BILL REQ. #: H-3891.1
| State of Washington | 59th Legislature | 2006 Regular Session |
Read first time 01/11/2006. Referred to Committee on Technology, Energy & Communications.
AN ACT Relating to utility taxation; amending RCW 82.16.010, 82.16.020, 82.16.050, 82.16.090, 54.28.010, 54.28.011, 54.28.020, 54.28.025, 54.28.030, 54.28.040, 54.28.050, 54.28.055, 54.28.060, 54.28.070, 54.28.080, 54.28.090, 54.28.100, 54.28.110, and 54.28.120; adding new chapters to Title 82 RCW; creating new sections; recodifying RCW 54.28.010, 54.28.011, 54.28.020, 54.28.025, 54.28.030, 54.28.040, 54.28.050, 54.28.055, 54.28.060, 54.28.070, 54.28.080, 54.28.090, 54.28.100, 54.28.110, and 54.28.120; and providing effective dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1
(1) "Amount of electricity sold at retail" means the amount of
kilowatt hours of electricity reported as retail sales to ultimate
consumers to the federal energy information administration on form EIA-861 or its successor.
(2) "Amount of electricity sold at wholesale" means the amount of
kilowatt hours of electricity reported as sales of electricity for
resale to:
(a) The federal energy information administration on form EIA-412
or its successor;
(b) The federal energy regulatory commission on form 1 or its
successor; or
(c) To the department on an affidavit in a form and manner as
prescribed by the department, if the taxpayer is not required to report
sales of electricity for resale under (a) or (b) of this subsection.
(3) "Customer" or "purchaser" means a person who acquires for
consideration electricity for use or consumption and not for resale.
(4) "Department" means the department of revenue.
(5) "Distribution services provider" means a person controlling or
operating distribution facilities for distribution of electricity to
the public. A distribution services provider includes a purchaser who
takes electricity directly from a transmission line and a purchaser who
generates electricity for the purchaser's own use but does not include
electricity generated by the purchaser for noncommercial use or for
agricultural use.
(6) "Net amount of electricity generated" means the amount of
kilowatt hours of electricity reported as net generation to the federal
energy information administration on form EIA-906 or its successor.
(7) "Person" is defined as provided in RCW 82.04.030.
NEW SECTION. Sec. 2
(b)(i) For electricity produced in the state for delivery outside
of the state, the taxpayer is the person that introduces the
electricity onto transmission lines. The amount of electricity subject
to tax under this subsection shall be determined by an apportionment
formula under (b)(ii) of this subsection. The taxpayer shall remit the
tax annually to the department under the provisions of chapter 82.32
RCW.
(ii) The amount of electricity subject to tax under this subsection
(1)(b)(ii) is, for the previous calendar year, the greater of the
following:
(A) Ninety-five percent of the net amount of electricity generated
by the taxpayer within the state, less the sum of the amount of
electricity sold at retail within the state and the amount of
electricity sold at wholesale to distribution services providers
located within the state; or
(B) Zero.
(c) For electricity produced for delivery within the state, the
taxpayer is the distribution services provider. The tax base is the
amount of kilowatt hours of electricity delivered to the distribution
services provider.
(2)(a) Electricity transmitted through the state that is not
produced or delivered in the state is exempt from the tax imposed by
this section.
(b) An agency of the United States government that produces
electricity within the state is exempt from the provisions in
subsection (1)(b) of this section.
(c) Electricity delivered to a purchaser that receives its power
directly from a transmission or distribution facility owned by an
entity of the United States government is exempt from the tax imposed
by this section.
(3) A distribution services provider is allowed to recover the tax
imposed by this section and the administrative costs to comply with
this chapter in its rates.
NEW SECTION. Sec. 3
NEW SECTION. Sec. 4
NEW SECTION. Sec. 5 (1) The following definitions apply to this
section:
(a) "Qualifying project" means a project designed to achieve job
creation or business retention, to add or upgrade nonelectrical
infrastructure, to add or upgrade health and safety facilities, to
accomplish energy and water use efficiency improvements, including
renewable energy development, or to add or upgrade emergency services
in any designated qualifying rural area.
(b) "Qualifying rural area" means:
(i) A rural county, which is a county with a population density of
less than one hundred persons per square mile as determined by the
office of financial management and published each year by the
department for the period July 1st to June 30th; or
(ii) Any geographic area in the state that receives electricity
from a taxpayer with twelve thousand or fewer customers and with fewer
than twenty-six meters per mile of distribution line as determined and
published by the department effective July 1st of each year. The
department shall use current data provided by the electricity industry.
(c) "Electric utility rural economic development revolving fund"
means a fund devoted exclusively to funding qualifying projects in
qualifying rural areas.
(d) "Local board" is a board of directors with at least, but not
limited to, three members representing local businesses and community
groups who have been appointed by the sponsoring electric utility to
oversee and direct the activities of the electric utility rural
economic development revolving fund.
(2) A taxpayer with fewer than twenty-six active meters per mile of
distribution line in any geographic area in the state shall be allowed
a credit against taxes due under this chapter in an amount equal to
fifty percent of contributions made in any calendar year directly to an
electric utility rural economic development revolving fund. The credit
shall be taken in a form and manner as required by the department. The
credit under this section shall not exceed twenty-five thousand dollars
per calendar year per taxpayer. The credit may not exceed the tax that
would otherwise be due under this chapter. Refunds shall not be
granted in the place of credits. Expenditures not used to earn a
credit in one calendar year may not be used to earn a credit in
subsequent years.
