AELC 2015 Legislative Session Report

TO: Architects & Engineers Legislative Council

FROM: Cliff Webster
Nathan Fitzgerald

RE: 2015 Legislative Session Report

DATE: July 14, 2015

NEW TRANSPORTATION FUNDING PACKAGE: A three-year effort by AELC and other proponents of an additional transportation funding package reached success in the third special legislative session on July 3rd. The most contested piece of the new investment package, the revenue measure, passed both chambers with strong bipartisan majorities—in the Senate by a vote of 37-7 and by 54-44 in the House of Representatives. The revenue package increases the gas tax 11.9 cents per gallon—seven cents this year and 4.9 cents in 2016. The package provides for $16.0 billion in additional transportation improvements by 2030. In addition, the package authorizes Sound Transit to ask voters for taxing authority to fund up to $15.0 billion for Puget Sound area expansion projects.

Significant controversy surrounded the insistence by Republicans for a provision to discourage Governor Inslee from implementing a low carbon fuel standard (LCFS) by administrative rule or executive order. Republicans were concerned by studies indicating such a requirement could increase gasoline prices at the pump. In the end, Governor Inslee acquiesced to a provision in the revenue bill that will cut about $1.0 billion in funding for public transit and pedestrian projects if any governor adopts LCFS requirements prior to 2023 without legislative approval.

The revenue and appropriations elements of the new transportation funding package are contained in these three bills: Transportation revenue (SB 5987); SB 5988 Additive transportation projects and appropriations (SB 5988); and Bonds supporting transportation activities (SB 5989)

The final transportation package also included several reform measures sought by Republican legislators, although the final versions of these measures involved significant compromise by both chambers and both sides of the aisle. The reform measures are:

HB 2012 Implementation of practical design
SB 5992 Requirements for ferry vessel construction
SB 5993 Apprentice utilization and prevailing wage surveys
SB 5994 Permits for state transportation corridor projects
SB 5995 Modifying the transportation system policy goal of mobility
SB 5996 Streamlined WSDOT permitting process
SB 5997 Design-build and construction program business plan

Of particular interest to AELC among these measures is SB 5997. The bill encourages the use of design-build for projects costing more than $2.0 million. It also directs WSDOT to develop a construction program business plan that: (1) incorporates the findings of the Joint Transportation Committee’s design-build contracting review study; (2) outlines a sustainable level of state-employed engineering staff; (3) includes project delivery methods for design and construction; and (4) makes recommendations on the development of a strong-owner strategy.

More information is available at http://fiscal.wa.gov/BudgetTBillsSenate.aspx and www.leg.wa.gov.

CAPITAL BUDGET: The 2015-2017 capital budget passed by the Legislature and signed by the governor authorizes spending of $3.9 billion during the biennium. Among the appropriations made in the budget are: $75 million for the Housing Trust Fund; $200 million for K-3 class size reductions; and $611 million for the biennial School Construction Assistance Program. The bill also allocates $11 million to the Public Works Assistance Account for previously authorized loans. More details about the capital budget are available at: http://fiscal.wa.gov/BudgetCBillsSenate.aspx (HB 1115)

B&O TAX ON SERVICES: For the third time in five years, AELC worked against a proposal to increase the business and occupation tax (B&O tax) on professional services. Offered by Governor Inslee and supported by House Democratic Caucus leaders, the measure would have increased the gross-receipts tax rate from 1.5 percent to 1.8 percent. Senate and House Republicans united against the tax increase and their position prevailed in the end. Since 1993, the B&O tax on services has been increased twice–to 2.5 percent (1993-1997) and to 1.8 percent (2010-2013). After both increases, AELC worked with allies in the business community to roll-back the increases to the 1.5 percent rate established in the early 1980s. (HB 2224)

QUALIFICATIONS-BASED SELECTION OF A&E SERVICES: A bill to allow two or more public agencies to enter into contracts providing for the joint utilization of architectural or engineering services caught AELC’s attention because it could have caused confusion concerning the formal opinion of the state Attorney General that cities, counties, and special districts cannot contract directly with another agency for architectural and engineering services without first complying with the procurement procedures set forth in RCW 39.80. 2011 AGO No. 2 Before the bill passed the Legislature, AELC successfully sought to amend the measure to ensure any agreement providing for the joint utilization of architectural or engineering services must be executed for a scope of work specifically detailed in the agreement and must be entered into prior to the commencement of procurement of services. (SB 5348/Chapter 232, Laws of 2015)

PREVAILING WAGE REFORM: AELC and the Land Surveyors Association of Washington (LSAW) actively supported a bill to require the Department of Labor and Industries to notify a contractor when a third party has filed a wage survey on the contractor’s behalf without obtaining the contractor’s signature on the survey. SB 5950 passed out of the Senate Commerce & Labor Committee but did not clear the full Senate. For the foreseeable future, it is unlikely any significant prevailing wage bills will pass, due to a stalemate between Democratically-led efforts in the House to expand the law and Senate Republican efforts to curtail expansion of the law to off-site activities and professional services. (SB 5950/HB 1074)

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