Authorizes the department of natural resources to develop and implement forest biomass energy demonstration projects, one east of the crest of the Cascade mountains and one west of the crest of the Cascade mountains. The demonstration projects must be designed to: (1) Reveal the utility of Washington's public and private forest biomass feedstock;

(2) Create green jobs and generate renewable energy;

(3) Generate revenues or improve asset values for beneficiaries of state lands and state forest lands;

(4) Improve forest health, reduce pollution, and restore ecological function; and

(5) Avoid interfering with the current working area for forest biomass collection surrounding an existing fixed location biomass energy production site.

Directs the department of natural resources to provide a progress report to the legislature regarding its efforts to develop, implement, and evaluate forest biomass energy demonstration projects and any other department initiatives related to forest biomass.

Authorizes the department of natural resources to seek grants or financing from the federal government, industry, or philanthropists for the purposes of implementing the act.