The proposed bill aims to create and expand tax incentives for the research, development, production, and sale of hydrogen fuel products in Washington state. It introduces a performance statement to evaluate the effectiveness of these tax preferences, which are designed to encourage specific behaviors among taxpayers, enhance industry competitiveness, and create or retain jobs in the hydrogen fuel sector. The bill mandates that the joint legislative audit and review committee assess various metrics, including the number of businesses and employees in the hydrogen fuel industry, advancements in technology, and employment changes compared to national trends.

Key provisions of the bill include a preferential business and occupation tax rate of 0.2904 percent for businesses engaged in hydrogen fuel product activities, effective January 1, 2024, and a tax credit for qualified hydrogen fuel product development expenditures. Additionally, it allows for a credit against state and local property taxes for facilities used primarily in manufacturing hydrogen fuel products, with specific eligibility criteria tied to prevailing wage rates. The credits are capped at $3 million per calendar year and are available for tax reporting periods from January 1, 2024, to December 31, 2033, with all sections of the bill set to expire on January 1, 2035.