BILL REQ. #: Z-0500.3
| State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 01/29/09. Referred to Committee on Environment, Water & Energy.
AN ACT Relating to reducing greenhouse gas emissions; amending RCW 70.235.005, 70.235.010, 70.235.030, 70.94.151, and 43.21B.110; adding new sections to chapter 70.235 RCW; creating a new section; prescribing penalties; and providing expiration dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 70.235.005 and 2008 c 14 s 1 are each amended to read
as follows:
(1)(a) The legislature finds that Washington has long been a
national and international leader on energy conservation and
environmental stewardship, including air quality protection, renewable
energy development and generation, emission standards for fossil-fuel
based energy generation, energy efficiency programs, natural resource
conservation, vehicle emission standards, and the use of biofuels.
Washington is also unique among most states in that in addition to its
commitment to reduce emissions of greenhouse gases, it has established
goals to grow ((the)) clean energy ((sector)) jobs and reduce the
state's expenditures on imported fuels.
(((2) The legislature further finds that Washington should continue
its leadership on climate change policy by creating accountability for
achieving the emission reductions established in RCW 70.235.020,
participating in the design of a regional multisector market-based
system to help achieve those emission reductions, assessing other
market strategies to reduce emissions of greenhouse gases, and ensuring
the state has a well trained workforce for our clean energy future.)) (b) It is the intent of the legislature that the state will:
(3)
(((a))) (i) Limit and reduce emissions of greenhouse gases
consistent with the emission reductions established in RCW 70.235.020;
(((b))) (ii) Minimize the potential to export pollution, jobs, and
economic opportunities; and
(((c))) (iii) Reduce emissions at the lowest cost to Washington's
economy, consumers, and businesses.
(((4) In the event the state elects to participate in a regional
multisector market-based system, it is the intent of the legislature
that the system will become effective by January 1, 2012, after
authority is provided to the department for its implementation.)) (2)
The legislature finds that acting now provides Washington businesses
with predictability, drives investment in the new clean energy economy,
creates jobs, positions Washington business to receive credit for early
reductions of greenhouse gases, and ensures that Washington citizens'
interests in the development of any federal cap-and-trade program. By
acting now, Washington businesses and citizens will have adequate time
and opportunities to be well positioned to take advantage of the low-carbon economy by developing a well-trained workforce and to make
necessary investments in low-carbon technology.
(3) The legislature also finds that acting now will unleash the
creativity of Washingtonians in developing the technologies to reduce
greenhouse gas emissions, technologies that will be needed throughout
the world as all nations seek to combat climate change, which will
provide Washington with a competitive advantage over states that choose
to not act to reduce greenhouse gas emissions.
(4) The legislature recognizes that the same actions and
technologies that will reduce greenhouse gas emissions will also reduce
our use of fossil fuels, keeping some of the nine billion six hundred
million dollars the state spends each year on importing these fuels in
our state for local investments and job creation.
(5) The legislature finds that in order to meet the job creation
goals established in this section and the greenhouse gas emission
reductions established in RCW 70.235.020, a firm limit on greenhouse
gas emissions is necessary. It is therefore the intent of the
legislature that Washington participate in the regional cap-and-trade
program.
(6)(a) The legislature also recognizes the importance of linking to
or participating in a federal cap-and-trade program when one is
implemented.
(b) It is also the intent of the legislature that the ((regional
multisector market-based system)) federal cap-and-trade program
recognize Washington's unique emissions portfolio, including the
state's hydroelectric system, the opportunities presented by
Washington's abundant forest resources and agriculture land, ((and))
the state's leadership in energy efficiency and the actions it has
already taken that have reduced its generation of greenhouse gas
emissions, and that entities receive appropriate credit for early
actions to reduce greenhouse gases.
(((6) If)) (7) Any revenues that accrue to the state ((are created
by a market system, they)) by the regional cap-and-trade program must
be used to further the state's efforts to achieve the ((goals))
emission reduction requirements established in RCW 70.235.020, protect
low and moderate income consumers, address the impacts of global
warming on affected habitats, species, and communities, and increase
investment in the clean energy economy in a way that ensures the new,
clean energy economy is one with widely shared prosperity particularly
for communities and workers that have ((suffered from heavy job losses
and chronic unemployment and underemployment)) been disproportionately
affected by economic downturns.
(8) The legislature finds that a well-functioning market is the
least-costly path to achieving the state's statutory greenhouse gas
reductions and that the market must be designed to prevent manipulation
and avoid excessive speculation.
(9) The legislature further finds that climate change impacts are
visible and the economic effects are becoming apparent with longer fire
seasons, shrinking glaciers, decreased snow pack, extreme precipitation
events, and more frequent droughts.
Sec. 2 RCW 70.235.010 and 2008 c 14 s 2 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Allowance" means a limited authorization, issued by a
jurisdiction participating in the regional cap-and-trade program or
otherwise recognized by the department as having as rigorous a
greenhouse gas cap-and-trade program, to emit up to one metric ton of
a greenhouse gas as measured in carbon dioxide equivalents. An
"allowance" is not a property right.
(2) "Allowance cap" means Washington's share of allowances from the
total number of allowances available to the jurisdictions participating
in the regional cap-and-trade program.
