Regulations and Incentives

| Regulations and Incentives Main Page | Federal Regulations and Incentives | 
| Washington State Regulations | Washington State Incentives | Clean Cities Efforts in Washington State |

2005-2006 Biennium

PSCCC worked with legislators on several bills in the 2005 Legislative Session of the 2005-2006 biennium. Unfortunately, these bills were not passed in this session. The bills were carried over to the 2006 session. Details on these bills can be found below. The 2006 session saw intense attention on biofuels. Numerous bills were introduced and key highlights are included below. For full details on all of these bills, visit the Washington State Legislature website.

2006 Legislative Session

• Senate Bill 6508 - Developing minimum renewable fuel content requirements and fuel quality standards in an alternative fuels market

Visit the Legislature's page on this bill here. The companion bill was House Bill 2738. Please visit these pages for full details but a brief summary is provided here. The bills eventually require that at least 2 percent of the diesel sold in Washington be biodiesel. This requirement would start either Dec. 1, 2008 or six months after the Director of the Dept. of Agriculture determines that Washington state farmers are growing enough oil seed to satisfy the requirement for 2% biodiesel. Furthermore, the biodiesel requirement would increase to 5% once in-state feedstocks and oil-seed crushing capacity can meet a 3% requirement. The bills also require that all gasoline sold in the state contain at least 2% ethanol beginning Dec. 1, 2008. The ethanol requirement could be increased to 10 percent if the Director of Ecology determines that this would not jeopardize continued attainment of Clean Air Act standards. In addition, the bills would require that 20% of the diesel used by state agencies be biodiesel beginning on Jun. 1, 2009.

**UPDATE: SB6508 has passed the House as amended by that body. The House amendments were then approved by the Senate so the bill has passed. The Governor signed the bill into law at a ceremony in Moses Lake on Mar. 30th. Click here to read the Session Law.**

• House Bill 2939 - Establishing the energy freedom program

The Legislature's page for this bill is here. Please refer to this page for complete information as only a very brief summary is provided here. This bill directs the Director of the Department of Agriculture to develop a process to solicit and prioritize applications for the program. The program would provide low-interest loans to political subdivisions to help with financing renewable energy and biofuel projects and activities. Each loan may be up to $5 million and matching funds are required. Up to $25 million is authorized to be transferred into the energy freedom account.
**UPDATE: HB2939 has passed the House and Senate. Click here to read the approved version that has been sent to the Governor. The Governor signed the bill into law on Mar. 22nd. Click here to read the Session Law. The Legislature appropriated $23 million into the energy freedom account for the first year.** 

• Senate Bill 6512 - Enhancing air quality at truck stops

The Legislature's page for this bill is here. Please refer to this page for complete information. In brief, the bill provides tax incentives for the electrification of truck stops so that trucks do not need to idle for long periods of time. Specifically, the bill provides business and occupation tax deductions for retail sales, leases or rentals of on-board or stand-alone electrification units to provide auxiliary power to trucks. The bill also provides sales and use tax exemptions for the sale and use of machinery and equipment for the retail sale, lease or rental of on-board or stand-alone electrification units. Finally, the bill provides sales and use tax exemptions for parts and labor required to enable the trucks to use an onboard electrification system.
**UPDATE: SB6512 has passed the House and Senate. The Governor signed the bill into law on Mar. 29th Click here to read the Session Law.**

• House Bill 2393 - Establishing an energy freedom program

The Legislature's page for this bill is here. The bill provides for $9 million worth of loans to be provided to four political subdivisions.  The loans would be used for the development of biofuel oilseed crushers and supporting infrastructure and facilities. The intent is to support the development of a Washington biodiesel industry based on Washington oilseeds. This bill passed out of the House on January 30th. It is currently in the Senate's Water, Energy & Environment Committee. *UPDATE - HB2393 has passed out of the Senate Water, Energy & Environment Committee. This bill did not make it any further so it is now dead.*
**2nd Update: Although this bill died, the major provisions were authorized in the State's supplemental capital budget bill (SB 6384). This bill provided $10.25 million for low-interest loans to political subdivisions for renewable energy projects. Specifically, the following groups received funding:

