Friday Legislative Report - Feb. 12, 2021
BACKGROUND
Monday marks the first major cutoff of the 2021 session; to remain viable, policy bills need to be heard and voted out of committee. Most of the final committee hearings prior to cutoff occurred this week and pushed bills on to fiscal committees, House and Senate Rules Committees, or left them to languish.
Committee chairs used this legislative turning point to shift their focus to big-picture plans necessary to implement the state’s budget. For example, Senate Environment, Energy and Technology Committee Chair Reuven Carlyle is looking for ways to raise revenue from the sale and consumption of carbon-based fuels. If his effort is successful, it is likely to be the marquee initiative that funds transportation and possibly other needs.
Other legislators are making early-session moves to address Washington’s revenue sources as well. Perhaps the most surprising of these came this week from the Senate Republican Caucus when their budget writer, Sen. Linda Wilson, dropped a fully developed operating budget in the form of SB 5451. Perhaps not surprising is the $55.5 billion proposal, which stakes out the Republican position for upcoming negotiations, avoids tax increases.
For more information on legislation of port-specific issues compiled by your WPPA legislative advocates, please read on.
MODEL TOXICS CLEAN-UP ACT (MTCA)
We added the Washington Friends of Farms & Forests as a new member of the MTCA Coalition this week. Our letter to fiscal leadership in the House and Senate expressing concern with elements of the Governor’s proposed budget sparked their interest. The Friends are an important voice for agriculture and forestry, adding heft and diversity to the Coalition.
We are also pleased by reports from our members regarding meetings with legislators. Your work has a cumulative effect among members of the legislature that might not be apparent from a single meeting. Keep up the good work!
To learn more about the importance of MTCA to ports you can read “cleaning up.” Recent examples of job creation and environmental restoration can be found at the Port of Tacoma and the Port of Seattle.
TRANSPORTATION
Work continued to understand and provide feedback on the varied proposals focused on creating revenue for transportation infrastructure. This week, Senate Republicans offered a glimpse into the revenue side of a long-awaited Senator King transportation proposal through SB 5451, their proposed operating budget. It proposes a $721 million shift in vehicle sales tax to the transportation budget in the 2021-23 biennium while phasing in the full allocation of sales tax for transportation over five years. That adds up to $23 billion over 16 years. No details on how that money would be spent--although we do expect to see a proposal from Senator King as early as next week.
Meanwhile, the House Majority’s $26B, 16-year proposal has been scheduled for a work session during the House Transportation Committee next Thursday. Ports will participate on a local government panel and will highlight the importance linking job creation with multimodal freight funding.
COMMUNITY ECONOMIC REVITALIZATION BOARD (CERB)
SB 5175, establishing a broadband program within the Community Economic Development Board (CERB) was heard in the Senate Ways and Means Committee this week, receiving testimony from CERB Chair and Port of Pasco Executive Director Randy Hayden, Port of Columbia Executive Director Jennie Dickinson, and Port of Skagit Broadband Manager Andrew Entrikin. WPPA is supporting the Governor’s budget request of $45M for CERB funding and this bill.
BROADBAND
Telecommunications policy and funding has been a priority issue weekly in economic development and fiscal committees. This week, SB 5175, establishing a capital broadband program with $200 million in funding, was heard in the Senate Ways & Means Committee. While the ambitious proposal is not likely to advance, it sends a clear signal from its sponsor Sen. Jim Honeyford that the Senate Republican caucus has strong support for broadband solutions. SB 5383, granting limited retail authority to PUDs was voted out of the Senate Environment & Technology Committee with a due pass recommendation on February 10. A striking amendment that would extend the same authority to ports was withdrawn just prior to the vote but is expected to adhere to the bill in Senate floor action. SB 5175, establishing a broadband program within the Community Economic Development Board (CERB) was heard in the Senate Ways and Means Committee this week.
TAX INCREMENT FINANCING (TIF)
Discussions relating to the tax increment financing proposals continue (HB 1189 in House Finance Committee and SB 5211 in Senate Way & Means). This is a complicated proposal and language changes have arrived from several directions, including the county assessors, the Department of Revenue, the education community and fire districts. Ports have also weighed in, amending language to require agencies wanting to create increment areas to formalize a working agreement with affected ports prior to creation of an increment area. The deadline for moving these bills out of the fiscal committees is still a week away (Monday February 22nd), so expect negotiations to continue in earnest this coming week.
OTHER KEY PRIORITIES
Aviation
Aviation bills continued to find success in the legislature this session. HB 1030 is scheduled to be heard in the House Capital Budget Committee next Wednesday. SB 5031 was heard yesterday in Ways & Means and should advance prior to fiscal cut-off. These companion bills would make the Community Aviation Revitalization Loan Program permanent. The Senate Transportation Committee also moved SB 5329 to Ways & Means in a unanimous vote yesterday. This bill would reallocate a portion of aviation fuel sales tax to the state aeronautics account for allocation to airport infrastructure projects.
Rail Safety and Labor
WPPA provided testimony on a couple of railroad-themed bills this week. HB 1418 seeks to transfer significant rail safety oversight to the Utilities & Transportation Committee. The bill is a response to the 2017 derailment of Amtrak 501 in Dupont, WA. WPPA also opposed SB 5065 in testimony this week. The bill would establish an entirely new framework related to railroad worker leave, including significant new reporting, oversight and enforcement action for all railroads operating in Washington. The bill is slated to receive a substitute which has yet to be made available. It is also scheduled to be voted out of committee next Monday.
