OLYMPIA — Yesterday, the Washington State House of Representatives passed House Bill 1960, to establish a new excise tax for renewable energy systems that support funding for local governments and tribal grants.
Prime sponsor State Rep. Alex Ramel, D-Bellingham, introduced this legislation to design a fairer tax system that meets the growing needs of expanded energy production and clean electricity in Washington state. “By replacing property taxes with a renewable energy excise tax for qualifying projects, schools, fire districts, counties and other local governments will see long-term, stable funding,” said Ramel.
Property taxes on large amounts of expensive equipment inadvertently create a tax shift for other taxpayers when the equipment is depreciated. This measure would replace property taxes on these systems with a new renewable energy excise tax based on the energy generating capacity of new wind farms, solar farms, and large battery storage facility projects. The revenue collected will primarily be used to support the local communities.
“When wind farms, solar farms, or electric battery storage systems are built in a community, that community ought to see lasting economic benefits from those projects— and that is what this bill ensures,” Ramel said.
HB 1960 specifies at least 75 percent of the revenue collected be allocated to local jurisdictions in the same ratio as the local property taxes, including to counties that host these projects, public schools, fire districts, libraries, and other local service districts.
The remaining revenue will support a tribal renewable energy capacity grant program and a model clean energy project ordinance. These investments will make clean energy siting and deployment less contentious in many communities around Washington.
The revenue generated is comparable to what would have been generated by property taxes over the lifetime of the equipment. “This is a thoughtful proposal which is the result of extensive and ongoing collaboration between stakeholders, counties, cities, developers, utilities, and tribal governments. It is intended to be predictable for those paying this excise tax as well as those benefiting from this program all while supporting our state’s clean energy goals,” Ramel added.
House Bill 1960 passed with a vote of 74-15. It now heads to the Senate for consideration. Watch Rep. Ramel’s remarks on House passage here or by clicking the image below.
