BILL REQ. #:  S-4043.2 

READ FIRST TIME 01/23/04.   

     AN ACT Relating to providing incentives to support renewable energy; adding a new chapter to Title 80 RCW; providing an effective date; and providing an expiration date.

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

NEW SECTION.  Sec. 1   The legislature finds that the use of renewable energy resources generated from local sources such as solar and wind power benefit our state by reducing the load on the state's electric energy grid, by providing nonpolluting sources of electricity generation, and by the creation of jobs for local industries that develop and sell renewable energy products and technologies.
     The legislature finds that Washington state has become a national and international leader in the technologies related to the solar electric markets. The state can support these industries by providing incentives for the purchase of locally made renewable energy products. Locally made renewable technologies benefit and protect the state's environment. The legislature also finds that the state's economy can be enhanced through the creation of incentives to develop additional renewable energy industries in the state.
     The legislature intends to provide incentives for the greater use of locally created renewable energy technologies, support and retain existing local industries, and create new opportunities for renewable energy industries to develop in Washington state.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Customer-generated electricity" means the electricity that is generated from a renewable energy system located on an individual's, businesses', or local government's real property. A system located on a leasehold interest does not qualify under this definition. "Customer-generated electricity" does not include electricity generated by a light and power business or a gas distribution business.
     (2) "Gas distribution business" has the same meaning as described in RCW 82.16.010.
     (3) "Light and power business" has the same meaning as described in RCW 82.16.010.
     (4) "Photovoltaic cell" means a device that converts light directly into electricity without moving parts.
     (5) "Renewable energy system" means a solar energy system or a wind generator used for producing electricity.
     (6) "Solar energy system" means any device or combination of devices or elements that rely upon direct sunlight as an energy source for use in the generation of electricity.
     (7) "Solar inverter" means the device used to convert direct current to alternating current in a photovoltaic cell system.
     (8) "Solar module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells and providing a single direct current electrical output.

NEW SECTION.  Sec. 3   (1) The renewable energy incentive account is created in the custody of the state treasurer.
     (2) Until June 30, 2013, one and three-quarters percent of the money collected under RCW 82.16.020(1), on light and power businesses and gas distribution businesses, shall be deposited into the account created in subsection (1) of this section.
     (3) Only the director of the department of revenue or the director's designee may authorize expenditures from the account.
     (4) The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.
     (5) Expenditures from the account may not exceed the balance in the account.

