By Diana Carlen
The Washington State Legislature has completed the 12th week of the legislative session. Friday marked the 84th day of the 2023 Legislative Session. There are 22 days left of the scheduled legislative session.
The fourth legislative deadline has come and gone — bills needed to have been approved by their respective policy committees by Wednesday, March 29, to remain under consideration. Fiscal committees will continue to hold public hearings and vote on bills that are determined to have a fiscal impact until Tuesday, April 4, which is the next legislative deadline.
House Operating Budget released
On Monday, the House of Representatives rolled out their biennial budget proposal. Spending totals for the biennium come in at $69.5 billion (Senate was slightly lower at $69.2 billion) and like the Senate, does not propose any new taxes. The budget includes approximately $316 million in revenue from the newly implemented Climate Commitment Act and leaves $3.2 billion in reserves over four years, a little less than the Senate’s proposal (Senate leaves $3.8 billion in reserves).
The budget prioritizes behavioral health needs, investments in housing and support for education. Of note, unlike the Senate, the House budget assumes passage of a voter-approved referendum to allow the state to borrow $4 billion to spend on housing — a proposal put forward in the governor’s budget proposal in December.
Some proposed spending items of interest include:
- $10.3 million to the Conservation Commission for implementation of the voluntary stewardship program (funded at $8.48 million in the Senate).
- $480,000 for the governor to invite federally recognized tribes, local governments, agricultural producers, commercial and recreational fisher organizations, business organizations, salmon recovery organizations, forestry and agricultural organizations, and environmental organizations to participate in a process to develop recommendations on proposed changes in policy and spending priorities to improve riparian habitat (funded at the same level in the Senate).
- $3 million to the Conservation Commission to support the outreach, identification, and implementation of salmon riparian habitat restoration projects (funded at the same level in the Senate).
- Approximately $2 million for the Department of Fish and Wildlife to continue the assessment of riparian ecosystems (funded at the same level in the Senate).
- $400,000 for the Department of Ecology to contract with a third-party consultant to gather stakeholder input and make recommendations on the design and implementation of a producer responsibility program for consumer packaging, including paper, plastic, metal, glass and paper products. The report would be due to the legislature by Nov. 1, 2023 (funded at $500,000 in the Senate).
The House operating budget proposal, was heard, voted out of the Committee, and passed off the House floor over the course of the week. The budget summary can be found here and proposed bill language can be found here.
Budget proposals fund further studies on Snake River dams
Both the House and Senate proposed budgets provide funding to study the replacement of the electricity, irrigation and transportation benefits that are currently provided by the lower Snake River dams. Last year, a state-funded report backed by Gov. Jay Inslee and Sen. Patty Murray (D-Wash.) was released, which evaluated the feasibility of breaching the lower Snake River dams. The Inslee-Murray report concluded that breaching the dams is only feasible if the benefits of the dams are replaced. The total cost of replacing the value of the dams, according to the report, is estimated at between $10 billion and $32 billion dollars.
The Senate proposes $2 million in funding for the Department of Commerce to contract with the national academy of sciences or a similar independent research organization to conduct an analysis of new electricity generation, transmission, ancillary services, efficiency and storage needed to offset what is currently provided by the lower Snake River dams, as well as identifying any impacts to grid reliability, consumer pricing, and carbon pollution that would result from dam removal. While the House does not directly name the Snake River dams in their proposal, the budget provides $4.5 million for the Department of Commerce to “contract with one or more of the western national laboratories or a similar independent organization, in consultation with state and federal energy agencies, and utilities to conduct the analysis which would include a list of requirements for a replacement portfolio that diversifies and improves the resilience and maintains the reliability and adequacy of the electric power system, is consistent with the state’s statutory and regulatory requirements for clean electricity generation, and is supplementary to the resources that will be required to replace fossil fuels in the electrical generation, transportation, industry and buildings sectors.”
Both the Senate and House operating budgets provide $500,000 for the Department of Ecology to conduct an analysis of how to continue water use for irrigation during draw-down related to potential lower Snake River dam removal.
