Regulations and Incentives

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

2004 Washington State Legislative Session 

2004 Alternative Fuels Legislation Stalled in State Legislature  The Puget Sound Clean Cities Coalition has actively worked with legislators and stakeholders from across the state to develop and support the passage of several bills to provide incentives for alternative fuels and vehicles. Despite strong bipartisan support from legislators across the state, these bills have failed to pass the Washington State Legislature this year due to a variety of factors, most of which are unrelated to the merits of the proposals. The alternative fuel bills would have provided tax incentives for the purchase of alternative fuel vehicles and the development of alternative fuel refueling stations, HOV lane access for alternative fuel vehicles, and a state fuel tax exemption for school districts on alternative fuels.

Bills Developed and/or Supported by the Coalition:

Summary of HB2447/SB6646:
- The sales and use tax exemption for investment projects for the manufacture of biodiesel fuel, alcohol fuels, and biodiesel feedstock is expanded to apply to individuals seeking the exemption regardless of geographic location.
- The excise tax incentives for alcohol and biodiesel fuels and biodiesel feedstock terminate prior to 2009 if the volume of biodiesel manufactured is equal to 20 percent of the total of the volume of diesel fuel and biodiesel fuel manufactured. The alcohol and biodiesel-related incentives that would terminate are the sales and use tax exemption on investment projects for manufacturers; the preferential B&O tax rate for manufacturers; the deduction from B&O taxable income for sales of blends of the fuels by retailers; and the sales and use tax exemption on equipment used for refueling.
- Takes effect July 1, 2004.

Status in House: 

Status in Senate: 

Summary of HB2821/SB6647: 
- Provides that every student transportation program, whether operated by a school district or a commercial chartered bus service, is exempt from the provisions of chapter 82.38 RCW requiring the payment of special fuel taxes on biodiesel fuel, natural gas, and liquefied petroleum gas if the biodiesel fuel is used at a minimum of a twenty percent blend by volume.
- Takes effect July 1, 2004.

Status in House:

Status in Senate:

Summary of HB2822/SB6648:
- Authorizes the use of high-occupancy vehicle lanes by inherently low-emission vehicles. "Inherently low-emission vehicle" means an inherently low-emission vehicle as defined in, and conforming to the certification and labeling requirements of, federal regulations under 40 C.F.R. Part 88, and includes zero-emission vehicles. Under these federal regulations, eligible vehicles are dedicated natural gas and propane vehicles and electric vehicles.
- Directs the department of transportation to conduct a study on how any existing high-occupancy toll lane program or value pricing pilot program may be expanded to include vehicles whose combined city and highway average gasoline mileage is at least twice the national average for passenger cars, as that figure is determined by the United States environmental protection agency, if such vehicles were to receive a fee waiver or discount.
- Requires the department to report its findings to the legislature by January 1, 2005, or at the conclusion of the department's study of high-occupancy toll lanes under the United States federal highway's value pricing pilot program, whichever occurs first.
- Takes effect July 1, 2004.

Status in House:

Status in Senate:

Summary of HB2823/SB6685:
- Provides Business and Occupation (B&O) tax credit for the purchase, or the lease for a period of at least three years, of new alternative fuel vehicles, if the vehicles are exclusively used in business operations. “Alternative fuel vehicles” means a motor vehicle, as defined in RCW 46.04.320, originally designed and equipped by the manufacturer to operate: (a) exclusively on natural gas, liquefied petroleum gas (propane), hydrogen or electricity; or (b) as a fuel cell vehicle, which is defined as a vehicle that operates on an electric motor drawing current from combining hydrogen and oxygen in an electrochemical process. The maximum amount of credit under this section that may be claimed, by each person, for any calendar year shall not exceed five hundred thousand dollars. The credit is based upon the following schedule:

- 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. For purposes of this subsection, "alternative fuel" means natural gas, liquefied petroleum gas (commonly called propane), and hydrogen. The maximum amount of credit under this section that may
be claimed, by each person, for any calendar year shall not exceed two million dollars. The credit is based upon the following schedule:
(a) Fifty percent of the costs incurred at facilities open to the public, not to exceed five hundred thousand dollars; and
(b) Twenty-five percent of the costs incurred at facilities not open to the public, not to exceed two hundred fifty thousand dollars.
- Provides an exemption from state sales and use taxes on machinery and equipment, or to services rendered in respect to constructing structures, installing, constructing, repairing, decorating, altering, or improving of structures or machinery and equipment, or to sales of tangible personal property that becomes an ingredient or component of structures or machinery and equipment, if the machinery, equipment, or structure is used directly for the retail sale of natural gas, liquefied petroleum gas, hydrogen, or a blend of natural gas and hydrogen for use in a motor vehicle or is used for the recharging of an electric vehicle.
- Takes effect July 1, 2004.