Public Works
SB 5032 continues fast paced as it is scheduled for its first hearing in the House Capital Budget Committee next Wednesday. The bill extends the use of alternative public works authorities. HB 1259 also gets a hearing in Appropriations on Tuesday. WPPA has an amendment that would increase our small works threshold to $500,000 ready should the committee choose to advance the bill.
We continue to monitor SB 5333 which could impact certain contractual provisions such as Covid-related force majeure, unenforceable. The bill advance out of the Senate Labor & Commerce Committee although with concerns raised by some members. Ports provided testimony on HB 1391 seeking to include all CPARB-recommended changes. The bill along with companion SB 5356 make technical corrections to the bid listing requirements negotiated last session.
Port Automation
SB 5026 advanced on a party line vote out of the Senate Housing & Local Government Committee this week. The bill prohibits container ports 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 limit our authority.
Personnel
SB 5021 specifies that the retirement benefits of employees participating in PERS and other public pension programs will not be impacted by a reduction in hours resulting from employer furlough programs. This bill is retroactive and would affect furlough programs implemented during the 2019-2021 and 2021-2023 fiscal biennia. The bill has been referred to the Rules Committee for further consideration. WPPA supports this bill on behalf of port employees.
HB 1091 Clean Fuel Standard (previously Low Carbon Fuel Standard)
The bill passed the House Appropriations Committee and was referred to the Transportation Committee and will be heard there next Tuesday. It had been expected to advance to Rules from Appropriations. WPPA has not taken a position on this bill.
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.
SB 5126 – Washington Climate Commitment Act
The bill embodies a cap and trade approach to carbon pricing. No hearing has been scheduled to approve an amended bill. A connection to Operating and Transportation budgets exempts the bill from the February 15th cutoff.
The bill proposed by the governor:
Establishes a cap and invest program, capping carbon emissions in Washington, for greenhouse gases (GHG);
Allocates revenues from the auction of carbon credits for specified purposes including “clean” transportation, natural climate resiliency, clean energy transition and assistance, and energy efficiency projects.
Convenes an Environmental Justice and Equity Advisory Panel to provide recommendations on the development and implementation of the cap and invest program.
Authorizes the Department of Ecology to require persons who produce or distribute fossil fuels or other products that emit GHG in Washington, to comply with air quality standards, emission standards, or GHG emission limitations.
We expect the Senate version of the bill to change significantly.
In its current version the bill does not provide funding for transportation and WPPA testified against it for this reason.
SB 5373 Carbon Tax (Washington STRONG)
The bill is an alternative to the cap and trade bill proposed by Governor Inslee. It has not yet been scheduled for a hearing.
The bill establishes a carbon tax that is used primarily to fund bonds. The bill reflects the strong preference for a carbon tax voiced by environmental justice advocates. The established environmental advocates strongly prefer a cap and trade alternative. Advocates for the bill assert that debt service for bonds would not count against the state’s statutory or constitutional debt limits. The tax authorized by the bill is set at $25 per ton and subsequently increased 5 percent per year thereafter.
Like SB 5126, it is exempt from the February 15th deadline for bills to move out of their committees of origin.
HB 1513 Reducing Carbon Emissions/Carbon Tax
Sponsored by Representative Lekanoff, this bill is similar in many respects to SB 5373 discussed above. Without a discussion of it’s specific provisions, this bill responds to the ongoing conflict among stakeholders and within the legislature between cap and trade and the carbon tax alternative.
HB 1534 carbon pollution Tax/Energy-Intensive, Trade-Exposed Industries (EITE)
Sponsored by Representative Shewmake, the bill establishes a carbon tax intended to protect EITEs. Introduced this morning, we will assess the bill in next week’s report.
SB 5125/HB 1193 Dredged Material Disposal
WPPA testified in favor of the Senate bill and expressed support for it in the House. These bills both moved out of their respective committees with slightly different language. Member ports are discussing which version to support going forward.
SB 5174 Recycling of Wind Turbine Blades
The bill requires manufactures to establish and pay for the capacity to recover and recycle wind turbine blades. WPPA is currently neutral on this policy, but it may represent an opportunity for port districts to recruit private businesses competing in the recycling marketplace. The bill will be heard by the Ways and Means Committee on February 16th.
SB 5141 Implementing the Recommendations of the Environmental Justice Task Force
The bill passed the Senate Environment, Energy and Technology Committee and was referred to Ways and Means on February 9th. Negotiations continue to address state agencies concerning implementation. WPPA has not taken a position on the bill and will monitor as it moves through the process.
SB 5415 Concerning the energy facility site evaluation council
The bill was withdrawn from executive action in the Senate Environment, Energy and Technology Committee. The bill is dead for the 2021 Session.
Tribal consultation and GMA (SHB 1241)
Cities that have a container port element in their comprehensive plans are required to “collaborate” with tribes in the area. The Port of Tacoma is considering an amendment to would recognize the Puyallup Tribal Land Claims Settlement as the appropriate mechanism to accomplish a dialogue. The committee process to insert this language into the bill has been sharply criticized by other local government associations and stakeholders. Of note, HB 1241 was approved in executive session in the Local Government Committee on February 10th but has not been referred for consideration in Appropriations or Rules.
A Continuing Observation on Carbon, Part 2
Complications for advocates for the Clean Fuel Standard, Environmental Justice, Carbon Pricing and Transportation Budgets continue. The referral of the Clean Fuel Standard to the House Transportation Committee surprised some observers. Leadership continues to voice confidence that the CFS and carbon pricing will pass the legislature. The Senate’s cap and trade proposal is scheduled for a hearing next week. WPPA has not yet seen a draft of the chair’s proposal, but it is expected to allocate funding from a cap and trade mechanism to transportation and other spending categories.