AN ACT Relating to the addition of airport capital projects as an allowable use of local real estate excise tax revenues;
HB 1650 expands the permitted uses of local real estate excise tax (REET) revenues by adding airport capital projects to the list of eligible capital purposes. Under the bill, counties and cities that impose REETs may use those revenues for airport-related planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement, subject to the bill’s definitions and limitations. The measure also makes conforming changes to existing REET statutes to incorporate airports into the broader framework for local capital financing.
The bill preserves the general rule that REET revenues must be identified in adopted budgets and used for capital projects, while creating specific exceptions and time-limited flexibility for certain jurisdictions. It allows some local governments to use a limited share of available funds for operations and maintenance of existing capital projects, and it includes special provisions for jurisdictions that had already pledged or committed REET revenues before the bill’s effective dates. The bill also addresses airport-specific eligibility, including references to Washington aviation system plans and national airport system plans, and excludes leaded-fuel distribution system improvements from the airport capital project definition.
HB 1650 appears to have broad legislative support. It passed the House Finance Committee unanimously, then passed the House and Senate with overwhelming margins, indicating general agreement that local governments should have more flexibility to fund airport infrastructure through existing local tax authority. The absence of recorded committee testimony in the provided materials limits insight into detailed public debate, but the vote totals suggest the bill was viewed as a practical local-government financing measure rather than a controversial tax increase.
The main point of contention, to the extent one is visible in the bill text, is the scope of allowable spending and the safeguards around using local tax revenues for airport projects instead of other capital needs. The bill carefully limits the new authority to capital projects and includes budget-identification requirements, voter-approval requirements for certain additional taxes, and restrictions on how much revenue may be used for operations and maintenance. These provisions suggest concern about preserving accountability and preventing diversion of REET revenues away from traditional infrastructure priorities.
HB 1650 amends Washington’s local real estate excise tax statutes to authorize counties and cities to use REET revenues for airport capital projects, and in some cases related operations and maintenance of existing capital projects. It modifies RCW provisions governing local REET authority, eligible capital projects, budgeting disclosures, and revenue-use restrictions. The bill affects local governments that levy REET, airport-related capital planning and construction, and taxpayers in jurisdictions choosing to adopt or expand this use of the tax.
The overall sentiment reflected in the voting history is strongly favorable. The bill moved through the House Finance Committee unanimously and then passed both chambers by wide margins, with only a small number of dissenting votes at final passage. That pattern suggests broad bipartisan support for giving local governments an additional financing tool for airport infrastructure and related capital needs.
There is limited evidence of active controversy in the materials provided, but the bill’s structure shows the likely areas of concern: whether airport projects should compete with other local capital priorities, how much REET revenue may be diverted to operations and maintenance, and whether local taxpayers should have direct approval when new or additional excise taxes are imposed. The bill addresses these concerns by limiting the use of funds to defined capital projects, requiring budget transparency, and preserving voter-approval requirements for certain tax actions. The restrictions on leaded-fuel system improvements and the special rules for preexisting pledges or commitments also indicate an effort to narrow the bill’s reach and protect existing financial arrangements.