(3) The right to earn tax credits under this section expires
December 31, 2010.
(4) To qualify for the credit in subsection (2) of this section,
the taxpayer shall establish an electric utility rural economic
development revolving fund which is governed by a local board whose
members shall reside in the qualifying rural area served by the
taxpayer. The local board shall have authority to determine all
criteria and conditions for the expenditure of funds from the electric
utility rural economic development revolving fund, and for the terms
and conditions of repayment.
(5) Any funds repaid to the electric utility rural economic
development revolving fund by recipients shall be made available for
additional qualifying projects.
(6) If at any time the electric utility rural economic development
revolving fund is dissolved, any money claimed as a tax credit under
this section shall either be granted to a qualifying project or
refunded to the state within two years of termination.
(7) The total amount of credits that may be used in any fiscal year
shall not exceed three hundred fifty thousand dollars in any fiscal
year. The department shall allow the use of earned credits on a first-come, first-served basis. Unused earned credits may be carried over to
subsequent years.
NEW SECTION. Sec. 6 (1) Unless the context clearly requires
otherwise, the definitions in this subsection apply throughout this
section.
(a) "Direct service industrial customer" means a person who is an
industrial customer that contracts for the purchase of power from the
Bonneville Power Administration for direct consumption as of July 1,
2006. "Direct service industrial customer" includes a person who is a
subsidiary that is more than fifty percent owned by a direct service
industrial customer and who receives power from the Bonneville Power
Administration pursuant to the parent's contract for power.
(b) "Facility" means a gas turbine electrical generation facility
that does not exist on July 1, 2006.
(c) "Average annual employment" means the total employment in this
state for a calendar year at the direct service industrial customer's
location where electricity from the facility will be consumed.
(2) Effective January 1, 2007, a credit is allowed against the tax
due under this chapter on sales of electricity made from a facility to
a direct service industrial customer if the contract for sale of
electricity to a direct service industrial customer contains the
following terms:
(a) Sales of electricity from the facility to the direct service
industrial customer will be made for ten consecutive years or more;
(b) The price charged for the electricity will be reduced by an
amount equal to the tax credit; and
(c) Disallowance of all or part of the credit under subsection (5)
of this section is a breach of contract and the damages to be paid by
the direct service industrial customer to the facility are the amount
of tax credit disallowed.
(3) The credit is equal to the gross proceeds from the sale of the
electricity to a direct service industrial customer multiplied by the
rate in effect at the time of the sale for the taxpayer under section
2 of this act. The credit may be used each reporting period for sixty
months following the first month electricity is sold from a facility to
a direct service industrial customer. Credit under this section is
limited to the amount of tax imposed under this chapter. Refunds shall
not be given in place of credits and credits may not be carried over to
subsequent calendar years.
(4) Application for credit shall be made before the first sale of
electricity from a facility to a direct service industrial customer.
The application shall be in a form and manner prescribed by the
department and shall include, but is not limited to, information
regarding the location of the facility, identification of the direct
service industrial customer who will receive electricity from the
facility, the projected date of the first sale of electricity to a
direct service industrial customer, the date construction is projected
to begin or did begin, and the average annual employment in the state
of the direct service industrial customer who will receive electricity
from the facility for the six calendar years immediately preceding the
year in which the application is made. A copy of the contract for sale
of electricity must be attached to the application. The department
shall rule on the application within thirty days of receipt.
(5) All or part of the credit shall be disallowed and must be paid
if the average of the direct service industrial customer's average
annual employment for the five calendar years subsequent to the
calendar year containing the first month of sale of electricity from a
facility to a direct service industrial customer is less than the six-
year average annual employment stated on the application for credit
under this section. The direct service industrial customer shall
certify to the department and to the facility by June 1st of the sixth
calendar year following the calendar year in which the month of first
sale occurs the average annual employment for each of the five prior
calendar years. All or part of the credit that shall be disallowed and
must be paid is commensurate with the decrease in the five-year average
of average annual employment as follows:
| Decrease in Average Annual Employment Over Five-Year Period | % of Credit to be Paid |
| Less than 10% | 10% |
| 10% or more but less than 25% | 25% |
| 25% or more but less than 50% | 50% |
| 50% or more but less than 75% | 75% |
| 75% or more | 100% |
| Payment Year | % of Credit to be Paid |
| 1 | 10% |
| 2 | 15% |
| 3 | 20% |
| 4 | 25% |
| 5 | 30% |
NEW SECTION. Sec. 7 (1) Unless the context clearly requires
otherwise, the definitions in this subsection apply throughout this
section.
(a) "Base credit" means the maximum amount of credit against the
tax imposed by this chapter that each taxpayer may take each fiscal
year as calculated by the department. The base credit is equal to the
proportionate share that the total grants received by each taxpayer in
the prior fiscal year bears to the total grants received by all
taxpayers and gas distribution businesses under RCW 82.16.0497 in the
prior fiscal year multiplied by two million five hundred thousand
dollars.
