Friday Legislative Report - Feb. 19, 2021
BACKGROUND
The state’s House and Senate Republicans released budgets over the past week; budgets that show the broad strokes of the minority party’s focus during the session. The proposals outline a budget that relies on no new tax increases to balance the current state deficit- a starkly different vision from state Democrats whose various bill proposals equate to a nearly $8B revenue increase for Washington. The chasm between the visions of the two parties is large, and the coming days of session will show how well the parties will work together to craft a budget solution that reflects their priorities.
For a port-focused view of all the legislative news of the week, read on.
MODEL TOXICS CLEAN-UP ACT (MTCA)
Please keep up the good work contacting legislators to tell your port’s story. It might be a tired phrase, but it is still 100 percent true. This work makes a big difference.
To learn more about the importance of MTCA to ports, we put together this blog post on “cleaning up”. Recent examples of job creation and environmental restoration can be found at the Port of Tacoma and the Port of Seattle.
TRANSPORTATION
Senator King unveiled his transportation proposal this morning; you can watch the rollout on TVW . He has proposed a $10.1 billion, 8-year package of projects that relies on a reallocation of the sales tax on vehicles from the general fund for most of the revenue for his proposals. The plan also calls for a modest $.03 increase in the state’s gas tax and other assorted fees. $5.1 billion of the proposal goes to fund highway maintenance and preservation while another $2.3 billion would go into fish barrier removal. The proposal also includes five mega projects, including partial funding for I-5 Columbia River Bridge, the West Seattle Bridge reconstruction and money for the Hood River Bridge replacement, located in the Senator’s district. King noted that revenue generated from the reallocation of vehicle sales tax is permanent but wanted to provide direction for only the next 8 years so as to allow future legislators discretion to decide how to spend future revenues derived from the tax shift.
The House Transportation Committee heard from stakeholders on issues identified in the JTC Statewide Needs Assessment during a work session held on Thursday. Commissioner Ryan Calkins (Port of Seattle) participated in a local government panel alongside representatives from cities and counties. We want to thank the commissioner for his leadership in expressing port needs as it relates to transportation infrastructure. Chair Fey has proposed a $26 billion, 16-year new revenue transportation package. We expect to learn more about this proposal in the coming weeks.
COMMUNITY ECONOMIC REVITALIZATION BOARD (CERB)
On Tuesday, Feb. 16, SB 5175 passed out of Weighs and Means, and went to the Rules Committee. The bill is on track, and WPPA thanks everyone who has expressed support for the important work CERB does in Washington.
BROADBAND
The clash of two differing policy perspectives on retail authority for public broadband builders has emerged as central theme to the telecommunications debate in this legislative session. Ports and Public Utility Districts could be given retail authority through two bills, one emanating from the House and the other from the Senate. SB 5383 was heard in the Senate Ways and Means Committee this week, and is likely to be moved to the Rules Committee with an amendment adding Ports to this limited-authority bill. Its more expansive counterpart, HB 1336, is sitting in the House Rules Committee. Two bills expanding broadband access to state highway rights-of-way, SB 5439 and HB 1457, were also heard in committee this week.
TAX INCREMENT FINANCING (TIF)
We continue to meet to discuss how to resolve concerns relating to the tax increment financing proposals continue (HB 1189 and SB 5211). This is a complicated proposal and the deadline for moving these bills out of the fiscal committees is Monday February 22nd, so expect negotiations to continue in earnest.
OTHER KEY PRIORITIES
Aviation
Both HB 1030 and SB 5031 have advanced to their respective Rules Committees this week. These companion bills would make the Community Aviation Revitalization Loan Program permanent. WPPA testified in support of SB 5329 this week, and the Senate Ways & Means Committee is set to consider advancing this bill to Rules next Monday. 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 continues to evaluate the substitute SB 5065 adopted in committee this week. The bill would appears to remove much of the most onerous portions of the bill but continues to work with stakeholders to better understanding the impact of the substitute. The bill is currently in the Senate Rules Committee.
Public Works
SB 5032 was both heard and voted on in the House Capital Budget Committee this week. The bill extends the use of alternative public works authorities.
The House Appropriations Committee did not adopt a port-sponsored amendment on HB 1259 this week. WPPA offered the amendment that would increase our small works threshold to $500,000. We will continue to work with Rep. Pollet to find opportunities to adopt public works recommendations advanced by the Capital Projects Advisory Review Board.
We continue to monitor SB 5333 which could impact certain contractual provisions such as COVID-related force majeure, unenforceable. The bill was heard in Ways & Means where WSDOT advised they believe the bill creates $100M in additional liability on existing construction contracts they oversee.
WPPA welcomed a small amendment adopted on HB 1391 this week. The bill along with companion SB 5356 make technical corrections to the bid listing requirements negotiated last session. The amendment makes clear that alternative public works processes are exempt from the bid listing requirements.
Port Automation
SB 5026 awaits a vote on the Senate Floor. 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.
House Bill 1091 Clean Fuel Standard (previously Low Carbon Fuel Standard)
The bill is expected to pass the Transportation Committee this afternoon, move to the Rules Committee and floor action. In previous sessions the bills fate in the Senate has hinged on the approval of a transportation funding package. The CFS is one of the carbon-related bills linked to transportation and equity bills. WPPA has not taken a position on HB 1091.
