title: RCW 70A.65.030

text:
(1) Except as provided in subsection (4) of this section, each year or biennium, as appropriate, when allocating funds from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, the air quality and health disparities improvement account created in RCW 70A.65.280, the climate transit programs account created in *RCW 46.68.500, or the climate active transportation account created in *RCW 46.68.490, or administering grants or programs funded by the accounts, agencies shall conduct an environmental justice assessment consistent with the requirements of RCW 70A.02.060 and establish a minimum of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities through: (a) The direct reduction of environmental burdens in overburdened communities; (b) the reduction of disproportionate, cumulative risk from environmental burdens, including those associated with climate change; (c) the support of community led project development, planning, and participation costs; or (d) meeting a community need identified by the community that is consistent with the intent of this chapter or RCW 70A.02.010.
(2) The allocation of funding under subsection (1) of this section must adhere to the following principles, additional to the requirements of RCW 70A.02.080: (a) Benefits and programs should be directed to areas and targeted to vulnerable populations and overburdened communities to reduce statewide disparities; (b) investments and benefits should be made roughly proportional to the health disparities that a specific community experiences, with a goal of eliminating the disparities; (c) investments and programs should focus on creating environmental benefits, including eliminating health burdens, creating community and population resilience, and raising the quality of life of those in the community; and (d) efforts should be made to balance investments and benefits across the state and within counties, local jurisdictions, and unincorporated areas as appropriate to reduce disparities by location and to ensure efforts contribute to a reduction in disparities that exist based on race or ethnicity, socioeconomic status, or other factors.
(3) Except as provided in subsection (4) of this section, state agencies allocating funds or administering grants or programs from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, the air quality and health disparities improvement account created in RCW 70A.65.280, the climate transit programs account created in *RCW 46.68.500, or the climate active transportation account created in *RCW 46.68.490, must:
(a) Report annually to the environmental justice council created in RCW 70A.02.110 regarding progress toward meeting environmental justice and environmental health goals;
(b) Consider recommendations by the environmental justice council; and
(c)(i) If the agency is not a covered agency subject to the requirements of chapter 70A.02 RCW, create and adopt a community engagement plan to describe how it will engage with overburdened communities and vulnerable populations in allocating funds or administering grants or programs from the climate investment account.
(ii) The plan must include methods for outreach and communication with those who face barriers, language or otherwise, to participation.
(4) During the 2023-2025 fiscal biennium:
(a) The requirement of subsection (1) of this section to conduct an environmental justice assessment applies only to covered agencies as defined in RCW 70A.02.010 and to significant agency actions as defined in RCW 70A.02.010.
(b) Agencies shall coordinate with the department and the office of financial management to achieve total statewide spending from the accounts listed in subsection (1) of this section of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities as otherwise described in subsection (1)(a) through (d) of this section and in accordance with RCW 70A.65.230.
(c) The requirements of subsection (3)(c) of this section for agencies other than covered agencies to create and adopt community engagement plans apply only to executive branch agencies and institutions of higher education, as defined in RCW 28B.10.016, receiving total appropriations of more than $2,000,000 for the 2023-2025 fiscal biennium from the accounts listed in subsection (1) of this section.
[ 2025 c 58 s 3011. Prior: 2023 c 475 s 1902; 2023 c 475 s 936; prior: 2022 c 182 s 104; 2022 c 181 s 13; 2021 c 316 s 4.]
Notes:
*Reviser's note: RCW 46.68.490 and 46.68.500 were repealed by 2025 c 417 s 801.
Explanatory note—2025 c 58: See note following RCW 1.16.050.
PDF
RCW 70A.65.030
Environmental justice assessment (as amended by 2025 c 417). (Effective until July 1, 2027.)
(1) ((Except as provided in subsection (4) of this section, each))Each year or biennium, as appropriate, when allocating funds from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, or the air quality and health disparities improvement account created in RCW 70A.65.280, ((the climate transit programs account created in RCW 46.68.500, or the climate active transportation account created in RCW 46.68.490,)) or administering grants or programs funded by the accounts, agencies shall conduct an environmental justice assessment consistent with the requirements of RCW 70A.02.060 and establish a minimum of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities through: (a) The direct reduction of environmental burdens in overburdened communities; (b) the reduction of disproportionate, cumulative risk from environmental burdens, including those associated with climate change; (c) the support of community led project development, planning, and participation costs; or (d) meeting a community need identified by the community that is consistent with the intent of this chapter or RCW 70A.02.010.
(2) The allocation of funding under subsection (1) of this section must adhere to the following principles, additional to the requirements of RCW 70A.02.080: (a) Benefits and programs should be directed to areas and targeted to vulnerable populations and overburdened communities to reduce statewide disparities; (b) investments and benefits should be made roughly proportional to the health disparities that a specific community experiences, with a goal of eliminating the disparities; (c) investments and programs should focus on creating environmental benefits, including eliminating health burdens, creating community and population resilience, and raising the quality of life of those in the community; and (d) efforts should be made to balance investments and benefits across the state and within counties, local jurisdictions, and unincorporated areas as appropriate to reduce disparities by location and to ensure efforts contribute to a reduction in disparities that exist based on race or ethnicity, socioeconomic status, or other factors.
(3) ((Except as provided in subsection (4) of this section, state))State agencies allocating funds or administering grants or programs from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, or the air quality and health disparities improvement account created in RCW 70A.65.280, ((the climate transit programs account created in RCW 46.68.500, or the climate active transportation account created in RCW 46.68.490,)) must:
(a) Report annually to the environmental justice council created in RCW 70A.02.110 regarding progress toward meeting environmental justice and environmental health goals;
(b) Consider recommendations by the environmental justice council; and
(c)(i) If the agency is not a covered agency subject to the requirements of chapter 70A.02 RCW, create and adopt a community engagement plan to describe how it will engage with overburdened communities and vulnerable populations in allocating funds or administering grants or programs from the climate investment account.
(ii) The plan must include methods for outreach and communication with those who face barriers, language or otherwise, to participation.
(((4) During the 2023-2025 fiscal biennium:
(a) The requirement of subsection (1) of this section to conduct an environmental justice assessment applies only to covered agencies as defined in RCW 70A.02.010 and to significant agency actions as defined in RCW 70A.02.010.
(b) Agencies shall coordinate with the department and the office of financial management to achieve total statewide spending from the accounts listed in subsection (1) of this section of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities as otherwise described in subsection (1)(a) through (d) of this section and in accordance with RCW 70A.65.230.
(c) The requirements of subsection (3)(c) of this section for agencies other than covered agencies to create and adopt community engagement plans apply only to executive branch agencies and institutions of higher education, as defined in RCW 28B.10.016, receiving total appropriations of more than $2,000,000 for the 2023-2025 fiscal biennium from the accounts listed in subsection (1) of this section.))
[ 2025 c 417 s 804. Prior: 2023 c 475 s 1902; 2023 c 475 s 936; prior: 2022 c 182 s 104; 2022 c 181 s 13; 2021 c 316 s 4.]
Notes:
Effective date—2025 c 417 ss 801, 802, and 804-807: See note following RCW 43.84.092.
Findings—Intent—2025 c 417: See note following RCW 82.38.030.
PDF
RCW 70A.65.030
Environmental justice assessment (as amended by 2025 c 424). (Effective until July 1, 2027.)