(b) "Billing discount" means a reduction in the amount charged for
providing service to qualifying persons in Washington made by a
taxpayer. Billing discount does not include grants received by the
taxpayer.
(c) "Grant" means funds provided to a taxpayer by the department of
community, trade, and economic development or by a qualifying
organization.
(d) "Low-income home energy assistance program" means energy
assistance programs for low-income households as defined on December
31, 2005, in the low-income home energy assistance act of 1981 as
amended August 1, 1999, 42 U.S.C. Sec. 8623 et seq.
(e) "Qualifying person" means a Washington resident who applies for
assistance and qualifies for a grant regardless of whether that person
receives a grant.
(f) "Qualifying contribution" means money given by a taxpayer to a
qualifying organization, exclusive of money received in the prior
fiscal year from its customers for the purpose of assisting other
customers.
(g) "Qualifying organization" means an entity that has a
contractual agreement with the department of community, trade, and
economic development to administer in a specified service area low-income home energy assistance funds received from the federal
government and other funds that may be received by the entity.
(2) Subject to the limitations in this section, a taxpayer may take
a credit each fiscal year against the tax imposed under this chapter.
(a)(i) A credit may be taken for qualifying contributions if the
dollar amount of qualifying contributions for the fiscal year in which
the tax credit is taken is greater than one hundred twenty-five percent
of the dollar amount of qualifying contributions given in fiscal year
2006.
(ii) If no qualifying contributions were given in fiscal year 2006,
a credit shall be allowed for the first fiscal year that qualifying
contributions are given. Thereafter, credit shall be allowed if the
qualifying contributions given exceed one hundred twenty-five percent
of qualifying contributions given in the first fiscal year.
(iii) The amount of credit shall be fifty percent of the dollar
amount of qualifying contributions given in the fiscal year in which
the tax credit is taken.
(b)(i) A credit may be taken for billing discounts if the dollar
amount of billing discounts for the fiscal year in which the tax credit
is taken is greater than one hundred twenty-five percent of the dollar
amount of billing discounts given in fiscal year 2006.
(ii) If no billing discounts were given in fiscal year 2006, a
credit shall be allowed in the first fiscal year that billing discounts
are given. Thereafter, credit shall be allowed if the dollar amount of
billing discounts given exceeds one hundred twenty-five percent of
billing discounts given in the first fiscal year.
(iii) The amount of credit shall be fifty percent of the dollar
amount of the billing discounts given in the fiscal year in which the
tax credit is taken.
(c) The total amount of credit that may be taken for qualifying
contributions and billing discounts in a fiscal year is limited to the
base credit for the same fiscal year.
(3) The total amount of credit, statewide, that may be taken in any
fiscal year shall not exceed two million five hundred thousand dollars.
(4)(a) Not later than June 1st of each year beginning in 2007, the
department shall publish the base credit for each taxpayer for the next
fiscal year.
(b) Not later than July 1st of each year beginning in 2007,
application for credit must by made to the department including but not
limited to the following information: Billing discounts given by the
applicant in fiscal year 2006; qualifying contributions given by the
applicant in the prior fiscal year; the amount of money received in the
prior fiscal year from customers for the purpose of assisting other
customers; the base credit for the next fiscal year for the applicant;
the qualifying contributions anticipated to be given in the next fiscal
year; and billing discounts anticipated to be given in the next fiscal
year. No credit under this section will be allowed to a taxpayer that
does not file the application by July 1st.
(c) Not later than August 1st of each year beginning in 2007, the
department shall notify each applicant of the amount of credit that may
be taken in that fiscal year.
(d) The balance of base credits not used by other taxpayers and gas
distribution businesses shall be ratably distributed to applicants
under the formula in subsection (1)(a) of this section. The total
amount of credit that may be taken by an applicant is the base credit
plus any ratable portion of unused base credit.
(5) The credit taken under this section is limited to the amount of
tax imposed under this chapter for the fiscal year. The credit must be
claimed in the fiscal year in which the billing reduction is made. Any
unused credit expires. Refunds shall not be given in place of credits.
(6) No credit may be taken for billing discounts made before July
1, 2006. Within two weeks of July 1, 2007, the department of
community, trade, and economic development shall notify the department
in writing of the grants received in fiscal year 2006 by each taxpayer
and gas distribution business. Within four weeks of July 1, 2007, the
department shall publish the base credit for each taxpayer and gas
distribution business for fiscal year 2006. Within eight weeks of July
1, 2007, application to the department must be made showing the
information required in subsection (4)(b) of this section. Within
twelve weeks of July 1, 2007, the department shall notify each
applicant of the amount of credit that may be taken in fiscal year
2007.
NEW SECTION. Sec. 8 (1) In computing tax under this chapter, a
taxpayer may deduct from gross income the lesser of the amounts
determined under subsections (2) through (4) of this section.
(2)(a) Fifty percent of wholesale power cost paid during the
reporting period, if the taxpayer has fewer than five and one-half
customers per mile of line.
(b) Forty percent of wholesale power cost paid during the reporting
period, if the taxpayer has more than five and one-half but less than
eleven customers per mile.
(c) Thirty percent of the wholesale power cost paid during the
reporting period, if the taxpayer has more than eleven but less than
seventeen customers per mile of line.
