BACKGROUND

Today the question on everyone’s lips in Olympia is whether the legislature is closer to a new transportation package. Last night, two pieces central to the “Grand Bargain”, a clean fuel standard and a cap-and-trade program, were passed along from the Senate to the House. Linkages between the clean fuel standard and a cap-and-trade program, environmental justice legislation, and a transportation package sets up an all or nothing proposition.  Three of the four pieces of this complex linkage are now being considered by the House; transportation has yet to move in either body. Are we closer to a transportation package?

MODEL TOXICS CLEAN-UP ACT (MTCA)

With full funding for Remedial Action Grants included in both House and Senate Capital Budgets the Conference Committee is unlikely to discuss the appropriation levels. Language was added in the House requiring Ecology to work with the Port of Everett to develop an extended grant agreement in preparation of the department's 2023-2025 biennial capital budget request. The state’s share of the 50 percent match for port cleanup projects is secure.

TRANSPORTATION

This week, it was the Senate’s turn to introduce a new transportation revenue bill, “Forward Washington”- the second one introduced by the legislature in as many weeks. Forward Washington was updated this week to include additional project priorities, more money for highway maintenance and preservation, and an increase for a dedicated port district program.  

The likelihood of seeing new transportation revenue increased this week, with the passage of a cap-and-trade bill out of the Senate; the bill includes over $5B in funding for transportation. WPPA will testify in support of Forward Washington during the Senate Transportation Committee next Monday.  

Ports are taking steps to show their support for new revenue transportation funding this year; for example, the Northwest Seaport Alliance’s Managing Members adopted a resolution supporting legislative action on a comprehensive transportation package. You can see this week’s resolution here. 

BROADBAND

This session’s two high-profile broadband bills addressing retail authority for Ports and PUDs, SB 5383 and HB 1336, can be subject to a floor vote in the coming days.  These bills differ significantly in that the Senate version limits retail authority to projects in areas unserved by broadband and the House version applies no restriction. Both bills must receive a vote by April 11 to remain active in this session.

Two bills designed to facilitate the installation of broadband along state highway rights-of-way, HB 1457 and SB 5439, remain active. The bills, which started the session with varying approaches to this issue, have become identical through negotiated amendments. HB 1457 has been designated as the preferred bill and sits on the floor calendar in the Senate where it must receive a vote by April 11 to remain active in this session.

TAX INCREMENT FINANCING (TIF)

ESHB 1189 continues to move. This past week, the bill was heard on the floor of the Senate where they adopted further amendments and sent it back to the House for concurrence.  A few of the changes in the Senate were meant to address concerns raised by ports. For example, the size of a potential TIF district was narrowed by limiting the allowable total assessed value, limiting the total percentage of the sponsoring jurisdictions’ assessed value, and limiting the total number of active TIF districts per sponsoring jurisdiction. 

The changes also clarify that a sponsoring jurisdiction cannot add additional improvements to the TIF district after it is created. In addition, the new language clarifies that a sponsoring jurisdiction cannot collect more than is necessary to repay costs associated with the project.  These and other changes were made at the behest of stakeholders, and the bill passed out of the Senate with just a couple “No” votes. It is now up to the House to review the changes and concur or take other action. 

OTHER KEY PRIORITIES

Aviation 

Companion bills which would make the Community Aviation Revitalization Loan Program (CARL) permanent continued to advance. HB 1030 moved to the floor calendar and SB 5031 remains in the Senate Rules Committee. Funding for the CARL program was included in both Capital Budgets, albeit at different levels. The House funded the program at $2.5M for the next biennium while the Senate provided $5M; WPPA supports the Senate’s funding for this program. HB 1198 extends the timeline for the Aviation Coordinating Commission to complete its work. That bill is also on the Senate floor calendar. 

Public Works 

SB 5032 received unanimous support in the House after an amendment which made minor modifications. The bill extends the sunset for ports and other public owners to use alternative public works procurement processes when constructing capital projects. Because it was amended, the bill must return to the Senate for a concurrence vote. 

Ports & Automation 

A bill prohibiting ports from purchasing container handling equipment which is both near or zero emissions and allows for automated operations has passed the Senate. The bill was not amended, so it is moving to the Governor for signature. 

Rail Safety and Labor 

WPPA continues to work with other interested parties in seeking an amendment to SB 5065, which remains in the House Rules Committee. WPPA pushed for an amendment exempting “shortline”, also known as Class 3 railroads. WPPA also continues to watch HB 1418, which establishes a process of consultation between the Utilities & Transportation Committee (UTC) and affected rail stakeholders, designed to build consensus on meaningful ways to improve rail safety in the state. 

Concerning the Creation of a State Bank

E2SSB 5188, formerly known as the State Bank bill, has been amended to authorize a Public Financial Cooperative as a membership organization to lend to local governments and tribal entities “for the purposes of meeting public works and economic development needs”. Ports will remember that this issue has been around for several years, and this year the bill seems to have more energy. The bill allows for the creation of an operating board made up of local governments, tribes and state residents, and allows the board to hire an executive director. The bill is currently in the House on Second Reading, awaiting a vote by the full chamber.

SSB 5141 Implementing the Recommendations of the Environmental Justice Task Force 

The bill remains in the Rules Committee awaiting action on the floor.  The linkages with a transportation package, a cap-and-invest program, and a clean fuel standard effect when each element of the “Grand Bargain” will be considered.  

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

Thursday evening, the bill was passed by the Senate; it had been significantly modified in the Ways and Means Committee. Changes of most interest to ports include:  

• Requires the passage of a separate additive transportation funding act generating more than $500 million per biennium in revenue before Ecology may assign compliance obligations or allow for credit generation.  The effect is to condition implementation upon a enactment of a new transportation package.  

• Perhaps the most significant programmatic effect, the amendment directs Ecology to set the maximum price for credits in a credit clearance market, which may not exceed $200 for 2028, and for 2029 and subsequent years may exceed $200 as annually adjusted for inflation.  The amendment limits the cost and resulting incentives from the clean fuel standard.  

• Requires Ecology to evaluate the net cumulative greenhouse gas (GHG) emissions, including any net displacement of global emissions, for new or expanded facilities that would require a SEPA review and would result in annual GHG over 25,000 MT per year.  The change is a direct result of experience with the methanol project proposed at the Port of Kalama. 

• Removes Ecology authority to set the pace of program implementation, instead established a specific implementation schedule in law. 

SSB 5126 – Washington Climate Commitment Act    

After a debate that lasted over 5 hours, the bill passed the Senate on a narrow 25-24 vote on Thursday evening.  Changes of most interest ports include:  

• Clarifies that new or expanded facilities' compliance with the cap and invest program is the only mitigation for greenhouse gases that can be required by any state agency, city, town, county, township, other subdivision, or municipal corporation of the state from these facilities.  The change is a response to Ecology denial of permits for the Kalama methanol project and an interest to ensure that projects are not subject to redundant regulatory regimes. 

• Clarifies that programs, activities, or projects funded from the climate investment account may include those that preserve and/or establish carbon sequestration by protecting and planting trees in marine shorelines and freshwater riparian areas.  This may create a funding opportunity when project mitigation is required. 

• Subject to certain conditions, an aerospace products and parts manufacturing facility must receive no cost allocations to accommodate an increase in production which increases its emissions above the baseline.  

• Requires Ecology to provide a recommendation to the legislature whether to provide an annual allocation to EITEs beyond 2034 for process emissions based on a best available technology limitation. 

SHB 1193 Dredged Material Disposal 

The bill was passed by the Senate 47-0.  The House will consider whether to accept changes made in the Senate or amend the bill and return it for further consideration.