(1) Except as provided in subsection (4) of this section, each year or biennium, as appropriate, when allocating funds from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, the air quality and health disparities improvement account created in RCW 70A.65.280, the climate transit programs account created in *RCW 46.68.500, or the climate active transportation account created in *RCW 46.68.490, or administering grants or programs funded by the accounts, agencies shall conduct an environmental justice assessment consistent with the requirements of RCW 70A.02.060 and establish a minimum of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities through: (a) The direct reduction of environmental burdens in overburdened communities; (b) the reduction of disproportionate, cumulative risk from environmental burdens, including those associated with climate change; (c) the support of community led project development, planning, and participation costs; or (d) meeting a community need identified by the community that is consistent with the intent of this chapter or RCW 70A.02.010.
(2) The allocation of funding under subsection (1) of this section must adhere to the following principles, additional to the requirements of RCW 70A.02.080: (a) Benefits and programs should be directed to areas and targeted to vulnerable populations and overburdened communities to reduce statewide disparities; (b) investments and benefits should be made roughly proportional to the health disparities that a specific community experiences, with a goal of eliminating the disparities; (c) investments and programs should focus on creating environmental benefits, including eliminating health burdens, creating community and population resilience, and raising the quality of life of those in the community; and (d) efforts should be made to balance investments and benefits across the state and within counties, local jurisdictions, and unincorporated areas as appropriate to reduce disparities by location and to ensure efforts contribute to a reduction in disparities that exist based on race or ethnicity, socioeconomic status, or other factors.
(3) Except as provided in subsection (4) of this section, state agencies allocating funds or administering grants or programs from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, the climate investment account created in RCW 70A.65.250, the air quality and health disparities improvement account created in RCW 70A.65.280, the climate transit programs account created in *RCW 46.68.500, or the climate active transportation account created in *RCW 46.68.490, must:
(a) Report annually to the environmental justice council created in RCW 70A.02.110 regarding progress toward meeting environmental justice and environmental health goals;
(b) Consider recommendations by the environmental justice council; and
(c)(i) If the agency is not a covered agency subject to the requirements of chapter 70A.02 RCW, create and adopt a community engagement plan to describe how it will engage with overburdened communities and vulnerable populations in allocating funds or administering grants or programs from the climate investment account.
(ii) The plan must include methods for outreach and communication with those who face barriers, language or otherwise, to participation.
(4) During the 2023-2025 and 2025-2027 fiscal ((biennium))biennia:
(a) The requirement of subsection (1) of this section to conduct an environmental justice assessment applies only to covered agencies as defined in RCW 70A.02.010 and to significant agency actions as defined in RCW 70A.02.010.
(b) Agencies shall coordinate with the department and the office of financial management to achieve total statewide spending from the accounts listed in subsection (1) of this section of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities as otherwise described in subsection (1)(a) through (d) of this section and in accordance with RCW 70A.65.230.
(c) The requirements of subsection (3)(c) of this section for agencies other than covered agencies to create and adopt community engagement plans apply only to executive branch agencies and institutions of higher education, as defined in RCW 28B.10.016, receiving total appropriations of more than $2,000,000 for the 2023-2025 fiscal biennium from the accounts listed in subsection (1) of this section.
[ 2025 c 424 s 972. Prior: 2023 c 475 s 1902; 2023 c 475 s 936; prior: 2022 c 182 s 104; 2022 c 181 s 13; 2021 c 316 s 4.]
Notes:
Reviser's note: *(1) RCW 46.68.490 and 46.68.500 were repealed by 2025 c 417 s 801.
(2) RCW 70A.65.030 was amended three times during the 2025 legislative session, without reference to one another. For rule of construction concerning sections amended more than once during the same legislative session, see RCW 1.12.025.
Effective date—2025 c 424: See note following RCW 9.46.100.
Effective date—2023 c 475: See note following RCW 16.76.030.
Intent—Effective date—2022 c 182: See notes following RCW 70A.65.240.
PDF
RCW 70A.65.030
Environmental justice assessment. (Effective July 1, 2027.)
(1) Except as provided in subsection (4) of this section, each year or biennium, as appropriate, when allocating funds from the climate commitment act transportation account created in RCW 70A.65.240, the climate commitment act operating account created in RCW 70A.65.410, the climate commitment act capital account created in RCW 70A.65.420, or the air quality and health disparities improvement account created in RCW 70A.65.280, or administering grants or programs funded by the accounts, agencies shall conduct an environmental justice assessment consistent with the requirements of RCW 70A.02.060 and establish a minimum of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities through: (a) The direct reduction of environmental burdens in overburdened communities; (b) the reduction of disproportionate, cumulative risk from environmental burdens, including those associated with climate change; (c) the support of community led project development, planning, and participation costs; or (d) meeting a community need identified by the community that is consistent with the intent of this chapter or RCW 70A.02.010.
(2) The allocation of funding under subsection (1) of this section must adhere to the following principles, additional to the requirements of RCW 70A.02.080: (a) Benefits and programs should be directed to areas and targeted to vulnerable populations and overburdened communities to reduce statewide disparities; (b) investments and benefits should be made roughly proportional to the health disparities that a specific community experiences, with a goal of eliminating the disparities; (c) investments and programs should focus on creating environmental benefits, including eliminating health burdens, creating community and population resilience, and raising the quality of life of those in the community; and (d) efforts should be made to balance investments and benefits across the state and within counties, local jurisdictions, and unincorporated areas as appropriate to reduce disparities by location and to ensure efforts contribute to a reduction in disparities that exist based on race or ethnicity, socioeconomic status, or other factors.
(3) Except as provided in subsection (4) of this section, state agencies allocating funds or administering grants or programs from the climate commitment act transportation account created in RCW 70A.65.240, the climate commitment act operating account created in RCW 70A.65.410, the climate commitment act capital account created in RCW 70A.65.420, or the air quality and health disparities improvement account created in RCW 70A.65.280, must:
(a) Report biennially to the environmental justice council created in RCW 70A.02.110 regarding progress toward meeting environmental justice and environmental health goals;
(b) Consider recommendations by the environmental justice council; and
(c)(i) If the agency is not a covered agency subject to the requirements of chapter 70A.02 RCW, create and adopt a community engagement plan to describe how it will engage with overburdened communities and vulnerable populations in allocating funds or administering grants or programs from the climate investment account.
(ii) The plan must include methods for outreach and communication with those who face barriers, language or otherwise, to participation.
(4)(a) The requirement of subsection (1) of this section to conduct an environmental justice assessment applies only to covered agencies as defined in RCW 70A.02.010 and to significant agency actions as defined in RCW 70A.02.010.
(b) Agencies shall coordinate with the department and the office of financial management to achieve total statewide spending from the accounts listed in subsection (1) of this section of not less than 35 percent and a goal of 40 percent of total investments that provide direct and meaningful benefits to vulnerable populations within the boundaries of overburdened communities as otherwise described in subsection (1)(a) through (d) of this section and in accordance with RCW 70A.65.230.
(c) The requirements of subsection (3)(c) of this section for agencies other than covered agencies to create and adopt community engagement plans apply only to executive branch agencies and institutions of higher education, as defined in RCW 28B.10.016, receiving total appropriations of more than $2,000,000 per biennium from the accounts listed in subsection (1) of this section.
[ 2026 c 219 s 9. Prior: 2025 c 424 s 972; 2025 c 417 s 804; 2025 c 58 s 3011; prior: 2023 c 475 s 1902; 2023 c 475 s 936; prior: 2022 c 182 s 104; 2022 c 181 s 13; 2021 c 316 s 4.]
Notes:
Effective date—2026 c 219: See note following RCW 70A.65.410.
Effective date—2025 c 424: See note following RCW 9.46.100.
Effective date—2025 c 417 ss 801, 802, and 804-807: See note following RCW 43.84.092.
Findings—Intent—2025 c 417: See note following RCW 82.38.030.
Explanatory note—2025 c 58: See note following RCW 1.16.050.
Effective date—2023 c 475: See note following RCW 16.76.030.
Intent—Effective date—2022 c 182: See notes following RCW 70A.65.240.

