BILL REQ. #:  H-0758.3 

Read first time 01/27/09.   Referred to Committee on Technology, Energy & Communications.

     AN ACT Relating to electricity generation sales and use tax exemptions; amending RCW 82.08.02567 and 82.12.02567; adding a new section to chapter 82.32 RCW; creating a new section; and providing expiration dates.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that development of renewable sources of energy is crucial for strengthening Washington's economy and for reducing greenhouse gas emissions. The legislature also finds that it is important for all communities, especially low-income and underserved communities, to have access to conservation practices and green jobs that are created as renewable energy production is increased and as Washington transitions to a green economy. It is therefore the intent of the legislature to spur the development of renewable energy production and encourage installation of conservation measures by training a highly skilled workforce using the opportunity grants program funded through the green industry jobs training account to ensure that people from low-income and underserved communities may have an opportunity to participate in the development of Washington's renewable energy economy and long-term prosperity.

Sec. 2   RCW 82.08.02567 and 2004 c 152 s 1 are each amended to read as follows:
     (1) ((The tax levied)) (a) A partial exemption in the form of a refund is provided for the tax imposed by RCW 82.08.020 ((shall not apply to)) for sales of machinery and equipment used directly in generating electricity using fuel cells, wind, sun, or landfill gas as the principal source of power, or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment, but only if the purchaser develops with such machinery, equipment, and labor a facility capable of generating not less than two hundred watts of electricity ((and provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the certificate for the seller's files)).
     (b) Buyers who receive this partial exemption must comply with the prevailing wage requirements of chapter 39.12 RCW on all installations.
     (c) Buyers who receive this partial exemption for installation projects with equipment or machinery costs of thirty-five thousand dollars or more must ensure that no less than fifteen percent of the labor hours installing the equipment or machinery are performed by apprentices.
     (2) Sellers must collect the tax on sales subject to this exemption. The buyer must apply for a refund directly from the department in a form and manner required by the department. The refund is for seventy percent of the state sales tax.
     (3) For purposes of this section and RCW 82.12.02567:
     (a) "Landfill gas" means biomass fuel of the type qualified for federal tax credits under 26 U.S.C. Sec. 29 collected from a landfill. "Landfill" means a landfill as defined under RCW 70.95.030;
     (b) "Machinery and equipment" means industrial fixtures, devices, and support facilities that are integral and necessary to the generation of electricity using fuel cells, wind, sun, or landfill gas as the principal source of power;
     (c) "Machinery and equipment" does not include: (i) Hand-powered tools; (ii) property with a useful life of less than one year; (iii) repair parts required to restore machinery and equipment to normal working order; (iv) replacement parts that do not increase productivity, improve efficiency, or extend the useful life of machinery and equipment; (v) buildings; or (vi) building fixtures that are not integral and necessary to the generation of electricity that are permanently affixed to and become a physical part of a building;
     (d) Machinery and equipment is "used directly" in generating electricity with fuel cells or by wind energy, solar energy, or landfill gas power if it provides any part of the process that captures the energy of the wind, sun, or landfill gas, converts that energy to electricity, and stores, transforms, or transmits that electricity for entry into or operation in parallel with electric transmission and distribution systems;
     (e) "Fuel cell" means an electrochemical reaction that generates electricity by combining atoms of hydrogen and oxygen in the presence of a catalyst;
     (f) "Apprentice" means an apprentice enrolled in an apprenticeship training program approved by the Washington state apprenticeship council; and
     (g) "Labor hours" means the total hours of workers receiving an hourly wage who are directly employed on the site of the project. "Labor hours" includes hours performed by workers employed by the contractor and all subcontractors working on the project. "Labor hours" does not include hours worked by foremen, superintendents, owners, and workers who are not subject to prevailing wage requirements.
     (3) This section expires June 30, ((2009)) 2015.

Sec. 3   RCW 82.12.02567 and 2004 c 152 s 2 are each amended to read as follows:
     (1) ((The provisions of this chapter shall not apply)) (a) A partial exemption in the form of a refund is provided for the tax imposed under this chapter with respect to machinery and equipment used directly in generating not less than two hundred watts of electricity using fuel cells, wind, sun, or landfill gas as the principal source of power, or to the use of labor and services rendered in respect to installing such machinery and equipment.
     (b) Buyers who receive this partial exemption must comply with the prevailing wage requirements of chapter 39.12 RCW on all installations.
     (c) Buyers who receive this partial exemption for installation projects with equipment or machinery costs of thirty-five thousand dollars or more must ensure that no less than fifteen percent of the labor hours installing the equipment or machinery are performed by apprentices.
     (2) Sellers obligated to collect use tax must collect tax on sales subject to this exemption. The buyer must apply for a refund directly from the department in a form and manner required by the department. The refund is for seventy percent of the state use tax.
     (3) The definitions in RCW 82.08.02567 apply to this section.
     (((3))) (4) This section expires June 30, ((2009)) 2015.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.32 RCW to read as follows:
     (1) The state treasurer must periodically transfer from the general fund to the green industries jobs training account created in RCW 43.330.310, the thirty percent portion of tax refund requests not subject to a refund under RCW 82.08.02567 or 82.12.02567.
     (2)(a) For the purposes of this section, "electricity generation sales and use tax exemption" means the sales and use tax exemption under RCW 82.08.02567 and 82.12.02567.
     (b) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information to evaluate whether the stated goals of legislation were achieved.
     (c)(i) A person who receives the benefit of an electricity generation sales and use tax exemption must make an annual report to the department detailing employment, wages, use of apprentices, and employer-provided health and retirement benefits. The report must detail employment by the total number of full-time, part-time, and temporary positions. The report must detail compliance with the prevailing wage requirements of chapter 39.12 RCW on all installations and the use of apprentices for all installations of electricity generation equipment and machinery that costs thirty-five thousand dollars or more.
     (ii) The report is due by March 31st following any year in which a tax exemption is claimed or used. The report may not include names of employees. The first report filed under this subsection must include employment, wage, benefit information, and use of apprentices for the twelve-month period immediately before first use of a tax exemption.
     (iii) Information in a report under this section is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (iv) If a person fails to submit an annual report under (a) of this subsection by the due date of the report, the department must declare the amount of taxes exempted for that year to be immediately due and payable. This information is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (d) The department must study the electricity generation sales and use tax exemption authorized under RCW 82.08.02567 and 82.12.02567. The department must submit a report to the finance committee of the house of representatives and the ways and means committee of the senate by December 1, 2011, and December 1, 2014. The report must detail employment, wages, and employer-provided health and retirement benefits. The report must measure compliance with the prevailing wage requirements on all installations and the use of apprentices for all installations of electricity generation equipment and machinery that costs thirty-five thousand dollars or more.