Small Business Guide to 2021 Session
Small Business Guide To 2021 Session
The 2021 Legislative Session concluded on Sunday, April 25, 2021 and the Governor had 20 days to take action on legislation, whether to sign into law, veto or partial veto of the bills. Bills that did not pass in the 2021 session will still be alive in the 2022 legislative session.
For your general information, attached is a “Small Business Guide to 2021 Session.”
The 2022 Regular 60-day Session will be on Monday, January 10, 2022, however, there is a possibility of a special session in the interim to address additional transportation funding needs.
2021 Legislative Priorities
Tuesday, March 16, 2021
1. HB 1189/SB 5211 – Tax Increment Financing
· Authorizes local governments to designate tax increment financing areas and to use increased local property tax collections to fund public improvements
· A local government designating a TIF area may issue general obligation bonds to finance the public improvements. Any increase in assessed value within an area is included in the add-ons for purposes of the 1% revenue growth limit calculation.
· Each taxing district shall receive that portion of its regular property taxes produced by the rate of tax levied by the taxing district on the tax allocation base value for that TIF project in the taxing district.
Sponsors: Senators Frockt, Mullet, Conway, Kuderer, Rolfes; Representatives: Duerr, Boehnke, Bateman, Sullivan, Fitzgibbon, Walen, Ramel, Springer, Wicks, Slatter, Pollet, Callan, Harris-Talley
STATUS HB: Senate Business, Financial Services & Trade Committee
STATUS SB: Senate Rules Committee (Not Likely to Move)
2. HB 1332/SB 5402 – Property Tax Deferral
· Suspends interest and penalties on property tax payments during the Coronavirus Disease 2019 (COVID-19) state of emergency and for 12 months thereafter.
· Directs that county treasures to grant a deferral of property tax payments normally due in April 2021.
· Establishes the COVID-19 Property Tax Deferral Loan Account.
· Allows cities and counties to apply for loans from the COVID-19 Property Tax Deferral Loan Account.
Sponsors: Senators Mullet, Kuderer; Representatives: Sullivan, Ramel, Leavitt, Dufault, Hackney, Wylie, Santos, Ortiz-Self, Ormsby, Rule, Stokesbary, Callan, Pollet, Macri
STATUS HB: Senate Ways & Means Committee
Hearing – Tuesday, March 16 at 4:00 p.m.
STATUS SB: Senate Ways & Means Committee (Not Likely to Move)
1. HB 1496/SB 5096 – Capital Gains
· Imposes a 7% Capital Gains Tax (CGT) beginning January 1, 2022 on the sale or other voluntary exchange of long-term capital assets by individuals.
· The first $250,000 of capital gains are excluded from the state CGT.
· All taxpayers must file with the state Department of Revenue (DOR), but a person with no tax liability is not required to file a tax return.
· A deduction for the sale of a qualified family-owned small business (under $10M in annual revenue) where the owner has materially participated for 5 of the past 8 years.
· Real Estate is partially exempt, but more changes are being worked with Leadership.
· Sen. Hobbs Amendment guarantees that Capital Gains Tax will go on the ballot as a Referendum of the people.
Sponsors: Representatives Senn, Walen, Davis, Johnson, J., Ramel, Bergquist, Macri, Gregerson, Simmons, Sells, Peterson, Bateman, Berry, Lekanoff, Frame, Fitzgibbon, Duerr, Hackney, Slatter, Kirby, Thai, Chopp, Valdez, Riccelli, Pollet, Ormsby, Harris-Talley, Stonier; Senators Robinson, Hunt, Nguyen, Wilson, C.
STATUS HB: House Finance Committee
STATUS SB: House Finance Committee
2. HB 1494/HJR 4204 – Split Roll Property Tax & Constitutional Amendment
· Creates Split roll property tax by giving exemption for primary residence that must be recouped by property taxes from other properties.
· Created tax exemption for principal residences up to $250,000 of assessed value.
· The Washington Constitution requires all taxes to be applied uniformly on property within each taxing district. The Constitution also limits regular property tax levies to a maximum of 1% of a property's assessed value.
