Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 70A.45.005 and 2021 c 316 s 44 are each amended to read as follows:

(1) The legislature finds that Washington has long been a national and international leader on energy conservation and environmental stewardship, including air quality protection, renewable energy development and generation, emission standards for fossil-fuel based energy generation, energy efficiency programs, natural resource conservation, sustainable forestry and the production of forest products, vehicle emission standards, and the use of biofuels. Washington is also unique among most states in that in addition to its commitment to reduce emissions of greenhouse gases, it has established goals to grow the clean energy sector and reduce the state's expenditures on imported fuels.

(2) The legislature further finds that Washington should continue its leadership on climate change policy by creating accountability for achieving the emission reductions established in RCW 70A.45.020, participating in the design of a regional multisector market-based system to help achieve those emission reductions, assessing other market strategies to reduce emissions of greenhouse gases, maintaining and enhancing the state's ability to continue to sequester carbon through natural and working lands and forest products, and ensuring the state has a well-trained workforce for our clean energy future. The consistent tracking and annual reporting of statewide emissions in a greenhouse gas inventory as required under RCW 70A.45.020 is an important responsibility that allows the legislature to determine whether state emissions are on a trajectory to achieve statutory emissions reduction limits, or whether new or amended policy interventions are necessary to achieve those limits.

(3) It is the intent of the legislature that the state will: (a) Limit and reduce emissions of greenhouse gas consistent with the emission reductions established in RCW 70A.45.020; (b) minimize the potential to export pollution, jobs, and economic opportunities; (c) support industry sectors that can act as sequesterers of carbon; and (d) reduce emissions at the lowest cost to Washington's economy, consumers, and businesses.

(4) In the event the state elects to participate in a regional multisector market-based system, it is the intent of the legislature that the system will become effective by January 1, 2012, after authority is provided to the department for its implementation. By acting now, Washington businesses and citizens will have adequate time and opportunities to be well positioned to take advantage of the low carbon economy and to make necessary investments in low carbon technology.

(5) It is also the intent of the legislature that the regional multisector market-based system recognize Washington's unique emissions and sequestration portfolio, including the:

(a) State's hydroelectric system;

(b) Opportunities presented by Washington's abundant forest resources and the associated forest products industry, along with aquatic and agriculture land and the associated industries; and

(c) State's leadership in energy efficiency and the actions it has already taken that have reduced its generation of greenhouse gas emissions and that entities receive appropriate credit for early actions to reduce greenhouse gases.

(6) If any revenues, excluding those from state trust lands, that accrue to the state are created by a market system, they must be used for the purposes established in chapter 70A.65 RCW and to further the state's efforts to achieve the goals established in RCW 70A.45.020, address the impacts of global warming on affected habitats, species, and communities, promote and invest in industry sectors that act as sequesterers of carbon, and increase investment in the clean energy economy particularly for communities and workers that have suffered from heavy job losses and chronic unemployment and underemployment.

Sec. 2. RCW 70A.45.020 and 2020 c 79 s 2, 2020 c 32 s 4, and 2020 c 20 s 1398 are each reenacted and amended to read as follows:

(1)(a) The state shall limit anthropogenic emissions of greenhouse gases to achieve the following emission reductions for Washington state:

(i) By 2020, reduce overall emissions of greenhouse gases in the state to 1990 levels, or ((ninety million five hundred thousand))90,500,000 metric tons;

(ii) By 2030, reduce overall emissions of greenhouse gases in the state to ((fifty million))50,000,000 metric tons, or ((forty-five))45 percent below 1990 levels;

(iii) By 2040, reduce overall emissions of greenhouse gases in the state to ((twenty-seven million))27,000,000 metric tons, or ((seventy))70 percent below 1990 levels;

(iv) By 2050, reduce overall emissions of greenhouse gases in the state to ((five million))5,000,000 metric tons, or ((ninety-five))95 percent below 1990 levels.

(b) By December 1, 2008, the department shall submit a greenhouse gas reduction plan for review and approval to the legislature, describing those actions necessary to achieve the emission reductions in (a) of this subsection by using existing statutory authority and any additional authority granted by the legislature. Actions taken using existing statutory authority may proceed prior to approval of the greenhouse gas reduction plan.

(c) In addition to the emissions limits specified in (a) of this subsection, the state shall also achieve net zero greenhouse gas emissions by 2050. Except where explicitly stated otherwise, nothing in chapter 14, Laws of 2008 limits any state agency authorities as they existed prior to June 12, 2008.

(d) Consistent with this directive, the department shall take the following actions:

(i) Develop and implement a system for monitoring and reporting emissions of greenhouse gases as required under RCW 70A.15.2200; and

(ii) Track progress toward meeting the emission reductions established in this subsection, including the results from policies currently in effect that have been previously adopted by the state and policies adopted in the future, and report on that progress. Progress reporting should include statewide emissions as well as emissions from key sectors of the economy including, but not limited to, electricity, transportation, buildings, manufacturing, and agriculture.

