Olympia, WA – March 27, 2021 – With just a month left in this year’s legislative session, state lawmakers this week turned their attention to new proposals for the state’s 2021-23 operating budget. Governor Inslee submitted his $57.6 billion spending plan in December, proposing new taxes to pay for the more than $4 billion increase over the current budget. Republicans released a budget proposal of their own in February that would fully fund state services over the next two years without raising taxes.
On Thursday, Senate Democrats announced their plan for massive new increases in state spending to $59.2 billion over the next two years. This would be on top of some $7 billion to be spent from federal COVID relief funds passed by Congress. The current state budget is $53 billion.
To pay for its proposed increases, the Senate proposal relies on passage of a likely unconstitutional state income tax on capital gains (SB 5096) and on draining the state’s “rainy day” reserve fund. It also assumes passage of a cap-and-trade bill (SB 5126) to get money businesses would pay the state to offset carbon emissions beyond set limits.
The cap-and-trade bill, along with a low-carbon fuel standards proposal (HB 1091) are moving in the legislature and are likely to pass this year. Critics of these bills say that, if enacted, the mandates would result in huge fuel cost increases for Washington businesses and consumers.
Senate Ways and Means Committee Chair Sen. Christine Rolfes (D-Bainbridge) introduced the Senate budget proposal during a news conference. “This budget spends a lot of money to stabilize our economy, to stabilize our health care system, to stabilize our environment,” she said.
The top Republican on the Senate Ways and Means Committee, Sen. Lynda Wilson (R-Vancouver) said in a statement that there are items in the budget Republicans could support, like more internet broadband and improving the health of state forest lands. She added, however, that “by linking it to an unnecessary, unconstitutional tax that was already rejected by Republicans, the Democrats have guaranteed the Senate budget will be purely partisan. That’s truly disappointing.”
The Senate proposal, 800-page Substitute SB 5092, is scheduled for a public hearing in the Senate Ways and Means Committee today—less than 24 hours after it was released. Also later today, House Democrats will announce their 2021-23 spending proposal, which is expected to match or exceed the spending increases proposed by their counterparts in the Senate.
Today is the last day for policy committees to pass bills from the opposite chamber and send them to the floor for action by the full House or Senate. SB 5228, to require racial and ethnic training courses in the state’s public medical schools, cleared the House Appropriations Committee yesterday. A similar bill to require continuing race-based training for health care professionals (SB 5229) passed the House on Wednesday by a partisan 57-41 vote.
Also by a mostly partisan 27-22 vote, the Senate passed HB 1078, to automatically restore voting rights for felons immediately after they get out of prison. Currently, released felons must complete parole before they can re-register to vote. The bill passed in the House by a partisan 57-41 vote last month and is now headed to Gov. Inslee for his signature.
WashingtonVotes.org is a free service provided by Washington Policy Center and is the go-to tracking tool to keep up with all the action in Olympia, especially during this mostly virtual session. Please check in often and follow us on Facebook and Twitter at #waleg.
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NOTES: RE: SB 5096: When the Democrats rule, proposed amendments to at least lessen the burden on taxpayers are struck down – and the taxpayers suffer.
2021 Senate Bill 5096: Concerning an excise tax on gains from the sale or exchange of certain capital assets
Introduced by Sen. June Robinson (Everett) (D) on January 11, 2021
Referred to the Senate Ways & Means Committee on January 11, 2021
Substitute offered in the Senate on February 16, 2021
Makes the following changes to the original bill: • Lowers the tax rate from 9 percent to 7 percent. • Increases threshold exclusion to $250,000. • Exempts all sales or exchanges of 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..