(d) Zero if the taxpayer has more than seventeen customers per mile
of line.
(3) Wholesale power cost multiplied by the percentage by which the
average retail electric power rates for the taxpayer exceed the state
average electric power rate. If more than fifty percent of the
kilowatt hours sold by a taxpayer are sold to irrigators, then only
sales to nonirrigators shall be used to calculate the average electric
power rate for that taxpayer. For purposes of this subsection, the
department shall determine state average electric power rate each year
based on the most recent available data and shall inform taxpayers of
its determination.
(4) Four hundred thousand dollars per month.
Sec. 9 RCW 82.16.010 and 1996 c 150 s 1 are each amended to read
as follows:
For the purposes of this chapter, unless otherwise required by the
context:
(1) "Railroad business" means the business of operating any
railroad, by whatever power operated, for public use in the conveyance
of persons or property for hire. It shall not, however, include any
business herein defined as an urban transportation business.
(2) "Express business" means the business of carrying property for
public hire on the line of any common carrier operated in this state,
when such common carrier is not owned or leased by the person engaging
in such business.
(3) "Railroad car business" means the business of operating stock
cars, furniture cars, refrigerator cars, fruit cars, poultry cars, tank
cars, sleeping cars, parlor cars, buffet cars, tourist cars, or any
other kinds of cars used for transportation of property or persons upon
the line of any railroad operated in this state when such railroad is
not owned or leased by the person engaging in such business.
(4) "Water distribution business" means the business of operating
a plant or system for the distribution of water for hire or sale.
(5) (("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.)) "Telegraph business" means the business of affording
telegraphic communication for hire.
(6)
(((7))) (6) "Gas distribution business" means the business of
operating a plant or system for the production or distribution for hire
or sale of gas, whether manufactured or natural.
(((8))) (7) "Motor transportation business" means the business
(except urban transportation business) of operating any motor propelled
vehicle by which persons or property of others are conveyed for hire,
and includes, but is not limited to, the operation of any motor
propelled vehicle as an auto transportation company (except urban
transportation business), common carrier or contract carrier as defined
by RCW 81.68.010 and 81.80.010: PROVIDED, That "motor transportation
business" shall not mean or include the transportation of logs or other
forest products exclusively upon private roads or private highways.
(((9))) (8) "Urban transportation business" means the business of
operating any vehicle for public use in the conveyance of persons or
property for hire, insofar as (a) operating entirely within the
corporate limits of any city or town, or within five miles of the
corporate limits thereof, or (b) operating entirely within and between
cities and towns whose corporate limits are not more than five miles
apart or within five miles of the corporate limits of either thereof.
Included herein, but without limiting the scope hereof, is the business
of operating passenger vehicles of every type and also the business of
operating cartage, pickup, or delivery services, including in such
services the collection and distribution of property arriving from or
destined to a point within or without the state, whether or not such
collection or distribution be made by the person performing a local or
interstate line-haul of such property.
(((10))) (9) "Public service business" means any of the businesses
defined in subdivisions (1), (2), (3), (4), (5), (6), (7), and (8)((,
and (9))) or any business subject to control by the state, or having
the powers of eminent domain and the duties incident thereto, or any
business hereafter declared by the legislature to be of a public
service nature, except telephone business as defined in RCW 82.04.065
and low-level radioactive waste site operating companies as redefined
in RCW 81.04.010. It includes, among others, without limiting the
scope hereof: Airplane transportation, boom, dock, ferry, pipe line,
toll bridge, toll logging road, water transportation and wharf
businesses.
(((11))) (10) "Tugboat business" means the business of operating
tugboats, towboats, wharf boats or similar vessels in the towing or
pushing of vessels, barges or rafts for hire.
(((12))) (11) "Gross income" means the value proceeding or accruing
from the performance of the particular public service or transportation
business involved, 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.
(((13))) (12) The meaning attributed, in chapter 82.04 RCW, to the
term "tax year," "person," "value proceeding or accruing," "business,"
"engaging in business," "in this state," "within this state," "cash
discount" and "successor" shall apply equally in the provisions of this
chapter.
Sec. 10 RCW 82.16.020 and 1996 c 150 s 2 are each amended to read
as follows:
(1) There is levied and there shall be collected from every person
a tax for the act or privilege of engaging within this state in any one
or more of the businesses herein mentioned. The tax shall be equal to
the gross income of the business, multiplied by the rate set out after
the business, as follows:
(a) Express, sewerage collection, and telegraph businesses: Three
and six-tenths percent;
(b) ((Light and power business: Three and sixty-two one-hundredths
percent;)) Gas distribution business: Three and six-tenths percent;
(c)
(((d))) (c) Urban transportation business: Six-tenths of one
percent;
(((e))) (d) Vessels under sixty-five feet in length, except
tugboats, operating upon the waters within the state: Six-tenths of
one percent;
(((f))) (e) Motor transportation, railroad, railroad car, and
tugboat businesses, and all public service businesses other than ones
mentioned above: One and eight-tenths of one percent;
(((g))) (f) Water distribution business: Four and seven-tenths
percent.
(2) An additional tax is imposed equal to the rate specified in RCW
82.02.030 multiplied by the tax payable under subsection (1) of this
section.