· HJR 4204 – Creates a Constitutional Amendment to get around the “Uniformity Clause” in the WA Constitution.
Sponsors: HB 1494 – Harris-Talley, Berg, Davis, Wicks, Peterson, Ortiz-Self, Orwall, Gregerson, Chapman, Ramel, Simmons, Berry, Lekanoff, Frame, Hackney, Slatter, Duerr, Kirby, Thai, Valdez, Ormsby, Morgan; HJR 4204 – Harris-Talley, Berg, Wicks, Peterson, Ortiz-Self, Simmons, Gregerson, Chapman, Berry, Frame, Thai, Pollet, Ormsby, Davis, Ramel
STATUS HB: House Finance Committee
3. SB 5139 – Rent Control
· Establishes Rent Control in WA State
· Prohibits a housing provider from increasing rent or other charges for the first 6 months after the end of the Governor’s emergency eviction ban under 59.18.
· After the first 6 months expire, housing providers are then limited to only increasing rent by 3% over the previous year’s consumer price index, for a subsequent six months, based on the rental rate as it was on March 1, 2020.Revises landlord and tenant provisions regarding the protection of certain residential tenants to include:
STATUS: DEAD – Senate Housing & Local Government Committee
Capital Gains Tax Bill Language Info:
Current Real Estate Language in Capital Gains Tax Bill – ESSB 5096
Page 3 – Sec. 102 – Definitions
(9) "Real estate" has the same meaning as in RCW 82.45.032, except that real estate does not include an individual's ownership interest or beneficial interest in an entity which itself owns an interest in real property located in this state for the purposes of this chapter.
Page 5 – Sec. 104 – This chapter does not apply to the sale or exchange of:
(1) All real estate;
(2) A controlling interest in an entity only to the extent that any long-term capital gain or loss from such sale or exchange is directly attributable to the entity's interest in real property and the sale or exchange was subject to tax under chapter 82.45 RCW. The department is not bound by the parties' agreement as to the allocation of consideration or fair market value, if such allocation or fair market value does not reflect the fair market value of the real property. For purposes of this subsection (2), "controlling interest" has the same meaning as in RCW 82.45.033;
Requested Fix for Real Estate in Capital Gains Tax Bill – ESSB 5096
Page 3 – Sec. 102 – Definitions
(9) "Real estate" has the same meaning as in RCW 82.45.032
, except that real estate does not include an individual's ownership interest or beneficial interest in an entity which itself owns an interest in real property located in this state for the purposes of this chapter.
Page 5 – Sec. 104 – This chapter does not apply to the sale or exchange of:
(1) All real estate;
2) A controlling interest in an entity only to the extent that any long-term capital gain or loss from such sale or exchange is directly attributable to the entity's interest in real property and the sale or exchange was subject to tax under chapter 82.45 RCW. The department is not bound by the parties' agreement as to the allocation of consideration or fair market value, if such allocation or fair market value does not reflect the fair market value of the real property. For purposes of this subsection (2), "controlling interest" has the same meaning as in RCW 82.45.033;
2021 Session – General Legislative Recap
WEEK OF APRIL 10, 2021
This is the 90th day of the 105-day session.
We are only 15 days away from the end of the first virtual Legislative Session.
This Sunday April 11 at 5:00 p.m. is the cutoff for bills to pass out of the Opposite House and finally the last day of the 2021 legislative session is on Sunday, April 25. From April 12 to April 25 the Operating, Capital and Transportation budgets will be further negotiated and finalized, and bills will be concurred that passed with amendments in the opposite House.
Bills that are concerned NTIB, or "needed to implement budget," which fiscal bills often are, then such legislation can still come up for a hearing at any time.
INSLEE UPDATES HEALTHY WASHINGTON CRITERIA FOR COUNTY PHASES
Inslee Updates Healthy Washington Criteria for County Phases
On Friday, April 9th, Governor Jay Inslee gave an update on his criteria for county phases in regards to COVID-19. Currently, counties are individually evaluated every three weeks. The first evaluation occurs on Monday, April 12th and changes to a county's phase status would take effect Friday, April 16th. In addition to being individually evaluated, large and small counties have different sets of appropriate criteria based on case counts and hospitalizations.
