BILL REQ. #:  S-3768.1 

Read first time 01/16/12.   Referred to Committee on Energy, Natural Resources & Marine Waters.

     AN ACT Relating to aviation biofuels production; reenacting and amending RCW 43.157.010; adding a new section to chapter 43.180 RCW; adding a new section to chapter 43.333 RCW; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   The legislature finds that Washington is becoming a leader in the development and commercialization of aviation biofuels due to its strong tradition of market innovation, a concentrated demand for sustainable aviation fuels, leading expertise and research capacity, an established aviation manufacturing sector, and the availability of a diverse range of feedstocks for the production of biofuels. The legislature also finds that the development of aviation biofuels has the potential to reduce dependence on foreign sources of fossil fuels, reduce greenhouse gas emissions, and promote economic development and jobs in Washington. The legislature intends to support the development of commercial-scale aviation biofuels production facilities in Washington by facilitating and streamlining the permitting process for new facilities and the expansion of existing facilities and by providing access to low-cost financing through the issuance of revenue bonds.
     The legislature finds that the 2012 Washington state energy strategy calls for a targeted, strategic policy focus on sustainable aviation biofuels to encourage the realization of Washington's potential. The legislature also finds that a regional stakeholder effort to explore the opportunities and challenges surrounding the production of sustainable aviation fuels, known as sustainable aviation biofuels northwest, urged policymakers in the Northwest to develop supportive public policies that will jump start the industry, attract investment, and accelerate industry growth. In order to provide focus and develop policy recommendations to support the sustainable aviation biofuels sector in Washington, the legislature intends to establish a sustainable aviation biofuels work group. Additionally, the legislature intends Innovate Washington, designated in 2011 as the lead agency for coordinating clean energy-related initiatives targeted at growing the clean energy sector, to convene the appropriate stakeholders and facilitate the opportunity for the state to realize the full economic growth impact to the state's economy.

Sec. 2   RCW 43.157.010 and 2009 c 565 s 34 and 2009 c 421 s 2 are each reenacted and amended to read as follows:
     ((For purposes of)) The definitions in this section apply throughout this chapter and RCW 28A.525.166, 28B.76.210, 28C.18.080, 43.21A.350, and 90.58.100, unless the context requires otherwise:
     (1)(a) ((A)) "Project of statewide significance ((is)) " means:
     (i) A border crossing project that involves both private and public investments carried out in conjunction with adjacent states or provinces;
     (ii) A development project that will provide a net environmental benefit;
     (iii) A development project in furtherance of the commercialization of innovations; ((or))
     (iv) A private industrial development with private capital investment in manufacturing or research and development; or
     (v) An aviation biofuels production facility.
     (b) To qualify for designation under RCW 43.157.030 as a project of statewide significance:
     (i) The project must be completed after January 1, 2009;
     (ii) The applicant must submit an application to the department for designation as a project of statewide significance to the department of commerce; and
     (iii) Except for an aviation biofuels production facility, the project must have:
     (A) In counties with a population less than or equal to twenty thousand, a capital investment of five million dollars;
     (B) In counties with a population greater than twenty thousand but no more than fifty thousand, a capital investment of ten million dollars;
     (C) In counties with a population greater than fifty thousand but no more than one hundred thousand, a capital investment of fifteen million dollars;
     (D) In counties with a population greater than one hundred thousand but no more than two hundred thousand, a capital investment of twenty million dollars;
     (E) In counties with a population greater than two hundred thousand but no more than four hundred thousand, a capital investment of thirty million dollars;
     (F) In counties with a population greater than four hundred thousand but no more than one million, a capital investment of forty million dollars;
     (G) In counties with a population greater than one million, a capital investment of fifty million dollars;
     (H) In rural counties as defined by RCW 82.14.370, projected full-time employment positions after completion of construction of fifty or greater;
     (I) In counties other than rural counties as defined by RCW 82.14.370, projected full-time employment positions after completion of construction of one hundred or greater; or
     (J) Been qualified by the director of the department as a project of statewide significance either because:
     (I) The economic circumstances of the county merit the additional assistance such designation will bring;
     (II) The impact on a region due to the size and complexity of the project merits such designation;
     (III) The project resulted from or is in furtherance of innovation activities at a public research institution in the state or is in or resulted from innovation activities within an innovation partnership zone; or
     (IV) The project will provide a net environmental benefit as evidenced by plans for design and construction under green building standards or for the creation of renewable energy technology or components or under other environmental criteria established by the director in consultation with the director of the department of ecology.
     A project may be qualified under this subsection (1)(b)(iii)(J) only after consultation on the availability of staff resources of the office of regulatory assistance.
     (2) "Department" means the department of ((community, trade, and economic development)) commerce.
     (3) "Manufacturing" shall have the meaning assigned it in RCW 82.62.010.
     (4) "Research and development" shall have the meaning assigned it in RCW 82.62.010.
     (5) "Applicant" means a person applying to the department for designation of a development project as a project of statewide significance.
     (6) "Aviation biofuels production facility" means a facility primarily for the processing of nonfossil biogenic carbon feedstocks to produce aviation fuels that meet the fuel quality technical standards of the American society for testing materials for aviation fuels and coproducts.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.180 RCW, to be codified prior to the subchapter that begins with RCW 43.180.300, to read as follows:
     (1) The commission may:
     (a) Issue bonds for the purpose of financing all or part of the project costs of facilities that are primarily for the production, processing, or handling of aviation biofuels or for the production, processing, or handling of nonfossil biogenic carbon feedstocks to be used in the production of aviation biofuels;
     (b) Make or purchase loans for financing of these facilities; or
     (c) Enter into financing documents relating to the repayment of those loans or the provision of, or security for, debt service on the bonds.
     (2) In connection with the financing of project costs of facilities that are primarily for the production, processing, or handling of aviation biofuels, the commission may exercise the other powers granted the commission under this chapter, including the requirements under RCW 43.180.170 and 43.180.180.
     (3) For the purposes of this section:
     (a) "Aviation biofuels" means fuels for aviation from nonfossil biogenic carbon feedstocks that meet the fuel quality technical standards of the American society for testing materials for aviation fuels and coproducts.
     (b) "Facilities" means land, rights in land, buildings, structures, equipment, landscaping, utilities, approaches, roadways and parking, handling and storage areas, and similar ancillary facilities.
     (c) "Financing document" means a lease, sublease, installment sale agreement, conditional sale agreement, loan agreement, mortgage, deed of trust guaranty agreement, or other agreement for the purpose of providing funds to pay or secure debt service on bonds.
     (d) "Project costs" means costs of:
     (i) Acquisition, construction, and improvement of any facilities included in a facility;
     (ii) Architectural, engineering, consulting, accounting, and legal costs related directly to the development, financing, and construction of a facility, including costs of studies assessing the feasibility of a facility;
     (iii) Finance costs, including discounts, if any, the costs of issuing bonds, and costs incurred in carrying out any trust agreement;
     (iv) Interest during construction and during the six months after estimated completion of construction, and capitalized debt service or repair and replacement or other appropriate reserves;
     (v) The refunding of any outstanding obligations incurred for any of the costs outlined in this subsection; and
     (vi) Other costs incidental to any of the costs listed in this section.

