Transportation funding/CCA

AN ACT Relating to funding the state transportation system using 1
climate commitment act revenues; amending RCW 70A.65.100, 70A.65.240, 2
and 70A.65.250; adding a new section to chapter 70A.65 RCW; creating 3
a new section; providing an effective date; and declaring an 4
emergency. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. It is the intent of the legislature to 7
ensure Washington's transportation infrastructure can support the 8
safe and efficient movement of people and goods. The legislature 9
finds that people were told that a repeal of the climate commitment 10
act would devastate transportation and infrastructure programs, 11
putting major road and bridge projects at risk of delay or even 12
cancellation. Yet, the climate commitment act prohibits the use of 13
auction revenues for funding major road and bridge projects. The 14
legislature recognizes that public transit and zero emissions 15
vehicles travel on roads. Congestion on the highway system increases 16
greenhouse gas emissions, instead of reducing them. Therefore, the 17
legislature finds to respect the will of the voters and honor 18
statements made to the people, climate commitment act revenues are 19
appropriately used for road and bridge projects.20
H-0421.1
HOUSE BILL 1324
State of Washington 69th Legislature 2025 Regular Session
By Representatives Barkis, Low, Schmidt, Griffey, Couture, Graham,
Ley, Volz, Marshall, Walsh, Penner, Keaton, Klicker, Orcutt, Stuebe,
Dent, Connors, Abbarno, Abell, Jacobsen, Caldier, Barnard, and Engell
Read first time 01/16/25. Referred to Committee on Transportation.
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NEW SECTION. Sec. 2. A new section is added to chapter 70A.65 1
RCW to read as follows: 2
Revenues derived under this act must be used on major highway 3
projects and bridge replacements including, but not limited to, 4
funding to replace the Interstate 5 bridge over the Columbia river; 5
finish the US 395 North Spokane corridor; finish the state route 6
number 520 bridge; and the Gateway freight project connecting state 7
route number 509 and state route number 167 to the ports in Pierce 8
county and King county to help move freight and reduce congestion.9
Sec. 3. RCW 70A.65.100 and 2024 c 352 s 5 are each amended to 10
read as follows: 11
(1) Except as provided in RCW 70A.65.110, 70A.65.120, and 12
70A.65.130, the department shall distribute allowances through 13
auctions as provided in this section and in rules adopted by the 14
department to implement these sections. An allowance is not a 15
property right. 16
(2)(a) The department shall hold a maximum of four auctions 17
annually, plus any necessary reserve auctions. An auction may include 18
allowances from the annual allowance budget of the current year and 19
allowances from the annual allowance budgets from prior years that 20
remain to be distributed. The department must transmit to the 21
environmental justice council an auction notice at least 60 days 22
prior to each auction, as well as a summary results report and a 23
postauction public proceeds report within 60 days after each auction. 24
The department must communicate the results of the previous calendar 25
year's auctions to the environmental justice council on an annual 26
basis beginning in 2024. 27
(b) The department must make future vintage allowances available 28
through parallel auctions at least twice annually in addition to the 29
auctions through which current vintage allowances are exclusively 30
offered under (a) of this subsection. 31
(3) The department shall engage a qualified, independent 32
contractor to run the auctions. The department shall also engage a 33
qualified financial services administrator to hold the bid 34
guarantees, evaluate bid guarantees, and inform the department of the 35
value of bid guarantees once the bids are accepted.36
(4) Auctions are open to covered entities, opt-in entities, and 37
general market participants that are registered entities in good 38
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standing. The department shall adopt by rule the requirements for a 1
registered entity to register and participate in a given auction.2
(a) Registered entities intending to participate in an auction 3
must submit an application to participate at least 30 days prior to 4
the auction. The application must include the documentation required 5
for review and approval by the department. A registered entity is 6
eligible to participate only after receiving a notice of approval by 7
the department. 8
(b) Each registered entity that elects to participate in the 9
auction must have a different representative. Only a representative 10
with an approved auction account is authorized to access the auction 11
platform to submit an application or confirm the intent to bid for 12
the registered entity, submit bids on behalf of the registered entity 13
during the bidding window, or to download reports specific to the 14
auction. 15
(5) The department may require a bid guarantee, payable to the 16
