Legislative Update: Week 14

Priority Areas

Business Impacts

Paid Family Medical Leave

Rep. Berry introduced E2SHB 1073, which 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 COVID-19 pandemic. It also 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. Additionally, it stipulates that employers and employees receiving pandemic leave assistance grants are subject to the provisions of the Paid Family and Medical Leave Program. The House concurred on April 13^th with a 56-42 vote count to the changes made by the Senate. The bill will now be sent to the Governor for signature.

Sen Robinson introduced ESSB 5097, which expands the definition of family member in the Paid Family and Medical Leave (PFML) program. It requires the Employment Security Department to collect and analyze data and submit reports to the Legislature with certain information relating to the PFML program and requires the general fund to cover additional leave expenses under certain circumstances. The House passed the bill on April 6^th with a 55-42 vote count. Because the bill was amended by the House it will now go back to the Senate for concurrence, dispute, or conference.

Climate Change and the Environment

Climate Commitment Act

Sen Carlyle sponsored E2SSB 5126 on behalf of the Governor and it establishes a program for capping emissions for certain covered entities and investing emission allowance auction proceeds in certain programs, projects, and activities beginning January 1, 2023. The bill was heard on April 14^th, amended and passed by the House Environment & Energy committee on April 16^th. A summary of the changes made to the bill can be found here. It is scheduled for a hearing on April 19^th and executive session on April 20^th in the House Appropriations committee.

Greenhouse gas emissions

Rep. Fitzgibbon introduced E3SHB 1091 on behalf of the Governor, and directs the Department of Ecology to establish a Clean Fuels program (CFP) to limit the aggregate, overall greenhouse gas (GHG) emissions per unit of transportation fuel energy to 20% below 2017 levels by 2035. It excludes exported fuel, fuel used by vessels, railroad locomotives, and aircraft, and certain other categories of transportation fuel from the CFP’s GHG emission intensity reduction requirements. The bill also requires the passage of separate transportation funding act generating more than $500 million per biennium in revenue before Ecology may assign compliance obligations or allow for actual credit generation in order to coordinate and synchronize the CFP with other transportation related investments. Because the bill was amended by the Senate it will now go back to the House for concurrence, dispute, or conference.

Housing

Condominium construction

Sen. Padden introduced ESSB 5024, which specifies that a qualified building enclosure inspector under the WA Condominium Act must be the architect or engineer of record or another person with substantial training and experience. It allows deposit funds for the purchase of a unit 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. The bill passed the House with a 97-0 vote count on April 8^th and the Senate concurred to the amendments on April 15^th with a unanimous vote count. It will now be sent to the Governor for signature.

Just cause evictions

Rep Macri introduced ESHB 1236, which specifies exclusive causes for eviction, refusal to renew a tenancy, and ending a tenancy under the Residential Landlord-Tenant Act (RLTA) and clarifies penalties for inclusion of unlawful provisions in rental agreements. The House concurred on April 13^th with a 54-44 vote count to the changes made in the Senate. It will now head to the Governor for his signature.

Landlord-tenant relations

Sen Kuderer introduced E2SSB 5160, and it 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 1/3 of the monthly rental charges during the period of accrued debt. The bill 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. Additionally, the bill requires the Department of Commerce to authorize landlords an opportunity to apply to certain state rental assistance programs. The House passed the bill on April 8^th with a 72-26 vote count and because the bill was amended by the House it will now go back to the Senate for concurrence, dispute, or conference.

Multifamily tax exemption

Sen Das sponsored E2SSB 5287 and 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 definition of a city not otherwise eligible for the 12-year MFTE and the 20-year exemption for permanently affordable homes to include all cities until December 31, 2031. The Senate concurred on April 14^th with a 41-7 vote count to the changes made by the House. It will now be sent to the Governor for signature.

Revenue source for eviction prevention

Rep Ormsby introduced E2SHB 1277, 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. It creates the eviction prevention rental assistance program in the Department of Commerce. Additionally, it directs the Department of Commerce to contract with the 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 person at risk or experiencing homelessness and develop pathways to permanent housing solutions. The bill was heard on April 5^th, amended and passed by the Senate Ways & Means committee on April 12^th. A summary of changes made in the adopted amendments can be found here and here. It has been placed on 2^nd Reading by the Senate Rules committee and awaits further action.

