Independent Business Association

 WEEKLY LEGISLATIVE REPORT

3/4/08

 

ACTION ALERT - Important Actions This Week

 

BIG WEEK – BIG NEWS  - Friday, February 29th was a “cutoff” meaning the last day for House Bills to pass their Senate Committee and for Senate Bills to pass their House Committee.  On Monday March 3rd, there was another “cutoff” for legislation having an impact on the state’s budget must pass out of the fiscal committees of the House and the Senate or they were technically dead.  Your IBA lobbyists have spent a long days in Olympia - including Saturday, March 1st - testifying before legislative committees and lobbying on key legislation affecting small businesses.  If any bill fails to pass one of the previously described “cutoffs” it is   technically dead (meaning they can possibly be brought back to life through some political maneuvering). 

 

We are now in the last 8 days of the 2008 legislative session and your calls and notes to your legislators on the following bills and issues are extremely important.  It is CRITICAL for you to contact your state Senator and two state Representatives on the issues that remain alive.  Even if you have called or written before, YOU need to call and write again!  Details on how to contact your legislators are below or CLICK HERE   Below is a brief summary of the highest priority bills affecting small businesses that are still alive:

 

·        Health Insurance Study – SB 6333  Contact your two state Representatives and urge them to oppose SB 6333  Click Here for more information.

 

·        State Budget – Contact your two state Representatives and your state Senator and ask them to “hold the line” on the state budget.  Click Here for more information.

 

·        Paid Family Leave - Contact your two state Representatives and your state Senator and ask them to repeal or delay the state’s Paid Family Leave Law given the recent decline in state revenues.  Click Here for more information.

 

·        Benefits During Appeal – Industrial Insurance  HB 3139 Contact your state Senator and urge him/her to oppose HB 3139  Click Here for more information.

 

·        Local Business License Clarification for new Streamlined Sales Tax Law – HB 3126 - Contact your state Senator and urge him/her to support HB 3126  Click Here for more information.

 

·        Heath Insurance Partnership Revisions - HB 2537  Contact your state Senator and urge him/her to oppose HB 2537  Click Here for more information.

 

Also, at the end of this Alert is a summary of the WINS and LOSSES so far for small businesses during this 2008 legislative session

 

How To Contact Your Legislators

We recommend you contact your legislators on several issues discussed below.  First, you must know who your legislators are.  You can identify who your legislators are on the Internet at www.ibaw.net/legfind  or by calling 1-800-562-6000.  We recommend you call your Legislator’s offices directly and deliver your message by phone, then follow-up with a short written note.  We are providing you sample messages/letters for major issues now on the move.

 

Important Events Last Week

 

BUDGET PROBLEMS!  The Legislature and the Governor are still trying to deal with the recently announced state’s revenue forecast was reduction of $423 million.   The Governor and Legislative leaders announced early in January of their plans to keep at least $1 billion in unspent revenues after passing the 2008 state budget revisions.  This is now not likely possible without significant cuts in previously approved spending.  Cuts in previously approved spending in an election year is not good for anyone’s re-election.  We urge you to contact your state Senator and two state Representatives and ask them to “hold the line” on the budget, not spend additional money and keep at least $1 billion in reserves given the economic slowdown we are not in.  For a sample letter to your legislators, go to www.ibaw.net/budget

 

Health Care Reform Study  SB 6333 proposes a citizen health care reform to study 5 different health insurance reform options – none of which will benefit small businesses and most of which are effectively government run health care programs.  From the way the legislation and the workgroup are structured, this appears to be more of a political campaign to sell these government-run health care options to voters under the guise of this workgroup.  IBA is opposing SB 6333 for those reasons. For more information about SB 6333 and a sample letter to your legislators, go to www.ibaw.net/6333

 

Legislative Issues

Below is a summary of the major issues affecting small businesses that IBA is working on.  Click on the subject area of interest to go to those issues:

 

Health Care

·        HB 2537 – Heath Insurance Partnership Revisions:  In 2007 the Legislature passed the Health Insurance Partnership (HIP) intended to provide health insurance to small businesses through a state contracted health insurance “connector”-style program like that recently implemented in Massachusetts.  IBA expressed a number of significant concerns about this legislation in 2007 and indicated that they felt the proposal would not work.  The board set up to implement the HIP discovered in late 2007 that they could not effectively implement the HIP plan as designed by the 2007 Legislature.  HB 2537 will make changes to the HIP legislation passed in 2007 to exempt it from various insurance law requirements and provide a subsidy for start up funding.  IBA is opposing this legislation because it will spend millions of taxpayer dollars on a program that will not benefit most small businesses and it also sets up a government run competitor to private health insurance for small businesses.  For more information about HB 3139 and SB 6750 and a sample letter to your legislators, go to www.ibaw.net/2537

 

