We are also champions. We are. You and I. We
won legislative trivia Wednesday night in the
Columbia Room in the legislative building under
the Capitol Dome. It was like the miracle on
ice, only it was on tile. I think it was carpeted.
Is it carpeted? It was a miracle on carpet. And
I want to shout out to all the other teams that
made this possible by not being as good at it.
They weren't even, yeah. You know, the interesting
thing about that is. Not only did we win, and
I hate to say this. No, that's a lie. I love
to say this. Breach. We dominated. We dominated.
Dominated. It wasn't even close. Welcome to County
Connection. the official podcast of the Washington
State Association of Counties, where we dive
into the legislative issues shaping the future
of our communities. From budgets to public safety,
infrastructure to elections, we'll break down
what's happening in Olympia and how it impacts
counties from across the Evergreen State. Stay
informed, stay engaged, and join us as we amplify
the voice of Washington's 39 counties. Welcome
to a really exciting episode of County Connections.
Some would say the student has become the teacher.
The guest has become the host. But most of you
may have figured out by now that I am not Paul
Jewell. I am Travis Dutton, Policy Coordinator
here at the Washington State Association of Counties.
And I have taken over the studio this afternoon
to interview Paul Jewell. And today we're going
to be talking about the legislative issues, the
ins and outs, and what's happening surrounding
it in Olympia. You look good in those headphones.
They suit you. Thank you. You're welcome. Sorry,
did I throw you off with that one? Well, do they
match their good fit for the shape of my head?
Does it make it look longer or squatty? You know,
I don't know that I was going to go into that
much detail. I was just trying to compliment
you a little bit. Thank you. The way they sit
squarely, it's really stunning. Well, I've been
told my ears are... At the perfect level in my
head. That could be true. Mostly, what is it
called when one side's the same as the other?
Symmetrical. Mostly symmetrical. Mostly symmetrical.
Mostly symmetrical, which I'll take that, right?
Yeah, for sure. So, do I need to redo the intro?
No, I think you're good. I think it sounded good.
I think the audience is going to like it. I think
the audience right now is just... On the edge
of their seats. I'm sure they are. Paul's not
hosting. I know. Weird, right? This could be
a train wreck. Well, I can tell you I'm on the
edge of my seat because it's a little weird on
this side of the table. It is. And also hearing
it through these headphones. I'm starting to
regret it already. That's all I'm saying. Oh,
yeah. I'm surprised you even let it happen to
begin with. But I'm here and it's going to be
a fight to get me out of here. Now that you've
got it, you're not giving it up. So, Paul Jewell.
Yes, sir. Government Relations Director. Yes.
We're here to talk about something pretty serious
and something we've been working on for quite
a few years. Yeah. House Bill 1960. Can you tell
us a little bit about what this bill does? Yeah,
well, House Bill 1960 is an interesting bill.
It's one that I would say, you know, I think
we can legitimately say. had its birth right
here at WASAC. You know, it really started a
couple of years ago when we found out that there
was kind of this problem occurring in communities
where... clean energy projects were being located.
So by clean energy projects, I mean things like
wind farms and solar farms. At the time, it was
mostly wind farms, but solar farms seem to be
kind of what's happening a lot more lately because
the technology has gotten a lot better. I think
the economics are better than they were in the
past, and there's been a lot of incentives, federal
incentives, grant programs, and things like that
around solar. projects as well that weren't necessarily
available in the past. Now, that being said,
we know that there's new wind farms coming along
too, right? But the list of future projects has,
it seems like it's weighted more heavily on solar.
It does. In the near future, as far as what's
been proposed or what's being planned. So it
does seem like it's increasing in. Yeah, I agree.
I think that's right. So anyways, a couple of
years ago, we started to hear from some of our
members that had multiple projects in their counties.
And not really new ones, but ones that had them
for a while, like more than 10 years. We started
to hear from them that they were noticing a pretty
big tax issue that was occurring from those projects.
And so we started kind of digging into it a little
bit and doing some research. And we found out
what's happening is there is a pretty significant
tax issue in these communities. And it's a bad
one for the communities. What's happening is...
Well, let me explain this from kind of a legal
point of view. And Travis, you know, you've helped
with this. In fact, you wrote the research paper.
Oh, that's right. For the most part. Don't act
like you. Yeah. Well, I was reading it in preparation
for this and I was like, this is good. I forgot.
Yeah, this is really good. Who wrote this? You
know, you did most of the writing in it. Right.
And a lot of the research. But what we found
out was the way these projects are taxed, they're
actually taxed. both as real property and personal
property, but the majority of the tax is actually
from personal property because the majority of
the value is in the equipment, whether it's,
you know, the turbines themselves or the substations
that they may own associated with it or the lines
or the transmission, which of course is the lines,
but other transmission apparatus. Or in the case
of like solar, the solar panels, et cetera, right?
So that's considered personal property. And even
though it's affixed to the ground almost semi
-permanently, like a house would be, with a poured
foundation and a whole ball of wax, the state's
tax laws actually allow them to classify it as
personal property. So you're saying that 200
foot tall... wind turbines yeah which you know
the new ones are even bigger than that they're
enormous yeah three four hundred feet tall so
they're they're pretty well affixed i mean that
thing if it wasn't well affixed would topple
over right so yeah they're really stuck in there
well you've been out there you've seen them i
mean the bolts you know the leg bolts on those
things are what three feet long maybe at least
yeah they're huge uh and they're what are they
maybe three inches around circumference i feel
like i've seen bigger ones you've got those massive
wrenches that yeah i mean they're really big
so it takes a because you know the wind's blown
and that thing is turning and you know you've
got a hollow tube essentially sitting there right
so it's got to be affixed to the ground so i
mean it's secured there just as well as any house
would be um but for whatever reason you know
state law allows them to classify the majority
of that stuff as personal property and the benefit
to them is they get to depreciate that right,
over time. It's just like any business that,
you know, makes an investment in equipment or
machinery or, you know, another major asset that's
not considered real property. The benefit to
them is that depreciation comes off their bottom
line for taxes, right? So I can understand why
a company would want that. What's also interesting,
though, is because that makes up the majority
of the value of the project, the real property,
the actual ground itself is a pretty minor. And
the value of that one really doesn't change that
much. Many years ago, state law was changed in
Washington to allow counties and other taxing
districts where the projects locate to add both
the real and the personal property to their tax
rolls for value, which means that they can count
it as new construction when the projects come
online. Now, if you don't know a lot about property
taxes, this might sound really confusing, but
counties have... and all taxing districts within
their jurisdictions, they have a set amount of
property value that they tax. And that property
value changes from year to year. And it changes
both by just property values increasing or decreasing
because of market rates, right? Comparable sales,
et cetera. Or the whole size of their value increases
when they get new construction. So think about
like... a new neighborhood or a couple of new
houses, or in this case, a wind farm or a solar
farm that wasn't there before, that actually
increases the overall taxable value of the property
value. And it's really new money, so to speak,
to those taxing districts. Is there... You mentioned
a couple examples. Is there an example that is
universal to counties around some big piece of...