(3) "Banking" means the carryover of unused allowances or offsets
from one compliance period to another.
(4) "Borrowing" means using allowances from a future compliance
period to meet a current compliance obligation.
(5) "Capped region" means a jurisdiction, including Washington,
that is participating in the regional cap-and-trade program, and
jurisdictions in other governmental-approved cap-and-trade programs,
that link to the regional cap-and-trade program.
(6) "Carbon dioxide equivalents" means a ((metric)) measure used to
compare the emissions from various greenhouse gases based upon their
global warming potential.
(((2))) (7) "Climate advisory team" means the stakeholder group
formed in response to executive order 07-02.
(((3))) (8) "Climate impacts group" means the University of
Washington's climate impacts group.
(((4))) (9) "Compliance obligation" means the requirement to turn
in to the department the number of allowances or offset credits equal
to the person's covered emissions during the compliance period.
(10) "Compliance period" means the time period during which
emissions subject to the compliance obligation are covered under the
program.
(11) "Covered emissions" includes (a) direct emissions; (b) for
transportation fuels and for residential, commercial, and industrial
fuel combustion at facilities below the emission threshold for
coverage, emissions from the combustion of those fuels that are sold in
Washington for use in Washington; and (c) for electricity imported into
Washington, emissions associated with the out-of-state production of
electricity that is sold or furnished to end-use customers in
Washington.
(12) "Department" means the department of ecology.
(((5))) (13) "Direct emissions" means emissions of greenhouse gases
from sources of emissions, including stationary combustion sources,
mobile combustion emissions, process emissions, and fugitive emissions.
(((6))) (14) "Director" means the director of the department.
(((7))) (15) "Early reduction allowance" means an allowance for
reductions in greenhouse gas emissions that occur after January 1,
2008, and before January 1, 2012, and that are approved by the
department.
(16) "Emission threshold" means the greenhouse gas emission level
at or above which a person has a compliance obligation.
(17) "Forest carbon working group" means the stakeholder group
formed by the departments of ecology and community, trade, and economic
development to develop the recommendations required under RCW
70.235.030(3)(g);
(18) "Greenhouse gas" and "greenhouse gases" includes carbon
dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons,
and sulfur hexafluoride.
(((8))) (19) "Indirect emissions" means emissions of greenhouse
gases associated with the purchase of electricity, heating, cooling, or
steam.
(((9))) (20) "Offset project" means a project that reduces or
removes greenhouse gases that meets the criteria established by the
department and where the greenhouse gases would not otherwise be
subject to coverage under the program.
(21) "Offset credit" means a credit that verifies and confirms the
reduction or removal of greenhouse gases by an offset project that can
be used to meet a compliance obligation.
(22) "Person" means an individual, partnership, franchise holder,
association, corporation, a state, a city, a county, or any subdivision
or instrumentality of the state.
(((10))) (23) "Point of regulation" means the person with the
compliance obligation.
(24) "Program" means the ((department's climate change program.)) cap-and-trade program developed and implemented under this
chapter.
(11)
(25) "Regional cap-and-trade program" means the cap-and-trade
program designed by the western climate initiative.
(26) "Retire" means to invalidate an allowance or offset credit
such that the allowance or offset credit may never be sold or otherwise
used again.
(27) "Terminal operator" means a person who owns, operates, or
otherwise controls a terminal, as that term "terminal" is defined in
RCW 82.36.010.
(28) "Total emissions of greenhouse gases" means all direct
emissions and all indirect emissions.
(((12))) (29) "Transportation fuel" means any carbon based fossil
fuel including combustible gas or liquid used for the propulsion of
equipment and vehicles.
(30) "Western climate initiative" means the collaboration of
states, Canadian provinces, Mexican states, and tribes to design a
multisector market-based mechanism as directed under the western
regional climate action initiative signed by the governor on February
22, 2007.
NEW SECTION. Sec. 3
NEW SECTION. Sec. 4
NEW SECTION. Sec. 5
(a) The director of the department of ecology, who represents the
governor and is chair of the work group;
(b) One member from each of the two largest caucuses of the senate,
appointed by the leader of their respective caucuses;
(c) One member from each of the two largest caucuses of the house
of representatives, appointed by the leader of their respective
caucuses;
(d) Six members from the public who must be selected by the members
designated in (a) through (c) of this subsection by September 1, 2009.
(2) The work group shall meet periodically to review the
development of the regional cap-and-trade program and the department's
rule making as authorized under section 19 of this act, including the
recommendation regarding the distribution of allowances under section
8 of this act.
(3) The work group shall develop and provide a recommendation to
the governor by May 1, 2011, on the timing and terms of Washington's
participation in the regional cap-and-trade program.
(4) This section expires June 30, 2011.
NEW SECTION. Sec. 6
(2) The allowance caps for each year from 2012 to 2020 must be set
in advance of the program start in 2012. Allowance caps for each year
after 2020 must be set at least three years in advance of the start of
the next compliance period.
(3) The allowance caps shall decline an equal amount each year
until Washington's greenhouse gas emissions are reduced as required by
RCW 70.235.020.
