SB 5447 — Promoting the alternative jet fuel industry in Washington.

(1) Washington State University, in collaboration with the University of Washington's department of environmental and occupational health, must calculate emissions of ultrafine and fine particulate matter and sulfur oxides in communities surrounding an international airport owned by a port district in a county with a population greater than 1,500,000 and report that information to the joint legislative audit and review committee by December 1, 2024, and December 1st of each year until such time as the joint legislative audit and review committee has completed its final report on the tax preferences contained in sections 9 through 12 of this act.

The report must include emissions data for areas near airport runways and under flight paths up to 3,000 feet in elevation.

The report must also include an analysis of any reduction in emissions relative to the amount of alternative jet fuel used for flights departing the airport.

Washington State University may access and use any data necessary to complete the reporting requirements of this section.

(2) To facilitate the calculation required in subsection (1) of this section, an international airport owned by a port district in a county with a population greater than 1,500,000 must report to Washington State University the total annual volume of alternative jet fuel used for flights departing the airport by October 1, 2024, p.

6 ESSB 5447 and October 1st of each year until such time as the joint legislative audit and review committee has completed its final report on the tax preferences contained in sections 9 through 12 of this act.

It is also thep. legislature's intent to support the development of the alternative jet fuels industry in Washington by providing targeted tax relief for such businesses.

(4)6 TheSB legislature5447 intendsthe legislature's intent to extendsupport the expirationdevelopment date of the taxalternative preferencesjet containedfuels industry in thisWashington actby ifproviding atargeted reviewtax finds:relief for such businesses.

(a)(4) AnIf increasea inreview finds that the production and use of alternative jet fuels inhas Washingtonincreased bybecause personsof claiming the tax preferences contained in this act;act, then the legislature intends to extend the expiration date of these tax preferences.

(b)(5) ThatIn theorder productionto andobtain usethe ofdata alternativenecessary jetto fuelsperform inthe thisreview state does not result in additionalsubsection pollution(4) including,of butthis notsection, limitedthe to,joint pollutionlegislative fromaudit per-andand polyfluoroalkylreview substances,committee noxiousmay gases,refer ultrafineto particles,any lead,data orcollected otherby metals;the state.

and (c) That the alternative jet fuel industry has created measurable economic growth in Washington.

(5) The review conducted by the joint legislative audit and review committee must include a racial equity analysis on air travel- related pollution in communities near an international airport owned by a port district in a county with a population greater than 1,500,000.

(6) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and p.

7 ESSB 5447 review committee may access and use data from an international airport owned by a port district in a county with a population greater than 1,500,000, the University of Washington, reports compiled by the Washington State University pursuant to section 7 of this act, and any other data collected by the state as it deems necessary.

(7) The joint legislative audit and review committee must complete a preliminary report by December 1, 2032.

(5)(a)(5) The tax rate under subsections (1) and (2) of this section takesapplies effectfor a period of 10 calendar years beginning on the first day of the firstmonth calendarimmediately quarter following the month in which the department receives noticenotification from the department of ecology that there are one or more facilities operating in this state with a cumulativefacility productioncapable capacity of producing at least 20,000,000 gallons of alternative jet fuel eachis year,operating in this state, as required in section 34 of this act.

(b) The tax rate expires nine calendar years after the close of the calendar year in which the tax rate under subsections (1) and (2) of this section takes effect.

87 ESSBSB 5447 (1)(a) Subject to the limits and provisions of this section, a credit is allowed against the tax otherwise due under this chapter for persons engaged in the manufacturing of alternative jet fuel.

(b) Except as provided in (c) of this subsection, the credit under this section is equal to $1$1.00 for each gallon of alternative jet fuel that has at least 50 percent less carbon dioxide equivalent emissions than conventional jet fuel and is sold during the prior calendar year by:

(f) A credit under this section may not be claimed until the department of ecology verifies that there areis oneat orleast moreone facilitiesfacility operating in this state withthat cumulativeis productioncapable capacity of producing at least 20,000,000 gallons of alternative jet fuel eachper year and has provided such notice to the department.

(g) ContractThe pricingcredit forunder salesthis ofsection applies only to alternative jet fuel betweenthat ameets personthe claimingappropriate ASTM international standards as it existed on the crediteffective underdate of this sectionsection, andor thea finalsubsequent consumerdate mustas reflectmay be provided by the perdepartment gallonby creditrule, underconsistent (b)with andthe (c)purposes of this subsection.section.