·        SB 6333 – Health Care Study:  The 2008 Legislature is proposing the establishment of a nine member work group appointed by the Governor in 2008 to study 5 different health insurance reform options – none of which will benefit small businesses and most of which are effectively government run health care programs.  From the way the legislation and the workgroup are structured, this appears to be more of a political campaign to sell these government-run health care options to voters under the guise of this workgroup.  IBA is opposing SB 6333 for those reasons. For more information about SB 6333 and a sample letter to your legislators, go to www.ibaw.net/6333

 

Paid Family Leave Programs

§         The latest word for legislative leaders that since all three of the Paid Family Leave bills failed to pass before the February 19th cutoff that they will include funding for this law that passed in 2007, in the budget they pass in the next 3 weeks.  IBA opposes the Paid Family Leave law and will continue to do so.  IBA will keep you informed on this issue as it move forward.  For more information about SB 6333 and a sample letter to your legislators, go to www.ibaw.net/familyleave   

 

Employment Issues

·        HB 2602 – Employment Leave For Domestic Violence, Etc.:  An employee who is a victim of or whose family member is a victim of domestic violence, sexual assault, or stalking may take reasonable leave from employment in order to participate in legal proceedings, receive medical treatment, or obtain other necessary services.  There is a requirement for reasonable notice to the employer and the employer has an obligation to hold the employee’s position, maintain their seniority and accrued benefits, and keep all information confidential. IBA Position:  OPPOSE HB 2602  HB 2602 remains alive.

 

Taxes

In 2007, the Legislature adopted “streamlined sales and use tax,” that changes Washington’s sales tax system to a destination-based system instead of an origin-based sales tax system.  The effective date of this legislation is July 1, 2008.  The Department of Revenue held a series of workshops last year all across the state for small business owners to ask questions and express concerns about the new law.  The Department’s website (http://dor.wa.gov/content/Home/Default.aspx) has a long list of helpful tools to assist small business owners in implementing the new system.

 

Additionally, efforts are under way to address the local B&O apportionment issue.  Legislation passed in 2003 required local governments to adopt “model ordinances” for levying local B&O taxes in a consistent fashion to ease administration and ensure that businesses are not being assessed on more than 100 percent of their gross receipts.  An issue has been discovered since the 2003 legislation dealing with the “location of a majority of customer contact” that needs to be resolved..  There are also efforts under way within the business community to see if  local collection of B&O taxes could be combined onto one form and administered by the Department of Revenue, easing compliance and ensuring businesses aren’t charged on more than 100 percent of their business activities.

 

  • HB 3126:  There is a major concern about the new “streamlined sales tax” law about local governments using this new destination-based system to claim “nexus” and charge businesses additional B&O taxes and business license fees.  Legislation has been drafted to address this problem and we’re working closely with the Chair and members of the House Finance Committee to pass this important legislation.  Simply claims that local governments cannot use the new streamlined sales and use tax law to claim nexus and charge businesses with local B&O taxes and business license fees.  IBA Position:  SUPPORT

 

Industrial Insurance (Workers’ Compensation)

  • HB 3139 – Benefits During Appeal:  Currently, when there is a decision to end time-loss benefits and the worker appeals, the worker is not paid any additional time-loss benefits while the appeal is pending.  However, in some cases, the Department of Labor & Industries can continue to pay “conditional” time-loss benefits while an appeal is pending and if the worker losses the appeal, the worker is supposed to pay back the “conditional” time-loss benefits they received.  Under this legislation, an injured worker who appeals a decision to stop paying time-loss benefits would be paid time loss benefits during the appeal unless the Board of Industrial Insurance Appeals orders that the benefits be stopped.  The big concern for small business owners is that most workers who receive time-loss benefits while an appeal is pending and who lose the appeal will not be able to pay back the time-loss benefits they should not have received.  In addition, the Department has the authority to waive the repayment of benefits in certain situations and that waiver is used quite often.  For more information about HB 3139 and SB 6750 and a sample letter to your legislators, go to www.ibaw.net/3139-6750   IBA Position:  OPPOSE HB 3139

 

  • HB 3122 – Redefinition of Independent Contractors:  The 2007 Legislature set up an underground economy task force for the construction industry.  One of the issues identified by the task force was that there were a significant number of individuals in the construction industry being identified as “independent contractors” who are not.  The task force found that there are effectively two different definitions of who is or is not an “independent contractor” in the state’s industrial insurance and unemployment insurance laws.  HB 3122 would “blend” these two definitions into one.  IBA Position:  Position Pending

 

Unemployment Compensation

  • HB 2655 - Provides that the Employment Security Department more flexibility to consider employers with delinquent tax payments to be “qualified employers” for experience rating purposes.  A “non-qualified” employer because of delinquent taxes pays the highest state unemployment tax rate.  IBA Position: SUPPORT 

 

