WAWG
By Diana Carlen
Lobbyist, Washington Association of Wheat Growers
Sunday, Jan. 28, marked the 21st day of the legislative session. We have now completed three weeks of session and are more than a third of the way done. The number of new bills being introduced daily is dropping in volume as the first legislative deadline is fast approaching, and new bills have little time to be heard or passed out of committee in time. All bills must be passed out of their respective policy committee by Jan. 31 to remain alive this year unless they are deemed necessary to implement the budget. Committees have been working feverishly to hold public hearings and pass bills out of committee to meet this deadline.
Initiative to Repeal the State’s Capital Gains Tax Certified by the Secretary of State
On Jan. 23, the Secretary of State’s Office formally certified Initiative 2109, which would repeal the state’s capital gains tax. Passed into law three years ago, the tax is 7% on the profits of a sale or exchange of assets like stocks and bonds above $250,000, but does not include retirement accounts and some real estate. The news that the initiative had been certified follows the announcement last week that the U.S. Supreme Court would not hear a legal challenge to Washington’s capital gains tax.
Collections for the capital gain tax have exceeded early forecasts and brought in more than $896 million. The money collected from the tax is earmarked for education.
It is likely that the legislature will not take action on the initiative, and it will instead automatically appear on the ballot in November.
To date all six initiatives being proposed by the Conservative political action committee (PAC) action group “Let’s Go Washington” have qualified for the ballot. This past week also saw the certification of Initiative 2111, which would prohibit the state, counties, cities, and other local jurisdictions from imposing an income tax, and Initiative 2124 which would allow people to opt out of the state’s long-term care tax.
Legislative Briefing Held on Columbia River Operations Settlement Agreement
This past week a legislative briefing was held to raise awareness among legislators of the commitments included in the Columbia River Operations Settlement Agreement. Washington state signed the agreement, which has far-reaching implications for many sectors of the economy, including agriculture and energy. Joining in the briefing were the Washington Public Ports Association, Northwest River Partners, Washington Rural Electric Coop Association, the Washington Association of Wheat Growers, the Washington Potato & Onion Association, and the Washington Public Utility District Association.
The sponsors of the briefing left state legislators with three questions related to how the state is going to manage the impacts of the agreement:
- How will we be included in the agreement’s implementation as it impacts millions of our members and your constituents?
- How much has the State of Washington committed to this agreement, what agencies have been identified as leads, and what other commitments have been made by the state?
- How will we be sure barge traffic remains safe and effective, that increased energy costs don’t impact our most vulnerable, and that the state continues to meet its decarbonization targets?
In addition to the briefing, a letter was sent to Gov. Inslee from nine associations asking for answers to questions related to Washington’s commitments. The letter raised concerns and questions about the impacts and commitments agreed to by Washington state included in the Dec. 14, 2023, settlement agreement issued as a result of mediation to resolve litigation over the Columbia River System Operations (CRSO). The settlement paves the way for breaching the lower Snake River dams but stops short of committing to breaching, an authority held by Congress. The settlement impacts the entire federal Columbia River System. Washington state was one of the Six Sovereigns that signed the agreement.
The letter raised concerns about impacts on electricity rates, clean energy, irrigation for farmland, and the elimination of a low-cost, low-emissions transportation corridor. The organizations voiced concern about the ambiguity of many of the commitments in the agreement and the lack of clarity concerning how the commitments could impact Washington state communities.
The letter was signed by Northwest River Partners, Pacific NW Waterways Association, Washington Public Ports Association, Washington State Water Resources Association, WPUDA, Washington Rural Electric Cooperative Association, Washington Potato and Onion Association, Columbia River Steamship Operators Association, and the Washington Association of Wheat Growers.
EPR Bill Heard in the Senate
The EPR bill, known as the Re-Wrap Act (SB 6005), was heard in the Senate Environment, Energy & Technology Committee this week. The bill saw similar testimony to its House companion that took place during the first week of session in which the business community still has concerns about cost of the program. The proposal would establish an Enhanced Producer Responsibility (EPR) program and set standards for post-consumer recycled content in consumer packaging and paper products. Agriculture continues to argue for an exemption from the bill for food touch packaging.
