Multiple Agency Fiscal Note Summary - 2S HB 1335, Racial restrictions/review (final 3/9/2021)
Summary
Multiple Agency Fiscal Note Summary for Bill Number 1335 2S HB, titled Racial restrictions/review, with a preparer line naming Gwen Stamey of OFM and a final date of 3/9/2021. It is followed by a Judicial Impact Fiscal Note for the Administrative Office of the Courts reporting No Fiscal Impact, and an Individual State Agency Fiscal Note for the Department of Commerce. The Commerce note describes Section 2 as a grant program to review existing recorded covenants and deed restrictions, with grants to higher education institutions beginning no later than January 1, 2022, and treats its cost as indeterminate. For illustrative purposes only, the department assumes total costs of $456,637 in FY22. A Department of Revenue fiscal note reports No Fiscal Impact.
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Multiple Agency Fiscal Note Summary
Bill Number: 1335 2S HB Title: Racial restrictions/review
Estimated Cash Receipts
NONE
Agency Name 2021-23 2023-25 2025-27
GF- State Total GF- State Total GF- State Total
Local Gov. Courts No fiscal impact
Loc School dist-SPI
Local Gov. Other Non-zero but indeterminate cost and/or savings. Please see discussion.
Local Gov. Total
Estimated Operating Expenditures
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Administrative .0 0 0 0 .0 0 0 0 .0 0 0 0
Office of the Courts
Department of Non-zero but indeterminate cost and/or savings. Please see discussion.
Commerce
Department of .0 0 0 0 .0 0 0 0 .0 0 0 0
Revenue
Department of .0 0 0 0 .0 0 0 0 .0 0 0 0
Licensing
Environmental and .0 0 0 0 .0 0 0 0 .0 0 0 0
Land Use Hearings
Office
Total $ 0.0 0 0 0 0.0 0 0 0 0.0 0 0 0
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts No fiscal impact
Loc School dist-SPI
Local Gov. Other Non-zero but indeterminate cost and/or savings. Please see discussion.
Local Gov. Total
Estimated Capital Budget Expenditures
Agency Name 2021-23 2023-25 2025-27
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Administrative Office of .0 0 0 .0 0 0 .0 0 0
the Courts
Department of Commerce .0 0 0 .0 0 0 .0 0 0
Department of Revenue .0 0 0 .0 0 0 .0 0 0
Department of Licensing .0 0 0 .0 0 0 .0 0 0
Environmental and Land .0 0 0 .0 0 0 .0 0 0
Use Hearings Office
Total $ 0.0 0 0 0.0 0 0 0.0 0 0
FNPID: 62742
FNS029 Multi Agency rollup
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts No fiscal impact
Loc School dist-SPI
Local Gov. Other Non-zero but indeterminate cost and/or savings. Please see discussion.
Local Gov. Total
Estimated Capital Budget Breakout
Prepared by: Gwen Stamey, OFM Phone: Date Published:
(360) 902-9810 Final 3/ 9/2021
FNPID: 62742
FNS029 Multi Agency rollup
Judicial Impact Fiscal Note
Bill Number: 1335 2S HB Title: Racial restrictions/review Agency: 055-Administrative Office
of the Courts
Part I: Estimates
X No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The revenue and expenditure estimates on this page represent the most likely fiscal impact. Responsibility for expenditures may be
subject to the provisions of RCW 43.135.060.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Legislative Contact Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Preparation: Pam Kelly Phone: 360-705-5318 Date: 03/02/2021
Agency Approval: Ramsey Radwan Phone: 360-357-2406 Date: 03/02/2021
OFM Review: Gaius Horton Phone: (360) 819-3112 Date: 03/03/2021
167,378.00 Request # 1335 2SHB-1
Form FN (Rev 1/00) 1 Bill # 1335 2S HB
FNS061 Judicial Impact Fiscal Note
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact on the Courts
Please see attached Judicial Impact Note (JIN).