(3) Twenty percent of the moneys collected under subsection (1) of
this section on water distribution businesses and sixty percent of the
moneys collected under subsection (1) of this section on sewerage
collection businesses shall be deposited in the public works assistance
account created in RCW 43.155.050.
Sec. 11 RCW 82.16.050 and 2004 c 153 s 308 are each amended to
read as follows:
In computing tax there may be deducted from the gross income the
following items:
(1) Amounts derived by municipally owned or operated public service
businesses, directly from taxes levied for the support or maintenance
thereof: PROVIDED, That this section shall not be construed to exempt
service charges which are spread on the property tax rolls and
collected as taxes;
(2) Amounts derived from the sale of commodities to persons in the
same public service business as the seller, for resale as such within
this state. This deduction is allowed only with respect to water
distribution, gas distribution or other public service businesses which
furnish water, gas or any other commodity in the performance of public
service businesses;
(3) Amounts actually paid by a taxpayer to another person taxable
under this chapter as the latter's portion of the consideration due for
services furnished jointly by both, if the total amount has been
credited to and appears in the gross income reported for tax by the
former;
(4) The amount of cash discount actually taken by the purchaser or
customer;
(5) The amount of bad debts, as that term is used in 26 U.S.C. Sec.
166, as amended or renumbered as of January 1, 2003, on which tax was
previously paid under this chapter;
(6) Amounts derived from business which the state is prohibited
from taxing under the Constitution of this state or the Constitution or
laws of the United States;
(7) Amounts derived from the distribution of water through an
irrigation system, for irrigation purposes;
(8) Amounts derived from the transportation of commodities from
points of origin in this state to final destination outside this state,
or from points of origin outside this state to final destination in
this state, with respect to which the carrier grants to the shipper the
privilege of stopping the shipment in transit at some point in this
state for the purpose of storing, manufacturing, milling, or other
processing, and thereafter forwards the same commodity, or its
equivalent, in the same or converted form, under a through freight rate
from point of origin to final destination; and amounts derived from the
transportation of commodities from points of origin in the state to an
export elevator, wharf, dock or ship side on tidewater or navigable
tributaries thereto from which such commodities are forwarded, without
intervening transportation, by vessel, in their original form, to
interstate or foreign destinations: PROVIDED, That no deduction will
be allowed when the point of origin and the point of delivery to such
an export elevator, wharf, dock, or ship side are located within the
corporate limits of the same city or town;
(9) ((Amounts derived from the production, sale, or transfer of
electrical energy for resale within or outside the state or for
consumption outside the state;)) Amounts derived from the distribution of water by a
nonprofit water association and used for capital improvements by that
nonprofit water association;
(10)
(((11))) (10) Amounts paid by a sewerage collection business
taxable under RCW 82.16.020(1)(a) to a person taxable under chapter
82.04 RCW for the treatment or disposal of sewage.
Sec. 12 RCW 82.16.090 and 1988 c 228 s 1 are each amended to read
as follows:
Any customer billing issued by a ((light or power business or)) gas
distribution business that serves a total of more than twenty thousand
customers and operates within the state shall include the following
information:
(1) The rates and amounts of taxes paid directly by the customer
upon products or services rendered by the ((light and power business
or)) gas distribution business; and
(2) The rate, origin and approximate amount of each tax levied upon
the revenue of the ((light and power business or)) gas distribution
business and added as a component of the amount charged to the
customer. Taxes based upon revenue of the ((light and power business
or)) gas distribution business to be listed on the customer billing
need not include taxes levied by the federal government or taxes levied
under chapter((s 54.28,)) 80.24((,)) or 82.04 RCW.
Sec. 13 RCW 54.28.010 and 1977 ex.s. c 366 s 1 are each amended
to read as follows:
As used in this chapter:
(1) "Operating property" means all of the property utilized by a
((public utility district)) publicly owned utility in the operation of
a plant or system for the generation, transmission, or distribution of
electric energy for sale;
(2) "Taxing districts" means counties, cities, towns, school
districts, and road districts;
(3) "Distributes to consumers" means the sale of electric energy to
ultimate consumers thereof, and does not include sales of electric
energy for resale by the purchaser;
(4) "Wholesale value" means all costs of a ((public utility
district)) publicly owned utility associated with the generation and
transmission of energy from its own generation and transmission system
to the point or points of inter-connection with a distribution system
owned and used by a ((district)) publicly owned utility to distribute
((such)) energy to consumers, or in the event a distribution system
owned by a ((district)) publicly owned utility is not used to
distribute ((such)) energy, then the term means the gross revenues
derived by a ((district)) publicly owned utility from the sale of
((such)) energy to consumers;
(5) "Thermal electric generating facility" means a steam-powered
electrical energy producing facility utilizing nuclear or fossil fuels;
(6) "Placed in operation" means delivery of energy into a
transmission or distribution system for use or sale in ((such)) a
manner as to establish a value accruing to the power plant operator,
except operation incidental to testing or startup adjustments;
(7) "Impacted area" for a thermal electric generating facility on
a federal reservation means that area in the state lying within thirty-five statute miles of the most commonly used entrance of the federal
reservation and which is south of the southern boundary of township
fifteen north;
(8) "Publicly owned utility" means a public utility district, city,
or town operating a plant or system for the generation, transmission,
or distribution of electric energy for sale;
(9) "Telecommunications," "telecommunications facilities," and
"wholesale telecommunications services" have the same meaning as under
chapter 54.16 RCW.