catchline: Environmental justice assessment (as amended by 2025 c 58). (Effective until July 1, 2027.)


doc_type: statute

jurisdiction: wa

title: RCW 70A.65.040

text:
(1) The environmental justice council created in RCW 70A.02.110 must provide recommendations to the legislature, agencies, and the governor in the development and implementation of the program established in RCW 70A.65.060 through 70A.65.210, and the programs funded from the carbon emissions reduction account created in RCW 70A.65.240, the climate commitment account created in RCW 70A.65.260, the natural climate solutions account created in RCW 70A.65.270, and the climate investment account created in RCW 70A.65.250.
(2) In addition to the duties and authorities granted in chapter 70A.02 RCW to the environmental justice council, the environmental justice council must:
(a) Provide recommendations to the legislature, agencies, and the governor in the development of:
(i) The program established in RCW 70A.65.060 through 70A.65.210 including, but not limited to, linkage with other jurisdictions, protocols for establishing offset projects and securing offset credits, designation of emissions-intensive and trade-exposed industries under RCW 70A.65.110, and administration of allowances under the program; and
(ii) Investment plans and funding proposals for the programs funded from the climate investment account created in RCW 70A.65.250 for the purpose of providing environmental benefits and reducing environmental health disparities within overburdened communities;
(b) Provide a forum to analyze policies adopted under this chapter to determine if the policies lead to improvements within overburdened communities;
(c) Recommend procedures and criteria for evaluating programs, activities, or projects;
(d) Recommend copollutant emissions reduction goals in overburdened communities;
(e) Evaluate the level of funding provided to assist vulnerable populations, low-income individuals, and impacted workers and the funding of projects and activities located within or benefiting overburdened communities;
(f) Recommend environmental justice and environmental health goals for programs, activities, and projects funded from the climate investment account, and review agency annual reports on outcomes and progress toward meeting these goals;
(g) Provide recommendations to implementing agencies for meaningful consultation with vulnerable populations, including community engagement plans under RCW 70A.65.020 and 70A.65.030; and
(h) Recommend how to support public participation through capacity grants for participation.
(3) For the purpose of performing the duties under subsection (2) of this section, two additional tribal members are added to the council.
[ 2025 c 417 s 805. Prior: 2022 c 182 s 105; 2022 c 181 s 14; 2021 c 316 s 5.]
Notes:
Effective date—2025 c 417 ss 801, 802, and 804-807: See note following RCW 43.84.092.
Findings—Intent—2025 c 417: See note following RCW 82.38.030.
Intent—Effective date—2022 c 182: See notes following RCW 70A.65.240.
PDF
RCW 70A.65.040
Environmental justice council—Duties. (Effective July 1, 2027.)
(1) The environmental justice council created in RCW 70A.02.110 must provide recommendations to the legislature, agencies, and the governor in the development and implementation of the program established in RCW 70A.65.060 through 70A.65.210, and the programs funded from the climate commitment act transportation account created in RCW 70A.65.240, the climate commitment act operating account created in RCW 70A.65.410, and the climate commitment act capital account created in RCW 70A.65.420.
(2) In addition to the duties and authorities granted in chapter 70A.02 RCW to the environmental justice council, the environmental justice council must:
(a) Provide recommendations to the legislature, agencies, and the governor in the development of:
(i) The program established in RCW 70A.65.060 through 70A.65.210 including, but not limited to, linkage with other jurisdictions, protocols for establishing offset projects and securing offset credits, designation of emissions-intensive and trade-exposed industries under RCW 70A.65.110, and administration of allowances under the program; and
(ii) Investment plans and funding proposals for the programs funded from the climate commitment act operating account created in RCW 70A.65.410 for the purpose of providing environmental benefits and reducing environmental health disparities within overburdened communities;
(b) Provide a forum to analyze policies adopted under this chapter to determine if the policies lead to improvements within overburdened communities;
(c) Recommend procedures and criteria for evaluating programs, activities, or projects;
(d) Recommend copollutant emissions reduction goals in overburdened communities;
(e) Evaluate the level of funding provided to assist vulnerable populations, low-income individuals, and impacted workers and the funding of projects and activities located within or benefiting overburdened communities;
(f) Recommend environmental justice and environmental health goals for programs, activities, and projects funded from the climate investment account, and review agency annual reports on outcomes and progress toward meeting these goals;
(g) Provide recommendations to implementing agencies for meaningful consultation with vulnerable populations, including community engagement plans under RCW 70A.65.020 and 70A.65.030; and
(h) Recommend how to support public participation through capacity grants for participation.
(3) For the purpose of performing the duties under subsection (2) of this section, two additional tribal members are added to the council.
[ 2026 c 219 s 10; 2025 c 417 s 805. Prior: 2022 c 182 s 105; 2022 c 181 s 14; 2021 c 316 s 5.]
Notes:
Effective date—2026 c 219: See note following RCW 70A.65.410.
Effective date—2025 c 417 ss 801, 802, and 804-807: See note following RCW 43.84.092.
Findings—Intent—2025 c 417: See note following RCW 82.38.030.
Intent—Effective date—2022 c 182: See notes following RCW 70A.65.240.

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Environmental justice council—Duties. (Effective until July 1, 2027.)

code: rcw

unit: section

court: Washington State Legislature


title: RCW 70A.65.050

text:
(1) The governor shall establish a governance structure to implement the state's climate commitment under the authority provided under this chapter and other statutory authority to provide accountability for achieving the state's greenhouse gas limits in RCW 70A.45.020, to establish a coordinated and strategic statewide approach to climate resilience, to build an equitable and inclusive clean energy economy, and to ensure that the government provides clear policy and requirements, financial tools, and other mechanisms to support achieving those limits.
(2) The governance structure for implementing the state's climate commitment must:
(a) Be holistic and address the needs, challenges, and opportunities to meet the climate commitment;
(b) Address emission reductions from all relevant sectors and sources by ensuring that emitters are responsible for meeting targeted greenhouse gas reductions and that the government provides clear policy and requirements, financial tools, and other mechanisms to support achieving those reductions;
(c) Support an equitable transition for vulnerable populations and overburdened communities, including through early and meaningful engagement of overburdened communities and workers to ensure the program achieves equitable and just outcomes;
(d) Build increasing climate resilience for at-risk communities and ecosystems through cross-sectoral coordination, strategic planning, and cohesive policies; and
(e) Apply the most current, accurate, and complete scientific and technical information available to guide the state's climate actions and strategies.
(3) The governance structure for implementing the state's climate commitment must include, but not be limited to, the following elements:
(a) A strategic plan for aligning existing law, rules, policies, programs, and plans with the state's greenhouse gas limits, to the full extent allowed under existing authority;
(b) Common state policies, standards, and procedures for addressing greenhouse gas emissions and climate resilience, including grant and funding programs, infrastructure investments, and planning and siting decisions;
(c) A process for prioritizing and coordinating funding consistent with strategic needs for greenhouse gas reductions, equity and environmental justice, and climate resilience actions;
(d) An updated statewide strategy for addressing climate risks and improving resilience of communities and ecosystems;
(e) A comprehensive community engagement plan that addresses and mitigates barriers to engagement from vulnerable populations, overburdened communities, and other historically or currently marginalized groups; and
(f) An analysis of gaps and conflicts in state law and programs, with recommendations for improvements to state law.
(4) The governor's office shall develop policy and budget recommendations to the legislature necessary to implement the state's climate commitment by December 31, 2021, in accordance with the purpose, principles, and elements in subsections (1) through (3) of this section.
(5) Nothing in this section establishes or creates legal authority for the department or any other state agency to enact, adopt, issue an order, or in any way implement additional regulatory programs beyond what is provided for under this chapter and other statutes.
[ 2021 c 316 s 7.]

catchline: Governance structure.