II. B - Cash Receipts Impact
II. C - Expenditures
Part III: Expenditure Detail
III. A - Expenditure By Object or Purpose (State)
NONE
III. B - Expenditure By Object or Purpose (County)
NONE
III. C - Expenditure By Object or Purpose (City)
NONE
III. D - FTE Detail
NONE
III. E - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B1 - Expenditures by Object Or Purpose (State)
NONE
IV. B2 - Expenditures by Object Or Purpose (County)
NONE
IV. B3 - Expenditures by Object Or Purpose (City)
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and dexcribe potential financing methods
NONE
167,378.00 Request # 1335 2SHB-1
Form FN (Rev 1/00) 2 Bill # 1335 2S HB
FNS061 Judicial Impact Fiscal Note
Part II: Narrative Explanation
This bill would allow for property owners, tenants or homeowners’ association to be entitled to
have any discriminatory restrictions or covenants contrary to public policy, RCW 49.60.224
struck from their property chain of title.
Part II.A – Brief Description of what the Measure does that has fiscal impact on
the Courts
Section 4(1)(b) – Would allow for the person bringing action in Superior Court to notify the
county auditor by email, certified mail, or personally when there is a declaratory judgement to
remove any discriminatory language from the chain of title. The auditor or official charged with
recording instruments shall remove the void provisions from the chain of title. The removed
language from the chain of title would be allowed to be preserved for historical purposes.
II.B - Cash Receipt Impact
None
II.C – Expenditures
None
Part III: Expenditure Detail
III.A – Expenditures by Object or Purpose
FY 2021 FY 2022 2021-23 2023-25 2025-27
FTE – Staff Years
A – Salaries & Wages
B – Employee Benefits
C – Prof. Service Contracts
E – Goods and Services
G – Travel
J – Capital Outlays
P – Debt Service
Total:
III.B – Detail:
Job Classification Salary FY 2021 FY 2022 2021-23 2023-25 2025-27
Total FTE’s
Part IV: Capital Budget Impact
None.
Part V: New Rule Making Required
None.
JUDICIAL IMPACT FISCAL NOTE BILL# 1335 2SHB
Individual State Agency Fiscal Note
Bill Number: 1335 2S HB Title: Racial restrictions/review Agency: 103-Department of
Commerce
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
Non-zero but indeterminate cost and/or savings. Please see discussion.
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Preparation: Matthew Ojennus Phone: 360-725-4047 Date: 03/09/2021
Agency Approval: Darrell Stoa Phone: (360) 725-2723 Date: 03/09/2021
OFM Review: Gwen Stamey Phone: (360) 902-9810 Date: 03/09/2021
Form FN (Rev 1/00) 167,582.00 Request # 164-600-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1335 2S HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
Difference between second substitute bill and substitute bill:
A specific appropriation for the work is removed. Amends disclosure requirements by sellers of property and
amends language on process to legally strike elements of title attachments.
Summary of second substitute bill:
Section 2 is a new section requiring the Department of Commerce (department) to establish and administer a
grant program to review existing recorded covenants and deed restrictions to identify those that have unlawful
restrictions including but not limited to those based on race. The department shall grant funds to public and
private not-for-profit higher education institutions for this purpose. The department must begin awarding grants
no later than January 1, 2022. This section expires July 1, 2027.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the
method by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time
and ongoing functions.
Section 2 of the bill is considered indeterminate. A funding amount is not specified, and without a specific
appropriation the cost is indeterminate until additional information is available to determine workload impacts,
such as the total funding available.
FOR ILLUSTRATIVE PURPOSES ONLY:
Agency Assumptions
The department assumes the grant program would be competitive and would award grants to 3 successful
applications with grant amounts of $250,000 each for the biennium. The department assumes that universities
and community colleges with law, paralegal, or real estate programs would be the most likely successful
applicants in a grant program. These are:
University of Washington – Law
Gonzaga University – Law
Seattle University – Law
North Seattle College – Real Estate
Washington State University – Real Estate
Clark College – Paralegal
Edmonds College – Paralegal
Highline College – Paralegal
South Puget Sound Community College – Paralegal
Racial restrictions/review 103-Department of Commerce
Form FN (Rev 1/00) 167,582.00 Request # 164-600-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1335 2S HB
Spokane Community College – Paralegal
Tacoma Community College – Paralegal
Whatcom Community College – Paralegal
This list does not preclude other applicants from applying.
Section 2 will require the following:
0.5 FTE Commerce Specialist 3 (1,044 hours) in FY22-FY27 to develop and administer this program. This
would include developing the solicitation materials, conducting the application process, coordinating review of
applications and selection of recipients and management of contracts.
