2023 Legislative Updates
AG BMP, WQPA & WATER PROJECTS FUNDING H361 is an appropriation bill the Treasure Valley Water Users Association has been working to provide $150 million in funding for the Water Management Account and $2 million for the Agricultural Best Management Practices Fund (Ag BMP Fund). The $150 million will go to the Idaho Water Resources Board for them to utilize for additional water infrastructure grants and loans and for our irrigation delivery entities to apply for these funds to improve their irrigation delivery systems. The $2 million for the Ag BMP Program will go to the Department of Environmental Quality to help continue funding for on-farm water quality projects.
H352- The Senate passed H352 which was legislation the Treasure Valley Water Users Association promoted. H352 allocates $5 million in funding to the Idaho Soil and Water Conservation Commission to fund the Water Quality Program for Agriculture (WQPA). Grants for this Program will be available during the month of May through the Commission and the local Soil and Water Conservation Districts. This is the second year that WQPA funding for $5 million has been allocated for on-farm water quality improvement projects and for small water infrastructure projects for irrigation delivery entities.
THE END IS NEAR – SINE DIE All indications are that today will be the final day of the 2023 session-at least for regular business. March 31 marks the eighty-second day of the 1st session of the 67th Legislature. We anticipate that both Houses will simply adjourn and then return on Thursday, April 6 to consider any bills that the Governor may veto. The general sentiment yesterday was that they did not want to be in session on Good Friday and wanted to be home for the Easter weekend. At that time, we anticipate the legislature will Sine Die a Latin term meaning - the conclusion of a meeting by a deliberative assembly, such as a legislature or organizational board, without setting a day to reconvene. A ballot measure that passed during the November general election would allow the Idaho Legislature to call itself back into session within 15 days of a written request by 60% of the members of the Idaho House of Representatives and 60% of the members of the Idaho Senate.
ADMINISTRATIVE RULES- State agencies have the duty to promulgate administrative rules. Administrative rules have the force and effect of law but are created by agencies within the executive branch of government. Normally the legislature passes intent language through statute that can guide the agencies in crafting the rules with stakeholder input. The volume and complexity of administrative rules has become cumbersome for a part time legislature to address on a yearly basis, and legislative responsibility in this regard must be addressed sooner rather than later. Recent practice has transpired so that the Legislature approves the entirety of the Idaho administrative rules structure every year.
H206a would place all administrative rules on an eight-year expiration cycle and improve transparency in the process. This will have the benefit of ensuring that each rule is periodically reviewed for continued relevance and applicability. The eight-year cycle would also enable agencies, the Division of Financial Management, and the Legislature to spread this work out over time, rather than the current practice of the Legislature approving the administrative rules each year. Further, H206aa would place into statute the requirement that all agencies would need to provide a virtual option through video conferencing or at a minimum a telephone option to allow oral public testimony on their administrative rule proposals. Ideally, this would allow more involvement of Idahoans living outside the Treasure Valley.
Finally, H206 would also require the agency to post the recording of the public hearing on the agency’s website for at least three years. This allows interested parties to review the meetings if they are unable to attend the rulemaking meeting. There were several concerns in the original legislation and as a result it was amended in the Senate. The original bill gave a committee chair the ability to put a bill in the drawer and not hear it in a public testimony. This is concerning because many rules that stakeholders have taken quite a bit of time on addressing would be dead because of one action. The amendments would make it so a committee would have to at least hear the rule and if they did decide to reject or kill the rule they would need to provide explanation as to why they rejected the rule. The changes reflect balance in the process.
PROPERTY TAXES- This past week, Governor Little vetoed H292 that dealt with providing property taxes to Idahoans. In his veto explanation, the governor felt that this was a hodgepodge of policy items intermingled with property tax relief. However, the biggest concern which was also felt by the legislature was the pause of TECM bonds that were scheduled for sale this week due to consternation in the bond market. Due to the veto and concern, H376 was born and whipped through the legislature in a few days to clean up several of the concerns.
H376 clarifies the sales tax distributions found in House Bill 292 and clarifies that $80 million is distributed to the transportation expansion and congestion mitigation fund (TECM), and any moneys over $80 million is distributed to local units of government for local highway projects. It also clarifies that these distributions take priority over certain other distributions. Having passed H376, both the House and Senate overrode the Governor’s veto by a super majority of the vote.