title: RCW 70A.65.060

text:
(1) In order to ensure that greenhouse gas emissions are reduced by covered entities consistent with the limits established in RCW 70A.45.020, the department must implement a cap on greenhouse gas emissions from covered entities and a program to track, verify, and enforce compliance through the use of compliance instruments.
(2) The program must consist of:
(a) Annual allowance budgets that limit emissions from covered entities, as provided in this section and RCW 70A.65.070 and 70A.65.080;
(b) Defining those entities covered by the program, and those entities that may voluntarily opt into coverage under the program, as provided in this section and RCW 70A.65.070 and 70A.65.080;
(c) Distribution of emission allowances, as provided in RCW 70A.65.100, and through the allowance price containment provisions under RCW 70A.65.140 and 70A.65.150;
(d) Providing for offset credits as a method for meeting a compliance obligation, pursuant to RCW 70A.65.170;
(e) Defining the compliance obligations of covered entities, as provided in chapter 316, Laws of 2021;
(f) Establishing the authority of the department to enforce the program requirements, as provided in RCW 70A.65.200;
(g) Creating a climate investment account for the deposit of receipts from the distribution of emission allowances, as provided in RCW 70A.65.250;
(h) Providing for the transfer of allowances and recognition of compliance instruments, including those issued by jurisdictions with which Washington has linkage agreements;
(i) Providing monitoring and oversight of the sale and transfer of allowances by the department;
(j) Creating a price ceiling and associated mechanisms as provided in RCW 70A.65.160; and
(k) Providing for the allocation of allowances to emissions-intensive, trade-exposed industries pursuant to RCW 70A.65.110.
(3) The department shall consider opportunities to implement the program in a manner that allows linking the state's program with those of other jurisdictions. The department must evaluate whether such linkage will provide for a more cost-effective means for covered entities to meet their compliance obligations in Washington while recognizing the special characteristics of the state's economy, communities, and industries. The department is authorized to enter into a linkage agreement with another jurisdiction after conducting an environmental justice assessment and after formal notice and opportunity for a public hearing, and when consistent with the requirements of RCW 70A.65.210. The department is authorized to withdraw from a linkage agreement and every linkage agreement must provide that the department reserves the right to withdraw from the agreement.
(4) During the 2022 regular legislative session, the department must bring forth agency request legislation developed in consultation with emissions-intensive, trade-exposed businesses, covered entities, environmental advocates, and overburdened communities that outlines a compliance pathway specific to emissions-intensive, trade-exposed businesses for achieving their proportionate share of the state's emissions reduction limits through 2050.
(5) By December 1, 2027, and by December 1st of each year that is one year after the end of a compliance period, and in compliance with RCW 43.01.036, the department must submit a report to the legislature that includes a comprehensive review of the implementation of the program to date, including but not limited to outcomes relative to the state's emissions reduction limits, overburdened communities, covered entities, and emissions-intensive, trade-exposed businesses. The department must transmit the report to the environmental justice council at the same time it is submitted to the legislature.
(6) The department must bring forth agency request legislation if the department finds that any provision of this chapter prevents linking Washington's cap and invest program with that of any other jurisdiction.
[ 2024 c 352 s 2; 2021 c 316 s 8.]
Notes:
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.
PDF
RCW 70A.65.060
Cap on greenhouse gas emissions. (Effective July 1, 2027.)
(1) In order to ensure that greenhouse gas emissions are reduced by covered entities consistent with the limits established in RCW 70A.45.020, the department must implement a cap on greenhouse gas emissions from covered entities and a program to track, verify, and enforce compliance through the use of compliance instruments.
(2) The program must consist of:
(a) Annual allowance budgets that limit emissions from covered entities, as provided in this section and RCW 70A.65.070 and 70A.65.080;
(b) Defining those entities covered by the program, and those entities that may voluntarily opt into coverage under the program, as provided in this section and RCW 70A.65.070 and 70A.65.080;
(c) Distribution of emission allowances, as provided in RCW 70A.65.100, and through the allowance price containment provisions under RCW 70A.65.140 and 70A.65.150;
(d) Providing for offset credits as a method for meeting a compliance obligation, pursuant to RCW 70A.65.170;
(e) Defining the compliance obligations of covered entities, as provided in chapter 316, Laws of 2021;
(f) Establishing the authority of the department to enforce the program requirements, as provided in RCW 70A.65.200;
(g) Providing for the transfer of allowances and recognition of compliance instruments, including those issued by jurisdictions with which Washington has linkage agreements;
(h) Providing monitoring and oversight of the sale and transfer of allowances by the department;
(i) Creating a price ceiling and associated mechanisms as provided in RCW 70A.65.160; and
(j) Providing for the allocation of allowances to emissions-intensive, trade-exposed industries pursuant to RCW 70A.65.110.
(3) The department shall consider opportunities to implement the program in a manner that allows linking the state's program with those of other jurisdictions. The department must evaluate whether such linkage will provide for a more cost-effective means for covered entities to meet their compliance obligations in Washington while recognizing the special characteristics of the state's economy, communities, and industries. The department is authorized to enter into a linkage agreement with another jurisdiction after conducting an environmental justice assessment and after formal notice and opportunity for a public hearing, and when consistent with the requirements of RCW 70A.65.210. The department is authorized to withdraw from a linkage agreement and every linkage agreement must provide that the department reserves the right to withdraw from the agreement.
(4) During the 2022 regular legislative session, the department must bring forth agency request legislation developed in consultation with emissions-intensive, trade-exposed businesses, covered entities, environmental advocates, and overburdened communities that outlines a compliance pathway specific to emissions-intensive, trade-exposed businesses for achieving their proportionate share of the state's emissions reduction limits through 2050.
(5) By December 1, 2027, and by December 1st of each year that is one year after the end of a compliance period, and in compliance with RCW 43.01.036, the department must submit a report to the legislature that includes a comprehensive review of the implementation of the program to date, including but not limited to outcomes relative to the state's emissions reduction limits, overburdened communities, covered entities, and emissions-intensive, trade-exposed businesses. The department must transmit the report to the environmental justice council at the same time it is submitted to the legislature.
(6) The department must bring forth agency request legislation if the department finds that any provision of this chapter prevents linking Washington's cap and invest program with that of any other jurisdiction.
[ 2026 c 219 s 11; 2024 c 352 s 2; 2021 c 316 s 8.]
Notes:
Effective date—2026 c 219: See note following RCW 70A.65.410.
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.

catchline: Cap on greenhouse gas emissions. (Effective until July 1, 2027.)


title: RCW 70A.65.070

text:
(1)(a)(i) The department shall commence the program by January 1, 2023, by determining an emissions baseline establishing the proportionate share that the total greenhouse gas emissions of covered entities for the first compliance period bears to the total anthropogenic greenhouse gas emissions in the state during 2015 through 2019, based on data reported to the department under RCW 70A.15.2200 or provided as required by this chapter, as well as other relevant data. By October 1, 2022, the department shall adopt annual allowance budgets for the first compliance period of the program, calendar years 2023 through 2026, to be distributed from January 1, 2023, through December 31, 2026.
(ii) If the department enters into a linkage agreement, and the linked jurisdictions do not amend their rules to synchronize with Washington's compliance periods, the department must amend its rules to synchronize Washington's compliance periods with those of the linked jurisdiction or jurisdictions. The department may not by rule amend the length of the first compliance period to end on a date other than December 31, 2026.
(b) By October 1, 2026, the department shall add to its emissions baseline by incorporating the proportionate share that the total greenhouse gas emissions of new covered entities in the second compliance period bear to the total anthropogenic greenhouse gas emissions in the state during 2015 through 2019. In determining the addition to the baseline, the department may exclude a year from the determination if the department identifies that year to have been an outlier due to a state of emergency. The department shall adopt annual allowance budgets for the second compliance period of the program that will be distributed during the second compliance period.
(c) By October 1, 2028, the department shall adopt by rule the annual allowance budgets for the end of the second compliance period through 2040.
(2) The annual allowance budgets must be set to achieve the share of reductions by covered entities necessary to achieve the 2030, 2040, and 2050 statewide emissions limits established in RCW 70A.45.020 by December 31st of each of those years, based on data reported to the department under chapter 70A.15 RCW or provided as required by this chapter. Annual allowance budgets must be set such that the use of offsets as compliance instruments, consistent with RCW 70A.65.170, does not prevent the achievement of the emissions limits established in RCW 70A.45.020. In so setting annual allowance budgets, the department must reduce the annual allowance budget relative to the limits in an amount equivalent to offset use, or in accordance with a similar methodology adopted by the department. The department must adopt annual allowance budgets for the program on a calendar year basis that provide for progressively equivalent reductions by December 31st of each year, year over year. An allowance distributed under the program, either directly by the department under RCW 70A.65.110 through 70A.65.130 or through auctions under RCW 70A.65.100, does not expire and may be held or banked consistent with RCW 70A.65.100(6) and 70A.65.150(1).
(3) The department must complete evaluations by December 31, 2027, and December 31st of the year following the conclusion of the third compliance period, of the performance of the program, including its performance in reducing greenhouse gases. If the evaluation shows that adjustments to the annual allowance budgets are necessary for covered entities to achieve their proportionate share of the 2030 and 2040 emission reduction limits identified in RCW 70A.45.020 by December 31, 2030, and December 31, 2040, as applicable, the department shall adjust the annual allowance budgets accordingly. The department must complete additional evaluations of the performance of the program by December 31st of the year following the conclusion of the fifth and sixth compliance periods, and make any necessary adjustments in the annual allowance budgets to ensure that covered entities achieve their proportionate share of the 2050 emission reduction limit identified in RCW 70A.45.020. Nothing in this subsection precludes the department from making additional adjustments to annual allowance budgets as necessary to ensure successful achievement of the proportionate emission reduction limits by covered entities. The department shall determine and make public the circumstances, metrics, and processes that would initiate the public consideration of additional allowance budget adjustments to ensure successful achievement of the proportionate emission reduction limits.
(4) Data reported to the department under RCW 70A.15.2200 or provided as required by this chapter for 2015 through 2019 is deemed sufficient for the purpose of adopting annual allowance budgets and serving as the baseline by which covered entities demonstrate compliance under the first compliance period of the program. Data reported to the department under RCW 70A.15.2200 or provided as required by this chapter for 2023 through 2025 is deemed sufficient for adopting annual allowance budgets and serving as the baseline by which covered entities demonstrate compliance under the second compliance period of the program.
(5) The legislature intends to promote a growing and sustainable economy and to avoid leakage of emissions from manufacturing to other jurisdictions. Therefore, the legislature finds that implementation of this section is contingent upon the enactment of RCW 70A.65.110.
[ 2025 c 320 s 5; 2024 c 352 s 3; 2022 c 181 s 1; 2021 c 316 s 9.]
Notes:
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.

