Week 3 Legislative Update: Unemployment Relief Passes

By: Boswell Consulting and Brooke Davies Consulting Posted: 02/01/2021

Bill reduces taxes for employers by over $900 million, increases weekly benefit for workers, and restores UI trust fund

The legislature has now completed three weeks of the scheduled fifteen-week 2021 session. This week was filled with virtual committee hearings, executive sessions, and floor action. All bills that are not necessary to implement the budget must be out of their policy committees by February 15 in order to stay alive this session. 

COVID-19 Response and Recovery

The Democrats' COVID-19 relief package, HB 1368, is quickly moving through the legislative process. The bill was passed out of the House Appropriations Committee on Thursday and is now in Rules where it can be pulled to the floor at any time for a vote.  In anticipation of passage out of the House it has been scheduled for a public hearing in the Senate Ways & Means committee on Tuesday, February 2nd as well as executive session on Thursday, February 4. This bill is funded largely from federal relief dollars.  

Another bill moving quickly through the legislative process is the Governor’s Unemployment Insurance bill, SB 5061, which passed through the Senate and the House with bipartisan support. The bill increases the weekly UI benefit and reduces taxes due on employers in 2021 by $920 million while raising the weekly benefit from $201 to $270. The bill will also restore the state’s UI trust fund, which has reduced from $4.8 billion to $1.4 billion during the pandemic. The bill contains an emergency clause and will take effect as soon as Governor Inslee signs it into law. 

On Thursday, Gov. Jay Inslee announced several changes to the state’s Healthy Washington — Roadmap to Recovery. Changes include the evaluation criteria for regions to move from Phase 1 to Phase 2, and the timeframe in which regions can progress. On Monday the Puget Sound Region and the West Region will move to phase two. You can read the full story here

Legislation brought forward by Rep. Walen, HB 1095, provides businesses tax exemptions for a qualifying COVID relief and recovery grants received on or after February 29, 2020. The bill has passed the House and is scheduled for a public hearing next week on Tuesday in the Senate Ways and Means Committee. SMCC is supportive of this legislation. 

Washington equitable access to credit act, HB 1015, is scheduled for a public hearing in the House Finance committee on Monday. The bill 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. 

New Revenue

This week there were two new revenue proposals introduced. On Thursday, Senators June Robinson and Reuven Carlyle introduced SB 5371, a statewide tax on sweetened beverages to fund public health. On Wednesday, Representative Noel Frame introduced HB 1406, a state wealth tax, taxing extraordinary financial intangible assets. These are in addition to the list of other revenue proposals that have been introduced including a capital gains tax, tax on insurance premiums, tax on short term rentals, tax on the sale of data, and various carbon taxing proposals. 

Transportation

On Wednesday, Senate Transportation Chair Steve Hobbs introduced the latest version of his Forward Washington transportation package. He did not release legislative language, but instead posted a summary of the revenue pieces, the “balance sheet” that compared revenues and project categories, and a more detailed project list. Notable is the fact that rather than relying on a carbon fee or revenue from a cap-and-trade bill, he included both options in his balance sheet. The plan spends between $17 and $19 billion over sixteen years, making it considerably smaller than Rep. Fey’s $26 billion package on the House side. Hobbs held a public hearing on Thursday and invited public comment on the revenue options, the projects, and any other aspects of the program. 

Housing Affordability

Legislation reducing barriers to condominium construction SB 5024 passed the Senate on Wednesday 37-12. The bill will now move over to the House for further consideration. On Wednesday, there was a hearing on SB 5287 legislation concerning the multi-family tax exemption (MFTE). Tenant advocates expressed their support for the bill while local governments and developers expressed concerns. Developers believe new affordability requirements in the bill will negatively impact the feasibility for builders. Local governments would like to see more flexibility in the program to adapt to local conditions. SMCC expressed concerns about the legislation in a sign-on letter organized by developers that are Chamber members. You can watch the hearing here

Legislation introduced by Senator Patty Kuderer providing certain tenant protections during and after a public health crisis, SB 5160, has not been scheduled for executive action. This bill is supported by tenant advocates as it seeks to codify many of the eviction protections put into place by the governor due to the pandemic, however it goes much farther by modifying other parts of the residential landlord tenant act. While housing providers recognize the need for legislative action as it relates to pandemic rent relief, they continue to have serious concerns with this approach. 

Another approach to address concerns related to rental housing during and after a public health crisis, HB 1228, sponsored by Rep. Barkis and Rep. Walen was heard on Thursday in the House Committee on Housing, Human Services & Veterans and has been scheduled for executive action next week. You can watch the hearing here. This bill is supported by housing providers. HB 1228 requires landlords to provide tenants with unpaid rent an affidavit of COVID-19 hardship, notice of early resolution program, and the option of a payment plan. The bill also creates the Emergency Rental Assistance Grant Program to assist tenants and landlords with past due rental payments. 

Legislation limiting rent increases after expiration of the Governor's eviction moratorium, SB 5139, commonly known as rent control, was scheduled for executive action on Thursday, January 28, but no action was taken.  

Legislation commonly referred to as “just cause”, which limits the reasons that a landlord may evict a tenant or decline to renew a lease, HB 1236, sponsored by representative Macri was heard on Tuesday, January 26 at 8:00 a.m. in the House Committee on Housing, Human Services & Veterans. You can watch the hearing here

Legislation modifying allowed uses of local tax revenue for affordable housing and related services to include the acquisition and construction of affordable housing and facilities, HB 1070, was passed out of the House Finance Committee this week with a party line vote. This legislation would implement changes to state law that align with King County’s Health through Housing legislation. SMCC supports this legislation.

Tax Increment Financing 

Legislation authorizing local governments to designate tax increment financing areas and use increased local property tax collections to fund public improvements, HB 1189, has some momentum this year. The bill was heard this week in the House Finance Committee; SMCC signed in to support the legislation. The bill has not yet been scheduled for an executive session. 

Employment Law

Legislation regarding unemployment insurance after voluntary leaving work, SB 5064, has been scheduled for an executive session on Wednesday, February 3 at 10:30 a.m. 

Legislation allowing whistle blowers to bring actions on behalf of the state for violations of workplace protections, commonly known as “qui tam,” HB 1076, has been scheduled for executive action on Friday, February 5. 

Legislation expanding coverage of the paid family and medical leave program HB 1073 has been scheduled for executive action on Friday, February 5. 

Police Reform

At this point there are several bills related to police reform, and it is still too early to tell which proposals will gain the most traction in the legislature and make it through the process. Below is a summary of some of the bills that are moving in the House related to police reform. 

HB 1054, establishing requirements for tactics and equipment used by peace officers, was referred to the House Rules Committee and can be pulled to the House floor at any time for a vote. This bill is sponsored by Rep. Jesse Johnson. 

HB 1089 concerning compliance audits of requirements relating to peace officers and law enforcement agencies has passed the House Public Safety committee and is scheduled to be heard next week on Monday in the House Appropriations Committee. This bill is sponsored by Rep. Alex Ramos. 

HB 1092 concerning law enforcement data collection has passed the House Public Safety Committee and is scheduled to be heard next week on Monday in the House Appropriations Committee. 

Other news

On Wednesday, the state Redistricting Commission held their first official meeting. The Commission convenes every ten years to redraw congressional and legislative district boundaries. Each caucus appoints one member to the Commission, and this year’s representative are Joe Fain (Senate Republican Caucus Appointee), Paul Graves (House Republican Caucus Appointee), April Sims (House Democratic Caucus Appointee), and Brady Walkinshaw (Senate Democratic Caucus Appointee). They also met on Saturday, January 30.