H-1730

AN ACT Relating to use tax on electricity; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.14 RCW; and providing an effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.12 RCW to read as follows:

(1) There is hereby levied and there shall be collected from every person in this state a use tax for the privilege of consuming electrical energy within this state.

(2) The tax shall be levied and collected in an amount equal to the value of electrical energy multiplied by the rate in effect for the public utility tax on a light and power business as defined under RCW 82.16.010. For the purposes of this section:

(a) "Value of electrical energy" means the consideration paid, given, or contracted to be paid or given by the purchaser of the electrical energy to the seller of the electrical energy, but does not include any amounts that are paid for distributing and transmitting electrical energy subject to tax under this subsection if those amounts are subject to tax under chapter 82.16 RCW.

(b) "Wheeling" means distributing and transmitting electrical energy.

(3) The tax levied under this section does not apply to the consumption of electrical energy generated for that person's own use. For the purposes of this subsection:

(a) Electrical energy is considered as generated by a person for that person's own use if the person owns or leases the generating facility, or a portion of the facility, that supplies electrical energy to the person, or has other financial arrangements with the owner of the facility that are comparable to an ownership or lease interest.

(b) "Person" includes the person, affiliated parties to the person, and the person's tenants.

(4) The tax levied under this section does not apply to the consumption of electrical energy and capacity if the user is:

(a) A company that was identified in section 5(d)(4)(A) of the Pacific Northwest electric power planning and conservation act (P.L. 96-501), as enacted on December 5, 1980, or such company's successor-in-interest, in whole or in part, including, without limitation, such company's assignee, parent, or subsidiary, a company with which such company was merged, or a company that acquired such company's assets, in whole or in part; or

(b) A company that had the ability, as of the effective date of this section, to import into the state, over interstate transmission facilities owned by such company, electrical energy purchased out-of-state, or such company's successor-in-interest, in whole or in part, including, without limitation, such company's assignee, parent, or subsidiary, a company with which such company was merged, or a company that acquired such company's assets, in whole or in part.

(5) Insofar as the exemption provided under subsection (4) of this section applies to a company's successor-in-interest, the exemption shall apply only to the consumption of electrical energy at production sites that were subject to the exemption, or would have been subject to the exemption had the exemption been in place, prior to or at the time of the acquisition of such company by its successor-in-interest, or to facilities that are located at production sites designated in an assignment under section 5(d)(4)(C)(ii) of the Pacific Northwest electric power planning and conservation act (P.L. 96-501).

(6) The exemption provided under subsection (4)(a) of this section shall not apply to that portion of the company's facilities that, as of December 5, 1980, was served by an electrical company that owned or operated an electric plant in the state and had dedicated such plant to public use at rates established by the Washington utilities and transportation commission.

(7) The tax levied in this section does not apply to the consumption of electrical energy purchased from a seller who has paid a tax under RCW 82.16.020 with respect to electrical energy for which exemption is sought under this subsection.

(8) There shall be a credit against the tax levied in this section in an amount equal to the tax paid by:

(a) The seller or buyer of the electrical energy if that tax is a gross receipts tax similar to that imposed under RCW 82.16.020 by any other state or political subdivision of any other state and any foreign country or political subdivision of any foreign country with respect to the electrical energy for which a credit is sought under this subsection; or

(b) The person consuming the electrical energy upon which a use tax similar to the tax imposed under this section was paid to another state with respect to the electrical energy for which a credit is sought under this subsection.

(9) Notwithstanding any other provision of this title or Title 35 RCW, electrical energy to which the use tax provided in this section is exempt, under subsection (3), (4), (5), or (6) of this section, shall be exempt from all other taxes, whether applied to the buyer or seller or any intermediary seller or purchaser of such electrical energy, under this chapter and chapters 82.16, 82.08, and 82.04 RCW, and RCW 35.21.860, 35.21.865, and 35.21.870.