catchline: Annual allowance budget and timelines.


title: RCW 70A.65.080

text:
(1) A person is a covered entity as of the beginning of the first compliance period and all subsequent compliance periods if the person reported emissions under RCW 70A.15.2200 for any calendar year from 2015 through 2019, or if additional data provided as required by this chapter indicates that emissions for any calendar year from 2015 through 2019 equaled or exceeded any of the following thresholds, or if the person is a first jurisdictional deliverer and imports electricity into the state during the compliance period:
(a) Where the person owns or operates a facility and the facility's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent;
(b) Where the person is a first jurisdictional deliverer and generates electricity in the state and emissions associated with this generation equals or exceeds 25,000 metric tons of carbon dioxide equivalent;
(c)(i) Where the person is a first jurisdictional deliverer importing electricity into the state and:
(A) For specified sources, the cumulative annual total of emissions associated with the imported electricity exceeds 25,000 metric tons of carbon dioxide equivalent;
(B) For unspecified sources, the cumulative annual total of emissions associated with the imported electricity exceeds 0 metric tons of carbon dioxide equivalent; or
(C) For electricity purchased from a federal power marketing administration pursuant to section 5(b) of the Pacific Northwest electric power planning and conservation act of 1980, P.L. 96-501, if the department determines such electricity is not from a specified source, the cumulative annual total of emissions associated with the imported electricity exceeds 25,000 metric tons of carbon dioxide equivalent.
(ii) In consultation with any linked jurisdiction to the program created by this chapter, by October 1, 2026, the department, in consultation with the department of commerce and the utilities and transportation commission, shall adopt by rule a methodology for addressing imported electricity associated with a centralized electricity market;
(d) Where the person is a supplier of fossil fuel other than natural gas and from that fuel 25,000 metric tons or more of carbon dioxide equivalent emissions would result from the full combustion or oxidation, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington; and
(e)(i) Where the person supplies natural gas in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington, and excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) delivered to opt-in entities;
(ii) Where the person who is not a natural gas company and has a tariff with a natural gas company to deliver to an end-use customer in the state in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) the amounts delivered to opt-in entities;
(iii) Where the person is an end-use customer in the state who directly purchases natural gas from a person that is not a natural gas company and has the natural gas delivered through an interstate pipeline to a distribution system owned by the purchaser in amounts that would result in exceeding 25,000 metric tons of carbon dioxide equivalent emissions if fully combusted or oxidized, excluding the amounts: (A) Supplied to covered entities under (a) through (d) of this subsection; and (B) delivered to opt-in entities.
(2)(a) A person is a covered entity as of the beginning of the second compliance period and all subsequent compliance periods if:
(i) The person reported emissions under RCW 70A.15.2200 or provided emissions data as required by this chapter for any calendar year from 2023 through 2025, where the person owns or operates a waste to energy facility utilized by a county and city solid waste management program and the facility's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent; or
(ii) Except as provided in (b) of this subsection, the person is a supplier of any combination of gasoline, diesel, biodiesel, or propane, and the person:
(A) Began producing, importing, delivering, or selling gasoline, diesel, biodiesel, or propane in any jurisdiction before January 1, 2023, and the person reported emissions under RCW 70A.15.2200 for any calendar year beginning in 2027 or any year thereafter for any combination of gasoline, diesel, biodiesel, or propane supplied in Washington, the full combustion or oxidation of which would result in 25,000 metric tons or more of carbon dioxide equivalent emissions in a calendar year, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington; or
(B)(I) Except as provided in (a)(ii)(B)(II) of this subsection, began producing, importing, delivering, or selling gasoline, diesel, biodiesel, or propane in any jurisdiction on or after January 1, 2023, and the person reported emissions under RCW 70A.15.2200 for any calendar year beginning in 2027 or any year thereafter for any combination of gasoline, diesel, biodiesel, or propane, the full combustion or oxidation of which would result in 500 metric tons or more of carbon dioxide equivalent emissions in a calendar year, excluding the amounts for fuel products that are produced or imported with a documented final point of delivery outside of Washington and combusted outside of Washington.
(II) If a person who is otherwise covered under (a)(ii)(B)(I) of this subsection demonstrates to the department that the person transports 100 percent of any combination of gasoline, diesel, biodiesel, or propane in a company-owned vehicle with a valid United States department of transportation number and international fuel tax agreement number issued by the department of licensing and that the person began producing, importing, delivering, or selling gasoline, diesel, biodiesel, or propane in any jurisdiction before January 1, 2024, the threshold specified in (a)(ii)(A) of this subsection applies to that person.
(b) The department may, by rule, lower or increase any of the thresholds specified in (a)(ii)(A) or (B) of this subsection if practicable and if necessary to ensure the achievement of the goals of this chapter or eliminate significant distortions in the fuel supply marketplace. A rule adopted under this subsection (2)(b) must take effect at least one year after the initiation of the rule making, and no earlier than January 1st of the following calendar year of program implementation.
(3) A person is a covered entity as of the beginning of the third compliance period, and all subsequent compliance periods if the person reported emissions under RCW 70A.15.2200 or provided emissions data as required by this chapter for 2027 or 2028, where the person owns or operates a railroad company, as that term is defined in RCW 81.04.010, and the railroad company's emissions equal or exceed 25,000 metric tons of carbon dioxide equivalent.
(4) When a covered entity reports, during a compliance period, emissions from a facility under RCW 70A.15.2200 that are below the thresholds specified in subsection (1) or (2) of this section, the covered entity continues to have a compliance obligation through the current compliance period. When a covered entity reports emissions below the threshold for each year during an entire compliance period, or has ceased all processes at the facility requiring reporting under RCW 70A.15.2200, the entity is no longer a covered entity as of the beginning of the subsequent compliance period unless the department provides notice at least 12 months before the end of the compliance period that the facility's emissions were within 10 percent of the threshold and that the person will continue to be designated as a covered entity in order to ensure equity among all covered entities. Whenever a covered entity ceases to be a covered entity, the department shall notify the appropriate policy and fiscal committees of the legislature of the name of the entity and the reason the entity is no longer a covered entity.
(5) For types of emission sources described in subsection (1) of this section that begin or modify operation after January 1, 2023, and types of emission sources described in subsection (2) of this section that begin or modify operation after 2027, coverage under the program starts in the calendar year in which emissions from the source exceed the applicable thresholds in subsection (1) or (2) of this section, or upon formal notice from the department that the source is expected to exceed the applicable emissions threshold, whichever happens first. Sources meeting these conditions are required to transfer their first allowances on the first transfer deadline of the year following the year in which their emissions were equal to or exceeded the emissions threshold.
(6) For emission sources described in subsection (1) of this section that are in operation or otherwise active between 2015 and 2019 but were not required to report emissions for those years under RCW 70A.15.2200 for the reporting periods between 2015 and 2019, coverage under the program starts in the calendar year following the year in which emissions from the source exceed the applicable thresholds in subsection (1) of this section as reported pursuant to RCW 70A.15.2200 or provided as required by this chapter, or upon formal notice from the department that the source is expected to exceed the applicable emissions threshold for the first year that source is required to report emissions, whichever happens first. Sources meeting these criteria are required to transfer their first allowances on the first transfer deadline of the year following the year in which their emissions, as reported under RCW 70A.15.2200 or provided as required by this chapter, were equal to or exceeded the emissions threshold.
(7) The following emissions are exempt from coverage in the program, regardless of the emissions reported under RCW 70A.15.2200 or provided as required by this chapter:
(a) Emissions from the combustion of aviation fuels;
(b) Emissions from watercraft fuels supplied in Washington that are combusted outside of Washington;
(c) Emissions from a coal-fired electric generation facility exempted from additional greenhouse gas limitations, requirements, or performance standards under RCW 80.80.110, for emissions that occurred prior to January 1, 2026;
(d) Carbon dioxide emissions from the combustion of biomass or biofuels;
(e)(i) Motor vehicle fuel or special fuel that is used exclusively for agricultural purposes by a farm fuel user. This exemption is available only if a buyer of motor vehicle fuel or special fuel provides the seller with an exemption certificate in a form and manner prescribed by the department. Prior to January 1, 2030, this exemption is available whether motor vehicle fuel or special fuel is used to propel a motor vehicle or not, but beginning January 1, 2030, this exemption only applies to motor vehicle fuel or special fuel that the farm fuel user uses to propel a motor vehicle.
(ii) The department must determine a method for expanding the exemption provided under (e)(i) of this subsection to include fuels used for the purpose of transporting agricultural products on public highways. The department must maintain this expanded exemption until December 31, 2029, in order to provide the agricultural sector with a feasible transition period.
(iii) For the purposes of this subsection:
(A) "Agricultural purposes" and "farm fuel user" have the same meanings as provided in RCW 82.08.865;
(B) "Motor vehicle fuel" means gasoline, the chief use of which is as a fuel for the propulsion of motor vehicles or vessels; and
(C) "Special fuel" means diesel, liquefied petroleum gas (also called propane), and biodiesel;
(f) Emissions from facilities with North American industry classification system code 92811 (national security);
(g) Emissions from municipal solid waste landfills that are subject to, and in compliance with, chapter 70A.540 RCW; and
(h) Beginning January 1, 2027, emissions from the combustion, oxidation, other process, or end use of a lubricant, as that term is defined as of January 1, 2026[,] in 40 C.F.R. Sec. 98.6. This exemption applies regardless of whether a supplier demonstrates to the department that a lubricant is not combusted or oxidized.
(8) The department shall not require multiple covered entities to have a compliance obligation for the same emissions. The department may by rule authorize refineries, fuel suppliers, facilities using natural gas, and natural gas utilities to provide by agreement for the assumption of the compliance obligation for fuel or natural gas supplied and combusted in the state. The department must be notified of such an agreement at least 12 months prior to the compliance obligation period for which the agreement is applicable.
(9)(a) The legislature intends to promote a growing and sustainable economy and to avoid leakage of emissions from manufacturing to other locations. The legislature further intends to see innovative new businesses locate and grow in Washington that contribute to Washington's prosperity and environmental objectives.
(b) Consistent with the intent of the legislature to avoid the leakage of emissions to other jurisdictions, in achieving the state's greenhouse gas limits in RCW 70A.45.020, the state, including lead agencies under chapter 43.21C RCW, shall pursue the limits in a manner that recognizes that the siting and placement of new or expanded best-in-class facilities with lower carbon emitting processes is in the economic and environmental interests of the state of Washington.
(c) In conducting a life-cycle analysis, if required, for new or expanded facilities that require review under chapter 43.21C RCW, a lead agency must evaluate and attribute any potential net cumulative greenhouse gas emissions resulting from the project as compared to other existing facilities or best available technology including best-in-class facilities and emerging lower carbon processes that supply the same product or end use. The department may adopt rules to determine the appropriate threshold for applying this analysis.
(d) Covered emissions from an entity that is or will be a covered entity under this chapter may not be the basis for denial of a permit for a new or expanded facility. Covered emissions must be included in the analysis undertaken pursuant to (c) of this subsection. Nothing in this subsection requires a lead agency or a permitting agency to approve or issue a permit to a permit applicant, including to a new or expanded fossil fuel project.
(e) A lead agency under chapter 43.21C RCW or a permitting agency shall allow a new or expanded facility that is a covered entity or opt-in entity to satisfy a mitigation requirement for its covered emissions under this chapter and under any greenhouse gas emission mitigation requirements for covered emissions under chapter 43.21C RCW by submitting to the department the number of compliance instruments equivalent to its covered emissions during a compliance period.
[ 2026 c 251 s 2; 2026 c 37 s 1; 2025 c 282 s 2; 2024 c 352 s 4; 2022 c 179 s 14; 2021 c 316 s 10.]
Notes:
Reviser's note: This section was amended by 2026 c 37 s 1 and by 2026 c 251 s 2, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Intent—Findings—2026 c 251: "(1) The legislature finds that the climate commitment act currently exempts from a compliance obligation fuels supplied in an amount below 25,000 metric tons of associated carbon dioxide equivalent annually. In establishing this exemption, it was never the intent of the legislature to put large fuel suppliers at a competitive disadvantage in the fuel supply marketplace relative to other fuel suppliers. However, the legislature finds that current trends in the fuel supply market indicate that the existing structure for assigning compliance obligations may establish incentives that lead to actions being taken by market participants that undercut principles of fair competition in the fuel supply market.
(2) So that the program created by this act does not create uneven economic conditions for businesses in Washington, it is the intent of the legislature that:
(a) The climate commitment act's assignment of compliance obligations associated with fuels ensure that there is a covered entity associated with all fuel supplied or otherwise produced, imported, or delivered in Washington, except in de minimis volumes; and
(b) The department of ecology should seek to enforce the requirements of the climate commitment act as they pertain to fuel suppliers equally and even-handedly throughout Washington, including with respect to different types of covered entities and in all geographic regions of the state, including in overburdened communities." [ 2026 c 251 s 1.]
Effective date—2026 c 37: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately." [ 2026 c 37 s 4.]
Effective date—2025 c 282: See note following RCW 70A.65.400.
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.

catchline: Program coverage.


