Sue Lani Madsen: Ecology dropped the ball, DOL picked it up

It’s rare to hear praise for the Department of Licensing from the small-government conservative chorus, but this time DOL gets to be the hero. The Department of Ecology dropped the ball on its duties under the Climate Commitment Act, and DOL picked it up.

“DOL has actually been amazing to work with,” said Bre Elsey, director of governmental affairs for the Washington Farm Bureau. “Ecology didn’t meet their obligations” and a work group was assembled to follow through on the original legislative intent of the Climate Commitment Act, commonly referred to as the CCA.

When the Washington Legislature passed the CCA in 2021, it hinged on the votes of moderate Democrats. The original legislation directed the Department of Ecology to provide an exemption for agriculture from the fees that would inevitably be passed along to consumers in the form of higher fuel and energy prices.

That’s right, the same legislation Gov. Jay Inslee publicly insisted would add only pennies to the price of fuel acknowledged the added cost. The CCA required Ecology to figure out a way to exempt a critical industry from the inevitably more-than-pennies price increases that would result.

The exemption was supposed to cover farm fuel use and fuels used for transporting ag products. “We have one trucking company owed over a million dollars just in fees,” Elsey said.

Ecology attempted to comply by offering an exemption to fuel wholesalers who would have an incentive to offer reduced price fuel to customers working in agriculture, said Caroline Halter, a spokeswoman for Ecology. Not all wholesalers applied for the exemption. Ecology has worked to bring more wholesalers on board across the state, Halter said.

Not all wholesalers took up the offer to manage two-tiered pricing, and a wholesale exemption is useless for small farms purchasing at retail locations or while trucking on down the road.

In 2023, the Legislature was convinced to cover some of the costs. Elsey said: “Ecology and I went toe to toe during the session, my evidence versus their evidence, and it was interesting to hear them try to explain ‘nothing to see hear’ to justify what they’re doing. Probably the most fun work session I’ve ever done.”

The $30 million allocated for rebates is far short of what Elsey estimates as approximately $100 million in damages. “We want people to apply because we need this data, ag needs this support. The program is flawed and Ecology has been 100% unwilling to fix it. This isn’t over. This is being litigated in the courts.”

The Washington Farm Bureau and Washington Trucking Association case against the Washington Department of Ecology was dismissed by Thurston County Superior Court Judge Chris Lanese in July and appealed to the Washington Supreme Court on Tuesday.

Washington Farm Bureau participated in the negotiations to set up a workable program to administer the fuel rebates. “DOL didn’t necessarily want to be saddled with this, but they’ve been consummate professionals in this,” Elsey said.

A pilot project was set up to check that it would work as well for the large ag businesses buying fuel wholesale as for the small farms buying fuel retail. “We brought in farmers to test the program to make it as easy as possible but not ripe for fraud, with paper versions for people without internet,” Elsey said. The program for rebates on 2023 fuel purchases just launched on Monday.

Michael Schmidt, cattle rancher and former candidate for the Legislature, is one of those small operations buying retail. “We keep hearing the CCA doesn’t hurt the farmer, but nobody’s showed us a path to what we do about it. Might be $50,000 to $60,000 in diesel for transporting our cattle. Forty-six cents a gallon back would be nice, but we didn’t keep receipts, didn’t know we needed to.”

Our family ranching operation didn’t save those little slips of curly paper printed in disappearing ink either. For a cautious skeptic, signing an attestation that threatens the possibility of significant penalties, fine or imprisonment for doing it wrong begged the question – is the rebate worth the risk?

Elsey said she understands a reluctance to be drawn into another government program, but receipts aren’t necessary, and she convinced me to try the application as a case study for a small farm.

The rebates are tiered in five ranges and don’t require exact gallons, which isn’t something a small farm necessarily tracks. Some of our fuel is purchased specifically for farm-owned vehicles, but some is purchased for multiple use vehicles. For farm-owned vehicles, we know dollars paid and can back out gallons using the average price per gallon for 2023. For the truck that sometimes pulls a livestock trailer and sometimes is simply the only way to get down the driveway in winter, we have IRS records separating out farm use. Elsey reassured me that estimating gallons purchased using mileage and average miles per gallon would meet the “best of my knowledge and belief” accuracy test for the attestation.

I tried it. It took 30 minutes.

Elsey now has more data to work with. And I’ll join the chorus of congratulations to the fine professionals at the Department of Licensing.

Contact Sue Lani Madsen at rulingpen@gmail.com.