Bellevue Chamber End of Session Report

2021 Session Summary

A little after 6:00pm on April 26th, the legislature adjourned the 2021 legislative session sine die. The 2021 Washington State legislative session was a long session, which means it lasted for 105 days and included the business of writing the full 2021-23 biennial operating, transportation, and capital budgets. The session adjourned on time. It is notable that prior to this year, no Washington State Legislature has ended on time four years in a row without a special session since 1941.

Given the ongoing COVID-19 pandemic, the 2021 session was convened mostly through virtual means. Committee hearings, floor debate and vote, caucus meetings, and stakeholder and constituent meetings with legislators all took place through virtual platforms. A few members of leadership in each chamber and key staff were in-person during floor action to conduct and coordinate business, but the numbers were few and all while being masked.

While there were questions early on about the functionality of a virtual session, the kinks were worked out and legislative business successfully carried on. There were even some benefits of virtual session with people from throughout the state being able to engage in the legislative process in a way that isn’t normally possible for many people. People from all corners of the state were able to participate, non-English speakers were able to testify with translators on screen with them, and in her final floor speech Senator Rolfes even shared that someone had testified from prison – something that hasn’t been seen before. She also noted that they saved 747 reams of paper by not printing the budget, which translates to 73 trees.

Of the approximate 1,130 bills introduced, 334 passed during the 2021 session. Some of the main issue areas of focus this session included COVID-19 response and recovery; police reform; early learning; public health; behavioral health, including response to the State v. Blake Washington Supreme Court ruling; housing and homelessness; and climate action.

These bills now go on to the Governor for consideration. Bill signing schedules and the list of bills that have been signed can be found here. As a reminder, any bill that hit the Governor’s desk within the last five days of session has 20 days (not counting Sundays) for him to take action. To date, the Governor has signed 146 bills into law and one of those bills has had a partial veto.

The legislature also successfully passed the full 2021-23 operating, transportation, and capital budgets, as well as new revenue through a capital gains tax (SB 5096).

Budgets

Operating Budget

The final 2021-23 operating budget appropriates $59.2 billion NGF-O and $122.6 billion in Total Budgeted funds. NGF-O policy level changes are a net increase of $3.2 billion. In Total Budgeted funds, policy level increases are a net $18.5 billion. The budget includes a $1.8 billion transfer from the Budget Stabilization Account to the state general fund.

In addition to the $961 million in new spending, the Legislature, through HB 2965, spends $200 million from the Budget Stabilization Account (Rainy Day Fund) for emergency response efforts related to the coronavirus (COVID-19) outbreak.

There were many significant investments provided in the final operating budget. Some of notable issue areas funded include:

  • $800 million in state funds for expenditure into the Teachers Retirement System Plan 1 fund to reduce the unfunded actuarial accrued liability of the fund
  • $664 million in state and federal funds to increase rates for certain Medicaid providers
  • $602 million in state and federal funds to restore health care related savings
  • $517 million in state and federal funds to increase behavioral health services, including provider rate increases, community supports, and crisis teams
  • $454 million in state and federal funds for personal care, family support and other services for low-income individuals living in community settings
  • $309 million in state and federal funds for learning recovery, educational technology, and stabilization funding for public schools
  • $298 million in state and federal funds to fund the Fair Start Act, which includes a variety of early learning and childcare initiatives
  • $292 million in state funds for housing, rental, and related services
  • $261 million in state funds to implement the working families tax credit
  • $147 million in state funds for the Foundational Public Health initiative
  • $125 million in state funds for wildfire preparedness, prevention, and protection activity

The large influx of federal dollars through COVID-19 relief packages included the following appropriations:

  • $1.7 billion for school reopening, addressing learning loss, and other allowable costs under Elementary and Secondary School Emergency Relief 2
  • $1.1 billion for the vaccine deployment, recruitment of public health workers, contact tracing and testing
  • $658 million to extend the state’s rental assistance program
  • $528 million for childcare grants and provider rates
  • $500 million in state funds for Unemployment Insurance benefit relief
  • $340 million for grants to adults who have been impacted by COVID-19 but are unable to access other benefits due to their citizenship status
  • $187 million to help prevent foreclosure for individuals under 100 percent area median income
  • $170 million for family leave during the period of the pandemic

