BILL REQ. #:  H-3899.1 

Prefiled 12/03/07. Read first time 01/14/08.   Referred to Committee on Ecology & Parks.

     AN ACT Relating to establishing a carbon tax; and adding a new chapter to Title 82 RCW.

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

NEW SECTION.  Sec. 1   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Authority" means the climate action fund authority.
     (2) "Coal" means bituminous coal, subbituminous coal, lignite, and coke.
     (3) "Department" means the department of revenue.
     (4) "Person" means any individual, division of government, business, or corporation.
     (5) "Petroleum product" means any liquid hydrocarbons at atmospheric temperature and pressure that are the product of the fractionation, distillation, or other refining or processing of crude oil, and that are used as, useable as, or may be refined as a fuel or fuel blendstock including, but not limited to, gasoline, diesel fuel, aviation fuel, and bunker fuel.

NEW SECTION.  Sec. 2   (1) There is hereby levied and imposed a carbon tax upon persons extracting coal, petroleum, and natural gas in Washington or importing coal, petroleum, petroleum products, and natural gas for use by Washington consumers. This tax is in addition to all other taxes imposed on coal, petroleum, petroleum products, and natural gas.
     (2) The following rates apply:
     (a) On July 1, 2008, the tax equals ten dollars per ton of carbon content on the fuel;
     (b) On July 1, 2009, the tax equals twenty dollars per ton of carbon content on the fuel;
     (c) On July 1, 2010, the tax equals thirty dollars per ton of carbon content on the fuel;
     (d) On July 1, 2011, the tax equals forty dollars per ton of carbon content on the fuel;
     (e) On July 2, 2012, the tax equals fifty dollars per ton of carbon content on the fuel;
     (f) On July 2, 2013, the tax equals sixty dollars per ton of carbon content on the fuel;
     (g) On July 2, 2014, the tax equals seventy dollars per ton of carbon content on the fuel;
     (h) On July 2, 2015, the tax equals eighty dollars per ton of carbon content on the fuel;
     (i) On July 2, 2016, the tax equals ninety dollars per ton of carbon content on the fuel; and
     (j) On July 2, 2017, the tax equals one hundred dollars per ton of carbon content on the fuel.
     (3) The department shall adopt rules as necessary to implement the carbon tax on coal, petroleum, petroleum products, and natural gas. The department shall develop and make available worksheets and guidance documents necessary to calculate the carbon content of coal, petroleum, petroleum products, and natural gas. The department shall use methods maintained by the United States environmental protection agency to calculate the carbon content of each type of fuel.
     (4) Any person extracting or importing coal, petroleum, petroleum products, and natural gas shall be liable for and pay monthly carbon taxes to the department.
     (5) The department shall deposit all collected carbon taxes into the climate action fund.

NEW SECTION.  Sec. 3   There is imposed a carbon tax at retail sale on motor vehicle fuel as defined in RCW 82.36.010, special fuel as defined in RCW 82.38.020, and aircraft fuel as defined in RCW 82.42.010. This tax is in addition to all other taxes imposed on motor vehicle fuels, special fuels, and aircraft fuel.
     (1) The following tax rates apply:
     (a) On July 1, 2008, the carbon tax equals ten cents per gallon;
     (b) On July 1, 2009, the carbon tax equals twenty cents per gallon;
     (c) On July 1, 2010, the carbon tax equals thirty cents per gallon;
     (d) On July 1, 2011, the carbon tax equals forty cents per gallon;
     (e) On July 1, 2012, the carbon tax equals fifty cents per gallon;
     (f) On July 1, 2013, the carbon tax equals sixty cents per gallon;
     (g) On July 1, 2014, the carbon tax equals seventy cents per gallon;
     (h) On July 1, 2015, the carbon tax equals eighty cents per gallon;
     (i) On July 1, 2016, the carbon tax equals ninety cents per gallon; and
     (j) On July 1, 2017, the carbon tax equals one dollar per gallon.
     (2) The department of licensing shall adopt rules as necessary to implement the carbon tax as required by this chapter.
     (3) The department of licensing shall deposit all carbon taxes collected on motor vehicle fuels into the motor vehicle fund as required under RCW 82.36.410. The department of licensing shall deposit all carbon taxes collected on special fuels into the motor vehicle fund as required by RCW 82.36.410. The department of licensing shall deposit all carbon taxes collected on aircraft fuel into the aeronautics account as required under RCW 82.42.090.

