State legislative report for the week of Jan. 18: Carbon legislation figured prominently

By Diana Carlen
WAWG Lobbyist

Friday marked day 13 of the 2021 Legislative Session. A total of 784 bills have been introduced so far. During the second week of the legislative session, the House of Representatives and Senate were busy holding public hearings and voting to advance bills. Only three weeks remain until the first legislative deadline, Feb. 15, 2021, when all bills must be voted out of their respective policy committees to remain alive.

Bipartisan Bill to Reopen Washington Heard in Committee

The bill that drew the most attention last week was a bipartisan bill to reopen businesses in the state.  On Wednesday, more than 1,400 people registered to testify, mostly in support, in the Senate State Government & Elections Committee on SB 5114, sponsored by Sen. John Braun (R-Centralia) and Sen. Mark Mullet (D- Issaquah). The bill would allow all Washington businesses to immediately and safely reopen under Phase 2 of Gov. Inslee’s Healthy Washington Roadmap to Recovery Plan. Phase 2 allows for increased business capabilities in multiple industries including increased gym and fitness capacity, indoor entertainment at 25 percent capacity and the reopening of indoor dining at 25 percent capacity.

Many members of these industries were represented at Wednesday’s hearing emphasizing not just the financial consequences of the ongoing lockdowns to their businesses, but also the emotion consequences.

Beyond the immediate commencement of Phase 2, the bill states that “the legislature intends to regularly review the best available public health data to determine whether additional actions should be taken.” A committee vote has not yet been scheduled on this bill.

The Washington Association of Wheat Growers (WAWG) signed in support of this bill.

Low Carbon Fuel Standard Passes Policy Committee

Legislation that would establish a statewide low carbon fuel standard was amended and voted out the House Environment & Energy Committee on Jan. 21.  HB 1091, sponsored by Rep. Joe Fitzgibbon (D-West Seattle), requires the Department of Ecology to establish a Clean Fuels Program that limits greenhouse gas emissions per unit of transportation fuel, similar to programs underway in British Columbia, California and Oregon.

Republicans put forward 13 amendments intended to highlight their concerns with the proposal. However, only one of their amendments was adopted which would require Ecology to contract out an independent analysis of the anticipated costs/savings from the Clean Fuels Program per gallon of gasoline and diesel. The bill was voted out of committee with the support of 7 Democrats, and opposition of 5 Republicans and 1 Democrat (Rep. Shewmake, D-Bellingham.)

The bill has stiff opposition by the oil industry, trucking industry, business community and agriculture who argue it is an inefficient way to reduce carbon emissions and costly.  For the past two years, proposals to implement a low carbon fuel standard have passed out of the House of Representatives but stalled in the Senate.  Notably, the LCFS does not generate money for transportation projects, which has been the concern of moderate Democrats in recent years. The bill will next be heard in a House fiscal committee.

Cap & Invest Proposal Introduced as “The Climate Commitment Act” 

Legislation titled, “The Climate Commitment Act,” was heard in the Senate Energy, Environment & Technology Committee. The legislation, SB 5126, would establish a “cap and invest” program for greenhouse gas emissions in which emissions would be capped, and the Department of Ecology would issue tradable allowances that regulated entities would have to acquire to cover their emissions.  A portion of these allowances would be allocated for free while the rest would be made available through quarterly auctions. In addition, regulated entities could purchase allowances from other entities. Over time, the cap and number of allowances issued would be reduced with the intent of reducing emissions to meet state goals.

It was a crowded virtual hearing from supporters and opponents.  Notably, the environmental community was divided on the proposal with the traditional environmental community supporting the proposal.  Environmental justice folks, on the other hand, opposed a cap-and-trade system and instead argued for a carbon tax.

