Friday Legislative Report - Feb. 26, 2021

BACKGROUND

The one-hundred-and-five-day 2021 legislative session reaches its half-way mark next week. From a legislative process perspective, this means that the policy and fiscal committees have advanced all bills that will remain active this session (except some necessary to implement the budget) to their respective rules committees. From there, they are considered for advancement to actual floor votes. At this point legislators spend their time in floor debate and voting, and many of the bills ports care about are in this process.  

For more information, on port-specific information on the current legislative process, please read on. 

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. Your work to contact legislators now makes a difference—after the 17th, being heard gets more challenging.

TRANSPORTATION

With the legislature focused on fiscal committee cut-off, little action occurred related to new revenue transportation. A substitute SB 5126 had a work session and was also voted out of the Senate Environment & Energy Committee this week.  The substitute was our first sign that funding from this Cap & Invest bill would be used for transportation investments. The bill requires the first $325 million generated by the sale of credits be transferred to a transportation spending account. Please see the “Washington Climate Commitment Act” for more details on this bill. 

WPPA is also watching SB 5232 which advanced out of committee and into the Senate Rules this week. The bill is an attempt to restrict the bonding of toll revenue but doing so prohibits the revenue necessary to fully fund and construct The Gateway Program (completion of SR 509/SR 167). The bill sponsor and the chair acknowledged as much but did not amend the bill. Advancing the bill suggests this issue will likely be resolved through the budget process. Budgets are expected shortly after the release of the March 17th revenue forecast. 

BROADBAND

It was another active week for several broadband bills in both chambers. HB1336, granting retail authority to Ports and PUDs, passed out of the House with a 60 to 37 vote. It will next land in the Senate Environment, Energy & Technology Committee where it will encounter more opposition than it has seen so for. A similar but less expansive bill, SB 5383, was amended to include port retail authority, passed out of committee, and placed on the floor calendar in the Senate this week. Two bills expanding broadband infrastructure access to state highway rights-of-way, SB5439 and HB1457, both passed out of committee this week and are likely to see a vote on the floor of their respective chambers in the coming days. Another bill, SB 5175, which codifies a broadband program within the Community Economic Revitalization Board is awaiting action in the Senate Rules Committee.

TAX INCREMENT FINANCING (TIF)

As mentioned in last week’s report, discussions continue about how to improve the tax increment financing proposal (SHB 1189 and 2SSB 5211). There is still time to make changes and representatives of ports and other members of the TIF Coalition continue to work diligently to do just that. WPPA appreciates the strong interest by ports’ finance and management departments to get this right, thereby creating a new useful tool for economic development in this state.

OTHER KEY PRIORITIES

Aviation 

HB 1030, SB 5031, and SB 5329 have all advanced to their respective floor calendars and are positioned to be voted on during the next 10 days of floor activity. Both HB 1030 and SB 5031 would make the Community Aviation Revitalization Loan Program (CARL) permanent and SB 5329 would reallocate a portion of aviation fuel sales tax to the state aeronautics account for airport infrastructure projects. WPPA supports all three bills and would like to thank Warren Hendrickson with Port of Bremerton and Dan Gase with the Port of Port Angeles for providing excellent committee testimony on both CARL bills.   

Rail Safety and Labor 

WPPA continues to evaluate the substitute SB 5065 adopted in committee this week.  The bill appears to remove the most onerous portions, but we continue to work with stakeholders for a better understanding the impact of the substitute. The bill is current in the Senate Rules Committee. 

Public Works 

WPPA continue to monitor SB 5333 which could make certain contractual provisions such as COVID-related force majeure, unenforceable. The bill barely made it out of Ways & Means where WSDOT advised they alone believe the bill creates $100 million in additional liability on existing construction contracts they oversee. The bill is remains in the Senate Rules Committee.  

Port Automation 

SB 5026 was passed off the Senate floor this week and awaits a hearing in the House Local Government Committee. 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 restrict port’s authority. 

SB 5188 Public State Bank

WPPA is watching a bill that proposes the creation of a state public bank, similar to one in North Dakota, which allows but does not require local governments to utilize. Versions of this proposal have been introduced in the legislature for several years, each time failing to gain substantial traction. This year, SB 5188 started out authorizing the creation of a state public bank but through amendments has morphed into a state public financial cooperative. Under the second substitute version of the bill, the State Treasurer is required to complete a study that recommends a staffing and operational structure of the cooperative. In addition, an Operating Board would be created. Local governments and tribes would be authorized to utilize the cooperative. The bill has been passed to the Rules Committee for further review.

3SHB 1091 Clean Fuel Standard (previously Low Carbon Fuel Standard)  

The bill was amended and approved by the Transportation Committee and awaits floor action.   

An amendment approved by the Transportation Committee reads: 

The department shall improve its internal processes to expedite processing of environmental reviews under chapter 43.21C RCW (SEPA) and applications for permits related to the siting of projects that would produce, or support the production of, transportation fuels with a carbon intensity lower than the standard adopted by the department. 

The language is intended to facilitate the siting of “clean fuel” projects, such as biofuel facilities.  The message to Ecology is helpful, as a start. 

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

This bill embodies the Cap and Invest approach to carbon pricing and appears to be the preferred carbon pricing bill in the Senate.   The substitute bill approved by the Senate Environment, Energy and Technology Committee requires $325M per year to be deposited into the Forward Flexible Account, totaling $5.2B over 16 years.  The Forward Flexible Account is a central element in Senator Hobbs’ proposed transportation package.  Appropriations from the account may be used broadly for, “transportation projects, programs, or activities identified (in a) Forward Flexible … omnibus transportation appropriations act.”

The funding for the broad transportation purposes authorized in SSB 5126 is supported by WPPA.  

SB 5373 Carbon Tax (Washington STRONG) 

The bill is the carbon tax alternative to the Cap and Invest bill (SB 5126) discussed above.   It will be heard on March 4th in the Senate Environment, Energy and Technology Committee. 

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. 

HB 1513 Reducing Carbon Emissions/Carbon Tax and HB 1534 carbon pollution Tax/Energy-Intensive, Trade-Exposed Industries (EITE)

These bills are similar to elements of 5373.  The bill will receive a hearing in the House Environment and Energy Committee but one has not yet been scheduled. 

SB 5125/HB 1193 Dredged Material Disposal

The House version passed unanimously and has been delivered to the Senate.  The Senate sponsor, Annette Cleveland, has agreed to amend the House language onto her bill before sending it over to the House.  The prognosis for the bill is 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 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. 

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 working on an amendment with the Puyallup Tribe to address the port’s concerns.