House bill taps oil producers to clean up pollution

OLYMPIA — The state House passed a bill Saturday that would levy about $100 million in fees annually on oil producers to help cities and counties clean up petroleum pollution in stormwater runoff.

House Bill 1614 would charge oil producers $1.50 for every barrel brought into Washington to help fund federally mandated clean-water regulations aimed at protecting Puget Sound. The fee also would apply to oil products produced and used in the state.

The measure is being contested by Republicans, who believe it is a tax and, therefore, should be placed before voters. Initiative 960 says any tax increase must be passed by a two-thirds vote in the Legislature or put on the ballot.

The bill passed the House 51-45 and now goes to the Senate. Senate leaders said they were trying to determine Saturday evening whether there is support for the measure. The Legislature was scheduled to adjourn by midnight today.

Lawmakers say that 65 percent of stormwater pollution comes from petroleum products. The fee would be charged to refineries and other producers of gasoline, asphalt, lubricants, industrial fuels and road oil. Crude oil, jet fuel, home-heating oil and agricultural diesel would be exempt.

Fee collection would start on Jan. 1, 2010.

Local governments would receive about $80 million a year from the fees to pay for current and new stormwater-cleanup projects, said bill sponsor Rep. Timm Ormsby, D-Spokane. The rest of the money would go to the state Department of Transportation and the Department of Ecology, also for stormwater cleanup.

"We're required by the federal government to implement these pollution-prevention measures. The question is, who pays these costs?" said Rep. Dave Upthegrove, D-Des Moines. "With this legislation, we ask that the oil industry pick up part of the costs — the polluters help pay."

Republicans said oil producers will pass the charge on to consumers.

"It's quite clear to me that the $1.50 tax will show up as a cent increase at the pump," said Rep. Ed Orcutt, R-Kalama. "It's going to come out of taxpayers' pockets. This is a bad piece of legislation. It is extremely ill-timed."

Upthegrove discounted the claim that taxpayers would pick up the cost.

While Ormsby calls the charge "a petroleum impact fee," nearly every Republican in the House chamber stood to complain that the bill creates a new tax.

"Don't think for a minute this is about the Puget Sound," said Rep. Charles Ross, R-Naches. "I cannot support this, not because I don't want a clean and beautiful Washington, but because there are businesses that are suffering. I just don't agree with this philosophy."

Jennifer Sullivan: 360-236-8267 or jensullivan@seattletimes.com