Sec. 14 RCW 54.28.011 and 1957 c 278 s 12 are each amended to
read as follows:
"Gross revenue" ((shall)) means the amount received from the sale
of electric energy excluding any tax levied by a ((municipal
corporation)) city or town upon the public utility district pursuant to
RCW 54.28.070 (as recodified by this act).
Sec. 15 RCW 54.28.020 and 1983 2nd ex.s. c 3 s 8 are each amended
to read as follows:
(1) There is ((hereby)) levied and there shall be collected from
every ((district)) publicly owned utility a tax for the act or
privilege of engaging within this state in the business of operating
works, plants or facilities for the generation, distribution and sale
of electric energy. With respect to each ((such district)) publicly
owned utility, except with respect to thermal electric generating
facilities taxed under RCW 54.28.025 (as recodified by this act),
((such)) the tax shall be the sum of the following amounts: (a) Two
and twenty-eight one-hundredths percent of the gross revenues derived
by the ((district)) publicly owned utility from the sale of all
electric energy which it distributes to consumers who are served by a
distribution system owned by the ((district)) publicly owned utility;
(b) ((five)) twenty-one and fifteen one-hundredths percent of the first
four mills per kilowatt-hour of wholesale value of self-generated
energy distributed to consumers by a ((district)) publicly owned
utility; (c) ((five)) twenty-one and fifteen one-hundredths percent of
the first four mills per kilowatt-hour of revenue obtained by the
((district)) publicly owned utility from the sale of self-generated
energy for resale.
(2) An additional tax is imposed equal to the rate specified in RCW
82.02.030 multiplied by the tax payable under subsection (1) of this
section.
NEW SECTION. Sec. 16 (1) There is levied and there shall be
collected from every publicly owned utility a tax for the act or
privilege of engaging within this state in the business of operating
works, plants, or facilities for the purposes of selling wholesale
telecommunications services. With respect to each such utility, such
tax shall be . . . percent of the wholesale value of the services sold.
(2) An additional tax is imposed equal to the rate specified in RCW
82.02.030 multiplied by the tax payable under subsection (1) of this
section.
Sec. 17 RCW 54.28.025 and 1983 2nd ex.s. c 3 s 9 are each amended
to read as follows:
(1) There is ((hereby)) levied and there shall be collected from
every ((district)) publicly owned utility operating a thermal electric
generating facility, as defined in RCW 54.28.010 ((as now or hereafter
amended)) (as recodified by this act), having a design capacity of two
hundred fifty thousand kilowatts or more, located on a federal
reservation, which is placed in operation after September 21, 1977, a
tax for the act or privilege of engaging within the state in the
business of generating electricity for use or sale, equal to one and
one-half percent of wholesale value of energy produced for use or sale,
except energy used in the operation of component parts of the power
plant and associated transmission facilities under control of the
person operating the power plant.
(2) An additional tax is imposed equal to the rate specified in RCW
82.02.030 multiplied by the tax payable under subsection (1) of this
section.
Sec. 18 RCW 54.28.030 and 1977 ex.s. c 366 s 3 are each amended
to read as follows:
On or before the fifteenth day of March of each year, each
((district)) publicly owned utility subject to this tax shall file with
the department of revenue a report verified by the affidavit of its
manager or secretary on forms prescribed by the department of revenue.
((Such)) The report shall state (1) the gross revenues derived by the
((district)) publicly owned utility from the sale of all distributed
energy to consumers and the respective amounts derived from ((such))
sales within each county; (2) the gross revenues derived by the
((district)) publicly owned utility from the sale of self-generated
energy for resale; (3) all revenue derived by the publicly owned
utility from the sale of wholesale telecommunications services; (4) the
amount of all generated energy distributed from each of the facilities
subject to taxation by a ((district)) publicly owned utility from its
own generating facilities, the wholesale value ((thereof)), and the
basis on which the value is computed; (((4))) (5) the total cost of all
generating facilities and the cost of acquisition of land and land
rights for ((such)) facilities or for reservoir purposes in each
county; (6) the total cost to build and maintain all wholesale
telecommunications facilities; and (((5) such)) (7) other and further
information as the department of revenue reasonably may require in
order to administer the provisions of this chapter. In case of failure
by a ((district)) publicly owned utility to file ((such)) a report, the
department may proceed to determine the information, which
determination shall be contestable by the ((district)) publicly owned
utility only for actual fraud.
Sec. 19 RCW 54.28.040 and 1996 c 149 s 16 are each amended to
read as follows:
(1) Before May 1st, the department of revenue shall compute the tax
imposed by this chapter for the last preceding calendar year and notify
the ((district)) publicly owned utility of the amount ((thereof)),
which shall be payable on or before the following June 1st.
(2) If payment of any tax is not received by the department on or
before the due date, there shall be assessed a penalty of five percent
of the amount of the tax; if the tax is not received within one month
of the due date, there shall be assessed a total penalty of ten percent
of the amount of the tax; and if the tax is not received within two
months of the due date, there shall be assessed a total penalty of
twenty percent of the amount of the tax.