(4) The allowance cap for 2012 must be set based on the
department's best estimate of the expected actual emissions covered by
the program in that year as adjusted by the reallocation provided for
in subsection (7) of this section.
(5) The allowance cap for 2015 will be increased by the
department's best estimate of expected new emissions to be included in
the program in that year, after the annual reduction is made to the
cap.
(6) The allowance caps may not take into account the early
reduction allowances authorized in section 7(6)(b) of this act.
(7) Washington shall contribute one percent of its 2012 allowance
cap into a pool. Washington's contribution together with the one
percent contributions of the other jurisdictions participating in the
regional cap-and-trade program must be reallocated among the
participating jurisdictions based on a formula that takes into account
the following factors:
(a) Production and consumption of electricity megawatt hours within
each jurisdiction participating in the regional cap-and-trade program;
(b) Population growth within the jurisdictions participating in the
regional cap-and-trade program; and
(c) Washington's share of the total covered emissions from 2001
through 2005 from jurisdictions participating in the regional cap-and-trade program.
(8) The allowance cap may also be adjusted as necessary to account
for expansion of the capped region through linkage to other
governmentally approved cap-and-trade programs, changes in coverage
under the regional cap-and-trade program, or discovery of incorrect or
inaccurate data used to determine the allowance cap.
NEW SECTION. Sec. 7
(2) Upon receipt by the department of an allowance to meet a
compliance obligation, the department shall retire the allowance.
(3) The department shall ensure that all allowances that it issues
are tracked so that the department knows who holds a given allowance
and when it is retired.
(4) The department shall identify allowances it issues that are
based upon emissions from electricity generation within the state and
separately identify allowances issued for emissions from electricity
generation located outside the state.
(5) The department may accept any allowance to satisfy a compliance
obligation as long as the allowances that are issued by a jurisdiction
other than the state meet criteria established by the department by
rule. However, the total number of allowances accepted from
jurisdictions other than those participating in the regional cap-and-trade program may be limited as set forth by the department by rule.
(6) The department shall adopt rules to implement the program that
include:
(a) A schedule for distributing Washington's allowances;
(b) Criteria that are consistent with the regional cap-and-trade
program for qualifying for an early reduction allowance;
(c) A process for allowances to be banked, which may include
limitations on the number of allowances any one party may hold or
control; and
(d) Prohibitions on borrowing allowances.
NEW SECTION. Sec. 8
(a) Methodologies and processes by which to distribute Washington's
allowances, including the percentage of allowances that should be
auctioned;
(b) Actions the state should take to guard against manipulation of
the market;
(c) The amount of allowances from within the state's allowance cap
that should be set aside for specific purposes, such as for use in low
water years, if any; and
(d) How to address any disparities in the distributional effects
upon individual households, especially low and moderate income
populations.
(2) When developing the recommendations in subsection (1) of this
section, the work group shall consider the eventual transition to full
auctioning of allowances, and shall take into account the following
factors when considering the level of auctions to recommend, including
the potential timing of a transition to full auction:
(a) Competition faced by Washington industries that will be covered
by the program where the competitors are not covered by a similar
program, such as those who operate in international markets;
(b) The potential for emission leakage, including through shifts in
production;
(c) The effect on Washington businesses that will be covered under
the program as compared to those that will not;
(d) The effect on Washington citizens;
(e) The impact on enhancing the transition to a clean energy
economy; and
(f) The strategic use of auction revenues.
(3) The department must consider the recommendations of the
stakeholder group formed under subsection (1) of this section when
adopting rules for the distribution of allowances.
NEW SECTION. Sec. 9
(a) Electricity that is generated or consumed within the state.
Consumption of electricity must be included only if it is required to
participate in the regional cap-and-trade program and must be included
consistent with the regional cap-and-trade program;
(b) Combustion at industrial and commercial facilities; and
(c) Industrial processes.
(2) In addition to the emissions covered in subsection (1) of this
section, in 2015 the program must cover emissions that meet or exceed
twenty-five thousand metric tons of carbon dioxide equivalents annually
from:
(a) Transportation fuel combustion within the state;
(b) Residential fuel combustion within the state; and
(c) Fuel delivered or sold for industrial and commercial combustion
within the state where the fuel is used by persons not otherwise
covered by the program in 2012.
(3) Except for purposes of reporting, the following carbon dioxide
emissions are not covered by the program:
(a) Emissions from industrial combustion of biomass in the form of
fuel wood, wood waste, wood by-products, and wood residuals as long as
the region's silvicultural sequestration capacity is maintained or
increased; and
(b) Emissions from the combustion of biofuels or the biofuel
component of blended fuels as the term "biofuel" is defined in RCW
43.325.010.
(4) By rule, the department:
(a) Shall determine the person who has the compliance obligation
for covered emissions. For emissions associated with the combustion of
fuels that are included in the program for the first time in 2015, the
person with the compliance obligation is either the terminal operator
or the person who imports fuel into the state for delivery to a person
other than a terminal operator for use in the state;
(b) May expand the program to include emissions below the twenty-five thousand metric ton threshold or beyond the scope identified
within subsections (1) and (2) of this section as necessary to ensure
that the emissions covered by the program are consistent with the
regional cap-and-trade program;
(c) Shall include measures so that persons do not inappropriately
avoid the emissions threshold for coverage.