Salaries and Benefits:
FY22-FY27: $52,307 per fiscal year
Goods and Services, Travel and Equipment:
FY22: $11,546
FY23-FY27: $7,546 per fiscal year
The department assumes travel is for on-site monitoring of grants. The department is assuming there will be six
days of per diem meals and three nights of lodging per fiscal year to complete the monitoring trips.
Grants, Benefits, Client Services:
FY22-FY27: $375,000 per fiscal year
Grant funds will be awarded to successful applicants to research land deeds for attachments that property
ownership restrictions based on race or religion. For those deeds with restrictions the successful grant recipients
will notify the property owner of the attachment and provide instructions on how to remove the attachment.
Intra-agency Reimbursements:
FY22-FY27: $17,784 per fiscal year
Note: Standard goods and services costs include supplies and materials, employee development and training,
Attorney General costs, central services charges and agency administration. Intra-agency Reimbursement-Agency
administration costs (e.g., payroll, HR, IT) are funded under a federally approved cost allocation plan.
==============================
Total Costs
FY22: $456,637
FY23-FY27: $452,637 per fiscal year
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Non-zero but indeterminate cost and/or savings. Please see discussion.
Racial restrictions/review 103-Department of Commerce
Form FN (Rev 1/00) 167,582.00 Request # 164-600-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1335 2S HB
III. B - Expenditures by Object Or Purpose
Non-zero but indeterminate cost and/or savings. Please see discussion.
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
NONE
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and describe potential financing methods
NONE
IV. D - Capital FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part IVB
NONE
Part V: New Rule Making Required
Racial restrictions/review 103-Department of Commerce
Form FN (Rev 1/00) 167,582.00 Request # 164-600-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 1335 2S HB
Department of Revenue Fiscal Note
Bill Number: 1335 2S HB Title: Racial restrictions/review Agency: 140-Department of
Revenue
Part I: Estimates
X No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
X Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Preparation: Frank Wilson Phone: 360-534-1527 Date: 03/03/2021
Agency Approval: Don Gutmann Phone: 360-534-1510 Date: 03/03/2021
OFM Review: Ramona Nabors Phone: (360) 902-0547 Date: 03/03/2021
Request # 1335-3-1
Form FN (Rev 1/00) 167,554.00 1 Bill # 1335 2S HB
FNS062 Department of Revenue Fiscal Note
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe, by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
Note: This fiscal note reflects language in 2SHB 1335, 2021 Legislative Session.
COMPARISON OF 2ND SUBSTITUTE BILL WITH SUBSTITUTE BILL:
Removes appropriations of $475,000 from the general fund to the Department of Commerce (Department) in Fiscal Year
2022-2023.
Removes the requirement for realtors to provide notice of any recorded covenant or deed restrictions that are unlawful
restrictions to purchasers of real property at the time of sale.
Adds a new section on the intent of the legislature and a remedy for existing racial, religious, or ethnic-based property
restrictions, covenants on a deed, or chain of title for real property.
Adds a disclosure statement between the buyer and seller. The seller must fill out and complete the disclosure statement within
five business days after mutual acceptance of a written contract to purchase between the buyer and a seller, unless otherwise
agreed.
Adds a requirement that a person bringing an action to strike unlawful covenant or deed restrictions in superior court to deliver
the court order striking such provisions by email, mail, or personal delivery to the county auditor or county official responsible
for recording official documents in the county records, and specifies how void provisions are to be removed by the auditor or
official.
PROPOSED LAW:
Adds that Department shall establish and administer a grant program to review existing recorded covenants and deed
restrictions to identify recorded documents that include racial or other unlawful restrictions and notify property owners.
Adds that the Department shall establish a process for accepting grant applications from higher education institutions and begin
awarding grants no later than January 1, 2022.
Adds the higher education institutions selected to participate in the grant programs shall review existing recorded covenants
and deed restrictions and identify unlawful restrictions under RCW 49.60.224.
Adds the higher education institutions notify property owners that own property subject to racial and unlawful restrictions and
the county auditor and utilize students to complete the requirements of the grant program. This section expires July 1, 2027.
Removes the requirement that counties and cities review existing deeds and covenants for unlawful racial or other
discriminatory restrictions and provide notice to property owners, and removes county and city authority to use real estate
excise tax revenue for the review and notification requirements.
Removes appropriations of $475,000 from the general fund to the Department of Commerce in Fiscal Year 2022-2023.
