Official Text and Analysis.

• Provides direction and requirements on the spending for a portion of the funding generated under the Climate Commitment Act. • Removes the requirement to consider and enact legislation dealing with compliance obligations for emissions-intensive and trade-exposed industries under the Climate Commitment Act. • Repeals the current motor vehicle fuel tax exemption for exported fuel and replaces it with a credit system in which a $0.06 per gallon tax would apply to some portion of exported fuel. • Increases a variety of transportation taxes and fees and provides additional local government taxing authority. • Removes language requiring passage of an additive transportation package before the Clean Fuel compliance and credit provisions go into effect. • Makes transfers from the state general fund and other changes dealing with state general fund support.

Eliminates telephone businesses from the 2 percent optional additional city utility councilmanic authority.

Provides an exemption from the driver's abstract fee to city attorneys and county prosecuting attorneys when they are using the document in a criminal proceeding.

1) Decreases Move Ahead WA Account and Move Ahead WA Account revenue of approximately $5 billion over 16 years. (2) Increases Motor Vehicle Fund revenues by approximately $25.3 billion over 16 years. (3) Decreases state general fund revenue by approximately $25.3 billion over 16 years.

States that the Transportation Commission shall not consider adjusting the maximum Good to Go! toll rate on the Interstate 405 and state route number 167 corridors to an amount above $10.

Clarifies that the free fare provisions for passengers 18 years old and younger are taxpayer funded provisions.

States legislative intent to provide funding for additional projects in Wenatchee, East Wenatchee, and in the vicinity of Leavenworth over the 16-year new move ahead WA investment program.

States legislative intent to provide $85,000,000 for the Confluence Parkway Project in Wenatchee over the 16-year new move ahead WA investment program.

Removes the 6 cent exported fuel tax credit system provisions from the bill.

Removes the inflation component of the authority for cities, towns, and Transportation Benefit Districts within ten miles of an international border to increase the border area fuel tax from 1 cent to 2 cents.

(1) Lowers the original car plate fee increase from $40 to $10 ($10 under current law). (2) Lowers the car replacement plate fee increase from $20 to $5 ($10 under current law). (3) Lowers original motorcycle plate fee increase from $16 to $6 ($4 under current law). (4) Lowers the motorcycle replacement plate fee increase from $8 to $4 ($4 under current law).

Corrects the internal references regarding distributions of revenues, generated from the expanded use of automated traffic safety cameras, to the Cooper Jones active transportation safety account.

States legislative intent that $500,000,000 of the amounts identified for Preservation & Maintenance on LEAP Transportation Document 2022-B as developed February 14, 2022, must enhance stormwater runoff treatment from existing roads and infrastructure with an emphasis on green infrastructure retrofits. Projects must be prioritized based on benefits to salmon recovery and ecosystem health, reducing toxic pollution, addressing health disparities, and cost-effectiveness. The department of transportation must submit progress reports on its efforts to reduce the toxicity of stormwater runoff from existing infrastructure, recommendations for addressing barriers to innovative solutions, and anticipated demand for funding each biennium.

Creates a new railroad crossing grant program to be administered by Freight Mobility Strategic Investment Board.

Eliminates the additional authority for a city or town to councilmanically impose a utility tax of up to 2 percent on natural gas, steam energy, and telephone utilities.

Hanges the additional 0.1 percent authority sales and use tax authority (on top of existing 0.2 percent authority) for Transportation Benefit Districts from councilmanic to voter approved.

Reduces $33 million in move ahead WA flexible account revenues over the 16 years.

Removes the Enhanced Driver's License & Identicard increases going from $24 to $42 for a 6-year license and $32 to $56 for an 8-year license.

1) Adds an intent section stating that this act is intended to direct resources towards deploying improvements to reduce roadway fatalities caused by a vehicle unintentionally leaving its lane of travel by requiring the Washington State Department of Transportation (WSDOT) to create a program that is focused on addressing this specific safety concern. (2) Establishes a Reducing Rural Roadway Departures Program (program) in WSDOT to provide funding for safety improvements to prevent lane departures in areas where the departure is likely to cause serious injuries or death, if an appropriation is provided. (3) Requires WSDOT to provide a list of the locations receiving funding from the program with a description of the safety improvements to the transportation committees and the Washington Traffic Safety Commission by December 31st each year. (4) Amends the highway safety fund statute to allow funds in the account to be used to implement the program.