(5) With respect to energy facilities covered under chapter 80.50
RCW and notwithstanding RCW 80.50.120, this chapter applies to all
energy facilities as that term is defined in RCW 80.50.020. Nothing in
this chapter may be construed as conflicting with chapter 80.50 RCW.
NEW SECTION. Sec. 10
(a) Requiring or conducting audits, investigations, and
surveillance of the market;
(b) Actions to prohibit conflicts of interest between emitters,
verifiers, monitors, auditors, investigators, or surveillance persons;
(c) Establishment of measures to address market emergencies;
(d) Prevention of fraud to the greatest extent possible;
(e) Prevention of speculators from unfairly affecting the price of
allowances in the program to the greatest extent possible;
(f) Issuance of orders, and penalties established by rule,
sufficient to address market manipulation; and
(g) Other conditions or provisions necessary to prevent market
manipulation.
(2) The department shall provide a report to the legislature by
December 31, 2010, on the design of the market that includes an
explanation of how manipulation and excessive speculation will be
avoided.
(3) The department shall refer the most egregious violations to the
attorney general or the county prosecutor for consideration for
criminal prosecution or to federal authorities for federal prosecution.
NEW SECTION. Sec. 11
(2) The auction design must be consistent with the regional cap-and-trade program and include the following:
(a) Elements that minimize allowance price volatility, guard
against bidder collusion, and minimize the potential for market
manipulation;
(b) Provisions to ensure that bidders are financially able to
purchase allowances if they are the successful bidder;
(c) Provisions to limit the number of allowances any one party may
purchase as necessary to help ensure that available allowances go to
persons with a compliance obligation; and
(d) A flexible process that allows for ongoing modification of the
auction design and procedures in response to allowance market
conditions and allowance market monitoring data, provided that the
process allows for public review and comment.
NEW SECTION. Sec. 12
(2) The department may issue offset credits for offset projects
located in Washington. The department may also issue offset credits
for offset projects that are located in any jurisdiction in the United
States, Mexico, and Canada that is outside the capped region. One
offset credit must be issued for up to each metric ton of emissions as
measured in carbon dioxide equivalent associated with an offset
project.
(3) Except as provided in this section, the department may accept
offset credits for compliance purposes from other jurisdictions in the
capped region as well as annex 1 countries from the United Nations
framework convention on climate change. The department may not accept
offset credits for an offset project that reduces, removes, or avoids
emissions that, had they occurred within the capped region, would have
been covered by the program.
(4) The department may also accept for compliance purposes offset
credits from developing countries in accordance with the clean
development mechanism of the Kyoto protocol or if the clean development
mechanism is replaced, a protocol developed by the department. The
department may develop criteria for these offset projects to ensure
similar rigor to offset projects within the state.
(5) Any offset credit that is used to meet a compliance obligation
must conform to the rules adopted by the department, which must be
consistent with the regional cap-and-trade program.
(6) Upon receipt by the department of an offset credit to meet a
compliance obligation, the department shall retire the offset credit.
(7) The department shall ensure that all offset credits that it
issues are tracked to ensure that the department knows who holds a
given offset credit and when it is retired.
NEW SECTION. Sec. 13
(1) Forest landowners maintaining and actively managing their
forestland using management activities such as thinning, lengthening of
rotations, increased retention of trees at harvest, fertilization,
genetics, timber stand improvement, and fire management;
(2) Forest landowners continuing the production of wood products
while maintaining or increasing their carbon stocks on the ground;
(3) Retention by forest landowners of high carbon stocks where
there is no obligation to retain such stocks; and
(4) The use by developers and builders of wood building materials
instead of more intensive fossil fuel products such as concrete and
steel.
NEW SECTION. Sec. 14
(1) Specific standards and guidelines that will support carbon
accounting in managed forests participating in an offset program;
(2) How to ensure that any carbon that is reduced or sequestered by
a forestry offset project will be eligible for an offset credit within
the regional cap-and-trade program;
(3) Recognition of management activities that increase carbon
stocks, including but not limited to, thinning, lengthening rotations,
increased retention of trees after harvest, fertilization, genetics,
timber stand improvement, fire management, and specific site class and
productivity of a managed forest;
(4) Specific standards and guidelines to support wood products
accounting, recognizing that carbon is stored in products after trees
are harvested including the use of the one hundred year method which
estimates the amount of carbon stored in the wood products that are
projected to remain in use after one hundred years;
(5) Guidelines on how forestry offset projects and forestry
financial incentive programs can work together so that Washington's
forest landowners will not be disadvantaged in comparison to other
jurisdictions participating in the regional cap-and-trade program; and
(6) Recommendations for how to verify or certify carbon stocks that
will not be administratively burdensome.
NEW SECTION. Sec. 15
(2) Compliance periods are a maximum of three years in length. The
department shall by rule establish the date by which all allowances and
offset credits must be turned in to the agency to meet the compliance
obligation, which must be after the compliance period ends. The
department may by rule allow for turning in allowances prior to the end
of a compliance period.