(e) Nothing in this section creates any new or additional regulatory authority for any state agency as they existed prior to January 1, 2019.

(2) ((By December 31st of each even-numbered year beginning in 2010, the))(a) The department and the department of commerce shall post and maintain on the department's website and report to the governor and the appropriate committees of the senate and house of representatives the total emissions of greenhouse gases for the ((preceding))most recent two years for which such data are available, and totals in each major source sector, including emissions associated with leaked gas identified by the utilities and transportation commission under RCW 81.88.160. The report must include greenhouse gas emissions from wildfires, developed in consultation with the department of natural resources. The department shall ensure the reporting rules adopted under RCW 70A.15.2200 allow it to develop a comprehensive inventory of emissions of greenhouse gases from all significant sectors of the Washington economy. The report required under this section must be completed by December 31st of each even-numbered year through 2030, and must be completed by December 31st of each year beginning December 31, 2031.

(3) Except for purposes of reporting, emissions of carbon dioxide from industrial combustion of biomass in the form of fuel wood, wood waste, wood by-products, and wood residuals shall not be considered a greenhouse gas as long as the region's silvicultural sequestration capacity is maintained or increased.

Sec. 3. RCW 70A.65.130 and 2021 c 316 s 15 are each amended to read as follows:

(1) For the benefit of ratepayers, allowances must be allocated at no cost to covered entities that are natural gas utilities.

(a) By October 1, 2022, the department shall adopt rules, in consultation with the utilities and transportation commission, establishing the methods and procedures for allocating allowances to natural gas utilities. Rules adopted under this subsection must allow for a natural gas utility to be provided allowances at no cost to cover their emissions and decline proportionally with the cap, consistent with RCW 70A.65.070. Allowances allocated at no cost to natural gas utilities must be consigned to auction for the benefit of ratepayers consistent with subsection (2) of this section, deposited for compliance, or a combination of both. The rules adopted by the department pursuant to this section must include provisions directing revenues generated under this subsection to the applicable utilities.

(b) By October 1, 2022, the department shall adopt an allocation schedule by rule, in consultation with the utilities and transportation commission, for the first two compliance periods for the provision of allowances for the benefit of ratepayers at no cost to natural gas utilities.

(c) By October 1, 2028, the department shall adopt an allocation schedule by rule, in consultation with the utilities and transportation commission, for the provision of allowances for the benefit of ratepayers at no cost to natural gas utilities for the compliance periods contained within calendar years 2031 through 2040.

(2)(a) Beginning in 2023, 65 percent of the no cost allowances must be consigned to auction for the benefit of customers, including at a minimum eliminating any additional cost burden to low-income customers from the implementation of this chapter. Rules adopted under this subsection must increase the percentage of allowances consigned to auction by five percent each year until a total of 100 percent is reached.

(b) Revenues from allowances sold at auction must be returned by providing nonvolumetric credits on ratepayer utility bills, prioritizing low-income customers, or used to minimize cost impacts on low-income, residential, and small business customers through actions that include, but are not limited to, weatherization, decarbonization, conservation and efficiency services, and bill assistance. The customer benefits provided from allowances consigned to auction under this section must be in addition to existing requirements in statute, rule, or other legal requirements.

(c) Except for low-income customers, the customer bill credits under this subsection are reserved exclusively for customers at locations connected to a natural gas utility's system on July 25, 2021. Bill credits may not be provided to customers of the gas utility at a location connected to the system after July 25, 2021.

(3) In order to qualify for no cost allowances, covered entities that are natural gas utilities must provide copies of their greenhouse gas emissions reports filed with the United States environmental protection agency under 40 C.F.R. Part 98 subpart NN - suppliers of natural gas and natural gas liquids for calendar years 2015 through 2021 to the department on or before March 31, 2022. The copies of the reports must be provided in electronic form to the department, in a manner prescribed by the department. The reports must be complete and contain all information required by 40 C.F.R. Sec. 98.406 including, but not limited to, information on large end users served by the natural gas utility. For any year where a natural gas utility was not required to file this report with the United States environmental protection agency, a report may be submitted in a manner prescribed by the department containing all of the information required in the subpart NN report.

(4) To ((continue receiving))receive no cost allowances, a natural gas utility must provide to the department ((the United States environmental protection agency subpart NN greenhouse gas emissions report for each reporting year in the manner and by the dates provided))an annual greenhouse gas emissions report as required by RCW 70A.15.2200(5) ((as part of the greenhouse gas reporting requirements of this chapter))."

Correct the title.