financial services administrator, in an amount greater than or equal 17
to the sum of the maximum value of the bids to be submitted by the 18
registered entity. 19
(6) To protect the integrity of the auctions, a registered entity 20
or group of registered entities with a direct corporate association 21
are subject to auction purchase and holding limits. The department 22
may impose additional limits if it deems necessary to protect the 23
integrity and functioning of the auctions: 24
(a) A covered entity or an opt-in entity may not buy more than 25 25
percent of the allowances offered during a single auction;26
(b) A general market participant may not buy more than four 27
percent of the allowances offered during a single auction;28
(c) Until Washington links with a jurisdiction that does not have 29
this requirement, a general market participant may not in aggregate 30
own more than 10 percent of total allowances to be issued in a 31
calendar year; 32
(d) No registered entity may buy more than the entity's bid 33
guarantee; and 34
(e) No registered entity may buy allowances that would exceed the 35
entity's holding limit at the time of the auction.36
(7)(a) For fiscal year 2023, upon completion and verification of 37
the auction results, the financial services administrator shall 38
notify winning bidders and transfer the auction proceeds to the state 39
treasurer for deposit as follows: (i) $127,341,000 must first be 40
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deposited into the carbon emissions reduction account created in RCW 1
70A.65.240; and (ii) the remaining auction proceeds to the climate 2
investment account created in RCW 70A.65.250 and the air quality and 3
health disparities improvement account created in RCW 70A.65.280.4
(b) For fiscal year 2024, upon completion and verification of the 5
auction results, the financial services administrator shall notify 6
winning bidders and transfer the auction proceeds to the state 7
treasurer for deposit as follows: (i) $356,697,000 must first be 8
deposited into the carbon emissions reduction account created in RCW 9
70A.65.240, except during fiscal year 2024, the deposit as provided 10
in this subsection (7)(b)(i) may be prorated equally across each of 11
the auctions occurring in fiscal year 2024; and (ii) the remaining 12
auction proceeds to the climate investment account created in RCW 13
70A.65.250 and the air quality and health disparities improvement 14
account created in RCW 70A.65.280, which may be prorated equally 15
across each of the auctions occurring in fiscal year 2024.16
(c) For fiscal year 2025, upon completion and verification of the 17
auction results, the financial services administrator shall notify 18
winning bidders and transfer the auction proceeds to the state 19
treasurer for deposit as follows: 20
(i) $366,558,000 must first be deposited into the carbon 21
emissions reduction account created in RCW 70A.65.240, except that 22
during fiscal year 2025, the deposit as provided in this subsection 23
(7)(c)(i) may be prorated equally across each of the auctions 24
occurring in fiscal year 2025; ((and))25
(ii) ((the)) The remaining auction proceeds to the climate 26
investment account created in RCW 70A.65.250 and the air quality and 27
health disparities improvement account created in RCW 70A.65.280, 28
which may be prorated equally across each of the auctions occurring 29
in fiscal year 2025; and30
(iii) The legislature intends to transfer funding in fiscal year 31
2025 from one or more climate commitment act accounts to the 32
multimodal transportation account created in RCW 47.66.070.33
(d) For fiscal years 2026 through 2037, upon completion and 34
verification of the auction results, the financial services 35
administrator shall notify winning bidders and transfer the auction 36
proceeds to the state treasurer for deposit as follows: (i) 37
$359,117,000 per year must first be deposited into the carbon 38
emissions reduction account created in RCW 70A.65.240; and (ii) the 39
remaining auction proceeds to the climate investment account created 40
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in RCW 70A.65.250 and the air quality and health disparities 1
improvement account created in RCW 70A.65.280. 2
(e) ((The deposits into the carbon emissions reduction account 3
pursuant to (a) through (d) of this subsection must not exceed 4
$5,200,000,000 over the first 16 fiscal years and any remaining 5
auction proceeds must be deposited into the climate investment 6
account created in RCW 70A.65.250 and the air quality and health 7
disparities improvement account created in RCW 70A.65.280.)) In each 8
fiscal year during fiscal years 2026 through 2037, the office of 9
financial management must determine the total amount of auction 10
proceeds that are obligated by legislative appropriation or the 11
deposits into the carbon emissions reduction account under this 12
section, and prorate this obligated amount among the auctions in each 13
fiscal year as appropriate. Following each auction, the office of 14