(3) For purposes of meeting a compliance obligation, the department
shall limit by rule the number of offset credits that may be submitted.
The limitation on the use of offsets must be consistent with the
limitation on offsets established by the regional cap-and-trade
program. The department may limit by rule the number of allowances
from other jurisdictions outside of those participating in the program
in order to ensure that a majority of emission reductions come from
within the jurisdictions participating in the regional cap-and-trade
program.
(4) If sufficient allowances are not turned in to meet the
compliance obligation, a penalty of three allowances must be submitted
for every one allowance that is due. When a person covered under the
program reasonably believes that it will be unable to meet a compliance
obligation, the person shall immediately notify the department. The
department shall issue an order requiring the person to submit the
penalty allowances. Failure to submit penalty allowances as required
by this subsection results in a penalty of up to five thousand dollars
for each penalty allowance that is not submitted.
(5) The department may issue penalties for failure to comply, and
orders to require compliance, with the provisions of this chapter
including requiring compliance plans. Except as provided in subsection
(4) of this section, any person who violates the terms of this chapter
or an order issued under this section incurs a penalty of up to ten
thousand dollars per day per violation for each day that the person has
not complied.
(6) Appeals of orders and penalties issued under this chapter must
be to the pollution control hearings board under chapter 43.21B RCW.
(7) The department may exercise its discretion to waive or issue
reduced penalties based upon criteria it establishes if the department
finds that the violation was inadvertent. Penalties issued under this
section or under RCW 70.94.151 are not paperwork violations as defined
in chapter . . . (Senate Bill No. 5042), Laws of 2009 nor are they
subject to the requirements of chapter 43.05 RCW.
NEW SECTION. Sec. 16
(1) Reducing price impacts for consumers with incomes within two
hundred fifty percent of the federal poverty level;
(2) Strategies to create jobs and provide for worker transition,
especially in and for those communities and workers that have been
disproportionately affected by economic downturns, through efforts to
reduce emissions, reduce energy use, and develop clean energy supplies;
(3) Supporting transit and transportation projects that will reduce
greenhouse gas emissions;
(4) Energy efficiency and renewable energy incentives including
matching electric utility sponsored programs that support customer
energy efficiency investment, new renewable energy resource
development, including related transmission, energy storage, and
integration technologies;
(5) Promoting emission reductions and carbon sequestration in
agriculture, forestry, waste management, and other uncapped sectors;
(6) Efforts funded by local governments to reduce community
greenhouse gas emissions except for reductions to covered emissions
where the local government is the person with the compliance
obligation;
(7) Recognizing early actions to reduce greenhouse gas emissions
where those actions do not qualify for early reduction allowances;
(8) Adaptation to climate change impacts, including impacts on
affected species, habitats, and communities; and
(9) Research, development, demonstrations, and deployment of
technology to reduce greenhouse gas emissions.
NEW SECTION. Sec. 17
(a) Coordination of a regional auction of allowances;
(b) Tracking of emissions and providing of public information about
progress towards the regional greenhouse gas reduction goals;
(c) Monitoring and reporting on market activity, including
potential market manipulation;
(d) Serving as a forum for jurisdictions within the capped region
to update one another on program progress;
(e) Coordination of review and adoption of protocols for offsets;
(f) Coordination of review and adoption of updated reporting
protocols for greenhouse gas emissions;
(g) Coordination of review and issuance of offset credits; and
(h) Suggesting criteria and means to accredit service providers to
deliver validation and verification services.
(2) Any agreement entered into under this section must include
provisions for Washington to exercise oversight of the organization,
including authority to audit the organization's finances and records.
The agreement must also authorize Washington to withdraw from the
agreement without penalty if the organization fails to meet its
obligations under the agreement.
(3) An organization formed under this section is not a state agency
and has no regulatory or enforcement authority.
(4) Nothing in this chapter may be deemed to constitute a waiver of
Washington's sovereign immunity. By entering into any agreement or
arrangement authorized under this section, neither the director nor the
director's designees nor Washington consents to suit outside of
Washington or consents to the governance of such suit under any law
other than that of Washington.
NEW SECTION. Sec. 18
NEW SECTION. Sec. 19
(2) The department's rules must be adopted December 31, 2010. The
rules may not go into effect until June 1, 2011, and after approval of
the governor.
NEW SECTION. Sec. 20
NEW SECTION. Sec. 21
(2) Nothing in this section affects the powers and duties
established in Article III of the state Constitution or chapters 38.52
and 43.06 RCW.
NEW SECTION. Sec. 22
(2) Nothing in this act is intended to expand state authority over
Indian country as that term is defined in 18 U.S.C. Sec. 1151.
Sec. 23 RCW 70.235.030 and 2008 c 14 s 4 are each amended to read
as follows:
(1)(a) The director shall develop, in coordination with the western
climate initiative, a design for a regional multisector market-based
system to limit and reduce emissions of greenhouse gas consistent with
the emission reductions established in RCW 70.235.020(1).
