AN ACT Relating to increasing tax exemption transparency and accountability;
HB 1569 is a broad tax-expenditure transparency and accountability bill. It declares that Washington has granted hundreds of tax exemptions and special preferences without consistently evaluating whether they create jobs, increase economic activity, or otherwise justify the revenue loss. The bill’s central purpose is to bring those tax preferences into the regular budget process so they are treated more like other state spending items and are subject to recurring review.
The bill creates a “discretionary tax expenditure budget” that must be included in the governor’s budget proposal and in the legislature’s omnibus operating appropriations act. It requires estimates of the revenue impact for each covered tax preference, identifies which preferences should be reviewed, clarified, terminated, or readopted, and generally requires reauthorization every two years unless a preference expires sooner or is otherwise continued by law. It also sets limits on new or existing discretionary tax expenditures, including a temporary moratorium on approval or reauthorization for a period after the act’s effective date, and establishes procedures for early expiration, legislative approval, and review by budget and fiscal committees.
The bill also expands reporting requirements for the Department of Revenue. It directs the department to produce regular reports listing the revenue loss from tax exemptions and expenditures, the purpose of each exemption, the beneficiaries, and whether the exemption conflicts with other state programs. Those reports must be made publicly available and presented in public hearings. The bill further requires the governor to submit recommendations on tax exemptions, and it directs the state budget outlook process to incorporate a public listing of discretionary tax expenditures, their fiscal impacts, expiration dates, and the latest recommendations from legislative review bodies.
In addition, HB 1569 changes the work of the Joint Legislative Audit and Review Committee and the Citizen Commission for Performance Measurement of Tax Preferences by requiring scheduled review of tax preferences on a regular cycle, considering factors such as public policy objectives, economic effects, distributional impacts, and whether a preference should continue, be modified, or be terminated. The bill also calls for technical corrections from the Department of Revenue and the Code Reviser to support implementation, and it includes a severability clause and a short title naming it the Tax Exemption Transparency and Accountability Act.
The overall sentiment reflected in the bill text is strongly supportive of greater scrutiny of tax preferences and skeptical of continuing exemptions without regular review. The measure frames tax exemptions as off-budget spending that reduces resources for education and other state services, and it emphasizes fairness, transparency, and accountability. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of opposition or support from hearings, but the bill’s structure suggests its main point of contention would be whether tax preferences should be treated as recurring budget items subject to sunset and reauthorization, versus more stable statutory tax policy. Likely stakeholders on different sides include budget watchdogs and transparency advocates in favor, and beneficiaries of existing tax preferences, affected industries, and possibly tax policy conservatives concerned about uncertainty or administrative burden.
HB 1569 would significantly alter Washington’s budget and tax administration framework by requiring many tax exemptions and preferences to be treated as discretionary tax expenditures within the state’s biennial budgeting process. It would amend multiple RCW provisions governing budget preparation, revenue reporting, legislative review, and tax preference oversight, and it would require recurring fiscal estimates, public reporting, and periodic reauthorization or expiration for covered preferences. The bill would affect the Department of Revenue, the governor’s budget office, the legislature’s fiscal committees, JLARC, the Citizen Commission for Performance Measurement of Tax Preferences, and taxpayers or industries that benefit from state tax preferences.
The bill’s tone is reform-oriented and critical of the current tax preference system, arguing that exemptions function like off-budget spending and should be subject to the same scrutiny as direct appropriations. In the absence of hearing transcripts or votes, the available text indicates a strong pro-transparency, pro-accountability sentiment from the bill’s sponsors. The measure appears designed to appeal to fiscal oversight concerns rather than to preserve existing tax preferences as-is.
The main contention is likely whether tax exemptions and preferences should be reauthorized on a regular cycle and folded into the budget process, or whether that approach would create instability for businesses, nonprofits, and other beneficiaries that rely on existing preferences. Another likely point of dispute is the bill’s broad scope, which reaches many categories of tax preferences and imposes detailed reporting and review requirements. Supporters would emphasize fairness, transparency, and revenue protection, while opponents would likely focus on administrative complexity, uncertainty, and the risk of eliminating preferences that serve policy goals such as economic development, manufacturing, agriculture, or targeted relief.