wa-law.org > bill > 2025-26 > HB 2330 > Original Bill
It is the intent of the legislature to establish a prioritization process to inform capital budget funding for state campus district energy system decarbonization projects. The legislature intends to support these campus energy decarbonization projects through capital appropriations that are additive, and do not supplant, capital budget funding for routine capital construction and renovation projects included in agencies' 10-year capital plans. Further, the legislature intends to provide state agencies with a high degree of funding predictability for projects that decarbonize state campus district energy systems, as those systems are defined in chapter 19.27A RCW, and to create an efficient process that supports compliance with the state's adopted clean buildings performance standards and statutory greenhouse gas emission limits for state agencies.
The campus energy upgrades committee is established within the department. The committee shall administer a prioritization process for scoring and ranking capital decarbonization projects for state campus district energy systems as those systems are defined in RCW 19.27A.260.
The committee shall be comprised of 11 voting and two nonvoting members. The director of the department shall appoint committee members for staggered two-year and three-year terms, as determined by the director. The director shall endeavor to appoint members representing diverse geographic regions of the state. Voting members must include:
One representative of the state energy office established in chapter 43.21F RCW;
Three persons with technical expertise in building decarbonization, thermal energy network or district heating and cooling system construction or conversion that is intended to reduce fossil fuel consumption, or related subject matter. At least one of these members must have experience in environmental justice issues;
One person with professional expertise in life-cycle greenhouse gas accounting;
One person with experience in developing and advocating for public-private partnerships in the clean energy or clean buildings sector;
One person with professional experience in financing or engineering complex decarbonization projects;
One person representing the interests of organized labor;
One person representing electric utilities;
One representative of the Washington utilities and transportation commission; and
One representative of the office of financial management and one representative of the department of enterprise services shall serve as nonvoting members acting in an advisory role to the committee.
The committee may consult with outside advisors and subject matter experts as needed.
Committee members shall serve without compensation but may request reimbursement for travel expenses as provided in RCW 43.03.050 and 43.03.060.
By a majority vote of appointed members, the committee shall select a committee chair for a term of two or three years.
The committee may adopt policies and procedures necessary to carry out its duties under this act.
The department shall provide staff support to the committee.
Meetings of the committee must comply with chapter 42.30 RCW, the open public meetings act, and must provide regular opportunities for public comment.
The campus energy upgrades committee shall develop and adopt a project scoring and ranking process by which capital projects for state campus district energy systems are prioritized for funding recommendations. The committee must:
Provide guidelines and templates for agencies to use when submitting projects to the committee for consideration; and
Consider weighting the criteria in subsection (3) of this section. The committee may adopt additional criteria as it deems necessary.
The adopted scoring and ranking process and associated guidelines must expand upon, and must not conflict with, existing statutory requirements for energy standards, as applicable. These standards may include, but are not limited to, energy life-cycle cost analysis and standards for major facility projects under Title 39 RCW, and energy-related building standards under this chapter.
The committee must include the following elements, in no particular order, in its adopted scoring and ranking process:
The approximate dollar value by fiscal year of operating cost savings upon completion of the proposed project, by fiscal year, over the entirety of the project's useful life. If the proposed project is a discrete phase of a larger project, the estimated savings resulting from both the discrete phase and from the planned completion of the entire campus district energy project must be considered, as deemed appropriate by the committee;
The approximate dollar value of avoided capital maintenance or replacement costs for repairs to existing energy systems for the expected or practical useful life of the existing systems being replaced or upgraded by the proposed project;
The readiness of the project to proceed to construction;
The amount of greenhouse gas emission reductions for the agency that are estimated to be achieved by the project, including the extent to which the project contributes to achieving agency compliance with greenhouse gas emission limits for state agencies outlined in RCW 70A.45.050 and energy-related building standards in this chapter;
The energy use intensity reductions in buildings connected to the district energy system project;
The amount of leveraged nonstate funding or in-kind contributions from other partners. This may include the use of a public-private partnership in which the private partner funds a portion or all of the design or construction of infrastructure associated with the project;
The expected reduction in greenhouse gas emission by private entities in the project area as a result of: (i) The state campus district energy system acting as an anchor customer for a thermal energy network deployed pursuant to RCW 80.28.450; (ii) the resulting expansion of such a thermal energy network; or (iii) the extent to which the project otherwise may reduce energy costs for surrounding residences and businesses;
The extent to which the proposed project is discrete, or phased, and the portion of the project that would be completed with the requested funding;
To the extent practicable, the overall balance of statewide geographic distribution of projects recommended for funding while considering the availability of current and developing workforce in the project area;
The alignment of the project with locally adopted climate action plans for the city or county in which the project is located;
The extent to which the project contributes to state or local emergency preparedness and disaster resilience;
The ability of the project to improve electric reliability in the region by balancing or spacing the timing of electrical loads on the grid;
The extent to which the project proposal includes necessary electrical infrastructure upgrades or improves local electrical grid capacity for future projects; and
The alignment of the proposed project with other major capital projects planned for the campus in order to achieve efficiencies and related cost savings when possible.