(b) By December 1, 2008, the director and the director of the
department of community, trade, and economic development shall deliver
to the legislature specific recommendations for approval and request
for authority to implement the preferred design of a regional
multisector market-based system in (a) of this subsection. These
recommendations must include:
(i) Proposed legislation, necessary funding, and the schedule
necessary to implement the preferred design by January 1, 2012;
(ii) Any changes determined necessary to the reporting requirements
established under RCW 70.94.151; and
(iii) Actions that the state should take to prevent manipulation of
the multisector market-based system designed under this section.
(2) In developing the design for the regional multisector market-based system under subsection (1) of this section, the department shall
consult with the affected state agencies, and provide opportunity for
public review and comment.
(3) In addition to the information required under subsection (1)(b)
of this section, the director and the director of the department of
community, trade, and economic development shall submit the following
to the legislature by December 1, 2008:
(a) Information on progress to date in achieving the requirements
of chapter 14, Laws of 2008;
(b) The final recommendations of the climate advisory team,
including recommended most promising actions to reduce emissions of
greenhouse gases or otherwise respond to climate change. These
recommendations must include strategies to reduce the quantity of
emissions of greenhouse gases per distance traveled in the
transportation sector;
(c) A request for additional resources and statutory authority
needed to limit and reduce emissions of greenhouse gas consistent with
chapter 14, Laws of 2008 including implementation of the most promising
recommendations of the climate advisory team;
(d) Recommendations on how projects funded by the green energy
incentive account in RCW 43.325.040 may be used to expand the
electrical transmission infrastructure into urban and rural areas of
the state for purposes of allowing the recharging of plug-in hybrid
electric vehicles;
(e) Recommendations on how local governments could participate in
the multisector market-based system designed under subsection (1) of
this section;
(f) Recommendations regarding the circumstances under which
generation of electricity or alternative fuel from landfill gas and gas
from anaerobic digesters may receive an offset or credit in the
regional multisector market-based system or other strategies developed
by the department; and
(g) Recommendations developed in consultation with the department
of natural resources and the department of agriculture with the climate
advisory team, the college of forest resources at the University of
Washington, and the Washington State University, and a nonprofit
consortium involved in research on renewable industrial materials,
regarding how forestry and agricultural lands and practices may
participate voluntarily as an offset or other credit program in the
regional multisector market-based system. The recommendations must
ensure that the baseline for this offset or credit program does not
disadvantage this state in relation to another state or states. These
recommendations shall address:
(i) Commercial and other working forests, including accounting for
site-class specific forest management practices;
(ii) Agricultural and forest products, including accounting for
substitution of wood for fossil intensive substitutes;
(iii) Agricultural land and practices;
(iv) Forest and agricultural lands set aside or managed for
conservation as of, or after, June 12, 2008; and
(v) Reforestation and afforestation projects.
(4) This section expires May 1, 2012.
Sec. 24 RCW 70.94.151 and 2008 c 14 s 5 are each amended to read
as follows:
(1) The board of any activated authority or the department, may
classify air contaminant sources, by ordinance, resolution, rule or
regulation, which in its judgment may cause or contribute to air
pollution, according to levels and types of emissions and other
characteristics which cause or contribute to air pollution, and may
require registration or reporting or both for any such class or
classes. Classifications made pursuant to this section may be for
application to the area of jurisdiction of such authority, or the state
as a whole or to any designated area within the jurisdiction, and shall
be made with special reference to effects on health, economic and
social factors, and physical effects on property.
(2) Except as provided in subsection (3) of this section, any
person operating or responsible for the operation of air contaminant
sources of any class for which the ordinances, resolutions, rules or
regulations of the department or board of the authority, require
registration or reporting shall register therewith and make reports
containing information as may be required by such department or board
concerning location, size and height of contaminant outlets, processes
employed, nature of the contaminant emission and such other information
as is relevant to air pollution and available or reasonably capable of
being assembled. In the case of emissions of greenhouse gases as
defined in RCW 70.235.010 the department shall adopt rules requiring
reporting of those emissions. The department or board may require that
such registration or reporting be accompanied by a fee, and may
determine the amount of such fee for such class or classes: PROVIDED,
That the amount of the fee shall only be to compensate for the costs of
administering such registration or reporting program which shall be
defined as initial registration and annual or other periodic reports
from the source owner providing information directly related to air
pollution registration, on-site inspections necessary to verify
compliance with registration requirements, data storage and retrieval
systems necessary for support of the registration program, emission
inventory reports and emission reduction credits computed from
information provided by sources pursuant to registration program
requirements, staff review, including engineering or other reliable
analysis for accuracy and currentness, of information provided by
sources pursuant to registration program requirements, clerical and
other office support provided in direct furtherance of the registration
program, and administrative support provided in directly carrying out
the registration program: PROVIDED FURTHER, That any such registration
made with either the board or the department shall preclude a further
registration and reporting with any other board or the department,
except that emissions of greenhouse gases as defined in RCW 70.235.010
must be reported as required under subsection (5) of this section.
All registration program and reporting fees collected by the
department shall be deposited in the air pollution control account.
All registration program fees collected by the local air authorities
shall be deposited in their respective treasuries.
