Washington State Legislative Session Report- Final Report of the 2021 Session

The 2021 Legislative Session officially adjourned on Sunday, April 25th, on time. This 105-day biennial budget-writing session marked the first time in history, the majority of the legislative session was held remotely due to the COVID-19 pandemic. 

The virtual format led to a decrease in the number of bills considered this year. Overall, 1,544 pieces of legislation were introduced this session, and 341 of those have passed the legislature and are on their way to the Governor’s desk to likely be signed into law. All bills that were introduced in the first half of the biennium and did not pass in 2021 are automatically reintroduced in the second half of the biennium, the 2022 legislative session. For a full list of bills that have been signed by the Governor click here. 

This year legislative priorities included social equity and police reform, climate, and COVID-19 relief and recovery. Early in the session the legislature took action on bills that would provide immediate COVID­-19 relief including the Governor’s Unemployment Insurance bill (SB 5061) and legislation sponsored by Rep. Walen (HB 1095) which ensures businesses don’t have to pay B&O taxes on money received through emergency assistance grants from the state or federal government.  

Leading up to the 2021 legislative session the House created a Policing Policy Leadership Team to work with stakeholders on legislation to strengthen police accountability. This session the legislature passed several bills related to police reform including two of the Policing Policy Leadership Teams priority legislation, HB 1054 and HB 1310, sponsored by Rep. Jesse Johnson. HB 1054 bans or limits police tactics such as no-knock warrants, chokeholds, neck restraints, and certain military equipment and HB 1310 amends the use of force statute to encourage peace officers to use de-escalation before using force. 

As part of the Legislature’s focus on climate this session the legislature passed, SB 5141, commonly known as the HEAL Act,  introduced by Sen. Saldaña. This legislation builds on work done by the Governor’s Environmental Justice Task Force. In addition to HB 1091 the low carbon fuel standard bill, the 2021 legislative session began with two divergent policy proposals to put an economy-wide price on carbon. Gov. Inslee and Sen. Carlyle favored SB 5126 the “Climate Commitment Act,” a cap-and-trade system like the one in place in California, where some House and Senate Democrats favored SB 5373 a direct carbon tax, known as the “Washington Strong” proposal. Both the LCFS (HB 1091) and the Cap and Invest (SB 5126) passed the legislature in the final days of session. Both versions of the bills that passed the legislature contain language that states the proposals cannot take effect until the legislature passes a 5-cent gas tax increase. 

Also in the final days of session, the Legislature passed SB 5476 which addresses the Washington State Supreme Court’s State v. Blake ruling. In short the legislation reduced the penalty for drug possession to a simple misdemeanor, and mandated law enforcement to offer referrals to assessment and services in lieu of arrest. The proposal expires in 2023, in anticipation of a future legislation to address a long term solution. 

In the last 24 hours of session the legislature passed the 2021-23 Operating Budget (SB 5092). Following a larger than anticipated revenue forecast for the 2021-23 fiscal years, the legislature proceeded to roll out a $59.2 billion Operating Budget for 2021-23. The largest expenditures in the operating budget included: $1.7 billion in federal funds for school reopening, $1.1 billion in federal funds for vaccine deployment, $800 million in state funds for expenditure into the Teachers Retirement System Plan, and $664 million in state and federal funds to increase rates for certain Medicaid providers. A capital gains tax was passed to fund part of the new budget (ESSB 5096) which is estimated to increase NGFO revenues by $415 million in 2021–23 and by $840 million in 2023–25. Most of the funding from the capital gains tax will be focused on early education and child care programs. The budget also includes new revenues from 2SSB 5315, which will subject captive insurers to the 2% premium tax and E2SHB 1277 would impose a $100 surcharge on recorded documents. The final Operating Budget also assumes a one-time transfer of $1.8 billion from the Budget Stabilization Account to the General Fund in fiscal year 2021 and it also appropriates funding from the American Rescue Plan Act (ARPA).

In addition to the Operating Budget, lawmakers also passed 2021-23 state Capital and Transportation Budgets. All session there has been talk of a “grand bargain” that would result in both major clean-energy legislation and a large transportation package that did not fully come to fruition. Although some of the clean energy legislation did pass this session, the chambers were not able to reach an agreement on a larger transportation spending package. Transportation budget writers will continue to work on a larger transportation spending package over the interim. If that conversation progresses enough there is a possibility the legislature could convene before 2022 for the purpose of passing that package. 

An alternative to Senator Carlyle’s Cap & Invest proposal, SB 5373 was introduced by Senator Lovelett early in session.  This bill, otherwise known as “Washington STRONG”, aimed to impose a $25/ton carbon fee, and would have been used to issue “green bonds”.  While the bill was heard in the Senate Environment & Energy committee in March, it failed to move forward this year and will be re-introduced in the 2022 Legislative Session.

At the request of Governor Inslee, Representative Fitzgibbon introduced the Low Carbon Fuel Standard bill this year, HB 1091.   This legislation would require the Department of Ecology to develop a Clean Fuels Program to limit the aggregate, overall greenhouse gas emissions of transportation fuels.  The House has not concurred with the Senate changes, and the Senate is steadfast in its position.  The House and Senate have concurred on all amendments, and both the Speaker of the House and the President of the Senate have signed the bill.

Legislation from Representative Ramel, HB 1084, was unable to find a path forward this legislative session.  Focused on reduction of statewide greenhouse gas emissions by the decarbonization of buildings, the bill made it out of the House Environment & Energy committee but failed to see executive action in Appropriations.  We will therefore see this bill reintroduced in 2022.

The HEAL Act legislation sponsored by Senator Saldana, SB 5141, passed both the House and Senate this year, and now heads to the Governor’s desk for signing.  This bill will require the implementation of the recommendations of the environmental justice task force, with the goal of reducing environmental and health disparities and improving the health of all Washington state residents.

A major piece of legislation this year was Senator Reuven Carlyle’s Cap & Invest bill, SB 5126, also known as the Climate Commitment Act, which establishes a program for capping emissions from certain covered entities and investing emission allowance auction proceeds in certain programs, projects, and activities.  This proposal didn’t pass the Senate until Week 13, leaving only 2 weeks for the House to consider the bill.  While the House was rushed they ultimately passed the bill the day before Sine Die, and the Senate concurred with the changes made by the House. The final language in the bill that passed the legislature delays implementation until the legislature passes a 5-cent gas tax increase. The bill now heads to the Governor’s desk to be signed into law.

While initial momentum was strong  HB 1280 did not move forward this legislative session.  Sponsored by Representative Ramel, this proposal would have set requirements for reducing greenhouse gas emissions in public facilities design.  The House passed its version of the bill in early March, but the bill was never pulled to the Senate floor for a vote.

Representative Shewmake introduced legislation this year aimed at delaying the product stewardship plan and annual report for solar panel manufacturers.  There appeared to be little contention on this subject, and the bill passed the House at the end of February, and passed the Senate at the end of March.  HB 1393 was signed into law by Governor Inslee on Wednesday, April 14th, and is effective July 25, 2021.

We were successful at maintaining Clean Energy Fund levels, and an additional $10 million for building electrification projects was added within the Clean Energy Fund, in addition to the traditional grid modernization and R&D Grants. The following items are included in the Clean Energy Fund capital budget bucket:

  • $17.6 million is provided for grid modernization grants for projects that advance clean energy and renewable technologies;
  • $10.8 million is provided for grants for new and emerging clean energy technologies;
  • $10 million is provided for grants for public agencies to improve building performance, reduce operating costs, and greenhouse gas emissions;
  • $10 million is provided for building electrification grants for projects to demonstrate grid- enabled, high-efficiency, all-electric buildings;
  • $5.5 million is provided for transportation electrification grants for projects that demonstrate innovative approaches to electrification of the transportation system;
  • $5 million is provided for weatherization of homes occupied by low-income families;
  • $5 million is provided for two projects related to maritime electrification;
  • $5 million is provided for a new rural clean energy innovation grants program;
  • $5 million is provided for a housing rehabilitation loan program;
  • $4.9 million is provided to continue the Community Energy Efficiency Program administered by the Washington State University Extension Energy Program; and
  • $2.5 million is provided for grants to nonprofit lenders to create a revolving loan fund to support renewable energy technologies.

We will need to continue to highlight these and the value of the Clean Energy Fund in corresponding projects throughout the interim.  We will also work to maintain and hopefully build legislative support for ongoing support of Clean Energy Fund projects.

We also expect significant efforts during the interim to build towards a statewide transportation package that will include additional electrification efforts within the transportation sector.  We will be monitoring these efforts throughout the interim as they develop.