Legislative Update: Week 4

Priority Areas

Business Impacts

Paid Family Medical Leave

Rep. Berry introduced HB 1073, which modifies the eligibility threshold for benefits from a minimum of 820 hours worked to a minimum of $1,000 earned. It also expands the job protection provisions by removing the employer size and employee hours worked threshold, and by revising the employment length threshold from 12 month to 90 days. The employer must also maintain existing health benefits during Paid Family Medical leave for any employee covered by the Paid Family Medical Leave job protection provisions. The bill was heard on January 15^th, amended and passed out of the House Labor & Workplace Standards committee on February 5^th. A summary of the substitute bill that was adopted can be found here.

Sen Robinson introduced a similar bill, SB 5097, with the same changes to the job protection provisions and health benefits. SB 5907 does not change to the eligibility threshold but does change the definition of a family member to include any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family member. The bill was heard on January 18^th and is scheduled for executive session on February 10^th in the Senate Labor, Commerce & Tribal Affairs committee.

Safely opening Washington

Sen Braun and Rep MacEwen sponsored SB 5114/HB 1321 and it allows businesses, facilities, institutions, and all other places or organizations to immediately and safely reopen or resume under Phase 2 of the Health Washington Roadmap to Recovery plan. It also states the intent of the Legislature to regularly review the best available public health data to determine whether additional actions should be taken until January 10, 2022. SB 5114 was heard on January 20^th in the Senate State Government & Elections committee. HB 1321 has not been scheduled for a hearing.

Step One for Washington’s Community and Economic Recovery

On Friday, January 22^nd the House and Senate Democrats announced a plan for community and economic recovery, starting with $2.2 billion in federal funds to provide assistance to families and businesses who have been impacted by the COVID-19 pandemic. The proposal provides funding in critical areas, starting with $240 million in small business grants; $668 million to school districts to address learning loss; $618 million for the Department of Heath to use for vaccine distribution, contract tracing, and testing; $325 million for direct rental and utility payments; $5 million for rental and foreclosure assistance; $4.7 million for food assistance programs with an additional $26.3 million in block grants for hunger relief organizations; $50 million for child care grants and incentives, prioritizing providers in child care deserts and supporting racial equity across the state; $65 million for Immigrant Relief Fund for those people left out of federal stimulus payments; $9 million for TANF and $12 million in Disaster Cash Assistance. The bills reflecting the changes and appropriations are HB 1367 and HB 1368 and their companion bills are SB 5343 and SB 5344. All four bills were expedited thru the legislative process. HB 1367 was passed off the House floor with a 97-0 vote count and HB 1368 passed with a 61-36 vote count on February 1st. HB 1367/SB 5343/ and HB 1368/SB 5344 were heard in Senate Ways & Means on February 2^nd. HB 1367 and HB 1368 were passed out of the Senate Ways & Means committee on February 4th. This indicates that the House versions of these bills will be the vehicle going forward. They have been placed on second reading by the Senate Rules committee and await further action. It is anticipated they will be debated and passed off the Senate floor this coming week.

Taxation of governmental financial assistance programs during an emergency proclamation

Rep. Walen introduced HB 1095, which provides a B&O tax, a public utilities tax, and a retail sales tax exemption for a qualifying grant received on or after February 29, 2020, that is related to a national or state emergency proclamation. "Qualifying grant" is defined as an amount received, or relief from debt or other legal obligation received that is received under a government-funded program to address the impacts of conditions giving rise to an official proclamation of a state of emergency by the President or by the Governor. The bill was heard on January 14^th, amended and passed out of the House Finance committee on January 19^th. The amended bill exempts this act from the requirements of a Tax Preference Performance Statement, a JLARC review, and the 10-year automatic expiration. On January 22^nd the House place this bill on a priority list and passed the bill with a 98-0 vote count. The bill was heard on February 2^nd and passed out of the Senate Ways & Means committee on February 4th. It has been paced on second reading by the Senate Rules committee.

Climate Change and the Environment

Climate Commitment Act

Sen Carlyle sponsored SB 5126 on behalf of the Governor and it requires the Governor to establish a

comprehensive program to implement the state’s commitment and convene a Climate Commitment task force. It established a cap and invest program for greenhouse gas (GHG) emissions to be implemented by the Department of Ecology and directs distribution of auction revenues to clean transportation, natural climate resiliency, clean energy transition and assistance, and energy efficiency projects. The bill was heard on January 19^th in the Senate Environment, Energy & Technology committee. This bill is a critical component in Sen. Hobbs’ transportation package and will be changing and in play till the end of session.