Yeah, a really good example would be just a housing
development, right? Or maybe a factory. Maybe
like Amazon, one of the ones that we see popping
up all along, whether it's... i -90 or i -5 would
be like an amazon distribution center right that's
considered real property that building uh that
dirt etc and it was you know in most cases it
was just an open field before and now it's a
big facility that generates a lot of income it
generates a lot of jobs that sort of thing but
it also adds value to the property in the area
and it increases the revenue for local government
and and that's that's you know hospital schools
um fire districts, EMS, counties, cities, et
cetera, right? So it's the whole gamut. So what
you're saying, these renewable energy projects,
wind projects, solar projects, they come into
town, they have personal property value. Right.
That means that that is new. property tax revenue
right that county is getting that they weren't
getting previously right is this happening in
all counties or is this it's happening in every
county where these projects are locating right
and um obviously if it's a wind or a solar project
you have to have a good wind resource or a good
solar resource um and for some of these communities
you know these projects were looked at in some
ways as kind of a big economic boost you know
there's There's a project that I'm aware of.
When the project came online, it changed the
property values so much because the property
in the area was pretty low value, frankly. It
wasn't irrigated farmland, that sort of stuff.
It changed it so much that it took on, not only
did it add a bunch of property tax revenue, it
took on a bunch of the property tax revenue responsibility
and other property taxpayers actually got a decrease.
In their property tax bills. And they were excited
about that. Yeah, that sounds awesome. Yeah.
Well, I mean, who wouldn't want that, right?
They even went as far as passing a new high school
capital project bond. Based on the new revenue
from the wind project. And the fact that they
all saw these discounts in their property. They're
like, oh, geez, we can afford a new high school.
Well, the problem came along about a few years
later. Because what happens with this. with these
values is with the property, with the personal
property, it depreciates at a pretty good clip.
I think we figured, what, 4 % a year or something
like that? About that, yeah. Yeah, so the trend
line is almost, it's almost like a 45 -degree
angle if you were looking at a chart, right,
from year one to year 20, so to speak. And what
happens is because it was added to the property
tax rolls. Even though the depreciation could
occur, and therefore, as the value of that project
goes down, that project's responsibility for
paying taxes actually decreases, these taxing
districts all continue to collect the same amount
or more because they can increase it by 1 % a
year. And what happens is that... the difference
between the depreciation and the reduced value
and now the reduced tax burden that's being paid
by the project and what needs to be collected
by the local taxing districts that difference
now falls on all of the other taxpayers so that's
residents businesses yep everybody everybody
else that's paying that tax yeah and it and you
know when it when it happens in small increments
year over year you don't notice it right away
but after about 10 or 15 years goes by suddenly
people are looking at their tax bills and they're
going, what is going on here, right? My taxes
are up 20, 30 % over the last four or five or
six years. What happened to the, you know, 1
% per year kind of maximum? And that was when,
you know, we kind of had the aha moment and we
started diving into this and we realized it is
the tax shift that is occurring in these communities.
That was what people were starting to notice.
And so, you know, we came to the conclusion really
quickly that it's a fact and unfortunately an
inconvenient one in Washington state that if
you live in a community where a clean energy
project develops, you have fairly significant
property tax increases. to look forward to in
your future just for the privilege of hosting
that project. And that just seemed like a bad
outcome to us. And it's going to happen. It sounds
like it's going to happen slowly. Maybe like
the frog in the boiling water. Like it happens
a little bit slower and then accumulates over.
a certain amount of time, and then suddenly it's...
Yeah, I think that's why it took a while to notice
it. You know what I mean? I think that it just
was kind of like you're saying, right? You know,
just it's one degree per time. You know, one
minute you're swimming around in this pot. The
next minute you're like, man, this water's getting
a little hot. And then the next minute, you know,
you're a cooked frog. That's why I have a personal
rule. Never get into a pot. Never. Under any
circumstances. It's a life. I'll keep that in
mind. So if I ever try to get you into a pot,
you're not going. No. Yeah, you're shaking your
head pretty hard right now. I wasn't born yesterday.
Good to know. But yeah, so I mean, that's a problem,
right? It's a big deal. It's growing. I'm a resident
in one of these counties where, or in the district
where this. clean energy, renewable energy project
exists. How much am I saying? Did we ever get
to a concrete number? What would be a way to
describe the size of the increase or the impact
of the increase on residents? Yeah, it's interesting.
And it varies, right? It varies depending on
where you're at, what size is the project, what
are your property values now, how many people
are sharing the load or the burden, et cetera.
