BACKGROUND

March 3rd marked the halfway point of the 2021 Session.  The deadline for passing bills from their house of origin looms on Tuesday of next week, and time available for debate limits what reaches the floor.  This cutoff marks the end of the line for many bills.  As floor action ends, policy committees restart their work next week to hear bills that were approved prior to the cutoff by the opposite house. 

Two significant bills of note advanced. E3SHB 1091 (Low Carbon Fuel Standard - LCFS) and 2SSB 5141 (Environmental Justice) appear to be linked by the politics of carbon pricing bills and the transportation budget.  In previous sessions, the Senate has insisted that a transportation package be approved before an LCFS policy is adopted. Environmental justice advocates strongly prefer a carbon tax over the cap and trade preferred by legislative leadership, and a transportation budget depends on revenue from carbon pricing. The connected politics and policies will challenge law makers’ ability to reach agreement on these policies individually. 

The Chairmen of the House Transportation, and Environment and Energy Committees, Jake Fey and Joe Fitzgibbon, respectively, will join us for a Zoom talk on Thursday, March 11th.  It is an opportunity to hear how leadership views the prospects for action on carbon pricing, LCFS, environmental justice and a new transportation package, and we hope to see you there. 

MODEL TOXICS CLEAN-UP ACT (MTCA)

The next state revenue forecast is just around the corner on March 17th. Budget action will ramp up following its release. Please continue contacting legislators. It really does make a difference.

BROADBAND

Some broadband bills to received legislative action since our last report. SB5383, which grants limited telecommunications authority to port districts passed through the Senate late last week on a vote of 43 to 3. A more expansive retail-authority bill HB1336 has been scheduled for public hearing in the Senate Environment, Energy & Technology Committee on March 11. WPPA is featured in an article by the Stranger on the importance of passage of HB1336; there is still time for you to get involved and let your legislator know this matters to ports. Additionally, two broadband bills focusing on infrastructure permitting in state highway rights-of-way remain active.

TAX INCREMENT FINANCING (TIF)

The House version of the tax increment financing bill continues to move and will be the preferred vehicle for TIF this session. HB 1189 passed off the floor of the House with bi-partisan support and was sent to the Senate. As of this report, the bill hasn’t yet been referred to a Senate Committee. The ports continue to work with the TIF Coalition to make improvements to the bill relating to the definition of assessed value, banked capacity and authorized uses of the revenue generated. The WPPA is seeking resolution to the remaining issues prior to another hearing on the bill.

OTHER KEY PRIORITIES

Aviation 

SB 5031 was voted on and passed unanimously off the Senate floor Thursday. The bill would make the Community Aviation Revitalization Loan Program (CARL) permanent. The passage of SB 5031 makes it less likely that its House companion, HB 1030, will receive a vote in that chamber. We continue to support both bills. SB 5329 remains on the Senate calendar, and would reallocate a portion of aviation fuel sales tax to the state aeronautics account for airport infrastructure projects. 

 Public Works 

WPPA continue to monitor SB 5333 which advanced to the Senate floor calendar this week. The bill could make certain contractual provisions such as COVID-related force majeure, unenforceable. WSDOT testified in committee that the bill creates $100 million in additional liability on existing construction contracts they oversee.  

Port Automation 

WPPA will testify next Wednesday on SB 5026 when it will have a hearing in the House Local Government Committee. The bill prohibits ports with container operations from making investments in zero or near-zero emission infrastructure if that equipment is also automated. We continue to express our concerns with bills like this which seek to restrict ports’ authority. 

SB 5141 Implementing the Recommendations of the Environmental Justice Task Force

The bill was approved by the Ways and Means Committee on a tight 13-to-12 vote. Implementation concerns continue to be a challenge for supporters. 

A brief summary of the bill: 

• Establishes environmental justice plan implementation, equitable community engagement and public participation, tribal consultation, assessment, and budget and funding obligation requirements for the departments of Health, Ecology, Agriculture, Natural Resources, Commerce, and Transportation, and the Puget Sound Partnership. 

• Establishes the Environmental Justice Council to adopt guidelines in coordination with an interagency workgroup to be considered by agencies, evaluate the progress of agencies implementing environmental justice requirements, recommend the identification and prioritization of actions for assessments, and provide a forum for the public to testify on environmental justice concerns.  The bill was amended to state that “the council is purely advisory and council decisions are not binding on an agency, individual, or organization.”  The Republican amendment drew support from Democrats. 

E3SHB 1091 Clean Fuel Standard (previously Low Carbon Fuel Standard) 

The bill was passed by the House following a 5-hour debate.   

In brief summary, the bill:  

• Directs the Department of Ecology (Ecology) to adopt rules establishing a Clean Fuels Program (CFP) to limit the aggregate, overall greenhouse gas (GHG) emissions per unit of transportation fuel energy to 10 percent below 2017 levels by 2028 and 20 percent below 2017 levels by 2035. 

• Directs Ecology to update, prior to 2032, CFP rules to further reduce GHG emissions from each unit of transportation fuel for each year through 2050, consistent with statutory state emission reduction limits. 

• Excludes exported fuel, fuel used by vessels, railroad locomotives, and aircraft, and certain other categories of transportation fuel from the CFP's GHG emission intensity reduction requirements. 

• Requires the CFP to include processes for the registering, reporting, and tracking of compliance obligations and to establish bankable, tradeable credits used to satisfy compliance obligations. 

• Requires annual reporting by Ecology on the CFP, as well as an analysis of the program's first five years by the Joint Legislative Audit and Review Committee. 

• Retains the current distribution of revenue under the 2015 Transportation Revenue Package, eliminating changes that would have been triggered as a result of the establishment of a CFP. 

• Requires the Washington State University Energy Program to initiate a program to identify least-conflict priority sites for low-carbon transportation fuel projects, and requires Ecology to periodically convene specified parties to discuss mitigation of significant likely environmental impacts associated with low-carbon transportation fuel projects. 

The bill was further amended on the floor to facilitate the siting of “clean fuel” projects, such as biofuel facilities.   

For background, a Clean Fuel Standard (CFS) regulates the carbon intensity of fuels by limiting, and reducing over time, greenhouse gas emissions from these products.  A market is created to allow producers of high-carbon content fuels to purchase credits from lower carbon intensity producers.  Revenues from these sales has been used to fund new low-carbon fuel supplies.  There is a continuing debate over the extent to which a CFS increases the cost of transportation fuels thereby limiting the ability to fund future transportation infrastructure.  A CFS does not generate revenue to the state. The program is currently operating in California.   

SSB 5126 – Washington Climate Commitment Act  

No action this week.  Exempt from bill cutoffs because of its budget implications, the bill resides in the Senate Ways and Means Committee.  

SB 5373 Carbon Tax (Washington STRONG) 

The bill is the carbon tax alternative to the Cap and Invest bill (SB 5126) above.   WPPA testified in opposition on March 4th in the Senate Environment, Energy and Technology Committee.  Consistent with direction from WPPA’s Board of Trustees, we expressed concern with the lack of dedicated funding for transportation purposes. 

The bill establishes a carbon tax that is used primarily to fund bonds to be retired using proceeds from a $25 per ton tax on carbon emissions that increases 5 percent in future years. 

SB 5125/HB 1193 Dredged Material Disposal 

The House version passed unanimously and has been delivered to the Senate.  Work continues to broker an agreement between the House and Senate about with version will advance. 

The purpose of these bills is to resolve conflict between the state Shoreline Management Act and federal law that requires the U.S. Army Corps of Engineers to maintain navigation channels.  The change eliminates duplicative local regulation of dredging regulated by the Corps.