CERTIFICATION OF ENROLLMENT
HOUSE BILL 1070
Chapter 202, Laws of 2019
66TH LEGISLATURE
2019 REGULAR SESSION
RENEWABLE NATURAL GAS--TAXES
EFFECTIVE DATE: July 28, 2019
Passed by the House March 8, 2019
  Yeas 95  Nays 0
FRANK CHOPP

Speaker of the House of Representatives
Passed by the Senate April 15, 2019
  Yeas 47  Nays 1
CYRUS HABIB

President of the Senate
CERTIFICATE
I, Bernard Dean, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is HOUSE BILL 1070 as passed by House of Representatives and the Senate on the dates hereon set forth.
BERNARD DEAN

Chief Clerk
Chief Clerk
Approved April 30, 2019 2:09 PM
FILED
May 1, 2019
JAY INSLEE

Governor of the State of Washington
Secretary of State
State of Washington

HOUSE BILL 1070

Passed Legislature - 2019 Regular Session
State of Washington
66th Legislature
2019 Regular Session
ByRepresentatives Mosbrucker, Fitzgibbon, Tharinger, and Doglio
Prefiled 12/31/18.Read first time 01/14/19.Referred to Committee on Environment & Energy.
AN ACT Relating to the tax treatment of renewable natural gas; amending RCW 82.16.310, 82.04.310, and 82.04.120; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 82.16.310 and 2014 c 216 s 301 are each amended to read as follows:
(1) The provisions of this chapter do not apply to sales by a gas distribution business of:
(a) Compressed natural gas or liquefied natural gas, where the compressed natural gas or liquefied natural gas is to be sold or used as transportation fuel; ((or))
(b) Natural gas from which the buyer manufactures compressed natural gas or liquefied natural gas, where the compressed natural gas or liquefied natural gas is to be sold or used as transportation fuel; or
(c) Renewable natural gas.
(2) The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
(3) For the purposes of this section, "transportation fuel" means fuel for the generation of power to propel a motor vehicle as defined in RCW 46.04.320, a vessel as defined in RCW 88.02.310, or a locomotive or railroad car.
(4) For the purpose of this section, "renewable natural gas" has the same meaning as provided in RCW 54.04.190.
Sec. 2. RCW 82.04.310 and 2014 c 216 s 302 are each amended to read as follows:
(1) This chapter does not apply to any person in respect to a business activity with respect to which tax liability is specifically imposed under the provisions of chapter 82.16 RCW including amounts derived from activities for which a deduction is allowed under RCW 82.16.050. The exemption in this subsection does not apply to sales of natural gas, including compressed natural gas and liquefied natural gas used or sold to manufacture transportation fuel, and renewable natural gas, by a gas distribution business, if such sales are exempt from the tax imposed under chapter 82.16 RCW as provided in RCW 82.16.310.
(2) This chapter does not apply to amounts received by any person for the sale of electrical energy for resale within or outside the state.
(3)(a) This chapter does not apply to amounts received by any person for the sale of natural or manufactured gas in a calendar year if that person sells within the United States a total amount of natural or manufactured gas in that calendar year that is no more than twenty percent of the amount of natural or manufactured gas that it consumes within the United States in the same calendar year.
(b) For purposes of determining whether a person has sold within the United States a total amount of natural or manufactured gas in a calendar year that is no more than twenty percent of the amount of natural or manufactured gas that it consumes within the United States in the same calendar year, the following transfers of gas are not considered to be the sale of natural or manufactured gas:
(i) The transfer of any natural or manufactured gas as a result of the acquisition of another business, through merger or otherwise; or
(ii) The transfer of any natural or manufactured gas accomplished solely to comply with federal regulatory requirements imposed on the pipeline transportation of such gas when it is shipped by a third-party manager of a person's pipeline transportation.
Sec. 3. RCW 82.04.120 and 2014 c 216 s 303 are each amended to read as follows:
(1) "To manufacture" embraces all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different or useful substance or article of tangible personal property is produced for sale or commercial or industrial use, and includes:
(a) The production or fabrication of special made or custom made articles;
(b) The production or fabrication of dental appliances, devices, restorations, substitutes, or other dental laboratory products by a dental laboratory or dental technician;
(c) Cutting, delimbing, and measuring of felled, cut, or taken trees;
(d) Crushing and/or blending of rock, sand, stone, gravel, or ore; ((and))
(e) The production of compressed natural gas or liquefied natural gas for use as a transportation fuel as defined in RCW 82.16.310; and
(f) The production or processing of renewable natural gas.
(2) "To manufacture" does not include:
(a) Conditioning of seed for use in planting; cubing hay or alfalfa;
(b) Activities which consist of cutting, grading, or ice glazing seafood which has been cooked, frozen, or canned outside this state;
(c) The growing, harvesting, or producing of agricultural products;
(d) Packing of agricultural products, including sorting, washing, rinsing, grading, waxing, treating with fungicide, packaging, chilling, or placing in controlled atmospheric storage;
(e) The production of digital goods;
(f) The production of computer software if the computer software is delivered from the seller to the purchaser by means other than tangible storage media, including the delivery by use of a tangible storage media where the tangible storage media is not physically transferred to the purchaser; and
(g) Except as provided in subsection (1)(e) of this section, any activity that is integral to any public service business as defined in RCW 82.16.010 and with respect to which the gross income associated with such activity: (i) Is subject to tax under chapter 82.16 RCW; or (ii) would be subject to tax under chapter 82.16 RCW if such activity were conducted in this state or if not for an exemption or deduction.
(3) With respect to wastewater treatment facilities:
(a) "To manufacture" does not include the treatment of wastewater, the production of reclaimed water, and the production of class B biosolids; and
(b) "To manufacture" does include the production of class A or exceptional quality biosolids, but only with respect to the processing activities that occur after the biosolids have reached class B standards.
NEW SECTION.  Sec. 4. The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act.
Passed by the House March 8, 2019.
Passed by the Senate April 15, 2019.
Approved by the Governor April 30, 2019.
Filed in Office of Secretary of State May 1, 2019.
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