Status in House:

Status in Senate:

Summary of HB2937:
- Exempts 100% biodiesel fuel from the 5 cent additional special fuel tax imposed in 2003.

Status in House:

Summary of HB2702:
- Requires half of planned new vehicle purchases made by the Department of General Administration (GA) to be electric hybrid vehicles, vehicles that use alternative fuels, or a combination of both, for the period July 1, 2004 through June 30, 2009.

Status in House:

Other Alternative Fuels or Vehicle-Related Legislation of Interest: 


SENATE BILL 6487 - Providing biodiesel and ethanol fuel mandates.   
- THIS BILL DID NOT PASS - 
By Senator Mulliken

Summary of SB 6487: 
- Provides that all diesel fuel sold or offered for sale in the state for use in internal combustion engines must contain at least two percent biodiesel fuel by volume. The minimum biodiesel fuel content requirement does not apply to fuel used in the following equipment: (1) Motors located at an electric generating plant regulated by the nuclear regulatory commission, unless the commission has approved the use of biodiesel fuel in motors at electric generating plants under its regulation; or (2) Railroad locomotives. 
- Requires that, on and after July 1, 2006, and until July 1, 2007, at least thirty-five percent of all gasoline sold by each distributor for use in motor vehicles in the state must contain ten percent ethanol by volume.
- Requires that, on and after July 1, 2007, and until July 1, 2008, at least seventy percent of all gasoline sold by each distributor for use in motor vehicles in the state must contain ten percent ethanol by volume.
- Requires that, on and after July 1, 2008, at least eighty-five percent of all gasoline sold by each distributor for use in motor vehicles in the state must contain ten percent ethanol by volume.
- Takes effect July 1, 2006.

Status:

SENATE BILL 6386 - Reducing air pollution from heavy duty diesel vehicles and large vessels.
- THIS BILL DID NOT PASS - 
By Senators Fraser, Morton, Winsley, Carlson, Regala and Kline

Summary of SB 6386:
- The Department of Ecology must develop, in consultation with local air authorities, the Department of Transportation, and the Washington Public Ports Association, a list of prioritized sites where stand-alone electrification projects should be initiated for heavy duty diesel vehicles. Criteria is provided for use in developing the prioritized list of sites. The prioritized list of potential electrification projects must be submitted to the appropriate committees of the Legislature and the Governor by December 15, 2004. 
- The department must initiate, by January 1, 2005, a request for proposal process to build a stand-alone electrification project at the highest priority site. The department must initiate additional stand-alone projects as funding may allow. The department must also conduct a study regarding the development of on-board electrification projects for heavy duty diesel vehicles, ports, airports, or rail yards. The department is not required to conduct any original scientific research as part of the study. The results of the study must be submitted to the Legislature and the Governor by October 15, 2005. 
- The department must seek financial assistance from federal and nonstate sources to fund stand-alone and on-board electrification infrastructure projects, and to assist owners and operators of heavy duty diesel vehicles and large vessels to modify their on-board equipment to accept auxiliary power when stationary. 
- The department must also develop a state funding strategy for construction of additional stand-alone projects on the priority list.

Status:

HOUSE BILL 2808 / SENATE BILL 6672 - Authorizing a pilot project for high-occupancy toll lanes.
- THIS BILL DID NOT PASS - 

Summary of HB 2808/SB 6672: Declares an intent to direct that the department of transportation, as a pilot project, develop and operate a high- occupancy toll lane on state route 167 in King county and to conduct an evaluation of that project to determine impacts on freeway efficiency, effectiveness for transit, feasibility of financing improvements through tolls, and the impacts on freeway users.

Status in House:

Status in Senate: