S-1213.1  _______________________________________________

                         SENATE BILL 5709

          _______________________________________________

State of Washington      57th Legislature     2001 Regular Session

By Senators Regala, Winsley and Fraser

Read first time 01/31/2001.  Referred to Committee on Environment, Energy & Water.

Exempting certain electrolytic processing businesses from public utility tax.

    AN ACT Relating to exempting from the state public utility tax the sales of electricity to an electrolytic processing business; adding a new section to chapter 82.16 RCW; and declaring an emergency.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 82.16 RCW to read as follows:

    (1) For the purposes of this section, an "electrolytic processing business" means a person who:

    (a) Is engaged in a manufacturing business that uses an electrolytic process and electricity is used as a raw material component of the product being manufactured;

    (b) Consumes more than ten megawatts of electricity per month; and

    (c) Is not a direct service industrial customer of the Bonneville power administration or does not otherwise receive an exemption or credit from the public utility tax imposed under this chapter.

    (2) Effective July 1, 2001, the tax levied under this chapter does not apply to sales of electricity made by a light and power business to an electrolytic processing business for consumption in the electrolytic process if the contract for sale of electricity to an electrolytic processing business contains the following terms:

    (a) The electricity to be used as a raw material component in the electrolytic process is separately metered from the electricity consumed for general operations of the business;

    (b) The price charged for the electricity used in the electrolytic process will be reduced by an amount equal to the tax exemption available to the light and power business under this section; and

    (c) Disallowance of all or part of the exemption under this section is a breach of contract and the damages to be paid by the electrolytic processing business are the amount of the tax exemption disallowed.

    (3) The exemption provided for in this section does not apply to amounts received from the remarketing or resale of electricity originally obtained by contract for the electrolytic process.

    (4) In order to claim an exemption under this section, the electrolytic processing business must provide the light and power business with an exemption certificate in a form and manner prescribed by the department.

NEW SECTION. Sec. 2.  This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.

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