Both the Senate and House transportation proposals include $5 million for Department of Transportation to analyze highway, road, and freight rail transportation needs and options to accommodate the movement of freight and goods that currently are transported by barge through the lower Snake River dams. Additionally, the House provides an extra $500,000 to the Joint Transportation Committee to engage an independent review team to work in coordination with the greater analysis to ensure greater confidence in the end results.
House Budget funds study on exempt fuel issue; Senate introduces legislation to deal with issue
Both the Senate and House fiscal committees rejected amendments to the budget this week by Republicans to provide immediate relief by allocating $50 million to reimburse farmers who paid fuel surcharges under the Climate Commitment Act. The House, however, adopted an amendment to their proposed budget to provide $500,000 to the Department of Agriculture to contract with a neutral, third-party facilitator to convene an advisory process. The purpose of the advisory process is to make recommendations to the legislature on a logistically practicable long-term process to ensure that exempt fuel users are in fact exempt form paying the costs embedded in exempt fuel prices that are attributable to the Climate Commitment Act allowance price.
On Friday, two Senate Democrats (Sen. Mark Mullet and Sen. Joe Nguyen) introduced legislation dealing with the exempt fuel issue. SB 5766 would require Ecology to create a refund portal by Jan. 1, 2024, to implement the farmer fuel exemption and provides $50 million to fund the program that year. It also calculates the refund amount based on eight-tenths of one percent of the most recent auction settlement price multiplied by the number gallons used by the farmer or agricultural transporter. The agricultural exemption must be administered through the remittance program meaning it could not be taken at point of sale. In addition, businesses would be prohibited from listing the Climate Commitment Act surcharge on billing statements and makes it a violation of the Consumer Protection Act if a business lists this surcharge on a billing statement. Finally, the bill creates a task force to broadly look at efforts and processes to implement the emission exemptions under the Climate Commitment Act.
Although SB 5766 was introduced past legislative deadlines, it is understood to be “necessary to implement the budget” if Democrat leadership decides to move the bill. It has not been scheduled for a hearing yet.
House Capital Budget released
In tandem with the House operating budget release, the House published their proposed capital budget on March 27. The capital budget proposal put forward by the House spends $8.3 billion over the 2023-25 biennium. The proposal uses $4.62 billion in new state bonds, $3.16 billion in other funding, and $525 million in revenue from the Climate Commitment Act. $160 million is reserved for the supplemental budget in 2024.
Some proposed spending items of interest include:
- $57.1 million to the State Conservation Commission for various pass-through grant programs intended to help conserve natural resources, with a focus on assisting private landowners with best land and water quality management practices (within this amount, $25 million to develop and implement a voluntary riparian grant program to fund the protection and restoration of critical riparian management zones; and $13 million for matching federal Conservation Reserve Enhancement Program funding and for technical assistance to applicants).
- Reappropriation of $3 million for the Voluntary Stewardship Program (funding is provided at the same level in the Senate).
- $6 million for the WA State Fairs Health and Safety Grants ($8 million is provided in the Senate).
- $44.7 million for continued implementation of the Columbia River Basin Supply Development (Odessa) ($60.7 million is provided in the Senate).
- $49 million for the Yakima Integrated Plan (Senate funds at same level).
The House Operating Budget proposal, was heard, voted out of committee, and passed off the House floor over the course of the week. The budget summary can be found here and proposed bill language can be found here.
House and Senate transportation budgets released
Both the House and Senate Transportation budgets were released this week, each offering a different take on the state’s transportation needs over the next biennium. In regard to the bottom line, the House Transportation Budget proposes a total of $13.6 billion while the Senate considers $12.9 billion. Budget priorities between the two remain largely consistent with a focus on traffic safety, emissions reduction, and investments in our state’s ferries. One area of discrepancy includes the total funds coming from the newly implemented Climate Commitment Act. The House uses a total of $921 million from the CCA for the transportation proposal, while the Senate spends a slightly reduced $758 million.
Some proposed spending items of interest include:
- $2 million for the Joint Transportation Committee to oversee design of an infrastructure and incentive strategy to drive medium- and heavy-duty vehicle carbon emission reductions in the state including programs for drayage trucks and school buses; and a review of the passenger vehicle tax incentive in current law.
- $149.9 million is provided for the implementation of commercial vehicle infrastructure and incentive programs.