Transit-oriented development

Sen Mullet sponsored SB 5312 and it authorized the use of appropriations to the Growth Management Planning and Environmental Review Fund to fund grants to cities to pay for certain planning related costs related to transit-orientated development, including subarea plans and environmental impact statements. It requires the Department of Commerce to prioritize applications for grants to facilitate transit-oriented development to maximize certain specified objectives in the area covered by the grant proposal. Additionally, it changes the date, from April 1, 2021, to April 1, 2025, by which cities must take certain actions related to increasing housing supply in order to be eligible to apply to the Department of Commerce for planning grants. The bill did not advance before opposite house cutoff on April 11^th and is now considered dead.

Land Use

Emergency shelters and housing through local planning and development regulations

Rep Peterson sponsored E2SHB 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, moderate density housing options, and racially disparate impacts and displacement in the housing element of the comprehensive plan. The bill requires the Department of Commerce to provide the inventory and analysis of existing and projected housing needs required in the housing element of the comprehensive plan. Additionally, it 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 except for cities with ordinances authorizing such shelters and housing in a majority of zones within one mile of transit. The House concurred on April 14^th with a 57-40 vote count to the changes made by the Senate. It will now be sent to the Governor for signature.

Planning under the GMA

Rep Duerr sponsored ESHB 1241 and it increases the review and revision cycle for comprehensive plans and Shoreline Master Plan from 8 to 10 years. 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. Additionally, it requires counites, cities, and other local governments to consult with federally recognized tribes during the planning process under the GMA upon receipt of notice from the tribes. It did not advance before opposite House of Origin cutoff on April 11^th and is now considered dead.

Salmon recovery through revisions to the comprehensive plans

Rep Lekanoff introduced E2SHB 1117, and it adds a goal of 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 stipulates that compliance by local governments is contingent on state funding and takes effect two years after the state funding has been appropriated.

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. It did not advance before opposite House of Origin cutoff on April 11^th and is now considered dead.

Revenue

Capital gains

Sen. Robinson introduced ESSB 5096, and was amended by the House Finance committee to apply a 7% tax on the sale or exchange of long-term capital assets if those profits are in excess of $250,000 for both individuals and those who files jointly. The bill 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 be deposited into the Education Legacy Trust Account, which funds schools, access to higher education through new enrollments and financial aid, early learning and childcare programs, and other educational improvement efforts. The bill was heard on March 15^th, amended and passed by the House Finance committee on April 16^th. Revenue from the proposal was accounted for in both the House and Senate operating budget proposals.

Wealth Tax

Rep Frame and Sen Hunt introduced SHB 1406/SB 5426, imposes a 1% wealth tax on intangible financial assets over $1 billion and directs revenues from the wealth tax to be deposited into the general fund. HB 1406 bill was amended and passed by the House Finance committee on March 31^st. A summary of the changes made to the bill can be found here. It has been referred to the House Appropriations committee for further consideration. SB 5426 has not yet been scheduled for a hearing. Both bills are considered necessary to implement the budget (NTIB) so is not subject to the cutoff calendar. This proposed new revenue source was not accounted for in either proposed budget.

Transportation

Transportation Budget

The House and Senate released their 2021-2023 biennium and 2019-2021 supplemental transportation budgets on Monday. The pandemic continues to negatively impact transportation revenues and challenge infrastructure funding.

The House proposals for the second supplemental transportation budget for the 2019-21 biennium and the new transportation budget for the 2021-23 fiscal biennium provide spending authority of $9.447 billion and $10.933 billion. The recent enactment of the federal American Rescue Plan, along with earlier federal relief packages, will provide over $1 billion to the state for transportation purposes. A portion of the funds will be used to backfill accounts that supported services affected by COVID-19 pandemic-related revenue losses, a portion will be used to address ferry operating needs, and a portion of the funding will be used to address fish passage barrier removals

The 2021-23 biennial transportation budget focuses on a couple of new and emerging areas of emphasis.

