SHB 1650
SignedHouse
Airport projects/local REET
Concerning the addition of airport capital projects as an allowable use of local real estate excise tax revenues.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill adds airport capital projects—specifically for airports with fewer than 10,000 annual enplanements—to the list of allowable uses for local real estate excise tax (REET) revenues in Washington. It updates two state laws to clarify that smaller airports can be funded with these local taxes, without changing existing restrictions on how the funds may be used.
- Allows counties and cities to use local real estate excise tax (REET) revenues for capital projects at airports with fewer than 10,000 annual enplanements (as determined by the Federal Aviation Administration).
- Amends RCW 82.46.010 and RCW 82.46.035 to explicitly include airports under 10,000 annual enplanements as an allowable use of REET funds.
- Maintains existing restrictions: REET funds can only be used for capital (not operational) projects unless specific exceptions apply (e.g., up to 35% for operations/maintenance of existing projects through December 31, 2023).
- Requires local governments to identify in their budgets which capital projects—including airports—are funded with REET revenue and confirm the tax is in addition to other available funds.
- Applies only to REET revenues collected after March 31, 2025, and does not affect existing debt obligations or pre-committed projects.
Who is affected
- Local governments (counties and cities) — Local governments (counties and cities) gain new flexibility to use local real estate excise tax (REET) revenues for airport capital projects, especially smaller airports with fewer than 10,000 annual enplanements.
- Residents of communities with small airports — Residents of areas with smaller airports may benefit from improved or expanded airport infrastructure, such as runway upgrades, terminal improvements, or safety enhancements, if their local government chooses to fund such projects with REET funds.
- Airport operators — Airport operators (often county or city departments or authorities) managing small airports (under 10,000 annual enplanements) can now access local tax revenue for capital improvements previously restricted to other infrastructure.
- Property owners and real estate buyers/sellers — Homeowners and property buyers in jurisdictions that impose the additional REET may see slightly higher transfer taxes at closing, though the tax rate remains capped at 0.25% or 0.5% depending on the type of REET.
Pro/Con Analysis
Potential Benefits (3)
Allowing REET funds to be used for capital projects at small airports improves aviation safety and emergency response capacity — e.g., runway resurfacing, lighting upgrades, and fire/rescue infrastructure — directly benefiting rural residents who rely on these airports for medical transport, fire suppression, and law enforcement.
Public SafetyPeopleRef: Sec. 1(6)(a) and Sec. 2(5)(c)The requirement that local governments certify REET funds are *in addition to* other available funds helps prevent substitution of existing budgets and strengthens fiscal accountability — giving communities more transparent control over how local tax revenue is spent on critical infrastructure.
Local GovernmentPeopleRef: Sec. 1(1) and Sec. 2(1)Expanding REET eligibility to small airports supports regional connectivity — especially in rural areas where airports serve as lifelines for access to healthcare, education, and jobs — reducing isolation and improving equitable access to essential services.
TransportationPeopleRef: Sec. 1(6)(a) and Sec. 2(5)(c)
Potential Concerns (4)
The bill does not provide new funding but only expands allowable uses of existing REET revenues, meaning communities must choose between airport projects and other infrastructure (e.g., roads, water, housing) — potentially diverting funds from higher-priority needs like affordable housing or flood control in growing regions.
Local GovernmentRef: Sec. 1(2)(a) and Sec. 2(2)The 10,000 annual enplanement threshold excludes most commercial airports — only 12 of Washington’s ~200 public-use airports qualify — limiting the bill’s impact to a narrow subset of rural communities and leaving many small airports without scheduled service still excluded.
Local GovernmentRef: Sec. 1(6)(a) and Sec. 2(5)(c)By restricting REET use to capital projects only (with limited operational exceptions until 2023), the bill excludes funding for operational costs like staffing, security, or safety inspections — meaning even improved airports may lack sustainable operations, and communities cannot use REET to address urgent housing needs if they prioritize airport upgrades.
HousingLean peopleRef: Sec. 1(2)(a) and Sec. 2(2)While small airports may see infrastructure improvements, the bill does not require or incentivize job creation or local hiring — and most small airports employ few people, so economic benefits are likely limited to regional contractors rather than local workers.
Business & EmploymentRef: Sec. 1(2)(a) and Sec. 2(2)
Who Is Most Affected
Rural counties and small cities with airports under 10,000 annual enplanements gain new authority to fund safety and infrastructure upgrades — but must prioritize airport projects over other needs like roads or housing, especially in constrained budgets.
Residents in remote or rural areas gain improved access to emergency services, medical transport, and regional connectivity — but only if their local government chooses to fund airport projects rather than other community priorities.
Airport authorities (often county-run) gain access to local tax revenue for capital improvements — but cannot use REET for ongoing operations, limiting long-term sustainability of upgrades without separate funding.
Property owners in jurisdictions that impose REET face no rate change, but may see opportunity costs if local governments shift funds from housing or roads to airports — potentially affecting affordability and quality of life in fast-growing areas.
State agencies (e.g., Department of Transportation, Aviation Division) face no new costs or responsibilities — but may see increased demand for technical assistance or coordination on airport projects in rural areas.