I can give you some examples of some things that
we did check out. Now, In one county, the size
of the project, it was a wind farm, was so great
and so large. And the property values in the
county were so small where the project located
that it literally doubled the taxable value in
the county, which means it doubled the potential
revenue that was available. And it took on half
of the burden. In other areas, it's a lot less
significant, right? but then you have to think
about whether you have one project, two projects,
three projects. In Klickitat County, for instance,
there are eight wind farms alone, right? So if
you're seeing this impact from one project, imagine
doing that times eight. Potentially. Now, that's
not going to happen in most places because these
projects are big and they go into different taxing
districts. And it's really the taxing. It's really
the residents in the taxing district that are
most impacted. But the entire county is impacted
at some level. And when you compound it with
that many projects. You know, that's pretty significant.
We did a little study. You'll remember this.
We did a little study. We looked at a house in
the little town of Kittitas. You remember this?
Yes. And it wasn't a nice house. I mean, I don't
want to – I shouldn't say it that way. It wasn't
an expensive house, right? It was a very nice
house. It was just a simple, if I remember, like
a – three bedroom Rambler, right? I would have
lived in it. It was a nice house. Yeah. Fairly
new, you know, built within maybe the last 20
years. It just wasn't anything super fancy, right?
This was kind of your average everyday kind of
house, you know, blue collar, probably, you know,
a type of home. Doesn't have a central computer
that talks to you. No, no, no, nothing like that.
And I think it was, what was the value? Like
300 ,000 or something like that. And we looked
at, we were able to isolate. just the tax shift
from the nearby wind farm in that area that had
occurred that year. And it raised the property
tax burden on just that $300 ,000 home in that
little town of Kittitas in that one year by $500.
500 bucks. In one year. In one year. just from
the tax shift. That doesn't include the other
taxes and the increases from, say, the schools
or state schools or the road levy or the general
fund levy or whatever that this person was paying.
That's just from that project. Now, imagine compounding
that year over year over year over year. What
we have found is that over that 20 -year period,
these projects shed 90 % of their tax burden
onto everybody else. 90%. So that $500, I may
not see that the first year. I may not notice
that right away. Oh, well, yeah, and it's going
to be a lot smaller, right? But it's that compounding.
Over 20 years, incremental increases are where
we get folks in trouble. Yep, yep. You can imagine
when we found this, right, and we were able to
kind of diagnose the problem, our members were
pretty interested in trying to find ways to solve
it. And so we put together, well, you put together
a pretty good process a couple of years ago,
right? Yeah. Yeah. And that was one of the things
I wanted to talk a little bit about was, you
know, we have a bill that's being considered
in the legislature right now. Right. But that's
not something that happens. Overnight. No, not
by any means. I know I've been working on this
project since I got here four years ago. I don't
know how long I've been here now. I think that's
right. Yeah. Holy cow. Yeah. It seems just like
yesterday, doesn't it? Yeah. I thought I'd be
better. So this doesn't happen overnight. And
you've mentioned a couple of counties so far.
You mentioned Kittitas County. You've mentioned
Klickitat Valley County. And I know that there
were a lot of counties that were involved in
this process. But can you walk us through a little
bit at a high level sort of, you know, we pulled
in other states. We pulled in a huge number of
partners because we wanted to make sure that
the outcome of this project was something that
we could say had been. approved or designed with
a huge number of stakeholders involved. Can you
walk us through some of the, you know, just sort
of the high level steps? For sure. I mean, we
started talking about this once we kind of diagnosed
the problem, right? And then we really felt like
we needed to kind of get it all. It's a complicated
issue. Just trying to explain the property tax
piece and having people understand how that works
and then how these projects kind of are affecting.
the property taxes on a local level is really,
it's not easy, right? It's not easy for people
to understand. And then they have to understand
how the projects, there's two different types
of assessments for these projects based on whether
they're utility owned or they're developer owned,
right? And that kind of complicates it. So we
decided to get together and we put together a
white paper essentially on the whole thing. And
it's still on our website. You can see it today.
It's a great, it's actually a really good piece.
pretty much catalogs the whole problem from start
to finish, and then even does some research on
how this is handled in other states and some
of the solutions to this problem that have been
put in place in, say, New York or Oregon or Nevada
or I think New Mexico and Texas. I mean, we looked
at lots of different solutions. Yeah, I think
we met with folks in Nebraska. And if anybody
wants to see it, if you come to my house, the
living room is each individual page of that room.
framed on the wall. It does make amazing wall
art. It is. The color scheme really worked well
on the wall colors. Well, I mean, if you're going
to work at WASAC, you might as well bring it
into your life all the way around. That's what
I said. Yeah. Bring WASAC into your life all
the way around. I'm very sorry for you if you
actually are using that for wall art. So we mentioned
we reached out to a lot of different states.
We interviewed a lot of different states. And
if those folks are listening, thank you again.
They spent a lot of time with us. They did. Really
helping us understand. And it was great to meet
them. And not only that, but when we started
talking about this problem, a lot of them didn't
know what we were talking about because their
taxing structures are different. But others were
like, oh, yeah, we totally get that. We know
exactly what you're talking about. And that was
really helpful, too. Yeah. So you also mentioned
some of our members wanted to get involved. We
ended up building a task force with some of our
members. We also were fortunate enough to get
some support and some involvement from the Washington
Association of County Officials, some of the
assessors and treasurers. Are there other key
partners that you want to highlight? Yeah, well,
Renewables Northwest joined us. The Department
of Commerce joined us. I think Fish and Wildlife
joined in for some of the talks. There were several
legislators as well. One that ended up sticking
with us all the way through, which is Representative
Alex Rammel, who has worked really hard on this
issue. And we'll talk about him in a little bit.
But, you know, we had I don't even remember how
many people were in those meetings, but 40 to
50, I think, every time consistently. Yeah. And
we went through a whole series of meetings through
the summer and fall. to basically educate the
group, right? So everybody had kind of a baseline
level of knowledge, how the taxes worked, how
these projects developed, how they were taxed,
what was the cause of the problem. And then we
did the research on the potential solutions,
right? And talked with a bunch of different groups.
And the recommendation from the group was actually
to... Eliminate the property tax completely.
