February 21, 2024
Bill Report

Lawmakers have approximately two and a half weeks remaining in their 60-day 2004 session. At this point in the Session, we feel well-positioned; however, we keep a certain level of paranoia until Sine Die because it’s never done until the gavel has closed the Session officially. 

Policy bills must have passed out of their house of origin to receive further consideration, and they will need to pass out of policy committees in the opposite chamber by tonight and fiscal committees by February 25 to move forward. Measures deemed “necessary to implement the budget” (NTIB) are exempt from legislative cutoffs and will remain alive through the final gavel. 

Economic Forecast and Taxes

The Economic and Revenue Forecast Council (ERFC) released its quarterly revenue forecast on February 14. The Near General Fund-Outlook forecast increased by $122 million in 2023-25 and $215 million in the 2025-27 biennium. Forecasted revenue is anticipated to be $67.005 billion in 2023-25 and $71.721 billion in 2025-27. 

The change is expected to spur little increased spending and to drive significant budget cuts in the supplemental budgets. We are not seeing new tax measures proposed other than HB 2276 and SB 6191, which would increase the real estate excise tax on transactions over $3.025 million. They are being pitched as a "mansion tax," but would have a greater impact on sales of raw land, apartment buildings, and the already struggling commercial real estate sector. Both bills have had hearings, but neither chamber wants to be the first to pass the higher tax. There is a business community opposition coalition, and we are watching their activities.

Initiatives to the Legislature

After initially being united in refusing to hear the six initiatives to the Legislature that have been certified, Democratic leadership has now indicated that they may hold hearings and consider action on some of the measures to keep them off the November ballot. If the Legislature approves the initiative as is, it stays off the ballot, but any of the six that lawmakers decline to act or on which they offer an alternative will be on that ballot. The three that are most likely to receive consideration during the session are:

• Reasonable police pursuit (I-2113)
• Clarifying prohibition on state/local income tax (I-2111)
• Establishing the parental bill of rights in public education (I-2081)

Bills that remain alive

• SB 5838, the Senate proposal to create an artificial intelligence task force to examine regulatory oversight of this rapidly evolving technology, has moved to the House. When the House was looking at this issue, they took a different approach in terms of composition and timelines for the task force, and they aren't expected to accept the Senate bill in the form it moved over in. The House bill sponsor would like to substitute the entire bill with the House language, but any changes will have to be accepted by the Senate, which indicated it wanted no further changes.
• SB 5968 regarding home equity sharing agreements. The Senate has passed the bill, which will be voted on in the House policy committee this week. We are generally comfortable with the language in the bill now, but we will keep an eye out to ensure nothing changes. 
• HB 1915 is WBA-supported legislation that would expand state financial literacy programs and requirements for high school graduation. It passed the House unanimously and is now in the Senate Education Committee. 
• SB 5801 deals with the regulation of special deposits. Before passage in the Senate, DFI asked for the statute to be moved to a different section, as it better fit there. We agreed with those changes, and it passed the Senate with a decisive 47 votes and has moved to the House. 
• HB 1893 would provide unemployment insurance benefits for workers on strike or lockout. While the business community strongly opposed this proposition, the bill passed the House and moved out of the Senate Labor & Commerce Committee on Monday morning. 

Bills that are now dead

• SB 5770, which would have allowed local governments to triple the rate of growth in their property tax collections from 1% to 3%, made it to the Rules Committee, the last step before going to the floor. However, the prime sponsor has publicly stated that it lost several supporters and is dead for the Session.
• SB 6299 attempted to protect existing jobs from being eliminated by using AI technologies in the workplace. Portions of the language in this bill were added to the Senate taskforce bill, SB 5383, but it remains to be seen if the House will accept it.

As Yogi Berra famously said, "It's never over 'til it's over," so we will continue closely monitoring legislative developments in the Session's final days and provide regular updates. As always, if you have any questions or your bank is concerned about an issue that isn't mentioned here, please get in touch with us.