The budget accounts for the following major revenue changes

  • $1.0 billion is transferred into the Washington Rescue Plan Transition Account to respond to the impacts of the COVID-19 pandemic including those related to education, human services, health care and the economy
  • $415 million gain from imposing a 7 percent tax on Washington capital gains realized from the sale of long-term assets
  • $34 million gain from creating a framework for registering eligible captive insurers and imposing a premium tax on the risk covered by premiums allocable to Washington
  • $12 million loss for mitigation payments for the support of manufacturing and job centers

The final budget, under the provisions of the four-year budget outlook (Chapter 8, Laws of 2012), is projected to end the 2023-25 biennium with $98 million in NGF-O ending fund balance and $1.1 billion in the Budget Stabilization Account.

Operating Budget Documents:

Capital Budget

The 2021-23 Capital budget appropriates a total of $6.3 billion for the 2021-23 fiscal biennium. Of this amount, $3.9 billion is financed with general obligation bonds. The remaining $2.4 billion consists of $589 million in federal stimulus funds, $275 million in Model Toxic Control Accounts, $255 million in alternative financing authorizations, and $1.2 billion in other funds. Approximately $82 million in bond capacity is reserved for a supplemental capital budget. Rep. Steve Tharinger, chair of the House Capital Budget Committee, stated that while the budget is notable for the historic amount of construction spending, the approach lawmakers took this year is also quite different, with a focus on helping areas of the state to do the technical work to apply for grants and funding they qualify to receive.

Capital Budget Documents:

Transportation Budget

The 2021-23 Transportation budget provides $11.8 billion in appropriation authority, including approximately $1 billion from the American Rescue Plan to help fill funding gaps. Of that one-time federal money, $600 million will be used to backfill pandemic-related revenue losses, while about $400 million is slated for water infrastructure investments to remove fish barriers and increase water flow. In addition to those federal funds, $142.9 million from the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA), the federal COVID-19 relief package passed in December, will also go toward fish culvert removal. And $124 million in CRRSA funds will go toward addressing the shortfall in funding for Puget Sound ferry operations.

In their statement about the passage of the budget, the House Democrats stated that this budget will continue to fund major work that was under threat last year because of financial pressures from the COVID pandemic and an initiative that caused Gov. Jay Inslee to put construction projects on hold to save money. Sen. Steve Hobbs, Chair of the Senate Transportation Committee, stated “One-time federal money will keep us afloat for a bit, but to really address the multitude of needs that exist in communities throughout Washington, a transportation revenue package must be passed.” During the sine die media availability Speaker Jinkins shared Democratic leaders in the House and Senate were already planning to meet in the next couple weeks to discuss the transportation revenue and investments package.

Transportation Budget Documents:

Priority Areas

Business Impacts

Paid Family Medical Leave

E2SHB 1073 – Expanding coverage of the paid family and medical leave program.

Prime Sponsor: Rep. Berry

Status: Passed Legislature; Signed by Governor

Summary of Original Bill: Expands coverage of the Paid Family and Medical Leave (PFML) program. Expands applicability of the PFML job protection provisions. Requires maintenance of health benefits for employees covered by PFML job protection provisions.

Summary Latest Version of Bill: Provides a pandemic leave assistance employee grant to certain employees who are unable to access their state paid family and medical leave benefits due to the COVID-19 pandemic. Outlines employee eligibility for the new grant based on alternate hours worked thresholds. Provides a pandemic leave assistance employer grant to employers with fewer than 150 employees, who have an employee taking leave and receiving a grant under the act. Stipulates that employers and employees receiving pandemic leave assistance grants are subject to the provisions of the Paid Family and Medical Leave Program.

