The bill addresses the urgent need for fish habitat restoration, particularly for salmon and steelhead populations, in light of a federal court injunction. It acknowledges the habitat loss caused by hydropower dams and road culverts that hinder salmon passage. To meet the state's legal obligations, the bill proposes a special tax on light and power utility businesses, which will fund special tax revenue bonds estimated to exceed $5 billion for habitat restoration. Key provisions include lowering the tax rate for these businesses from 3.62% to 1.741% and establishing a new tax rate of 2.01053% specifically for funding the federal injunction salmon habitat restoration account. Additionally, a federal injunction salmon habitat bond retirement account will be created to manage bond proceeds, ensuring that funds are dedicated to projects that mitigate fish passage barriers and enhance salmon recovery.

The bill also allows for the use of funds for local and state habitat restoration projects as identified in mediation or settlement agreements. It includes provisions for the state finance committee to issue special tax revenue bonds to refund outstanding bonds, covering redemption premiums and accrued interest. Furthermore, if the Washington state supreme court mandates that the principal and interest on the bonds be included in the state's aggregate debt calculations, certain sections of the act will expire based on the court's decision. The bill establishes that sections 7 through 13 will create a new chapter in Title 77 of the Revised Code of Washington (RCW), with sections 2 through 5 set to take effect on January 1, 2026.

Statutes affected:
Original Bill: 82.16.020, 82.18.040, 82.45.230
Substitute Bill: 82.16.020, 82.18.040, 82.45.230