BILL REQ. #:  H-4072.1 

Read first time 01/22/08.   Referred to Committee on Technology, Energy & Communications.

     AN ACT Relating to establishing the Washington state department of energy; amending RCW 43.17.010, 43.17.020, and 80.70.010; reenacting and amending RCW 42.17.2401; adding a new section to chapter 41.06 RCW; and adding a new chapter to Title 43 RCW.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that past global, national, and regional energy market conditions and policy assumptions that promoted a limited state government approach to the securing of energy resources no longer exists and that state government, in conjunction with the private sector, must take an active and constructive role in securing energy resources.
     (2) The legislature finds that energy market uncertainties threaten to significantly undermine our state economy and citizen's prosperity and that state government must be in the forefront of developing an effective response to these uncertainties.
     (3) The legislature finds that the state's energy security will be improved by developing new electrical generation and transmission facilities, by securing transportation fuel supplies, and by promoting greater use of distributed generation.
     (4) The legislature further finds a need to redefine and streamline the state's role in energy-related regulatory and permitting functions to better drive development and implementation of state energy policies and investments that secure necessary energy resources for the state and its citizens.
     (5) To carry out this function, the legislature intends to establish the Washington state department of energy.
     (6) Additionally, the legislature intends to transfer certain existing energy regulatory functions to the department to streamline the process of securing new energy resources.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Council" means the energy facility site evaluation council.
     (2) "Department" means the Washington state department of energy.
     (3) "Director" means the director of the Washington state department of energy.
     (4) "Division" means the energy policy division of the department of community, trade, and economic development.

NEW SECTION.  Sec. 3   There is created a department of state government to be known as the Washington state department of energy. The department is vested with all powers and duties transferred to it under this chapter and such other powers and duties as may be authorized by law.

NEW SECTION.  Sec. 4   The executive head and appointing authority of the department is the director. The director shall be appointed by the governor, with the consent of the senate, and shall serve at the pleasure of the governor. The director shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040. If a vacancy occurs in the position while the senate is not in session, the governor shall make a temporary appointment until the next meeting of the senate.

NEW SECTION.  Sec. 5   It is the intent of the legislature wherever possible to place the internal affairs of the department under the control of the director in order that the director may institute therein the flexible, alert, and intelligent management of its business that changing contemporary circumstances require. Therefore, whenever the director's authority is not specifically limited by law, the director has complete charge and supervisory powers over the department. The director may create such administrative structures as the director considers appropriate, except as otherwise specified by law. The director may employ such assistants and personnel as necessary for the general administration of the department. This employment shall be in accordance with the state civil service law, chapter 41.06 RCW, except as otherwise provided.

NEW SECTION.  Sec. 6   The department shall be subdivided into three divisions, including the division of energy policy, energy facility site evaluation, and energy resources procurement. Except as otherwise specified or as federal requirements may otherwise require, these divisions must be established and organized in accordance with plans to be prepared by the director and approved by the governor. In preparing such plans, the director shall endeavor to promote efficient public management, to improve programs, and to take full advantage of the economies, both fiscal and administrative, to be gained from the consolidation of functions and agencies under this chapter.

NEW SECTION.  Sec. 7   The director shall appoint a deputy director, a department personnel director, and such assistant directors as may be needed to administer the department. The deputy director shall have charge and general supervision of the department in the absence or disability of the director and, in case of a vacancy in the office of director, shall continue in charge of the department until a successor is appointed and qualified, or until the governor appoints an acting director.

NEW SECTION.  Sec. 8   Any power or duty vested in or transferred to the director by law or executive order may be delegated by the director to the deputy director or to any other assistant or subordinate; but the director shall be responsible for the official acts of the officers and employees of the department.