(3) Upon receipt of the amount of each tax imposed the department
of revenue shall deposit the same with the state treasurer, who shall
deposit four percent of the revenues received under RCW 54.28.020(1)
((and)), 54.28.025(1) (as recodified by this act), and section 16(1) of
this act, and all revenues received under RCW 54.28.020(2) ((and)),
54.28.025(2) (as recodified by this act), and section 16(2) of this act
in the general fund of the state and shall distribute the remainder
((in the manner hereinafter)) as set forth in RCW 54.28.050 and
54.28.055 (as recodified by this act). The state treasurer shall send
a duplicate copy of each transmittal to the department of revenue.
Sec. 20 RCW 54.28.050 and 1982 1st ex.s. c 35 s 21 are each
amended to read as follows:
(1) After computing the tax imposed by RCW 54.28.020(1) (as
recodified by this act) and section 16(1) of this act and making the
distribution under RCW 54.28.040 (as recodified by this act), the
department of revenue shall instruct the state treasurer, after placing
thirty-seven and six-tenths percent in the state general fund to be
dedicated for the benefit of the public schools, to distribute the
balance as follows:
(a) For amounts collected under RCW 54.28.020(1)(a) (as recodified
by this act), the balance shall be distributed to each county in
proportion to the gross revenue from sales made within each county;
((and to distribute the balance))
(b) For amounts collected under section 16(1) of this act, if the
telecommunications facilities are located in only one county, the
balance shall be distributed to the county in which the wholesale
telecommunications facilities are located. If the telecommunications
facilities are located in more than one county, the balance shall be
distributed in a pro rata manner to each applicable county based on the
cost of the telecommunications facilities; and
(c) For amounts collected under RCW 54.28.020(1) (b) and (c) (as
recodified by this act), the balance shall be distributed as follows:
If the entire generating facility, including reservoir, if any, is in
a single county then all of the balance to the county where ((such))
the generating facility is located. If any reservoir is in more than
one county, then to each county in which the reservoir or any portion
((thereof)) is located, a percentage 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)) the
reservoir are in more than one county, the balance shall be divided
sixty percent to the county in which the owning ((district)) publicly
owned utility is located and forty percent to the other county or
counties or if ((said)) the powerhouse and dam, if any, are owned by a
joint operating agency organized under chapter 43.52 RCW, or by more
than one ((district)) publicly owned utility or are outside the county
of the owning ((district)) publicly owned utility, then to be divided
equally between the counties in which ((such)) the facilities are
located. 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.
(2) The provisions of this section shall not apply to the
distribution of taxes collected under RCW 54.28.025 (as recodified by
this act).
Sec. 21 RCW 54.28.055 and 1986 c 189 s 1 are each amended to read
as follows:
(1) After computing the tax imposed by RCW 54.28.025(1) (as
recodified by this act) and after making the distribution specified in
RCW 54.28.040 (as recodified by this act), the department of revenue
shall instruct the state treasurer to distribute the amount collected
as follows:
(a) Fifty percent to the state general fund for the support of
schools; and
(b) Twenty-two percent to the counties, twenty-three percent to the
cities, three percent to the fire protection districts, and two percent
to the library districts.
(2) Each county, city, fire protection district and library
district shall receive a percentage of the amount for distribution to
counties, cities, fire protection districts and library districts,
respectively, in the proportion that the population of ((such)) the
((district)) publicly owned utility residing within the impacted area
bears to the total population of all ((such districts)) publicly owned
utilities residing within the impacted area. For the purposes of this
chapter, the term "library district" includes only regional libraries
as defined in RCW 27.12.010(4), rural county library districts as
defined in RCW 27.12.010(5), intercounty rural library districts as
defined in RCW 27.12.010(6), and island library districts as defined in
RCW 27.12.010(7). The population of a library district, for purposes
of ((such)) a distribution, shall not include any population within the
library district and the impact area that also is located within a city
or town.
(3) If any distribution pursuant to subsection (1)(b) of this
section cannot be made, then that share shall be prorated among the
state and remaining local districts.
(4) All distributions directed by this section to be made on the
basis of population shall be calculated in accordance with data to be
provided by the office of financial management.
Sec. 22 RCW 54.28.060 and 1996 c 149 s 12 are each amended to
read as follows:
Interest at the rate as computed under RCW 82.32.050(2) shall be
added to the tax ((hereby)) imposed from the due date until the date of
payment. The tax ((shall)) constitutes a debt to the state and may be
collected as such.
Sec. 23 RCW 54.28.070 and 1941 c 245 s 3 are each amended to read
as follows:
Any city or town in which a public utility district operates works,
plants, or facilities for the distribution and sale of electricity, or
for the sale of wholesale telecommunications services, shall have the
power to levy and collect from ((such)) the district a tax under this
section. With respect to the distribution and sale of electricity, a
tax may be imposed on the gross revenues derived by ((such)) the
district from the sale of electricity within the city or town,
exclusive of the revenues derived from the sale of electricity for
purposes of resale. ((Such)) With respect to the sale of wholesale
telecommunications services, a tax may be imposed under the applicable
authority in chapter 35.21 RCW. The tax when levied shall be a debt of
the district, and may be collected as such. Any ((such)) district
shall have the power to add the amount of ((such)) tax to the rates or
charges it makes for electricity ((so)) or wholesale telecommunications
services sold within the limits of ((such)) the city or town.