Removes the requirement for realtors to provide notice of any recorded covenant or deed restrictions that are unlawful
restrictions to purchasers of real property at the time of sale.
Adds a new section on the intent of the legislature and a remedy for existing racial, religious, or ethnic-based property
Request # 1335-3-1
Form FN (Rev 1/00) 167,554.00 2 Bill # 1335 2S HB
FNS062 Department of Revenue Fiscal Note
restrictions, covenants on a deed, or chain of title for real property.
Adds a disclosure statement between the buyer and seller. The seller must fill out and complete the disclosure statement within
five business days after mutual acceptance of a written contract to purchase between the buyer and a seller, unless otherwise
agreed.
Adds a requirement that a person bringing an action to strike unlawful covenant or deed restrictions in superior court to deliver
the court order striking such provisions by email, mail, or personal delivery to the county auditor or county official responsible
for recording official documents in the county records, and specifies how void provisions are to be removed by the auditor or
official.
EFFECTIVE DATE:
The bill takes effect 90 days after final adjournment of the session in which it is enacted. This act applies to real estate
transactions on January 1, 2022, or thereafter.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
This legislation results in no revenue impact to taxes administered by the Department of Revenue.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the method
by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time and
ongoing functions.
The Department of Revenue will not incur any costs with the implementation of this legislation.
Part III: Expenditure Detail
III. A - Expenditures by Object Or Purpose
NONE
III. B - Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in Part I
and Part IIIA
NONE
III. C - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
Request # 1335-3-1
Form FN (Rev 1/00) 167,554.00 3 Bill # 1335 2S HB
FNS062 Department of Revenue Fiscal Note
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and dexcribe potential financing methods
NONE
None.
Part V: New Rule Making Required
Request # 1335-3-1
Form FN (Rev 1/00) 167,554.00 4 Bill # 1335 2S HB
FNS062 Department of Revenue Fiscal Note
Individual State Agency Fiscal Note
Bill Number: 1335 2S HB Title: Racial restrictions/review Agency: 240-Department of
Licensing
Part I: Estimates
X No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Preparation: Xia Zhan Phone: 360 902-0113 Date: 03/03/2021
Agency Approval: Kristin Bettridge Phone: 360-902-3644 Date: 03/03/2021
OFM Review: Kyle Siefering Phone: (360) 995-3825 Date: 03/03/2021
Form FN (Rev 1/00) 167,371.00 Request # 1335 2S HB-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1335 2S HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
This bill requires the Department of Commerce (COM) to establish a grant program to review existing deeds and
covenants for unlawful racial restrictions, and provide applicable notice to property owners and county auditors.
It also requires realtors to provide similar notice of unlawful recorded covenant or deed restrictions to purchasers
at the time of sale. This is no work done by the Department of Licensing (DOL) in this bill. Therefore, there is no
fiscal impact to DOL.
The second substitute bill differs from SHB 1335 as it clarifies the intent and adds a little more substance, but
continues to task COM with establishing a grant program and provides for a Notice to the Buyer within a sales
transaction. None of this requires action from DOL.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
The change in this bill is separate from DOL fees and does not impact revenue to the department.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the
method by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time
and ongoing functions.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
NONE
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
Racial restrictions/review 240-Department of Licensing
Form FN (Rev 1/00) 167,371.00 Request # 1335 2S HB-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1335 2S HB
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and describe potential financing methods
NONE
IV. D - Capital FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part IVB
NONE
None.
Part V: New Rule Making Required
Racial restrictions/review 240-Department of Licensing
Form FN (Rev 1/00) 167,371.00 Request # 1335 2S HB-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1335 2S HB
Individual State Agency Fiscal Note
Bill Number: 1335 2S HB Title: Racial restrictions/review Agency: 468-Environmental and
Land Use Hearings Office
Part I: Estimates
X No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Preparation: Nina Carter Phone: 360 664-9171 Date: 03/01/2021
Agency Approval: Nina Carter Phone: 360 664-9171 Date: 03/01/2021
OFM Review: Lisa Borkowski Phone: (360) 902-0573 Date: 03/04/2021
Form FN (Rev 1/00) 167,344.00 Request # -1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1335 2S HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
Second Substitute HB 1335
Sec. 1 adds a new section to Discrimination – Human Rights Commission Ch. 49.60 establishes a grant program
from Department of Commerce for funding to universities to review existing deeds and covenants for unlawful
racial or other discriminatory restrictions. The universities will give notice of such restrictions to property
owners and county auditors.