Referred to the Senate Rules Committee on February 18, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Prohibits the state attorney general from requesting the court to reconsider its prior rulings declaring income to be property.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Eliminates the requirement for taxpayers owing the state tax to also file a copy of their federal income tax return.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. John Braun (Centralia) (R) on March 6, 2021
Exempts all real estate from capital gains tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Sharon Brown (Kennewick) (R) on March 6, 2021
Adds a referendum clause and a new section listing prior resolutions to impose an income tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Provides a deduction against the capital gains tax for amounts contributed to a nonprofit organization engaged in services for individuals with disabilities.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Provides sales and use tax exemptions for clothing and prepared food. Backfills revenue impact to the state general fund by using capital gains tax revenues deposited into the taxpayer fairness account to the extent funds are available in the taxpayer fairness account.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Specifies that the state capital gains tax authorized in section 103 of this act shall not be construed in any way as providing authorization for cities or counties to impose a local version of the tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Phil Fortunato (Auburn) (R) on March 6, 2021
Makes the capital gains tax voluntary.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Steve Hobbs (Lake Stevens) (D) on March 6, 2021
Removes the emergency clause. Removes language from the intent section specifying that the tax is necessary for the support of state government and its existing institutions..
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Marko Liias (Lynnwood) (D) on March 6, 2021
Exempts the sale of a controlling interest in a business entity from capital gains tax for the portion of the sale attributable to real estate if the transaction is also subject to real estate excise tax.
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Ann Rivers (Vancouver) (R) on March 6, 2021
Provides a deduction against the capital gains tax for amounts contributed to a nonprofit organization.
Amendment offered by Sen. June Robinson (Everett) (D) on March 6, 2021
Striking amendment: 1) Modifies the title; (2) Adds intent language; (3) Eliminates the maximum number of employees a business may have for its sale to qualify for the small business deduction; (4)Increases the qualifying gross income threshold for the small business deduction from $6,000,000 to $10,000,000; (5) Removes the section of the bill that would require ambiguities to be construed in favor of the application of the tax; (6) Removes the section of the bill that would authorize reciprocal tax collection agreements; (7) Modifies the deposit and distribution of tax collections: Deposits the first $350,000,000 collected each fiscal year into the Education Legacy Trust Account, deposits the next $100,000,000 into the general fund, and deposits the remainder into a newly created taxpayer fairness account; (8) Provides annual inflationary adjustments for the $250,000 exclusion amount, $10,000,000 gross income threshold for the small business deduction, and account distribution amounts; and (9) Makes technical corrections and clarifications.
The amendment passed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Shelly Short (Addy) (R) on March 6, 2021
Changes the title of the bill to: “enacting a capital gains income tax.”.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Shelly Short (Addy) (R) on March 6, 2021
Specifies that applicable Title 26 federal tax code references in the bill are to the federal income tax laws.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Keith Wagoner (Sedro-Woolley) (R) on March 6, 2021
Delays the effective date of the act until July 1, 2025, to allow the Legislature to review recommendations from the Tax Structure Work Group before imposing a state tax on capital gains.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Judy Warnick (Grant) (R) on March 6, 2021
Exempts all sales or exchanges of cattle, horses, and livestock from the capital gains tax.
The amendment failed by voice vote in the Senate on March 6, 2021
Amendment offered by Sen. Lynda Wilson (Clark County) (R) on March 6, 2021
Provides a total tax deduction for any sale or transfer to a family member.
Amendment offered by Sen. Lynda Wilson (Clark County) (R) on March 6, 2021
Limits the capital gains tax on tangible personal property to only that property which was located in Washington during the current taxable year.
The amendment failed by voice vote in the Senate on March 6, 2021
Received in the House on March 9, 2021
Referred to the House Finance Committee on March 9, 2021
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NOTES ON SB 5126 – This is another bill that, if passed, would be detrimental to Washingtonians and have NO impact on global temperatures. More virtue signaling at the expense of your constituency.
2021 Senate Bill 5126: Concerning the Washington climate commitment act
Introduced by Sen. Reuven Carlyle (Seattle) (D) on January 11, 2021
Referred to the Senate Environment, Energy & Technology Committee on January 11, 2021
Referred to the Senate Ways & Means Committee on February 26, 2021
Substitute offered in the Senate on March 22, 2021
• Establishes a cap and invest program for greenhouse gas emissions to be implemented by the Department of Ecology. • Directs distribution of auction revenues for the Forward Flexible Account and for specified purposes including clean transportation, natural climate resiliency, clean energy transition and assistance, and energy efficiency projects. • Requires an environmental justice review to ensure that the cap and invest program achieves reduction sin criteria pollutants in overburdened communities highly impacted by air pollution. • Convenes an Environmental Justice and Equity Advisory Panel to provide recommendations on the development and implementation of the cap and invest program.