• Diversity and equity: WSDOT office of equal opportunity is provided $6 million for efforts to increase diversity in the transportation construction workforce through the pre-apprenticeship support services The Joint Transportation Committee is directed to conduct a study on the impacts of current and historical city transportation investments on communities of color, low-income households, vulnerable populations, and displaced communities.
• Electrification and green transportation: $152.5 million is provided to continue work on the state’s first hybrid electric Olympic Class vessel, with construction in spring 2022. It also expands previous electric vehicle charging infrastructure and green transportation

The Senate proposals for the second supplemental transportation budget for the 2019-21 biennium and the new transportation budget for the 2021-23 fiscal biennium provide spending authority of $9 billion and $11.7 billion. Federal recovery and relief bills recently passed provide new resources to the transportation budget to help offset some of the impacts of the Covid-19 pandemic. These include:

• $1.0billion from the American Rescue Plan Act of 2021, of which $600 million is being used to partially backfill revenue losses from the pandemic and $400 million is being used for water infrastructure investments to remove fish
• $142.9 million in Coronavirus Response and Relief Supplemental Appropriations Act funds are used to help fund the removal of fish barriers in order to make progress on complying with the court injunction by 2030.
• $124 million in Coronavirus Response and Relief Supplemental Appropriations Act funds are deposited into the Puget Sound Ferry Operations account to offset a shortfall of ferry fare revenue, eliminating the need to transfer funds from other state accounts to support this

The Senate passed the Senate transportation proposal (SB 5165) on March 29^th with unanimous support, and the House passed their proposal on April 2^nd. The chairs of the House and Senate transportation committees will meet and negotiate the differences in both transportation budget before passing a final transportation budget before the end of session.

Extending the issuance period of driver licenses and identicards

Rep Ramel sponsored SHB 1207 and it extends the renewal 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 and adjusts the associated fees to reflect the new terms while allowing an option for a 6-year renewal term. It allows online issuance and renewal of non-photo driver’s instruction permits and requires remote photo capture at driver’s license and identicard online renewal beginning January 2023. The House concurred on April 13^th with a 90-8 vote count to the changes made by the Senate. The bill will now be sent to the Governor for signature.

Fare enforcement

Rep Fitzgibbon introduced SHB 1301 and it allows Sound Transit to establish an alternative fare enforcement system, which allows for the issuance of notices of violation, the resolution of notices of violation, and appeals. It also limits the fines associated with notices of violation to the same maximum amount allowed for civil infractions. The bill was signed into law by the Governor on April 16^th.

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 amended and passed by the Senate on March 29^th with a 48-1 vote count. It was amended to prohibit tolling revenue bonds being sold for either facility until January 1, 2023 and prohibits bonds being sold until quarterly toll revenues have returned to $8.5 million of the Treasurer determines toll revenues can meet financial obligations. The bill was heard on April 2^nd in the House Transportation committee. This bill is considered necessary to implement the budget (NTIB) so is not subject to the cutoff calendar.

Transportation Revenue

Sen Hobbs released new details on his “Forward Washington” transportation investments proposal (SB 5481, SB 5482, SB 5483) on April 6^th. The investment proposal allocates $17.8 billion over 16 years and the details on the proposal can be found below. The proposal was heard on April 12^th and passed by the Senate Transportation committee on April 14^th. It has been referred to the Senate Rules committee for further consideration.

• Balance Sheet: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stBalanceSheet040821.pdf
• Revenue Summary: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stRevenueSummary040821.pdf
• Project List: http://leap.leg.wa.gov/leap/Budget/Detail/2021/stLEAPTransportationDocumentNL-1- pdf

Rep. Fey released details on his “Miles Ahead Washington” transportation investment proposal (HB 1564) on March 31^st and was heard on April 1^st. The investment proposal allocates $22 billion over 16 years and the details on the proposal can be found here:

• Spending bill: http://leap.leg.wa.gov/leap/Budget/Detail/2021/htNewLawBillH-1461.2-033121.pdf
• Investment details: http://leap.leg.wa.gov/leap/Budget/Detail/2021/htLEAPdoc2021- 1NewLawsSpendingPlan-033121.pdf
• Project list: http://leap.leg.wa.gov/leap/Budget/Detail/2021/htLEAPdoc2021-2NewLawProjectList- pdf