Just get rid of it on these projects and replace
it with what is called a nameplate capacity -based
excise tax, which is a tax per megawatt rate,
essentially. Nameplate capacity is the rating
for a particular project on what its potential
out... could be under ideal conditions, right?
So that doesn't, it's not about what it produces,
which may change. year to year yeah that well
that could fluctuate from day to day day to day
year to year just because who knows what wind
is going to decide to do right so the name or
sun or sun good point but the nameplate capacity
is potential yeah so for instance if it were
running you know for a wind farm right if it
were running at uh its maximum you know efficiency
24 7 or maybe it's maybe it's just during daylight
hours i don't know but For a wind project, it's
probably 24 -7. What is the possible output?
And the reason we went with that is because every
project has one. Every project has a nameplate
capacity rating, and it doesn't change, right?
Unless the project gets bigger or smaller, it
doesn't change. And so it was an easy thing.
You didn't have to audit it. You know, you didn't
have to trust that someone was giving you the
right numbers because there were examples out
there that are production -based. taxes, right?
You know, how many megawatts of energy did they
produce and then a rate per megawatt. And then
like you said, that varies. And so the other
benefit of the nameplate capacity was it doesn't
vary and it's just going to be really consistent,
you know, year over year. Consistency was a huge
goal for this project across the board. Consistent
payments to counties, consistent payments by
projects, consistent revenue for local taxing
districts. So the nameplate capacity really fit
the... Requirement that we put for ourselves
and our partners. Okay. Right. So let's go back
to Mr. Representative Alex Ramel. You mentioned
that he was involved in the project pretty much
from the beginning. Yes. And participated and
engaged in conversations with us very regularly.
How does he fit into where we are now with House
Bill 1960 sitting in House rules waiting? with
bated breath to move. Yeah. Where does Representative
Rammel fit into this? Well, he actually is the
prime sponsor of House Bill 1960. He introduced
the bill last year and shepherded it as far as
it could go last year and then picked it up this
year. And he's helping us move it through the
process again. It's one of his signature bills
this session. He's been great to work with. We
certainly are grateful. What's interesting about...
Representative Rammel, his district isn't actually
affected by this issue for the most part. I mean,
they could be in the future because I know that
battery storage is part of this bill as well.
Battery storage is kind of a new kind of developing
industry around clean energy. And battery storage
is the drawer in my kitchen where I put all of
the triple A's and double A's and just a hodgepodge
of living or dead batteries. Yeah, for sure.
In your kitchen, that's what it is. Yeah, okay.
But that's not what we mean by it. So what is
battery storage in this case? So, you know, one
of the things about green energy like wind and
solar is it's intermittent, right? natural gas
or even coal, which are fossil fuel based or
even hydropower where you can where the water
is flowing constantly. Right. Or you can turn
on the gas and it's burning constantly. Or you
can, you know, run the coal through the plant
and it's, you know, and it's burning constantly
as well. And you can, you know, have the power
to turn it on or turn it off. Wind and solar
aren't like that. Right. I mean, when the wind
is blowing, you're generating electricity. When
the wind is not, you're not. It's kind of like.
You know back in the 17th century when the only
way you got across The globe was when the wind
blew on the ocean. Otherwise, you're sitting
still, right? Other than the tides themselves.
So it's the same kind of concept with wind energy.
When the wind's blowing, it's turning the turbines,
which are generating the electricity that's delivering
it to the grid. And if the wind's not blowing
and the turbines aren't turning, then there's
no energy coming from those projects. And if
the sun's not shining, right, and it's the middle
of the night, then those solar panels aren't
producing either. The only way that you can really
take that type of energy, right, and kind of
smooth out the intermittent nature of it is to
produce extra when you don't need it necessarily
and store it in what are called these battery
storage systems, right? And so it's a series
of lithium -ion batteries essentially in these
buildings where they, you know. store excess
power that then becomes available when other
power isn't available or when you have an excess
load that you need to accommodate or whatever
it may be. And so it's part of the whole kind
of grid efficiency and flexibility system that
we're trying to put together. Well, I was going
to say in the Northwest, but I think it's probably
everywhere. I think so. Yeah. So and just to
be clear to the folks listening at home. I responsibly
dispose of my batteries and don't just leave
them stored in a drawer. Well, you know, batteries
are inert anyways. It doesn't really matter.
They're not the contaminant people thought they
were. Another episode. We'll do another battery
episode. The next time I interview, if this goes
well. Well, alkaline batteries aren't the contaminant
people thought they were. There's all kinds of
new batteries now. And this is really, yeah,
we're going to spin off in another direction.
Yeah, I realized I took you in a very... Yeah,
as the host, it's your job to bring me back.
Well, I'm about to. This is... So yes, I led
you pretty far astray. Let's go back really quickly.
You were mentioning the bill sponsor, Representative
Rammel, being from a district that may not be
directly impacted by the experiences of having
wind farms or solar farms in your community.
Right. But our... entire states connected to
these projects. Yeah, and I think he's got a
passion for clean energy and climate change issues.
And so he kind of grabbed onto this. And as a
legislator, this is a tough one to grab onto
because it's so complicated, right? And there's
not a lot of, you know, there's no hero worship
for the person who sponsors this bill, right?
This is one of those. kind of nuts and bolts,
technical pieces that are really, really important
to the overall system. But there's just not a
lot of glory for a legislator to be championing
this kind of issue. So it just goes to show you
that he's one that really cares about his job
and about what he does. The other piece that's
really interesting about Representative Rammel
is I think he was a bit of a skeptic at first.
And he sat with us through every one of those
meetings. And I know he didn't want to at first
either. You know, I don't want to speak for him,
but my impression was he was there to kind of
pay attention to what was going on. But, you
know, was really thinking that he was going to
try to push us in a different direction for whatever
reason. He went through the process with all
of us, and I think he really was impressed with
the research that we did. And the conversations
that we had with the stakeholders were just exceptional.
The people that were there wanted to be there.
They self -selected, right? And like you said,
there were 40, 50 people at every single one
of them. So the turnout by itself was impressive.