(3) If a registration or report has been filed for a grain
warehouse or grain elevator as required under this section,
registration, reporting, or a registration program fee shall not, after
January 1, 1997, again be required under this section for the warehouse
or elevator unless the capacity of the warehouse or elevator as listed
as part of the license issued for the facility has been increased since
the date the registration or reporting was last made. If the capacity
of the warehouse or elevator listed as part of the license is
increased, any registration or reporting required for the warehouse or
elevator under this section must be made by the date the warehouse or
elevator receives grain from the first harvest season that occurs after
the increase in its capacity is listed in the license.
This subsection does not apply to a grain warehouse or grain
elevator if the warehouse or elevator handles more than ten million
bushels of grain annually.
(4) For the purposes of subsection (3) of this section:
(a) A "grain warehouse" or "grain elevator" is an establishment
classified in standard industrial classification (SIC) code 5153 for
wholesale trade for which a license is required and includes, but is
not limited to, such a licensed facility that also conducts cleaning
operations for grain;
(b) A "license" is a license issued by the department of
agriculture licensing a facility as a grain warehouse or grain elevator
under chapter 22.09 RCW or a license issued by the federal government
licensing a facility as a grain warehouse or grain elevator for
purposes similar to those of licensure for the facility under chapter
22.09 RCW; and
(c) "Grain" means a grain or a pulse.
(5)(a) The department shall adopt rules requiring the reporting of
emissions of greenhouse gases as defined in RCW 70.235.010. The rules
must include a de minimis amount of emissions below which reporting
will not be required for both indirect and direct emissions. The rules
must require that emissions of greenhouse gases resulting from the
burning of fossil fuels be reported separately from emissions of
greenhouse gases resulting from the burning of biomass.
(b) Except as provided in (((b))) (f) of this subsection, the
department shall, under the authority granted in subsection (1) of this
section, adopt rules requiring: (i) Any owner or operator((: (i))) of
a fleet of on-road motor vehicles that as a fleet emit at least twenty-five hundred metric tons of greenhouse gas annually in the state to
report the emissions of greenhouse gases generated from or emitted by
that fleet; ((or)) and (ii) any owner or operator of a source or
combination of sources that emit at least ten thousand metric tons of
greenhouse gas annually in the state to report their total annual
emissions of greenhouse gases; (iii) the importer, seller, deliverer,
or distributor of fuels for use in Washington where the annual
emissions in the state associated with the combustion of the fuel
delivered equal or exceed ten thousand metric tons of greenhouse gas to
report the emissions of greenhouse gases associated with the combustion
of those fuels; and (iv) the importer, seller, deliverer, or
distributor of electricity from outside Washington for consumption in
Washington to report the emissions of greenhouse gases associated with
the generation of the electricity delivered into the state where the
annual emissions associated with electricity equal or exceed ten
thousand metric tons of greenhouse gas. Reporting required in (b)(i)
and (ii) of this subsection must begin in 2010 for emissions in 2009.
Reporting required in (b)(iii) and (iv) of this subsection must begin
in 2011 for emissions in 2010. The department must adopt a rule to
require that the person in (b)(iii) and (iv) of this subsection who
must report is consistent with the person with the compliance
obligation under the cap-and-trade program established under chapter
70.235 RCW. The rules must also require that emissions from
electricity generation within the state be reported separately from
emissions from electricity generation located outside the state.
(c) In calculating emissions of greenhouse gases for purposes of
determining whether or not reporting is required, only direct emissions
shall be included. For purposes of reporting emissions of greenhouse
gases in chapter 14, Laws of 2008, "source" means any stationary source
as defined in RCW 70.94.030, or mobile source used for transportation
of people or cargo. The emissions of greenhouse gases must be reported
as carbon dioxide equivalents.
(d) The rules must require that persons report 2009 emissions
starting in 2010. The rules must establish an annual reporting
schedule that takes into account the time needed to allow the owner or
operator reporting emissions of greenhouse gases to gather the
information needed and to verify the emissions being reported.
However, in no event may reports be submitted later than October 31st
of the year in which the report is due.
(e) The department may phase in the reporting requirements for
sources or combinations of sources under (((a))) (b)(ii) of this
subsection until the reporting threshold is met, which must be met by
January 1, 2012. The department may from time to time amend the rules
to include other persons that emit less than the annual greenhouse gas
emissions levels set out in this subsection if necessary to comply with
any federal reporting requirements for emissions of greenhouse gases.
(((b))) (f) In its rules, the department may defer the reporting
requirement under (a) of this subsection for emissions associated with
interstate and international commercial aircraft, rail, truck, or
marine vessels until (i) there is a federal requirement to report these
emissions; or (ii) the department finds that there is a generally
accepted reporting protocol for determining interstate emissions from
these sources.
(((c))) (g) The department shall share any reporting information
reported to it with the local air authority in which the owner or
operator reporting under the rules adopted by the department operates.
(((d))) (h) The fee provisions in subsection (2) of this section
apply to reporting of emissions of greenhouse gases. Owners and
operators required to report under (a) of this subsection who fail to
report or pay the fee required in subsection (2) of this section are
subject to enforcement penalties under this chapter. The department
shall enforce the reporting rule requirements unless it approves a
local air authority's request to enforce the requirements for sources
operating within the authority's jurisdiction.
