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Legislative Update from WRPA Lobbyist 07/15/2015

An Olympia-based scribe captured it well in his coverage of the Session’s adjournment: “At long last, it’s over.”
The 2015 Legislature will go down in the record books for having the longest single-year set of Sessions in state history, spanning nearly six months (176 days). You can actually dial back to a longer series of Sessions – 229 days in 1975-76 -- but those were spread over two years vs. one.
Yet while the Sessions torturously stretched on and on – triggered mostly by a high-profile Operating Budget debate illustrating divided philosophies on governing, spending, and taxes – the 2015 Legislature will also be remembered for some very good end products: an Operating Budget that adds $1.3 billion in new expenditures for K-12 education; a cut in tuition rates at colleges and universities; perhaps the most prolific Capital Budget in nearly a decade; and a historic transportation revenue-and-reform package.
Those of us in parks and recreation and outdoor recreation will also look back at the 2015 Session(s) as an extremely productive one. We can honestly look over our top priorities and see significant progress on every one. There were several important ‘wins’ we can tally up, specifically:

The Legislature approved a historic level of funding for the Youth Athletic Facilities (YAF) program -- $10 million! Of that, $7 million is set aside for grants and $3 million was earmarked for two specific projects.  Remember, though, that after the Recreation & Conservation Funding Board recommended a $12 million allocation for YAF, the Governor’s Capital Budget proposal – and the one from the House – came in at $3 million. The Senate placed a high value on the YAF and came in at $10 million, a figure that held through negotiations. Just the $7 million for competitive grants tops the $6 million program request we in WRPA made to lawmakers! Parks agencies and parks districts that applied for YAF through a letter of intent will now learn by fall whether they qualify for any funding under the Program;

Closing out a high-profile debate over the future of the Washington Wildlife and Recreation Program, the Legislature retained the current structure of WWRP, funded it at $55.3 million, and added another $46 million of investments in local parks and trails, water access, and farmland preservation projects (mostly through $37.1 million of projects in a “Recreation Grant” category for RCO). If you tally the WWRP projects funded within the program category and related ones, the $101+ million investment tops even the $100 million WWRP appropriation we saw in 2007. As we well know, lawmakers also approved a proviso directing an interim stakeholder process and the development of recommended statutory changes to the WWRP. The proviso followed much of the script of a proviso we had put submitted in partnership with the Washington Wildlife and Recreation Coalition (WWRC).

The third time was the charm in our journey of working on passage of a bill to simplify and streamline the definition of what amusement and recreation and physical fitness services should be subject to sales tax. Legislators approved House Bill 1550, which has been signed into law and takes effect Jan. 1, 2016. Under the 1550 statute, we will no longer have to worry about recreational leagues or swim lessons or field rentals being subject to sales tax and we should have less administrative headaches with a statute that is clearer and more explicit.

Lawmakers took a top recommendation from the Governor’s Outdoor Recreation Task Force, put it in motion, and passed a landmark piece of legislation, ESSB 5843. Along with re-injecting funding into the No Child Left Inside program ($1 million), the bill establishes for the first time ever a designated outdoor recreation sector lead adviser within the Governor’s Office. Washington now moves to the forefront among U.S. states in valuing the economic importance of outdoor recreation and staffing the Governor’s Office with a person who will focus on promoting and growing the outdoor recreation economy. The state’s Operating Budget includes $331,000 to fully fund the Outdoor Recreation staffer.

While Washington State Parks had hopes of a higher funding level, the $26 million in general fund support allocated to State Parks puts the agency on much more solid footing. The appropriation also marks a clear recognition that the state’s cherished parks system should not funded on a Discover Pass and fee-for-service basis alone.

The Legislature approved the first major new investment in transportation infrastructure – with a package of revenue, spending, and bonding bills (ESSB 5987, E2SSB 5988, ESSB 5989) due to be signed into law on Wednesday afternoon. For those of us in WRPA, there is plenty to cheer – starting with the fact that a “Complete Streets” grant program is funded for the first time ever at $106 million over 16 years. Lawmakers also added $75 million to the existing Bicycle & Pedestrian Grants program and $56 million to the Safe Routes to Schools program. Additionally, for city and county parks agencies, I would note that the Legislature appropriated $375 million over 16 year for direct distributions to local governments. That funding is fairly flexible and can be applied in part to multi-modal needs.
We can also take pride in the fact that lawmakers imposed very few new mandates or pre-emptions on local agencies, and enacted a series of value-added policy bills.
That doesn’t mean there weren’t some disappointments, because, of course, there were.  For one, lawmakers passed a bill mandating a delayed collection of GMA impact fees.  But even there, there was a silver lining in terms of the amendments to the bill and the time and tools provided for us to deal with it.