• Spokane Conservation district:                $ 2,000,000

• Port of Warden:                                       $ 2,500,000

• Odessa public development authority:    $ 2,500,000

• Port of Columbia county:                         $ 2,500,000

• Port of Sunnyside:                                      $ 750,000

• Senate Bill 6501 - Creating the Washington bioenergy assistance program

The Legislature's page for this bill is here. The companion bill was House Bill 2775, although HB2939 has become, in effect, the companion bill to SB6501. The bill would create a bioenergy assistance program within the Department of Agriculture. Political subdivisions and private entities would be eligible to participate in the program. The maximum amount available for an application would be $5 million. The intent is to stimulate the construction of facilities to produce, distribute or store biofuels created from Washington farm sources. See the bill's page for full details. The Senate bill passed on Feb. 13th; the bill is now in the House Technology, Energy & Communications Committee. The House bill did not make it out of the House Capital Budget Committee. *UPDATE - SB6501 has passed out of the House Technology, Energy & Communications Committee. This bill did not make it any further so it is now dead, but HB2939, which was essentially a companion bill to this bill, did pass.*

Other Bills

A number of other bills relating to alternative fuels were proposed in this session but did not make it out of the house of origin by the cut-off date. These bills are listed below with a link to the Legislature webpage that contains details each bill.

• House Bill 3170 - Designating state route number 5 as Washington hydrogen highway
• Senate Bill 6514 - Regarding biodiesel mandates for state agencies
• Senate Bill 6515 - Providing information on biofuels and renewable energy
• Senate Bill 6516 - Providing sales and use tax exemptions to encourage the use of alternative fuels
• Senate Bill 6524 - Providing incentives for converting methane gas to a usable fuel

2005 Legislative Session

Summary of HB 1645:
- Provides an exemption for school districts from the state motor fuels tax on alternative fuels.
- Provides a sales/use tax exemption for school districts on the purchase or conversion of alternative fuel school buses and other vehicles
- Provides a sales/use tax exemption to school districts for the purchase and installation of aftermarket emissions control equipment.
- Takes effect July 1, 2005.
Complete text of the most current version of the bill is available through the Washington State Legislature website.

Status:
This bill did not make it out of the House Finance committee.

Summary of HB 1646:
- Provides a sales/use tax exemption on equipment and labor for construction of a manufacturing facilities used to manufacture alternative fuels.
- Provides a sales/use tax exemption on fuel storage tanks, delivery vehicles, or associated facilities or to labor to install such equipment used in the storage and distribution of liquefied natural gas produced from renewable, waste, or stranded sources of methane gas.
- Provides a 6-year property/leasehold tax exemption on property and land used primarily for the manufacture of alternative fuels.
- Provides a Business and Occupation Tax rate of 0.138 for manufacturers of alternative fuels and for manufacturers of natural gas liquefaction equipment, including equ8pment to produce compressed natural gas from the liquefied natural gas.
- Takes effect July 1, 2005.
Complete text of the most current version of the bill is available through the Washington State Legislature website.

Status:
This bill did not make it out of the House Finance committee.

Summary of HB 1647:
- Provides Business and Occupation (B&O) tax credit for the purchase or conversion of alternative fuel vehicles.
- Provides a Business and Occupation (B&O) tax credit for the costs expended for acquiring and installing alternative fuel and electric vehicle recharging equipment, including alternative fuel storage tanks.
- Provides a B&O tax credit of 10 cents per gallon on alternative fuels.
- Exempts retail sales of alternative fuels from computation of the B&O tax.
- Provides a sales/use tax exemption on natural gas vehicle fueling or refueling appliances.
- Takes effect July 1, 2005.
Complete text of the most current version of the bill is available through the Washington State Legislature website.

Status:
This bill did not make it out of the House Finance committee.