• Provides direction and requirements on the spending for a portion of the funding generated under the Climate Commitment Act. • Removes the requirement to consider and enact legislation dealing with compliance obligations for emissions-intensive and trade-exposed industries under the Climate Commitment Act. • Repeals the current motor vehicle fuel tax exemption for exported fuel and replaces it with a credit system in which a $0.06 per gallon tax would apply to some portion of exported fuel. • Increases a variety of transportation taxes and fees and provides additional local government taxing authority. • Removes language requiring passage of an additive transportation package before the Clean Fuel compliance and credit provisions go into effect. • Makes transfers from the state general fund and other changes dealing with state general fund support.

Strikes the entirety of the underlying bill and makes the following changes: (1) Removes the intent to provide $500,000,000 to enhance stormwater runoff treatment. (2) Removes references to various LEAP Transportation Documents developed February 14, 2022, and replaces them with a reference to LEAP Transportation Document 2022-A, as developed February 8, 2022. (3) Defines biofuel as fuel that is derived from biomass that has at least 40 percent lower GHG emissions based on a full life-cycle analysis when compared to petroleum fuel for which biofuel is capable of serving as a substitute, and is exempted from the MVFT on exported fuel. (4) Reduces the original license plate fee for used cars from $50 to $40. (5) Removes the ability of cities and towns to increase utility taxes up to two percent for transportation. (6) Expands the responsibilities assigned to the Electric Vehicle Coordinating Council to include the development of a public and private outreach plan, creation of an industry electric vehicle advisory committee, and ensuring that activities related to transportation electrification benefit vulnerable and overburdened communities. (7) Adds the Climate Transit Programs Account and the Climate Active Transportation Account, which are created in the bill, to the list of accounts for which the Legislature has previously established its intent to achieve certain investment outcomes relative to vulnerable populations and Indian tribes. (8) Removes the requirement for the Freight Mobility Strategic Investment Board to create a railroad crossing grant program. (9) Makes other technical changes regarding deposits of funds and effective dates.

Eliminates the proposed $2 billion transfer from the General Fund—State to the Multimodal Transportation Account—State. Beginning in fiscal year 2023, deposits 50 percent of all sales and use tax revenue collected on the sale or use of new and used motor vehicles into the Motor Vehicle Fund.

Redesignates $960,000,000 of the funding identified for transit support grants in LEAP Transportation Document 2022-A, as developed February 8, 2022, in equal amounts over 16 years to the County Road Administration Board, the Transportation Improvement Board, and the Freight Mobility Strategic Investment Board, to be used for preservation and improvements for roads that electric and hybrid vehicles and electric buses can travel upon.

Removes the provisions related to exported fuel taxes. Requires that, beginning in July 2025, appropriations to correct fish passage barrier projects must be paid out of the State General Fund until $2.053 billion has been expended on the projects.

The aeronautics account receives an additional 4.4 million a year for 16 years. The aircraft fuel excise tax increase which would generate $1.6 million per year over a 16-year period is removed. The state treasurer would distribute approximately $6 million dollars per year to the aeronautics account rather than to the state general fund.

1) Reinstates the motor vehicle fuel tax exemption as it applies to fuel produced in Washington and exported to other states within the United States. (2) Amends the Public Works Assistance Account to allow for transfers to the Move Ahead WA for public works funded in the Move Ahead WA program. Makes transfers of $100 million per fiscal year for 15 years from Fiscal Year 2024 to Fiscal Year 2038.

Removes the increase of the Driver's License Photo or Update Card Fee of $10 ($10 under current law).

Declares the intent of the Legislature regarding equitable funding for transportation. Identifies programs that will be funded by the general fund, beginning July 1, 2025, and declares that the Legislature will convene a work group regarding the transition of programs to being funded by the general fund. Changes the source of the recurring transfers to the transportation infrastructure account, regional mobility account, and rural mobility account from the multimodal transportation account to the general fund.

Transfers $2 billion from the Multimodal Transportation Account—State to the Motor Vehicle Account—State.

Removes the inflation component of the authority for cities, towns, and Transportation Benefit Districts within ten miles of an international border to increase the border area fuel tax from 1 cent to 2 cents.

Changes the additional 0.1 percent authority sales and use tax authority (on top of existing 0.2 percent authority) for Transportation Benefit Districts from councilmanic to voter approved.

