The House Finance Committee, chaired by Chair Berg, advanced a package of roughly two dozen bills on Wednesday, Feb. 26, covering tax administration, local-option taxes, real estate excise tax (REET) uses, energy incentives and programs for behavioral-health diversion and veterans services. Committee members frequently debated whether new local taxes should require voter approval or be credited against state revenue, and several bills cleared the committee by close margins.

The most notable procedural outcomes: the committee reported a series of substitute bills out of committee with "due pass" recommendations and recorded a mix of unanimous and split votes. Representative Wiley described one approval as a step back from proposed increases: "The proposed substitute basically dials back what was a modest increase in a successful program to existing levels because of the obvious fiscal constraints we have this year." The committee also heard longer testimony on diversion and behavioral health funding from Representative Santos, who recounted family experience to underline urgency for local capacity.

Why it matters: the bills provide new or expanded local taxing options, change allowable uses for local REET funds, create or expand incentive programs for distributed energy and residential battery storage, and adjust tax administration rules (including capital gains and timber reporting). Many provisions give local governments new authorities to raise revenue for public health, affordable housing, veterans services and diversion programs; those choices may increase local revenues and require local implementation decisions.

Key actions and outcomes (summary of votes and provisions)

- House Bill 10-43 (Commute Trip Reduction tax credit): reported out of committee with a due pass recommendation (voice vote); staff recorded 15 ayes, 0 nays. The adopted proposed substitute kept an extension through 2035 and removed several limit changes from earlier drafts.

- House Bill 17-91 (Expand allowable uses for REIT 1 and REIT 2 revenues): proposed substitute reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. The substitute broadens REIT 2 capital-project definitions to include public investments and construction/improvement of affordable housing supported by interlocal housing collaboration and changes an exemption effective date to Jan. 1, 2026.

- House Bill 18-67 (Affordable housing REIT eligibility): proposed substitute reported out with a due pass recommendation; staff recorded 9 ayes, 6 nays. The substitute expands eligibility so counties — and cities under conditions — may impose an affordable-housing REET (up to 0.5%), clarifies city eligibility timing tied to county adoption or resolution of intent, and requires county crediting where both impose the REIT.

- House Bill 18-05 (Local 0.1% sales/use tax for children and families services): reported out with a due pass recommendation after amendment votes; staff recorded 10 ayes, 5 nays. Amendments considered included a voter-approval requirement and an option to credit the local tax against the state sales/use tax (both were rejected); the committee adopted an amendment requiring voter approval in one earlier similar bill's discussion but not for the final reported substitute. (Details: two amendments were discussed — Orcutt’s voter-approval amendment and Jacobson’s credit-against-state amendment.)

- House Bill 10-44 (Real estate filing fee increase): reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. The amendment discussion centered on whether the state should absorb costs created by prior statutory changes; the adopted language left a $20 fee retained by county treasurers on REET filings that require payment of the REETAX.

- House Bill 17-02 (County public utility tax): substitute reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. The adopted substitute clarifies applicability (consumers outside a city), allows voter approval requirements in amendments, and requires 0.2% of revenues be used for utility assistance for low-income residents in one adopted amendment.

- House Bill 19-13 (Repeal public utility tax credit for home energy assistance): reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. No amendments were adopted.

- House Bill 13-89 (Extend timber reporting requirement for timber purchases): reported out with a due pass recommendation by voice vote; staff recorded 15 ayes, 0 nays. The measure extends a four‑year reporting requirement used to calculate excise-tax values on timber harvests.

- House Bill 14-94 (Multi‑family tax exemption (MFT) changes): reported out with a due pass recommendation; staff recorded 11 ayes, 4 nays. The bill updates reporting, extends a pilot MFT option used by Shoreline, and clarifies program governance.

- House Bill 13-76 (Capital gains prepayment): reported out with a due pass recommendation by voice vote; staff recorded 15 ayes, 0 nays. The bill lets taxpayers who realize long-term capital gains prepay liabilities up to six months before due date; the committee discussed conditions on interest for overpayment.