(((e))) (i) The energy facility site evaluation council shall,
simultaneously with the department, adopt rules that impose greenhouse
gas reporting requirements in site certifications on owners or
operators of a facility permitted by the energy facility site
evaluation council. The greenhouse gas reporting requirements imposed
by the energy facility site evaluation council must be the same as the
greenhouse gas reporting requirements imposed by the department. The
department shall share any information reported to it from facilities
permitted by the energy facility site evaluation council with the
council, including notice of a facility that has failed to report as
required. The energy facility site evaluation council shall contract
with the department to monitor the reporting requirements adopted under
this section.
(((f))) (j) In developing its rules, the department shall, with the
assistance of the department of transportation, identify a mechanism to
report an aggregate estimate of the annual emissions of greenhouse
gases generated from or emitted by otherwise unreported on-road motor
vehicles.
(((g))) (k) The inclusion or failure to include any person, source,
classes of persons or sources, or types of emissions of greenhouse
gases into the department's rules for reporting under this section does
not indicate whether such a person, source, or category is appropriate
for inclusion in the multisector market-based system designed under RCW
70.235.020.
(((h))) (l) Should the federal government adopt rules sufficient to
track progress toward the emissions reductions required by chapter 14,
Laws of 2008 governing the reporting of greenhouse gases, the
department shall amend its rules, as necessary, to seek consistency
with the federal rules to ensure duplicate reporting is not required.
Nothing in this section requires the department to increase the
reporting threshold established in (a) of this subsection or otherwise
require the department's rules be identical to the federal rules in
scope.
(((i))) (m) The definitions in RCW 70.235.010 apply throughout this
subsection (5) unless the context clearly requires otherwise. However,
for the purposes of this subsection (5), the term "person" has the same
meaning as defined in RCW 70.94.030.
(n) For violations of this subsection (5), in addition to other
enforcement authority under this chapter, the department may issue
penalties of up to ten thousand dollars per day per violation for each
day that emissions are not reported beyond the deadline to report
established by rule.
Sec. 25 RCW 43.21B.110 and 2003 c 393 s 19 are each amended to
read as follows:
(1) The hearings board shall only have jurisdiction to hear and
decide appeals from the following decisions of the department, the
director, local conservation districts, and the air pollution control
boards or authorities as established pursuant to chapter 70.94 RCW, or
local health departments:
(a) Civil penalties imposed pursuant to RCW 18.104.155, 70.94.431,
70.105.080, 70.107.050, 88.46.090, 90.03.600, 90.48.144, 90.56.310,
((and)) 90.56.330, and chapter 70.235 RCW.
(b) Orders issued pursuant to RCW 18.104.043, 18.104.060,
43.27A.190, 70.94.211, 70.94.332, 70.105.095, 86.16.020, 88.46.070,
90.14.130, 90.48.120, ((and)) 90.56.330, and chapter 70.235 RCW.
(c) Except as provided in RCW 90.03.210(2), the issuance,
modification, or termination of any permit, certificate, or license by
the department or any air authority in the exercise of its
jurisdiction, including the issuance or termination of a waste disposal
permit, the denial of an application for a waste disposal permit, the
modification of the conditions or the terms of a waste disposal permit,
or a decision to approve or deny an application for a solid waste
permit exemption under RCW 70.95.300.
(d) Decisions of local health departments regarding the grant or
denial of solid waste permits pursuant to chapter 70.95 RCW.
(e) Decisions of local health departments regarding the issuance
and enforcement of permits to use or dispose of biosolids under RCW
70.95J.080.
(f) Decisions of the department regarding waste-derived fertilizer
or micronutrient fertilizer under RCW 15.54.820, and decisions of the
department regarding waste-derived soil amendments under RCW 70.95.205.
(g) Decisions of local conservation districts related to the denial
of approval or denial of certification of a dairy nutrient management
plan; conditions contained in a plan; application of any dairy nutrient
management practices, standards, methods, and technologies to a
particular dairy farm; and failure to adhere to the plan review and
approval timelines in RCW 90.64.026.
(h) Any other decision by the department or an air authority which
pursuant to law must be decided as an adjudicative proceeding under
chapter 34.05 RCW.
(2) The following hearings shall not be conducted by the hearings
board:
(a) Hearings required by law to be conducted by the shorelines
hearings board pursuant to chapter 90.58 RCW.
(b) Hearings conducted by the department pursuant to RCW 70.94.332,
70.94.390, 70.94.395, 70.94.400, 70.94.405, 70.94.410, and 90.44.180.
(c) Proceedings conducted by the department, or the department's
designee, under RCW 90.03.160 through 90.03.210 or 90.44.220.
(d) Hearings conducted by the department to adopt, modify, or
repeal rules.
(e) Appeals of decisions by the department as provided in chapter
43.21L RCW.
(3) Review of rules and regulations adopted by the hearings board
shall be subject to review in accordance with the provisions of the
Administrative Procedure Act, chapter 34.05 RCW.
NEW SECTION. Sec. 26 Sections 3, 4, 6 through 12 and 15 through
22 this act are each added to chapter
NEW SECTION. Sec. 27 Captions used in this act are not any part
of the law.