The bill aims to enhance the production of low-to-zero carbon alternative jet fuel in Washington state by clarifying tax incentives for producers. It introduces a new section that underscores the significance of alternative jet fuel in meeting the state's emissions targets and climate objectives. The legislation amends existing laws to set a tax rate of 0.275 percent for manufacturers and sellers of alternative jet fuel, effective when the Department of Ecology confirms that facilities with a cumulative production capacity of at least 20 million gallons are operational or by July 1, 2031. It also outlines the conditions for claiming tax credits, which include verification of carbon intensity reductions.

Additionally, the bill modifies tax credit criteria, allowing a credit of $1 per gallon for fuel that meets specific carbon emissions standards, with potential increases for further reductions. It requires applicants to obtain a carbon intensity score from the Department of Ecology before applying and mandates that the Department notify applicants of credit approval or denial within 60 days. The bill specifies that credits can be used against any tax due, can be carried over for one subsequent year, and prohibits refunds. Credits can be earned starting from the first day of the first calendar quarter following the Department's notice or July 1, 2031, whichever is earlier, and establishes a ten-year limit on claiming credits after the initial claim, expiring on July 1, 2051.

Statutes affected:
Original bill: 70A.535.150, 82.04.287, 82.04.436, 82.32.534
Substitute bill: 82.04.287, 82.04.436, 82.04.4361, 82.16.187