April 30, 2019: End of Session Final Session Report
The 2019 Legislative Session officially adjourned on Sunday, April 28th, the first time the Legislature has ended on time for a budget-writing session in ten years. This 105-day biennial budget-writing session was marked by a slate of newly elected legislators entering the mix and significantly strengthened Democrat majority in both chambers.
The legislature saw considerable activity and the passage of many pieces of legislation this year in the housing, energy and environment, and mental health policy areas. Also notable was the passage of I-1000, a controversial initiative to the legislature that overturns a voter-approved restriction on affirmative action.
Perhaps most significant this year, however, was the budget. Following a larger than anticipated revenue forecast for the 2019-21 budget, the legislature proceeded to roll out $52.4 billion in operating budget spending (close to an $8 billion increase from the previous biennium) and an unprecedented package of tax bills raising $850 million in new tax revenue. The largest expenditures in the operating budget included: $3.9 billion to maintain current levels of K-12 funding, $451 million to pay for state employee salary increases and health care benefits, $280 million for behavioral health, and $45.5 million to help prevent and fight forest fires. A broad slate of new taxes were passed to fill the spending gap which included a graduated real estate excise (REET) tax (ESSB 5998), increased business and occupation (B&O) tax rate for large banks (SHB 2167) and travel agents (ESSB 6004), a new tax on vapor products (E2SHB 1873), and elimination of the automatic sales tax exemption for non-residents (ESSB 5997).
On top of the budget spending, the Democrats also passed E2SHB 2158, which generates nearly $1 billion over four years by imposing a B&O surcharge on professional services and “advanced computing” businesses to fund various higher education and career connected learning programs. It is notable, however, that no capital gains tax passed this year despite being included in both the House and the Governor’s budget proposals and being proposed separately from the budget in the Senate.
In addition to the operating budget, lawmakers also passed new state capital and transportation budgets in the last 24 hours of session. Also in the final hours, the Legislature passed a controversial bill (ESSB 5313) to lift the local levy lid for school funding.
Finally, this was Speaker Frank Chopp last session as the Speaker of the House. Chopp has been in this role for 20 years, making him the longest serving speaker in Washington State. The House took time on the floor to honor Speaker Chopp on the last day of session. House Democrats will select a new speaker on July 31st. It is unclear at this time who that person will be, but many believe they will select the first female speaker.
This session witnessed the passage of a number of environmental bills including several of the proposals from Governor Inslee’s climate package published in December. These are groundbreaking policies that have the potential to significantly alter our state’s energy landscape and propel Washington as a leader in clean energy and technology.
The most significant of these policies is E2SSB 5116, known as the 100% Clean legislation. It is comprehensive legislation that sets standards for utilities to eliminate coal-fired electricity from their portfolios by the year 2025, achieve a carbon neutral electricity supply by 2030, and service customers with 100% carbon free electricity by 2045, or face penalties. Similar legislation was originally introduced at the end of the 2018 Legislative Session, which led to significant industry and stakeholder engagement during the interim and a well-worked bill that utilities were generally supportive of this year. It had an overall smooth journey through the legislature and ultimately passed in accordance with Governor Inslee’s announcement of his presidential campaign in early April.
Part of Governor Inslee’s proposed climate package this year was clean buildings legislation to set new standards for energy efficiency in buildings. The bill, ESHB 1257, sponsored by Rep. Beth Doglio (D-22), faced challenges from the building and development trades and lost momentum midway through session. It was able to ultimately regain enough drive to make it across the finish line in the last several weeks, however the final version is much narrower than originally proposed; most notably applying now only to commercial buildings, and allowing but not requiring natural gas conservation and renewable standards.
Another important piece of legislation this session was Rep. Jake Fey’s (D-27) green transportation package, E2SHB 2042. The bill raises registration fees on electric vehicles and hybrids to pay for EV and alternative fuel vehicle incentives, amongst other things. The bill received bipartisan support and passed the legislature in the final hours of session.
Two bills regarding solar energy were also successful this session. The passage of E2SSB 5223 concerning net metering is a significant victory for the solar industry, as it will allow many more customers to receive full utility compensation for the energy they generate through their panels. The other bill, EHB 1126, will allow utilities to begin planning for their distributed energy resource (DER) futures.
