Washington Incentives and Laws

Washington Incentives and Laws

Last Updated March 2006

State Incentives

Alternative Fuels Tax Deduction

A tax deduction is available for the sale or distribution of biodiesel or alcohol fuel (comprised of at least 85% alcohol fuel by volume). Additionally, fuel delivery vehicles and machinery, equipment, and related services that are used for the retail sale of a biodiesel or alcohol fuel are exempt from state retail fuel sales and use taxes. (Reference Revised Code of Washington 82.08.955)

Biofuels Production Tax Exemption

Until July 1, 2009, investments in buildings, equipment and labor for the purpose of manufacturing biodiesel, biodiesel feedstock or alcohol fuel are eligible for the deferral of state and local sales and use taxes. Qualifying buildings, equipment and land used in the manufacturing of alcohol fuel, biodiesel, or biodiesel feedstocks are also exempt from state and local property and leasehold taxes for a period of six years. Additionally, a reduced Business & Occupation tax rate of 0.138% applies to persons engaged in manufacturing of alcohol fuel, biodiesel fuel, or biodiesel feedstock. (Reference Revised Code of Washington (RCW), 82.04.260, 82.12.955, 82.29A.135, and 84.36.635)

Biofuels Production Incentive

The Energy Freedom Program includes the Energy Freedom Loan Account, funded by $100 million from the State General Fund and managed by a 13-member Energy Freedom Board (Board), which will be staffed by the Department of Community, Trade, and Economic Development (DCTED). The Board will establish a competitive process for awarding low-interest loan and grants in research and development of new and renewable energy sources, including infrastructure, facilities, technologies and research and development that will advance Washington's move towards energy independence. Financial assistance may be awarded by the Board for: research and development of new and renewable energy and biofuel sources, including biomass, solar, and wind power; renewable energy and biofuel development infrastructure and facilities; and research and development to develop markets for alternative fuel byproducts. The Energy Freedom Loan Program expires June 30, 2016. (Reference House Bill 2939, 2006)

Idle Reduction Tax Incentives

Tax incentives are available for the infrastructure and services that support the use of auxiliary power for heavy-duty vehicles weighing more than 14,000 pounds through on-board or stand-alone electrification systems. These incentives offer a business and occupation tax deduction and sales and tax exemption for machinery and equipment integral to providing auxiliary power at truck stops. Sales and use tax exemptions are also available for parts and labor necessary to enable heavy-duty diesel trucks to accept power for onboard electrification systems. These exemptions would expire on July 1, 2015. (Reference Senate Bill 6512, 2006)

Alternative Fuel Vehicle (AFV) Annual Fee

In order to encourage the use of nonpolluting fuels, owners of compressed natural gas (CNG) and liquefied petroleum gas (LPG) powered vehicles are required to pay an annual license fee, based on gross vehicle weight rating (GVWR), instead of motor fuel excise taxes. The fee is calculated as follows:

To determine the actual annual license fee imposed by this section for a registration year, the appropriate dollar amount given in the above schedule must be multiplied by the motor vehicle fuel tax rate in cents per gallon (as established by Revised Code of Washington 82.36.025) effective on July 1 of the preceding calendar year, and the resulting amount be divided by $0.12. In addition, there is a $5 handling fee. (Reference Revised Code of Washington 82.38.075)

State Laws and Regulations

Biodiesel Fuel Standard and Ethanol Use Requirement

At least 2% of the diesel sold in Washington must be biodiesel, beginning November 30, 2008 or when a determination is made by the Director of the State Department of Ecology that feedstock grown in Washington State can satisfy a 2% fuel blend requirement. The biodiesel requirement would increase to 5% once in-state feedstocks and oil-seed crushing capacity can meet a 3% requirement. Additionally, all gasoline sold in the state must contain at least 2% ethanol beginning December 1, 2008. The ethanol requirement could be increased to 10% if the Director of Ecology determines that this would not jeopardize continued attainment of Clean Air Act standards. (Reference Senate Bill 6508, 2006 and Revised Code of Washington 19.112 and 82.38)

Biodiesel Use Requirement

All state agencies are encouraged to use a fuel blend of 20% biodiesel and 80% petroleum diesel (B20) for use in diesel-powered vehicles. Effective June 1, 2006, for state agencies complying with the ULSD mandate of the U.S. Environmental Protection Agency (EPA), at least 2% biodiesel must be used as an additive to USLD for lubricity, provided that the use of a lubricity additive is appropriate and that performance and cost are comparable with other available lubricity additives. Furthermore, 20% of the diesel used by state agencies must be biodiesel beginning on June 1, 2009. (Reference Senate Bill 6508, 2006, Revised Code of Washington 43.19.642 and Executive Order 05-01, 2005)

