H-5356.1

SUBSTITUTE HOUSE BILL 2957

ByHouse Appropriations (originally sponsored by Representatives Fitzgibbon and Pollet)

AN ACT Relating to reducing greenhouse gas emissions by providing authority for the regulation of indirect sources under the clean air act and implementing standards and programs that reduce emissions associated with buildings; amending RCW 70.94.030, 70.94.331, 70.94.151, and 70.94.015; adding new sections to chapter 70.94 RCW; adding a new section to chapter 70.235 RCW; adding a new section to chapter 80.28 RCW; adding a new section to chapter 19.27A RCW; and creating a new section.

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

Sec. 2. RCW 70.94.030 and 2005 c 197 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) "Air contaminant" means dust, fumes, mist, smoke, other particulate matter, vapor, gas, odorous substance, or any combination thereof.

(2) "Air pollution" is presence in the outdoor atmosphere of one or more air contaminants in sufficient quantities and of such characteristics and duration as is, or is likely to be, injurious to human health, plant or animal life, or property, or which unreasonably interfere with enjoyment of life and property. For the purpose of this chapter, air pollution shall not include air contaminants emitted in compliance with chapter 17.21 RCW.

(3) "Air quality standard" means an established concentration, exposure time, and frequency of occurrence of an air contaminant or multiple contaminants in the ambient air which shall not be exceeded.

(4) "Ambient air" means the surrounding outside air.

(5) "Authority" means any air pollution control agency whose jurisdictional boundaries are coextensive with the boundaries of one or more counties.

(6) "Best available control technology" (BACT) means an emission limitation based on the maximum degree of reduction for each air pollutant subject to regulation under this chapter emitted from or that results from any new or modified stationary source, that the permitting authority, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such a source or modification through application of production processes and available methods, systems, and techniques, including fuel cleaning, clean fuels, or treatment or innovative fuel combustion techniques for control of each such a pollutant. In no event shall application of "best available control technology" result in emissions of any pollutants that will exceed the emissions allowed by any applicable standard under 40 C.F.R. Part 60 and Part 61, as they exist on July 25, 1993, or their later enactments as adopted by reference by the director by rule. Emissions from any source utilizing clean fuels, or any other means, to comply with this subsection shall not be allowed to increase above levels that would have been required under the definition of BACT as it existed prior to enactment of the federal clean air act amendments of 1990.

(7) "Best available retrofit technology" (BART) means an emission limitation based on the degree of reduction achievable through the application of the best system of continuous emission reduction for each pollutant that is emitted by an existing stationary facility. The emission limitation must be established, on a case-by-case basis, taking into consideration the technology available, the costs of compliance, the energy and nonair quality environmental impacts of compliance, any pollution control equipment in use or in existence at the source, the remaining useful life of the source, and the degree of improvement in visibility that might reasonably be anticipated to result from the use of the technology.

(8) "Board" means the board of directors of an authority.

(9) "Control officer" means the air pollution control officer of any authority.

(10) "Department" or "ecology" means the department of ecology.

(11) "Emission" means a direct or indirect release of air contaminants into the ambient air.

(12) "Emission standard" and "emission limitation" mean a requirement established under the federal clean air act or this chapter that limits the quantity, rate, or concentration of direct or indirect emissions of air contaminants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction, and any design, equipment, work practice, or operational standard adopted under the federal clean air act or this chapter.

(13) "Fine particulate" means particulates with a diameter of two and one-half microns and smaller.

(14) "Lowest achievable emission rate" (LAER) means for any source that rate of emissions that reflects:

(a) The most stringent emission limitation that is contained in the implementation plan of any state for such class or category of source, unless the owner or operator of the proposed source demonstrates that such limitations are not achievable; or

(b) The most stringent emission limitation that is achieved in practice by such class or category of source, whichever is more stringent.

In no event shall the application of this term permit a proposed new or modified source to emit any pollutant in excess of the amount allowable under applicable new source performance standards.

(15) "Modification" means any physical change in, or change in the method of operation of, a stationary source that increases the amount of any air contaminant emitted by such source or that results in the emission of any air contaminant not previously emitted. The term modification shall be construed consistent with the definition of modification in Section 7411, Title 42, United States Code, and with rules implementing that section.

(16) "Multicounty authority" means an authority which consists of two or more counties.