Greenhouse gas emissions

Rep. Fitzgibbon and Sen. Stanford introduced HB 1091/SB 5231 on behalf of the Governor, which directs the Department of Ecology to adopt rules establishing a Clean Fuels Program to limit the greenhouse gas (GHG) emission per unit of transportation fuel energy to 10% below 2017 levels by 2028 and 20% below 2017 levels by 2035. Ecology is also directed to update the Clean Fuels Program rules to further reduce GHG emission from each unit of transportation fuel for each year through 2050, consistent with statutory state emission reduction limits. SHB 1091 was amended in the House Environment and Energy committee to clarify that the Clean Fuels Program’s standards must reduce overall, aggregate carbon intensity, rather than carbon intensity achieved by an individual type of transportation fuel. It also requires Ecology’s Clean Fuels Program rules to include mechanism for certifying electricity that has a carbon intensity of zero and to allow the assignment of credits to electric utilities for electricity used, at minimum, for residential electric vehicle charging or fueling. The bill was heard on February 4^th and is scheduled for executive session on February 9^th in the House Appropriations committee. SB 5231 has not yet been scheduled for a hearing.

Housing

Accessory dwelling units

Rep Gregerson sponsored HB 1337 and it allows cities and counties that adopt specified policies regarding accessory dwelling units (ADU) to qualify for a distribution from the accessory dwelling unit incentive account. Distributions from the ADU incentive account are based on the number of qualifying new ADUs constructed after the regulations are adopted. Department of Commerce is required to verify the amount of new ADU construction that has occurred in the jurisdiction before disbursing $10,000 to the jurisdiction for each qualifying new ADU constructed. The bill is scheduled for a hearing on February 9^th and executive session on February 12^th in the House Local Government committee.

Condominium construction

Sen. Padden introduced SSB 5024, which exempts condominiums with 10 or fewer units and no more than two stories from the requirement to submit building enclosure design documents and obtain periodic inspections throughout the course of construction. It also allows deposit funds for purchase of a unit to be used for construction costs. The amended bill clarifies statutory limitations that apply to earnest money deposits for real estate conveyances do not apply to deposits for the purchase of a unit in a condo community. The Senate amended and passed the bill on January 27^th with a 37-12 vote count. The adopted amendment terminates the exemption for small condominiums from building enclosure design and inspection requirements on June 30, 2031. The bill has been referred to the House Civil Rights & Judiciary committee for further consideration.

Housing benefit districts

Rep Ryu introduced HB 1128, which authorizes counties and cities to establish a housing benefit district for the purpose of acquiring, land banking, predevelopment contracting, selling, improving, funding, and leasing land for the creation of affordable low-and middle-income housing and community development projects. To carry out the objectives of a housing benefit district, a housing benefit district may impose a sales and use tax and property taxes. The bill was heard on January 19^th, amended and passed in the House Local Government committee on January 29^th. A summary of the amended bill can be found here. The bill has been referred to the House Finance committee for further consideration.

Housing supply through the GMA and housing density tax incentives

Rep Bateman and Sen Liias sponsored HB 1157/SB 5390 and it requires jurisdiction to plan for additional housing types and consider housing locations in relation to employment locations in the housing element of the comprehensive plan. It also requires jurisdiction to ensure that housing is properly planned for and housing target are implemented in the land use element. Additionally, it requires urban densities to include at least 6 net dwelling units per acre and authorizes cities to establish a real estate excise tax density incentive zone within urban growth areas. HB 1157 was heard on January 27^th in the House Local Government Committee. SB 5390 is scheduled for a hearing on February 9^th in the Senate Housing & Local Government committee.

Housing unit inventory

Sen Liias introduced SB 5235, which prohibits counties planning under the GMA and cities within such counties from prohibiting primarily renter occupied housing units on the same lot as an accessory dwelling unit and prohibits local governments from limiting the number of unrelated persons occupying a home, with exceptions. The bill was heard on January 26^th, amended and passed on February 4^th in the Senate Housing & Local Government committee. The amended bill clarifies that lawful limits on occupant load per square foot as established by applicable building code or ordinance are exceptions to the prohibition on regulating or limiting the number of unrelated persons occupying a household. The bill has been referred to Senate Rules for further consideration.