NEW SECTION.  Sec. 4   A new section is added to chapter 43.333 RCW to read as follows:
     (1) Innovate Washington shall convene a sustainable aviation biofuels work group.
     (2) The purpose of the work group is to:
     (a) Further the development of sustainable aviation fuel as a productive industry in Washington, using as a foundation the regional assessment prepared by the collaborative known as the sustainable aviation fuels northwest;
     (b) Facilitate communication and coordination among aviation biofuels stakeholders;
     (c) Provide a forum for discussion and problem-solving regarding potential and current barriers related to technology development, production, distribution, supply chain development, and commercialization of aviation biofuels; and
     (d) Provide recommendations to the legislature on potential legislation that will facilitate the technology development, production, distribution, and commercialization of aviation biofuels.
     (3) Innovate Washington, in consultation with the legislative members, shall designate work group members that represent sectors involved in sustainable aviation biofuels research, development, production, and utilization. The work group shall include but not be limited to representatives from the following:
     (a) The Washington state senate;
     (b) The Washington state house of representatives;
     (c) An agriculture advocacy organization;
     (d) An airline operator;
     (e) An airplane manufacturer;
     (f) An airport operator located in western Washington and an airport operator located in eastern Washington;
     (g) Biofuels feedstock producers;
     (h) Two biofuels producers;
     (i) The department of agriculture;
     (j) The department of commerce;
     (k) The department of natural resources;
     (l) A sustainable energy advocacy organization;
     (m) The United States department of defense;
     (n) The University of Washington;
     (o) Washington State University;
     (p) The Pacific Northwest national laboratory; and
     (q) A member of the board of directors of Innovate Washington.
     (4) The work group shall choose its chair from among its membership.
     (5) The work group may not meet more than twice a year.
     (6) The work group shall provide an annual update of its findings and recommendations to the governor and the appropriate committees of the legislature by December 1st of each year through 2014.
     (7) This section expires June 30, 2015.