Sec. 24 RCW 54.28.080 and 1957 c 278 s 8 are each amended to read
as follows:
Whenever any public utility district acquires an operating property
from any private person, firm, or corporation and a portion of the
operating property is situated within the boundaries of any school
district and at the time of ((such)) acquisition there is an
outstanding bonded indebtedness of the school district, then the public
utility district shall, in addition to the tax imposed by this chapter,
pay directly to the school district a proportion of all subsequent
payments by the school district of principal and interest on ((said))
the bonded indebtedness, ((said)) the additional payments to be
computed and paid as follows: The amount of principal and interest
required to be paid ((by)) to the school district shall be multiplied
by the percentage which the assessed value of the property acquired
bore to the assessed value of the total property in the school district
at the time of ((such)) the acquisition. ((Such)) The additional
amounts shall be paid by the public utility district to the school
district not less than fifteen days prior to the date that ((such)) the
principal and interest payments are required to be paid by the school
district. In addition, any public utility district which acquires from
any private person, firm, or corporation an operating property situated
within a school district, is authorized to make voluntary payments to
((such)) the school district for the use and benefit of the school
district.
Sec. 25 RCW 54.28.090 and 1980 c 154 s 9 are each amended to read
as follows:
The county legislative authority of each county shall direct the
county treasurer to deposit funds to the credit of each taxing district
in the county, other than school districts, according to the manner
they deem most equitable; except not less than an amount equal to
three-fourths of one percent of the gross revenues obtained by a
district from the sale of electric energy within any incorporated city
or town shall be remitted to ((such)) the city or town. Information
furnished by the district to the county legislative authority shall be
the basis for the determination of the amount to be paid to ((such))
cities or towns.
The provisions of this section shall not apply to the distribution
of taxes collected under RCW 54.28.025 (as recodified by this act).
Sec. 26 RCW 54.28.100 and 1957 c 278 s 11 are each amended to
read as follows:
All money((s)) received by any taxing district shall be used for
purposes for which state taxes may be used under the provisions of the
state Constitution.
Sec. 27 RCW 54.28.110 and 1957 c 278 s 13 are each amended to
read as follows:
Whenever((, hereafter,)) property is removed from the tax rolls as
a result of the acquisition of operating property or the construction
of a generating plant by a public utility district, ((such)) the public
utility district may make voluntary payments to any municipal
corporation or other entity authorized to levy and collect taxes in an
amount not to exceed the amount of tax revenues being received by
((such)) the municipal corporation or other entity at the time of
((said)) the acquisition or ((said)) construction and which are lost by
((such)) the municipal corporation or other entity as a result of the
acquisition of operating property or the construction of a generating
plant by the public utility district((: PROVIDED, That)). However,
this section shall not apply to taxing districts as defined in RCW
54.28.010((, and: PROVIDED FURTHER, That)) (as recodified by this act)
and in the event any operating property ((so)) removed from the tax
rolls is dismantled or partially dismantled the payment which may be
paid ((hereunder)) shall be correspondingly reduced.
Sec. 28 RCW 54.28.120 and 1957 c 278 s 14 are each amended to
read as follows:
In the event any ((district hereafter)) publicly owned utility
purchases or otherwise acquires electric utility properties comprising
all or a portion of an electric generation ((and/or)) or distribution
system, or telecommunications properties for the purposes of providing
wholesale telecommunications services, from a public service company,
as defined in RCW 80.04.010, the total amount of privilege taxes
imposed under this chapter ((278, Laws of 1957)) to be paid by the
((district)) publicly owned utility annually on the combined operating
property within each county where ((such)) the utility property is
located, irrespective of any other basis of levy contained in this
chapter, will be not less than the combined total of the ad valorem
taxes, based on regular levies, last levied against the electric
utility property constituting the system so purchased or acquired, or
the telecommunications properties purchased or acquired, plus the taxes
paid by the ((district)) publicly owned utility for the same year on
the revenues of other operating property in the same county under terms
of this chapter. If all or any portion of the property so acquired is
subsequently sold, or if rates charged to purchasers of electric energy
or wholesale telecommunications services are reduced, the amount of
privilege tax required under this section shall be proportionately
reduced.
NEW SECTION. Sec. 29 RCW 54.28.010, 54.28.011, 54.28.020,
54.28.025, 54.28.030, 54.28.040, 54.28.050, 54.28.055, 54.28.060,
54.28.070, 54.28.080, 54.28.090, 54.28.100, 54.28.110, and 54.28.120
are each recodified as a new chapter in Title
NEW SECTION. Sec. 30 Section 16 of this act is added to the new
chapter created in section 29 of this act.
NEW SECTION. Sec. 31 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. 32 Sections 13 through 30 of this act take
effect July 1, 2006.
NEW SECTION. Sec. 33 Sections 1 through 8 of this act constitute
a new chapter in Title
NEW SECTION. Sec. 34 Captions used in sections 1 through 4 of
this act are not any part of the law.
NEW SECTION. Sec. 35 Sections 1 through 12, 33, and 34 of this
act take effect January 1, 2007.