  • HB 2656 - Makes corrections to two statutory references in the Employment Security Act regarding predecessor and successor employer contribution rates.  IBA Position:       SUPPORT

 

Other Issues

  • SB 5831 Licensing HVAC Contractors and Certifying HVAC Workers  This legislation originally proposed to impose new licensing and certification requirements on the heating, ventilation, and air conditioning (HVAC) industry.  The Senate turned it into a study because a large majority of the Senators were not convinced the proposed level of regulation being proposed was needed.  IBA opposed SB 5831 as originally proposed and will support the study as approved by the Senate.   For more information about HB 2966 and SB 5831 and a sample letter to your legislators, go to www.ibaw.net/2966-5831   IBA Position:  OPPOSE HB 2966 and SB 5831

 

  • SB 6385 Contractor’s Liability   This legislation will establish a new liability for contractors.  The contractor has a duty to exercise reasonable care in the construction of any improvement.   The contractor may not avoid this duty even through a warranty provided by the builder or a third party home warranty program.  Contractors believe this legislation is excessive and unnecessary as homeowner already have a right to sue a contractor.  It is likely to make it very costly or impossible for a contractor to get required contractor’s insurance.  IBA is opposing this legislation.

 

  • Budget – State Spending:  YOU need to contact your legislators NOW about the 2008 state budget (see below)..  The 2007 Legislature passed a $29.6 billion budget for the ’07-’09 budget period.  This is a $2 billion increase from the previous 2 year budget and a $6.1 billion, 26%, increase over four years

 

The 2007 Legislature also approved a state “budget stabilization account” that puts 1% of each year’s revenues into this account.  Funds from this account may be spent by a majority vote of the Legislature if: (1) forecasted state employment growth for any fiscal year is less than 1 percent; or (2) the Governor declares an emergency resulting from a catastrophic event that requires government action to protect life or public safety.  Other withdrawals from the Budget Stabilization Account may be made only by a 60% vote of the Legislature.

 

Some have expressed serious concerns that state spending has grown far faster than have state tax revenues.  With an economic slowdown, some are projecting a state revenue deficit which will require higher taxes or sharp state spending cuts in the near future.   Contact Your Legislators NOW!  For more information about the state’s budget and a sample letter to your legislators, go to www.ibaw.net/budget   

 

BUDGET BILLS NOW BEING CONSIDERED BY THE LEGISLATURE

 

HB 2687 and SB 6378 Supplemental State Budget   Governor Gregoire has proposed an increase in state spending in the second year of the state’s current two-year budget of $234 million, a 0.75% increase.  The Governor is proposing to keep a budget surplus, including the 1% put into the state’s budget stabilization account, of $1.2 billion just in case the state’s economy slows down.  IBA Position:  Minimize Any Increase In State Spending   For more information about the state’s budget and a sample letter to your legislators, go to www.ibaw.net/budget   

 

·        HB 2342 and SB 6387 Citizen Budget Information Access  These proposals will make detailed budget information available on the Internet so citizens can see where their money is going.

 

 

SOME LEGISLATIVE WINS AND LOSSES ALREADY

 

There have already been a number of likely wins and losses for small businesses in the 2008 legislative session.  Below is a brief summary of some of those wins and losses because legislative proposals failed to move out of their Committee for further consideration by the full Legislature.  However, any of these could come back to life and still pass the Legislature in 2008.

 

WIN - SB 6221 Health Care Reform  A state run health care program is set up that defines a set of benefits and contracts with insurance companies to provide the insurance.  It is paid for by a tax on each employee under age 65 will be assessed between 2 and 4 percent of social security wages; self-employed individuals under age 65 will be assessed between 9 and 10 percent of social security wages; and employers will be assessed between 9 and 12 percent of aggregate social security wages.   SB 6621 failed to be approved for consideration by the full Senate.

 

WIN - HB 2640 Health Care Reform Sets up a new Washington State health care program for all residents that provides both preventative care and insurance.  The details will be developed by a new board established by the legislation.  It also imposes the following new taxes:  employers shall pay three percent up to five hundred thousand dollars of wages, four percent over five hundred thousand dollars of wages and up to one million dollars of wages; and five percent over one million dollars of wages. Employees would pay a flat assessment equal to one percent of their wages subject to the Medicare tax.  HB 2640 failed to be approved for consideration by the full House.

 

WIN - HB 2536 – Proposed the establishment of a nine member work group appointed by the Governor in 2008 to examine some specific health care reform options, none of which would be beneficial to small businesses.  IBA opposed HB 2536 and it failed to be approved by the House of Representatives.

 

WIN - HB 2689 and SB 6365 – Association Health Plan Study:  Directs the Insurance Commissioner to conduct a study of   association health care plans.   IBA opposed this legislation as it appears it is intended to be used to eliminate association health insurance plans in the future.  Association health care plans are the most successful health care plans for small businesses.   HB 2689 failed to be approved for consideration by the full House and SB 6385 failed to be approved for consideration by the full Senate.