(17) "New source" means (a) the construction or modification of a stationary source that increases the amount of any air contaminant emitted by such source or that results in the emission of any air contaminant not previously emitted, and (b) any other project that constitutes a new source under the federal clean air act.

(18) "Permit program source" means a source required to apply for or to maintain an operating permit under RCW 70.94.161.

(19) "Person" means an individual, firm, public or private corporation, association, partnership, political subdivision of the state, municipality, or governmental agency.

(20) "Reasonably available control technology" (RACT) means the lowest emission limit that a particular source or source category is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility. RACT is determined on a case-by-case basis for an individual source or source category taking into account the impact of the source upon air quality, the availability of additional controls, the emission reduction to be achieved by additional controls, the impact of additional controls on air quality, and the capital and operating costs of the additional controls. RACT requirements for a source or source category shall be adopted only after notice and opportunity for comment are afforded.

(21) "Silvicultural burning" means burning of wood fiber on forestland consistent with the provisions of RCW ((70.94.660))70.94.6534.

(22) "Source" means all of the emissions units including quantifiable fugitive emissions, that are located on one or more contiguous or adjacent properties, and are under the control of the same person, or persons under common control, whose activities are ancillary to the production of a single product or functionally related group of products.

(23) "Stationary source" means any building, structure, facility, or installation that emits or may emit any air contaminant.

(24) "Trigger level" means the ambient level of fine particulates, measured in micrograms per cubic meter, that must be detected prior to initiating a first or second stage of impaired air quality under RCW 70.94.473.

Sec. 3. RCW 70.94.331 and 1991 c 199 s 710 are each amended to read as follows:

(1) The department shall have all the powers as provided in RCW 70.94.141.

(2) The department, in addition to any other powers vested in it by law after consideration at a public hearing held in accordance with chapters 42.30 and 34.05 RCW shall:

(a) Adopt rules establishing air quality objectives and air quality standards;

(b) Adopt emission standards which shall constitute minimum emission standards throughout the state. An authority may enact more stringent emission standards, except for emission performance standards for new woodstoves and opacity levels for residential solid fuel burning devices which shall be statewide, but in no event may less stringent standards be enacted by an authority without the prior approval of the department after public hearing and due notice to interested parties;

(c) Adopt by rule air quality standards and emission standards for the control or prohibition of emissions to the outdoor atmosphere of radionuclides, dust, fumes, mist, smoke, other particulate matter, vapor, gas, odorous substances, or any combination thereof. Such requirements may be based upon a system of classification by types of emissions or types of sources of emissions, or combinations thereof, which it determines most feasible for the purposes of this chapter. The department or authority may require persons who produce or distribute fossil fuels or other products that emit or the combustion of which emits greenhouse gases in Washington to comply with air quality standards, emission standards, or emission limits on emissions of greenhouse gases. However, an industry, or the air pollution control authority having jurisdiction, can choose, subject to the submittal of appropriate data that the industry has quantified, to have any limit on the opacity of emissions from a source whose emission standard is stated in terms of a weight of particulate per unit volume of air (e.g., grains per dry standard cubic foot) be based on the applicable particulate emission standard for that source, such that any violation of the opacity limit accurately indicates a violation of the applicable particulate emission standard. Any alternative opacity limit provided by this section that would result in increasing air contaminants emissions in any nonattainment area shall only be granted if equal or greater emission reductions are provided for by the same source obtaining the revised opacity limit. A reasonable fee may be assessed to the industry to which the alternate opacity standard would apply. The fee shall cover only those costs to the air pollution control authority which are directly related to the determination on the acceptability of the alternate opacity standard, including testing, oversight and review of data.

(3) The air quality standards and emission standards may be for the state as a whole or may vary from area to area or source to source, except that emission performance standards for new woodstoves and opacity levels for residential solid fuel burning devices shall be statewide, as may be appropriate to facilitate the accomplishment of the objectives of this chapter and to take necessary or desirable account of varying local conditions of population concentration, the existence of actual or reasonably foreseeable air pollution, topographic and meteorologic conditions and other pertinent variables.

(4) The department is directed to cooperate with the appropriate agencies of the United States or other states or any interstate agencies or international agencies with respect to the control of air pollution and air contamination, or for the formulation for the submission to the legislature of interstate air pollution control compacts or agreements.

