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.