Sen. Mark Mullet

A Washington state senator has renewed his proposal to refund cap-and-trade costs to farmers and haulers of farm goods, an idea that failed to win support last spring from farm groups.

Sen. Mark Mullet, D-Issaquah, said Friday he expects more backing now for refunds. The Department of Ecology hasn’t yet found a way to exempt farm fuels from cap-and-trade, he said.

“People realize Ecology is not getting the problem solved,” he said.

Cap-and-trade taxes carbon emissions from fuels, but under the law emissions from fuel used to grow or transport farm groups are supposedly exempt from the tax.

It’s unclear, however, how a farmer or trucker fueling at a self-service gas station can claim the exemption.

The problem is especially tricky for truckers who haul farm and non-farm goods on the same trip. Some carbon emissions on the trip are covered by cap-and-trade, and some are not.

Mullet introduced a bill late last session offering farmers and truckers rebates. Farm groups saw rebates as a pale substitute for promised exemptions. The Inslee administration also opposed rebates and blamed oil companies for misapplying the law.

The Washington Farm Bureau and Washington Trucking Associations plan to sue Ecology in Thurston County Superior Court, seeking to force Ecology to write a rule to exclude farm fuels from cap-and-trade.

While the groups continue to press Ecology for an exemption, the lawsuit does not conflict with Mullet’s proposal to offer refunds, Farm Bureau director of government relations Breanne Elsey said Friday.

Farmers and haulers have been wrongly paying cap-and-trade costs since Jan. 1 and probably will never get the money back without refunds, she said.

“I don’t think you can get around it for the retroactive component,” Elsey said.

Mullet’s bill has other provisions intended to bring down cap-and-trade costs. He will have to wait until the Legislature meets to formally introduce it. Lawmakers aren’t scheduled to convene until January.

The draft legislation proposes basing refunds on the most recent cap-and-trade auction. If the bill were in place today, refunds would be 50 cents a gallon. Farmers and truckers would submit receipts online.

Refunds would come from cap-and-trade auction proceeds. So far, the state has collected $1.46 billion. “The state has the money to offer the remittances,” said Mullet, a gubernatorial candidate.

Cap-and-trade fees are “absolutely drowning” some trucking companies that transport farm goods, said Sheri Call, president and CEO of the Trucking Associations.

“Right now, we’re looking for anything to mitigate the cost,” she said. “A rebate program would be much better than what we’re experiencing right now.”

At the direction of lawmakers, Ecology convened a work group to look at how to exempt farm fuels from cap-and-trade. The work group may have recommendations later this month.

A work group member, Washington Cattle Feeders Association executive director Jack Field, said he hasn’t seen any proposal that shields all farmers and ranchers from cap-and-trade costs, as lawmakers intended.

Rebates probably will have widespread support in agriculture, he said. “Based on where we are now, I don’t see any other way.”

Before suing, the Farm Bureau and Trucking Associations petitioned Ecology to write a rule exempting farm fuels from cap-and-trade. Granting the petition would undercut the work group, according to Ecology Director Laura Watson’s response to the petition.