Increased residential building capacity

Sen Das introduced SB 5269, which requires all GMA planning jurisdiction to all for multifamily housing units in areas zone for single-family residential use with urban growth areas (UGA) and requires certain parking units per lot size or dwelling unit within a UGA. Additionally, it includes the general value increase of property conversions to multifamily housing units in the calculation of the property tax revenue limit. The bill was heard on January 27^th in the Senate Housing & Local Government committee and is scheduled for executive session on February 10^th.

Just cause evictions

Rep Macri introduced HB 1236, which specifies exclusive causes for eviction, refusal to renew, and termination of tenancy under the Residential Landlord-Tenant Act (RLTA) and makes other changes to rights and remedies. The bill was heard on January 26^th, amended and passed out of the House Housing, Human Services & Veterans committee on February 5^th. A summary of the changes to the bill can be found here.

Landlord-tenant relations

Sen Kuderer introduced SB 5160, which prohibits landlords from terminating or refusing to renew a rental lease that expires at the end of the lease term or is subject to a 20-day termination notice until 2 years after expiration of any public health emergency. It allows tenants impacted by COVID-19 to terminate their tenancy with a 20-day written notice and prohibits landlords from charging or imposing fees or other changes for nonpayment of rent during any public health emergency. Additionally, it requires landlords to first offer tenants a repayment plan based on the individual, financial, health, or other circumstances of the tenant. The bill was heard on January 20^th, amended and passed on February 3^rd out of the Senate Housing & Local Government committee. A summary of the changes made in the substitute bill as adopted can be found here. The bill was referred to the Senate Ways and Means committee for further consideration.

Rep Barkis introduced HB 1228, which suspends any eviction moratorium currently in effect and requires landlords to provide tenants with unpaid rent an affidavit of COVID hardship, notice of early resolution program, and option of payment plan. It creates the Emergency Rental Assistance Grant Program to assist tenants and landlords with past due rental payments and establishes the early resolution program to facilitate resolution of nonpayment of rent cases. Additionally, it requires landlords to notify tenants of the early resolution program before filing any unlawful detainer action. The bill was heard on January 28^th in the House Housing, Human Services & Veterans committee and is scheduled for executive session on February 11^th and 12^th.

Limiting rent increases

Sen Das introduced SB 5139, which prohibits any increases in rent or other charges for residential tenancies for the first 6 months after expiration of the eviction moratorium. It also limits rent increased for a 6-month period after the initial 6-month prohibition period to 3% points above the consumer price index and based on monthly rent as of March 1, 2020. The bill was heard on January 21^st and was scheduled for executive session on January 28^th and February 3^rd, but no action was taken in the Senate Housing & Local Government committee. It has been rescheduled for executive session on February 10^th.

Local Government option for funding essential housing programs

Sen. Lovelett introduced SB 5012, which authorizes local government to levy a special excise tax up to 10% on short-term rentals and use those revenues for operating and capital cost of affordable housing programs including homeless housing assistance, temporary shelters, and other related services. The bill was heard on January 13^th, amended and passed on February 3^rd in the Senate Housing & Local Government committee. A summary of the changes made in the substitute bill as adopted can be found here. The bill has been referred to the Senate Ways & Means committee for further consideration.

Rep Ryu introduced HB 1070, which modifies allowed uses of local tax revenue for affordable housing and related services to include the acquisition and construction of affordable housing and facilities. The bill would expand the use of the local 1/10 of 1% sales tax funding option for affordable housing and behavioral health facilities to include acquiring housing. The bill was amended and passed out of the House Finance committee on January 25^th on January 28^th. The amendments adopted by the committee can be found here, here and here. It has been referred to the House Rules committee for further consideration.

Rep Kloba has introduced HB 1035, which provides local governments with options to grant rent relief and preserve affordable housing in their communities. The bill gives communities a local option to preserve and increase healthy, high quality, and affordable rental housing opportunities for low-income households and very low-income households when the governing authority has found that there are insufficient affordable housing opportunities available. The bill also encourages housing opportunities that are affordable to renters at below market rent levels, as determined by the governing authority upon considering community needs, market rental costs, and income levels of renters. The bill is scheduled for a hearing in the House Finance committee on February 8^th.

Multifamily tax exemption

Sen Das sponsored SB 5287and it expands the Multifamily Property Tax Exemption (MFTE) to all cities and urban growth areas within any county with a population of at least 2 million. It adds affordability requirements and modifies the income requirements for the 8-year MFTE program, increases the affordability requirements and modifies the income requirements for the 12-year MFTE program. Additionally, it authorizes a 12-year extension of existing MFTE programs that are set to expire and establishes a new 20-year property tax exemption for the creation of permanently affordable homes. The bill was heard on January 26^th in the Senate Housing & Local Government committee and is scheduled for executive session on February 10^th.

