By Diana Carlen
Friday, March 17, marked the 68th day of the 2023 Legislative Session. There are 36 days left of the scheduled legislative session.
The Legislature is busy meeting in policy committees hearing bills that passed the opposite chamber. Bills need to pass out of their respective policy committees by March 29 to continue to advance through the legislative process. The revenue forecast was released on March 20. This report on state tax collections will inform budget writers as they develop the two-year operating budget. We expect budget proposals to be released shortly after the revenue forecast.
Exempt Fuel Issue Still Not Resolved
There is still no resolution on the issue of farmers paying the carbon surcharge on fuel that they were supposed to be exempt from paying. While large users have started purchasing exempted fuel from one distributor that has a clear “line of sight” from the refinery to the end consumer, those transactions are providing relief to a very small group of large fuel users. There seems to be no urgency to address this issue legislatively and time is ticking with only a little more than a month left of the legislation session.
Farmers are still encouraged to keep all fuel receipts in case a process to get a refund for the carbon fee is established in the future.
Food Processor Tax Incentives Passes House of Origin
On March 16, House Bill 1573, sponsored by Rep. Alicia Rule (D-Blaine), passed the House floor by a vote of 77-19. The legislation was able to be brought up past the house of origin cutoff because Democrat leadership designated it “necessary to implement the budget” given its tax revenue implications.
The bill is a critical measure for agricultural processors in our state as it would extend the expiration date of business and occupation tax preferences for dairy, fruit and vegetable, and seafood processors by a decade. The expiration date would be moved from July 1, 2025, to July 1, 2035.
During floor debate, the prime sponsor spoke to the bill’s necessity in keeping Washington’s food production competitive and prices affordable. House Minority Leader Rep. JT Wilcox (R-Yelm), also clarified that the measure does not exempt our agricultural producers from taxation completely (as alluded to by a Seattle legislator) as there are a number of other charges and taxes the industry pays.
Agricultural Promotion Legislation Heard and Passed out of Policy Committee
On March 13, the House Agriculture and Natural Resources Committee held a public hearing on Engrossed Senate Bill 5341, sponsored by Sen. Ron Muzzall (R-Oak Harbor). The legislation would direct the Washington State Department of Agriculture (WSDA) to create an advisory committee of food production organizations in order to make recommendations on a location-based program to promote local food and agricultural products in Washington state. Following the submission of such a report, WSDA would be able to adopt rules necessary to implement the program.
During the public hearing WSDA spoke in favor of the legislation noting the bill’s origin came from recommendations from the state’s food policy forum and speaking to a promotion program’s ability to strengthen the state’s food system. Of note, Washington is one of only five states that does not have a brand recognition program. The bill passed out of the House policy committee on Friday.
Other Notable Fiscal Bills that Passed out of the House last Week:
- Supporting Clean Energy Through Tax Changes (HB 1756), sponsored by Rep. Alex Ramel (D-Bellingham), would exempt qualified personal property owned by a taxpayer and used for the generation of renewable energy from the state property tax levy. In turn, taxpayers granted a personal property tax exemption under the legislation would be subject to a production excise tax. The bill also creates the Renewable Energy Local Benefit Account under the state treasury for revenue from the production excise tax. This week the bill was passed by the House by a vote of 81-12.
- Green Businesses Utility Tax (HB 1768), sponsored by Rep. Clyde Shavers (D-Oak Harbor), would provide a temporary public utility tax exemption for the sale of electricity by light and power businesses to a company using electricity for qualifying projects using green electrolytic hydrogen production process, renewable hydrogen production process, and compression, liquification, storage, or dispensing of green electrolytic hydrogen or renewable hydrogen. On Thursday the bill was voted off the House floor by a vote of 94-1.
- Hydrogen Fuel Products (HB 1729), sponsored by Rep. Peter Abbarno (R-Centralia), provides a preferential B&O tax rate and credits for hydrogen fuel product manufacturers, processor for hires, retailers, and wholesalers. The bill passed the House floor unanimously this week.
Other Notable Bills that were Voted Out of a Policy Committee this Week:
- Motor Carriers Restrooms (HB 1457), sponsored by Rep. Eric Robertson (R-Sumner), would require a shipper or receiver to allow a carrier delivering or picking up goods to use restrooms during normal business so long as it does not pose a security, health or safety risk. The bill skipped a public hearing in the Senate Labor & Commerce Committee and was instead passed by the committee during executive action and referred to the Senate Ways & Means Committee.
- Climate-Ready Communities (HB 1176), sponsored by Rep. Vandana Slatter (D-Bellevue), is Governor-request legislation. The bill would establish the Washington Climate Corps, administered by Serve Washington, to provide climate related service opportunities for young adults and veterans. The bill also puts in place the Clean Energy Technology Workforce Advisory Committee. The Committee would be responsible for reviewing workforce and business issues in the energy sector and the impacts of the energy transition as well as recommending strategies to prevent workforce displacement and support job creation in clean energy. HB 1176 was another bill that skipped public hearing in the policy committee, to be directly passed out of the Senate Committee on Higher Education & Workforce Development and referred to the Senate Ways & Means Committee.
- Pesticide Registration Committee (SB 5143), sponsored by Sen. Nikki Torres (R-Pasco), would change the name of the Commission on Pesticide Registration to the Commission on Integrated Pest Management in order to align the name of the Commission with the work it is conducting. The bill was heard in the House Agriculture and Natural Resources Committee on Tuesday and voted out of committee on Friday.
- Musculoskeletal Injuries (SB 5217), sponsored by Sen. Manka Dhingra (D-Redmond), would repeal the law prohibiting the Department of Labor and Industries from adopting rules related to ergonomics or musculoskeletal disorders. The bill would then allow L&I to adopt rules for certain risk classes of workers, so long as the Department did not take up more than one set of rules for an industry per year. The Bill was heard in the House Committee on Labor & Workplace Standards on Tuesday and voted out of committee on Friday without any of the amendments offered by House Republicans. Business stakeholders continue to oppose the legislation.