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
This bill embodies the Cap and Invest approach to carbon pricing. The Senate Environment, Energy and Technology Committee held a work session on the bill this morning on a proposed substitute version offered by Senator Carlyle. The session focused on the differences between the bill proposed by Governor Inslee and the Chairman’s proposed substitute bill. Please see the WPPA blog for a detailed discussion of changes in the proposed substitute. Senator Hobbs, chairman of the Senate Transportation Committee, spoke in support of the provision dedicating $650 million per year to transportation purposes. Opposing legislators emphasized the potential impact the substitute bill would have on employment and lower income residents.
A hearing has not yet been scheduled for the proposed substitute bill. However, SB 5126 (Cap and Invest) is preferred by legislative leadership over the carbon tax presented below. The connection to Operating and Transportation budgets exempts the bill from the February 15th cutoff.
SB 5373 Carbon Tax (Washington STRONG)
The bill is the carbon tax alternative to the Cap and Invest bill (SB 5126) discussed above. The sponsor, Senator LoveIett, has received a commitment for a hearing. The fact that SB 5373 will be heard underscores the tension that persists within the Senate caucus about the appropriate carbon pricing policy.
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.
SB 5373 is exempt from the February 15th deadline for bills to move out of their committees of origin. WPPA will oppose the bill because it constrains the transportation uses eligible for funding.
HB 1513 Reducing Carbon Emissions/Carbon Tax
Sponsored by Representative Lekanoff, this bill is similar in many respects to SB 5373 discussed above. A date has not been set, but the bill will be heard in the House Environment and Energy Committee. The bill reflects the preference of environmental justice advocates for a carbon tax over a cap and invest carbon pricing mechanism. See discussion of SB 5126 for more on the tension among the parties to this debate.
HB 1534 carbon pollution Tax/Energy-Intensive, Trade-Exposed Industries (EITE)
Like HB 1513, provisions of the bill reflect elements of SB 5373. Sponsored by Representative Shewmake, the bill establishes a carbon tax intended to protect EITEs. The bill will receive a hearing in the House Environment and Energy Committee.
SB 5125/HB 1193 Dredged Material Disposal
As previously reported, the bills moved out of their respective committees with slightly different language. The next step is to reconcile the versions and reach an agreement for the bill that will proceed through the process. A floor vote is expected on one or both bills next week. This week the prognosis looks good.
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.
SB 5174 Recycling of Wind Turbine Blades
The bill requires the Department of Ecology to develop guidance for a wind turbine blade stewardship and take-back program. It also prohibits the sale or installation of a wind turbine blade in or into Washington beginning July 1, 2023, unless the manufacturer is included in an approved stewardship plan. 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 awaits floor action in the Senate.
SB 5141 Implementing the Recommendations of the Environmental Justice Task Force
The bill is scheduled for executive action in the Ways and Means Committee today. Senator Carlyle has offered a substitute bill and there are other amendments offered by members of the Majority Caucus. SB 5141 creates an Environmental Justice Council (EJC) to provide guidance for and to review significant actions taken by state agencies for consistency with the principles of environmental justice. State agencies covered by the bill include the Department of Ecology, the Puget Sound Partnership, the Department of Fish and Wildlife, the Department of Natural Resources, the Department of Health, the Department of Commerce, the Department of Agriculture, and the Department of Transportation, and any agency that opts to assume the obligations of the Act.
Provisions in the proposed substitute bill include:
A "significant agency action" means an agency action that may cause environmental harm or may affect the equitable distribution of environmental benefits to an overburdened community or a vulnerable population, consistent with guidance issued by the EJC, in consultation with the interagency workgroup.
Requires agency environmental justice implementation plans to include specific plans and timelines for incorporating environmental justice considerations into agency activities.
Directs that each agency develop a process for conducting environmental justice assessments, and consult with the EJC to accomplish this work.
Provides that environmental justice assessments identify direct and cumulative environmental and health impacts; and describe options and readily available costs projections for the agency to reduce impacts.
Requires an agency to incorporate environmental justice principles into funding decision processes consistent with the guidelines issued by and in iterative consultation with the council, with an implementation date set for July 1, 2023.
Authorizes the EJC to make recommendations to agencies on the identification of significant agency actions requiring an environmental justice assessment.
Allows that exceptions to the environmental justice assessment and incorporation of environmental justice principles into funding processes requirements may be made when an agency head determines:
Delay in the significant agency action poses a potentially significant threat to human health or the environment, or causes serious harm to the public interest;
An assessment would delay decisions concerning tax, debt, or other revenue administration; or the requirements would be in conflict with federal law or constitutional limitations, including those applicable to state-owned trust lands.
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 pursuing an amendment to would recognize the Puyallup Tribal Land Claims Settlement as the appropriate mechanism to accomplish a dialogue.
Continuing Observations on Carbon Pricing, Part 3
If betting were allowed, this week the smart money would be on inaction in 2021. Complicated linkages among carbon pricing, transportation and equity are creating tensions and visibly muddying decision making in the majority caucuses. Complication impedes action.