Morton challenges fiscal note on biomass bill, wins revision

February 16, 2009

Olympia…During the Feb. 6 public hearing on a bill providing tax incentives to encourage the use of biomass in renewable energy production, Sen. Bob Morton, R-Kettle Falls, challenged the fiscal note – the cost estimate to the state for the next biennium. 

The measure, Senate Bill 5441, would provide both a business and occupation tax credit and a sales and use tax exemption for forest-derived biomass to produce electricity, steam, heat or biofuel. The Office of Financial Management (OFM) attached a fiscal note to the bill that estimated a cost of more than $65 million to the state in lost revenue over the next two years. 

“The estimate was way beyond reason,” Morton said. “We were looking at a good bill that would likely get shelved with that kind of fiscal note. I asked the committee chair to request a review and breakdown of the financial data used.” 

Before the Senate Environment, Water and Energy Committee acted to move the bill out of committee on Feb. 13, OFM had produced a revised fiscal note of $6.9 million. 

“If we encourage the use of forest-derived biomass, we’ll not only create a new source of renewable fuel, but we will be supporting the state’s effort to increase the health of our forests by removing dead and dying trees that spread disease and insect infestations to healthy trees.”  

In 2004, Morton sponsored a bill to create a Forest Health Strategy Work Group charged with developing a forest health plan. In 2007 Senate Bill 6141 was signed into law creating a three-tiered program to significantly reduce insect infestations and disease that lead to high risks of forest fires, wildlife habitat destruction and water quality degradation. 

Washington has 21 million acres of forestland. When the Department of Natural Resources conducted a forest health survey in 2005 more than 2.5 million acres contained elevated levels of tree mortality due to insect infestations, disease and overcrowding.  

The committee also approved Senate Bill 5442 on Feb. 13. This measure provides a sales and use tax exemption for “hog fuel” used to produce electricity, steam, heat or biofuel. 

“Hog fuel” is wood waste that is typically larger and coarser than wood chips. It is often used to fire boilers or furnaces at the mill or plant where it is produced.   

SB 5441 and SB 5442 were referred to the Senate Ways and Means Committee where they will be considered in crafting the state’s operating budget for the 2009-11 biennium. 

Forest Biomass Demonstration Projects

In another effort to protect the health of Washington’s forests and jump-start the forest biomass fuel industry, Sen. Morton is co-sponsoring a measure to create two demonstration projects to develop forest biomass as a renewable energy resource. 

The measure, Senate Bill 5979, would partner the Department of Natural Resources with private industry that has the technology to convert biomass into energy – one customized for eastern Washington and one for western Washington. 

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Additional contact: Penny Drost (360) 786-7522 or drost.penny@leg.wa.gov