Sec. 2 new section is added to chapter 43.330 RCW allowing universities to administer a grants program to
review existing recorded covenants and deed restrictions.
Sec. 3 requires realtors to provide notice of any unlawful recorded covenant or deed restriction to purchasers at
the time of sale.
Sec. 4 specifies how a person brings legal action under certain provisions of the Human Rights Commission.
Fiscal Impact: None to the Growth Management Hearings Board.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the
method by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time
and ongoing functions.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
NONE
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
Racial restrictions/review 468-Environmental and Land Use Hearings Office
Form FN (Rev 1/00) 167,344.00 Request # -1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1335 2S HB
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and describe potential financing methods
NONE
IV. D - Capital FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part IVB
NONE
Part V: New Rule Making Required
Racial restrictions/review 468-Environmental and Land Use Hearings Office
Form FN (Rev 1/00) 167,344.00 Request # -1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1335 2S HB
LOCAL GOVERNMENT FISCAL NOTE
Department of Commerce
Bill Number: 1335 2S HB Title: Racial restrictions/review
Part I: Jurisdiction-Location, type or status of political subdivision defines range of fiscal impacts.
Legislation Impacts:
Cities:
X Counties: County Auditors would provide minor administrative assistance to higher education researchers who participate in the
Department of Commerce grant program that would be established by this legislation. Auditors would also record
modified property documents when requested by landowners or through a court order .
Special Districts:
Specific jurisdictions only:
Variance occurs due to:
Part II: Estimates
No fiscal impacts.
Expenditures represent one-time costs:
Legislation provides local option:
X Key variables cannot be estimated with certainty at this time: Total number of real property documents that auditors may choose to
digitize; the number of documents that would be identified as having
unlawful language; number of documents that would need to be
modified and recorded; number of impacted landowners who may
seek a court order to modify property documents.
Estimated revenue impacts to:
Non-zero but indeterminate cost and/or savings. Please see discussion.
Estimated expenditure impacts to:
Non-zero but indeterminate cost and/or savings. Please see discussion.
Part III: Preparation and Approval
Fiscal Note Analyst: Jordan Laramie Phone: 360-725-5044 Date: 03/09/2021
Leg. Committee Contact: Jessica Van Horne Phone: 360-786-7288 Date: 02/26/2021
Agency Approval: Allan Johnson Phone: 360-725-5033 Date: 03/09/2021
OFM Review: Gwen Stamey Phone: (360) 902-9810 Date: 03/09/2021
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FNS060 Local Government Fiscal Note
Part IV: Analysis
A. SUMMARY OF BILL
Provide a clear, succinct description of the bill with an emphasis on how it impacts local government .
CHANGE FROM PRIOR BILL:
Sec. 1 is new legislature findings surrounding restrictive language in real property documents such as covenants on a deed , or chain of
title, for that real property.
Sec. 2 is a new chapter to RCW 43.330 (Department of Commerce)
Same language as Sec. 1 of the prior bill. Establishes Department of Commerce grant program for higher institutions to review real
property documents for restrictive language and their responsibility to notify county auditors and property owners , where applicable.
Sec. 3 amends RCW 64.06.020 (Real Property Transfers – Sellers’ Disclosures, Improved residential real property—Seller's duty—
Format of disclosure statement—Minimum information.)
Includes a new notice to the buyer in the real property transfers, sellers’ disclosures documentation. The new notice gives buyers
information on how to, “strike illegal language from covenants or deeds by bringing an action in Superior Court or by the free recording of
a restrictive covenant modification document,” by county auditors.
Sec. 4 amends RCW 49.60.227 (Discrimination – Human Rights Commission, Declaratory Judgment Action to Strike Discriminatory
Provision of Real Property Contract—Restrictive Covenant Modification Document as Alternative)
(1)(b) If a court finds any provisions of a real property instrument contains a provision that is void under RCW 49 .60.224 it must enter an
order striking the void provisions from the public record, eliminating the provisions from the title or lease.
