

Previous Reports From the State Capitol

March 8—Big Legislative Deadline Approaches March 13

March 5—Restrictive Scheduling, Independent Contractors Bills Dead for Year

February 23—NFIB Still Opposed to Revised Independent Contractor Bill

February 18—A Public Option That Really Isn’t

February 15—Legislative Work Buried Under Snowmaggedon

February 8—NFIB Digs in for Fight Against Harmful Labor Bills

February 1—Barbers Cosmetologists Mobilize Against Bill-Win

January 25—Latest Bill Draft Still a Tangled Mess for Hairstylists

January 18—NFIB Plunges Into Thick of Legislative Action

January 11—Washington State Legislature Opens for Business

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