- $800,000 is provided for coordination with cities, counties, ports, and private entities to develop recommendations for state assistance in the development of specific candidate truck parking sites.
- $300,000 is provided to pursue federal grant opportunities to develop and implement a technology-based truck parking availability system along the I-5 corridor in partnership with Oregon and California.
- Funding is provided for staff and consultant services to work with communities to meet reduced vehicle miles traveled targets (funded in the house at $294,000 and in the Senate at $1.75 million).
- Federal expenditure authority is reappropriated for the Forward Drive road usage charge project overseen by the Washington State Transportation Commission. This amount is the 2023-25 biennium’s share of a $5.525 million grant awarded in July 2020. The purpose of the project is to advance research in key policy areas related to road usage charge, including assessing impacts of future mobility shifts on road usage charge revenues and conducting an equity analysis (both House and Senate fund at $11.9 million).
A summary of the House transportation proposal can be found here, and a Senate summary can be found here. The complete proposed House transportation budget bill is linked here, and it’s Senate counterpart is linked
State received just shy of $300 million from first auction
On March 28, Ecology confirmed that the state raised $299,983,267 through the sale of carbon allowances at the state’s first cap-and-invest auction that was held on Feb. 28. Funds have been deposited in the state treasury. Ecology announced the results in their Public Proceeds Report.
The results of the auction were released earlier this month in an Auction Summary Report. All 6,185,222 available allowances were sold at a final settlement price of $48.50. The report, which is posted to Ecology’s Auctions and Trading webpage, also included other information about market security and eligible participants.
The revenue raised is subject to appropriation by the Legislature and will be used to fund climate projects focused on clean transportation, clean energy, climate resiliency, and environmental justice initiatives.
More information about how auction funding will be used is available on Ecology’s Auction Proceeds webpage. The webpage includes detailed information about the different accounts established by law to house auction funding, and the specific climate goals each is designed to address.
Notable bills that received a public hearing last week:
- WA food & Agriculture Products (SB 5341), sponsored by Sen. Ron Muzzall (R-Oak Harbor), would direct the Washington State Department of Agriculture to create an advisory committee of food production organizations in order to make recommendations on a location-based program to promote local food and agricultural products in Washington. Following the submission of such a report, WSDA would be able to adopt rules necessary to implement the program.
- Voluntary Stewardship Program(SSB 5353), sponsored by Sen. Keith Wagoner (R-Sedro-Woolley), would allow additional counties to join the Voluntary Stewardship Program and be eligible for program funding. The bill also requires the Conservation Commission to determine which watersheds in the new participating counties received adequate funding to implement the program every two years and requires county action if adequate funding is not received.
- Drought Preparedness (SHB 1138), sponsored by Rep. Mike Chapman (D-Port Angeles) is Department of Ecology request legislation. The bill provides a pathway for funding a response to drought emergencies, including unanticipated and sudden droughts. The bill was amended in the Senate policy committee to include a transfer from the state general fund to the emergency drought response account in the amount needed to bring the account to $3,000,000 upon the issuance of a drought emergency order.
Notable bills that were voted out of committee this week:
- Pesticide Advisory Board (ESHB 1019), sponsored by Tom Dent (R-Moses Lake) would establish a formal and permanent Pesticide Advisory Board to advise the Department of Agriculture. The bill was amended in the Senate Agriculture, Water, Natural Resources & Parks Committee to add an at-large and a member representing the household and commercial products association to the voting membership of the pesticide advisory board and wood preservers to the list of non-voting members.
- Musculoskeletal Injuries (ESSB 5217), sponsored by Sen. Manka Dhingra (D- Redmond), would repeal the law prohibiting the Department of Labor and Industries from adopting rules related to ergonomics or musculoskeletal disorders. The bill would then allow L&I to adopt rules for certain risk classes of workers, so long as the Department did not take up more than one set of rules for an industry per year.
Notable bills considered dead after the March 29th cutoff deadline:
- Irrigation District Elections (SB 5709), sponsored Sen. Nikki Torres (R-Pasco), would have permitted irrigation district board of directors to conduct an election via mail-in ballots. The bill also would have also clarified who may vote in an irrigation district election and establishes measures to ensure election security.