NEW SECTION.  Sec. 9   The director may appoint such advisory committees or councils as may be required by any federal legislation as a condition to the receipt of federal funds by the department. The director may also appoint statewide committees or councils on such subject matters as are or come within the department's responsibilities. The statewide committees and councils shall have representation from both major political parties and shall have substantial consumer representation. The committees or councils shall be constituted as required by federal law or as the director may determine. The members of the committees or councils shall hold office as follows: One-third to serve one year; one-third to serve two years; and one-third to serve three years. Upon expiration of the original terms, subsequent appointments shall be for three years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term for which the vacancy occurs. No member may serve more than two consecutive terms.
     Members of such state advisory committees or councils may be paid their travel expenses in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION.  Sec. 10   In furtherance of the policy of the state to cooperate with the federal government in all of the programs under the jurisdiction of the department, such rules as may become necessary to entitle the state to participate in federal funds may be adopted, unless expressly prohibited by law. Any internal reorganization carried out under the terms of this chapter shall meet federal requirements that are a necessary condition to state receipt of federal funds. Any section or provision of law dealing with the department that may be susceptible to more than one construction shall be interpreted in favor of the construction most likely to comply with federal laws entitling this state to receive federal funds for the various programs of the department. If any law dealing with the department is ruled to be in conflict with federal requirements that are a prescribed condition of the allocation of federal funds to the state, or to any departments or agencies thereof, the conflicting part is declared to be inoperative solely to the extent of the conflict.

NEW SECTION.  Sec. 11   A new section is added to chapter 41.06 RCW to read as follows:
     In addition to the exemptions under RCW 41.06.070, the provisions of this chapter shall not apply in the department to the director, the director's personal secretary, the deputy director, all division directors and assistant directors, and one confidential secretary for each of these officers.

Sec. 12   RCW 43.17.010 and 2007 c 341 s 46 are each amended to read as follows:
     There shall be departments of the state government which shall be known as (1) the department of social and health services, (2) the department of ecology, (3) the department of labor and industries, (4) the department of agriculture, (5) the department of fish and wildlife, (6) the department of transportation, (7) the department of licensing, (8) the department of general administration, (9) the department of community, trade, and economic development, (10) the department of veterans affairs, (11) the department of revenue, (12) the department of retirement systems, (13) the department of corrections, (14) the department of health, (15) the department of financial institutions, (16) the department of archaeology and historic preservation, (17) the department of early learning, ((and)) (18) the Puget Sound partnership, and (19) the department of energy, which shall be charged with the execution, enforcement, and administration of such laws, and invested with such powers and required to perform such duties, as the legislature may provide.

Sec. 13   RCW 43.17.020 and 2007 c 341 s 47 are each amended to read as follows:
     There shall be a chief executive officer of each department to be known as: (1) The secretary of social and health services, (2) the director of ecology, (3) the director of labor and industries, (4) the director of agriculture, (5) the director of fish and wildlife, (6) the secretary of transportation, (7) the director of licensing, (8) the director of general administration, (9) the director of community, trade, and economic development, (10) the director of veterans affairs, (11) the director of revenue, (12) the director of retirement systems, (13) the secretary of corrections, (14) the secretary of health, (15) the director of financial institutions, (16) the director of the department of archaeology and historic preservation, (17) the director of early learning, ((and)) (18) the executive director of the Puget Sound partnership, and (19) the director of energy.
     Such officers, except the director of fish and wildlife, shall be appointed by the governor, with the consent of the senate, and hold office at the pleasure of the governor. The director of fish and wildlife shall be appointed by the fish and wildlife commission as prescribed by RCW 77.04.055.

