House Finance advances two dozen tax, local-option and energy bills; many require local votes or further work

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…