Now, in advance of each county's evaluation on Monday to determine its phase, the governor has
proclaimed that in order to move down one phase a county must fail both metrics for case
counts and hospitalizations. Under the previous plan, a county only needed to fail one metric
to move back one phase.
Governor Inslee stated, “Given the incredible progress on vaccinations and our focus protecting
people from severe illness, we believe analyzing and requiring both metrics together is the right
approach to make sure we’re considering the connection between COVID cases and our medical
system and hospitalizations.”
ADDRESSING THE STATE V. BLAKE DECISION
SB 5476 is one of many bills introduced in response to the Washington State Supreme Court’s February decision, State v. Blake which was the ruling that struck down the law criminalizing drug possession in Washington State. A public hearing was held on April 5th in Senate Ways and Means with executive action scheduled for April 10th.
This bill will establish personal use amounts for controlled substances and removes criminal penalties for the possession of a controlled or counterfeit substance or a legend drug that does not exceed the personal use amount. It also authorizes law enforcement to refer individuals possessing a personal use amount of a controlled substance, counterfeit substance, or legend drug to a forensic navigator for the purpose of evaluation and treatment.
INCREASING HOUSING SUPPLY
Freshman Representative Jessica Bateman’s HB 1157 passed off the House Floor last Sunday, March 28th with a 93-4 vote. This is the bill that authorizes counties and cities to establish a real estate excise tax density incentive zone within urban growth areas and provides for the distribution of state real estate excise tax revenues within such incentive zones.
A qualified residential dwelling is either an individual residential dwelling unit or a residential building of two or more dwelling units constructed within an incentive zone that achieves a net increase in the total number of residential dwelling units compared to the maximum number of residential dwelling units that could have been built prior to the adoption of zoning and development regulations creating the incentive zone. To be included as qualified residential dwelling units, the units must be restricted from being offered as short-term rentals for more than 30 days a year for the first 15 years after construction, and the county or city must determine how the residential dwelling units are to be restricted from being short-term rentals within their respective jurisdictions.
This bill is moving fairly quickly as we head into the final stretch of session. It was heard in Senate Ways and Means on April 5th and is scheduled for executive session on April 10th.
Week of April 2, 2021
This is the 82nd day of the 105-day session.
We are only 23 days away from the end of the first virtual Legislative Session.
Today, Friday, April 2 was the cutoff for bills to pass the Opposite House Fiscal Committee, Sunday April 11 is the cutoff for bills to pass out of the Opposite Houseand finally the last day of the 2021 legislative session is on Sunday, April 25. From April 12 to April 25 the Operating, Capital and Transportation budgets will be further negotiated and finalized, and bills will be concurred that passed with amendments in the opposite House.
Even though today was the last day to pass bills out of committee and read them into the record on the floor from fiscal committees. Technically, however, if a bill is NTIB, or "needed to implement budget," which fiscal bills often are, then such legislation can come up at any time.
“Miles Ahead Washington House Transportation
On Wednesday, March 31 the House Transportation Chair Rep. Jake Fey (D-27) released three documents including his “title only” HB 1564 which consists of “a blanket provision specifying that additive transportation funding is adopted.” The other two documents released that same day included a proposed spending plan of $22.3 billionover 16 years with sizable investments into carbon emissions reduction initiatives. HB 1564 was heard in House Transportation where it received about 3 hours of testimony from different individuals and groups advocating for their projects and concerns. All documents can be found on the LEAP site linked here.
Major Investments Proposed
The I-5 Columbia River Bridge with $1 billion allocated in funding was the largest investment this transportation package prioritized. This would go towards replacing the I-5 bridge connecting Vancouver, Washington to Portland, Oregon to fund a replacement bridge that has been in discussions for well over a decade. It has come close to fruition in the past, but the Washington State Legislature would not fund the then called “Columbia River Crossing” after disagreements surrounding certain issues including the cost of the project, proposed light rail services, and tolling. The current bridge is over 100 years old and causes traffic congestion when vehicles are required to stop when the bridge lifts up to allow large vessels to pass under it.