Sec. 14   RCW 42.17.2401 and 2007 c 341 s 48, 2007 c 241 s 2, and 2007 c 15 s 1 are each reenacted and amended to read as follows:
     For the purposes of RCW 42.17.240, the term "executive state officer" includes:
     (1) The chief administrative law judge, the director of agriculture, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of community, trade, and economic development, the secretary of corrections, the director of early learning, the director of ecology, the commissioner of employment security, the chair of the energy facility site evaluation council, the secretary of the state finance committee, the director of financial management, the director of fish and wildlife, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the executive director of the Puget Sound partnership, the director of the recreation and conservation office, the director of retirement systems, the director of revenue, the secretary of social and health services, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the president of each of the regional and state universities and the president of The Evergreen State College, and each district and each campus president of each state community college, and the director of energy;
     (2) Each professional staff member of the office of the governor;
     (3) Each professional staff member of the legislature; and
     (4) Central Washington University board of trustees, the boards of trustees of each community college and each technical college, each member of the state board for community and technical colleges, state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, executive ethics board, forest practices appeals board, forest practices board, gambling commission, life sciences discovery fund authority board of trustees, Washington health care facilities authority, each member of the Washington health services commission, higher education coordinating board, higher education facilities authority, horse racing commission, state housing finance commission, human rights commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, ((recreation and conservation funding board,)) state investment board, commission on judicial conduct, legislative ethics board, liquor control board, lottery commission, marine oversight board, Pacific Northwest electric power and conservation planning council, parks and recreation commission, board of pilotage commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines ((hearing[s])) hearings board, public employees' benefits board, recreation and conservation funding board, salmon recovery funding board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington personnel resources board, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and fish and wildlife commission.

NEW SECTION.  Sec. 15   The department shall contract with the Washington State University energy extension to provide research services as deemed necessary by the director.

NEW SECTION.  Sec. 16   (1) All powers, duties, and functions of the department of community, trade, and economic development pertaining to chapters 43.21F, 43.21G, and 19.29A RCW and RCW 43.330.904 are transferred to the department. All references to the director or the department of community, trade, and economic development in the Revised Code of Washington shall be construed to mean the director or the department when referring to the functions transferred in this section.
     (2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the department of community, trade, and economic development pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the department. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the department of community, trade, and economic development in carrying out the powers, functions, and duties transferred shall be made available to the department. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the department.
     (b) Any appropriations made to the department of community, trade, and economic development for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the department.
     (c) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.
     (3) All employees of the department of community, trade, and economic development engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the department. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the department to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.
     (4) All rules and all pending business before the department of community, trade, and economic development pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the department. All existing contracts and obligations shall remain in full force and shall be performed by the department.
     (5) The transfer of the powers, duties, functions, and personnel of the department of community, trade, and economic development shall not affect the validity of any act performed before the effective date of this section.
     (6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.
     (7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the public employment relations commission as provided by law.

NEW SECTION.  Sec. 17   (1) The energy facility site evaluation council is hereby abolished and its powers, duties, and functions are hereby transferred to the department. All references to the chair of the energy facility site evaluation council or the energy facility site evaluation council in the Revised Code of Washington shall be construed to mean the director or the department.
     (2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the energy facility site evaluation council shall be delivered to the custody of the department. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the energy facility site evaluation council shall be made available to the department. All funds, credits, or other assets held by the energy facility site evaluation council shall be assigned to the department.
     (b) Any appropriations made to the energy facility site evaluation council shall, on the effective date of this section, be transferred and credited to the department.
     (c) If any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.
     (3) All employees of the energy facility site evaluation council are transferred to the jurisdiction of the department. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the department to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.
     (4) All rules and all pending business before the energy facility site evaluation council shall be continued and acted upon by the department. All existing contracts and obligations shall remain in full force and shall be performed by the department.
     (5) The transfer of the powers, duties, functions, and personnel of the energy facility site evaluation council shall not affect the validity of any act performed before the effective date of this section.
     (6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.
     (7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the public employment relations commission as provided by law.

