Legislative Update: Week 6

Priority Areas

Business Impacts

Paid Family Medical Leave

Rep. Berry introduced SHB 1073, and was amended by the House Labor & Workplace Standards committee to modify the definition of “family member” for Paid Family and Medical Leave. It also provides temporary alternative eligibility for claims through June 30, 2022. The bill was heard on February 17^th in the House Appropriations committee and is scheduled for executive session on February 22^nd.

Sen Robinson introduced a similar bill, SSB 5097, and was amended by the Senate Labor, Commerce & Tribal Affairs committee to modify the definition of “family member”, modifies the requirements for certain employment protection upon return from leave, and modifies which employees are eligible for continuation of health benefits during leave. The bill has been placed on 2^nd Reading by the Senate Rules committee for further consideration.

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. The bills did not move out of committee before policy cutoff on February 15^th and is considered dead.

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, but the House bills ultimately became the vehicles. HB 1367 was passed by the House with a 97-0 vote count and ESHB 1368 passed with a 61-36 vote count on February 1st. The bills were heard in the Senate Ways & Means committee on February 4^th and moved out of committee on February 5^th. HB 1367 was passed unanimously by the Senate and ESHB 1368 passed with 47-2 vote count on February 10^th. The bills were signed by the Governor on February 19^th. The legislation takes effect immediately and agencies will now start the work of moving those dollars out

Taxation of governmental financial assistance programs during an emergency proclamation

Rep. Walen introduced SHB 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. This bill is a priority for both chambers and was expedited. On January 22^nd the House unanimously passed the bill. The bill was heard on February 2^nd and passed out of the Senate Ways & Means committee on February 4th. On February 10^th the Senate unanimously passed the bill. The bill has been delivered to the Governor for signature.

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. On February 19^th, the Senate Environment, Energy & Technology committee held a work session on the Proposed Substitute bill. A presentation by staff on the proposed substitute can be found here and the proposed substitute here. It is scheduled for executive session in the Senate Environment, Energy & Technology Committee on February 25^th.

Greenhouse gas emissions

Rep. Fitzgibbon introduced 2SHB 1091 on behalf of the Governor, which directs the Department of Ecology to establish a Clean Fuels program to limit the aggregate, overall greenhouse gas emissions per unit of transportation fuel energy. HB 1091 was amended in the House Environment & Energy committee and referred to the House Appropriations committee where it was further amended. A summary of the changes made in the House Appropriations committee can be found here. HB 1091 was referred to the House Transportation, heard on February 16^th, amended and passed by the committee on February 19^th. The amendment requires the Department of Ecology to improve internal processes to expedite the processing of environmental reviews under SEPA and for permit applications for projects related to the production of low- carbon transportation fuels. It will now be referred to House Rules for further consideration.

Housing

Condominium construction

Sen. Padden introduced ESSB 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 bill passed the Senate on January 27^th with a 37-12 vote count. The bill has been referred to the House Civil Rights & Judiciary committee for further consideration.

Housing benefit districts

Rep Ryu introduced SHB 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. The bill was amended and passed on January 29^th by the House Local Government committee. 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 SHB 1157/SSB 5390 to increase housing supply. SHB 1157 was amended by the House Local Government committee to authorize counties and cities to establish a real estate excise tax density incentive zone within urban growth areas and provides for the distribution of real estate excise tax revenue with such incentive zones. The bill was referred to the House Finance committee, heard on February 18^th, and scheduled for executive session on February 19^th but no action was taken. SSB 5390 was amended by the Senate Housing & Local Government committee and it amends the elements of a comprehensive plan to ensure consideration of multifamily housing units and housing targets. It also creates a real estate excise tax density incentive zones within urban growth areas in buildable land areas. The bill has been referred to the Senate Ways & Means committee and has not been scheduled for a hearing at this time.

Housing unit inventory

Sen Liias introduced SSB 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 amended bill as passed by the Senate Housing & Local Government committee 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 placed on 2^nd Reading by the Senate Rules for further consideration.

Increased residential building capacity

Sen Das introduced SB 5269, which requires all GMA planning jurisdictions to allow for multifamily housing units in areas zoned 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, amended and passed on February 10^th out of the Senate Housing & Local Government committee. A summary of the changes to the bill can be found here. It has been referred to Senate Ways & Means and has not been scheduled for a hearing at this time.

Just cause evictions

Rep Macri introduced SHB 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. The bill has been referred to the House Rules committee for further consideration.

Landlord-tenant relations

Sen Kuderer introduced SSB 5160, and it was amended by the Senate Housing & Local Government committee to prohibit 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. Additionally, it requires landlords to first offer tenants a repayment plan schedule equal to or greater than payment of the rent debt in monthly payments of at least one-sixth of the rent debt owed. The bill was heard on February 16^th, amended and passed by the Senate Ways & Means committee on February 19^th. A summary of the changes to the bill can be found here. It will now be referred to Senate Rules 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 scheduled for executive session on February 15^th, but no action was taken and is considered dead.