Budget Impact:

  • Office of the Attorney General
    Paid Family Medical Leave: $121,000 total
    Funding is provided for additional legal services for ESD pursuant to Engrossed Second Substitute House Bill 1073 (paid leave coverage) . (Legal Services Revolving Account-State) (One-Time)
  • Employment Security Department
    Paid Leave Coverage: $168.745 mil total
    Federal funding is provided for the implementation of Engrossed Substitute House Bill 1073 (paid leave coverage), which creates a new pandemic leave grant program to provide assistance to individuals who are ineligible for Paid Family Medical Leave due to not meeting the hours worked threshold during the pandemic related shutdown. (Coronavirus State Fiscal Recovery Fund-Federal) (One-Time)

Climate Change and the Environment

Climate Commitment Act

2SSB 5126 – Concerning the Washington climate commitment act.

Prime Sponsor: Sen. Carlyle, Governor Request

Status: Passed Legislature

Summary of Original Bill: Requires the Governor to establish a comprehensive program to implement the state’s climate commitment and convene a Climate Commitment Task Force. Establishes a cap and invest program for greenhouse gas (GHG) emissions to be implemented by the Department of Ecology (Ecology). Directs distribution of auction revenues for specified purposes including clean transportation, natural climate resiliency, clean energy transition and assistance, and energy efficiency projects. Convenes an Environmental Justice and Equity Advisory Panel to provide recommendations on the development and implementation of the cap and invest program. Authorizes Ecology to require persons who produce or distribute fossil fuels or other products that emit GHG in Washington, to comply with air quality standards, emission standards, or GHG emission limitations. Provides a definition of emission, emission standard, and emission limitation as applied to GHG emissions that includes indirect emissions from the production or distribution of petroleum products or natural gas.

Summary Latest Version of Bill: Establishes a cap and invest program for greenhouse gas emissions to be implemented by the Department of Ecology. The cap and invest program will not take effect until January 2023 and if a new transportation spending has been approved. If a transportation spending plan has been approved, a new 5 cent gas tax would be implemented. The bill requires polluters to decrease emission steadily or buy allowances for pollution and proceeds from the program can be spent on energy conservation, transportation and assistance for a transition to clean energy. It also requires air quality to be monitored in communities suffering disproportionately from health and environmental impacts from pollution.

Budget Impacts:

  • Department of Commerce
    Climate Commitment Act: $400,000 NGF-O
    Funding is provided for the implementation of Engrossed Second Substitute Senate Bill 5126 (climate commitment act). (General Fund-State)
  • Office of the Governor
    Climate Commitment Act: $350,000 NGF-O
    Funding is provided to implement the provisions of Engrossed Second Substitute Senate Bill 5126 (climate commitment act). (General Fund-State)
  • Department of Ecology
    Climate Commitment Act: $18 million NGF-O; $5.1 million other
    One-time General Fund-State and ongoing Climate Investment Account funds are provided for Engrossed Second Substitute Senate Bill 5126 (Climate commitment act), which establishes a new program for regulating greenhouse gas emissions in Washington. The Department of Ecology's (Ecology) costs include rulemaking, setting up and overseeing auctions for allowances, environmental justice assessments, and other responsibilities. (General Fund-State; Climate Investment Account-State)

Greenhouse gas emissions

E3SHB 1091 – Reducing greenhouse gas emissions by reducing the carbon intensity of transportation fuel.

Prime Sponsor: Rep. Fitzgibbon, by Governor Request

Status: Passed Legislature

Summary of Original Bill: Directs the Department of Ecology (Ecology) to adopt rules establishing a Clean Fuels Program (CFP) to limit the greenhouse gas (GHG) emissions per unit of transportation fuel energy to 10 percent below 2017 levels by 2028 and 20 percent below 2017 levels by 2035. Directs Ecology to update, prior to 2032, CFP rules to further reduce GHG emissions from each unit of transportation fuel for each year through 2050, consistent with statutory state emission reduction limits. Excludes exported fuel, electricity, fuel used by vessels, railroad locomotives, and aircraft, and certain other categories of transportation fuel from the CFP's GHG emission intensity reduction requirements. Requires the CFP to include processes for the registering, reporting, and tracking of compliance obligations and to establish bankable, tradeable credits used to satisfy compliance obligations. Requires annual reporting by Ecology on the CFP, as well as an analysis of the program's first five years by the Joint Legislative Audit and Review Committee. Retains the current distribution of revenue under the 2015 Transportation Revenue Package, eliminating changes that would have been triggered as a result of the establishment of a CFP.