Sec. 18   RCW 80.70.010 and 2004 c 224 s 1 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Applicant" has the meaning provided in RCW 80.50.020 and includes an applicant for a permit for a fossil-fueled thermal electric generation facility subject to RCW 70.94.152 and 80.70.020(1) (b) or (d).
     (2) "Authority" means any air pollution control agency whose jurisdictional boundaries are coextensive with the boundaries of one or more counties.
     (3) "Carbon credit" means a verified reduction in carbon dioxide or carbon dioxide equivalents that is registered with a state, national, or international trading authority or exchange that has been recognized by the council.
     (4) "Carbon dioxide equivalents" means a metric measure used to compare the emissions from various greenhouse gases based upon their global warming potential.
     (5) "Cogeneration credit" means the carbon dioxide emissions that the council, department, or authority, as appropriate, estimates would be produced on an annual basis by a stand-alone industrial and commercial facility equivalent in operating characteristics and output to the industrial or commercial heating or cooling process component of the cogeneration plant.
     (6) "Cogeneration plant" means a fossil-fueled thermal power plant in which the heat or steam is also used for industrial or commercial heating or cooling purposes and that meets federal energy regulatory commission standards for qualifying facilities under the public utility regulatory policies act of 1978.
     (7) "Commercial operation" means the date that the first electricity produced by a facility is delivered for commercial sale to the power grid.
     (8) "Council" means the energy facility site evaluation council created by RCW 80.50.030.
     (9) "Department" means the department of ((ecology)) energy.
     (10) "Fossil fuel" means natural gas, petroleum, coal, or any form of solid, liquid, or gaseous fuel derived from such material to produce heat for the generation of electricity.
     (11) "Mitigation plan" means a proposal that includes the process or means to achieve carbon dioxide mitigation through use of mitigation projects or carbon credits.
     (12) "Mitigation project" means one or more of the following:
     (a) Projects or actions that are implemented by the certificate holder or order of approval holder, directly or through its agent, or by an independent qualified organization to mitigate the emission of carbon dioxide produced by the fossil-fueled thermal electric generation facility. This term includes but is not limited to the use of, energy efficiency measures, clean and efficient transportation measures, qualified alternative energy resources, demand side management of electricity consumption, and carbon sequestration programs;
     (b) Direct application of combined heat and power (cogeneration);
     (c) Verified carbon credits traded on a recognized trading authority or exchange; or
     (d) Enforceable and permanent reductions in carbon dioxide or carbon dioxide equivalents through process change, equipment shutdown, or other activities under the control of the applicant and approved as part of a carbon dioxide mitigation plan.
     (13) "Order of approval" means an order issued under RCW 70.94.152 with respect to a fossil-fueled thermal electric generation facility subject to RCW 80.70.020(1) (b) or (d).
     (14) "Permanent" means that emission reductions used to offset emission increases are assured for the life of the corresponding increase, whether unlimited or limited in duration.
     (15) "Qualified alternative energy resource" has the same meaning as in RCW 19.29A.090.
     (16) "Station generating capability" means the maximum load a generator can sustain over a given period of time without exceeding design limits, and measured using maximum continuous electric generation capacity, less net auxiliary load, at average ambient temperature and barometric pressure.
     (17) "Total carbon dioxide emissions" means:
     (a) For a fossil-fueled thermal electric generation facility described under RCW 80.70.020(1) (a) and (b), the amount of carbon dioxide emitted over a thirty-year period based on the manufacturer's or designer's guaranteed total net station generating capability, new equipment heat rate, an assumed sixty percent capacity factor for facilities under the council's jurisdiction or sixty percent of the operational limitations on facilities subject to an order of approval, and taking into account any enforceable limitations on operational hours or fuel types and use; and
     (b) For a fossil-fueled thermal electric generation facility described under RCW 80.70.020(1) (c) and (d), the amount of carbon dioxide emitted over a thirty-year period based on the proposed increase in the amount of electrical output of the facility that exceeds the station generation capability of the facility prior to the applicant applying for certification or an order of approval pursuant to RCW 80.70.020(1) (c) and (d), new equipment heat rate, an assumed sixty percent capacity factor for facilities under the council's jurisdiction or sixty percent of the operational limitations on facilities subject to an order of approval, and taking into account any enforceable limitations on operational hours or fuel types and use.

NEW SECTION.  Sec. 19   Sections 1 through 10 and 15 through 17 of this act constitute a new chapter in Title 43 RCW.