Global Warming Mitigation Initiative – West Coast

Governors of Washington, Oregon and California approved a series of recommendations for action to combat global warming, as detailed in the West Coast Governors´ Global Warming Initiative. The conclusion was that Oregon, California and Washington must act individually and regionally to reduce greenhouse gas emissions. The initiatives include the establishment of new targets for reduction of average annual state fleet greenhouse gas emissions and collaboration on the purchase of hybrid electric vehicles. Areas highlighted in the West Coast Report on Global Warming for achieving greenhouse gas reductions include expanding the markets for energy efficiency, renewable resources and alternative fuels. In Washington, state agencies are required to achieve 20% reduction in petroleum use in state vehicles by September 1, 2009. Agencies must give priority to the purchase and use of hybrid electric and other fuel efficient, low-emission vehicles (those that achieve at least 30 miles per gallon meet federal EPA Tier 2 emission standards). (Reference Executive Order 05-01, 2005)

Global Warming Mitigation Initiative – King County

As directed by local Executive Orders and the King County Acting Locally Initiative, King County departments are to increase their use of 'green' power and biodiesel. At least 50% of King County's total energy use must be generated from renewable energy sources by 2012 for non-transit uses and 2020 for transit uses. Additionally, the amount of biodiesel blends used in the county's vehicles must be increased from the current B5 blend to a B20 blend such that the county uses 2.5 million gallons of biofuels annually.

Biodiesel Storage

Underground Storage Tank regulations apply to biodiesel blends but not to 100% biodiesel (B100). An owner changing the use of an underground storage tank from storage of diesel to storage of B100 must communicate the change to the Washington State Department of Ecology and have a site assessment performed by a certified site assessor. (Reference Washington Administrative Code 173-360)

Point of Contact

Gail Jaskar
Washington State Department of Ecology
Phone (360) 407-7225 or (800) 826-7716
gjas461@ecy.wa.gov
http://www.ecy.wa.gov/pubs/0309103.pdf
 

Clean School Bus Funding

Until July 1, 2008, 85% of the money from the segregated subaccount of the state treasury's air pollution control account must be distributed to air pollution control authorities. Of the money received by an air pollution control authority or the state Department of Licensing, 85% must be used for the Clean School Bus Program, to retrofit school buses with exhaust emission control devices or to provide funding for refueling infrastructure necessary to allow school bus fleets to use alternative, cleaner fuels. (Reference Revised Code of Washington 70.94.017)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs are permitted on roads having speed limits of 35 miles per hour (mph) or less. (Reference Revised Code of Washington 46.61.725)

Alternative Fuel Vehicle (AFV) Emission Inspection Exemption

Electric, CNG, and LPG vehicles are exempt from emission control inspections. Effective June 13, 2002, hybrid motor vehicles that obtain a fuel economy rating by the EPA of at least 50 miles per gallon of gasoline during city driving are also exempt from these inspections. (Reference Revised Code of Washington 46.16.015)

Clean-Fuel Vehicle Purchasing Requirement

At least 30% of all new vehicles purchased through a state contract must be clean-fuel vehicles; this percentage shall increase at the rate of 5% each year. It is preferred that dedicated clean-fuel vehicles be purchased; in the event that dedicated clean-fuel vehicles are not available or would not meet operation requirements, conventionally powered vehicles may be converted to clean-fuel or dual-fuel use. (Reference Revised Code of Washington 43.19.637)

Alternative Fuel Vehicle (AFV) Identification Requirement

Every automobile, truck, motorcycle, motor home, or off-road vehicle that is fueled by an alternative fuel shall bear a reflective placard issued by the National Fire Protection Association indicating that the vehicle is powered by an alternative fuel. (Reference Revised Code of Washington 46.37.467)

Fleet Action Plan - Seattle

The 'Clean Green Fleet Action Plan' aims to increase the use of alternative fuels, reduce fleet fuel use, reduce vehicle emissions, and improve the fuel efficiency of the City of Seattle's (City) fleet. The City's long-term intent is to have a fleet that is 100% clean and green, through the use of clean fuels and vehicles that are the most fuel efficient and low emission vehicles available to meet the needs of City operations. The specific measures called for in the plan include a 5% reduction in annual fleet fuel use by 2005 as compared to 1999.

Point of Contact

Mark H. Brady
Clean Cities Coordinator
Puget Sound Clean Cities Coalition
Phone (206) 684-0935
Fax (206) 684-0656
bradymh@seattle.gov
http://pugetsoundcleancities.org/
 

Utilities/Private Incentives

Natural Gas Technical Assistance

Puget Sound Energy (PSE) is a partner in the Puget Sound Clean Cities Coalition. PSE, a gas and electric utility, operates its own CNG stations and provides technical support and assistance to customers wishing to purchase natural gas for use in CNG vehicles.

Point of Contact

Chuck Dougherty
Program Manager for Alternative Fuel Vehicles
Puget Sound Energy
Phone (253) 476-6202
Fax (253) 476-6415
chuck.dougherty@pse.com
 

Washington Points of Contact: