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Monday, October 19, 2020  Spokane, Washington  Est. May 19, 1883
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House group OKs estate tax rewrite

OLYMPIA – With less than two weeks left in the special session and Gov. Jay Inslee urging them to “pick up the pace,” legislators showed some slight progress but faced what could be a major complication.

After one of the few substantive hearings since the special session began May 13, the House Finance Committee approved a rewrite of the state’s estate tax, hoping to fix a hole left by a 2012 Supreme Court ruling.

Inslee congratulated legislators on moving one element of the 2013-15 operating budget but warned time was running out.

Shortly after the committee hearing adjourned, senators were stunned by the call for a moment of silence for Sen. Mike Carrell, R-Lakewood, who had died less than two hours earlier. The death of the silver-haired former teacher leaves the Senate evenly split, with 24 members in a coalition of all the Republicans and two disaffected Democrats and the remaining 24 Democrats in the other caucus.

The estate tax legislation is designed to fix what supporters say is a loophole created by last year’s court ruling that mainly affects trusts set up by married couples with high incomes. When one spouse dies, the assets are transferred to the other without a state estate tax liability; the tax isn’t paid until the second spouse dies. The court ruling said the law doesn’t apply to cases in which one spouse died before it passed in 2005 and the second after it went into effect.

Rep. Timm Ormsby, D-Spokane, said the bill would provide equity between married couples and single people through a system that has been passed by the Legislature and voters who approved a referendum on it. The law requires the money collected from the estate tax to be spent on education.

Lawyers who testified on the bill disagreed whether it was written in a way that can apply the tax retroactively. Unions and progressive groups supported the bill. Business groups and anti-tax activists opposed the bill. But a bigger complication than any competing set of legislative proposals surfaced at noon Wednesday when Sen. Joe Fain, R-Auburn, broke the routine of the Senate’s pro forma session to request a moment of silence for Carrell, who had died about 90 minutes earlier in a Seattle hospital.

Carrell, 69, a 19-year veteran of the Legislature, was a champion of legislation to help at-risk youth, fight sex trafficking, help current and former members of the armed services, and support law enforcement. The retired math and science teacher was diagnosed with a blood disease earlier this year and underwent stem-cell transplants and chemotherapy. He was gone for the closing weeks of the regular session while in treatment, but he did keep up with legislation through regular phone conversations with other members.

Sen. Mark Schoesler of Ritzville, the Senate Republican leader, said Carrell died peacefully in his sleep at University of Washington hospital with his wife, Charlotte, nearby, succumbing to complications from the treatment.

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