Engaged people. Yeah, they were super engaged.
And I think that impressed Representative Rammel
and inspired him to... Go ahead and sponsor a
bill. And he's been he's been dogged with it.
You know, I think that's a good word with it.
You know, he's been sifting through every complicated
piece one at a time all the way through the process
to get us to where we are today. So I want to
talk a little bit more about you'd mentioned,
you know, 40 to 50 people. We had this big process,
including legislators, including Representative
Rammel, walking through, educating everybody,
making sure we all had. you know, foundational
knowledge on shared knowledge of what was happening
and what we needed to do to fix it. And we landed
on a, on a solution, right? So we, we ended up
landing on this nameplate capacity as a group
with some other details, but I haven't been part
of a work group where it is a, I'm picturing
the, the four wizard of Oz characters, skipping
arm and arm down the yellow brick road. The four
characters. Do you mean like, Yeah, I didn't
know what to... Dorothy, the Tidman, the Scarecrow,
and the Lion. Yeah, I didn't want to waste podcast
time listing them all. I figured people would
get... Which one do you think you are? That's
a good question. Yeah, because, I mean, you know,
the Tidman doesn't have a heart, right? That's
you. Was James Van Der Beek in The Wizard of
Oz? I don't know. The Scarecrow. What does the
Scarecrow not have? A brain? Oh, no brain. That's
me. And then, of course, there's the lion with
no courage. I don't know. I got to be honest
with you. Dorothy's looking like the best one
of the four to me. So this project was not an
arm in arm hopping down the yellow brick road.
just joyful. There were moments where the trees
were throwing apples at us. Yeah, for sure. Talk
about, you know, to get to a final, to get to
a solution on a problem this big that involves
this many stakeholders, a lot of compromises
have to be made. A lot of things need to be removed.
What are some of the biggest things that our
members, that this work group... that Representative
Rammel worked on through negotiations to make
this bill still relevant and still something
that we can support and get behind. Well, yeah,
you know, I mean, you bring up an interesting
point there because, you know, when we wrote
the white paper and when we identified this issue,
right, it was black and white to us. It was very
clear we had the facts. And when I say it's a
fact that if you live in a community where these
projects are located under today's. taxing structure,
you will see a property tax increase and that's
what you have to look forward to. That's not
untrue. That's 100 % true. It's a fact, right?
There's no hyperbole there. But even that landed
wrong with some people, right? And even our own
members in some cases. If you remember, some
people looked at our white paper and they said,
oh, thank you for putting this white paper out.
You know, we're going to use this to stop clean
energy projects. We said, that's not what this
white paper is about. This white paper is about
a tax issue. Others said, why did you put this
white paper out? You know, this is an anti -clean
energy project white paper. No, this is not what
this paper is about. This paper is about a tax
issue, right? And so even within our own membership,
there was some controversy. So then when we went
out to the stakeholder group, it was... even
more right and we intentionally included people
who were pro right these are developers who want
you know, to put these projects in. And we included
people who were opposed, right? And we included
environmentalists and we included state agency
folks and county commissioners and county treasurers
and assessors and the whole gamut so that we
could get everybody at the table and start kind
of sifting through some solutions. And the nameplate
capacity tax was widely accepted as the best.
solution, right? There were a lot. We looked
at PILT programs. We looked at alternative property
tax structures. We looked at alternative taxes,
and it was the nameplate -based excise tax. Everyone
agreed on that. Now, you think that's the end
of it, but it's not. It's not? Not even close.
What else was there? Well, there's just a million
things. Look at you getting me all excited. I'm
getting engaged. I know. There's just a million
things to think about, right? What are the tax
rates going to be? Who's going to collect the
tax? How is it going to get collected? Are there
other things that we should be thinking about
as part of this? What do you do with the existing
projects? What do you do with the new projects?
Are they going to be different? Are they going
to be the same? What about centrally assessed
projects versus locally assessed projects? How
do those work? How can you write a tax structure
that, you know, new tax system that affects them
both equally? Or can you? Just a million things
that we had to think through, you know, and how
do you define certain things, right, that you're
going to include in the bill? And so we had to
sit down and... you know, go through hardcore
negotiations with a lot of different stakeholders.
And, you know, as they got satisfied, they kind
of dropped off. And then, you know, others remained.
And, you know, we're still negotiating this bill
even today on a few remaining points. I think
one of the things that was surprising to me,
or maybe not surprising, was with all of these
stakeholders, like you mentioned, we wrote that
white paper. It was all pretty black and white.
It looked very direct as to what the problem
and what a potential solution could look like.
We went through a long process to make sure we
had it right. I would say every single meeting,
we learned something new from one of those stakeholders.
Even up to last month, we're still learning new
information that is helping us. We're still learning
new information that's helping us perfect this
bill. grateful for the opportunity to make sure
that there's not some fact out there that we
missed that would have undone all of this. But
I think that feels like an important part of
so many stakeholders is that they were there
to not only advocate for their groups, but they
were there to help continue educating everybody
on why we needed to make certain adjustments
to the bill. Yep. No, I think that's absolutely
right. And the bill's come a long way. We've
done a ton of work. We didn't get... What's in
there now is not nearly what we hoped would be
in there as far as tax rates. We wanted a much
higher tax rate to get into the bill than is
currently in there today. We did get some additional
benefits for local governments, which is great.
So if the bill passes and when the bill passes,
there'll be an opportunity for the communities
out there who are hosting the projects to no
longer be negatively impacted, but actually to
be. more positively impacted because they'll
get additional benefits that they didn't have
access to, which is good. But with every negotiation,
there's give and take, right? I mean, I think
accepting reduced rates moving forward for new
projects was a bit of a tough pill to swallow,
but there were some justifications for that that
we were actually starting to see already kind
of play into some of the new project estimates
that were coming out. So we had to admit that
those were probably legitimate. and kind of move
forward. We had to make some exemptions and some
tolerances for some things that we didn't necessarily
want. But it's all part of the nature of the
negotiation. You can never go into a negotiation
thinking you're going to get everything. If you
do, then it's usually not a very successful negotiation,
right? But at the end of the day for us, One
of our primary goals on the onset of this project
was to eliminate that tax shift. Yes. And that
still is what we are accomplishing. Yeah, that's
the primary goal. We want to make sure our counties
and their communities still receive the revenue
that they should be receiving. But we want it
to be done in a way that doesn't hurt the local
taxpayer. You know, when you think about the
potential damage that the shift... can cause.