(2)(h) AContract personpricing mayfor notsales receiveof alternative jet fuel between a person claiming the credit under this section forand amountsthe claimedfinal asconsumer creditsmust underreflect sectionthe 11per ofgallon thiscredit actunder or(b) chapterand 82.16(c) RCW.of this subsection.

(3)(2) ToA claimperson amay not receive credit under this section afor personamounts mustclaimed electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as providedcredits orunder approvedsection by11 theof department.this act.

(3) To claim a credit under this section a person must electronically file with the department all returns, forms, and any p.

8 SB 5447 other information required by the department, in an electronic format as provided or approved by the department.

p.(a) Complete an application for the credit which must include:

9 ESSB 5447 (a) Complete an application for the credit which must include:

(iii) Documentation sufficient for the department to verify that the alternative jet fuel for which the credit is being claimed meets the carbon intensity reduction benchmarks under subsection (1)(b) and (c) of this section, as certified by the department of ecology under section 34 of this act;

(iv) Documentation sufficient to verify compliance with subsection (1)(g)(1)(h) of this section;

(7)(a) The credit under this section may only be claimed against taxes due under section 9 of this act,act. less any taxable amount for which a credit is allowed under RCW 82.04.440.

(b) AThe credit earned during one calendar year may be carried over anduntil claimedused, againstas taxesprovided incurredin forsubsection the(9) nextof subsequentthis calendarsection. year but may not be carried over for any calendar year thereafter.

(9)(a) Credits may be earned beginning on the first day of the first calendar quarter following the month in which notice under subsection (1)(f) of this section was received by the department.

109 ESSBSB 5447 (b)(9) Credits may not be earned beginningand nineclaimed for a period of 10 calendar years afterbeginning on the closefirst day of the calendarmonth yearimmediately following the month in which thenotification creditunder maysubsection be(1)(f) earned,of asthis providedsection inwas (a)received ofby thisthe subsection.department.

(b) Except as provided in (c) of this subsection, the credit under this section is equal to $1$1.00 for each gallon of alternative jet fuel that has at least 50 percent less carbon dioxide equivalent emissions than conventional jet fuel and is purchased during the prior calendar year by a business for use as alternative jet fuel for flights departingoriginating in this state.

(e) A credit under this section may not be claimed until the department of ecology verifies that there areis oneat orleast moreone facilitiesfacility operating in this state withthat cumulativeis productioncapable capacity of producing at least 20,000,000 gallons of alternative jet fuel eachper year and has provided such notice to the department.

(f) The credit under this section applies only to alternative jet fuel that meets the appropriate ASTM international standards as it existed on the effective date of this section, or a subsequent date as may be provided by the department by rule, consistent with the purposes of this section.

(3) To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.

(4) To claim a credit under this section, the person applying must:

1110 ESSBSB 5447 (a)(3) CompleteTo anclaim applicationa forcredit theunder creditthis whichsection a person must include:electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.

(4) To claim a credit under this section, the person applying must:

(a) Complete an application for the credit which must include:

(iii) Documentation sufficient for the department to verify that the alternative jet fuel for which the credit is being claimed meets the carbon intensity reduction benchmarks under subsection (1)(b) and (c) of this section, as certified by the department of ecology under section 34 of this act;

(b) AThe credit earned during one calendar year may be carried over anduntil claimedused, againstas taxesprovided incurredin forsubsection the(9) nextof subsequentthis calendarsection. year but may not be carried over for any calendar year thereafter.

(9)(a)(c) Credits"Qualifying maycounty" bemeans earneda beginningcounty onthat thehas firsta daypopulation ofless thethan first650,000 calendarat quarterthe followingtime thean monthapplication infor whicha noticecredit under subsection (1)(e) of this section wasis received by the department.

(b) Credits may not be earned beginning nine calendar years after the close of the calendar year in which the credit may be earned, as provided in (a) of this subsection.

(10) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.

1211 ESSBSB 5447 NEW(9) SECTION.Credits may be earned and claimed for a period of 10 calendar years beginning on the first day of the month immediately following the month in which notification under subsection (1)(e) of this section was received by the department.

(10) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.

NEW SECTION.

