CERTIFICATION OF ENROLLMENT
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5126
Chapter 316, Laws of 2021
(partial veto)
67th Legislature
2021 Regular Session
GREENHOUSE GAS EMISSIONS—CAP AND INVEST PROGRAM
EFFECTIVE DATE: July 25, 2021
Passed by the Senate April 24, 2021 CERTIFICATE
Yeas 27 Nays 22
I, Brad Hendrickson, Secretary of
the Senate of the State of
DENNY HECK Washington, do hereby certify that
President of the Senate the attached is ENGROSSED SECOND
SUBSTITUTE SENATE BILL 5126 as
passed by the Senate and the House
of Representatives on the dates
Passed by the House April 23, 2021 hereon set forth.
Yeas 54 Nays 43
BRAD HENDRICKSON
LAURIE JINKINS
Secretary
Speaker of the House of
Representatives
Approved May 17, 2021 2:51 PM with FILED
the exception of certain items that
were vetoed (see veto message). May 18, 2021
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 ENGROSSED SECOND SUBSTITUTE SENATE BILL 5126
AS AMENDED BY THE HOUSE
Passed Legislature - 2021 Regular Session
State of Washington 67th Legislature 2021 Regular Session
By Senate Ways & Means (originally sponsored by Senators Carlyle,
Saldaña, Conway, Das, Frockt, Hunt, Liias, Nguyen, Pedersen, Salomon,
Stanford, and Wilson, C.; by request of Office of the Governor)
READ FIRST TIME 03/24/21.
1 AN ACT Relating to the Washington climate commitment act;
2 amending RCW 70A.15.2200, 43.376.020, 43.21B.300, and 43.52A.040;
3 reenacting and amending RCW 43.21B.110 and 70A.45.005; adding a new
4 section to chapter 43.21C RCW; adding a new section to chapter 70A.15
5 RCW; adding a new section to chapter 70A.45 RCW; adding a new chapter
6 to Title 70A RCW; creating new sections; prescribing penalties;
7 providing a contingent effective date; and providing expiration
8 dates.
9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
10 NEW SECTION. Sec. 1. FINDINGS AND INTENT. (1) The legislature
11 finds that climate change is one of the greatest challenges facing
12 our state and the world today, an existential crisis with major
13 negative impacts on environmental and human health. Washington is
14 experiencing environmental and community impacts due to climate
15 change through increasingly devastating wildfires, flooding,
16 droughts, rising temperatures and sea levels, and ocean
17 acidification. Greenhouse gas emissions already in the atmosphere
18 will increase impacts for some period of time. Actions to increase
19 resilience of our communities, natural resource lands, and ecosystems
20 can prevent and reduce impacts to communities and our environment and
21 improve their ability to recover.
p. 1 E2SSB 5126.SL
 1 (2) In 2020, the legislature updated the state's greenhouse gas
2 emissions limits that are to be achieved by 2030, 2040, and 2050,
3 based on current science and emissions trends, to support local and
4 global efforts to avoid the most significant impacts from climate
5 change. Meeting these limits will require coordinated, comprehensive,
6 and multisectoral implementation of policies, programs, and laws, as
7 other enacted policies are insufficient to meet the limits.
8 (3) The legislature further finds that while climate change is a
9 global problem, there are communities that have historically borne
10 the disproportionate impacts of environmental burdens and that now
11 bear the disproportionate negative impacts of climate change.
12 Although the state has done significant work in the past to highlight
13 these environmental health disparities, beginning with senator Rosa
14 Franklin's environmental equity study, and continuing through the
15 work of the governor's interagency council on health disparities, the
16 creation of the Washington environmental health disparities map, and
17 recommendations of the environmental justice task force, the state
18 can do much more to ensure that state programs address environmental
19 equity.
20 (4) The legislature further finds that while enacted carbon
21 policies can be well-intended to reduce greenhouse gas emissions and
22 provide environmental benefits to communities, the policies may not
23 do enough to ensure environmental health disparities are reduced and
24 environmental benefits are provided to those communities most
25 impacted by environmental harms from greenhouse gas and air pollutant
26 emissions.
27 (5) The legislature further finds that wildfires have become one
28 of the largest sources of black carbon in the last five years. From
29 2014 through 2018, wildfires in Washington state generated 39,200,000
30 metric tons of carbon, the equivalent of more than 8,500,000 cars on
31 the road a year. In 2015, when 1,130,000 acres burned in Washington,
32 wildfires were the second largest source of greenhouse gas emissions
33 releasing 17,975,112 metric tons of carbon dioxide into the
34 atmosphere. Wildfire pollution affects all Washingtonians, but has
35 disproportionate health effects on low-income communities,
36 communities of color, and the most vulnerable of our population.