Finally, the Clean Energy Transition was funded in the final Capital budget at $32.6 million for the biennium. This includes funding for the following:
- Grid Modernization: $6,107,000 (including the Northwest Seaport Alliance shore power electrification: $4,400,000)
- Research, Development, & Deployment: $8,100,000 (including Bioenergy: $1,000,000)
- Loan Programs: $3,00,000
- Pacific Northwest National Laboratory grid scale storage facility: $8,300,000
- Grays Harbor wave energy: $593,000
- Guemes Ferry electrification: $1,500,000
|Concerning the capital budget.||Del to Gov||Tharinger|
|Making 2019-2021 biennium operating appropriations and 2017-2019 biennium second supplemental operating appropriations.||S Pres Signed||Ormsby|
|EHB 1126||Enabling electric utilities to prepare for the distributed energy future.||Del to Gov||Morris|
|Concerning energy efficiency.||Del to Gov||Doglio|
|E2SHB 2042||Advancing green transportation adoption.||S Pres Signed||Fey|
|2SHB 2157||Updating the Washington tax structure to address the needs of Washingtonians.||H Rules C||Tarleton|
|Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future.||Del to Gov||Carlyle|
|Concerning net metering.||Del to Gov||Palumbo|
|SSB 5588||Authorizing the production, distribution, and sale of renewable hydrogen.||C 51 L 19||Hawkins|
|ESSB 6004||Concerning the taxation of travel agents and tour operators.||Del to Gov||Rolfes|
|Reducing the greenhouse gas emissions associated with transportation fuels.||H Rules 3C||Fitzgibbon|
|SHB 1113||Amending state greenhouse gas emission limits for consistency with the most recent assessment of climate change science and with the United States’ commitment under the 2015 Paris climate agreement.||H Approps||Slatter|
|HB 1127||Concerning the electrification of transportation.||H Env & Energy||Morris|
|HB 1128||Authorizing an alternative form of regulation of electrical and natural gas companies.||H Env & Energy||Morris|
|HB 1129||Concerning customer-sited electricity generation.||H Env & Energy||Morris|
|Supporting Washington’s clean energy economy and transitioning to a clean, affordable, and reliable energy future.||H Approps||Tarleton|
|SHB 1226||Encouraging investment in and reducing the costs of transitioning to the clean energy future.||H Finance||DeBolt|
|HB 1397||Encouraging the use of electric or hybrid-electric aircraft for regional air travel.||H Rules 3C||Slatter|
|SHB 1642||Allowing the energy savings associated with on-bill repayment programs to count toward a qualifying utility’s energy conservation targets under the energy independence act.||H Rules C||Doglio|
|Advancing electric transportation.||H Env & Energy||Slatter|
|Concerning commercial property assessed clean energy and resilience.||H Rules C||Doglio|
|SHB 1832||Concerning the electrification of the Washington public vehicle fleet.||H Trans||Macri|
|Concerning net metering.||H Env & Energy||Mead|
|HB 1984||Ensuring that attempts to limit greenhouse gas emissions in Washington state do not make Washington’s agricultural products and food processing businesses economically uncompetitive, thereby shifting emissions to jurisdictions without similar greenhouse gas policies.||H Env & Energy||Maycumber|
|Concerning use of industrial waste through industrial symbioses.||H Env & Energy||Doglio|
|SHB 2156||Investing in quality prekindergarten, K-12, and postsecondary opportunities throughout Washington with excise taxes on sales and extraordinary profits of high valued assets.||H Rules R||Jinkins|
|Concerning the tax treatment of renewable natural gas.||S Environment, E||King|
|Concerning appliance efficiency standards.||S Rules X||Carlyle|
|SB 5118||Concerning the right to consume self-generated electricity.||S Rules X||Palumbo|
|Concerning the capital budget.||S Rules 2||Frockt|
|Making 2019-2021 biennium operating appropriations.||S Ways & Means||Rolfes|
|Concerning energy efficiency.||S Rules X||Carlyle|
|Advancing electric transportation.||S Ways & Means||Palumbo|
|Reducing the greenhouse gas emissions associated with transportation fuels.||S Environment, E||Salda?a|
|SB 5629||Promoting small modular reactors in Washington.||S Environment, E||Brown|
|Concerning commercial property assessed clean energy and resilience.||S Environment, E||Palumbo|
|Reducing emissions by making changes to the clean car standards and clean car program.||S Rules 3||Nguyen|
|Concerning use of industrial waste through industrial symbioses.||S Rules 3||Brown|
|SB 5980||Relating to greenhouse gas emissions.||S Environment, E||Honeyford|
|SB 5981||Implementing a greenhouse gas emissions cap and trade program.||S Environment, E||Carlyle|
|SB 6000||Relating to state general obligation bonds and related accounts.||S Ways & Means||Frockt|
|SB 6001||Relating to the capital budget.||S Ways & Means||Frockt|
|SB 6002||Relating to the capital budget.||S Ways & Means||Frockt|
|SB 6003||Relating to state government.||S Ways & Means||Rolfes|
|SB 6005||Relating to revenue.||S Ways & Means||Rolfes|
|SB 6006||Relating to education.||S Ways & Means||Rolfes|