BILL REQ. #:  H-0563.1 

Read first time 01/11/2007.   Referred to Committee on Technology, Energy & Communications.

     AN ACT Relating to the energy freedom program, including activities to promote green highways; amending RCW 15.110.005, 15.110.010, 15.110.020, 15.110.040, 15.110.060, 47.17.020, 47.17.135, and 47.17.140; adding new sections to chapter 15.110 RCW; creating a new section; and providing an expiration date.

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

Sec. 1   RCW 15.110.005 and 2006 c 171 s 1 are each amended to read as follows:
     The legislature finds that:
     (1) Washington's dependence on energy supplied from outside the state and volatile global energy markets makes its economy and citizens vulnerable to unpredictable and high energy prices;
     (2) Washington's dependence on petroleum-based fuels increases energy costs for citizens and businesses;
     (3) Diesel soot from diesel engines ranks as the highest toxic air pollutant in Washington, leading to hundreds of premature deaths and increasing rates of asthma and other lung diseases;
     (4) The use of biodiesel results in significantly less air pollution than traditional diesel fuels;
     (5) Improper disposal and treatment of organic waste from farms and livestock operations can have a significant negative impact on water quality;
     (6) Washington has abundant supplies of organic wastes from farms that can be used for energy production and abundant farmland where crops could be grown to supplement or supplant petroleum-based fuels;
     (7) The use of energy and fuel derived from these sources can help citizens and businesses conserve energy and reduce the use of petroleum-based fuels, would improve air and water quality in Washington, reduce environmental risks from farm wastes, create new markets for farm products, and provide new industries and jobs for Washington citizens;
     (8) The bioenergy industry is a new and developing industry that is, in part, limited by the availability of capital for the construction of facilities for converting farm and forest products into energy and fuels and the availability of infrastructure necessary to allow motorists in Washington to refuel their alternative fuel vehicles while traveling along major state highways;
     (9) The 2010 Olympic and Paralympic Winter Games present an opportunity to further Washington's energy independence by working with Vancouver, British Columbia, Oregon, and California to develop a hydrogen highway to showcase sustainable transportation and alternative fuels, and to accelerate the commercialization of hydrogen and fuel cell technologies;
     (10) 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; and
     (((10))) (11) The energy freedom program is meant to lead Washington state towards energy independence.
     Therefore, the legislature finds that it is in the public interest to encourage the rapid adoption and use of bioenergy, to develop a viable bioenergy industry within Washington state, to promote public research and development in bioenergy sources and markets, ((and)) to support a viable agriculture industry to grow bioenergy crops, and to develop infrastructure for biofuel use by the motorists of Washington state. To accomplish this, the energy freedom program is established to promote public research and development in bioenergy, ((and)) to stimulate the construction of facilities in Washington to generate energy from farm sources or convert organic matter into fuels, and to develop refueling infrastructure in Washington state to ensure that biofuels are readily accessible to the motorists of Washington state.

Sec. 2   RCW 15.110.010 and 2006 c 171 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) "Applicant" means any political subdivision of the state, including port districts, counties, cities, towns, special purpose districts, and other municipal corporations or quasi-municipal corporations. "Applicant" may also include federally recognized tribes and state institutions of higher education with appropriate research capabilities.
     (2) "Assistance" includes loans, leases, product purchases, or other forms of financial or technical assistance.
     (3) "Department" means the department of agriculture.
     (4) "Director" means the director of the department of agriculture.
     (5) "Green highway zone" means an area in the state designated by the department that is within reasonable proximity of state route number 5, state route number 90, and state route number 82.
     (6) "Peer review committee" means a board, appointed by the director, that includes bioenergy specialists, energy conservation specialists, scientists, and individuals with specific recognized expertise.
     (((6))) (7) "Project" means the construction of facilities, including the purchase of equipment, to convert farm products or wastes into electricity or gaseous or liquid fuels or other coproducts associated with such conversion. These specifically include fixed or mobile facilities to generate electricity or methane from the anaerobic digestion of organic matter, and fixed or mobile facilities for extracting oils from canola, rape, mustard, and other oilseeds. "Project" may also include the construction of facilities associated with such conversion for the distribution and storage of such feedstocks and fuels.
     (((7))) (8) "Refueling project" means the construction of new alternative fuel refueling facilities, as well as upgrades and expansion of existing refueling facilities, that will enable these facilities to offer alternative fuels to the motoring public.
     (9) "Research and development project" means research and development, by an institution of higher education as defined in subsection (1) of this section, relating to:
     (a) Bioenergy sources including but not limited to biomass and associated gases; or
     (b) The development of markets for bioenergy coproducts.