37 Restoring the health of our forests and investing in wildfire
38 prevention and preparedness will therefore contribute to improved air
39 quality and improved public health outcomes.
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 1 (6) The legislature further finds that by exercising a leadership
2 role in addressing climate change, Washington will position its
3 economy, technology centers, financial institutions, and
4 manufacturers to benefit from national and international efforts that
5 must occur to reduce greenhouse gases. The legislature intends to
6 create climate policy that recognizes the special nature of
7 emissions-intensive, trade-exposed industries by minimizing leakage
8 and increased life-cycle emissions associated with product imports.
9 The legislature further finds that climate policies must be
10 appropriately designed, in order to avoid leakage that results in net
11 increases in global greenhouse gas emissions and increased negative
12 impacts to those communities most impacted by environmental harms
13 from climate change. The legislature further intends to encourage
14 these industries to continue to innovate, find new ways to be more
15 energy efficient, use lower carbon products, and be positioned to be
16 global leaders in a low carbon economy.
17 (7) Under the program, the legislature intends to identify
18 overburdened communities where the highest concentrations of criteria
19 pollutants occur, determine the sources of those emissions and
20 pollutants, and pursue significant reductions of emissions and
21 pollutants in those communities. The legislature further intends for
22 the department of ecology to conduct environmental justice
23 assessments to ensure that funds and programs created under this
24 chapter provide direct and meaningful benefits to vulnerable
25 populations and overburdened communities. Additionally, the
26 legislature intends to prevent job loss and provide protective
27 measures if workers are adversely impacted by the transition to a
28 clean energy economy through transition and assistance programs,
29 worker-support projects, and workforce development and other
30 activities designed to grow and expand the clean manufacturing sector
31 in communities across Washington state. The legislature further
32 intends to empower the environmental justice council established
33 under RCW 70A.---.--- (section 20, chapter . . ., Laws of 2021
34 (Engrossed Second Substitute Senate Bill No. 5141)) to provide
35 recommendations for the development and implementation of the
36 program, the distribution of funds, and the establishment of
37 programs, activities, and projects to achieve environmental justice
38 and environmental health goals. The legislature further intends for
39 the department of ecology to create and adopt community engagement
40 plans and tribal consultation frameworks in the administration of the
p. 3 E2SSB 5126.SL
1 program to ensure equitable practices for meaningful community and
2 federally recognized tribal involvement. Finally, the legislature
3 intends to establish this program to contribute to a healthy
4 environment for all of Washington's communities.
5 NEW SECTION. Sec. 2. DEFINITIONS. The definitions in this
6 section apply throughout this chapter unless the context clearly
7 requires otherwise.
8 (1) "Allowance" means an authorization to emit up to one metric
9 ton of carbon dioxide equivalent.
10 (2) "Allowance price containment reserve" means an account
11 maintained by the department with allowances available for sale
12 through separate reserve auctions at predefined prices to assist in
13 containing compliance costs for covered and opt-in entities in the
14 event of unanticipated high costs for compliance instruments.
15 (3) "Annual allowance budget" means the total number of
16 greenhouse gas allowances allocated for auction and distribution for
17 one calendar year by the department.
18 (4) "Asset controlling supplier" means any entity that owns or
19 operates interconnected electricity generating facilities or serves
20 as an exclusive marketer for these facilities even though it does not
21 own them, and has been designated by the department and received a
22 department-published emissions factor for the wholesale electricity
23 procured from its system. The department shall use a methodology
24 consistent with the methodology used by an external greenhouse gas
25 emissions trading program that shares the regional electricity
26 transmission system. Electricity from an asset controlling supplier
27 is considered a specified source of electricity.
28 (5) "Auction" means the process of selling greenhouse gas
29 allowances by offering them up for bid, taking bids, and then
30 distributing the allowances to winning bidders.
31 (6) "Auction floor price" means a price for allowances below
32 which bids at auction are not eligible to be accepted.
33 (7) "Auction purchase limit" means the limit on the number of
34 allowances one registered entity or a group of affiliated registered
35 entities may purchase from the share of allowances sold at an
36 auction.
37 (8) "Balancing authority" means the responsible entity that
38 integrates resource plans ahead of time, maintains load-interchange-
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 1 generation balance within a balancing authority area, and supports
2 interconnection frequency in real time.
3 (9) "Balancing authority area" means the collection of
4 generation, transmission, and load within the metered boundaries of a
5 balancing authority. A balancing authority maintains load-resource
6 balance within this area.