The committee may prioritize projects that address systems that are at the end of their expected useful life or are at risk of imminent failure.
The committee must review related project information produced by the energy life-cycle cost analysis conducted under chapter 39.35 RCW if available. In addition, the committee must share project proposal information with the department of enterprise services for use in the energy life-cycle cost analysis, if the analysis is required, in order to avoid duplication of effort.
The committee and the department may request additional information from agencies that submitted plans under RCW 19.27A.260 in order to validate data used in the prioritization framework developed under this section.
When developing and finalizing each recommended funding list, the committee must consider: (a) The need to balance long-term system planning and growth priorities for state entities; (b) the need to balance major capital project requests for design and construction funding, given the fiscal impact of funded design projects on the state's overall capital budget; and (c) the need to balance state capital funding between design and construction project phases to meet state priorities and associated deadlines established in this chapter and RCW 70A.45.050.
A preliminary report describing the draft prioritization framework and scoring criteria is due to the governor and the legislature by December 30, 2026. The preliminary report must include information collected from decarbonization plans received by the department under RCW 19.27A.260 that contain, at a minimum, complete information regarding:
Project elements that can be developed as discrete modules or phases;
Greenhouse gas emission reduction or energy savings estimates;
Project cost estimates; and
Estimates of construction schedules or the amount of time required to complete project phases.
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Beginning in 2028, the committee shall report to the governor and the house capital budget and senate ways and means committees, or successor committees, of the legislature by November 15th of each even-numbered year. The report must include:
A prioritized list of capital projects related to state campus district energy systems recommended for funding in the subsequent biennial capital budget. The prioritized project list must group projects into the following categories for funding: (A) Feasibility studies, demonstration projects, and predevelopment activities; (B) design and construction for discrete project phases or complete projects; (C) minor works for the repair or replacement of project elements that will be a part of or connected to the completed campus decarbonization project; and
An analysis of barriers to state agencies entering into energy as a service contracts as authorized under RCW 39.35C.050 or participating in public-private partnerships, and recommendations for legislation to facilitate agencies' use of these models.
If a project that was ranked in the top 35 percent of the most recent past recommended list was not funded by the legislature, the committee must retain that project's ranked position on the next recommended project list unless the committee determines that adjusting the project ranking is warranted based on the best available information.
The committee may submit a supplemental prioritized list of emergent projects by November 15th of an odd-numbered year for consideration by the governor and legislature for funding in a supplemental capital budget.
The budget document or documents shall also contain:
a. Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, and those anticipated for the ensuing biennium;
b. The undesignated fund balance or deficit, by fund;
c. Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;
d. Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;
e. Tabulations showing expenditures classified by fund, function, and agency;
f. The expenditures that include nonbudgeted, nonappropriated accounts outside the state treasury;
g. Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.71 RCW, shown by agency and in total; and
h. Tabulations showing each postretirement adjustment by retirement system established after fiscal year 1991, to include, but not be limited to, estimated total payments made to the end of the previous biennial period, estimated payments for the present biennium, and estimated payments for the ensuing biennium.
The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures. The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves shall equal or exceed the total of proposed applicable expenditures. The budget document or documents shall further include:
Interest, amortization and redemption charges on the state debt;
Payments of all reliefs, judgments, and claims;
Other statutory expenditures;
Expenditures incident to the operation for each agency;
Revenues derived from agency operations;
Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium;
A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;
Common school expenditures on a fiscal-year basis;
A showing and explanation of anticipated amounts of general fund and other funds required to amortize the unfunded actuarial accrued liability of the retirement system specified under chapter 41.45 RCW, and the contributions to meet such amortization, stated in total dollars and as a level percentage of total compensation.
The governor's operating budget document or documents shall reflect the statewide priorities as required by RCW 43.88.090.
The governor's operating budget document or documents shall identify activities that are not addressing the statewide priorities.
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Beginning in the 2021-2023 fiscal biennium, the governor's operating budget document or documents submitted to the legislature must leave, in total, a positive ending fund balance in the general fund and related funds.
