H-4900.2  _______________________________________________

                          HOUSE BILL 3148

          _______________________________________________

State of Washington      56th Legislature     2000 Regular Session

By Representatives Ericksen, Crouse, Linville and Dunn

Read first time 02/24/2000.  Referred to Committee on Finance.

Exempting from sales and use tax machinery and equipment used in natural gas-fired energy generating facilities.

    AN ACT Relating to sales and use tax exemptions for natural gas-fired energy generating facilities; and amending RCW 82.08.02567 and 82.12.02567.

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

    Sec. 1.  RCW 82.08.02567 and 1999 c 358 s 4 are each amended to read as follows:

    (1) The tax levied by RCW 82.08.020 shall not apply to sales of machinery and equipment used directly in generating electricity using wind, sun, natural gas in a combined cycle unit, 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 kilowatts of electricity and provides the seller with an exemption certificate in a form and manner prescribed by the department by rule.  The seller shall retain a copy of the certificate for the seller's files.

    (2) For purposes of this section and RCW 82.12.02567:

    (a) "Combined cycle unit" means an electric generating unit that:  (i) Consists of one or more combustion turbines and one or more boilers with a portion of the required energy input to the boiler(s) provided by the exhaust gas of the combustion turbine or turbines; and (ii) has a heat rate efficiency of less than eight thousand British thermal units per kilowatt hour.

(b) "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))) (c) "Machinery and equipment" means industrial fixtures, devices, and support facilities that are integral and necessary to the generation of electricity using wind, sun, or landfill gas as the principal source of power;

    (((c))) (d) "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))) (e) Machinery and equipment is "used directly" in generating electricity by wind energy, solar, 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 transforms or transmits that electricity for entry into electric transmission and distribution systems.

    (3) This section expires June 30, 2005.

    Sec. 2.  RCW 82.12.02567 and 1999 c 358 s 10 are each amended to read as follows:

    (1) The provisions of this chapter shall not apply with respect to machinery and equipment used directly in generating not less than two hundred kilowatts of electricity using wind, sun, natural gas in a combined cycle unit, or landfill gas as the principal source of power.

    (2) The definitions in RCW 82.08.02567 apply to this section.

    (3) This section expires June 30, 2005.

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