Referred to the Senate Rules Committee on March 24, 2021
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NOTES ON HB-1091: Another bad bill that will hurt us all – radical requirements that incorporate an “Environmental Justice and Equity Advisory Panel” (???) – More on this in another story. Reps Chapman (D) and Tharinger (D) voted for this – it passed along party lines. Environmental Justice and “Equity” = socialism. Remember this next election cycle.
2021 House Bill 1091: Reducing greenhouse gas emissions by reducing the carbon intensity of transportation fuel
Introduced by Rep. Joe Fitzgibbon (West Seattle) (D) on January 11, 2021
Referred to the House Environment & Energy Committee on January 11, 2021
Substitute offered in the House on January 21, 2021
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 10 percent below 2017 levels by 2028 and 20 percent below 2017 levels by 2035.
Referred to the House Appropriations Committee on January 26, 2021
Substitute offered in the House on February 9, 2021
Clarifies that the Clean Fuels Program’s standards must reduce overall, aggregate carbon intensity, rather than the carbon intensity achieved by any individual type of transportation fuel; eliminates the exemption for electricity from carbon intensity reduction requirements; requires the Department of Ecology’s (Ecology) Clean Fuels Program rules to include a mechanism for certifying electricity that has a carbon intensity of zero and to allow the assignment of credits to electric utilities for electricity used, at minimum, for residential electric vehicle charging or fueling.
Referred to the House Transportation Committee on February 11, 2021
Substitute offered in the House on February 19, 2021
Adds a requirement that the Department of Ecology improve its internal processes to expedite the processing of environmental reviews under the State Environmental Policy Act and for permit application for projects related to the production of low-carbon transportation fuels.
Amendment offered by Rep. Peter Abbarno (Centralia City) (R) on February 27, 2021
Requires the Office of Financial Management to contract, in consultation with the office of equity, for an independent economic analysis of the Clean Fuels Program’s economic impacts through 2050.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Peter Abbarno (Centralia City) (R) on February 27, 2021
Requires the Department of Ecology, in annual reports or other public documents or communications that refer to assumed public health benefits from the Clean Fuels Program (CFP), to distinguish between pollutant reductions from the CFP and those reductions primarily attributable to vehicle emission standards.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Andrew Barkis (Pierce) (R) on February 27, 2021
Restores provisions in existing law that address the 8 allocation of transportation funds to the Connecting Washington Account from other transportation accounts in the event of the establishment of a low carbon fuel standard or similar programs.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Matt Boehnke (Benton) (R) on February 27, 2021
Authorizes the Department of Ecology to adopt Clean Fuels Program (CFP) rules that allow for the generation of credits for infrastructure investments in broadband access that facilitate remote work and therefore reduce transportation emissions consistent with the 2021 State Energy Strategy. Requires Ecology to establish a metric for CFP credit allocation per foot of installed broadband infrastructure that varies by type of broadband technology.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Matt Boehnke (Benton) (R) on February 27, 2021
Requires the Department of Ecology to submit a report to the Legislature by January 1, 2023, that analyzes the impact to labor union members in Washington from the implementation of the Clean Fuels Program, in comparison to impacts from establishment of an additional 10 cent per gallon motor vehicle fuel tax.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Mike Chapman (Port Angeles) (D) on February 27, 2021
Eliminates the directive to the Department of Ecology to improve and expedite State Environmental Policy Act (SEPA) reviews and permit applications for projects that would produce or support the production of low carbon transportation fuels.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Mary Dye (Adams) (R) on February 27, 2021
Excludes diesel from the transportation fuels subject to the Clean Fuels Program’s carbon intensity reduction requirements. Limits the carbon intensity standard adopted by the Department of Ecology to a standard based on gasoline and gasoline substitutes.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Mary Dye (Adams) (R) on February 27, 2021
Requires the Department of Ecology’s Clean Fuels Program rules to allow for the establishment of compliance obligations that create the least costs feasible to regulated entities while achieving emissions reduction targets. Requires the rules to establish broadly available credit-generating activities without limitations on the number of credits that may be earned by program participants or under specific activity categories.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Joe Fitzgibbon (West Seattle) (D) on February 27, 2021