title: RCW 70A.65.090

text:
(1) All covered entities must register to participate in the program, following procedures adopted by the department by rule.
(2) Entities registering to participate in the program must describe any direct or indirect affiliation with other registered entities.
(3) A person responsible for greenhouse gas emissions that is not a covered entity may voluntarily participate in the program by registering as an opt-in entity. An opt-in entity must satisfy the same registration requirements as covered entities. Once registered, an opt-in entity is allowed to participate as a covered entity in auctions and must assume the same compliance obligation to transfer compliance instruments equal to their emissions at the appointed transfer dates. An opt-in entity may opt out of the program at the end of any compliance period by providing written notice to the department at least six months prior to the end of the compliance period. The opt-in entity continues to have a compliance obligation through the current compliance period. An opt-in entity is not eligible to receive allowances directly distributed under RCW 70A.65.110, 70A.65.120, or 70A.65.130.
(4) A person that is not covered by the program and is not a covered entity or opt-in entity may voluntarily participate in the program as a general market participant. General market participants must meet all applicable registration requirements specified by rule.
(5) Federally recognized tribes and federal agencies may elect to participate in the program as opt-in entities or general market participants.
(6) The department shall use a secure, online electronic tracking system to: Register entities in the state program; issue compliance instruments; track ownership of compliance instruments; enable and record compliance instrument transfers; facilitate program compliance; and support market oversight.
(7) The department must use an electronic tracking system that allows two accounts to each covered or opt-in entity:
(a) A compliance account where the compliance instruments are transferred to the department for retirement. Compliance instruments in compliance accounts may not be sold, traded, or otherwise provided to another account or person.
(b) A holding account that is used when a registered entity is interested in trading allowances. Allowances in holding accounts may be bought, sold, transferred to another registered entity, or traded. The amount of allowances a registered entity may have in its holding account is constrained by the holding limit as determined by the department by rule. Information about the contents of each holding account, including but not limited to the number of allowances in the account, must be displayed on a regularly maintained and searchable public website established and updated by the department.
(8) Registered general market participants are each allowed an account, to hold, trade, sell, or transfer allowances.
(9) The department shall maintain an account for the purpose of retiring allowances transferred by registered entities and from the voluntary renewable reserve account.
(10) The department shall maintain a public roster of all covered entities, opt-in entities, and general market participants on the department's public website. The roster must specify the provision of RCW 70A.65.080 (1), (2), or (3) under which each covered entity is determined to be a covered entity, and must identify any fuel sellers described in RCW 70A.65.200(1)(b).
(11) The department shall include a voluntary renewable reserve account.
[ 2026 c 251 s 4; 2021 c 316 s 11.]
Notes:
Intent—Findings—2026 c 251: See note following RCW 70A.65.080.

catchline: Requirements.