 

WIN - HB 2665, HB 3305 and SB 6280 Paid Family Leave  The 2007 Legislature passed a state Paid Family Leave law that provided a new unemployment-like $250 weekly benefit for those taking this new family leave benefit.  This new law applies to ALL employers.  But, the 2007 legislation required additional legislation to fund and implement the law and HB 2665, HB 3305 and SB 6280 were intended to by that additional legislation.  IBA opposed the state Paid Family Leave legislation and HB 2665, HB 3305, and SB 6280.  None of these bills survived after the February 19th cutoff and all are technically dead.  IBA expects one of these bills or a new bill to appear in the closing weeks of the 2008 Legislature to fund and implement the Paid Family Leave law passed in 2007.  For more information about HB 2665. HB 3305, and SB 6280 and a sample letter to your legislators, go to www.ibaw.net/2665-6280

 

WIN -HB 2421 and SB 6622  Workplace Bullying  Employers will be prohibited from engaging in or allowing any employees to engage in any workplace “bullying” which is defined in this legislation.  IBA is opposing this legislation  For more information about HB 2421 and SB 6622 and a sample letter to your legislators, go to www.ibaw.net/2421-6622  Both HB 2421 and SB 6622 failed to make it past the February cutoff and are technically dead.

 

WIN - HB 2383 and HB 2387  Employer Communications Proposes stop employers from requiring employees to attend specific meetings or receive certain communications regarding politics, religion or union affiliation.    IBA opposed this legislation as it took rights away from employers, especially involving union organizing efforts.  HB 2383 and HB 2387 both failed to be approved for consideration by the full Senate.

 

WIN - SB 6614 Authorizing Exemplary Damages  Washington State, in most cases is NOT a punitive damages state.  Punitive damages are additional court awarded damages imposed on the defendant as a way of penalizing the defendant for their wrongful actions.  Too often, punitive damages in other states are huge amounts, often in the millions or tens of millions.  Most insurance policies do not cover the policyholder if punitive damages are levied against them.  SB 6614 would authorize exemplary (much the same as punitive) damages in Washington State in all civil actions such as business liability issues, etc.  IBA is opposing SB 6614.  SB 6614 failed to be approved for consideration by the full Senate.

 

WIN - SB 6835  State Labor Relations Act  This legislation proposed to establish a state labor relations act to govern union representation within small businesses that are currently not covered by the National Labor Relations Act.  It would set up complex regulations like those in the National Labor Relations Act that small businesses would have to comply with relative to whether their employees will be represented by a labor union.  IBA opposed SB 6835.  For more information about SB 6835 and a sample letter to your legislators, go to www.ibaw.net/6835   SB 6835 failed to be approved by the full Senate before the February 19th cutoff.\

 

WIN - SB 6750 - Benefits During Industrial Insurance Appeal:  Proposed to pay time-loss benefits during an appeal of those benefits in certain cases.  IBA opposed SB 6750.  For more information about HB 3139 and SB 6750 and a sample letter to your legislators, go to www.ibaw.net/3139-6750  SB 6750 failed to pass the Senate before the February 19th cutoff but HB 3139 (see above) with deals with the same issues is still alive.

 

WIN - HB 2980 – Ex Parte Communication With Medical Provider After Appeal:  Prohibits the employer or the Department from having communications with an injured worker’s physician after an appeal of an industrial insurance claim is filed.  This would limit on-going claim management as well make the appeals process more challenging.  IBA Position:  OPPOSE HB 2980   HB 2980 failed to pass the House before the February 19th cutoff.

 

LOSS - SB 6867 & HB 3294 - Brinks Court Decision Correction:  This legislation would have corrected the  Washington State Supreme Court decision involving Brinks Home Security that the time employees spent driving the company vehicle from home to their first business call, and the time they spend driving from their last business call to their home, was considered work time.  IBA SUPPORTED this legislation and SB 6867 failed to be approved for consideration by the full Senate, and  HB 3294 failed to be approved for consideration by the full House.

 

LOSS - HB 2965:  Calls for a feasibility study to consider the practicalities of turning over local B&O tax collection duties to the Department of Revenue.  While there are concerns with giving additional responsibilities to the state, small businesses aren’t currently getting a fair deal from local governments when it comes to paying local B&O taxes.  IBA Position:  SUPPORT  HB 2965 failed to pass the House before the February 19th cutoff.

 

LOSS - HB 2380:  Will provide additional tax credits to small businesses to assist them in complying with the new “streamlined sales and use tax” system adopted in 2007 (effective July 1, 2008).  The original SST bill provided some relief, but it didn’t cover enough businesses to be effective.  IBA Position:  SUPPORT