- House Bill 18-70 (County option tax up to $0.05 for public-health clinics): reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. Amendments requiring voter approval and crediting against the state levy were considered but not adopted.

- Second substitute House Bill 11-02 (Increase support/services for veterans): second substitute reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. Committee considered amendments that would subject the levy to voter approval or credit it against the state levy; those amendments were not adopted.

- Substitute House Bill 16-14 (Capital gains administrative clarifications): substitute reported out with a due pass recommendation; staff recorded 13 ayes, 2 nays. The committee adopted an amendment to clarify required federal forms and attachments for taxpayers filing the state capital gains return.

- Proposed substitute House Bill 19-96 (Local tax for behavioral‑health diversion): proposed substitute reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. The substitute removed a combined-rate restriction tied to HB 18-05 and clarified strategic-plan requirements addressing housing and case management; two amendments addressing voter approval and credit‑back were rejected.

- Second substitute House Bill 18-47 (Agrivoltaics, distributed energy priorities and SEPA exemption): second substitute reported out with a due pass recommendation; staff recorded 14 ayes, 1 nay. The substitute narrows the agrivoltaics definition to projects that continue agricultural production and limits certain tax-treatment changes to farm and agricultural land rather than open-space land.

- Substitute House Bill 18-71 (Residential battery incentive program administered by WSU Extension Energy Program): substitute reported out with a due pass recommendation; staff recorded 10 ayes, 5 nays. The committee adopted an amendment capping total incentive payments at $60,000,000 and $10,000,000 per fiscal biennium and allowing the program to increase per‑customer caps after market review.

- Substitute House Bill 17-28 (Estate tax deduction for farms to add qualified non‑familial heir): substitute reported out with a due pass recommendation by voice vote; staff recorded 15 ayes, 0 nays. An amendment provided a definition for a farm employee and synchronized statutory references.

- Substitute House Bill 16-50 (Allow certain small airports as capital projects for REET use; bar leaded-fuel systems): substitute reported out with a due pass recommendation; staff recorded 15 ayes, 0 nays. The proposed substitute added small-airport categories and prohibited using local REET revenues for installing or improving distribution systems for leaded aviation fuel.

- Second substitute House Bill 10-37 (Public facilities district pilot allowing partial-county districts): second substitute reported out with a due pass recommendation; staff recorded 15 ayes, 0 nays. The second substitute authorizes, through 12/31/2060, creation of a public facilities district that includes less than all unincorporated portions of a participating county under specified population/location criteria and sets governance/treasurer requirements.

What the committee debated repeatedly

- Voter approval vs. local control: Repeated motions and amendments from Representative Orcutt sought to require voter approval before counties or cities could impose new local taxes; those voter‑approval amendments were consistently offered across several bills but were mostly not adopted. Proponents of local control, including Chair Berg and other members, argued local elected officials should retain discretion to use toolbox options; opponents said voters deserve an explicit say on new taxes.

- Credit against state levy or state sales tax: Representative Jacobson repeatedly offered amendments to credit newly authorized local taxes against state levies or the state sales/use tax. Those credit‑back amendments were also repeatedly rejected.

- Caps and guardrails: For incentive programs and new local taxes, the committee frequently added or considered amendments to define caps (for example, the residential battery incentive program was capped at $60 million total and $10 million per biennium) or to earmark a small percentage for low‑income assistance (e.g., 0.2% for utility-assistance in the county public-utility tax discussion).

What’s next

Bills reported out of committee will move to floor consideration and may be amended further. Several bills carry implementation details that will require follow‑up (rulemaking, interlocal agreements, administrative guidance from Department of Revenue or implementing agencies). Members flagged possible further committee activity on March 7.

For readers tracking local revenue authorities, the session signals a clear push to expand local tools alongside debate about voter consent and how to balance state and local revenue responsibilities.