(b) Except as provided in (c) of this subsection, the credit under this section is equal to $1$1.00 for each gallon of alternative jet fuel that has at least 50 percent less carbon dioxide equivalent emissions than conventional jet fuel and is purchased during the prior calendar year by a business for use as alternative jet fuel for flights departingoriginating in this state.

(e) A credit under this section may not be claimed until the department of ecology verifies that there areis oneat orleast moreone facilitiesfacility operating in this state withthat cumulativeis productioncapable capacity of producing at least 20,000,000 gallons of alternative jet fuel eachper year and has provided such notice to the department.

(2)(f) AThe personcredit mayunder notthis receivesection creditapplies underonly to alternative jet fuel that meets the appropriate ASTM international standards as it existed on the effective date of this sectionsection, foror amountsa claimedsubsequent date as creditsmay underbe chapterprovided 82.04by RCW.the department by rule, consistent with the purposes of this section.

(3)(2) ToA claimperson amay not receive credit under this section afor personamounts mustclaimed electronicallyas filecredits withunder thesection department11 allof returns,this forms,act and any other information required by the department, in an electronic format as provided or approvedchapter by82.04 theRCW. department.

p.

12 SB 5447 (3) To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.

(iii) Documentation sufficient for the department to verify that the alternative jet fuel for which the credit is being claimed meets the carbon intensity reduction benchmarks under subsection (1)(b) and p.(c) of this section, as certified by the department of ecology under section 4 of this act;

13 ESSB 5447 (c) of this section, as certified by the department of ecology under section 3 of this act;

(6) If a person fails to supply the information as required in subsection (4)(7) of this section, the department must deny the application.

(b) AThe credit earned during one calendar year may be carried over anduntil claimedused, againstas taxesprovided incurredin forsubsection the(9) nextof subsequentthis calendarsection. year but may not be carried over for any calendar year thereafter.

(9)(a)(9) Credits may be earned and claimed for a period of 10 calendar years beginning on the first day of the firstmonth calendarimmediately quarter following the month in which noticenotification under subsection (1)(e) of this section was received by the department.

(b) Credits may not be earned beginning nine calendar years after the close of the calendar year in which the credit may be earned, as provided in (a) of this subsection.

p.

13 SB 5447 NEW SECTION.

RCWIf 70A.65.260any andprovision 2022of cthis 179act sor 17its areapplication eachto amendedany person or circumstance is held invalid, the remainder of the act or the application of the provision to readother aspersons follows:or circumstances is not affected.

(1) The climate commitment account is created in the state treasury.

The account must receive moneys distributed to the account from the climate investment account created in RCW 70A.65.250.

Moneys in the account may be spent only after appropriation.

Projects, activities, and programs eligible for funding from the account must be physically located in Washington state and include, but are not limited to, the following:

p.

14 ESSB 5447 (a) Implementing the working families' tax ((rebate)) credit in RCW 82.08.0206;

(b) Supplementing the growth management planning and environmental review fund established in RCW 36.70A.490 for the purpose of making grants or loans to local governments for the purposes set forth in RCW 43.21C.240, 43.21C.031, 36.70A.500, and 36.70A.600, for costs associated with RCW 36.70A.610, and to cover costs associated with the adoption of optional elements of comprehensive plans consistent with RCW 43.21C.420;

(c) Programs, activities, or projects that reduce and mitigate impacts from greenhouse gases and copollutants in overburdened communities, including strengthening the air quality monitoring network to measure, track, and better understand air pollution levels and trends and to inform the analysis, monitoring, and pollution reduction measures required in RCW 70A.65.020;

(d) Programs, activities, or projects that deploy renewable energy resources, such as solar and wind power, and projects to deploy distributed generation, energy storage, demand-side technologies and strategies, and other grid modernization projects;

(e) Programs, activities, or projects that increase the energy efficiency or reduce greenhouse gas emissions of industrial facilities including, but not limited to, proposals to implement combined heat and power, district energy, or on-site renewables, such as solar and wind power, to upgrade the energy efficiency of existing equipment, to reduce process emissions, and to switch to less emissions intensive fuel sources;

(f) Programs, activities, or projects that achieve energy efficiency or emissions reductions in the agricultural sector including:

(i) Fertilizer management;

(ii) Soil management;

(iii) Bioenergy;

(iv) Biofuels;

(v) Grants, rebates, and other financial incentives for agricultural harvesting equipment, heavy-duty trucks, agricultural pump engines, tractors, and other equipment used in agricultural operations;

(vi) Grants, loans, or any financial incentives to food processors to implement projects that reduce greenhouse gas emissions;

p.