(5) The department is directed to conduct or cause to be conducted a continuous surveillance program to monitor the quality of the ambient atmosphere as to concentrations and movements of air contaminants and conduct or cause to be conducted a program to determine the quantity of emissions to the atmosphere.

(6) The department shall enforce the air quality standards and emission standards throughout the state except where a local authority is enforcing the state regulations or its own regulations which are more stringent than those of the state.

(7) The department shall encourage local units of government to handle air pollution problems within their respective jurisdictions; and, on a cooperative basis provide technical and consultative assistance therefor.

(8) The department shall have the power to require the addition to or deletion of a county or counties from an existing authority in order to carry out the purposes of this chapter. No such addition or deletion shall be made without the concurrence of any existing authority involved. Such action shall only be taken after a public hearing held pursuant to the provisions of chapter 34.05 RCW.

(9) The department shall establish rules requiring sources or source categories to apply reasonable and available control methods. Such rules shall apply to those sources or source categories that individually or collectively contribute the majority of statewide air emissions of each regulated pollutant. The department shall review, and if necessary, update its rules every five years to ensure consistency with current reasonable and available control methods. The department shall have adopted rules required under this subsection for all sources by July 1, 1996.

For the purposes of this section, "reasonable and available control methods" shall include but not be limited to, changes in technology, processes, or other control strategies.

Sec. 4. RCW 70.94.151 and 2010 c 146 s 2 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 persons to report emissions of greenhouse gases as defined in RCW 70.235.010 where those emissions from a single facility, source, or site, or from fossil fuels sold in Washington by a single supplier meet or exceed ten thousand metric tons of carbon dioxide equivalent annually. ((The department may phase in the requirement to report greenhouse gas emissions until the reporting threshold in this subsection is met, which must occur by January 1, 2012.)) In addition, the rules must require that:

(i) Emissions of greenhouse gases resulting from the combustion of fossil fuels be reported separately from emissions of greenhouse gases resulting from the combustion of biomass;

(ii) ((Reporting will start in 2010 for 2009 emissions.)) Each annual report must include emissions data for the preceding calendar year and must be submitted to the department by ((October))March 31st of the year in which the report is due. ((However, starting in 2011, a person who is required to report greenhouse gas emissions to the United States environmental protection agency under 40 C.F.R. Part 98, as adopted on September 22, 2009, must submit the report required under this section to the department concurrent with the submission to the United States environmental protection agency.)) Except as otherwise provided in this section, the data for emissions in Washington and any corrections thereto that are reported to the United States environmental protection agency must be the emissions data reported to the department; ((and))

(iii) Emissions of carbon dioxide associated with the complete combustion or oxidation of liquid motor vehicle fuel, special fuel, or aircraft fuel that is sold in Washington where the annual emissions associated with that combustion or oxidation equal or exceed ten thousand metric tons be reported to the department. Each person who is required to file periodic tax reports of motor vehicle fuel sales under RCW 82.36.031 or special fuel sales under RCW 82.38.150, or each distributor of aircraft fuel required to file periodic tax reports under RCW 82.42.040 must report to the department the annual emissions of carbon dioxide from the complete combustion or oxidation of the fuels listed in those reports as sold in the state of Washington. ((The))Except as provided in (a)(iv) of this subsection, the department shall not require suppliers to use additional data to calculate greenhouse gas emissions other than the data the suppliers report to the department of licensing. The rules may allow this information to be aggregated when reported to the department. The department and the department of licensing shall enter into an interagency agreement to ensure proprietary and confidential information is protected if the departments share reported information. Any proprietary or confidential information exempt from disclosure when reported to the department of licensing is exempt from disclosure when shared by the department of licensing with the department under this provision; and

(iv) If the department determines that it is necessary for purposes of accurately measuring greenhouse gas emissions associated with sources of indirect emissions regulated consistent with RCW 70.94.331(2)(c), the department may require the submission of data or information to be used for purposes of calculating greenhouse gas emissions that is different from or additional to the data reported under (a)(iii) of this subsection.

(b)(i) Except as otherwise provided in this subsection, the rules adopted by the department under (a) of this subsection must be consistent with the regulations adopted by the United States environmental protection agency in 40 C.F.R. Part 98 as it existed on ((September 22, 2009))January 1, 2020.