Business and agriculture testified in opposition to the proposal including WAWG President Ryan Poe. Specifically, Poe testified about concerns that farmers and people living in rural areas would be disproportionately impacted by this legislation.  He explained that agriculture is simply an energy intensive industry that relies on energy for tractor fuel, fertilizer, livestock feed and more. Any increase in petroleum and natural gas prices would have a direct effect on the cost of production. His testimony is available to read here.

There is significant stakeholder interest in the legislation, both for and against, and the complex bill will require substantial work in the months ahead for the bill to pass.  Given the virtual format of the session, getting this bill passed this year will be challenging for proponents.

Clean Buildings Bill Heard in House Energy & Environment Committee

On Jan. 22, HB 1084, sponsored by Rep. Alex Ramel (D-Bellingham), was heard in the House Environment & Energy Committee. The bill seeks to implement some of the recommendations of the State Energy Strategy.  Ramel served on the advisory task force for the Washington Department of Commerce’s review of the state’s energy strategy.  The legislation seeks to impose considerable costs and restrictions on the use of natural gas in the state for the residential and commercial sectors.

There was significant opposition from gas utilities, union groups and business to the bill because it would pose a significant risk to power reliability in Washington state by restricting and banning an important energy source for our region.

Transportation Revenue Package Introduced

On Jan. 19, House Transportation Committee Chair, Rep. Jake Fey (D-Tacoma) unveiled his transportation revenue proposal, which is set to raise $26 billion over 16 years. Notably, the package assumes the passage of a low carbon fuel standard.

Unlike transportation revenue proposals of the past, Rep. Fey’s package does not rely on bonding and, instead, would be a “pay-as-you-go” package. Foregoing bonding means that the package could pass with a simple majority (which Democrats currently have in both chambers). The state constitution requires a higher threshold for authorizing the sale of bonds and, given the composition of the Legislature, would require Republican votes.

The proposal includes the following revenue sources:

  • An $.18 cent gas tax, $.10 increase in 2021 and $.08 increase in 2022. After 2022, the gas tax will be indexed to inflation. The gas tax is intended to be used towards highway-related investments.
  • Carbon Fee: $15/ton 2021-2023, $20/ton 2023-2025, $25/ton in 2025-2027. Prior to increasing the fee beyond $25/ton, a review process will be put in place.
  • A 1 percent rental car sales tax increase.
  • A $.03 increase in diesel fuel tax, to be dedicated to freight specific projects.
  • A $.04 aircraft fuel tax, to be targeted at airport related purposes.
  • Various weight and user fee increases.

Key investments include:

  • $6.7 billion for state and local projects (as mentioned above, to be determined);
  • $4.6 billion for maintenance and preservation;
  • $3.5 billion for state and local culvert projects;
  • $828 million for Transportation Improvement Board;
  • $8 billion for carbon reduction initiatives; and
  • $27 million in air related enterprises.

The press conference can be viewed here, and a summary of the full proposal can be found here.

It is anticipated that Senate Transportation Chair, Steve Hobbs (D-Lake Stevens) will release his proposal next week.

Work Session on Precision Agriculture Held

On Jan.19, the Senate Agriculture, Water, Natural Resources & Parks Committee held a work session on precision agriculture. As a part of the work session, the committee invited four speakers with expertise in their field to present on what is needed to promote precision agriculture and the future possibilities that it holds for the industry. The four speakers included Russ Elliot of the Washington State Broadband Office; Chris Voigt at the Washington Potato Commission; Ryan Holterhoff with Grant County PUD; and Steve Mantle with, a Walla Walla-based agriculture tech start up.

A common theme throughout all presentations was the importance of building and investing in strong broadband networks that can reach rural communities and farmlands in our state. Additionally, the presenters spoke to the high return on investment (ROI) that farms can potentially see from precision agriculture. Russ Elliot estimated that investments in precision agriculture technologies can see 50 percent ROI. Chris Voigt spoke specifically to the kinds of technical improvements that farms can utilize with precision agriculture, including in-depth soil and water analysis and precise disease and insect monitoring. A link to watch the entire work session can be found here.