Summary Latest Version of Bill: Directs the Department of Ecology (Ecology) to adopt rules establishing a Clean Fuels Program (CFP) to limit the aggregate, overall greenhouse gas (GHG) emissions per unit of transportation fuel energy to 20 percent below 2017 levels by 2038. Ecology must set a price cap for credits in a Credit Clearance Market (CCM) that may not exceed $200 in 2018 dollars for 2023. For 2024 and subsequent years, the price cap may exceed $200 in 2018 dollars, but not beyond CPI inflation for urban consumers. The Department of Commerce must develop periodic fuel supply forecast to project the availability of fuels and credits necessary for compliance with CFP requirements and must consider the vehicle fleet in WA, constraints on accessing low carbon fuels, credits that may be banked, carried over, and held by credit aggregators. The forecast must be finalized no later than 90 days before the start of CFP compliance period. Ecology is also allowed to issue an emergency deferral of the CFP in extreme and unusual circumstances which prevent the distribution of an adequate supply of renewable fuels needed to comply with the program. JLARC is required to perform an analysis of the first five years of the CFP program by December 1, 2029. Requires the passage of a separate additive transportation funding act before Ecology may assign compliance obligations or allow for actual credit generation, in which the state fuel tax is increased by at least an additional 5 cents.

Budget Impacts:

  • Department of Ecology
    Clean Transportation Fuel Standards: $3.1 million NGF-O; $382,000 other
    A combination of one-time and ongoing funding and staff are provided to implement the clean fuels program in Engrossed Third Substitute House Bill 1091 (Transportation fuel/carbon). This work includes rulemaking, compliance tracking and monitoring with a low-carbon fuel standard, and development of a registration system for affected fuel producers and importers. (General Fund-State; Clean Fuels Program Account-State)

Housing

Condominium construction

ESSB 5024 – Reducing barriers to condominium construction.

Prime Sponsor: Sen. Padden

Status: Passed Legislature

Summary of Original Bill: Exempts condominiums with ten 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. Allows deposit funds for the purchase of a unit in a common interest community to be used for construction costs if the declarant maintains a surety bond in favor of the purchaser in the amount of the deposit.

Summary Latest Version of Bill: Specifies that a qualified building enclosure inspector under the Washington Condominium Act must be the architect or engineer of record or another person with substantial training and experience. Allows deposit funds for the purchase of a unit in a common interest community under the Washington Uniform Common Interest Ownership Act (WUCIOA) to be withdrawn from escrow and used for construction costs if a surety bond is maintained in favor of the purchaser in the amount of the deposit to be withdrawn. Relieves the party holding escrow funds from the obligation to monitor the expenditure of funds and liability to any purchaser for the release of funds for construction. Limits earnest money deposits under the WUCIOA to no more than 5 percent of the purchase price.

Just cause evictions

ESHB 1236 – Protecting residential tenants from the beginning to end of their tenancies by penalizing the inclusion of unlawful lease provisions and limiting the reasons for eviction, refusal to continue, and termination.

Prime Sponsor: Rep. Macri

Status: Passed Legislature

Summary of Original Bill: 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.

Summary Latest Version of Bill: Specifies exclusive causes for eviction, refusal to renew, and ending a tenancy under the Residential Landlord-Tenant Act and makes other changes to rights and remedies. The bill was amended several times throughout session. For a comprehensive summary of the bill as passed by the legislature, see the final bill report here.

Landlord-tenant relations

E2SSB 5160 – Addressing landlord-tenant relations by providing certain tenant protections during the public health emergency, providing for legal representation in eviction cases, establishing an eviction resolution pilot program for nonpayment of rent cases, and authorizing landlord access to certain rental assistance programs.