(ii) The department may by rule include additional gases to the definition of "greenhouse gas" in RCW 70.235.010 only if the gas has been designated as a greenhouse gas by the United States congress or by the United States environmental protection agency. Prior to including additional gases to the definition of "greenhouse gas" in RCW 70.235.010, the department shall notify the appropriate committees of the legislature. Decisions to amend the rule to include additional gases must be made prior to December 1st of any year and the amended rule may not take effect before the end of the regular legislative session in the next year.

(iii) The department may by rule exempt persons who are required to report greenhouse gas emissions to the United States environmental protection agency and who emit less than ten thousand metric tons carbon dioxide equivalent annually.

(iv) The department must establish a methodology for persons who are not required to report under this section to voluntarily report their greenhouse gas emissions.

(c) The department shall review and if necessary update its rules whenever the United States environmental protection agency adopts final amendments to 40 C.F.R. Part 98 to ensure consistency with federal reporting requirements for emissions of greenhouse gases. However, the department shall not amend its rules in a manner that conflicts with (a) or (b) of this subsection.

(d) The department shall share any reporting information reported to it with the local air authority in which the person reporting under the rules adopted by the department operates.

(e) The fee provisions in subsection (2) of this section apply to reporting of emissions of greenhouse gases. Persons 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 persons operating within the authority's jurisdiction. ((However, neither the department nor a local air authority approved under this section are authorized to assess enforcement penalties on persons required to report under (a) of this subsection until six months after the department adopts its reporting rule in 2010.))

(f) 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.

(g) 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 state, regional, or national greenhouse gas reduction programs or strategies. ((Furthermore, aircraft fuel purchased in the state may not be considered equivalent to aircraft fuel combusted in the state.))

(h) The department may by rule require persons to have a third party verify their report to the department. The department retains final authority when determining the accuracy of reports submitted to the department.

(i)(i) The definitions in RCW 70.235.010 apply throughout this subsection (5) unless the context clearly requires otherwise.

(ii) For the purpose of this subsection (5), the term "supplier" includes: (A) A motor vehicle fuel supplier or a motor vehicle fuel importer, as those terms are defined in RCW 82.36.010; (B) a special fuel supplier or a special fuel importer, as those terms are defined in RCW 82.38.020; and (C) a distributor of aircraft fuel, as those terms are defined in RCW 82.42.010.

(iii) For the purpose of this subsection (5), the term "person" ((includes))means: (A) An owner or operator, as those terms are defined by the United States environmental protection agency in its mandatory greenhouse gas reporting regulation in 40 C.F.R. Part 98, as adopted on September 22, 2009; and (B) a supplier. However, the department may adopt rules that amend these United States environmental protection agency definitions to address differences in state and federal boundaries.

NEW SECTION.  Sec. 5. A new section is added to chapter 70.94 RCW to read as follows:

(1)(a) The department must adopt rules under this chapter to regulate greenhouse gases as defined in RCW 70.235.010.

(b) The rules may not be adopted before May 1, 2021, and may not take effect before October 1, 2021.

(c) In the exercise of authority granted under this section and sections 2 and 3, chapter . . ., Laws of 2020 (sections 2 and 3 of this act), if the rule applies to sources of direct or indirect emissions other than transportation fuels alone, the department may not regulate entities that have indirect emissions of less than twenty-five thousand metric tons per year. For the purposes of assessing whether an entity exceeds this threshold, the department may average emissions reported for recent years for which such data is available, or may use other reasonable methods of determining whether an entity may be assumed to emit at least twenty-five thousand metric tons per year, and therefore may be covered by regulatory requirements consistent with this section and sections 2 and 3, chapter . . ., Laws of 2020 (sections 2 and 3 of this act).

(2)(a) For the purposes of any rules adopted by the department to regulate greenhouse gases under this chapter, for biofuels that lead to reduced life-cycle emissions relative to fossil fuels that the biofuel may reasonably be presumed to be a substitute for including, but not limited to, gasoline, diesel, natural gas, or heating oil, the department must assign to the biofuel credits against compliance obligations or assign to the biofuel the generation of emission reduction units or other regulatory or market-based mechanisms in an amount proportional to the difference in life-cycle emissions between the fossil fuel and the biofuel.