The first year after the passage of H292 would provide up to $355 million dollars in property tax relief. During the second and third year it is estimated that $110 million be used to reduce property taxes for owner-occupied properties that are receiving the homestead property tax exemption. There would be approximately $100 million to be used to reduce property taxes for all property taxpayers; and another estimated $100 million will be distributed to school districts on an average daily attendance basis. School districts are required to use funds in the order of priority as follows: (1) payment of school bonds (2) payment of school levies (3) saved for future school facility construction needs or (4) used for new bonds. H292 would also eliminate the March date that school districts can use for elections. Circuit breaker criteria are also relaxed to allow more people to qualify for the program. The circuit breaker is a program targeted towards those who meet the following qualifications: the property owners total 2022 income, after deducting medical expenses, was $33,870 or less; the property owner was 65 or older, blind, widowed, disabled, a former POW or hostage, or a motherless or fatherless child under 18 years old; the property owner owned and lived in a home in Idaho that was their primary residence before April 15, 2023; and the property must have a current homeowner’s exemption.
AGRICULTURE PROTECTION AREAS- The Idaho Farm Bureau Federation made a presentation in the House of Representatives and Senate Agricultural Affairs Committees related to agriculture land preservation. H377 was introduced and printed only to serve as a spark for discussions to be held during the interim period and to bring back in 2024 a piece of legislation that could be considered by the legislature. There are two primary goals of the proposal: (1) promoting proactive planning tools for working landowners, and governing bodies to maintain and enhance the economic value of working lands, and (2) to create a new dedicated fund to incentivize Idaho working landowners to protect their farm, ranch, and forest property. The measure establishes an agriculture protection area board to oversee applications and implementation of the agriculture protection area. The board is proposed to be made up of at least three (3) and not more than five (5) members from the county' s soil and water conservation district board of directors to serve as the agriculture protection area board. The concept of ag land disappearance is one that a number of legislators have voiced concerns about, especially around urban areas.
AGENCY POLICY DOCUMENTS- H174a is a simple bill that clarifies that agency policies and guidance shall not have the force and effect of law. There have been several concerns by legislators that agencies and departments have removed rules but then have placed the verbiage into policy and have treated the policy to have the force and effect of law. H174a was brought by Representative Judy Boyle and has passed both bodies and is now waiting for consideration by Governor Little.
This review is provided by Association Management Group (Waitley Associates, Batt Associates, LP Associates & Agriculture, and Rooks Associates). https://www.amgidaho.com/
With roughly two months left until Constitutional Sine Die, the pace of session has slowed considerably. The Senate, in particular, is moving very deliberately and has 25 bills in the queue to vote on – many of which have been carried over for multiple floor sessions. At the current pace, those 25 bills could take the better part of two weeks (without all-day floor sessions) to get through. This is because Senate Republicans are using procedural tools at their disposal to require that bills be read in full before a vote can occur and using floor motions to request floor votes on bills that did not make it out of committee. As a result, few bills can get voted on each day and Senate Committees are not scheduling work sessions on bills until the floor calendar clears. Separately, the House floor has operated more efficiently. However, the House committees are still awaiting a number of bills from the Senate. Moreover, there are many bills sitting in the Joint Ways and Means Committee awaiting the May Revenue Forecast. The significance of the May Revenue Forecast is that the forecast will determine how much the state can spend on the next biennial budget and meet its balanced budget mandate. All in all, over the next two months the Senate Republican procedural delays will likely have an impact on how many more bills can pass this session.
SB 144/HB 2066 – Food Processing Equipment Property Tax Deferral Extension
The Joint Committee on Tax Expenditures held a public hearing on SB 144 and HB 2066 which are identical bills and would extend the existing food processing equipment property tax deferral program from 2025 to 2030. Dave Dillon and Patrick Maag testified in support of extending this program. Based on data from the Oregon Department of Agriculture, food processors have certified roughly $183 million in food processing equipment over the last two years with this exemption. We do not expect a vote on this bill until after the revenue forecast which is in mid-May.
SB 85 / SB 398 – Confined Animal Feeding Operations (CAFO)
The Senate Rules Committee has posted a public hearing and possible work session for Thursday, April 27th on both SB 85 and SB 398 (related to CAFOs). As of now, the hearing agenda is listed as a public hearing, but we expect the agenda to change to an informational hearing with invited testimony only. The hearing will focus on an amendment that we hope to review soon.