Beginning in the 2021-2023 fiscal biennium, the projected maintenance level of the governor's operating budget document or documents submitted to the legislature must not exceed the available fiscal resources for the next ensuing fiscal biennium.
For purposes of this subsection:
"Available fiscal resources" means the beginning general fund and related funds balances and any fiscal resources estimated for the general fund and related funds, adjusted for proposed revenue legislation, and with forecasted revenues adjusted to the greater of (A) the official general fund and related funds revenue forecast for the ensuing biennium, or (B) the official general fund and related funds forecast for the second fiscal year of the current fiscal biennium, increased by 4.5 percent for each fiscal year of the ensuing biennium.
"Projected maintenance level" means estimated appropriations necessary to maintain the continuing costs of program and service levels either funded in the governor's budget document or documents submitted to the legislature or mandated by other state or federal law, adjusted by the estimated cost of proposed executive branch legislation, and the amount of any general fund moneys projected to be transferred to the budget stabilization account pursuant to Article VII, section 12 of the state Constitution. Proposed executive branch legislation does not include proposals by institutions of higher education, other separately elected officials, or other boards, commissions, and offices not under the authority of the governor that are not funded or assumed in the governor's budget document or documents submitted to the legislature.
"Related funds" has the meaning defined in RCW 43.88.055.
(b) of this subsection (5) does not apply:
To any governor-proposed legislation submitted to the legislature that makes net reductions in general fund and related funds appropriations to prevent the governor from making across-the-board reductions in allotments for these particular funds as provided in RCW 43.88.110(10); or
In a fiscal biennium for which the governor proposes appropriations from the budget stabilization account pursuant to Article VII, section 12(d)(ii) of the state Constitution.
A separate capital budget document or schedule shall be submitted that will contain the following:
A statement setting forth a long-range facilities plan for the state that identifies and includes the highest priority needs within affordable spending levels;
A capital program consisting of proposed capital projects for the next biennium and the two biennia succeeding the next biennium consistent with the long-range facilities plan. Insomuch as is practical, and recognizing emergent needs, the capital program shall reflect the priorities, projects, and spending levels proposed in previously submitted capital budget documents in order to provide a reliable long-range planning tool for the legislature and state agencies;
A capital plan consisting of proposed capital spending for at least four biennia succeeding the next biennium;
A strategic plan for reducing backlogs of maintenance and repair projects. The plan shall include a prioritized list of specific facility deficiencies and capital projects to address the deficiencies for each agency, cost estimates for each project, a schedule for completing projects over a reasonable period of time, and identification of normal maintenance activities to reduce future backlogs;
A statement of the reason or purpose for a project;
Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;
A statement about the proposed site, size, and estimated life of the project, if applicable;
Estimated total project cost;
Estimated total project cost for each phase of the project as defined by the office of financial management;
Estimated ensuing biennium costs;
Estimated costs beyond the ensuing biennium;
Estimated construction start and completion dates;
Source and type of funds proposed;
Estimated ongoing operating budget costs or savings resulting from the project, including staffing and maintenance costs;
For any capital appropriation requested for a state agency for the acquisition of land or the capital improvement of land in which the primary purpose of the acquisition or improvement is recreation or wildlife habitat conservation, the capital budget document, or an omnibus list of recreation and habitat acquisitions provided with the governor's budget document, shall identify the projected costs of operation and maintenance for at least the two biennia succeeding the next biennium. Omnibus lists of habitat and recreation land acquisitions shall include individual project cost estimates for operation and maintenance as well as a total for all state projects included in the list. The document shall identify the source of funds from which the operation and maintenance costs are proposed to be funded;
For any capital appropriation requested for a state campus district energy system, the capital budget document provided with the governor's budget must identify how the appropriation is consistent with recommendations made by the campus energy upgrades committee pursuant to sections 3 and 4 of this act.
For any capital budget request for funding in the 2025-2027 or 2027-2029 fiscal biennia for which the project cost is substantially increased, a statement detailing the amount and reason for the additional cost. If the increased cost is the result of a change in design, the agency must also submit a construction cost estimate for the design as originally submitted. For purposes of this subsection (6)(r), "substantially increased" means total estimated project costs are more than 15 percent above those listed in the prior agency budget request and for which the legislature relied in making a funding decision for design or construction, adjusted for C-100 inflation factors;
Such other information bearing upon capital projects as the governor deems to be useful;
Standard terms, including a standard and uniform definition of normal maintenance, for all capital projects; and
Such other information as the legislature may direct by law or concurrent resolution.
For purposes of this subsection (6), the term "capital project" shall be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative evaluation and accountability program committee, and office of financial management.