(b) For the purposes of this subsection, "biofuel" means a liquid or gaseous fuel derived from organic matter including, but not limited to, biodiesel, renewable diesel, ethanol, renewable natural gas, and renewable propane.

(3) For the purposes of any rules adopted by the department to regulate greenhouse gases under this chapter, the department may:

(a) Determine, assess, and collect annual fees from persons subject to the rules in an amount sufficient to cover the direct and indirect costs of administering and enforcing the requirements of the rules; and

(b) Rely upon market-based mechanisms, including bankable, tradeable credits or emission reduction units to achieve greenhouse gas emission reductions, as long as such mechanisms are not auctioned or sold by the state to persons subject to the rules.

(4) By January 20, 2021, the house of representatives environment and energy committee and the senate environment, energy, and technology committee must hold at least one joint meeting at which the department must present an update on the progress of rule making authorized by this act.

NEW SECTION.  Sec. 6. A new section is added to chapter 70.94 RCW to read as follows:

(1) The department may give special consideration to energy-intensive and trade-exposed facilities only to the extent necessary to address leakage.

(2) For the purposes of this section, "energy-intensive and trade-exposed facilities" mean facilities with the following North American industry classification system (NAICS) codes, using the system in effect as of January 1, 2020:

(a) 311411: Frozen fruit, juice, and vegetable manufacturing;

(b) 311423: Dried and dehydrated food manufacturing;

(c) 311611: Animal (except poultry) slaughtering;

(d) 322110: Pulp mills;

(e) 322121: Paper (except newsprint) mills;

(f) 322122: Newsprint mills;

(g) 322130: Paperboard mills;

(h) 325120: Industrial gas manufacturing;

(i) 324110: Petroleum refineries;

(j) 325188: All other basic inorganic chemical manufacturing;

(k) 325199: All other basic organic chemical manufacturing;

(l) 325311: Nitrogenous fertilizer manufacturing;

(m) 327211: Flat glass manufacturing;

(n) 327213: Glass container manufacturing;

(o) 327310: Cement manufacturing;

(p) 327410: Lime manufacturing;

(q) 327420: Gypsum product manufacturing;

(r) 327992: Ultra high purity silicon manufacturing;

(s) 331111: Iron and steel mills;

(t) 331312: Primary aluminum production;

(u) 331315: Aluminum sheet, plate, and foil manufacturing;

(v) 331419: Primary smelting and refining of nonferrous metal (except copper and aluminum);

(w) 334413: Semiconductor and related device manufacturing;

(x) 336411: Aircraft manufacturing; and

(y) 336413: Other aircraft parts and auxiliary equipment manufacturing.

(3) The energy-intensive and trade-exposed facilities to which the department may give special consideration do not include the products produced by the facilities.

NEW SECTION.  Sec. 7. A new section is added to chapter 70.94 RCW to read as follows:

(1) The legislature intends to support and enhance the state's ability to continue to sequester carbon through natural and working forestlands and forest products, and to promote and invest in industry sectors that act as sequesters of carbon. Among the measures that maintain and enhance carbon sequestration are maintaining and expanding the forestland base, reducing emissions from land conversion to nonforest uses, increasing forest resiliency to reduce the risk of carbon releases from disturbances such as wildfire, pest infestation, and disease, and applying sustainable forest management techniques to maintain or enhance forest carbon stocks and forest carbon sinks, including through the transference of carbon to wood products.

(2) In adopting rules to exercise the authority granted under sections 2 and 3, chapter . . ., Laws of 2020 (sections 2 and 3 of this act), and section 5 of this act, if the rule applies to sources of direct or indirect emissions other than transportation fuels alone, the department must provide for substantial emission reduction credits or offsets to be recognized in the sequestration of carbon in working and natural lands forests and the forest products sector. The standards for qualifying projects and activities must be consistent with protocols and verification standards adopted by other jurisdictions and nongovernmental carbon offset organizations.

NEW SECTION.  Sec. 8. A new section is added to chapter 70.235 RCW to read as follows:

In exercising the authority provided under sections 2 and 3, chapter . . ., Laws of 2020 (sections 2 and 3 of this act), and section 5 of this act, the department, consistent with the requirements of chapter 34.05 RCW and in the context of cost-benefit and least burdensome analyses, must seek to integrate new state greenhouse gas requirements with existing requirements and rules. The department must seek to design new requirements in a way that helps regulated entities achieve emission reduction requirements simultaneously with other regulatory obligations at the lowest compliance cost possible.

