Committee hears proposal to codify remittance program for agriculture fuel exemptions under Climate Commitment Act

House Environment & Energy Committee members heard staff and stakeholder testimony Thursday on House Bill 1912, a bill that would direct the Department of Ecology to adopt rules to establish a remittance program for fuels exempted under the 2021 Climate Commitment Act.

Sponsors and agency staff said the bill aims to address ongoing implementation difficulties that have left some agricultural fuel users paying surcharges that the law intended to exempt.

Jacob Lipson, staff to the committee, told members the Climate Commitment Act included two agricultural exemptions and that the statute originally intended one exemption—to fuels used to transport agricultural products on public highways—to sunset after five years. "House Bill 1912 directs Department of Ecology to adopt rules to establish a remittance program under the Climate Commitment Act for fuel used by persons whose fuel use falls into those two categories of agricultural exemptions," Lipson said. Representative Tom Dent (13th Legislative District) told the committee the exemption "rose to the top" of the ag subcommittee's concerns and that prior efforts, including a work group and a $30 million rebate proviso, had not produced a simple, durable fix.

Representatives of the governor's office and the Department of Ecology said they support the goal but flagged technical and implementation concerns. Kate Brunns, climate and energy policy adviser to the governor, expressed support for finding a statutory solution and said the governor's office was working with the sponsor and Ecology on amendments. Joel Creswell, climate pollution reduction program manager at Ecology, said the bill as drafted raises implementation issues: it would require Ecology to calculate a uniform compliance cost even though suppliers have different compliance costs, and it would require remittances on a cadence inconsistent with Ecology's reporting schedule, which currently receives exempt-fuel reports annually.

Agriculture groups and other stakeholders testified in favor of moving the item forward while urging amendments. The Washington Farm Bureau and commodity groups said they want a permanent, workable mechanism that ensures the intended recipients—farm fuel users—receive the exemption or remittance; several fuel distributors and card-lock operators warned the bill as written could inadvertently make small and mid-size distributors into covered entities under the Climate Commitment Act and would force them to participate in allowance auctions.

Committee members did not take final action on the bill. Several witnesses urged continued negotiation among the sponsor, Ecology, the governor's office and fuel suppliers to preserve point-of-sale exemptions where they already exist and to design a remittance process that targets farm fuel users rather than shifting compliance obligations to distributors.

The committee suspended action on House Bill 1912 pending further technical fixes and stakeholder engagement.