Update on Western Climate Initiative Legislation
March 17, 2009

State legislative initiatives addressing the Western Climate Initiative’s (WCI) proposed cap and trade program have been making their ways through the legislatures of six western states the past 8 weeks with varying degrees of success. The WCI is a coalition of Governors and Premiers of seven western states and four Canadian provinces. In September of 2008 the coalition issued final recommendations for a regional cap and trade program.

The debate over the WCI’s plan is currently playing out in six western states. Governors of three WCI states, New Mexico, Oregon and Washington, have officially endorsed legislation seeking authority to allow adoption of the WCI cap and trade program design elements and participation in the WCI program to take place through executive action. Governors in three other WCI states, Utah, Arizona and Montana, have postponed sponsoring WCI legislation during the 2009 session. However, that has not stopped individual legislators in those states from entering the WCI legislative fray.

Legislatures in Washington and New Mexico so far have resisted legislation favored by their Governors requesting immediate adoption of the WCI program. Instead, they appear to be taking a more deliberate approach by endorsing legislative action that would provide an additional two years of study of the WCI plan and require more legislative involvement in the decision whether or not to adopt the plan and join the WCI regional program.

More legislative involvement is an emerging theme in other states as well. Legislation in Montana has been amended to shift responsibility for developing a study of the WCI plan from the Department of Environmental Quality to a bi-partisan legislative Climate Change Committee. In Utah, legislation amending the Utah Energy Policy Act requires an economic impact study before any legislation or executive action addressing climate change can take effect, and the Utah House of Representatives passed a non-binding resolution calling on Governor Huntsman to withdraw from the WCI. Legislation making its way through the Arizona legislature, HB 2467, would prohibit the Arizona Department of Environmental Quality from participating in the WCI.

Utah’s 2009 legislative session has ended and New Mexico’s is slated to end this week; however, there is still a lot of time remaining for the legislative landscape to change for WCI initiatives in other partner states. The following is a summary of the status of WCI-related bills that have passed or are still making their way through the legislatures of the WCI Partner states in 2009.

Update on Western Climate Initiative (WCI) Legislation:  Status of WCI-Related Bills That Have Passed or Are Still Moving Through the Legislatures of the WCI Partner States in 2009

Click on the state names to access each state's legislative bill information webpage to search for full-text versions of the legislation discussed below.

• Washington – Two pieces of WCI legislation, HB 1819 and SB 5735, both recognized as Governor Gregoire’s “cap and trade bills,” have been introduced during the Washington 2009 session. On Wednesday, March 11, the Washington Senate passed a watered-down version of SB 5735 in a 29-19 vote. The version of the bill that passed the Senate rejected the Governor’s request for authority to adopt rules to implement the WCI cap and trade program this year and instead directed the State to spend 2009 and 2010 studying the cap and trade issues in more detail and identify other ways Washington could reduce greenhouse gas emissions. The companion bill in the House, HB 1819, no longer resembles the original bill that was introduced at the end of January and narrowly passed two house committees earlier this month and is now in Rules Committee for a second reading. HB 1819’s future is uncertain at this time.
  
  
• Oregon – In Oregon, the principle vehicle for carrying Governor Kulongoski’s WCI cap and trade initiative is SB 80. Among other things SB 80 directs the Oregon Environmental Quality Commission to adopt by rule greenhouse gas cap and trade regulations and establishes a Climate Initiative Task Force to develop and present recommendations to the Commission on the design elements for a cap and trade program. The Commission is required to submit cap and trade rules adopted by the Commission and a report outlining the policy justification for the rules to the Legislature no later than February 1, 2011. The bill has been assigned to the Senate Environment and Natural Resources Committee, but as of this writing no hearing has been scheduled or action taken to advance the bill.
  
  
• Montana – HB 375, creates a bi-partisan Legislative Climate Change Committee to study and develop a report by September 2010 with recommendations on whether Montana should participate in a regional program to regulate greenhouse gas emissions. The bill, as amended, narrowly passed the House, 53-47, and is currently scheduled for a second Senate committee hearing. Similar to executive efforts in Washington, New Mexico and Oregon, HB 375 started out attempting to limit legislature involvement in the study and decision making process on whether the state should participate in a regional climate change program. Amendments made by the House have since shifted balance of authority for the study and report to a legislative Climate Change Committee and assigned advisory roles in the study process to the Department of Environmental Quality and Department of Natural Resources and Conservation .
  
  
• Utah – While the Governor’s Office has postponed sponsoring WCI legislation until 2010, the 2009 session of the Utah Legislature saw several bills and a House Resolution that addressed the WCI regional program. Citing the fact that Utah’s participation in the WCI occurred without legislative consultation and that regulation of GHG emissions would impact the economy, non-binding House Resolution 3 called on Governor Huntsman to withdraw Utah from the Western Climate Initiative and passed the Utah House 51-19. The Legislature also enacted HB 412, amending the Utah Energy Policy Act, which requires an economic impact study before any legislation or executive action to address climate change can take effect. Senate and House supporters of the bill stated that the change in Utah’s energy code was needed to guarantee that the Legislature is included in future decisions to address climate change.
  
  
• Arizona – With former Governor Janet Napolitano vacating the Governor’s Office to join President Obama’s cabinet, Arizona’s future involvement in the WCI is in question. The new Governor, Janet Brewer, has not staked out a position on Arizona’s continued involvement in the WCI. In the absence of an executive initiative defining the state’s future role, the Arizona House of Representatives is considering legislation, HB 2467, that expressly prohibits the Arizona Department of Environmental Quality from participating in the WCI. The bill has passed two House Committees without amendment and is currently on the Third Reading calendar in the House of Representatives.
  
  
• New Mexico – House Bill 653, Global Warming Solutions Act, proposes to by-pass the legislature and assign authority for policy implementation and rule making on the WCI regional climate change program to the state’s seven member Environmental Improvement Board. The outlook for passage of the bill is still uncertain with less than a week to go in the New Mexico legislative session. HB 653 was heard in the House Energy and Natural Resources Committee in early March and failed on a 6-5 vote. In a procedural move, the full House rejected the Committee report and passed the bill on to the House Judiciary Committee. The bill was scheduled for hearing on Monday, March 16, but was pulled from the agenda at the request of the bill’s sponsor, Representative Rodefer (D). Two legislator-sponsored memorials, HM 52 and SM 40 have fared better. The companion GHG study memorials direct the Interim Radioactive and Hazardous Materials Committee to: (1) study federal and regional programs that propose to regulate greenhouse gas emissions, (2) evaluate the economic and fiscal impacts of each program on New Mexico’s economy, and (3) identify changes in New Mexico statutes that will be required for New Mexico participate in these programs. The interim Committee is required to report its findings by December 2010 and to provide recommendations for legislation, programs and policies that will enable the state to reduce greenhouse gas emissions at reasonable costs. HM 52 passed the House, and SM 40 has passed through both Senate committees and is awaiting a floor vote in the Senate.

Holland & Hart and Energy Strategies are teaming up to monitor and report on climate change law and policy development in the western United States. This Western Climate Alert is one of an ongoing series of reports and updates devoted to climate change policy developments in individual western states, the Western Climate Initiative, and emerging federal climate legislation and regulations that affect western energy and industrial development interests.