7 (10) "Best available technology" means a technology or
8 technologies that will achieve the greatest reduction in greenhouse
9 gas emissions, taking into account the fuels, processes, and
10 equipment used by facilities to produce goods of comparable type,
11 quantity, and quality. Best available technology must be technically
12 feasible, commercially available, economically viable, not create
13 excessive environmental impacts, and be compliant with all applicable
14 laws while not changing the characteristics of the good being
15 manufactured.
16 (11) "Biomass" means nonfossilized and biodegradable organic
17 material originating from plants, animals, and microorganisms,
18 including products, by-products, residues, and waste from
19 agriculture, forestry, and related industries as well as the
20 nonfossilized and biodegradable organic fractions of industrial
21 waste, including gases and liquids recovered from the decomposition
22 of nonfossilized and biodegradable organic material.
23 (12) "Biomass-derived fuels," "biomass fuels," or "biofuels"
24 means fuels derived from biomass that have at least 40 percent lower
25 greenhouse gas emissions based on a full life-cycle analysis when
26 compared to petroleum fuels for which biofuels are capable as serving
27 as a substitute.
28 (13) "Carbon dioxide equivalents" means a measure used to compare
29 the emissions from various greenhouse gases based on their global
30 warming potential.
31 (14) "Carbon dioxide removal" means deliberate human activities
32 removing carbon dioxide from the atmosphere and durably storing it in
33 geological, terrestrial, or ocean reservoirs, or in products. "Carbon
34 dioxide removal" includes existing and potential anthropogenic
35 enhancement of biological or geochemical sinks and including, but not
36 limited to, carbon mineralization and direct air capture and storage.
37 (15) "Climate commitment" means the process and mechanisms to
38 ensure a coordinated and strategic approach to advancing climate
39 resilience and environmental justice and achieving an equitable and
40 inclusive transition to a carbon neutral economy.
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 1 (16) "Climate resilience" is the ongoing process of anticipating,
2 preparing for, and adapting to changes in climate and minimizing
3 negative impacts to our natural systems, infrastructure, and
4 communities. For natural systems, increasing climate resilience
5 involves restoring and increasing the health, function, and integrity
6 of our ecosystems and improving their ability to absorb and recover
7 from climate-affected disturbances. For communities, increasing
8 climate resilience means enhancing their ability to understand,
9 prevent, adapt, and recover from climate impacts to people and
10 infrastructure.
11 (17) "Closed facility" means a facility at which the current
12 owner or operator has elected to permanently stop production and will
13 no longer be an emissions source.
14 (18) "Compliance instrument" means an allowance or offset credit
15 issued by the department or by an external greenhouse gas emissions
16 trading program to which Washington has linked its greenhouse gas
17 emissions cap and invest program. One compliance instrument is equal
18 to one metric ton of carbon dioxide equivalent.
19 (19) "Compliance obligation" means the requirement to submit to
20 the department the number of compliance instruments equivalent to a
21 covered or opt-in entity's covered emissions during the compliance
22 period.
23 (20) "Compliance period" means the four-year period for which the
24 compliance obligation is calculated for covered entities.
25 (21) "Cost burden" means the impact on rates or charges to
26 customers of electric utilities in Washington state for the
27 incremental cost of electricity service to serve load due to the
28 compliance cost for greenhouse gas emissions caused by the program.
29 Cost burden includes administrative costs from the utility's
30 participation in the program.
31 (22) "Covered emissions" means the emissions for which a covered
32 entity has a compliance obligation under section 10 of this act.
33 (23) "Covered entity" means a person that is designated by the
34 department as subject to sections 8 through 24 of this act.
35 (24) "Cumulative environmental health impact" has the same
36 meaning as provided in RCW 70A.---.--- (section 2, chapter . . .,
37 Laws of 2021 (Engrossed Second Substitute Senate Bill No. 5141)).
38 (25) "Curtailed facility" means a facility at which the owner or
39 operator has temporarily suspended production but for which the owner
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 1 or operator maintains operating permits and retains the option to
2 resume production if conditions become amenable.
3 (26) "Department" means the department of ecology.
4 (27) "Electricity importer" means:
5 (a) For electricity that is scheduled with a NERC e-tag to a
6 final point of delivery into a balancing authority area located
7 entirely within the state of Washington, the electricity importer is
8 identified on the NERC e-tag as the purchasing-selling entity on the
9 last segment of the tag's physical path with the point of receipt
10 located outside the state of Washington and the point of delivery
11 located inside the state of Washington;
12 (b) For facilities physically located outside the state of
13 Washington with the first point of interconnection to a balancing
14 authority area located entirely within the state of Washington when
15 the electricity is not scheduled on a NERC e-tag, the electricity
16 importer is the facility operator or owner;
17 (c) For electricity imported through a centralized market, the
18 electricity importer will be define