A person bringing an action to strike a written real property instrument that is void under RCW 49 .60.224 must deliver the order by email,
certified United States mail, or personally to the office of the county auditor, in the county in which the property is located. For charter
counties, the order must be delivered in the same ways, to the official charged with the responsibility for recording instruments in county
records. The auditor or official must remove the void provisions entirely from the chain of title, by removing the record from the chain of
title, if feasible. The auditor or official may also strike through the void language and include the court order in the chain of title . A record
removed from the chain of title may be preserved for historical or archival purposes .
Sec. 5 This act applies to real estate transactions entered into on, or after, January 1, 2022.
SUMMARY OF CURRENT BILL:
The legislation would create a grant program within the Department of Commerce for qualifying colleges and universities to find and
identify written property documents that have racial or other restrictive language that is unlawful per RCW 49 .60.224. County auditors
would be notified when these colleges and universities identified existing covenants and deeds as having restrictive language against
protected classes, as well as, the property owners of these documents. Additionally, this legislation establishes the process for the
restrictive language to be entirely removed from the covenants from the chain of title , if feasible. These actions would be done through
action taken by county auditor or the county official charged with the responsibility for recording instruments in the county record .
BACKGROUND:
The Washington Law Against Discrimination (WLAD) declares void any provision in a written instrument relating to real property that
purports to forbid or restrict the conveyance, encumbrance, occupancy, or lease of the property to individuals within a protected class. If a
written instrument contains a provision void under the WLAD, the owner, occupant, or tenant of the property or the homeowners'
association board may bring an action in superior court to have the provision stricken from the public records .
B. SUMMARY OF EXPENDITURE IMPACTS
Briefly describe and quantify the expenditure impacts of the legislation on local governments , identifying the expenditure provisions by
section number, and when appropriate, the detail of expenditures. Delineate between city, county and special district impacts.
CHANGES FROM PRIOR BILL:
Changes from the prior bill would have indeterminate, but potentially significant, costs for local governments. These costs would depend
on the scale of involvement for county auditors in the goals of the Department of Commerce (Commerce) grant program , modifying
documents that are discovered with restrictive language, and records processing efficiencies that may streamline research and document
modifications are undertaken by some, or all, county auditors.
SUMMARY OF CURRENT BILL:
This legislation would have indeterminate, but potentially significant, costs for county auditors that help facilitate the goals of the
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FNS060 Local Government Fiscal Note
Commerce grant program. These costs would vary by jurisdiction, and be dependent on how many documents county auditors may choose
to digitize, how many documents are found to have restrictive language, how many documents need to be redacted or have portions
removed, costs to assist researchers with technical questions about document review, and costs to assist property owners in how to make
changes to existing real property documents. These costs could also be impacted by two scenarios for reviewing and processing
documents: 1) using the existing property records systems, which are a mixture of digital and physical records, or 2) fully digitizing the
existing records within the online document search and property document recording system . All jurisdictions would have to abide by
property document modification actions required by court order.
LOCATION OF DOCUMENT SEARCH:
County auditors may be required to provide assistance in sourcing documents to the higher education institutions for this work , if
necessary. Whether this work is isolated within the county jurisdiction where the college resides or in counties around the state , is not
known. There are 26 colleges and universities in Washington State that are regionally accredited by the Northwest Commission on
Colleges and University. These colleges and universities are in 11 counties, and include Benton, Clark, King, Kittitas, Pierce, Spokane,
Thurston, Walla Walla, Whatcom, Whitman, and Yakima Counties.
COSTS ASSOCIATED WITH GRANT PROGRAM RESEARCH:
County auditors would have costs related to finding and/or assisting with records, covenant, deeds, etc. for participating colleges to review
and identify real property documents. For King County researchers specifically, they would have to physically access the King County
Archives to review real property documents.
COST SCENARIOS FOR DOCUMENT REVIEW AND PROCESSING FOR COUNTY AUDITORS:
SCENARIO 1
USING EXISTING COUNTY AUDITOR RECORD SYSTEM RESOURCES FOR PROPERTY DOCUMENT REVIEW :
If the costs include using the existing property document search methods within County Auditors Offices or County Archives , counties
would incur indeterminate costs that would vary depending on where the document search was located . County Auditors have noted that
the research for the Commerce grant program would have review hundreds of thousands of documents , some of which exist digitally and
some that can only be viewed physically at County Auditor’s Offices or County Archives .