It's not just to the individual taxpayer themselves,
right? If I'm paying more than I should be because
I'm making up for someone else's burden, that
hurts me personally and it's unfair. I think
we can all agree on that. But there are other
problems that come along with that, right? I
mean, what if the schoolhouse in my district
is falling down and is in bad in a bad state
and needs major repair or replacement, and the
school district doesn't have enough funding for
that, they're going to come to the taxpayers
for a bond, right? A capital bond. Well, if I'm
already paying elevated property taxes because
of these projects for something I didn't vote
for, right? Something I didn't ask to be taxed
for, and now the school comes along and says,
hey, can you give me more money? receptive am
I going to be to that sort of ask, right? Probably
not very receptive at all. So it's got further
reaching implications. Yeah, it certainly goes
out in waves, right? You know, it could affect
the ability for other really legitimate and very
good government services like education, healthcare,
and other things that are needed to be denied
by the taxpayers because they're already tapped
out on this other side, right? And the other
problem is kind of the fundamental issue between
urban and rural, the urban and rural divide that's
very real here in Washington. And ironically,
we had a great conversation, I don't know if
you remember, with New York. And they were talking
about the dynamics in New York. And it was eerie
how similar they were to the dynamics in Washington,
right? Because everybody thinks Washington State,
they think Seattle, right? Big urban center,
et cetera. What do you think about when you think
New York? What? Yeah. Okay. Broadway. But where
is Broadway? No, I think just, I actually just
in my head assumed the whole state is just New
York City. And then my father -in -law's from
Buffalo. So I know that's there as well. Right.
So like I said, it's just New York City and Buffalo.
But there are large portions of New York that
are not urban at all. They're rural. I mean,
think of the Catskills. I would not have pictured
any of New York to be rural. They grow apples
in New York, right? Are we cool with that? Well,
they were there first. I think ours are better,
but they do grow apples in New York. So it's
just, it's interesting. And they were kind of
talking about how... Wait, is that why it's called
the Big Apple? Ding, ding, ding, ding. Way to
go, Travis. Holy cow. Hang on, I got to write
that down. Now, I'm going to Google just to be
sure that that's what it is. But I do know they
grow apples, or at least they historically have
grown apples in New York. Hey, Mitch, could you
put in some, like... Waiting music? Like some
Jeopardy music that we could listen to? I was
going to talk while I did this. Anyways, hearing
about all of that. Actually, no. It's called
the Big Apple because 1920s horse racing reporters,
notably John J. Fitzgerald, used the term to
describe the city's prestigious racetracks as
the top prize. It represented the ultimate big
league destination. That's why it's called the
Big Apple, not because they grew apples there.
That makes no sense to me. But anyways, that'll
be another... That feels like a letdown. We'll
interview New York's Association of Counties
on that in the future. That totally feels like
a letdown. Yeah. Getting back, getting back full
circle. We had a great conversation with our
counterparts in New York. Yeah. And the dynamics
there between, you know, kind of the urban and
rural divide were really remarkably similar to
what was happening in Washington state. And in
Washington, a lot of the people in these rural
areas where these projects are being located,
if you listen to them and what they're saying,
they feel imposed upon, right? They feel imposed
that they didn't vote for the statewide policies.
to reduce fossil fuels and increase our reliance
on alternative energy sources like clean energy,
like green energy projects. They didn't vote
for those policies. They didn't believe in those
policies. They didn't support those policies.
Yet, where the projects are located is in their
area, right? So it's affecting their access to
land. It's affecting their view sheds, right?
It's impacting their quality of life. And on
top of that, they're paying more. for the privilege,
right? So you can understand how that alone can
exasperate that kind of political dichotomy,
right, that exists. And so we need to address
that, right? And we can address that through
these solutions as well and kind of turn that
around a little bit. One of the interesting things
that I remember learning early on paired with
that New York conversation. And that's not the
fruit pair. I mean, like a pairing combined with
the New York. I like a good wine pairing. Wine
pairing? Yeah. Yeah, I do. I was trying to go
with like some apple and then pair. I was going
to see if I could work quince. I like a good
beer pairing too, but I can tell you that's not
going to happen in New York. Probably not. Not
under any circumstances. But one of the other
things I learned was that. New York, all the
way across the country, very similar dynamics,
very similar experiences around renewable energy
projects that we were seeing here, yet across
the Columbia River in Oregon. Completely different.
It was completely flip -flopped. Right. The rural
smaller counties on the east side of the state
were driving. Even competing for these projects.
Yeah. And that was because they just had a whole
different framework for how they were taxing
and how they required the projects to contribute
benefits to the local economy that Washington
doesn't. And there was a lot of things that came
into play, right? Like just that there were a
lot of. There were a lot of other things that
played into the way Oregon approaches their clean
energy projects, including a significant amount
of infrastructure that already existed or access
to some of that. transmission so there were a
lot of there were a lot of reasons that it was
different over there but yeah i mean but but
a lot of those conditions exist here too right
i mean we've got the bpa uh just like they do
we've you know the columbia river system goes
right between oregon and washington some of the
major dams and but more of them are located you
know on the washington in the central washington
stem right and so I think they just made different
choices at the outset when the industry started
to develop in Oregon because they've got some
requirements in place that when a project goes
into a community, they actually have to negotiate
local benefits. And that's not in place in Washington
state. Now, their tax structure system is different
too, right? Oregon doesn't have the high level
of property taxes that we do. We depend way more
on property taxes than Oregon does, but they
have an income tax that we don't have. And that
affects the wind farms too. So it's interesting
to talk about those solutions and it's really
interesting to see the difference in neighboring
states, but it's also not apples to apples to
get back to the whole apple analogy again, right?