Sec. 3   RCW 15.110.020 and 2006 c 171 s 3 are each amended to read as follows:
     (1) The energy freedom program is established within the department. The director may establish policies and procedures necessary for processing, reviewing, and approving applications made under this chapter.
     (2) When reviewing applications submitted under this program, the director shall consult with those agencies having expertise and knowledge to assess the technical and business feasibility of the project and probability of success. These agencies may include, but are not limited to, Washington State University, the University of Washington, the department of ecology, the department of community, trade, and economic development, and the Washington state conservation commission.
     (3) Except as provided in subsection (4) of this section, the director, in cooperation with the department of community, trade, and economic development, may approve an application only if the director finds:
     (a) The project will convert farm products or wastes directly into electricity or into gaseous or liquid fuels or other coproducts associated with such conversion;
     (b) The project demonstrates technical feasibility and directly assists in moving a commercially viable project into the marketplace for use by Washington state citizens;
     (c) The facility will produce long-term economic benefits to the state, a region of the state, or a particular community in the state;
     (d) The project does not require continuing state support;
     (e) The assistance will result in new jobs, job retention, or higher incomes for citizens of the state;
     (f) The state is provided an option under the assistance agreement to purchase a portion of the fuel or feedstock to be produced by the project, exercisable by the department of general administration;
     (g) The project will increase energy independence or diversity for the state;
     (h) The project will use feedstocks produced in the state, if feasible, except this criterion does not apply to the construction of facilities used to distribute and store fuels that are produced from farm products or wastes;
     (i) Any product produced by the project will be suitable for its intended use, will meet accepted national or state standards, and will be stored and distributed in a safe and environmentally sound manner;
     (j) The application provides for adequate reporting or disclosure of financial and employment data to the director, and permits the director to require an annual or other periodic audit of the project books; and
     (k) For research and development projects, the application has been independently reviewed by a peer review committee as defined in RCW 15.110.010 and the findings delivered to the director.
     (4) When reviewing an application for a refueling project, the director may award a grant or a loan to an applicant if the director finds:
     (a) The project will offer alternative fuels to the motoring public;
     (b) The project does not require continued state support;
     (c) The project is located within a green highway zone as defined in RCW 15.110.010;
     (d) The project will contribute towards an efficient and adequately spaced alternative fuel refueling network along the green highways designated in RCW 47.17.020, 47.17.135, and 47.17.140; and
     (e) The project will result in increased access to alternative fueling infrastructure for the motoring public along the green highways designated in RCW 47.17.020, 47.17.135, and 47.17.140.
     (5) The director may approve ((an)) a project application for assistance under subsection (3) of this section up to five million dollars. In no circumstances shall this assistance constitute more than fifty percent of the total project cost.
     (((5))) (6) The director may approve a refueling project application for a grant or a loan under subsection (4) of this section up to fifty thousand dollars. In no circumstances shall a grant or a loan award constitute more than fifty percent of the total project cost.
     (7) The director shall enter into agreements with approved applicants to fix the terms and rates of the assistance to minimize the costs to the applicants, and to encourage establishment of a viable bioenergy industry. The agreement shall include provisions to protect the state's investment, including a requirement that a successful applicant enter into contracts with any partners that may be involved in the use of any assistance provided under this program, including services, facilities, infrastructure, or equipment. Contracts with any partners shall become part of the application record.
     (((6))) (8) The director may defer any payments for up to twenty-four months or until the project starts to receive revenue from operations, whichever is sooner.

Sec. 4   RCW 15.110.040 and 2006 c 171 s 5 are each amended to read as follows:
     (1) If the total requested dollar amount of assistance awarded for projects under RCW 15.110.020(3) exceeds the amount available in the energy freedom account created in RCW 15.110.050, the applications must be prioritized based upon the following criteria:
     (((1))) (a) The extent to which the project will help reduce dependence on petroleum fuels and imported energy either directly or indirectly;
     (((2))) (b) The extent to which the project will reduce air and water pollution either directly or indirectly;
     (((3))) (c) The extent to which the project will establish a viable bioenergy production capacity in Washington;
     (((4))) (d) The benefits to Washington's agricultural producers; and
     (((5))) (e) The number and quality of jobs and economic benefits created by the project.
     (2) This section does not apply to grants or loans awarded for refueling projects under RCW 15.110.020(4).