Senator Dembrow (D-Portland) has been working with Oregon Department of Agriculture, Oregon Water Resources Department, Oregon Department of Environmental Quality, the Governor’s office, and advocates on both sides of the CAFO issue in an attempt to pass legislation that would create new permitting standards for CAFOs. As you may recall, SB 85 became very controversial when it appeared to be a vehicle for a 5-year moratorium on new or expanding CAFOs, but ultimately was moved to the Senate Rules Committee because it didn’t have enough support to move forward. Now that it is in the Rules Committee, the conversation has moved away from a moratorium to a more holistic look at the CAFO regulatory program and what changes could be made without any major disruptions to animal agriculture and food processors. We expect to see an amendment reflecting those conversations soon. What we do not know is who will be in support or opposed to the amendment (eg. does it go too far or not far enough).
Once there is an agreement on the amendment and amendment language (if there ever is an agreement), the bill will likely have a fiscal impact statement (costs to the agencies for implementation) and then if voted out of the Senate Rules Committee, it will go to the Joint Ways and Means Committee. Like many other bills, the ability of the state to fund implementation could depend on the May Revenue Forecast. In short, there are still a number of steps (and votes) that will be taken on any bill related to CAFOs before it can get to the Governor’s desk.
HB 3568 – Warehouse Employment Standards
HB 3568 is a bill that has been introduced in a number of other states aimed at Amazon warehouses and warehouse workers. The House Rules Committee held a hearing on the bill and the -1 amendment which requires warehouse distribution centers (and many wholesale distribution centers) to provide each employee a written description of a quota system that evaluates employee productivity that the employee is subject to at time of hire and prohibits an employer from taking certain employment actions based on that quota system. As drafted, ag and food processing warehouses would be subject to this bill. This was unintentional so the bill sponsor, Representative Ruiz, has agreed to an ag and processor exemption. After Washington passed its version of the bill, we expect more negotiations over the next few weeks on this bill in Oregon. But with the clock running and the pace of the Senate floor, something will likely need to move in the next few weeks to have a good shot at passing both chambers prior to sine die.
SB 592 – Worker Safety Inspection
The House Business and Labor Committee is scheduled to hold a hearing on SB 592. When introduced, this bill was quite controversial, but ultimately negotiated into a bill that the business community could agree to. As a reminder, SB 592 authorizes the OSHA to conduct comprehensive inspections of any place of employment based on a history of prior violations. It also requires the Director to conduct comprehensive inspections whenever an accident investigation reveals that violation has caused or contributed to work-related fatality at place of employment or three or more willful or repeated violations have occurred. We do expect that this bill will pass without any significant amendments.
The Washington State Legislature adjourned Sine Die on Sunday, April 23 just before 10pm.
The focus of legislative leaders the past 3 days has been preparing the budgets for final passage. Legislators convened conference committees to negotiate the 2023-2025 biennium Operating and Transportation Budgets. And the 2023-2025 biennium Capital Budget was adopted as a compromise proposal that did not require a conference committee.
This session the House introduced 1,171 bills and 273 of those passed both chambers, and the Senate introduced 1,146 bills and 221 of those passed both chambers bringing the total to 494 bills passed the Legislature.
Now that the 2023 legislative session has been adjourned sine die, legislators will return to their districts for interim campaigning. The 60-day 2024 legislative session will begin on January 8.
Sunday morning, House Minority leader JT Wilcox announced that he will step down from his leadership position. Wilcox has been leader of the House Republicans for 5 years. Wilcox believes that House Republicans will elect a new leader by the end of May.
Senate Ways & Means Chair Christine Rolfes has officially announced that she will seek appointment to a vacant seat on the Kitsap County Commission. Rolfes is the lead budget writer and in the powerful position as Chair of the Senate Ways and Means committee. Rolfes told journalists that if appointed to the Kitsap County Commission she would not return to Olympia for the 2024 session. If Rolfes does not return, the next Chair of Senate Ways and Means would likely be Sen. June Robinson, currently the Vice Chair of the Ways and Means committee. The other possible replacement would be Sen. Joe Nguyen who has voiced his interest to Senate leadership.
ESSB 5187- Sunday, the House and Senate each approved the $69.3 billion 2023-2025 biennium Operating Budget. The final Operating Budget proposal adds $4.7 billion in new spending from the previous biennium, leaves $3 billion in reserves, and does not rely on new taxes.