financial management must determine the amount of additional auction 15
proceeds that exceed the obligated amount in this subsection, if any, 16
and direct the state treasurer to transfer 50 percent of these 17
additional auction proceeds from one or more climate commitment act 18
accounts with available funds into the multimodal transportation 19
account created in RCW 47.66.070.20
(f) For fiscal year 2038 and each year thereafter, upon 21
completion and verification of the auction results, the financial 22
services administrator shall notify winning bidders and transfer the 23
auction proceeds to the state treasurer for deposit as follows: (i) 24
50 percent of the auction proceeds to the carbon emissions reduction 25
account created in RCW 70A.65.240; and (ii) the remaining auction 26
proceeds to the climate investment account created in RCW 70A.65.250 27
and the air quality and health disparities improvement account 28
created in RCW 70A.65.280. 29
(8) The department shall adopt by rule provisions to guard 30
against bidder collusion and minimize the potential for market 31
manipulation. A registered entity may not release or disclose any 32
bidding information including: Intent to participate or refrain from 33
participation; auction approval status; intent to bid; bidding 34
strategy; bid price or bid quantity; or information on the bid 35
guarantee provided to the financial services administrator. The 36
department may cancel or restrict a previously approved auction 37
participation application or reject a new application if the 38
department determines that a registered entity has:39
(a) Provided false or misleading facts; 40
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(b) Withheld material information that could influence a decision 1
by the department; 2
(c) Violated any part of the auction rules; 3
(d) Violated registration requirements; or 4
(e) Violated any of the rules regarding the conduct of the 5
auction. 6
(9) Records containing the following information are confidential 7
and are exempt from public disclosure in their entirety:8
(a) Bidding information as identified in subsection (8) of this 9
section; 10
(b) Information contained in the secure, online electronic 11
tracking system established by the department pursuant to RCW 12
70A.65.090(6); 13
(c) Financial, proprietary, and other market sensitive 14
information as determined by the department that is submitted to the 15
department pursuant to this chapter; 16
(d) Financial, proprietary, and other market sensitive 17
information as determined by the department that is submitted to the 18
independent contractor or the financial services administrator 19
engaged by the department pursuant to subsection (3) of this section; 20
and 21
(e) Financial, proprietary, and other market sensitive 22
information as determined by the department that is submitted to a 23
jurisdiction with which the department has entered into a linkage 24
agreement pursuant to RCW 70A.65.210, and which is shared with the 25
department, the independent contractor, or the financial services 26
administrator pursuant to a linkage agreement. 27
(10) Any cancellation or restriction approved by the department 28
under subsection (8) of this section may be permanent or for a 29
specified number of auctions and the cancellation or restriction 30
imposed is not exclusive and is in addition to the remedies that may 31
be available pursuant to chapter 19.86 RCW or other state or federal 32
laws, if applicable. 33
(11) The department shall design allowance auctions so as to 34
allow, to the maximum extent practicable, linking with external 35
greenhouse gas emissions trading programs in other jurisdictions and 36
to facilitate the transfer of allowances when the state's program has 37
entered into a linkage agreement with other external greenhouse gas 38
emissions trading programs. The department may conduct auctions 39
jointly with linked jurisdictions. 40
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(12) In setting the number of allowances offered at each auction, 1
the department shall consider the allowances in the marketplace due 2
to the marketing of allowances issued as required under RCW 3
70A.65.110, 70A.65.120, and 70A.65.130 in the department's 4
determination of the number of allowances to be offered at auction. 5
The department shall offer only such number of allowances at each 6
auction as will enhance the likelihood of achieving the goals of RCW 7
70A.45.020. 8
Sec. 4. RCW 70A.65.240 and 2022 c 182 s 101 are each amended to 9
read as follows: 10
(1) The carbon emissions reduction account is created in the 11
state treasury. Moneys in the account may be spent only after 12
appropriation. Expenditures from the account are intended to affect 13
reductions in transportation sector carbon emissions through a 14
variety of carbon reducing investments. These can include, but are 15
not limited to: Transportation alternatives to single occupancy 16
passenger vehicles; reductions in single occupancy passenger vehicle 17
miles traveled; reductions in per mile emissions in vehicles, 18
