Week three of the 2023 legislative session included traction on housing and childcare legislation and highlighted the contentious issue of the site selection for the new commercial service airport.
Housing
The conversation surrounding housing supply and the missing middle has gained significant momentum. House Bill 1110/Senate Bill 5190 would increase middle housing in areas traditionally dedicated to single-family detached housing in cities with a population of at least 6,000, or in a city near an urban growth area with a population of more than 200,000, to increase density in residential areas. The Senate bill was heard last week in the Senate Housing Committee, and Seattle Metro Chamber President and CEO Rachel Smith testified in support of the legislation. You can watch her testimony here.
Childcare
One piece of legislation that is moving through the process is related to childcare, House Bill 1199, sponsored by Rep. Tana Senn. The legislation seeks to increase the availability of childcare by prohibiting a homeowners association from prohibiting, unreasonably restricting or limiting the use of a unit as a licensed family home childcare or as a licensed child daycare center. The bill passed the House, 96-0, and will move to the Senate for further consideration.
New Airport
The Commercial Aviation Coordinating Commission was formed to identify the preferred site for a next commercial service airport. The final commission recommendation to the legislature is due by June, and the preliminary recommendations have identified three locations, two in Pierce County and one in Thurston County. On Jan. 25 there was a rally held at the capitol to oppose the new locations for an international airport. This will continue to be a contentious issue as the date for the final recommendation approaches.
Ergonomics Regulations
On Jan. 24 the Senate Labor and Commerce Committee heard the newest proposal related to ergonomics, Senate Bill 5217, sponsored by Sen. Manka Dhingra. In 2000, the department of Labor and Industries adopted specific workplace ergonomics regulations that were highly controversial. The regulations were repealed in 2003 after the voters passed Initiative 841, which also prohibited L&I from adopting similar regulations. Senate Bill 5217 seeks to restore L&I’s ability to regulate ergonomics. Last year there was a similar, more expansive, proposal on this topic that narrowly passed the House after several hours on the floor, and ultimately died in the Senate.
Reproductive Rights
Last week Democrats focused on legislation related to reproductive rights in honor of the 50th anniversary of the Roe v. Wade decision. On Jan. 24 legislators heard eight bills related to reproductive health across six committees. This topic was also the focus for democratic leadership during their legislative democratic leaders media availability on Jan. 23.
Taxes
Last week the Washington Supreme Court heard oral arguments in the capital gains case. In 2021 the legislature passed a capital gains tax applicable to individuals at a rate of 7% on net gains more than $250,000 in a calendar year, with the proceeds going to the education legacy trust account and the common school construction account. The tax was later challenged on the basis that it violates the state constitution. If the tax is found to be unconstitutional, budget writers will have a revenue hole to fill and will need to look elsewhere to fund some of their education and childcare priorities.
Finally, a proposal from the tax structure work group, Senate Bill 5842, had a public hearing last week. The margin tax takes Washington state’s current Business & Occupation (B&O) tax structure and converts it into a gross receipts tax like the Texas franchise tax. The current B&O tax structure is based on gross income, where most businesses do not receive a deduction. Under the new proposed structure, businesses would be taxed on their profit margin, calculated as gross income, minus one of four deductions chosen annually – cost of goods sold, compensation paid, a fixed percentage of gross receipts (30%) or a flat amount ($1 million).
Legislation to Watch
Employment Law
SB 5123 – Concerning the employment of individuals who lawfully consume cannabis
This legislation would place restrictions on an employer’s ability to screen for an applicant’s lawful use of cannabis unless federal regulations require otherwise. The bill was scheduled for executive action on Jan. 24 but no action was taken. The bill is now scheduled for executive action on Jan. 31
This legislation expands unemployment insurance benefits to certain workers who leave their jobs for good cause, for example quitting because of illness or disability, safety issues that were not addressed by the employer, the death, illness, or disability of a family member, or inability to access care for a child or vulnerable adult. The bill was heard the first week of session and was passed out of committee on Jan. 20 with two amendments. The bill has been referred to Rules.
SSB 5286 – Modifying the premium provisions of the Paid Family and Medical Leave program
This bipartisan legislation proposes changes to the Paid Family Medical Leave program including adjusting the way premiums are calculated, raising the cap on premiums, and creating a reserve fund. The bill had a public hearing on Jan. 16 and was passed out of committee the following day. The bill is now in Rules where it can be pulled to the floor calendar.
