Washington Legislature Discusses Proposed Climate Resiliency and Mitigation Surcharge

On February 22, 2022, the Washington State Legislature Senate Committee on Ways & Means held a public hearing to discuss SB 5967, which was recently amended. The amendments, if enacted, would create a new “business and occupation tax” (“B&O tax”) creating Climate Resiliency and Mitigation Surcharges on specified financial institutions.

Financial institutions which would be subject to this 0.5% tax surcharge would be part of a new class of “specified financial institutions that are bankers of fossil fuels financing $1 billion or more to at least one fossil fuel company.” These “specified” institutions will be listed in what will be referred to as the “Washington Fossil Fuel Financing Report.” Under the proposal, this report will be created by the Washington Department of Commerce.

Although the Committee did not make any decisions on the tax during this hearing, the provisions of the bill would make the new surcharge effective starting in 2023. Affected financial institutions should consider the implications of the bill.