It's not because the systems aren't the same.
So we've talked a lot about... how we got here.
We've talked a lot about what's in the bill.
I want to get into a little bit about what's
next to wrap up our conversation, but is there
anything else in the bill that you really want
to highlight, even though we might see some changes
even before the bill takes the next step, but
are there any, any other bill details that you
really want to make sure we highlight here? Well,
I think, you know, The basics of the bill are
kind of what we mentioned. It changes the property
tax laws in Washington so that these projects
moving forward, if they're clean energy projects,
will not be part of property taxes in these communities.
They'll be taxed under the nameplate capacity
-based excise tax system. So they'll never have
a chance to go on the tax rolls and that tax
shift phenomenon that's occurring now will not
happen. in the future. So that's a really good
outcome. The other thing that's really important
here, I think for local governments is there's
both a, there's both a local share and a state
share of, of the, of the, uh, nameplate capacity
based excise tax. Local governments will have
the opportunity to capture a significant portion,
75 % of that state share, um, moving forward,
which is a huge benefit to their communities
that they wouldn't otherwise have. So that's
a revenue. in addition to the county portion
of those property taxes. Right. You said they
have to meet certain conditions. Well, yeah,
they'll have a chance to capture it. So for counties
that already have projects, they don't have to
do anything. You use that term grandfathered,
right? They basically get an exemption from any
other requirements, and they'll qualify to capture
that revenue, which is good. It would be new
money moving forward. For new projects, There
will be a process. through the Department of
Commerce to develop what's known as a model ordinance
for land use and development codes that support
development of these types of projects in different
communities. And counties will have a say in
that process, and it has to meet requirements
under the GMA, the State's Growth Management
Act. And once it's done, counties will have to
adopt it or something similar to it and get certified
by Commerce that they have that in place. And
once that happens, then they'll be able to. able
to capture that extra revenue as well. So you
said the counties will have to adopt a model
ordinance around some land use that supports
clean energy. For somebody that has, I'm going
to pretend like this is for somebody else, asking
for a friend, what kind of things does a land
use ordinance need to have to be supportive of
clean energy or the opposite of that? If you're
asking for a friend, let's be specific. What
kind of rash is it and where is it located? Just
joking. I'm just going to show you. No, no, no.
Don't do that. No, it's not that bad. This is
a family podcast. All right, moving on. So I'm
sorry. I just couldn't resist. Okay. So just
to be clear, you're not going to look at my rash?
I'm not looking at your rash. Okay. But I will
talk to you about the model ordinance. That actually
seems more appropriate for the podcast than what
our members want to know about. I'm sure it is.
What was your question again? For somebody that's
not necessarily familiar with what a land use
ordinance that supports. the development of renewable
energy, what kinds of things would or would not
support? Like, what kinds of things does this
need to have to be supportive or not? Yeah, well,
so for a really good example, some of our counties
just have moratoriums in place, right? Which
means that they won't even accept an application,
much less process it. So you have to automatically
just go to FSEC, the Energy Facility Citing Evaluation
Council, which we haven't talked about at all.
But just for those who are listening, if you
don't know what that is, it's a statewide permitting
authority that has the ability to cite these
facilities anywhere in Washington, regardless
of the local permitting authority. or regardless
of any other local or state laws. They basically
are assumed to be in compliance with all local
and state laws when they issue their permitting
decision, even if they're not. Will FSEC look
at my rash? That's not, I don't think that's
within the agency's mission, but I have some
contacts over there. I could give them to you
and you could find out. That's the easiest example
would be if you have a moratorium in place, obviously
you're not going to meet the requirements of
the model ordinance and you're not going to be
able to get. you know, that revenue. But other
things, you know, for instance, you know, if
you zone areas that don't have, you know, if
you zone areas to allow wind farms where there's
no wind resource and you limit them to only those
areas, that's what we call, you know, effectively
zoning things out of, you know, the ability to
be located in your, in your County. Right. Because
the land that they can build on would not be
something they would want to build on because
it wouldn't give them any. So, so while, yeah,
you've zoned for it, you have, wouldn't really
zone for it right um or having setback requirements
that are so onerous you know 10 miles from the
nearest structure and there's you know nothing
10 miles from the nearest structure where there's
a wind or solar resource that's reasonable uh
to you know try to build a facility to try to
capture right so those sorts of things that would
be considered those would be considered obstructive
to this type of development versus something
that is you know considered um uh conducive right
that would allow this type of development would
say okay you know these are areas where there's
wind resource we're going to go ahead and zone
for this type of facility here you know we're
going to have reasonable setbacks that meet industry
standards based on scientific you know data and
research right we're going to allow you know
mitigation or we're going to require mitigation
that's reasonable that doesn't somehow make the
project so cost prohibitive that it's essentially
not It's essentially a no when it's not a no,
right? Those sorts of things. So it's all those
land use and development codes that local governments
have authority over that they can use to either
make it easier or make it harder for different
types of projects to develop in their community.
Some places don't want distribution facilities,
right? And so they make it hard for you to build
one there because their traffic requirements
are so, you know um uh either traffic mitigation
requirements are so onerous or you know where
they decide you can put one is 30 miles away
from the nearest interchange and that's not what
you're looking for right that sort of stuff yeah
okay where do you want to i want to make sure
where i know we're running along um do you want
to talk about any of the compromise stuff i was
going to sort of shift to the bills in the house
like talk about some of the next steps sort of
what we want but do you want to talk focus on
any of the well we could just kind of talk about
where the bill is so right now it's in house
rules um and we're hearing that it's likely to
get voted out of the house this weekend so if
it's in house rules that means it's already passed
out of This one was introduced in House Finance.