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 did not move out of committee before policy cutoff on February 15^th and is considered dead.

Local Government option for funding essential housing programs

Sen. Lovelett introduced SSB 5012, and was amended in the Senate Housing & Local Government to allow 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 has been referred to the Senate Ways & Means committee for further consideration.

Rep Ryu introduced SHB 1070, and was amended by the House Finance committee to expand the allowable portions of revenues from the 1/10 of 1% sales tax funding option for affordable housing to include acquiring affordable housing, facilities providing housing-related services, behavioral health-related facilities, or land for these purposes. It also clarifies that affordable housing includes emergency, transitional, and supportive housing. Additionally, it requires a county that seeks to acquire a facility using funds from the local sales and use tax to consult with the city in which the facility is located prior to acquisition and to ensure that at least 15% of the services provided in an acquired facility are provided for residents of that city. The bill has been referred to the House Rules committee for further consideration.

Rep Kloba has introduced HB 1035, which allows cities and counties to establish an affordable housing incentive program (AHIP) to preserve affordable housing within the city or within the unincorporated areas of the county. An AHIP may grant property tax exemptions to single-family, multifamily dwellings and manufactured or mobile homes lots for a period of 6 years with one 6-year renewal. The bill was heard on February 8^th in the House Finance committee and scheduled for executive session, but no action was taken.

Multifamily tax exemption

Sen Das sponsored SB 5287 and was amended by the Senate Housing & Local Government committee to authorize a 12-year extension of existing 8-year and 12-year Multifamily Property Tax Exemptions (MFTEs) that are set to expire if they meet certain affordability requirements. It establishes a new 20-year property tax exemption for the creation of permanently affordable homes. Additionally, it temporarily expands the 12-year MFTE and the 20-year exemption for permanently affordable homes to all cities until December 31, 2024 if they meet certain density requirements. The bill was heard on February 19^th and is scheduled for executive session on February 22^nd in the Senate Ways & Means committee.

Prohibiting discrimination against prospective tenants for unpaid rent or eviction

Rep Morgan introduced HB 1441, which prohibits a landlord from discriminating against a prospective tenant based on unpaid rent or eviction that resulted from unpaid rent that accrued during an eviction moratorium. The bill was heard on February 9^th and passed by the House Housing, Human Services & Veterans committee on February 11^th. It has been referred to the House Rules committee for further consideration.

Reporting from the eviction resolution pilot program

Sen Kuderer sponsored SSB 5260 and it requires participating superior courts and dispute resolution centers in the eviction resolution pilot (ERP) program to report data on an annual basis to the Administrative Office of the Courts (AOC) and to report that data annually to the Legislature. The bill was heard on January 21^st, amended and passed on February 3^rd out of the Senate House & Local Government committee. The amended bill modifies reporting dates for both superior courts and the AOC under the ERP to align within the next fiscal biennium. It has been referred to Senate Rules for further consideration.

Revenue source for eviction prevention

Rep Ormsby and Sen Robinson introduced SHB 1277/SB 5279, which creates an additional $100 surcharge on recorded documents to fund an eviction prevention rental assistance program, landlord mitigation program, and for the operations, maintenance, and service costs for permanent supportive housing. A summary of the changes made to HB 1277 by the House Housing, Human Services & Veterans committee can be found here. It has been referred to House Appropriations for further consideration. The bill is considered necessary to implement the budget (NTIB) so is not subject to the cutoff calendar. 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 Senate passed the bill with a 44-3 vote count on February 16^th and has been referred to the House Environment & Energy committee for further consideration.

Land Use

Climate response through updates to the comprehensive plans

Rep Duerr sponsored SHB 1099 and was amended by the House Environment & Energy committee to add a goal of climate change mitigation to the listed goals of the Growth Management Act. It adds climate change and resiliency element to the list of elements that certain counties and cities must adopt under the GMA. Additionally, the Department of Commerce in consultation with other state agencies to publish guidelines that specify a set of actions counties and cities have available to them to take related to greenhouse gas emissions reductions and vehicle miles traveled reductions. The bill was heard on February 16^th in the House Appropriations committee. It is scheduled for executive session on February 22^nd.

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. The bill did not move out of committee before policy cutoff on February 15^th and is considered dead.

Emergency shelters and housing through local planning and development regulations

Rep Peterson sponsored SHB 1220 and was amended by the House Local Government committee. The bill 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 was heard on February 17^th, amended and passed by the House Appropriations committee on February 18^th. The amended bill states cities are not precluded from implementing provisions to mitigate neighborhood or community impacts of specific facility types and specifies that emergency shelters are indoor emergency shelters. It will now be referred to House Rules for further consideration.