Revenue source for eviction prevention

Rep Ormsby and Sen Robinson introduced HB 1277/SB 5279, which creates an additional $100 surcharge on recorded documents to fund an eviction prevention rental assistance program within the Department of Commerce; operations, maintenance, and service costs for permanent supportive housing; and the landlord mitigation program. HB 1277 was heard on January 22^nd, amended and passed out of the House Housing, Human Services & Veterans committee on January 29^th. A summary of the changes made in the substitute bill as adopted can be found here. It has been referred to House Appropriations for further consideration. SB 5279 has not been scheduled for a hearing.

Transit-oriented development

Sen Mullet sponsored SB 5312 and it provides that appropriations to the Growth Management Planning and Environmental Review Fund for the purpose of grants to cities to facilitate transit-oriented development may be used to pay for the costs associated with the preparation of SEPA environmental impact statements, planned action ordinances, subarea plans, costs associated with the utilization of other tools under SEPA, and the costs of local code adoption and implementation of such efforts. It requires the Department of Commerce to prioritize applications for grants to facilitate transit-oriented development that maximize density and transit access related policy objectives. The bill was heard on January 27^th and passed on February 4^th out of the Senate Housing & Local Government committee. It has been referred to Senate Rules for further consideration.

Land Use

Climate response through updates to the comprehensive plans

Rep Duerr sponsored HB 1099 and it adds climate change mitigation to the listed goals of the of the Growth Management Act. It adds climate change and resiliency element to the list of elements that must be included within the comprehensive plans and requires that it result in reductions in greenhouse gas emissions and vehicle miles traveled within the city or county adopting the comprehensive plan. The bill was heard on January 19^th, amended and passed out of the House Environment & Energy committee on January 29^th. A summary of the changes made in the substitute bill as adopted can be found here. The bill has been referred to the House Appropriations committee for further consideration.

Efficiency in housing by streamlining approval of engineered plans

Sen Gildon introduced SB 5243, which provides that any building permit applications submitted with plans or specification signed by a professional engineer or architect must be deemed complete by the city or county building department. It allows the building department to review the application for general compliance with the zoning or other land use control ordinances in effect, but it may not impose substantial modifications or conditions on such submittals. The bill was heard in the Senate Housing & Local Government committee on January 26^th.

Emergency shelters and housing through local planning and development regulations

Rep Peterson sponsored HB 1220 and it updates the housing goals of the GMA to include planning for and accommodating affordable housing. It requires jurisdiction to address moderate, low, very low, and extremely low-income housing, and racial disparate impacts in the housing element of the comprehensive plan. The bill was heard on January 27^th and is scheduled for executive session on February 9^th and 10^th in the House Local Government committee.

Planning under the GMA

Rep Duerr sponsored HB 1241 and it increases review and revision cycle for comprehensive plans and Shoreline Master Plans from 8 to 10 years. It also requires cities and counties with more than 7,500 population to produce an annual work program for implementing the comprehensive plan. Additionally, it requires counties and cities to submit an implementation progress report with certain required information to the Department of Commerce 5 years after reviewing and revising a comprehensive plan. The bill was heard on February 3^rd and is scheduled for executive session on February 10^th and 12^th in the House Local Government committee.

Salmon recovery through revisions to the comprehensive plans

Rep Lekanoff introduced HB 1117, which adds salmon recovery to the listed goals of the of the Growth Management Act. It requires the land use element of the comprehensive plan to include a strategy that achieves net ecological gain of salmon habitat and the capital facilities element to address the elimination of fish passage barriers. The bill was heard on January 28^th, amended and passed out of the House Environment & Energy committee on February 4th. A summary of the changes made in the substitute bill as adopted can be found here.

Revenue

Capital gains

Sen. Robinson introduced SB 5096, which imposes a 9% capital gains tax beginning January 1, 2022 on capital gains earnings above $25,000 for individuals and $50,000 for joint filers. The tax would not apply to residential dwellings along with the land upon which the dwelling is located; assets held in a retirement account; assets transferred as part of a condemnation proceeding; livestock related to farming or ranching; agricultural land that meets certain requirements; certain types of property used in a trade or business such as machinery and equipment that have been immediately expensed; capital assets acquired and used only for purposed of a trade or business of a sole proprietorship; and timber and timberlands. The bill was heard on January 14^th in the Senate Ways and Means committee.