Sec. 9. RCW 70.94.015 and 2019 c 284 s 6 are each amended to read as follows:

(1) The air pollution control account is established in the state treasury. All receipts collected by or on behalf of the department from RCW 70.94.151(2), and receipts from nonpermit program sources under RCW 70.94.152(1) ((and)), 70.94.154(7), and section 5 of this act and all receipts from RCW 70.94.6528 and 70.94.6534 shall be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only to develop and implement the provisions of ((chapters 70.94 and))this chapter and chapter 70.120 RCW and RCW 70.235.080.

(2) The amounts collected and allocated in accordance with this section shall be expended upon appropriation except as otherwise provided in this section and in accordance with the following limitations:

Portions of moneys received by the department of ecology from the air pollution control account shall be distributed by the department to local authorities based on:

(a) The level and extent of air quality problems within such authority's jurisdiction;

(b) The costs associated with implementing air pollution regulatory programs by such authority; and

(c) The amount of funding available to such authority from other sources, whether state, federal, or local, that could be used to implement such programs.

(3) The air operating permit account is created in the custody of the state treasurer. All receipts collected by or on behalf of the department from permit program sources under RCW 70.94.152(1), 70.94.161, 70.94.162, and 70.94.154(7) shall be deposited into the account. Expenditures from the account may be used only for the activities described in RCW 70.94.152(1), 70.94.161, 70.94.162, and 70.94.154(7). Moneys in the account may be spent only after appropriation.

NEW SECTION.  Sec. 10. A new section is added to chapter 80.28 RCW to read as follows:

In reviewing the utility compliance obligations associated with any rule that is adopted under the authority of sections 2 and 3, chapter . . ., Laws of 2020 (sections 2 and 3 of this act), and section 5 of this act, the commission shall ensure that its processes and mechanisms allow timely cost recovery for prudent and reasonable costs associated with compliance with this act that are incurred by electrical companies and gas companies under its jurisdiction.

NEW SECTION.  Sec. 11. A new section is added to chapter 70.94 RCW to read as follows:

(1) Until January 1, 2023, no local air authority, city, county, or other subdivision of the state may directly regulate greenhouse gas emissions through an overall emissions cap or a charge on greenhouse gas emissions.

(2) Until January 1, 2023, no local air authority, city, county, or other subdivision of the state may regulate greenhouse gas emissions through a low carbon fuel standard or clean fuels standard if the department proposes or adopts a rule under this chapter to establish a clean fuels standard or low carbon fuel standard by January 1, 2021.

(3) No local air authority, city, county, or other subdivision of the state may adopt restrictions taking effect prior to June 1, 2022, that prohibit natural gas infrastructure in newly constructed buildings.

NEW SECTION.  Sec. 12. A new section is added to chapter 19.27A RCW to read as follows:

The Washington state energy code for residential structures, 2018 edition, is not effective before July 1, 2022, provided that the legislature adopts policies and provides funding for energy efficiency retrofits in existing residential buildings to achieve emission reductions in an amount projected by the department of commerce to exceed the emission reductions that would have been achieved by the 2018 edition for residential energy code.

NEW SECTION.  Sec. 13. A new section is added to chapter 70.94 RCW to read as follows:

(1) The provisions of this act, the powers granted herein, and any requirements or standards established pursuant to those powers, are null and void in their entirety upon enactment of a more comprehensive program addressing greenhouse gas emissions including, but not limited to, a cap and trade system or a tax on greenhouse gas emissions.

(2) For the purposes of this section, a more comprehensive greenhouse gas emission program is a program that puts a price on emissions associated with direct or indirect fossil fuel sources and that is designed and forecasted, using models developed by state agencies with subject matter expertise, to achieve the emission reduction limits established in RCW 70.235.020.

(3) Upon determining that a more comprehensive greenhouse gas emission program has been enacted, the department of ecology shall publish a finding to that effect in the Washington State Register and submit this finding to the appropriate committees of the house of representatives and the senate, the chief clerk of the house of representatives, the secretary of the senate, and the code reviser's office. Upon publication in the Washington State Register, this act is null and void immediately.

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