The House bill (HB 2049) has been referred to the House Appropriations Committee but has not been scheduled for a public hearing yet.
Food Waste Bills Receive Hearings
Companion bills dealing with organics waste management (SB 6180/HB 2301) to divert organic material such as food waste from the landfill received hearings on Jan. 23 in the Senate and House. The legislation proposes sweeping changes to further food waste reduction. The bill covers topics from organic material collection services by local governments to color requirements for garbage, recycling, and organic material disposal bins.
The Washington Potato & Onion Association testified with concerns over the provisions in the bill prohibiting the use of plastic produce stickers beginning in 2028. Food NW testified with concerns over the date labeling provisions in the legislation arguing that date labeling should be regulated at the federal level so there is consistency and not varying standards state by state.
Carbon Market Linkage Bill Continues to Move Through Process
Governor-request legislation (SB 6058/SHB 2201) to facilitate linkage of Washington’s carbon market under the Climate Commitment Act (CCA) with California and Quebec moved out of their respective policy committees in both the Senate and House this week. The committees passed out very similar substitute bills with one exception — the Senate version included an adopted amendment that specifies that Ecology is authorized to withdraw from a linkage agreement. Both bills are anticipated to be heard in their respective fiscal committees.
In addition, another bill received a hearing this week that would be helpful to entities regulated under the CCA who are required to purchase allowances.
Bill to Allow Puget Sound Energy to Transition Away from Serving Retail Natural Gas Customers Passes House
Last session, the state’s largest investor-owned utility, Puget Sound Energy (PSE), proposed legislation (HB 1589) that would have outlined a path for them to transition out of the retail natural gas business. While the legislation did not call for discontinuing service to current natural gas customers, it would have banned PSE from connecting new natural gas for residential or commercial customers after June 30, 2023. The legislation failed to pass during the 2023 session.
This week, the bill was amended on the House floor and passed by a vote of 52-45. The revised bill bans PSE from connecting new natural gas for residential or commercial customers after June 30, 2023, unless a customer had filed an application for a connection by that date. The prohibition does not apply to facilities engaged in one or more manufacturing processes described by North American Industry Classification System codes beginning with 31, 32, or 33, which includes food manufacturing.
Other Notable Bills that Saw Action this Week:
- Suitability of Lands (HB 2336) would require the Washington State Department of Agriculture (WSDA), in consultation with the State Conservation Commission, to perform an assessment of unused and underutilized state-owned lands to determine their suitability for agricultural purposes. For those not suitable for agricultural purposes, the bill requires the Washington State University Energy Program to perform an assessment to determine the suitability of such lands for renewable energy production purposes. The bill passed out of the House Agriculture and Natural Resources Committee.
- Methane in Agriculture (HB 1574) allows grant funds from the Sustainable Farms and Fields Program to be used for practices that increase carbon sequestration in soil organic matter levels and standing vegetation as well as reduce livestock and soil greenhouse gas emissions. A hearing was held in the House Agriculture and Natural Resources Committee.
- Water Consumptive Quantity (HB 1752) allows the U.S. Bureau of Reclamation, under special circumstances, to apply for a change in the number of acres that could be irrigated with water rights held by the Bureau for water use within the boundaries of the Columbia Basin Project. A hearing was held on the bill in the House Agriculture and Natural Resources Committee.
- Energy Sites Water Supply (SB 5992) requires applicants seeking Energy Facility Site Evaluation Council certification for a facility generating electricity using renewable resources to provide evidence of an adequate water supply for the project. A hearing was held in the Senate Environment, Energy & Technology Committee.
- Pesticide Application Committee (SB 6166/HB 2302) extends the Pesticide Application Safety Committee and the advisory work group from July 1, 2025, to July 1, 2035. SB 6166 passed out of the Senate Labor & Commerce Committee on Jan. 22, while HB 2302 was heard in the House Agriculture and Natural Resources Committee the next day.
- Untreated Sewage Discharges (HB 2290) requires a one cent fee for every gallon of discharge contaminated by untreated sewage that a municipal sewer system or treatment plant releases into the Puget Sound or connected waters. The bill was heard in the House Environment & Energy Committee.