BILL REQ. #:  H-3618.1 

Read first time 01/13/2006.   Referred to Committee on Natural Resources, Ecology & Parks.

     AN ACT Relating to minimizing the environmental cost of greenhouse gas emissions by encouraging mitigation for carbon dioxide; adding a new section to chapter 82.04 RCW; and adding new sections to chapter 70.94 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due as provided in this section for voluntary efforts to mitigate carbon dioxide emissions.
     (2) The credit allowed under this section is one dollar for every ton of carbon emissions certified as mitigated under section 2 of this act.
     (3) No application is necessary for the tax credit allowed under this section. The person must keep records for the department to verify eligibility under this section, including all necessary certification documentation required under section 2 of this act.

NEW SECTION.  Sec. 2   A new section is added to chapter 70.94 RCW to read as follows:
     (1) Except as otherwise provided in this section, businesses and nonprofit organizations that choose to claim the tax credit allowed under section 1 of this act must obtain documentation from a qualified third party organization certifying that the business or nonprofit organization has offset one hundred percent of their carbon dioxide emissions with qualifying mitigation projects.
     (2) The department shall generate and maintain a list of third party organizations that are qualified to certify the successful completion of carbon dioxide mitigation efforts undertaken by businesses or nonprofit organizations in order to qualify for the tax credit allowed under section 1 of this act. Organizations chosen for the list must be independent and free of any financial interests in the types of businesses or nonprofit organizations likely to use their services, and must be able to demonstrate to the department that the organization possesses the minimum technical expertise necessary to verify that mitigation offset projects satisfy the requirements of this section.
     (3)(a) Businesses or nonprofit organizations choosing to claim the tax credit allowed under section 1 of this act must enter into a business relationship with one of the third party organizations listed by the department under subsection (2) of this section. The terms of the relationship may not conflict with this section and must be determined by the initiating business or nonprofit organization and the third party organization.
     (b) The third party organization shall be responsible for:
     (i) Establishing the business or nonprofit organization's baseline carbon dioxide emissions level;
     (ii) Working with the initiating business or nonprofit organization to establish a carbon dioxide mitigation plan that includes funding for offset projects meeting the standards for offset projects required by this section;
     (iii) Conducting an emissions audit of the initiating business or nonprofit organization that verifies that one hundred percent of the business or nonprofit organization's emitted baseline carbon dioxide equivalents, as that term is defined in RCW 80.70.010, has been mitigated.
     (c) The third party organizations shall certify a business or nonprofit organization if that business or nonprofit organization satisfies the requirements of this section by either directly funding and implementing specific mitigation offset projects, or by indirectly funding mitigation offset projects by providing a monetary contribution to the carbon dioxide mitigation account created in section 3 of this act. The contribution amount required by the business or nonprofit organization shall be established by the third party organization consistent with this subsection.
     (4) The department shall develop minimal standards for carbon dioxide mitigation offset projects to be undertaken by a business or nonprofit organization under this section. At a minimum, the standards must require that all offset projects:
     (a) Occur or take place within the state of Washington;
     (b) Are in addition to projects that are likely to occur in the absence of the tax credit allowed under section 1 of this act;
     (c) Not include projects, except for project expansions, existing or undertaken before the tax year in which the tax credit was claimed; and
     (d) Produce quantifiable and measurable results.
     (5) The department may audit and inspect all aspects of the business relationship entered into under this section by the business or nonprofit organization and the third party organization. The department may nullify or modify any certification provided by a third party organization if the department finds that the certification does not accurately reflect the requirements of this section.

NEW SECTION.  Sec. 3   A new section is added to chapter 70.94 RCW to read as follows:
     (1) The carbon dioxide mitigation account is created in the state treasury. All receipts from businesses or nonprofit organizations choosing, under section 2 of this act, to indirectly fund carbon dioxide mitigation offset projects must be deposited into the account. Moneys in the account may only be spent after appropriation. Expenditures from the account may only be used consistent with this section.
     (2) The department shall contract with a third party organization or organizations to locate, design, and implement carbon dioxide mitigation projects. Funding for the mitigation projects shall come from the account created in this section. All projects funded under this section must comply with the minimum standards for carbon dioxide mitigation projects adopted by the department under section 2 of this act.