BP BHEAD INT S [atlas:bill]

AN ACT Relating to taxation of municipal electrical utilities; adding a new chapter to Title 82 RCW; and providing an effective date.

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

NEW SECTION. Sec. 1. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Distributes to consumers" means the sale of electrical energy to ultimate consumers thereof, and does not include sales of electrical energy for resale by the purchaser.

(2) "Gross income" means the value proceeding or accruing from the operation of a light and power business, including operations incidental thereto, but without any deduction on account of the cost of the commodity furnished or sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.

(3) "Light and power business" means the business of operating a plant or system for the generation, production, or distribution of electrical energy for hire or sale and/or for the wheeling of electricity for others.

(4) "Municipal light and power business" means a business providing electrical service that is owned or operated by a city or town directly or indirectly through the creation of a board, authority, corporation, or other entity to manage its operation.

(5) "Wholesale value" means the consideration, whether money, credit, rights, or other property, expressed in terms of money, paid or given or contracted to be paid or given by the purchaser to the seller for electricity sold at wholesale. If electricity is acquired by gift or is produced by the person using the same or is sold under conditions wherein the purchase price does not represent the true wholesale value thereof, the wholesale value shall be determined as nearly as possible according to the wholesale selling price of other electricity in this state under such rules as the department of revenue may prescribe.

NEW SECTION. Sec. 2. A tax is imposed on each municipal light and power business equal to 2.14 percent multiplied by gross income from the sale of all electric energy which it distributes to consumers who are served by a distribution system owned by the district.

NEW SECTION. Sec. 3. A tax is imposed on each municipal light and power business equal to two percent of the wholesale value of electricity generated at facilities located outside the boundaries of the city or town owning or operating the municipal light and power business.

NEW SECTION. Sec. 4. Revenue collected under section 2 of this act shall be distributed as follows:

(1) Forty-four percent of the revenue shall be deposited in the common school construction fund.

(2) The balance shall be distributed to each county in proportion to the gross income from sales made within each county. Any moneys received by a county from this municipal privilege tax shall be distributed proportionately by the county treasurer in accordance with RCW 84.56.230 as though such moneys were receipts from regular ad valorem property tax levies within such county, except that no distribution shall be made to the state. The calculation for distribution to taxing districts shall not include consideration of the rate of levy by the state.

NEW SECTION. Sec. 5. Revenue collected under section 3 of this act shall be distributed as follows:

(1) Forty-four percent of the revenue shall be deposited in the common school construction fund.

(2) The balance shall be distributed to the county or counties where the generating facility is located. If the entire generating facility, including reservoir, if any, is in a single county then all of the balance shall be distributed to the county where such generating facility is located. If a reservoir is in more than one county, then to each county in which the reservoir or any portion thereof is located a percentage of the balance shall be distributed equal to the percentage determined by dividing the total cost of the generating facilities, including adjacent switching facilities, into twice the cost of land and land rights acquired for any reservoir within each county, land and land rights to be defined the same as used by the federal power commission. If the powerhouse and dam, if any, in connection with such reservoir are in more than one county, the remaining balance shall be equally divided between the two counties. If all of the powerhouse and dam, if any, are in one county, then the balance shall be distributed to the county in which the facilities are located.

NEW SECTION. Sec. 6. Chapter 82.32 RCW applies to the taxes imposed in this chapter. The tax due dates, reporting periods, and return requirements applicable to chapter 82.16 RCW apply to the taxes imposed in this chapter. In addition to other information required by the department of revenue under chapter 82.32 RCW, the department may require information on the total cost of all electric generating facilities subject to tax under this chapter and the cost of acquisition of land and land rights for such facilities or for reservoir purposes in each county, and any other information needed to determine the proper distribution of tax revenues to counties.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION. Sec. 8. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 9. This act takes effect July 1, 1998.