Rep Senn sponsored a similar bill, HB 1496, and it imposes a 7% capital gains tax on the sale of real property and 9.9% rate on the sale of corporate stocks, bonds, and other high-end financial assets to fund the expansion and affordability of childcare. The bill exempts the first $200,000 in profit for single taxpayers and $400,000 for joint filers. It also exempts primary residences sold for $5 million or less; retirement accounts, including IRA and 401K retirement plans; livestock; and the sale of agricultural land and timber. Qualifying family-owned businesses grossing under $10 million annually are also exempt. The capital gains tax proposal also includes a credit for taxes paid through the Real Estate Excise Tax. For the first two years, 50% of the revenue is directed to the Fair Start for Kids Account created under HB 1213 and the balance goes to the State General Fund. After two years, the amount going to the Fair Start for Kids Account increases to 60%. The bill has been scheduled for a public hearing on February 11^th in the House Finance committee.

Covered Lives

Rep Riccelli and Sen. Robinson introduced HB 1201/SB 5149, which would impose a tax on health insurance plans in Washington. The tax assessed is $3.25 per member per month on health carriers, Medicaid managed care organizations, and third-party administrators. The covered lives assessment is estimated to be $143 million for fiscal year 2024 and $200 million for fiscal year 2025 and each fiscal year thereafter ($400 million biennially). Revenue collected under this proposal is deposited in the foundational public health services account. The bill is at the request of the Governor. SB 5149 was heard on January 27^th in the Senate Health & Long-Term Care committee. HB 1201 has not been scheduled for a hearing.

Sugary Beverage Tax

Sen Robinson introduced SB 5371, which provides funding for public health services and health equity initiatives through a statewide sweetened beverage tax. The bill imposes a tax on sugar sweetened beverages of $0.175 per fluid ounce, and then annually is adjusted to reflect the yearly increase of the consumer price index. Of the revenue collected, 60% must be deposited into a health equity account, and the remaining 40% must be deposited into the foundational public health services account. The bill establishes a community advisory board to make recommendations on the disbursement of funds in the health equity account. The bill has not yet been scheduled for a hearing.

Wealth Tax

Rep Frame and Sen Hunt introduced HB 1406/SB 5426, which improves the equity of Washington state's tax code by creating the Washington state wealth tax and taxing extraordinary financial intangible assets. The bill creates a state wealth tax by narrowing the existing tax preference that exempts all intangible property and assesses a modest one percent tax only on financial intangible assets, such as publicly traded options, futures contracts, and stocks and bonds. The first $1,000,000,000 of assessed value is exempt from the Washington state wealth tax. The bill uses revenue generated by the state wealth tax to offer credits against taxes paid disproportionately by low-income and middle-income families and small start-up and low-margin businesses. In addition, the bill invests the revenues generated by the tax to fund other critical services, such as education, childcare, public health, housing, and public safety. HB 1406 bill was heard on February 2^nd in the House Finance committee. SB 5426 has not yet been scheduled for a hearing.

Transportation

Extending the issuance period of driver licenses and identicards

Rep Ramel and Sen Liias sponsored HB 1207/SB 5270 and it extends the cycle for standard and enhanced driver’s licenses, standard and enhanced identicards, commercial driver’s licenses, and motorcycle endorsements from 6 years to 8 years. It also provides for remote photo and signature capture for driver’s license and identicard renewals and allows online issuance and renewal of non-photo driver’s instruction permits. HB 1207 was heard on January 26^th in the House Transportation committee and SB 5270 was heard on February 1^st in the Senate Transportation committee.

Limiting bonding toll revenues on certain state highway facilities

Sen King sponsored SB 5232 and it repeals toll bond authorizations for I-405/SR 167 express toll lanes and the Puget Sound Gateway facility. It also requires toll facility proposals to consider a policy guideline to pledge toll revenue for debt financing only when the revenue is generated from toll bridges. The bill was heard on January 26^th in the Senate Transportation committee.

Transportation Revenue

More details about Sen Hobbs’ proposal are here:

• Balance Sheet: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stHobbsBalancSheet012821.pdf
• Revenue Summary: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stHobbsNewLawRevenueSummary012821.pdf
• Project List: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stHobbsNewLawProjectList012821.pdf

Details about the Rep Fey’s proposal are here: http://leap.leg.wa.gov/leap/Budget/Detail/2021/htRevenueAndSpendingFramework1_19.pdf