2393-S2 AMH DUNS H4550.5

2SHB 2393  - H AMD
     By Representative Dunshee

ADOPTED 01/30/2006

     Strike everything after the enacting clause and insert the following:

"NEW SECTION.  Sec. 1   The legislature finds that:
     (1) Relying on foreign oil hurts our state's economy, citizens, and businesses;
     (2) Experts tell us that the global oil shortage will only worsen, making the three dollars per gallon gasoline of summer 2005 seem affordable;
     (3) Instead of leaving our economy at the mercy of global events, and the policies of foreign nations, Washington state should adopt a policy of energy independence;
     (4) Each year, citizens and businesses in Washington state spend nine billion dollars on gasoline and diesel, with those funds drained from the state economy;
     (5) The energy freedom program is meant to lead Washington state toward energy independence;
     (6) The biofuels industry is a new and developing industry now limited by the availability of capital for construction of facilities for converting farm products into energy and fuels; and
     (7) For biofuels to be economically viable in Washington, it will be necessary to grow dedicated crops, construct crushers near Washington farms, and build refineries to create fuel.
     Therefore, it is the intent of the legislature to reduce Washington's dependence on imported oil, expand renewable fuel production and use in Washington, help citizens and business conserve energy, and promote sustainable rural economic development by creating new jobs and stimulating business and economic activity in local communities across Washington.
     To accomplish this, the energy freedom program is established to stimulate strategic investment in facilities, infrastructure, and technologies that will advance Washington's move toward energy independence.

NEW SECTION.  Sec. 2   A new section is added to 2005 c 488 (uncodified) to read as follows:
FOR THE DEPARTMENT OF COMMUNITY, TRADE, AND ECONOMIC DEVELOPMENT
     Energy Freedom Program (06-2-852)

     The appropriation in this section is subject to the following conditions and limitations:
     (1)(a) The appropriation is provided solely for low-interest loans to political subdivisions for renewable energy projects including the development of biofuel oilseed crushers, supporting infrastructure, and facilities. The political subdivision may negotiate an appropriate agreement with the bioenergy industry for the use of the oilseed crushers, supporting infrastructure, and facilities.
     (b) For purposes of this section, political subdivision means any port district, county, city, town, special purpose district, and any other municipal corporations or quasi-municipal corporations in the state.
     (2) The appropriation is provided solely for the following list of projects:

ProjectRecommendation
Spokane conservation district$2,750,000
Odessa public development authority$2,750,000
Port of Columbia county$2,750,000
Port of Sunnyside$750,000
Total$9,000,000

     (3) All agreements negotiated between the political subdivision and the bioenergy industry for use of the oilseed crushers, supporting infrastructure, or facilities funded in this section must provide for at least a fifty percent match by the industry partner. The industry match may include, but is not limited to, investments in rail, buildings, refining capacity, or seed stock.
     (4) All other project funds must be disbursed prior to energy freedom loans, except where required on a matching basis by other federal or state programs.
     (5) The department shall disburse loans to the political subdivision on a reimbursement basis only.
     (6) The department may defer loan repayment for up to twenty-four months or until the projects start to receive revenue from operations, whichever is sooner.
     (7) Upon written notice to the political subdivision, the department may suspend or cancel its loans if any of the following occur:
     (a) The political subdivision fails to make satisfactory and reasonable progress to complete the project, or the department concludes the political subdivision will be unable to complete the project or any portion of it; or
     (b) The political subdivision or bioenergy industry partners have made misrepresentations in any information furnished to the department or the legislature in connection with the project.
     (8) In the event that any portion of the loan has been paid to the political subdivision under this section at the time of breach, or failure of the political subdivision to satisfactorily perform, the department may require that the full amount of the loan, or a portion thereof, be repaid within a period specified by the department.
     (9) Future loan repayments shall be deposited into the energy freedom account created in section 3 of this act.
     (10) Chapter 39.12 RCW applies to the renewable energy projects funded in whole or in part by the appropriation in this section.
     (11) It is the intent of the legislature to provide loans for the development of a Washington state biodiesel industry based on Washington grown oilseed. The legislature is aware that in the development of this industry, the start-up process may necessitate the use of other oilseeds until Washington state growers plant sufficient crops to support this industry. The legislature also understands the realities of weather and market conditions in this process. The conversion to maximum Washington grown oilseed must be accomplished as quickly as possible. The political subdivision shall: (a) Develop a plan for outreach to local growers and an estimate of when maximum Washington state oilseed-based production will be reached; (b) develop a goal for the political subdivision to return a portion of the biofuel to local oilseed producers; and (c) report this information to the department of community, trade, and economic development by December 1, 2006. The department shall report on the implementation of this section by January 1, 2007, to the appropriate committees of the legislature.

Appropriation:
     State Taxable Building Construction Account--State . . . . . . . . . . . . $9,000,000

     Prior Biennia (Expenditures) . . . . . . . . . . . . $0
     Future Biennia (Projected Costs) . . . . . . . . . . . . $0
          TOTAL . . . . . . . . . . . . $9,000,000

NEW SECTION.  Sec. 3   A new section is added to chapter 43.63A RCW to read as follows:
     The energy freedom account is created in the state treasury. All receipts from appropriations made to the account, proceeds from other lawful sources, and loan payments of principal and interest derived from loans made under section 2 of this act must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for loans and grants to political subdivisions for renewable energy and biofuel development projects and activities.

NEW SECTION.  Sec. 4   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately."

EFFECT:  Bioenergy industry partners are required to provide a 50% match to the project appropriations. Loan disbursements will be made on a reimbursement basis only. The department may defer loan repayment for up to twenty-four months or until the projects start to receive revenue from operations, whichever is sooner. The department may require repayment of loans if the political subdivision fails to make reasonable progress toward project completion, or if project partners have made misrepresentations in any of the information furnished to the department or the legislature. Prevailing wage applies to the renewable energy projects funded in whole or in part by the appropriation in this act.

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