ESSB 5200- Over the weekend, the House and Senate approved the $8.9 billion 2023-2025 biennium Capital Budget. Authorizes $9.0 billion in total budgeted funds, of which $4.7 billion is debt limit bonds for the 2023-25 biennium. The remaining amounts are $947 million in federal funds, $328 million in Model Toxic Control Accounts, $717 million in Climate Commitment Accounts, $295 million in alternate financing authorizations, $275 million in State Common School Construction Account, and $1.8 billion in all other funds. Approximately $95 million in bond capacity is reserved for a supplemental capital budget. Budget leaders in both chambers celebrated this year’s Capital Budget process for being bipartisan.
ESHB 1125- On Saturday April 22, House and Senate each approved the $13.4 billion 2023-2025 biennium Transportation Budget. For the first time, this year’s Transportation Budget includes $1 billion in funding from revenue generated by the Climate Commitment Act. Like the Capital Budget, this budget was developed with bipartisan support.
Blake Decision Fix Bill
E2SSB 5536- was introduced as a permanent fix to the 2021 Blake decision that ruled Washington State’s drug possession laws were unconstitutional. The bill was considered in conference committee on the evening of April 22 after the Senate refused to concur with the House striking amendment. The House proposed permanent Blake fix made illegal drug possession a misdemeanor while the Senate version made illegal drug possession a gross misdemeanor. Just before 8pm on Sunday April 23, the House considered the conference committee report for E2SSB 5536. The conference committee report adopted the Senate’s decision to make simple possession a gross misdemeanor and maintained the House’s decision on local preemption and pathways for treatment. The House rejected this proposed version of the bill by a vote of 43-55. The vote was held open by House Speaker Laurie Jinkins for 4 very awkward minutes before the results were recorded. Shortly after the defeat of SB 5536, the Legislature adjourned sine die. There is serious discussion of a special session to work on the Blake Fix before July 1 when all drug possession becomes legal in Washington. Local governments will have to pass city and county laws that make drugs illegal and set the penalties.
HB 1762- Concerning warehouse distribution centers. Requires certain warehouse distribution center employers to provide written descriptions of quotas to employees in certain circumstances. Provides that a violation occurs if the quota does not provide sufficient time for meal and rest breaks, or exposes workers to health and safety hazards, or violates related laws. Requires employers to provide information about quotas and work speeds data upon an employee's request and a request by a former employee for three years from separation. Prohibits retaliation, including a rebuttable presumption. Allows the Department of Labor and Industries to investigate complaints, enforce the requirements, including assessing penalties. Amendments in the Senate removed the ability of an employee, former employee, or their designated representatives to file a private right of action for injunctive relief and, in the case of retaliation, for damages; removed the ability of the Attorney General to bring a civil action for violations; changed the standard for rebutting a presumption of retaliation. The bill exempts farm product warehousing and dry storage (NAICS 493130). The final version of the bill that passed on Saturday April 22 removed the exemption for refrigerated warehousing and storage (NAICS 493120). The final bill as passed the Legislature raised the number of warehouse workers statewide from 500 to 1,000. There will be no impact to refrigerated cold storage warehouses for the agricultural industry.
SB 5369- Directs the Department of Ecology (Ecology) to petition the United States Environmental Protection Agency to reassess its regulations on allowable inadvertent polychlorinated biphenyls (PCBs) in product manufacturing processes for the purpose of eliminating or reducing the presence of PCBs in consumer products. Requires Ecology to establish a restriction or prohibition on PCB containing paints and printing inks by June 1, 2025. We will be engaged through the rule making process to make sure Ecology focus stays on PCB pigments and dyes.
HB 1628- Would increase the Real Estate Excise Tax. The bill creates a new tier of real estate excise tax rates on the sale of properties over $5 million and a new local option of .25% for all properties that doesn’t require a vote of the people. The bill passed out of the House Finance Committee on April 14. The bill was amended: Starting on 1/1/25: Changes the ceiling for the tier 1 (1.1% rate) from $525,000 to $750,000: Changes the ceiling for tier 2 (1.28% rate) from $750,000 to $1.525M; tier 4 (selling price over $3.025M) rate increases from 3% to 3.5%. The commercial rate will take effect beginning 1/1/27; directs the revenue to fund affordable housing projects and other uses; adds language to clarify local REET bonding authority. The bill died without enough votes in the House and Senate.
SB 5770- Increase in property taxes. The bill raises the one-percent limit on property tax growth to three percent. Generally, the bill proposes to increase the property tax limit factor to 100 percent plus population change and inflation, not to exceed 103 percent. The bill would expand the senior citizen property tax exemption and indicates the additional revenue would provide resources for the education of students with disabilities. The bill died without a public hearing.