including through the funding of alternative fuel infrastructure and 19
incentive programs; projects that reduce congestion on roadways; and 20
emission reduction programs for freight transportation, including 21
motor vehicles and rail, as well as for ferries and other maritime 22
and port activities. Expenditures from the account ((may only be made 23
for transportation carbon emission reducing purposes and may not be 24
made for highway purposes authorized under the 18th Amendment of the 25
Washington state Constitution, other than specified in this section, 26
and)) shall be made in accordance with subsection (2) of this 27
section. It is the legislature's intent that expenditures from the 28
account used to reduce carbon emissions be made with the goal of 29
achieving equity for communities that historically have been omitted 30
or adversely impacted by past transportation policies and practices.31
(2) Appropriations in an omnibus transportation appropriations 32
act from the carbon emissions reduction account shall be made 33
exclusively to fund the following activities: 34
(a) Maintenance, repairs, improvements, and replacement of 35
highways and transportation routes, favoring bridges used by active 36
transportation and transit users;37
(b) Active transportation; 38
(((b))) (c) Transit programs and projects; 39
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(((c))) (d) Alternative fuel and electrification;1
(((d))) (e) Ferries; and 2
(((e))) (f) Rail. 3
Sec. 5. RCW 70A.65.250 and 2024 c 376 s 911 are each amended to 4
read as follows: 5
(1)(a) The climate investment account is created in the state 6
treasury. Except as otherwise provided in RCW 70.65.100 and 70.65.240 7
and chapter 316, Laws of 2021, ((all)) receipts from the auction of 8
allowances authorized in this chapter must be deposited into the 9
account. Moneys in the account may be spent only after appropriation.10
(b) Projects or activities funded from the account must meet high 11
labor standards, including family sustaining wages, providing 12
benefits including health care and employer-contributed retirement 13
plans, career development opportunities, and maximize access to 14
economic benefits from such projects for local workers and diverse 15
businesses. Each contracting entity's proposal must be reviewed for 16
equity and opportunity improvement efforts, including: (i) Employer 17
paid sick leave programs; (ii) pay practices in relation to living 18
wage indicators such as the federal poverty level; (iii) efforts to 19
evaluate pay equity based on gender identity, race, and other 20
protected status under Washington law; (iv) facilitating career 21
development opportunities, such as apprenticeship programs, 22
internships, job-shadowing, and on-the-job training; and (v) 23
employment assistance and employment barriers for justice affected 24
individuals. 25
(2) Moneys in the account may be used only for projects and 26
programs that achieve the purposes of the greenhouse gas emissions 27
cap and invest program established under this chapter and for tribal 28
capacity grants under RCW 70A.65.305. During the 2023-2025 fiscal 29
biennium, moneys in the account may also be used for tribal capacity 30
grant activities supporting climate resilience and adaptation, 31
developing tribal clean energy projects, applying for state or 32
federal grant funding, and other related work; and for providing 33
payments to agricultural fuel purchasers. Moneys in the account as 34
described in this subsection must first be appropriated for the 35
administration of the requirements of this chapter, in an amount not 36
to exceed five percent of the total receipt of funds from allowance 37
auction proceeds under this chapter. Beginning July 1, 2023, and 38
annually thereafter, the state treasurer shall distribute funds in 39
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the account that exceed the amounts appropriated for the purposes of 1
this subsection (2) as follows: 2
(a) Seventy-five percent of the moneys to the climate commitment 3
account created in RCW 70A.65.260; and 4
(b) Twenty-five percent of the moneys to the natural climate 5
solutions account created in RCW 70A.65.270. 6
(3) The allocations specified in subsection (2)(a) and (b) of 7
this section must be reviewed by the legislature on a biennial basis 8
based on the changing needs of the state in meeting its clean economy 9
and greenhouse gas reduction goals in a timely, economically 10
advantageous, and equitable manner. 11
(4) During the 2023-2025 fiscal biennium, the legislature may 12
direct the state treasurer to make transfers of moneys in the climate 13
investment account to the carbon emissions reduction account, the 14
climate commitment account, and the natural climate solutions 15
account. 16
NEW SECTION. Sec. 6. This act is necessary for the immediate 17
preservation of the public peace, health, or safety, or support of 18
the state government and its existing public institutions, and takes 19
effect July 1, 2025.20
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