Monthly Archives: March 2010

House Ways and Means Committee Moves Lottery Bill

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This afternoon the House Ways & Means Committee took action on Seante Bill 6409, the lottery bill for financial aid.

The Committee took action on a subsitute bill that greatly limited the programs that would benefit from the Washington Opportunity Pathways Account. The substitute bill replaces the language in the original bill with the following:

  • Expresses legislative intent to use increased lottery account revenue for stabilizing and increasing funding for higher education student financial aid.
  • Creates the Washington Opportunity Pathways account. Funding from the Account may only be used for the State Work Study, Opportunity Grant, Washington Scholars, Washington Award for Vocational Excellence (WAVE), State Need Grant, GET Ready for Math and Science, Passport to College, and College Bound.
  • Provides that all net lottery revenue not otherwise obligated for paying lottery administration, lottery prizes, debt service on Safeco Stadium, or Qwest Field and Exhibition Center, gambling education and the Education Construction Account is deposited into the Washington Opportunity Pathways Account.
  • Net revenues from shared lottery games that were previously directed to the state general fund are now directed to the Washington Opportunity Pathway Account.
  • Requires the Lottery Commission, in consultation with independent experts and the HECB, to implement strategies to actively market the state lottery as an essential contributor to Washington early education and higher education programs. 
  • Requires the Lottery Commission to report to the appropriate committees of the Legislature on key components, performance objectives, and anticipated revenue impacts of the marketing strategies by December 1, 2010.
  • Requires JLARC to complete a performance review of the Lottery Commission’s marketing expenditures and incentive pay structure by November 2010.

The substitute bill removes the recruitment of entrepreneurial researchers, innovation partnership zones, and research teams as well as early childhood education and assistance program (ECAP) as programs to receive funds placed into the Washington Opportunity Pathways Accounts.

Substitute Senate Bill 6409 now goes to the House floor for further consideration.

House Finance Committee Passes Cigarette Tax Bill

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The House Finance Committee passed out of committee House Bill 2493, which increases taxes on cigarettes and tobacco related products.

House Bill 2493 increases cigarette tax by$1 per package and taxes on other tobacco products are equalized. The substitute bill passed out of committee makes several changes to taxes related to other tobacco products and also requires the revenue generated by the taxes to go into the general fund instead of the Tobacco Prevention and Control Account. 

  • Eliminates the separate Other Tobaccob Product tax classifications for roll-your-own tobacco and capsular smokeless tobacco.
  • Lowers the maximum rate cap on large cigars from $3.025 to 65 cents per cigar.
  • Eliminates the annual $18 million transfer from the general fund to the tobacco prevention and control account (The entire amount is deposited in the general fund). 
  • Makes the tax on moist snuff purely weight based by taxing moist snuff at the per pack rate for cigarettes for each 1.2 ounce can. 
  • Makes the bill effective April 1, 2010, except the tax on moist snuff, which is effective October 1, 2010. 

In addition the bill was amended in committee to specify that the moist snuff tax rate is the greater of: 95% of the sales prices or 83.5% of the per pack cigarette tax rate.

House Bill 2493 now goes to the House floor for further consideration.

House Ways and Means Committee Hears More Bills and Takes Action on Some

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This afternoon the House Ways & Means Committee held a public hearing  and took action on three bills of interest to Evergreen.

Senate Bill 6409

Senate Bill 6409 creates the Washington Opportunity Pathways Account. Beginning in state fiscal year 2011, all net revenues from in-state lottery games that are not otherwise dedicated to debt service on the Safeco Stadium and Qwest Field and Exhibition Center are dedicated to the new account.

The Washington Opportunity Pathways Account is subject to appropriation by the Legislature, and may only be used for the following programs: recruitment of entrepreneurial researchers, innovation partnership zones, and research teams; the early childhood education and assistance program (ECAP); the State Need Grant; the State Work Study program; College Bound Scholarships; Washington Promise Scholarships; Washington Scholars; the Washington Award for Vocational Excellence (WAVE); the Passport to College Promise; the Educational Opportunity Grant; and GET Ready for Math & Science Scholarships.