The local government costs would depend on how many documents could be viewed digitally or how many would have to be viewed in
person and how many jurisdictions the universities would choose to review documents for . Costs would include county records official’s
staff time to assist with the technical requests of research participants, which would vary by jurisdiction, and the number of documents
being reviewed.
County auditors also stated that the process to redact and/or remove restrictive language from documents on a chain of title from the
physical written record could be time-intensive. However, the costs for this provision would be indeterminate, as the number of identified
property documents with restrictive language would vary by jurisdiction and depend where the research was being conducted .
SCENARIO 2
COSTS TO DIGITIZE RECORDS TO EXPIDITE REDACTING AND/OR REMOVING PORTIONS OF EXISTING DOCUMENTS:
Digitizing all physical documents could improve the feasibility and efficiency of the research project participants , as well as, reduce the
burden on County Auditor’s Offices that would be tasked with assisting their research efforts . However, it would come with increased
costs.
Of the 34 counties that responded to the survey of non-digitized records, there are currently 16 million pages of official records that are
still in physical form (paper, Mylar, microfilm, or microfiche). Digitizing these documents has an estimated cost of approximately $1 per
page to scan, index, and verify records from their physical form to a useful digital record. Including counties that did not immediately
respond to the document inventory, the estimate is that this process would cost approximately $20 million to convert all physical
documents to electronic format and upload them into existing recording systems .
County auditors stated that the process to redact and/or remove restrictive language from documents on a chain of title from electronic
records would be less time-intensive than from the costs of modifying the physical records . However, the costs for this provision would be
indeterminate, as the number of identified property documents with restrictive language would vary by jurisdiction where the research was
being conducted.
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FNS060 Local Government Fiscal Note
COSTS TO ANSWER QUESTIONS FROM PROPERTY OWNERS
County auditors anticipate costs associated with answering questions from property owners whose real property documents are identified
as having restrictive language that is unlawful. The number of property owners that may require consultation from county auditors would
depend on how many documents were identified during the Commerce grant program’s scope of work by colleges and higher learning
institutions. Depending on the volume of questions, it could take one full time staff member dedicated to this role. The Spokane County
Auditor’s Office estimates that this may cost up to $80,000 per year, per County Auditor’s Office where the grant program participant is
researching property records. However, if the volume of questions from property owners is relatively low, existing staff may be able to
handle the elevated volume of questions from affected property owners.
ACTION REQUIRED BY COURT ORDER
For those landowners that use the court process to remove void real property provisions per Sec . 4(1)(b), the original documents would
need to be electronically redacted and then removed. Since court action would occur on an individual, this approach could be costly.
Spokane County stated that recording system vendors charge a flat fee for uploading scanned historical records . The fee for one recording
vendor (used by at least 20 counties) is $5,200, regardless of the number of documents per upload.
Processing the court order would require staff time to record the court amended records , to locate the original documents and to
redact/remove the original records. Recording the amended records is a normal course of business. The time and cost for processing the
original records would depend upon the number of records in each case .
RECORDING COSTS AFTER PROPERTY DOCUMENTS HAVE BEEN IDENTIFIED
There would be processing time for county auditors to record the modified documents from property owners when these documents are
identified. This effort has indeterminate costs and would depend on the number of documents that are found by higher education
institutions during their review. If hundreds or thousands of documents need to be recorded in a short period of time , there could be a need
to bring an additional staff member to complete the work without disrupting other county auditor functions . Spokane County believes that
this could be accomplished with a part-time position working .25 FTE for two-years, at a cost of $30,000 to $40,000 over that period.
These costs would apply to other counties where the participating higher learning institution is conducting research . However, this would
only apply if the volume was high enough to demand a new position.
C. SUMMARY OF REVENUE IMPACTS
Briefly describe and quantify the revenue impacts of the legislation on local governments , identifying the revenue provisions by section
number, and when appropriate, the detail of revenue sources. Delineate between city, county and special district impacts.
CHANGES FROM PRIOR BILL:
There are changes to this legislation that effect the implementation of the real property document review described in the original bill .
However, there would still be no revenue impact to local governments as a result of these provisions .
SUMMARY OF CURRENT BILL:
This bill has no revenue impact for local governments.
SOURCES:
House Bill Report, HB 1335 (2021)
Northwest Commission on Colleges and University
Spokane Auditor’s Office
Washington State Association of County Auditors
Washington State Association of Counties
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FNS060 Local Government Fiscal Note
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