NEW SECTION.  Sec. 4   (1) Any individual, business, or local governmental entity, not in the light and power business or in the gas distribution business, may apply to the department of revenue, each fiscal year beginning on July 1, 2004, for an investment cost recovery incentive for each kilowatt-hour from a customer-generated electricity renewable energy system installed on its property. No incentive may be paid for kilowatt-hours generated prior to July 1, 2004.
     (2)(a) Prior to submitting the application for the incentive allowed under this section, the applicant shall submit to the department of revenue and to the climate and rural energy development center at the Washington State University, established under RCW 28B.30.642, a certification in a form and manner prescribed by the department that includes, but is not limited to, the following information:
     (i) The name and address of the applicant and location of the renewable energy system;
     (ii) The applicant's tax registration number;
     (iii) That the electricity produced by the applicant meets the definition of "customer-generated electricity" and that the renewable energy system produces electricity with:
     (A) A solar inverter and solar module manufactured in Washington state;
     (B) A wind generator powered by blades manufactured in Washington state;
     (C) A solar inverter manufactured in Washington state;
     (D) A solar module manufactured in Washington state; or
     (E) Solar or wind equipment manufactured outside of Washington state;
     (iv) That the electricity can be transformed or transmitted for entry into or operation in parallel with electricity transmission and distribution systems;
     (v) The date that the renewable energy system received its final electrical permit from the applicable local jurisdiction.
     (b) Within thirty days of receipt of the certification the department of revenue shall advise the applicant in writing whether the renewable energy system qualifies for an incentive under this section. The department may consult with the climate and rural energy development center to determine eligibility for the incentive. Certifications and the information contained therein are subject to disclosure under RCW 82.32.330(3)(m).
     (c) By August 1st of each year application for the incentive shall be made to the department of revenue by certification in a form and manner prescribed by the department that includes, but is not limited to, the following information:
     (i) The name and address of the applicant and location of the renewable energy system;
     (ii) The applicant's tax registration number;
     (iii) The date of the letter from the department of revenue stating that the renewable energy system is eligible for the incentives under this section;
     (iv) A statement of the amount of kilowatt-hours generated by the renewable energy system in the prior fiscal year.
     (d) Within sixty days of receipt of the incentive certification the department shall notify the applicant in writing whether the incentive payment will be authorized or denied. The department may consult with the climate and rural energy development center to determine eligibility for the incentive payment. Incentive certifications and the information contained therein are subject to disclosure under RCW 82.32.330(3)(m). The department shall authorize the payment of the incentive from the renewable energy incentive account within seven days of the issuance of a letter approving the incentive.
     (e)(i) Persons receiving incentive payments shall keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of incentive applied for and received. Such records shall be open for examination at any time upon notice by the department of revenue. If upon examination of any records or from other information obtained by the department it appears that an incentive has been paid in an amount that exceeds the correct amount of incentive payable, the department shall assess against the person for the amount found to have been paid in excess of the correct amount of incentive payable and shall add thereto interest on the amount.
     (ii) The department shall notify the person by mail of the amount due and the amount shall be paid within thirty days from the date of the notice, or within such further time as the department may provide. Payments received shall be deposited into the renewable energy incentive account.
     (iii) For the purposes of this section, the rate of interest to be charged to the person shall be an average of the federal short-term rate as defined in 26 U.S.C. Sec. 1274(d) plus two percentage points. The rate set for each new year shall be computed by taking an arithmetical average to the nearest percentage point of the federal short-term rate, compounded annually. That average shall be calculated using the rates from four months: January, April, and July of the calendar year immediately preceding the new year, and October of the previous preceding year.
     (iv) If it appears that the amount of incentive paid is less than the correct amount of incentive payable the department shall authorize additional payment. The department shall notify the person by mail of the additional incentive to be paid and the amount shall be paid within thirty days from the date of the notice.
     (v) No adjustment to the amount of incentive paid may be made by the department more than four years after the close of the tax year.
     (vi) For any amounts that may be due the state the collection procedures of chapter 82.32 RCW apply.
     (f) The brief adjudicative proceeding procedures of RCW 34.05.482 through 34.05.494 apply to agency actions under this section.
     (3) The investment cost recovery incentive shall be paid at the following rate unless requests exceed the amount contained in the renewable energy incentive fund:
     (a) Forty-eight cents per kilowatt-hour for systems with solar inverters and solar modules manufactured in Washington state;
     (b) Twenty-five cents per kilowatt-hour for systems using wind generators powered by blades manufactured in Washington state;
     (c) Thirty-seven cents per kilowatt-hour for systems with a solar inverter or solar module manufactured in Washington state; or
     (d) Twenty cents per kilowatt-hour for solar or wind equipment manufactured outside of Washington state.
     (4) No individual, household, business, or local governmental entity is eligible for an incentive payment that exceeds four thousand five hundred dollars per year.
     (5) If requests for the investment cost recovery incentive exceed the amount of funds available in the renewable energy incentive account, the incentive amounts will be reduced proportionately.
     (6) The climate and rural energy development center at Washington State University energy program shall be reimbursed by the department of revenue five percent of annual funds allocated to the fund, to apply toward the administrative and educational expenses related to this program. The center will establish guidelines and standards for technologies that are identified as Washington manufactured and therefore most beneficial to the state's environment.
     (7) The department of revenue shall retain one percent of each incentive payment to apply toward the administrative expenses related to this program.

NEW SECTION.  Sec. 5   This act takes effect July 1, 2004.

NEW SECTION.  Sec. 6   This chapter expires July 1, 2014.

NEW SECTION.  Sec. 7   Sections 1 through 6 of this act constitute a new chapter in Title 80 RCW.