Other major investments in the project include investments made towards improving I-5’s HOV lanes in the Tacoma and Lakewood area, US 2 Trestle Capacity Improvements & Westbound Trestle Replacement, and investments in Statewide Freight Corridors.
Week of March 12, 2021
This is the 61st day of the 105-day session.
This week we had the cutoff of bills to move from the House of origin for all bills except those that deal with fiscal impacts. We are more than halfway through the legislative session. The next cutoff for bills to move from the Opposite House Policy Committee is on Friday, March 26, followed by the Opposite House Fiscal Committee cutoff on Friday, April 2 and the cutoff for bills to pass out of the Opposite house which is Sunday, April 11.
Below is a summary of what occurred this week for your general update.
Recent Revenue Forecast Positive
The latest revenue forecast by the Washington State Economic and Revenue Forecast Council (ERFC) stated revenue collections since the November forecast are $593 million (9.0%) above expectations. Here are some of the highlights in the report:
- 1.3% increase in Washington employment this year which is down from the 3.5% increase in the November forecast.
- Above average growth through the remainder of the forecast as the economy recovers from the pandemic-induced recession.
- Employment growth to average 2.2% per year in 2022 through 2025 compared to the 1.7% average rate expected in November.
- Private services-providing sectors lost 7,400 jobs in November, December, and January, weighed down by the loss of 19,900 jobs in leisure and hospitality.
- State and local government employment increased by 3,900 jobs. Federal government employment declined by 3,200 jobs
- Washington’s unemployment rate reached 7.1% in December, up from 5.7% in November. This was the first increase in the state’s jobless rate since July.
Governor Inslee Moves Washington into Phase 3 Starting March 22, 2021 &
New Eligibility for COVID Vaccine
Starting Wednesday, March 17, everyone in Phase 1B, Tier 2 will be eligible for their COVID vaccine. This includes workers in agriculture, food processing, grocery stores, public transit, firefighters and law enforcement, among others. Phase 1B, Tier 2 also includes people over the age of 16 who are pregnant or have a disability that puts them at high-risk. This doesn’t preclude any of the prior eligible people, they can still receive the vaccination if they haven’t gotten it yet.
On Thursday March 11th, Governor Inslee announced plans to move all of Washington State to Phase 3 in his “Healthy Washington: Roadmap to Recovery.” More guidance is expected next week for specific industries. The following changes will take effect on March 22, 2021:
- 50% occupancy, or 400 people, whichever is lower, at all outdoor facilities, as long as physical distancing and masking are enforced.
- All indoor spaces, including restaurants, gyms, movie theaters and others, can increase capacity to 50% occupancy, or 400 people
- Larger event venues can have up to 25% capacity, or 9,000 people, whichever is lower.
- Outdoor sporting facilities (professional & High School) with permanent seating move up to 25% capacity for spectators.
In late February Judge Barker, from the Eastern District of Texas, issued a 21-page ruling in response to a lawsuit from a group of landlords and property managers. "The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium," Judge Barker wrote. The CDC eviction ban will remain in effect through March 31 while the case works its way through the legal process. This link gives more information about the impacts of this ruling and what is being worked on here in Washington State.
Expiration Date for Individual, Non-Medicare Coverage Purchased
Through WSHIP Eliminated
HB 1096 had a public hearing on March 10th just before the cutoff and on March 12th was voted out of Senate Health and Long-Term Care. This healthcare billremoves the December 31, 2022, expiration date for non-Medicare coverage offered through the Washington State Health Insurance Pool (WSHIP). The costs of coverage through WSHIP are paid through premiums and assessments on health insurers.
WSHIP has approximately 200 enrollees in individual, non-Medicare coverage, and 1100 enrollees in Medicare coverage. After December 31, 2022, individual, non-Medicare coverage will no longer be offered through WSHIP.
Week of March 5, 2021
This is the 54th day of the 105-day session.
