A promise finally fulfilled; Ferguson signs bill exempting ag from CCA fuel taxes

(The Center Square) - Years after Washington farmers were promised they would be exempt from fuel taxes related to the Climate Commitment Act (CCA), Gov. Bob Ferguson has signed a bill into law to finally fulfill that commitment.

In a Thursday ceremony in Kennewick, hosted by the Tri-City Development Council (TRIDEC), Ferguson signed 11 bills related to priorities in central and eastern Washington, including Engrossed Second Substitute House Bill No 1912.

Farmers have been paying fuel charges related to the CCA since 2023, even though they were supposed to be exempt.

The CCA includes a cap-and-trade system to generate revenue for green energy projects aimed at reducing emissions.

CCA fees are tacked onto the price of gasoline and diesel customers at the pump, but the rebate program for ag producers proved to be so complicated that many farmers were unable to take advantage of the fuel exemption.

“The rebate program didn’t really work well because if you buy between a thousand and 3,000 gallons, you will get so much money back. But it wasn’t equitable because if you bought a thousand gallons or 3,000 gallons, it would be the same amount you get back,” said Moses Lake Republican Rep. Tom Dent, the bill's prime sponsor. “The formula for figuring out the rebate is so complicated. I’m good at math, and I still can’t wrap my head around it.”

Currently an agricultural producer can apply for a rebate run by the Washington State Department of Licensing (DOL) for up to $4,500. That amount was for many farmers, much less than they lost from the CCA charge.

The fix was ESSHB 1912 to exempt fuel used on and off the farm for agricultural purposes from CCA fees. The exemptions are extended to all farm-used fuel, including natural gas and propane. It also extends the exemption to 2029.

“Our new governor is looking at agriculture in a serious way, because agriculture is very important to all of us and it is a challenging industry,” said Dent in a Friday morning interview.

As previously reported by The Center Square, Dent attributed success with the bill this time around to his working relationship with Ferguson, whom Dent served as an agricultural advisor for on his transition team.

Dent noted it was encouraging for him and others who work on agriculture issues to have Ferguson travel to the Tri Cities to sign the bill on Thursday.

“There were a lot of people there. Potato growers and other farmers and people in the industry. So they were very pleased,” said Dent. “I have never through this whole process received one negative email around this and what I was trying to do.”

The bill also requires the Department of Ecology to map exempt fuel locations across the state using voluntary information from fuel sellers, ensuring Washington’s roughly 32,000 farmers know where to purchase qualifying fuel.

Dent said he didn’t get everything he wanted in the legislation as it crossed the finish line but was thrilled to finally get the bill signed into law.

“I don't envision myself as being finished with this issue,” said Dent.