The Washington Student Association, the Higher Education Coordinating Board (HECB), and the four-year public baccalaureates testified in support of the legislation. Students asked the Committee to support the bill as an opportunity to fund financial aid. The HECB and the four-year institutions also expressed support but reminded the committee that the funding source in the bill would not fully fund the financial aid programs listed and encouraged the committee to ensure that financial aid is funded as this option matures.

The Committee took no further action on the bill.

Senate Bill 6833

The Committee held a public hearing and took action on Senate Bill 6833. SB 6833 allows the Office of the State Treasurer to enter agreements with state agencies for investment by the Treasurer of funds not currently deposited with the Treasurer.  At this time higher education is exempt from the bill. 

The bill was amended in Committee to include, in addition to the existing requirments for monthly reporting on individuals accounts, the Office of the State Treasurer is directed to post the monthly report on the OST website and to include a graph displaying month end balances for the general fund, total funds in the treasury and treasurer’s trust fund, and total funds managed by the state treasurer.

Senate Bill 6833 now goes to the House floor for further consideration.

House Bill 3193

The House Ways & Means Committee held a public hearing and took action on House Bill 3193 . HB 3193 reduces the bonus for National Board for Professional Teaching Standards (National Board)-certified teachers teaching in high poverty schools from $5,000 to $2,500 during the 2010-11 school year and requires persons receiving the National Board bonus to be in “instructional assignments” in a Washington public school.

In addition, the bill would revise the statutory definition of a “high poverty school” to conform with language currently used in the operating budget; this results in no change to current practice.

House Bill 3193 now goes to the floor for further consideration.  

Three Days Until Adjournment: The Latest

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With only three days to go until the Washington Legislature must adjourn the 2010 supplemental session several major pieces necessary to allow policymakers to leave Olympia without a special session remain in motion.

Here is the latest as of this morning.

Operating Budget
The 2010 supplemental operating budget (ESSB 6444) has passed both the House and Senate and is now in conference.

Capital Budget
The House proposed 2010 supplemental capital budget (HB 2836) is on the House floor waiting for further consideration. The Senate proposed 2010 supplemental capital budget (SB 6364) is on the Senate floor waiting for further consideration.

Revenue Legislation
Two revenue-related bills have made it into the end-game. Senate Bill 6143– increases taxes and closes loopholes –  and Senate Bill 6874 – increases tobacco product tax. 

Senate Bill 6134 has passed both the House and Senate and is now in conference.

Senate Bill 6874 is on the House floor awaiting further consideration.

House Passes Revenue Legislation

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Late last night the House passed their proposed revenue package (SB 6143) with a vote of 52-45.

Though the House passed their proposed revenue package from committee to the floor last week  (HB 3191), it is the Senate’s proposed revenue legislation that the House voted on last night.

The House passed a striker, which removes the language from the Senate’s revenue legislation and replaces it with the House’s proposed revenue package (HB 3191). As a result the House effectively passed their proposed revenue package using SB 6143 as the vehicle.

The striking language passed by the House narrows or eliminates numerous current tax loopholes; removes sales tax exemptions for bottled water, elective cosmetic surgery, candy & gum, and custom software; and includes various other measures.

The House considered 18 amendments to the bill, of which nine were adopted.