Prime Sponsor: Sen. Kuderer

Status: Passed by Legislature; Signed/Partial Veto by Governor

Summary of Original Bill: 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 two years after expiration of any public health emergency, with exceptions. Authorizes tenants adversely impacted by COVID-19 to terminate their tenancy upon a 20-day written notice. Prohibits landlords from charging or imposing late fees or other charges for nonpayment of rent during any public health emergency. Requires landlords, before any collection action for unpaid rent accrued during the Governor's eviction moratorium, or during any public health emergency, to first offer tenants a repayment plan based on the individual, financial, health, or other circumstances of the tenant. Requires the court to appoint counsel for indigent tenants at the initial hearing and at trial and for the state to pay the costs of such legal services subject to amounts appropriated.

Summary Latest Version of Bill: Requires landlords to offer tenants a reasonable schedule for repayment of any unpaid rent accrued during the public health emergency that does not exceed monthly payments equal to one- third of the monthly rental charges during the period of accrued debt. Expands eligibility for claim reimbursement under the landlord mitigation program to include unpaid rent accrued during the eviction moratorium and public health emergency periods and the tenant vacated or abandoned the tenancy and any remaining unpaid rent after the tenant defaults on a repayment plan. Requires the court to appoint counsel for indigent tenants at the initial hearing and at trial subject to amounts appropriated. Requires the Administrative Office of the Courts to contract with dispute resolution centers to establish a two-year, statewide eviction resolution pilot program to facilitate the resolution of nonpayment of rent cases. Requires the Department of Commerce to authorize landlords an opportunity to apply to certain state rental assistance programs, if feasible, while establishing necessary application and eligibility and conditions on receipt of funds. Eliminates the optional notice for landlords to use in nonpayment of rent cases that instructs tenants to pay into the court registry the rent allegedly owed or file a statement denying rent is owed.

Summary Governor Partial Veto: The Governor vetoed sections 17 and 13 of the bill with the following message: “While Section 12 attempts to provide direct financial relief to landlords as part of a larger legislative solution in E2SSB 5160, it creates an entitlement for landlords to receive rent assistance without a sufficient framework to prioritize resources to those landlords who have the greatest need. The estimated cost of Section 12 is $2.4 billion, which is $1.5 billion more than is currently appropriated by the state or awarded by the federal government. RCW 43.88.055 requires the Legislature to enact an operating budget that leaves a positive ending fund balance at the end of the fiscal biennium. Although the final budget will likely have a different ending fund balance than is reflected today, $1.5 billion in additional costs could not be sustained by available fiscal resources. In order to ensure that the Legislature meets its statutory obligation to leave a positive ending fund balance at the end of the 2021-23 biennium, I am vetoing Section 12 of this bill at the request of legislative leadership. In addition, Section 13 is largely duplicative of an early action bill that I have already signed, ESHB 1368, which provides $2 million in grant opportunities for eligible landlords. Because of this, Section 13 creates administrative problems for the department of commerce and may also cause confusion for landlords. As a result, again at the request of legislative leadership, I am also vetoing Section 13.

Budget Impact:

  • Office of Civil Legal Aid
    Landlord-Tenant Relations: $22.25 mil GFS
    Funding is provided for the implementation of Engrossed Second Substitute Senate Bill 5160 (landlord-tenant relations), which creates a right to counsel for indigent tenants. (General Fund-State) (Custom)
  • Department of Commerce
    Landlord Assistance Grants: $7.5 mil total
    Funding is provided for landlord assistance grants pursuant to Engrossed Second Substitute Senate Bill 5160 (landlord-tenant relations). (Coronavirus State Fiscal Recovery Fund-Federal) (One-Time)
  • Administrative Office of the Courts
    Landlord Tenant Relations: $9 million NGF-O
    Funding is provided for the implementation of Engrossed Second Substitute Senate Bill 5160 (landlord tenant relations), which creates an eviction resolution pilot program. (General Fund-State)

Multifamily tax exemption

E2SSB 5287 – Concerning affordable housing incentives.

Prime Sponsor: Sen. Das

Status: Passed Legislature

Summary of Original Bill: Expands the Multi-Family Property Tax Exemption (MFTE) to all cities and urban growth areas within any county with a population of at least 2 million. Adds affordability requirements and modifies the income requirements for the eight- year MFTE. Increases the affordability requirements and modifies the income requirements for the 12- year MFTE. Authorizes a 12- year extension of existing MFTEs that are set to expire. Establishes a new 20-year property tax exemption for the creation of permanently affordable homes.