The House and Senate are currently on the floor debating and voting on bills to pass out of the House of origin by Tuesday, March 9. All bills except those that deal with fiscal impacts will be dead for the 2021 session if they do not pass by this cutoff date.
Below is a summary of what occurred this week for your general update.
Since last week when the Washington State Supreme Court declared the state’s entire law against simple drug possession to be invalid, there have been calls on Legislators to create legislation that would allow law enforcement to conduct investigations, collect evidence, and to take a second look at allowing the state to basically do what Oregon has done by a vote of the people regarding the possession of illicit drugs. Drug decriminalization while controversial among some has been criticized by many in how it occurred in the courts and not in the Legislature.
SB 5468 simply adds the word “knowingly” to RCW 69.50.4013 which Senator Mullet believes will remedy the situation in Washington State and not hinder those in Law Enforcement who have been asking for a fix to the current situation.
“It is unlawful for any person to knowingly possess a controlled substance unless the substance was obtained directly from, or pursuant to, a valid prescription or order of a practitioner while acting in the course of his or her professional practice, or except as otherwise authorized by this chapter.”
Another remedy has been offered by Senator Padden, SB 5471, which goes much further than Senator Mullets bill. It not only adds the word “knowingly” but also adds with certain types of drugs with corresponding penalties and fees, both for knowing and unknowing of their possession.
There have been many different bills introduced this session with new revenue proposed, but one of the more serious and furthest along the legislative journey to the Governor’s desk is SB 5096, which imposes a 7.0 percent capital gains tax beginning January 1, 2022. This bill sponsored by Senator Robinson had passed out of Senate Ways and Means on February 16th and had not seen movement out of Senate Rules since. Then on March 3rd, it was placed on the 2nd Reading which gets it ready to be pulled to the Senate Floor for a vote.
The current version is slightly different from the original with the following changes:
- Lowers the tax rate from 9 percent to 7 percent;
- Increases threshold exclusion to $250,000;
- Exempts all sales or exchanges of real estate – however there is an amendment to include back real-estate;
- Replaces sole proprietor deduction with a family-owned small business deduction;
- Exempts the value of goodwill received when a car dealership is sold;
- Deposits the first $350 million in revenues collected each year into the Education Legacy Trust Account and deposits the remainder into a new Taxpayer Relief Account;
- Makes other technical clarifications and corrections.
Producing, Distributing, and Purchasing Generic Prescription Drugs
ESSB 5203 allows the Health Care Authority (HCA) to enter into partnerships with other states, state agencies, or nonprofit entities to produce, distribute, or purchase generic prescription drugs and purchase and distribute insulin.
State purchased health care programs must purchase the generic prescription drugs and insulin through the partnership, unless the state purchased health care program can obtain the generic prescription drug or insulin at a cost savings through another purchasing mechanism. Local governments, private entities, health carriers, and others may choose to voluntarily purchase the generic prescription drugs and insulin from the HCA as available quantities allow.
This bill passed off the Senate Floor on March 4th with a 28-21 party line vote and now heads to House.
LEGISLATIVE NEWS AND UPDATES.
In addition, for those who are members of WA-SSA, you can access "SSA-Foreclosure Evictions Pauses 102120.pdf"
In accordance with Proclamation 20-25, House of Representatives facilities are closed until further notice. Legislators and staff are teleworking and can be reached via email or by phone during regular business hours. To find who your State Representatives are, please go to:
For general information, please contact the Legislative Information Center at: email@example.com; 360-786-7573. To leave a message for your State Representatives and Senator: TOLL-FREE HOTLINE: 1-800-562-6000. For all other inquiries, please contact the Chief Clerk's office: Chief.Clerk@leg.wa.gov 360-786-7750.
The Legislative home page as at http://leg.wa.gov/
Member Rosters & Information for 2019-2020. NOTE: a new roster list will be updated soon. With elections just completed in early November combined with a few tight races, there are still results to be determined.