The definitions in this section apply throughout RCW 19.27A.210through 19.27A.250, and sections 1 through 4 of this act unless the context clearly requires otherwise.
"Agricultural structure" means a structure designed and constructed to house farm implements, hay, grain, poultry, livestock, or other horticultural products, and that is not a place used by the public or a place of human habitation or employment where agricultural products are processed, treated, or packaged.
"Baseline energy use intensity" means a building's energy use intensity that is representative of energy use in a normal weather year.
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"Building owner" means an individual or entity that owns a building.
In the event of a land lease, "building owner" means the entity possessing title to the building on leased land.
"Building tenant" means a person or entity occupying or holding possession of a building or premises pursuant to a rental agreement.
"Conditional compliance" means a temporary compliance method used by covered building owners that demonstrate the owner has implemented energy use reduction strategies required by the standard, but has not demonstrated full compliance with the energy use intensity target or alternative metric.
"Consumer-owned utility" has the same meaning as defined in RCW 19.27A.140.
"Covered building" includes a tier 1 covered building and a tier 2 covered building.
"Department" means the department of commerce.
"Director" means the director of the department of commerce or the director's designee.
"Electric utility" means a consumer-owned electric utility or an investor-owned electric utility.
"Eligible building owner" means: (a) The owner of a covered building required to comply with the standard established in RCW 19.27A.210; or (b) all eligible tier 2 covered building owners.
"Energy" includes: Electricity, including electricity delivered through the electric grid and electricity generated at the building premises using solar or wind energy resources; natural gas, including natural gas derived from renewable sources, synthetic sources, and fossil fuel sources; district steam; district hot water; district chilled water; propane; fuel oil; wood; coal; or other fuels used to meet the energy loads of a building.
"Energy use intensity" means a measurement that normalizes a building's site energy use relative to its size. A building's energy use intensity is calculated by dividing the total net energy consumed in one year by the gross floor area of the building, excluding the parking garage. "Energy use intensity" is reported as a value of thousand British thermal units per square foot per year.
"Energy use intensity target" means the target for net energy use intensity of a covered building.
"Gas company" includes every corporation, company, association, joint stock association, partnership, and person, their lessees, trustees, or receiver appointed by any court whatsoever, and every city or town owning, controlling, operating, or managing any gas plant within this state.
"Greenhouse gas" includes carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
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"Gross floor area" means the total number of square feet measured between the exterior surfaces of the enclosing fixed walls of a building, including all supporting functions such as offices, lobbies, restrooms, equipment storage areas, mechanical rooms, break rooms, and elevator shafts.
"Gross floor area" does not include outside bays or docks.
"Investor-owned utility" means a corporation owned by investors that meets the definition of "corporation" as defined in RCW 80.04.010 and is engaged in distributing either electricity or natural gas, or both, to more than one retail electric customer in the state.
"Multifamily residential building" means a covered multifamily building containing sleeping units or more than five dwelling units where occupants are primarily permanent in nature.
"Net energy use" means the sum of metered and bulk fuel energy entering the building, minus the sum of metered energy leaving the building or campus. Renewable energy produced on a campus that is not attached to a covered building may be included.
"Qualifying utility" means a consumer-owned or investor-owned gas or electric utility that serves more than 25,000 customers in the state of Washington.
"Savings-to-investment ratio" means the ratio of the total present value savings to the total present value costs of a bundle of an energy or water conservation measure estimated over the projected useful life of each measure. The numerator of the ratio is the present value of net savings in energy or water and nonfuel or nonwater operation and maintenance costs attributable to the proposed energy or water conservation measure. The denominator of the ratio is the present value of the net increase in investment and replacement costs less salvage value attributable to the proposed energy or water conservation measure.
"Standard" means the state energy performance standard for covered buildings established under RCW 19.27A.210.
"Thermal energy company" has the same meaning as defined in RCW 80.04.010.
"Tier 1 covered building" means a building where the sum of nonresidential, hotel, motel, and dormitory floor areas exceed 50,000 gross square feet, excluding the parking garage area.
"Tier 2 covered building" means a building where the sum of multifamily residential, nonresidential, hotel, motel, and dormitory floor areas exceeds 20,000 gross square feet, but does not exceed 50,000 gross square feet, excluding the parking garage area. Tier 2 covered buildings also include multifamily residential buildings where floor areas are equal to or exceed 50,000 gross square feet, excluding the parking garage area.
"Weather normalized" means a method for modifying the measured building energy use in a specific weather year to energy use under normal weather conditions.