(The Center Square) – The Washington Farm Bureau is urging state lawmakers to address a multi-million-dollar dispute with the Department of Ecology over a tax exemption for fuels used for agricultural purposes and transporting agricultural products on public highways.

The bureau contends the state’s 2021 Climate Commitment Act, which seeks to reduce greenhouse gas emissions, includes a five-year exemption from its cap-and-trade program for emissions from diesel fuels used in farming and hauling agricultural products by truck.

But in developing regulations, Ecology instead created “an arbitrary exemption process inconsistent with its statutory obligations,” the farm bureau and Washington Trucking Associations alleged in a lawsuit filed in September in Thurston County Superior Court.

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The two organizations contend that the CCA-imposed charges, implemented in January, have increased ag-related diesel costs between 45 cents and 70 cents per gallon, resulting in an estimated $74 million increase in fuel prices “that should be exempt.” They are seeking an administrative law review of the provision, and restitution. A trial setting date is scheduled Jan. 12.

On Thursday, Bre Elsey, the farm bureau’s director of governmental affairs, said, “It’s unfortunate that Ecology officials propose changes to the Climate Commitment Act for their own public relations crisis due to sky-rocketing fuel costs, but won’t consider a statutory fix to remit millions of dollars in illegal charges back to the state’s farmers and ranchers.”

The farm bureau said Ecology could “easily resolve any unjust costs imposed on the transport of agricultural products by partnering with agriculture to reopen the statute.” A petition submitted in June seeking resolution was rejected by the state agency, prompting the lawsuit in September.

In addition to the pending litigation, the farm bureau is hoping state lawmakers also address the issue when they convene in January for the 2024 session.

“As the Legislature prepares to reassess its cap-and-trade program, the Washington Farm Bureau urges the state to correct this injury and provide restitution for the damages already incurred due to the state's failure to honor its programmatic obligations under law,” said Elsey.

It was not immediately specified whether any lawmakers had yet drafted a bill for consideration.

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