Renewable energy facilities would pay new state and local taxes

The state must collect a renewable energy excise tax, and a county may collect an additional local excise tax, from covered facilities and storage systems. The provisions cover wind and solar facilities with at least 10 megawatts of capacity and battery storage systems with at least 10 megawatts of storage, with stated exclusions for certain utility-regulated or tax-replacement projects. The state rates are $968 per year per megawatt for solar facilities, $1,200 for wind facilities, and $156 per megawatt-hour of storage capacity. The local rates are $2,905 per year per megawatt for solar facilities, $3,600 for wind facilities, and $467 per megawatt-hour of storage capacity. A county must choose whether to impose the local tax. The tax is in addition to other listed state taxes. Covered personal property is exempt from property tax when a facility or storage system starts operating or is repowered on or after January 1, 2028. Older projects may qualify by opting into the excise taxes and meeting notice and county-authorization requirements. The state and local excise taxes begin January 1, 2028. The rates continue for the facility or storage system's lifetime or until it is repowered, subject to the act's other timing rules.

The Department of Commerce must distribute available program funds to counties hosting qualifying energy projects. Qualifying projects include energy storage systems, wind or solar facilities, and related facilities constructed after the section takes effect. Funding depends on amounts appropriated for the program. A county's share generally follows the state excise tax attributed to that county during the previous reporting period. Most counties must pass the funds to local taxing districts based on their relative property-tax shares. A rural county may keep the full amount. Eligibility depends on factors such as the project's operating date, an earlier environmental application, or the county's adoption or substantial adoption of the department's model ordinance. Later projects must meet tribal and cultural-resource engagement requirements. The legislature intends to dedicate at least 75 percent of local investment account appropriations to this program beginning in fiscal year 2029. The department must publish a model siting ordinance by July 1, 2028.

The Department of Ecology must provide biennial capacity grants to eligible federally recognized tribes and technical support for local renewable energy siting. Eligible grant recipients include federally recognized tribes in Washington and tribes with treaty-ceded lands in Washington. Siting support covers local governments and qualifying energy projects. Tribes may use grants for clean energy consultation, climate resilience, tribal energy projects, grant applications, and related work. The department must develop the model ordinance with local governments, project developers, tribes, and other interested groups. After the model ordinance is published, local siting rules that are more restrictive or burdensome than the model may prevent a county or city from qualifying for the local investment program, subject to stated exceptions for state requirements and environmental mitigation. Receiving funds does not take away a tribe's ability to object to or legally challenge a qualifying project. The grant program is ongoing and biennial. The legislature intends to fund it from the climate investment account in fiscal year 2028 and increasingly from the local investment account beginning in fiscal year 2029.