  • Requires the applicant for the rural county sales tax exemption/deferral program to provide information on new jobs for the local work force.
  • Requires the department of revenue and the other members of the streamlined sales tax project advisory group to recommend modifications to the definition of candy under the streamlined agreement.
  • Removes provisions imposing sales tax on janitorial services.
  • Changes the effective date of the minimum nexus provisions from April 1, 2010, to July 1, 2010. Makes a technical correction.
  • Eliminates the July 1, 2020, expiration date for the livestock nutrient management sales and use tax exemption.
  • Expires, on July 1, 2011, the section that allow the DOR to disregard tax avoidance transactions.
  • Changes the effective date of the provisions modifying the 1st  mortgage deduction from April 1, 2010, to July 1, 2010.
  • Caps the aircraft tax for aircraft manufactured in 1970 and before to an amount that is twice the current aircraft tax.
  • Clarifies that the nexus and apportionment provisions only apply to state business and occupation taxes and not local taxes.

The House’s revenue legislation generates $700 million in new revenue for the 2009-11 biennium. This is approximately $190 million less than the revenue passed by the Senate over the weekend.  

SB 6143 now goes back to the Senate for concurrence. If the Senate does not agree to the changes the House made then the bill will move to conference.

Senate Ways and Means Committee Funds Evergreen’s Biomass Feasibility Study Among Other Actions

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The Senate Ways & Means Committee met for a better part of today to hear several bills and take action on several more.

Of great significance for Evergreen was action taken to move forward the Senate’s 2010 proposed Capital Budget (SB 6364).  SSB 6364 was amended in committee, by Senator Fraser,  to appropriate $125,000 to Evergreen to complete a feasibility study on the College’s Biomass Gasification Project.

In addition, the Senate’s proposed capital budget:

  • Reduces appropriations for debt limit bonds by $139 million.
  • The reduction of $139 million is a combination of reducing new appropriations for the 2009-11 biennium by $73 million and the reappropriation authority for projects authorized in the prior biennia by $66 million.
  • Avoids exceeding the 9 percent constitutional debt limit.
  • Captures $48 million in savings for major higher education construction projects from competitive bids received for these projects.
  • Provides $36 million in funding for the replacement of Balmer Hall at the University of Washington.
  • Places greater reliance on Evergreen’s local funds, including the school trust and a portion of student tuition.

The Committee also took action on House Bill 3178– Information Technology. House Bill 3178  organizes, consolidates, and, where appropriate, contracts with private providers for technology systems and resources.  In addition, the bill establishes spending restrictions for information technology for the 2009-2011 biennium.

The Senate Committee removed the language in the House version of HB 3178 and replaced it with language that primarily reflects the House bill but with the following changes:

  • The Legislature and courts are no longer required to submit major IT project budget requests to executive branch agencies for review.
  • Language is more explicit regarding IT in the Legislature and courts.
  • Legislative and judicial branches are no longer required to develop IT portfolios consistent with the provisions of 43.105.172.
  • The legislative and judicial branches are no longer required to prepare and submit to the department a biennial performance report consistent with the provisions of RCW 43.105.17.
  • Other technical changes.

In addition to the replacing the language in the bill, the Committee also adopted two amendments to the bill: (1) A null and void clause added which would repeal the language in the bill if no dollars are appropriated for the bill and (2) Removes language referring to the pilot project.

Both Senate Bill 6364 and House Bill 3178 go to the Senate floor for further consideration.

House Ways and Means Committee Takes Action on Teacher Education Bill

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Today, the House Ways & Means Committee held a public hearing on a teacher preparation related bill.

House Bill 3913 reduces the bonus for National Board for Professional Teaching Standards (National Board)-certified teachers teaching in high poverty schools from $5,000 to $2,500 during the 2010-11 school year and requires persons receiving the National Board bonus to be in “instructional assignments” in a Washington public school.

In addition, the bill would revise the statutory definition of a “high poverty school” to conform with language currently used in the operating budget; this results in no change to current practice.

No further action was taken by the committee on HB 3913.

Status of Moving Parts as Session Nears End

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Today is the first day of the last week of the scheduled 2010 supplemental session. Though much progress was made over the weekend several major pieces necessary to adjourn without a special session remain in motion.

Operating Budget
The 2010 supplemental operating budget (ESSB 6444) has passed both the House and Senate. The House passed a striker, which strikes the language from the Senate’s proposed 2010 operating budget and replaces it with the House’s proposed operating budget language. As a result the House effectively passed their proposed operating budget using SSB 6444 as the vehicle. The Senate did not concur with the changes made by the House.  As a result, ESSB 6444 is now in conference.

Capital Budget
The House proposed 2010 supplemental capital budget (HB 2836) is on the House floor waiting for further consideration. The Senate proposed 2010 supplemental capital budget (SB 6364) passed out of committee today and now goes to the Senate floor for further consideration.

Revenue Legislation
Though several revenue-related bills have been heard recently in various committees two revenue-related bills have made it into the end-game. Senate Bill 6143- sales tax and closes loopholes –  and Senate Bill 6874 – increases tobacco product tax.  Senate Bill 6143 is on the House floor awaiting further consideration. It is expected that the House will strike the language in SB 6143 and replace it with language that reflects the House’s proposed revenue package. Senate Bill 6874 is also on the House floor awaiting further consideration.

Senate Passes Tobacco Product Tax Increase

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On Sunday the Senate passed the second of a two-bill revenue legislative package, an increase on tobacco products.

Substitute Senate Bill 6874, passed on 29-19. The bill would significantly increase the cost of tobacco products in Washington.  If enacted, the bill would increase the tax on cigarettes by $1, to a total of $3.025 per pack of 20 cigarettes. In addition, an added tax of  $1.825 per pack is included on promotions such “as buy one pack get one free” and “two packs for the price of one”.  Finally, cigarettes that are manufactured by nonparticipating members in the master settlement agreement are subject to an additional tax of 42 cents per pack.

The bill also creates the basic health plan stabilization account in which the tax revenue generated will go to  support enrollment in the basic health plan.

Senate Bill 6874 now goes to the House for further consideration.

Senate Passes Sales Tax Revenue Legislation

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Today, the Senate passed Substitute Senate Bill 6143. SSB 6143 is one of a two-bill revenue package that the Senate Ways & Means Committee took action on late this week.  The other revenue bill SSB 6874 – increases taxes on tobacco products – awaits further action on the Senate floor.

SSB 6143 modifies excise tax laws to preserve funding for public schools, colleges, and universities, as well as other public systems essential for the safety, health, and security of all Washingtonians.

SSB 6143 includes a proposed temporary three-tenths of 1 percent sales tax increase and the implementation of the Working Families Tax Credit. The sales tax increase would be for three years and would include funding for the Working Families Tax Credit to dramatically reduce the impact on low income families. The Washington Department of Revenue has estimated the tax increase would cost the typical household $29.33 a year. The tax credit, provided to those eligible for the federal Earned Income Tax Credit, would provide a minimum rebate of $25.

In addition, the bill closes more than a dozen tax loopholes ( No longer among them is a sales tax exemption for used car trade-ins). Finally, the bill includes the implementation of a sales tax on bottled water and the implementation of a three-year business and occupation tax surcharge on services of one-quarter of 1 percent. The latter would be teamed with an increase in the small business tax credit from $35 per month to $70 per month.

The Senate considered 27 amendments to the bill, of which seven were adopted.

  1. Removed the appropriation and the state expenditure limit sections of the underlying bill.
  2. Permanently doubles the small business credit for businesses paying under the service rate.
  3. Changes the expiration of the sales tax on bottled water from 2015 to 2013.
  4. Allows an exemption from the sales tax on bottled water for persons without potable water.
  5. Makes a technical change to the banking provisions of the economic nexus provisions.
  6. Removes sections related to local use tax on brokered natural gas to conform this bill with the passage of ESHB 3179 (which made the same amendments to local use tax on brokered natural gas).
  7. Prohibits legislative expense allowances if the temporary sales tax increase is extended beyond June 30, 2013.

SSB 6143 now goes to the House for further consideration.