Web sites for Legislative Agendas, Schedules, and Calendars:
The ‘Overview of the Legislative Process,’ is at the following web site:
Naturally, with COVID19, attending in person events is very limited if at all possible, BUT for the future, this site may be of interest for Coming to the Legislature:
which includes How a Bill Becomes a Law, How to Read a Bill, and How to Testify in Committee.
Washington Self-Storage Association
2020 Legislative Priorities
February 13, 2019
Written & Distributed from the Offices of Gjurasic, Kohl & Baldwin
Public Affairs Consultants
Issues of the20 Session
The Washington State Legislature’s first day of session was on Monday, January 13, 2020. We are in the 32nd day of the 60-day legislative session. The first cutoff of bills to pass out of the policy committee, except for fiscal committees, was Friday, February 7. The cutoff for bills to pass out of the Fiscal Committees was Tuesday, February 11 and Wednesday, February 19 is last day for bills to be considered in the house of origin and then there will be hearings in the opposite house. The last day of session is on Thursday, March 12. The passage of I-976 ($30 car tabs) which passed by 53% of the vote will be dominating the state Transportation Budget as it freezes funding and lowers and eliminates certain fees. The impact will be reprioritization of certain transportation projects. The final outcome with be decided at the Washington State Supreme Court, which will decide the legality of this initiative.
2020 Legislative Issues: State
· Lengthens the time between late rent payments and the sale of personal, and when an owner may terminate the right of the occupant to the use of the storage space property from fourteen to twenty-eight consecutive days,
· Caps late fees charged by self-storage facilities from reasonable fees to no more than twenty dollars or twenty percent of the monthly rental amount, whichever is greater, for each late rental payment; and shall not constitute a penalty for each month an occupant does not pay rent when due.
In a meeting with Sen. Reuven Carlyle’s staff, he mentioned that SB 5957 will be re-introduced in the 2021 session and he will be in contact with us after session. He claims a constituent attorney thought that costs and process applied to consumers needs to be revised.
Sponsors: Senator Carlyle
STATUS: DEAD – Senate Labor & Commerce Committee
2. HB 2779 – Rent Control
Would place price and supply restrictions on housing supply in the State of Washington and limit the amount that a housing provider can charge for rent:
· Washington Law current prohibits Rent Control anywhere in WA State.
· Rent Control has failed in the other cities that have tried it. It won’t help Washington’s Housing Crisis.
· We Need More Homes Not Less – Rent Control will increase costs and slash housing creation for Washington residents.
Sponsors: Representatives Macri, Pollet, Gregerson, Ormsby, Dolan, Doglio, Morgan, Ramel, Ortiz-Self, Frame, Johnson, J., Chopp, Lekanoff
This legislation would allow counties to establish C-PACER programs and cooperate with local lenders on loans secured by the property tax obligation, similar to a local improvement district. The obligation to repay the improvements loan is tied to the property, rather than the owner, which makes longer term financing more attractive because no debt is added onto an owner’s balance sheet. If the building is sold, the loan repayment obligation stays with the property rather than the owner. Eligible properties include new and existing commercial, industrial, non-profit, and multi-family buildings. C-PACER programs help:
· Building owners save money through lower utility bills and insurance premiums. The long-term payback can make PACE-funded projects cash flow positive.
· Spur economic activity by making building improvements easier to finance.
· Communities meet climate goals by facilitating more energy efficiency and renewable energy projects.
Sponsors: Representatives Duerr, Barkis, Fitzgibbon, Shewmake, Hoff, Kloba, Corry, Gildon, Ybarra, Jenkin, Pollet, Doglio; Senators Lovelett, Das, Fortunato, Rivers, Salomon, Warnick, Zeiger, Nguyen, Liias, Hunt
STATUS HB: House Rules Committee
STATUS SB: DEAD – Senate Environment, Energy & Technology Committee
2020 Legislative Issues Monitoring
Most B&O tax bills, Capital Gains tax bills, as they are necessary to implement the budget are typically introduced at the time the state budgets are introduced to help balance the budget. This year it is a supplemental budget that will be introduced as we are in mid-year for the two-year budget. We will continue to monitor bills and budgets that effect the self-storage industry.