NEW SECTION.  Sec. 4   (1) The climate action fund authority is created and constitutes a public instrumentality and agency of the state, separate and distinct from the state, exercising public and essential governmental functions.
     (2) The powers of the authority are vested in and shall be exercised by a board of trustees consisting of:
     (a) One member from the house of representatives committee on energy and one member from the house of representatives committee on environment, appointed by the speaker of the house of representatives representing each caucus;
     (b) One member from the senate committee on energy and one member from the senate committee on environment, appointed by the president of the senate representing each caucus; and
     (c) Seven members appointed by the governor with the consent of the senate, one of whom shall be appointed by the governor as chair of the authority and who shall serve on the board and as chair of the authority at the pleasure of the governor.
     (3) The respective officials shall make the initial appointments no later than July 30, 2008. The term of the trustees, other than the chair, is four years from the date of their appointment, except that the terms of three of the initial gubernatorial appointees, as determined by the governor, are for two years from the date of their appointment. A trustee appointed by the governor may be removed by the governor for cause under RCW 43.06.070 and 43.06.080. The appropriate official shall fill any vacancy on the board by appointment for the remainder of the unexpired term. The trustees appointed by the governor shall be compensated in accordance with RCW 43.03.240 and may be reimbursed, solely from the funds of the authority, for expenses incurred in the discharge of their duties under this chapter, subject to RCW 43.03.050 and 43.03.060. The trustees who are legislators shall be reimbursed for travel expenses in accordance with RCW 44.04.120.
     (4) Seven members of the board constitute a quorum.
     (5) The trustees shall elect a treasurer and secretary annually, and other officers as the trustees determine necessary, and may adopt bylaws or rules for their own government.
     (6) Meetings of the board shall be held in accordance with the open public meetings act, chapter 42.30 RCW, and at the call of the chair or when a majority of the trustees so requests. Meetings of the board may be held at any location within or out of the state, and trustees may participate in a meeting of the board by means of a conference telephone or similar communication equipment under RCW 23B.08.200.
     (7) The authority is subject to audit by the state auditor.
     (8) The attorney general must advise the authority and represent it in all legal proceedings.

NEW SECTION.  Sec. 5   The authority is empowered to:
     (1) Use public moneys in the climate action fund to promote and fund state and local government activities, projects, and programs that reduce emissions of greenhouse gases and that support the state greenhouse gases emission reduction goals under RCW 80.80.020. The authority shall fund activities, projects, and programs which include, but are not limited to:
     (a) Incentives to individuals, businesses, and local governments for the deployment of renewable energy generation and energy efficiency technologies and practices;
     (b) Efforts to promote the growing of biofuel feedstock and development of biofuel production facilities;
     (c) Research and development of renewable energy technologies, energy efficiency technologies, and practices;
     (d) Development of sustainable energy utilities;
     (e) Funding to the public transportation systems account within the transportation fund under RCW 82.44.180;
     (f) Funding to the green energy incentive account of the energy freedom account under RCW 43.325.040; and
     (g) Funding to the vehicle electrification demonstration grant program under RCW 43.325.110;
     (2) Hold funds received by the authority in trust for their use pursuant to this chapter to promote and fund reductions in greenhouse gases emissions;
     (3) Manage its funds, obligations, and investments as necessary and as consistent with its purpose including the segregation of revenues into separate funds and accounts;
     (4) Make grants to entities pursuant to contract for research and demonstration of greenhouse gases reduction activities to be conducted in the state. Grant agreements shall specify deliverables to be provided by the recipient pursuant to the grant. The authority shall solicit requests for funding and evaluate the requests by reference to factors such as: (a) The quality of the proposed research; (b) its potential to reduce emissions of greenhouse gases, with particular attention to the likelihood that it will also lower energy costs, or offer a breakthrough in developing new sources of renewable energy; (c) its potential to provide economic, environmental, and other benefits to the citizens of the state; (d) its potential to stimulate the renewable energy and energy efficiency manufacturing, and related employment in the state; (e) the geographic diversity of the grantees within Washington; and (f) evidence of potential royalty income and contractual means to recapture such income for purposes of this chapter;
     (5) Create one or more advisory boards composed of scientists, industrialists, and others familiar with renewable energy, energy efficiency, energy conservation, the emissions of greenhouse gases, and climate; and
     (6) Adopt policies and procedures to facilitate the orderly process of grant application, review, and reward.

NEW SECTION.  Sec. 6   The authority has all the general powers necessary to carry out its purposes and duties and to exercise its specific powers. In addition to other powers specified in this chapter, the authority may:
     (1) Sue and be sued in its own name;
     (2) Make and execute agreements, contracts, and other instruments, with any public or private person or entity, in accordance with this chapter;
     (3) Employ, contract with, or engage independent counsel, financial advisors, auditors, other technical or professional assistants, and such other personnel as are necessary or desirable to implement this chapter;
     (4) Establish such special funds, and controls on deposits to and disbursements from them, as it finds convenient for the implementation of this chapter;
     (5) Enter into contracts with public and private entities for research to be conducted in the state;
     (6) Adopt rules, consistent with this chapter;
     (7) Delegate any of its powers and duties if consistent with the purposes of this chapter;
     (8) Exercise any other power reasonably required to implement the purposes of this chapter;
     (9) Hire staff and pay administrative costs.

NEW SECTION.  Sec. 7   Members of the board and persons acting on behalf of the authority, while acting within the scope of their employment or agency, are not subject to personal liability resulting from carrying out the powers and duties conferred on them under this chapter. Neither the state nor the authority is liable for any loss, damage, harm, or other consequence resulting directly or indirectly from grants made by the authority or by any research funded by such grants.

NEW SECTION.  Sec. 8   The authority may petition the legislature to be dissolved upon a showing that it has no reason to exist and that any assets it retains must be distributed to one or more similar entities approved by the legislature. The legislature reserves the right to dissolve the authority after its contractual obligations to its funders and grant recipients have expired.

NEW SECTION.  Sec. 9   The climate action fund is created in the custody of the state treasurer. Only the board or the board's designee may authorize expenditures from the fund. Expenditures from the fund may be made only for purposes of this chapter. Administrative expenses of the authority, including staff support, may be paid only from the fund. Revenues to the fund consist of transfers made by the department of collected carbon taxes.

NEW SECTION.  Sec. 10   Sections 1 through 9 of this act constitute a new chapter in Title 82 RCW.