NEW SECTION.  Sec. 5   A new section is added to chapter 15.110 RCW to read as follows:
     (1) If the total requested dollar amount of funds for refueling projects under RCW 15.110.020(4) exceeds the amount available in the green energy incentive subaccount created in section 6 of this act, the applications must be prioritized based upon the following criteria:
     (a) The extent to which the project will help reduce dependence on petroleum fuels and imported energy either directly or indirectly;
     (b) The extent to which the project will reduce air and water pollution either directly or indirectly;
     (c) The extent to which the project will establish a viable bioenergy production capacity in Washington;
     (d) The extent to which the project will make biofuels more accessible to the motoring public;
     (e) The benefits to Washington's agricultural producers; and
     (f) The number and quality of jobs and economic benefits created by the project.
     (2) This section does not apply to assistance awarded for projects under RCW 15.110.020(3).

NEW SECTION.  Sec. 6   A new section is added to chapter 15.110 RCW to read as follows:
     The green energy incentive subaccount is created as a subaccount of the energy freedom account. All receipts from appropriations made to the green energy incentive subaccount shall be deposited into the subaccount and shall be appropriated only for:
     (1) Refueling projects awarded under this chapter;
     (2) Pilot projects for plug-in hybrids;
     (3) Programs to reduce truck stop idling;
     (4) Demonstration projects developed with a science museum for the purpose of bringing science education to children by way of a mobile learning vehicle; and
     (5) Demonstration projects developed with the University of Washington that result in the design and building of a hydrogen vehicle fueling station.

NEW SECTION.  Sec. 7   Moneys deposited in the green energy incentive subaccount created in section 6 of this act shall not exceed one million dollars.

Sec. 8   RCW 15.110.060 and 2006 c 171 s 7 are each amended to read as follows:
     The director shall report to the legislature and governor on the status of the energy freedom program created under this chapter, on or before December 1, 2006, and annually thereafter. This report must include information on the projects that have been funded, the status of these projects, and their environmental, energy savings, and job creation benefits, as well as an assessment of the availability of alternative fuels in the state.

Sec. 9   RCW 47.17.020 and 1970 ex.s. c 51 s 5 are each amended to read as follows:
     A state highway to be known as state route number 5, and designated as a Washington green highway, is established as follows:
     Beginning at the Washington-Oregon boundary line on the interstate bridge over the Columbia river at Vancouver, thence northerly by way of Kelso, Chehalis, Centralia, Olympia, Tacoma, Seattle, Everett and Mt. Vernon, thence northwesterly to the east of Lake Samish, thence northeasterly and northerly by way of Bellingham to the international boundary line in the vicinity of Blaine in Whatcom county.

Sec. 10   RCW 47.17.135 and 1979 ex.s. c 33 s 3 are each amended to read as follows:
     A state highway to be known as state route number 82, and designated as a Washington green highway, is established as follows:
     Beginning at a junction with state route number 90 in the vicinity of Ellensburg, thence southerly and easterly by way of Yakima, Union Gap, Sunnyside, Prosser, Kiona, and Goose Gap west of Richland, thence southeasterly near Kennewick and southwesterly by way of the vicinity of Plymouth to a crossing of the Columbia river at the Washington-Oregon boundary line.

Sec. 11   RCW 47.17.140 and 1991 c 56 s 2 are each amended to read as follows:
     A state highway to be known as state route number 90, and designated as the American Veterans Memorial Highway as well as a Washington green highway, is established as follows:
     Beginning at a junction with state route number 5, thence, via the west approach to the Lake Washington bridge in Seattle, in an easterly direction by way of Mercer Island, North Bend, Snoqualmie pass, Ellensburg, Vantage, Moses Lake, Ritzville, Sprague and Spokane to the Washington-Idaho boundary line.

NEW SECTION.  Sec. 12   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 13   Sections 1 through 6 and 8 of this act expire June 30, 2016.