Planning under the GMA

Rep Duerr sponsored SHB 1241 and was amended by the House Local Government committee to increase the review and revision cycle for comprehensive plans and Shoreline Master Plan from 8 to 10 years. It requires cities and counties with a population of 7,500 or more, that have not experienced a specified recent population decline, 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 has been referred to the House Rules committee for further consideration.

Salmon recovery through revisions to the comprehensive plans

Rep Lekanoff introduced SHB 1117, and was amended by the House Environment & Energy committee to add 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. Additionally, capital facilities element and transportation element of comprehensive plan must include a schedule for the elimination of all identified fish passage barriers. The Department of Fish and Wildlife must also adopt rules to establish criteria for net ecological gain and consistency with applicable regional salmon recovery plans. The bill was heard on February 16^th in the House Appropriations committee and is scheduled for executive session on February 22^nd.

Revenue

Capital gains

Sen. Robinson introduced SSB 5096 was amended by the Senate Ways & Means committee to apply a 7% tax to profits from the sale of stocks and bonds, personal property and the sale of a business but only if those profits are in excess of $250,000 for both individuals and those who file jointly. Exemptions have been broadened to include the sale of a house, a family-owned small business, commercial real estate, retirement accounts, or agricultural and timber land. Any profits from stocks and bonds under $250,000 are also excluded, and the exemption for the sale of a family-owned small business was expanded to exempt the sale of any family-owned small business that grosses less than $6 million per year. The first $350 million of revenues received each year are deposited into the state Education Legacy Trust Account. The remainder is deposited into a new Taxpayer Relief Account. The capital gains tax would not take effect until the second year of the next biennium. The bill has been referred to the Senate Rules committee for further consideration.

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 was heard on February 11^th in the House Finance committee.

Covered Lives

Sen. Robinson introduced SB 5149, which would impose a tax on health insurance plans in Washington. 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, amended and passed by the Senate Health & Long-Term Care committee on February 12^th. A summary of the changes to the amended bill can be found here. Among the changes made, the amendment set a maximum per member per month rate and total assessment to be collected for each fiscal year starting at $1.54 in fiscal year 2022 and increasing each year to $3.07 for fiscal year 2026 and beyond. It also removes limited health care services plans from the definition of covered lives. The bill has been referred to the Senate Ways & Means committee for further consideration.

Estate Tax

Rep Orwall sponsored HB 1465 and it changes the Washington estate tax, including increasing the exclusion amount, changing deductions, and making changes to the rates and rate structure. It creates the Equity in Housing Account to be funded by 10% of the estate tax revenues and can only be used to address homelessness, including foreclosure prevention, rental assistance, outreach engagement services, housing services, and behavioral health. The bill was heard on February 9^th in the House Finance committee.

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. It is scheduled for a public hearing on February 22^nd in the Senate Ways & Means committee.

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

Electrification of transportation

Rep Macri and Sen Liias introduced HB 1204/SB 5256, which requires the Washington State Transportation Commission to adopt regulations on or before January 1, 2025, mandating that all model year 2030 or later passenger and light-duty vehicles registered in Washington be electric vehicles. It also prohibits the Department of Licensing from registering vehicles that are not in compliance with these regulations for model year 2030 or later passenger and light-duty vehicles. HB 1204 was heard on February 1^st in the House Transportation committee. SB 5256 has not yet been scheduled for a hearing.

Fare enforcement

Rep Fitzgibbon introduced HB 1301, which allows Sound Transit to establish an alternative fare enforcement system. It allows for the issuance of a notice of violation in addition to or as a replacement for the current civil infraction system. The bill was heard on February 8^th, amended and passed by the House Transportation committee on February 19^th. A summary of the changes made to the bill can be found here.

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 and is scheduled for executive session on February 22^nd.

Payment plans for certain vehicle fees and taxes

Sen Nobles introduced SB 5448, which creates an optional payment plan to allow vehicle owners to make quarterly payments on their vehicle registration fees. The bill has been scheduled for a public hearing on February 18^th in the Senate Transportation committee.

Transportation Revenue

Sen King unveiled an 8-year $10.1 billion revenue proposal on February 19^th. It includes a $0.03 cent gas tax increase, increase in vehicle weight fees, transit and light rail surcharge, 2% increase in the bicycle sales and use tax, and shifting the motor vehicle sales and use tax from the operating budget to the transportation budget. His proposal predominately funds highway maintenance and preservation, culverts, and major highway projects such as the US 2 Trestle, Hood River Bridge, and I-5 Columbia River Bridge. Details about Sen King’s proposal can be found here.

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