title: RCW 70A.65.100

text:
(1) Except as provided in RCW 70A.65.110, 70A.65.120, and 70A.65.130, the department shall distribute allowances through auctions as provided in this section and in rules adopted by the department to implement these sections. An allowance is not a property right.
(2)(a) The department shall hold a maximum of four auctions annually, plus any necessary reserve auctions. An auction may include allowances from the annual allowance budget of the current year and allowances from the annual allowance budgets from prior years that remain to be distributed. The department must transmit to the environmental justice council an auction notice at least 60 days prior to each auction, as well as a summary results report and a postauction public proceeds report within 60 days after each auction. The department must communicate the results of the previous calendar year's auctions to the environmental justice council on an annual basis beginning in 2024.
(b) The department must make future vintage allowances available through parallel auctions at least twice annually in addition to the auctions through which current vintage allowances are exclusively offered under (a) of this subsection.
(3) The department shall engage a qualified, independent contractor to run the auctions. The department shall also engage a qualified financial services administrator to hold the bid guarantees, evaluate bid guarantees, and inform the department of the value of bid guarantees once the bids are accepted.
(4) Auctions are open to covered entities, opt-in entities, and general market participants that are registered entities in good standing. The department shall adopt by rule the requirements for a registered entity to register and participate in a given auction.
(a) Registered entities intending to participate in an auction must submit an application to participate at least 30 days prior to the auction. The application must include the documentation required for review and approval by the department. A registered entity is eligible to participate only after receiving a notice of approval by the department.
(b) Each registered entity that elects to participate in the auction must have a different representative. Only a representative with an approved auction account is authorized to access the auction platform to submit an application or confirm the intent to bid for the registered entity, submit bids on behalf of the registered entity during the bidding window, or to download reports specific to the auction.
(5) The department may require a bid guarantee, payable to the financial services administrator, in an amount greater than or equal to the sum of the maximum value of the bids to be submitted by the registered entity.
(6) To protect the integrity of the auctions, a registered entity or group of registered entities with a direct corporate association are subject to auction purchase and holding limits. The department may impose additional limits if it deems necessary to protect the integrity and functioning of the auctions:
(a) A covered entity or an opt-in entity may not buy more than 25 percent of the allowances offered during a single auction;
(b) A general market participant may not buy more than four percent of the allowances offered during a single auction;
(c) Until Washington links with a jurisdiction that does not have this requirement, a general market participant may not in aggregate own more than 10 percent of total allowances to be issued in a calendar year;
(d) No registered entity may buy more than the entity's bid guarantee; and
(e) No registered entity may buy allowances that would exceed the entity's holding limit at the time of the auction.
(7)(a) For fiscal year 2023, upon completion and verification of the auction results, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows: (i) $127,341,000 must first be deposited into the carbon emissions reduction account created in RCW 70A.65.240; and (ii) the remaining auction proceeds to the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280.
(b) For fiscal year 2024, upon completion and verification of the auction results, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows: (i) $356,697,000 must first be deposited into the carbon emissions reduction account created in RCW 70A.65.240, except during fiscal year 2024, the deposit as provided in this subsection (7)(b)(i) may be prorated equally across each of the auctions occurring in fiscal year 2024; and (ii) the remaining auction proceeds to the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280, which may be prorated equally across each of the auctions occurring in fiscal year 2024.
(c) For fiscal year 2025, upon completion and verification of the auction results, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows: (i) $366,558,000 must first be deposited into the carbon emissions reduction account created in RCW 70A.65.240, except that during fiscal year 2025, the deposit as provided in this subsection (7)(c)(i) may be prorated equally across each of the auctions occurring in fiscal year 2025; and (ii) the remaining auction proceeds to the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280, which may be prorated equally across each of the auctions occurring in fiscal year 2025.
(d) For fiscal years 2026 through 2037, upon completion and verification of the auction results, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows: (i) $359,117,000 per year must first be deposited into the carbon emissions reduction account created in RCW 70A.65.240; and (ii) the remaining auction proceeds to the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280.
(e) The deposits into the carbon emissions reduction account pursuant to (a) through (d) of this subsection must not exceed $5,200,000,000 over the first 16 fiscal years and any remaining auction proceeds must be deposited into the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280.
(f) For fiscal year 2038 and each year thereafter, upon completion and verification of the auction results, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows: (i) 50 percent of the auction proceeds to the carbon emissions reduction account created in RCW 70A.65.240; and (ii) the remaining auction proceeds to the climate investment account created in RCW 70A.65.250 and the air quality and health disparities improvement account created in RCW 70A.65.280.
(8) The department shall adopt by rule provisions to guard against bidder collusion and minimize the potential for market manipulation. A registered entity may not release or disclose any bidding information including: Intent to participate or refrain from participation; auction approval status; intent to bid; bidding strategy; bid price or bid quantity; or information on the bid guarantee provided to the financial services administrator. The department may cancel or restrict a previously approved auction participation application or reject a new application if the department determines that a registered entity has:
(a) Provided false or misleading facts;
(b) Withheld material information that could influence a decision by the department;
(c) Violated any part of the auction rules;
(d) Violated registration requirements; or
(e) Violated any of the rules regarding the conduct of the auction.
(9) Records containing the following information are confidential and are exempt from public disclosure in their entirety:
(a) Bidding information as identified in subsection (8) of this section;
(b) Information contained in the secure, online electronic tracking system established by the department pursuant to RCW 70A.65.090(6);
(c) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to the department pursuant to this chapter;
(d) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to the independent contractor or the financial services administrator engaged by the department pursuant to subsection (3) of this section; and
(e) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to a jurisdiction with which the department has entered into a linkage agreement pursuant to RCW 70A.65.210, and which is shared with the department, the independent contractor, or the financial services administrator pursuant to a linkage agreement.
(10) Any cancellation or restriction approved by the department under subsection (8) of this section may be permanent or for a specified number of auctions and the cancellation or restriction imposed is not exclusive and is in addition to the remedies that may be available pursuant to chapter 19.86 RCW or other state or federal laws, if applicable.
(11) The department shall design allowance auctions so as to allow, to the maximum extent practicable, linking with external greenhouse gas emissions trading programs in other jurisdictions and to facilitate the transfer of allowances when the state's program has entered into a linkage agreement with other external greenhouse gas emissions trading programs. The department may conduct auctions jointly with linked jurisdictions.
(12) In setting the number of allowances offered at each auction, the department shall consider the allowances in the marketplace due to the marketing of allowances issued as required under RCW 70A.65.110, 70A.65.120, and 70A.65.130 in the department's determination of the number of allowances to be offered at auction. The department shall offer only such number of allowances at each auction as will enhance the likelihood of achieving the goals of RCW 70A.45.020.
[ 2024 c 352 s 5; 2023 c 475 s 937; 2022 c 181 s 3; 2021 c 316 s 12.]
Notes:
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.
Effective date—2023 c 475: See note following RCW 16.76.030.
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RCW 70A.65.100
Auctions of allowances. (Effective July 1, 2027.)
