BILL REQ. #: H-4274.2

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SUBSTITUTE HOUSE BILL 2550
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State of Washington

59th Legislature

2006 Regular Session

By House Committee on Capital Budget (originally sponsored by Representatives Dunshee, Jarrett, Ormsby, Newhouse, Ericks, Cox, Linville and Springer)

READ FIRST TIME 01/20/06.

AN ACT Relating to amending the 2005-2007 capital budget; adding a new section to chapter 43.63A RCW; adding a new section to 2005 c 488 (uncodified); creating a new section; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

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:

Project	Recommendation
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 other project funds must be disbursed prior to energy freedom loans, except where required on a matching basis by other federal or state programs.
     (4) Future loan repayments shall be deposited into the energy freedom account created in section 3 of this act.
     (5) 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.

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