Summary Latest Version of Bill: Authorizes a 12-year extension of existing eight-year and 12-year Multi-Family Property Tax Exemptions (MFTEs) that are set to expire if they meet certain affordability requirements.

Establishes a new 20-year property tax exemption for properties in certain cities that commit to renting at least 20 percent of units as affordable to low-income households for at least 99 years, if certain transit requirements are met. Establishes a new 20-year property tax exemption for the creation of permanently affordable homes. Authorizes any city not otherwise eligible for the MFTE program to offer the 12-year exemption until December 31, 2026. Authorizes any city not otherwise eligible for the MFTE program to offer the 20-year exemption for permanently affordable homes until December 31, 2031. Makes several administrative modifications to the MFTE program, including changes to reporting requirements.

Budget Impact:

  • Department of Commerce
    Affordable Housing Incentives: $224,000 NGF-O
    Funding is provided for the implementation of Engrossed Second Substitute Senate Bill 5287 (affordable housing incentives). (General Fund-State)

Revenue source for eviction prevention

E2SHB 1277 – Providing for an additional revenue source for eviction prevention and housing stability services.

Prime Sponsor: Rep. Ormsby, Sen. Robinson

Status: Passed Legislature

Summary of Original Bill: Establishes a $100 surcharge on recorded documents to fund various housing services. Creates the Eviction Prevention Rental Assistance Program in the Department of Commerce.

Summary Latest Version of Bill: Establishes an additional $100 surcharge on recorded documents to fund various housing services. 20 percent of the funds must be used for operations, maintenance, and service costs for permanent supportive housing; from July 1,2021 through June 30m 2023, 4 percent of funds must be deposited into the landlord mitigation program; after June 30,2023, 2 percent of funds must be deposited into the landlord mitigation program; and, the remainder of the funds must be distributed to the Home Security Fund Account, with at least 60 percent fund to be used for project based vouchers for nonprofit housing providers, rapid rehousing, and acquisition. In addition, funds may be used for project-based vouchers for nonprofit housing providers, foreclosure prevention services, rental assistance for people experiencing homelessness, and tenant education and legal assistance. After 2 years, 15 percent of funds specified for project-based vouchers for nonprofit housing are subject to performance-based metrics which are created by the Department of Commerce. Counties who fail to meet or exceed the majority of targets for 2 consecutive years must enter into a corrective action plan and may be subject to fund reductions. Creates the Eviction Prevention Rental Assistance Program in the Department of Commerce to prevent evictions by providing resources to household most likely to become homeless or to suffer severe health consequences, or both, after an eviction. Directs the Department of Commerce to contract with the William D. Ruckelshaus center to examine trends affecting, and policies guiding, the housing and services provided to individuals and families who are or at risk of homelessness in Washington and develop a report on a strategy to improve services and outcomes for persons at risk or experiencing homelessness and develop pathways to permanent housing solutions.

Budget Impact:

  • Department of Commerce
    Eviction Prevention Rental Asst.: $88.768 mil total
    Funding is provided for the Eviction Prevention Rental Assistance Program created in Engrossed Second Substitute House Bill 1277 (housing/revenue source). If HB 1277 is not enacted by June 30, 2021, this amount lapses and an equal amount of funding is instead provided from the Coronavirus State Fiscal Recovery FundFederal in section 7XX of the operating budget. (Home Security Fund Account-State) (Custom)
  • Housing/Homelessness Assistance: $133.152 mil total
    Funding is provided for housing and homelessness assistance pursuant to Engrossed Second Substitute House Bill 1277 (housing/revenue source). Of this amount, $20 million is provided for hotel and motel vouchers, rapid rehousing, and associated services. If HB 1277 is not enacted by June 30, 2021, this amount lapses and an equal amount of funding is instead provided from the Coronavirus State Fiscal Recovery Fund-Federal in section 7XX of the operating budget. (Home Security Fund Account-State) (Custom)
  • Landlord Mitigation Program: $11.68 mil total
    Funding is provided for the Landlord Mitigation Program pursuant to Engrossed Second Substitute House Bill 1277 (housing/revenue source). If HB 1277 is not enacted by June 30, 2021, this amount lapses and an equal amount of funding is instead provided from the Coronavirus State Fiscal Recovery Fund-Federal in section 7XX of the operating budget. (Landlord Mitigation Program Account-Non-Appr) (Custom)
  • Permanent Supportive Housing O&M: $58.4 mil total
    Funding is provided for operations, maintenance, and service grants for permanent supportive housing pursuant to Engrossed Second Substitute House Bill 1277 (housing/revenue source). If HB 1277 is not enacted by June 30, 2021, this amount lapses and an equal amount of funding is instead provided from the Coronavirus State Fiscal Recovery Fund-Federal and the Washington Rescue Plan Transition Account-State in section 7XX of the operating budget. (Affordable Housing For All-State) (Ongoing)
  • Special Appropriations to the Governor
    Conditional Approp/HB 1277: $292 million other
    In the event that House Bill 1277 is not enacted by June 30, 2021, funding is provided from the Coronavirus State Fiscal Recovery Fund-Federal and Washington Rescue Plan Transition Account-State, replacing an equal amount of funding lapsing in Section 129(76) of the operating budget. This funding is provided for rental assistance; housing vouchers and rapid rehousing; grants for permanent supportive housing operations, maintenance, and services costs; the Landlord Mitigation Program; and other housing and homelessness services. (Coronavirus State Fiscal Recovery Fund-Federal; Washington Rescue Plan Transition Account-State)

Land Use

Emergency shelters and housing through local planning and development regulations

E2SHB 1220 – Supporting emergency shelters and housing through local planning and development regulations.

Prime Sponsor: Rep. Peterson

Status: Passed Legislature

Summary of Original Bill: Updates the housing goals of the Growth Management Act to include planning for and accommodating affordable housing. Requires jurisdictions to address moderate, low, very low, and extremely low-income housing in the housing element of the comprehensive plan. Requires jurisdictions to address racially disparate impacts and displacement in the housing element of the comprehensive plan.

Summary Latest Version of Bill: Updates the housing goals of the Growth Management Act (GMA) to include planning for and accommodating affordable housing. Requires GMA jurisdictions to address moderate, low, very low, and extremely low-income housing. Moderate density housing options, and racially disparate impacts and displacement in the housing element of the comprehensive plan. Requires the Department of Commerce to provide an inventory and analysis of existing and projected housing needs required in the housing element of the comprehensive plan, including emergency housing and shelters and permanent supportive housing. Prohibits cities from preventing transitional housing or permanent supportive housing in zones where residential dwelling units or hotels are allowed, and from preventing indoor emergency shelters and indoor emergency housing in zones where hotels are allowed unless the city has an ordinance authorizing such shelters and housing in a majority of zones within 1 mile of transit. Directs GMA jurisdictions to consider certain policies that encourage the construction of accessory dwelling units to meet affordable housing goals.

Budget Impact:

  • Department of Commerce
    Growth Management/Homeless Housing: $702,000 GFS
    Funding is provided to implement Engrossed Second Substitute House Bill 1220 (emergency shelters & housing), including additional staffing to assist local governments planning under the Growth Management Act. (General Fund-State) (Custom)

Revenue

Capital gains

ESSB 5096 – Concerning an excise tax on gains from the sale or exchange of certain capital assets.

Prime Sponsor: Sen. Robinson, request of Office of Financial Management

Status: Passed Legislature

Summary of Original Bill: Imposes a 9.0 percent 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.

Summary Latest Version of Bill: Imposes a 7.0 percent capital gains tax beginning January 1, 2022 on the sale or exchange of long-term capital assets if those profits are in excess of $250,000 to help meet the state’s paramount duty. It exempts all real estate transferred by deed, retirement assets, assets condemned by the government, livestock, timber, timberlands, commercial fishing privileges, goodwill received from the sale of an auto dealership, and certain depreciable property used in a trade or business. The proceeds from the tax must fund K-12 education, early learning, and child care, and advance the paramount duty to amply provide an education to every child in the state. The annual distribution to the Education Legacy Trust Account is capped at $500 million (annually adjusted) with remaining tax proceeds being deposited into the Common School Construction Account. It also provides a charitable donation deduction of up to $100,000 (annually adjusted) for the tax year for taxpayers donating at least $250,000 (annually adjusted) to qualifies nonprofit organizations that tax year.