(1) Except as provided in RCW 70A.65.110, 70A.65.120, and 70A.65.130, the department shall distribute allowances through auctions as provided in this section and in rules adopted by the department to implement these sections. An allowance is not a property right.
(2)(a) The department shall hold a maximum of four auctions annually, plus any necessary reserve auctions. An auction may include allowances from the annual allowance budget of the current year and allowances from the annual allowance budgets from prior years that remain to be distributed. The department must transmit to the environmental justice council an auction notice at least 60 days prior to each auction, as well as a summary results report and a postauction public proceeds report within 60 days after each auction. The department must communicate the results of the previous calendar year's auctions to the environmental justice council on an annual basis beginning in 2024.
(b) The department must make future vintage allowances available through parallel auctions at least twice annually in addition to the auctions through which current vintage allowances are exclusively offered under (a) of this subsection.
(3) The department shall engage a qualified, independent contractor to run the auctions. The department shall also engage a qualified financial services administrator to hold the bid guarantees, evaluate bid guarantees, and inform the department of the value of bid guarantees once the bids are accepted.
(4) Auctions are open to covered entities, opt-in entities, and general market participants that are registered entities in good standing. The department shall adopt by rule the requirements for a registered entity to register and participate in a given auction.
(a) Registered entities intending to participate in an auction must submit an application to participate at least 30 days prior to the auction. The application must include the documentation required for review and approval by the department. A registered entity is eligible to participate only after receiving a notice of approval by the department.
(b) Each registered entity that elects to participate in the auction must have a different representative. Only a representative with an approved auction account is authorized to access the auction platform to submit an application or confirm the intent to bid for the registered entity, submit bids on behalf of the registered entity during the bidding window, or to download reports specific to the auction.
(5) The department may require a bid guarantee, payable to the financial services administrator, in an amount greater than or equal to the sum of the maximum value of the bids to be submitted by the registered entity.
(6) To protect the integrity of the auctions, a registered entity or group of registered entities with a direct corporate association are subject to auction purchase and holding limits. The department may impose additional limits if it deems necessary to protect the integrity and functioning of the auctions:
(a) A covered entity or an opt-in entity may not buy more than 25 percent of the allowances offered during a single auction;
(b) A general market participant may not buy more than four percent of the allowances offered during a single auction;
(c) Until Washington links with a jurisdiction that does not have this requirement, a general market participant may not in aggregate own more than 10 percent of total allowances to be issued in a calendar year;
(d) No registered entity may buy more than the entity's bid guarantee; and
(e) No registered entity may buy allowances that would exceed the entity's holding limit at the time of the auction.
(7) Upon completion and verification of the results of each auction, the financial services administrator shall notify winning bidders and transfer the auction proceeds to the state treasurer for deposit as follows:
(a) First, each fiscal year an amount must be deposited in the climate commitment act operating account created in RCW 70A.65.410 as follows: $25,000,000 for fiscal year 2028, increased each subsequent fiscal year by the implicit price deflator averaged for each fiscal year using the official current base rate, compiled by the bureau of economic analysis, United States department of commerce. The department must calculate this amount for every fiscal year and communicate it to the state treasurer, the office of financial management, and legislative staff. The legislature intends the funding in (a) of this subsection to be used primarily for the department's costs to administer this chapter.
(b) The remaining auction proceeds each fiscal year after the distribution in (a) of this subsection must be deposited as follows:
(i) 73 percent to the climate commitment act transportation account created in RCW 70A.65.240. However, for fiscal year 2029, the amount of the deposit to the climate commitment act transportation account is $300,000,000 or 73 percent, whichever is greater. When total revenue to the climate commitment act transportation account under this subsection reaches a maximum of $359,117,000 for the fiscal year, revenue under this subsection (7)(b)(i) is instead deposited into the climate commitment act capital account created in RCW 70A.65.420;
(ii) 12 percent to the climate commitment act operating account created in RCW 70A.65.410. However, in fiscal year 2029, in addition to the distribution in (a) of this subsection, the amount of the deposit into the climate commitment act operating account is 50 percent of the remaining amount after making the distribution in (a) of this subsection and the deposit under (b)(i) of this subsection. When total revenue to the climate commitment act operating account under (a) and (b)(ii) of this subsection reaches a maximum of $80,000,000 for the fiscal year, revenue under this subsection (7)(b)(ii) is instead deposited into the climate commitment act capital account created in RCW 70A.65.420; and
(iii) 15 percent to the climate commitment act capital account created in RCW 70A.65.420. However, for fiscal year 2029, the amount of the deposit into the climate commitment act capital account is 50 percent of the remaining amount after making the distribution in (a) of this subsection and the deposit under (b)(i) of this subsection.
(8) The department shall adopt by rule provisions to guard against bidder collusion and minimize the potential for market manipulation. A registered entity may not release or disclose any bidding information including: Intent to participate or refrain from participation; auction approval status; intent to bid; bidding strategy; bid price or bid quantity; or information on the bid guarantee provided to the financial services administrator. The department may cancel or restrict a previously approved auction participation application or reject a new application if the department determines that a registered entity has:
(a) Provided false or misleading facts;
(b) Withheld material information that could influence a decision by the department;
(c) Violated any part of the auction rules;
(d) Violated registration requirements; or
(e) Violated any of the rules regarding the conduct of the auction.
(9) Records containing the following information are confidential and are exempt from public disclosure in their entirety:
(a) Bidding information as identified in subsection (8) of this section;
(b) Information contained in the secure, online electronic tracking system established by the department pursuant to RCW 70A.65.090(6);
(c) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to the department pursuant to this chapter;
(d) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to the independent contractor or the financial services administrator engaged by the department pursuant to subsection (3) of this section; and
(e) Financial, proprietary, and other market sensitive information as determined by the department that is submitted to a jurisdiction with which the department has entered into a linkage agreement pursuant to RCW 70A.65.210, and which is shared with the department, the independent contractor, or the financial services administrator pursuant to a linkage agreement.
(10) Any cancellation or restriction approved by the department under subsection (8) of this section may be permanent or for a specified number of auctions and the cancellation or restriction imposed is not exclusive and is in addition to the remedies that may be available pursuant to chapter 19.86 RCW or other state or federal laws, if applicable.
(11) The department shall design allowance auctions so as to allow, to the maximum extent practicable, linking with external greenhouse gas emissions trading programs in other jurisdictions and to facilitate the transfer of allowances when the state's program has entered into a linkage agreement with other external greenhouse gas emissions trading programs. The department may conduct auctions jointly with linked jurisdictions.
(12) In setting the number of allowances offered at each auction, the department shall consider the allowances in the marketplace due to the marketing of allowances issued as required under RCW 70A.65.110, 70A.65.120, and 70A.65.130 in the department's determination of the number of allowances to be offered at auction. The department shall offer only such number of allowances at each auction as will enhance the likelihood of achieving the goals of RCW 70A.45.020.
[ 2026 c 219 s 3; 2024 c 352 s 5; 2023 c 475 s 937; 2022 c 181 s 3; 2021 c 316 s 12.]
Notes:
Effective date—2026 c 219: See note following RCW 70A.65.410.
Contingent effective date—2024 c 352: See note following RCW 70A.65.010.
Effective date—2023 c 475: See note following RCW 16.76.030.

catchline: Auctions of allowances. (Effective until July 1, 2027.)