(10)(a) The tax imposed in this section shall be paid by the person consuming the electrical energy to the department. The department may contract with a light and power business wheeling the electrical energy subject to the tax levied under this section for the collection of the tax imposed under this section. The contract must provide for a deduction of a percentage amount of the tax collected, not to exceed two percent of the taxes collected, for expenses incurred for the collection of the tax. This subsection should not be construed as requiring a light and power business to enter into a contract with the department for the collection of the tax.

(b) Except as provided in (c) of this subsection, a light and power business wheeling electrical energy to a person subject to the tax under this section shall make a quarterly report to the department. The report must contain the kilowatt hours of electrical energy delivered, the name of the person to whom it is delivered, and any nonproprietary information held by the light and power business that is essential for the department to facilitate the collection of the tax. The light and power business wheeling the electrical energy subject to the tax under this section and subject to the reporting requirements of this subsection may require reimbursement for costs incurred for making quarterly reports to the department from the person on whose behalf the electrical energy is wheeled. Information reported under this subsection is not subject to public disclosure under chapter 42.17 RCW.

(c) The obligation of a light and power business to make a quarterly report under (b) of this subsection shall not apply to the light and power business if the seller of the electrical energy subject to the tax under this section is licensed, incorporated, certified, or registered to do business in the state or to sell electrical energy at retail within the state, in which circumstance the department may apply the reporting obligation under (b) of this subsection to the seller.

NEW SECTION. Sec. 2. A new section is added to chapter 82.14 RCW to read as follows:

(1) The governing body of a city, while not required by legislative mandate to do so, may, by resolution or ordinance for the purposes authorized by this chapter, fix and impose on every person a use tax for the privilege of consuming electrical energy within the city.

(2) The tax shall be levied and collected in an amount equal to the value of electrical energy multiplied by the rate in effect for the tax on electrical energy businesses under RCW 35.21.870 in the city in which the electrical energy is consumed. For the purposes of this section:

(b) "Wheeling" means distributing and transmitting electrical energy.

(3) The tax levied under this section does not apply to the consumption of electrical energy generated for that person's own use. For the purposes of this subsection:

(b) "Person" includes the person, affiliated parties to the person, and the person's tenants.

(4) The tax levied under this section does not apply to the consumption of electrical energy and capacity if the user is:

(5) Insofar as the exemption provided under subjection (4) of this section applies to a company's successor-in-interest, the exemption shall apply only to the consumption of electrical energy at production sites that were subject to the exemption, or would have been subject to the exemption had the exemption been in place, prior to or at the time of the acquisition of such company by its successor-in-interest, or to facilities that are located at production sites designated in an assignment under section 5(d)(4)(C)(ii) of the Pacific Northwest electric power planning and conservation act (P.L. 96-501).

(7) The tax levied in this section does not apply to the consumption of electrical energy purchased from a seller who has paid a tax under RCW 35.21.870 with respect to electrical energy for which exemption is sought under this subsection.

(8) There shall be a credit against the tax levied in this section in an amount equal to the tax paid by:

(a) The seller or buyer of the electrical energy if that tax is a gross receipts tax similar to that authorized under RCW 35.21.870 and imposed by any other state or political subdivision of any other state with respect to the electrical energy for which a credit is sought under this subsection; or

(9) Notwithstanding any other provision of this title or Title 35 RCW, electrical energy to which the use tax provided in this section is exempt, under subsection (3), (4), (5), or (6) of this section, shall be exempt from all other taxes, whether applied to the buyer or seller or any intermediary seller or purchaser of such electrical energy, under chapters 82.16, 82.12, 82.08, and 82.04 RCW, and RCW 35.21.860, 35.21.865, and 35.21.870.

(10) The tax imposed in this section shall be paid by the person consuming the electrical energy. The administration and collection of the tax imposed under this section shall be under RCW 82.14.050.

NEW SECTION. Sec. 3. This act takes effect August 1, 1997.