Housing Affordability and Homelessness
The legislation prohibits, with certain exceptions, a landlord from: (1) engaging in predatory practices related to excessive rent increases; (2) differentiating treatment based on whether the tenancy is month-to-month or longer term; and (3) charging move-in fees and deposits that exceed one month’s rent before a tenant takes possession of a dwelling unit. The bill was heard Jan. 24 and is scheduled for Executive action on Feb. 2. The bill is opposed by housing providers, realtors, the Association of Washington Business and others.
This legislation aims to limit rent increases to reduce homelessness. Among other regulations the bill prohibits a landlord from increasing the rent more than the CPI-U or 3%, whichever is greater, up to a maximum or 7%. The Department of Commerce is required to calculate and publish the maximum annual rent increase percentage. Although they are very similar the main difference between House Bill 1389 and House Bill 1388 is that 1389 allows landlords to accrue increases and apply them later. For example, if a landlord did not increase rent by 5% in 2023 they would be able to increase by 10% in 2024. The House bill had a public hearing on Jan. 24 and is scheduled for executive action on Feb. 2. Its companion bill Senate Bill 5435 had a public hearing Jan. 27.
This legislation would require cities and counties to allow accessory dwelling units (ADUs) in urban growth areas (with some restrictions) and permit homeowners to convert garages into ADUs. This bill had a public hearing on Jan. 23 and is scheduled for executive action on Feb. 2.
HB 1276/ SB 5235 – Concerning accessory dwelling units
This legislation would require cities and counties to allow ADUs but differs from House Bill 1337 in that it also allows homeowners to lease the ADUs as short-term rentals. House Bill 1276 had a public hearing on Jan. 23 but has not yet been scheduled for executive action. The Senate bill had a public hearing on Jan. 26.
This legislation creates a new 99-year property tax exemption for properties that commit to renting or selling at least 35% of the multifamily housing square footage as affordable housing to low- and moderate-income households. The bill was heard on Jan. 13 but has not yet been scheduled for executive action.
Environment
HB 1505/ SB 5447 – Promoting the alternative jet fuel industry in Washington
This week bipartisan legislation was introduced related to sustainable aviation fuels. The goal of the legislation is to promote in-state use and deployment of sustainable aviation fuels through tax incentives and other tools. The Senate bill is scheduled for a public hearing at 8 a.m. on Feb. 1.
HB 1216/ SB 5380 – Concerning clean energy siting
This governor-request legislation would create an Interagency Clean Energy Siting Coordinating Council to be co-chaired by the Department of Ecology and the Department of Commerce. The purpose of the council would be to expedite the permitting for clean energy projects. The bill would also establish a definition for clean energy projects “of statewide significance” and require SEPA review to be completed within two years. The Senate was heard in the Senate Environment, Energy and Technology Committee on Jan. 24. Neither bill has been scheduled for executive action at this time.
What was once known as the RENEW Act (Sente Bill 5697 last session) has been rebranded as the Washington Recycling and Packaging Act or WRAP Act. This session the WRAP Act is sponsored by Rep. Liz Berry and Sen. Christine Rolfes. Both bills were heard Jan. 17, before the Senate Environment, Energy, and Technology Committee and House Environment and Energy Committee. The house bill is scheduled for executive action on Feb. 2 and the senate bill is scheduled for action on Feb. 3.
Transportation
This legislation was introduced to encourage more transit-oriented development by prohibiting minimum parking requirements. This bill would prohibit cities and counties planning under the Growth Management Act from imposing minimum parking requirements within certain distances of transit stops to allow areas well-served by transit to add more housing and business opportunities. House Bill 1351 had a public hearing on Jan. 25 and the senate companion is scheduled to be heard on Feb. 2.
What’s Coming Next
The focus will turn to several bills addressing the 2021 Blake decision, which struck down Washington State’s drug possession law as unconstitutional, have been introduced and will have hearings this week. All bills introduced so far elevate knowing possession of a controlled substance to a gross misdemeanor.
Important Dates
Feb. 17, 2023 – Policy Committee Cutoff
Feb. 24, 2023 – Fiscal Committee Cutoff
March 8, 2023 – House of Origin Cutoff
March 29, 2023 – Policy Committee Cutoff – Opposite House
April 4, 2023 – Fiscal Committee Cutoff – Opposite House
April 12, 2023 – Opposite House Cutoff
April 23, 2023 – Sine Die