Removes the electric vehicle target that all passenger and light duty vehicles of model year 2030 or later be electric vehicles, along with the requirement that the Electric Vehicle Coordinating Council complete a scoping plan for achieving this target.

Clarifies that the target established that all passenger and light duty vehicles of model year 2030 or later be electric vehicles may not be used by a state agency to restrict the purchase, sale, or registration of vehicles that are not electric vehicles by military personnel or their family members.

Requires the Department of Transportation to preserve state highways with a posted speed limit of 40 miles per hour (mph) or less to the same standard as highways above 40 mph.

Makes the following changes to the Amtrak Cascades fare reduction policy: Removes the Legislative intent to eliminate fares for passengers 18 years of age and younger for service on the Amtrak Cascades corridor. Removes direction to WSDOT to negotiate with ODOT to determine the ridership, revenue, and policy impacts of elimination of these fares. Removes the requirement that WSDOT report back to the transportation committees of the Legislature with results of the negotiations with ODOT and the status of fare policy requests submitted to Amtrak.

Eliminates the direction to require the Washington State Ferries to adopt a policy to allow all riders 18 years of age and younger to ride free of charge. Eliminates the requirement that, to be eligible for a transit support grant, a transit agency must adopt a zero-fare policy to allow passengers 18 years of age and younger to ride free of charge.

Removes the expansion of the use of automated traffic safety cameras to allow cameras to detect speed violations in school walk areas, public park speed zones, hospital speed zones, and at other locations by cities using one camera per 10,000 in population.

Requires the Department of Agriculture to produce and 10 distribute a fuel tax sticker for display on motor fuel pumps that provides information on federal and state fuel tax rates.

Creates a new railroad crossing grant program to be administered by Freight Mobility Strategic Investment Board.

House version of transportation funding package. Provides direction and requirements on the spending for a portion of the funding generated under the Climate Commitment Act. • Removes the requirement to consider and enact legislation dealing with compliance obligations for emissions-intensive and trade-exposed industries under the Climate Commitment Act. • Increases a variety of transportation taxes and fees and provides additional local government taxing authority. • Removes language requiring passage of an additive transportation package before the Clean Fuel compliance and credit provisions go into effect. • Makes transfers from the State General Fund and other changes dealing with State General Fund support. This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not part of the legislation nor does it constitute a statement of legislative intent. House Bill Report - 1 - ESSB 5974 Staff: David Munnecke (786-7315). Background: Climate Commitment Act. The Climate Commitment Act directed the Department of Ecology (Ecology) to implement a cap and invest program to reduce greenhouse gas (GHG) emissions consistent with the statewide statutory emissions limits. Starting on January 1, 2023, the cap and invest program will cover industrial facilities, certain fuel suppliers, in-state electricity generators, electricity importers, and natural gas distributors with annual GHG emissions above 25,000 metric tons of carbon dioxide equivalent (CO2e). Covered entities must either reduce their emissions or obtain allowances to cover any remaining emissions. The total number of allowances will decrease over time to meet statutory limits. Some utilities and industries will be issued free allowances; other allowances will be auctioned. The cap and invest program must track, verify, and enforce compliance through the use of compliance instruments. A compliance instrument is an allowance or offset credit issued by Ecology or a trading program that has linked with Washington's cap and invest program. One compliance instrument is equal to one metric ton of CO2e. Except for directly distributed, no-cost allowances allocated to certain entities, allowances under the cap and invest program must be distributed through auctions. Ecology must hold a maximum of four auctions each year, plus any necessary reserve auctions. An auction may include allowances from the annual allowance budget of the current year and allowances from the annual allowances budgets of prior years that remain to be distributed. Upon completion and verification of auction results, the auction proceeds must be transferred to the State Treasurer for specific deposits first to the Carbon Emissions Reduction Account (CERA) and the remaining auction proceeds to the Climate Investment Account and Air Quality and Health Disparities Improvement Account. The deposits to the CERA are as follows: • $127,341,000 for Fiscal Year (FY) 2023; • $356,697,000 for FY 2024; • Makes transfers from the Public Works Assistance Account to the Move Ahead WA account. • Creates multiple new transportation accounts and programs. • Makes a variety of other changes associated with financing and spending assumptions, and with certain transportation policies, as provided in the Move Ahead WA transportation package.

Conference committee report adopted. Passed final passage as recommended by conference committee .