Budget Impact:

  • Office of the Attorney General
    Capital Gains Tax: $122,000 non-GFS
    Funding is provided for implementation of Engrossed Substitute Senate Bill 5096 (capital gains tax). (Legal Services Revolving Account-State)
  • Department of Revenue
    Capital Gains Tax Administration: $6.678 mil GFS
    Funding is provided to implement ESSB 5096 (capital gains tax). (General Fund-State) (Custom)

Transportation

Extending the issuance period of driver licenses and identicards

SHB 1207/SB 5270 – Improving access to department of licensing issued documents by extending the issuance period of driver licenses and identicards to eight years, allowing online issuance and renewal of instruction permits, and expanding online renewal of driver licenses and identicards.

Prime Sponsor: Rep. Ramel, by request of Dept. of Licensing

Status: Passed Legislature (1207)

Summary of Original Bill: Extends the renewal cycle for standard and enhanced driver's licenses, standard and enhanced identicards, commercial driver's licenses, and motorcycle endorsements from six years to eight years and adjusts the associated fees to reflect the new terms. Allows online issuance and renewal of non-photo driver's instruction permits. Allows remote photo and signature capture at driver's license and identicard renewal. Allows that driver's licenses and identicard can be renewed online any time, and specifies that photos must be updated at least every 16 years.

Summary Latest Version of Bill: Extends the renewal cycle for standard and enhanced driver's licenses, standard and enhanced identicards, commercial driver's licenses, and motorcycle endorsements from six years to eight years and adjusts the associated fees to reflect the new terms while retaining an option for a six-year renewal term. Allows online issuance and renewal of non-photo driver's instruction permits. Requires remote photo capture at driver's license and identicard online renewal beginning January 2023. Allows driver's licenses and identicards to be renewed online any time through July 2024. Specifies that photos must be updated at least every 16 years for persons over 30; and every eight years for persons under 30. Requires the Department of Licensing to complete a study of the impacts to employment, backlog reduction, access to services, and other topics and report by December 2023.

Budget Impact:

  • Department of Licensing
    Driver Legislation Changes: $523,000
    Funding is provided for the implementation of Substitute House Bill 1207 (DOL Issued Documents), which extends the renewal period of driver licenses and identicards from six to eight years, while retaining a six-year option; allows DOL to capture photos and signatures remotely for driver's licenses and identicards; and makes other changes related to eliminating the need for some in-person renewals. (Highway Safety Account-State) (One-Time)

Fare enforcement

SHB 1301 – Providing expanded options for fare enforcement by regional transit authorities.

Prime Sponsor: Rep. Fitzgibbon

Status: Passed Legislature; Signed by Governor

Summary of Original Bill: Allows a regional transit authority (RTA) to establish an alternative fare enforcement system, which allows for the issuance of a notice of violation. Allows RTAs to establish a system to adjudicate civil infractions.

Summary Latest Version of Bill: Allows a regional transit authority to establish an alternative fare enforcement system, which allows for the issuance of notices of violation, the resolution of notices of violation, and appeals. Limits the fines associated with notices of violation to the same maximum amount allowed for civil infractions. In the substitute bill, the ability of an RTA to establish a system to adjudicate civil infractions is removed. It is specified that an alternative fare enforcement system may include the resolution of notices of violation and appeals. The fines associated with a notice of violation are limited to the same maximum amount allowed for civil infractions.

Budget Impacts:

  • Joint Transportation Committee
    Equity in Transportation Study: $215,000
    Funding is provided for a study on the impacts of current and historical city transportation investments on designated populations, including communities of color, low-income households, vulnerable populations, and displaced communities. A report of the study findings and recommendations is due to the transportation committees of the Legislature by December 20, 2022. (Motor Vehicle Account-State) (One-Time)
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