(1) Eliminates definitions for “Green Hydrogen,” “Renewable Hydrogen,” and “Renewable Resources,” and changes references to green hydrogen or renewable hydrogen to instead reference hydrogen. (2) Allows the generation of Clean Fuels Program credits by transportation fuels with associated greenhouse gas emissions exceeding 80 percent of baseline 2017 carbon intensity levels, but below the applicable standard adopted by the Department of Ecology. (3) Allows electric vehicle manufacturers to be eligible to generate clean fuels program credits. (4) Allows electricity to be certified with a carbon intensity of zero if a renewable energy credit or other environmental attribute has been used or retired for the electricity, but without requiring the retirement or use of the renewable energy credit or attribute be used or retired only for purposes of the Clean Fuels Program.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Keith Goehner (Chelan) (R) on February 27, 2021
Requires the Department of Ecology to determine by March 31, 2029, if Clean Fuels Program credits issued prior to 2029 were sufficient to satisfy the requirement to reduce the carbon intensity of transportation fuel by 10 percent below 2017 levels. If the department determines that the carbon intensity of transportation fuels has not been reduced by at least fifty percent of the 2028 target, the Department must issue a press release, notify the governor and appropriate committees of the Legislature, and the Clean Fuels Program becomes scheduled for sunset review and termination.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Mark Klicker (Walla Walla) (R) on February 27, 2021
Authorizes Clean Fuels Program rules to allow nonprofit and public entities to earn credits from the fueling of battery or fuel cell electric vehicles.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Mark Klicker (Walla Walla) (R) on February 27, 2021
Requires the Department of Ecology’s Clean Fuels Program rules to allow the generation of credits from the transportation of agricultural products by barge in Washington.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Jacquelin Maycumber (Ferry) (R) on February 27, 2021
Prohibits the use of fuels to generate credits under the Clean Fuels Program unless the fuel was extracted or produced in a country certified by the Department of Labor and Industries to have laws that provide ten categories of labor rights. Requires the Department of Labor and Industries to publish a list of eligible countries by December 1, 2021, and to update that list annually for use in the Clean Fuels Program during the following program year.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Jacquelin Maycumber (Ferry) (R) on February 27, 2021
Requires the Department of Ecology to consider emissions 8 from land-clearing fires that increase available land for biofuel and crop production as part of the life cycle greenhouse gas emission measurement for each transportation fuel.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Dave Paul (Island) (D) on February 27, 2021
Requires the cost containment mechanisms in the Clean Fuels Program (CFP) rules adopted by the Department of Ecology (Ecology) be harmonized with the cost containment mechanism of other states with similar clean fuels program requirements and which supply to or receive from Washington significant quantities of transportation fuel.
The amendment passed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Eric Robertson (Sumner) (R) on February 27, 2021
Delays the start date of the Clean Fuels program until the adjournment of the regular legislative session following the submission of a report to the Legislature by the Washington State Institute for Public Policy on the cost-effectiveness and tax revenue effects of the adopted rule.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Drew Stokesbary (Auburn) (R) on February 27, 2021
Requires a tax preference performance statement for the business and occupation tax exemption for the generation, purchase, sale, transfer, and retirement of Clean Fuels Program credits. Establishes specific public policy purposes by which the effects of the tax preference will be measured. Directs the Joint Legislative Audit and Review Committee to consider specified impacts of the tax preference on clean energy businesses. Requires the Department of Revenue to include the Business and Occupation Tax exemption in its quadrennial tax exemption report.
The amendment failed by voice vote in the House on February 27, 2021
Amendment offered by Rep. Drew Stokesbary (Auburn) (R) on February 27, 2021
Requires the 2022 independent analysis of the Clean Fuels Program on motor vehicle fuel prices to also examine the anticipated cost impacts of fuel price changes to persons earning less than the state median income. Requires the Department of Ecology to determine the amount per recipient, and overall cost to the state, of a rebate program to offset fuel cost increases for persons that earn less than the state median income.
The amendment failed by voice vote in the House on February 27, 2021
• 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 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.
Received in the Senate on March 2, 2021
Referred to the Senate Environment, Energy & Technology Committee on March 2, 2021
Referred to the Senate Ways & Means Committee on March 17, 2021