It started in House Finance. It went to Appropriations,
and it was voted out of Appropriations on the
House side. So here we are right up against the
deadline for House of Origin floor cutoff on
Tuesday. So we're trying to get it through. We've
run into a couple snags lately, but Representative
Rammel says he's still willing to move it out
of the House. And then once that happens, hopefully
this weekend, we'll have to do it all again.
again, over in the Senate, but only in a much
shorter period of time, right? A lot of pressure
to try to get it moved. The issues that we have
to deal with right now are, we've kind of lost
support from some of our stakeholders. I think
unfairly, frankly, because I feel like we've...
compromised quite a bit. And we've agreed to
quite a few concessions on this bill, much more,
in my opinion, than the other stakeholders have.
What would you say the top one or two concessions
that you feel? Well, I mean, the rates, first
of all, you know, we wanted rates similar to
what we have in place today, which were right
around, you know, $7 ,000 to $8 ,000 for wind
farms. And I think the rate that was agreed to
was just over $4 ,000 megawatt hour for wind
farms. So that's a pretty big haircut. So that
rate just, I know you said it all there, but
just to be clear, that rate is the amount that's
charged per megawatt. Per megawatt, yeah. That
it potentially could produce. Exactly. Okay.
Exactly. You know, and... There were quite a
few other things that we had to compromise on
in order to get agreement, the rates being one
of the big pieces. But there were other things
like the length of the project term, when they
would convert. We wanted this to affect all projects,
including the existing ones, so that the tax
shift would stop. We agreed to let existing projects
kind of continue on in their current situation
until... they repowered or aged out, which means
it's still going to affect those taxpayers for
a few years out there. But at some point in the
future, that will stop. That wasn't the scenario
we were hoping for, but it was something that
we settled on. So there were quite a few things
that we had to kind of... take a step back from
and say, okay, how can we get to an agreement
here? And I feel like we did a lot of that work
and worked really hard. And it feels like right
now, to be honest with you, it feels like the
goalposts are moving a little bit on the other
side. And that's a little frustrating. It also
feels like if one group throws a wrench into
the whole system, it sort of undoes a lot of...
Where everybody else was right. One person changes
their mind. One stakeholder changes their mind
and ask for a change, which then unravels a lot
of the work that other stakeholders have done
in negotiating with us as well. Right. Yeah.
And that's always, you know, whenever you have
multiple. parties in a negotiation or a lot of
different groups that are potentially affected
by legislation, that's always a risk. You know,
you hope that people, you know, that have been
at the table, you know, don't take advantage
of that as an opportunity to, you know, back
away or regress, but sometimes that doesn't happen.
Okay. So it's sitting in rules. You said hopefully
this weekend it'll move out of rules and then
it'll move over to the Senate. Yep. I know we've
created a—well, Tyler has created a really great
one -pager that we're going to be using to work
doors and try and get some support around moving
it out of House rules, encouraging the state
representatives to bring it up, discuss it, and
move it forward. Just because we know probably
all of the senators are listening, we really
hope—I'm not going to say it's a guarantee, but
we really hope that this bill moves over to the
Senate. What would you want to say right now
to any senator listening, knowing that this bill
is likely heading their way and we want them
to keep moving it forward? What would you say
to a senator that's just about to have this bill
come over to their committee? Well, I'd like
to sit down and have a conversation with them.
That's for sure, because it's a it's a complex
bill. But, you know, for the most part, you know,
I'd want them to know it's been well worked,
that this is not something that we just developed
overnight or even this year. You know, we this
has been a four year process from start to finish.
And that's that's a well worked piece of legislation.
That's something that that, you know, has had
a lot of seasoning to. And I think that's what
a lot of legislators look for when they see a
complicated issue like this, right? They don't
want something that's just a flash in the pan
that suddenly somebody hatched up overnight that's
going to have all kinds of unintended consequences.
I think this is one that we've really, really,
really thought through. It's a well -aged steak,
right? Yeah, I mean. You said seasoned. Yeah,
there's a limit to aging your meat. You know
what I mean? You don't want to go too far on
that. Yeah, no, three years we've been working.
Working on this at least three years. I don't
know how long you dry age a steak, but I feel
like three years is way too long. It's probably
a little too long. Okay. All right. But, yeah,
I mean, so I hope they're looking for that. And
if they have questions about it, you know, certainly
I hope that they reach out to you or they reach
out to me so that we can give them or Representative
Rammel, for that matter, so we can give them,
you know, the real information and the facts.
And I hope that they see this as a benefit to
their community, no matter what side of this
issue you're on. Right. If you're clean, if you're
pro clean energy or if. if you're, you know,
anti -clean energy and a climate denier, right?
You know, it doesn't. it really doesn't matter
because this is a tax issue. And it's about making
it right for the people who live in these communities
and who are hosting these projects. There is
no other situation that I can think of in our
tax laws that creates this type of situation
where it puts such a burden on the local taxpayer
in such an unfair way. And I hope that's what
the legislators, how they see this as well, because
that's what it is. It's really easy to get caught
up in, you know, ideological, emotional politics
of this issue, you know, around climate change
and green energy. But that's not what this bill
is. Not by any means. It's about a tax. And frankly,
it's about an unfair tax. And this is the way
to fix it. And we need to fix it now. So it really
feels like, you know, to use an Olympics metaphor,
this really feels like it should just smoothly
slide like. the Jamaican bobsled team through
the rest of the process. I hope so. I hope so.
All right. Let's see what happens. Thank you
very much, Paul Jewell, for joining us today.
It was an honor to interview you. Yeah, it was
weird. It was weird. I'll admit it was weird.
Yeah. I'm not sure I like it. We'll see. I might
want to be back with the headphones on the next
time we talk. We'll see what happens. Yeah. I
get, I get, I don't, I don't like it. I'm not
sure yet. A lot around a lot of things. I don't
know yet. I'm not sure about Travis. All right.
Well, I appreciate you going through this exercise
and whether this gets released or not. It was
a fun interview. Thank you for being here. And
we will see you all next time on the County Connections
podcast. Thanks, Travis. Thanks for tuning in
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