15 ESSB 5447 (vii) Renewable energy projects;

(viii) Farmworker housing weatherization programs;

(ix) Dairy digester research and development;

(x) Alternative manure management;

and (xi) Eligible fund uses under RCW 89.08.615;

(g) Programs, activities, or projects that increase energy efficiency in new and existing buildings, or that promote low carbon architecture, including use of newly emerging alternative building materials that result in a lower carbon footprint in the built environment over the life cycle of the building and component building materials;

(h) Programs, activities, or projects that promote the electrification and decarbonization of new and existing buildings, including residential, commercial, and industrial buildings;

(i) Programs, activities, or projects that improve energy efficiency, including district energy, and investments in market transformation of high efficiency electric appliances and equipment for space and water heating;

(j) Clean energy transition and assistance programs, activities, or projects that assist affected workers or people with lower incomes during the transition to a clean energy economy, or grow and expand clean manufacturing capacity in communities across Washington state including, but not limited to:

(i) Programs, activities, or projects that directly improve energy affordability and reduce the energy burden of people with lower incomes, as well as the higher transportation fuel burden of rural residents, such as bill assistance, energy efficiency, and weatherization programs;

(ii) Community renewable energy projects that allow qualifying participants to own or receive the benefits of those projects at reduced or no cost;

(iii) Programs, activities, or other worker-support projects for bargaining unit and nonsupervisory fossil fuel workers who are affected by the transition away from fossil fuels to a clean energy economy.

Worker support may include, but is not limited to:

(A) Full wage replacement, health benefits, and pension contributions for every worker within five years of retirement;

(B) full wage replacement, health benefits, and pension contributions for every worker with at least one year of service for each year of service up to five years of service;

(C) wage insurance for up to five years for p.

16 ESSB 5447 workers reemployed who have more than five years of service;

(D) up to two years of retraining costs, including tuition and related costs, based on in-state community and technical college costs;

(E) peer counseling services during transition;

(F) employment placement services, prioritizing employment in the clean energy sector;

and (G) relocation expenses;

(iv) Direct investment in workforce development, via technical education, community college, institutions of higher education, apprenticeships, and other programs including, but not limited to:

(A) Initiatives to develop a forest health workforce established under RCW 76.04.521;

and (B) Initiatives to develop new education programs, emerging fields, or jobs pertaining to the clean energy economy;

(v) Transportation, municipal service delivery, and technology investments that increase a community's capacity for clean manufacturing, with an emphasis on communities in greatest need of job creation and economic development and potential for commute reduction;

(k) Programs, activities, or projects that reduce emissions from landfills and waste-to-energy facilities through diversion of organic materials, methane capture or conversion strategies, installation of gas collection devices and gas control systems, monitoring and reporting of methane emissions, or other means, prioritizing funding needed for any activities by local governments to comply with chapter 70A.540 RCW;

(l) Carbon dioxide removal projects, programs, and activities;

and (m) Activities to support efforts to mitigate and adapt to the effects of climate change affecting Indian tribes, including capital investments in support of the relocation of Indian tribes located in areas at heightened risk due to anticipated sea level rise, flooding, or other disturbances caused by climate change.

The legislature intends to dedicate at least $50,000,000 per biennium from the account for purposes of this subsection.

(2) The state treasurer may, subject to funds appropriated for this specific purpose, transfer from the climate commitment account to the state general fund an amount equal to any reduction in state revenue from the preferential business and occupation tax rate under section 9 of this act and credits under sections 10 through 12 of p.

17 ESSB 5447 this act for the prior calendar year, as annually determined by the department of revenue.

(3) Moneys in the account may not be used for projects or activities that would violate tribal treaty rights or result in significant long-term damage to critical habitat or ecological functions.

Investments from this account must result in long-term environmental benefits and increased resilience to the impacts of climate change.

IfRCW any82.32.805 provisiondoes ofnot thisapply act or its application to anythis personact. or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

RCWSections 82.32.8059 doesthrough not12 applyof to this act.act take effect July 1, 2024.

Sections 9 through 13 of this act take effect July 1, 2024.

NEW SECTION.

Sec.

17.

1814 ESSBSB 5447