HB 1994
In CommitteeHouse
Renewable energy hosts/tax
Encouraging local support of communities that host renewable energy through changes in tax policy.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill lets Washington counties impose a local tax on large renewable energy projects—like solar farms, wind turbines, or battery storage sites—to fund community programs. The tax is capped at specific rates per megawatt and must be approved by voters in each county.
- Allows counties to impose a local excise tax on industrial-scale renewable energy facilities (solar, wind, or battery storage) of 50 megawatts or more, subject to voter approval.
- Sets maximum tax rates per megawatt of nameplate capacity: $4,000 (solar, pre-2027), $4,500 (solar, 2027+), $800–$6,300 (wind, varying by operational year), and $1,500 per megawatt-hour for battery storage.
- Tax rates are adjusted annually for inflation starting in 2026 using the Seattle-area consumer price index.
- Taxes expire no later than 30 years after first imposition and must be renewed by voters to continue.
- Requires ballot measures to clearly state how tax revenue will be used.
Who is affected
- Counties in Washington — Counties that host large-scale renewable energy projects (e.g., solar farms, wind farms, or battery storage sites of 50+ megawatts) may choose to impose a new local tax on those facilities to generate revenue for community use.
- Renewable energy project developers and operators — Operators of large-scale renewable energy facilities (solar, wind, or battery storage) in participating counties may be subject to a new local excise tax based on the facility’s nameplate capacity.
- Local residents — Residents of counties that adopt the tax may benefit from locally funded community programs or services, depending on how the county uses the revenue.
- Local government agencies — Local governments may use the tax revenue for public services, infrastructure, or community programs, as specified in the voter-approved ballot measure.
Pro/Con Analysis
Potential Benefits (4)
Counties gain new fiscal autonomy to fund community programs (e.g., parks, libraries, infrastructure) directly tied to hosting energy infrastructure — addressing local impacts of large projects and supporting equitable distribution of benefits to residents in host communities.
Local GovernmentPeopleRef: Sec. 1(1)Revenue can be used for public services like emergency response, road maintenance, or broadband expansion in rural areas where many renewable projects are sited — improving quality of life and resilience in communities that often bear infrastructure burdens without proportional benefit.
Public SafetyPeopleRef: Sec. 1(1)By allowing counties to internalize some local environmental and land-use costs of large projects, the tax may incentivize better siting, reduced sprawl, and more community engagement — though it does not directly regulate environmental outcomes.
EnvironmentLean peopleRef: Sec. 1(1)The 30-year sunset and voter renewal requirement ensures democratic accountability and prevents permanent tax imposition without ongoing consent, balancing local control with long-term fiscal responsibility.
Local GovernmentRef: Sec. 1(3)
Potential Concerns (5)
The tax could increase local government revenue for community programs, but the actual revenue generated is uncertain and highly dependent on county adoption and project siting — no guaranteed funding stream. This uncertainty limits fiscal predictability for counties and may lead to inconsistent service delivery across regions.
FinancialRef: Sec. 1(2)(a)(i)Inflation adjustments begin only in 2026, meaning early-stage projects (e.g., those operational before 2026) will face a tax rate that loses real value over time, potentially reducing long-term revenue effectiveness and creating inequity between older and newer facilities.
FinancialRef: Sec. 1(2)(a)(ii)Wind tax rates vary significantly by operational year, with older facilities taxed at only $800/MW — far below solar and newer wind rates — despite having similar or greater environmental footprints. This creates an arbitrary disparity that may discourage repowering or upgrades of older wind farms, potentially slowing decarbonization of the grid.
FinancialRef: Sec. 1(2)(b)(i)-(iv)Battery storage is taxed per megawatt-hour of *capacity*, not actual output — meaning idle or underutilized facilities still pay the same rate as fully operational ones. This distorts the tax base and may penalize projects in early commissioning phases or those serving intermittent grid needs.
FinancialRef: Sec. 1(2)(c)The tax may increase project-level costs for developers and operators, potentially reducing project economics and discouraging investment in new large-scale renewable energy in Washington — especially in counties that adopt the tax, potentially slowing clean energy job growth in those areas.
Business & EmploymentRef: Sec. 1(2)
Who Is Most Affected
Counties with large renewable projects (e.g., Grant, Kittitas, Walla Walla) may gain meaningful new revenue, but those without such projects gain nothing — increasing inter-county fiscal disparities.
Developers and operators of large-scale projects face new costs, which may reduce project economics — especially for margin-sensitive projects or those in counties that adopt the tax. Smaller developers may be disproportionately impacted.
Residents in host counties may benefit from improved local services if the tax is adopted, but non-host counties see no benefit. Rural residents may benefit most if revenue funds broadband or emergency services.
State agencies (e.g., Department of Revenue) gain administrative responsibilities but no new funding, potentially straining existing resources without compensation.
Low-income residents in host counties may benefit indirectly from improved services, but the tax is not targeted to them — and could indirectly raise electricity costs if passed through by developers.