Over the next several months, we will now go into “interim” mode – but we have an incredibly important interim process to keep our eye on and participate in. The review of, and recommended changes to, the WWRP needs to be treated as a big, big deal, and I would suggest we in WRPA need to be very active in not only participating in but shaping this process. More to come on that front in the weeks ahead. For now, I will be working on some thank-you letters to the key players involved in the 2015-17 Capital Budget – we’ll have those out to you within a few days.
Top Priorities
Enhance WWRP funding in 2015-17 Capital Budget (Capital Budget): As noted above, WWRP remains in its current structure, funded at $55.3 million. Another $46+ million was appropriated in other categories for WWRP listed projects. In particular, through a $37.1 million list of “Recreation Grants” under RCO, lawmakers invested more significantly in local parks and trails projects than ever before.
HB 1550 - DOR request legislation on “Amusement and Recreation Services” sales taxes (Policy Bill): As noted above, this bill has been signed into law and takes effect Jan. 1, 2016. We have provided Members with a table showing what is and is not subject to sales tax under the new law. Contact Doug Levy or Brittany Jarnot if you would like this re-sent.
Re-establish competitive grant funding for the Youth Athletic Facilities (YAF) program (Capital Budget): As noted above, the YAF reaches a new high-water mark with $7 million in competitive grants and another $3 million in earmarks. If your agency previously responded to a letter of interest process through the RCO, you will be eligible for a Fall 2015 grant-funding round. As a reminder, the grants are conditioned with the following language: The appropriation is provided solely for grants for acquisition, development or renovation of youth athletic fields. The recreation conservation office must require grant recipients of youth recreation field grants to have a fee waiver policy for youth athletic clubs who use the fields acquired, developed or renovation with funds from this appropriation. The fee waiver policy must discount or waive fees based on the youth athletic club's rates charged and scholarships provided to low-income athletes compared to other clubs using the fields.
Support Key Recommendations of the Blue Ribbon Task Force on Outdoor Recreation – ESSB 5843 (Capital and Operating Budgets; Policy Bills): With the passage of 5843 into law, and the bill set to take effect on July 24, one of the first big orders of business is to provide input to the Governor’s Office on the skills, background, and experience we think is essential for the new Outdoor Recreation Sector Lead hire. A group of us will be convening in the next week or two to have a first discussion about possibilities. Another note is that in terms of the No Child Left Inside (NCLI) funding, it appears that RCO will be administering these grants rather than State Parks. This is by choice, as RCO has a grant administration apparatus already in place.
On other Task Force recommendations in the Governor’s Budget or introduced as bills or budget items, we provided a memo and table to all of you last week showing that a number of the top-tier recommendations were positively acted on through bills or the budgets:
Sustainable State Parks Funding: As noted above, $26 million in general fund assistance is provided to State Parks in the 2015-17 biennium.

Real Estate Excise Tax Flexibility
: After being left for “dead,” this bill sprang to life during the Special Sessions. The 2nd Special Session passage of Engrossed House Bill 2122 is a nice – albeit fairly modest – bonus for cities and counties. Under 2122, local governments have the authority to use their second ¼-percent Real Estate Excise Tax (REET) proceeds for the same broad array of purposes as they can use the first ¼-percent. They can also flex up the REET funds toward maintenance needs. In both cases, the flexibility only goes up to $1 million a year maximum, and there must a report compiled showing that the jurisdiction has adequate funding in place or planned to address its Capital Improvement Programs (CIPs). This legislation is a step forward in that it replaces a prior 2011 statute which was temporary in nature. 2122 also removes sunset clause language to make the increased flexibility permanent in statute. The Governor signed 2122 into law last Thursday and it takes effect on Sept. 26, 2015.

"Marine Tourism Bill” – ESSB 6057
: This legislation ended up being tucked into Part VIII of ESSB 6057, a bill providing a few tax incentives to spur economic development and job growth. 6057 was wrapped into the Operating Budget negotiations and thus approved right at the end of the 2nd Special Session. Under current law, large, out-of-state, LLC-designated vessels are subject to an excise tax after 60 days in state waters – which is a disincentive to the larger vessels coming into state waters. Under Part VIII of ESSB 6057, these vessels will be able to stay in Washington waters up to six months a year so long as they obtain a prescribed “vessel permit” for a statutorily-designated fee. The Northwest Marine Trade Association (NMTA) led the successful lobbying effort on this bill, getting it enacted after several years of trying.

“Lid removal” for non-highway purpose fuel tax accounts
: I had reported to you that SHB 1738 looked to be “dead” for the Session, but as readers of my reports know, I have also indicated that “dead” bills can sometimes be resurrected. Such was the case for 1738, after some clarifying conversations between prime sponsor Rep. Ed Orcutt (R-Kalama/20th Dist.) and Senate Transportation Chair Curtis King (R-Yakima/14th Dist.).  When King learned that the refund portions of 1738 were not retroactive, he became more comfortable with it. The bill then passed off the House Floor on June 11 and the Senate Floor on June 27, both by unanimous votes. The Governor signed 1738 into law last Thursday, and it takes effect Sept. 26. 1738 removes a 23-cent cap on the amount of gas tax used for non-highway-purpose allocations, and refunds the lost 14.5 cents of allocation (from back in 2003 and 2005) beginning in the year 2031, after most of the bond obligations have been met from the 2003 “Nickel Package” (5-cent gas tax increase) and 2005 “Transportation Partnership Act” (9 ½ cent gas tax increase). Along with the one-time refund, 1738 also contains language to ensure the non-highway accounts are automatically adjusted upward in the future to coincide with any gas tax increase. Additionally, with the two-phase, 11.9-cent gas tax increase associated with the current gas tax, the proper percentage of new gas tax allocations from that will be credited to the Boating Facilities, “NOVA,” and snowmobile accounts.
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