"NEW SECTION.  Sec. 101   A new section is added to chapter 82.08 RCW to read as follows:
     (1)(a) Except as provided in section 104 of this act, purchasers who have paid the tax imposed by RCW 82.08.020 on machinery and equipment used directly in generating electricity using fuel cells, wind, sun, biomass energy, tidal or wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas as the principal source of power, or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment, are eligible for an exemption as provided in this section, but only if the purchaser develops with such machinery, equipment, and labor a facility capable of generating not less than one thousand watts of electricity.
     (b) From July 1, 2009, through June 30, 2013, a partial exemption in the form of a remittance is provided for the tax levied by RCW 82.08.020 to the sale of machinery and equipment described in (a) of this subsection that are used directly in generating electricity or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment.
     (c) Buyers who receive this partial exemption must comply with the prevailing wage requirements of chapter 39.12 RCW on all installations.
     (d) Buyers who receive this partial exemption for installation projects with equipment or machinery costs of thirty-five thousand dollars or more must ensure that no less than fifteen percent of the labor hours installing the equipment or machinery are performed by apprentices.
     (2) Sellers must collect the tax on sales subject to this exemption. The buyer must apply for a refund directly from the department in a form and manner required by the department. The refund is for fifty percent of the state sales tax.
     (3) For purposes of this section and section 102 of this act, the following definitions apply:
     (a) "Biomass energy" includes: (i) Byproducts of pulping and wood manufacturing process; (ii) animal waste; (iii) solid organic fuels from wood; (iv) forest or field residues; (v) wooden demolition or construction debris; (vi) food waste; (vii) liquors derived from algae and other sources; (viii) dedicated energy crops; (ix) biosolids; and (x) yard waste. "Biomass energy" does not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome-arsenic; wood from old growth forests; or municipal solid waste.
     (b) "Fuel cell" means an electrochemical reaction that generates electricity by combining atoms of hydrogen and oxygen in the presence of a catalyst.
     (c) "Landfill gas" means biomass fuel, of the type qualified for federal tax credits under Title 26 U.S.C. Sec. 29 of the federal internal revenue code, collected from a "landfill" as defined under RCW 70.95.030.
     (d)(i) "Machinery and equipment" means fixtures, devices, and support facilities that are integral and necessary to the generation of electricity using fuel cells, wind, sun, biomass energy, tidal or wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas as the principal source of power.
     (ii) "Machinery and equipment" does not include: (A) Hand-powered tools; (B) property with a useful life of less than one year; (C) repair parts required to restore machinery and equipment to normal working order; (D) replacement parts that do not increase productivity, improve efficiency, or extend the useful life of machinery and equipment; (E) buildings; or (F) building fixtures that are not integral and necessary to the generation of electricity that are permanently affixed to and become a physical part of a building.
     (e) "Apprentice" means an apprentice enrolled in an apprenticeship training program approved by the Washington state apprenticeship council; and
     (f) "Labor hours" means the total hours of workers receiving an hourly wage who are directly employed on the site of the project. "Labor hours" includes hours performed by workers employed by the contractor and all subcontractors working on the project. "Labor hours" does not include hours worked by foremen, superintendents, owners, and workers who are not subject to prevailing wage requirements.
     (3)(a) Machinery and equipment is "used directly" in generating electricity by wind energy, solar energy, biomass energy, tidal or wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas power if it provides any part of the process that captures the energy of the wind, sun, biomass energy, tidal or wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas, converts that energy to electricity, and stores, transforms, or transmits that electricity for entry into or operation in parallel with electric transmission and distribution systems.
     (b) Machinery and equipment is "used directly" in generating electricity by fuel cells if it provides any part of the process that captures the energy of the fuel, converts that energy to electricity, and stores, transforms, or transmits that electricity for entry into or operation in parallel with electric transmission and distribution systems.
     (4)(a) A purchaser claiming an exemption in the form of a remittance under subsection (1)(c) of this section must pay the tax imposed by RCW 82.08.020 and all applicable local sales taxes imposed under the authority of chapters 82.14 and 81.104 RCW. The purchaser may then apply to the department for remittance in a form and manner prescribed by the department. A purchaser may not apply for a remittance under this section more frequently than once per quarter. The purchaser must specify the amount of exempted tax claimed and the qualifying purchases for which the exemption is claimed. The purchaser must retain, in adequate detail, records to enable the department to determine whether the purchaser is entitled to an exemption under this section, including: Invoices; proof of tax paid; and documents describing the machinery and equipment.
     (b) The department must determine eligibility under this section based on the information provided by the purchaser, which is subject to audit verification by the department. The department must on a quarterly basis remit exempted amounts to qualifying purchasers who submitted applications during the previous quarter.
     (5) This section expires July 1, 2013.

NEW SECTION.  Sec. 102   A new section is added to chapter 82.12 RCW to read as follows:
     (1)(a) Except as provided in section 105 of this act, purchasers who have paid the tax imposed by RCW 82.12.020 on machinery and equipment used directly in generating electricity using fuel cells, wind, sun, biomass energy, tidal or wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas as the principal source of power, or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment, are eligible for an exemption as provided in this section, but only if the purchaser develops with such machinery, equipment, and labor a facility capable of generating not less than one thousand watts of electricity.
     (b) From July 1, 2009, through June 30, 2013, a partial exemption in the form of a remittance is provided for the tax levied by RCW 82.08.020 to the sale of machinery and equipment described in (a) of this subsection that are used directly in generating electricity or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment.
     (c) Buyers who receive this partial exemption must comply with the prevailing wage requirements of chapter 39.12 RCW on all installations.
     (d) Buyers who receive this partial exemption for installation projects with equipment or machinery costs of thirty-five thousand dollars or more must ensure that no less than fifteen percent of the labor hours installing the equipment or machinery are performed by apprentices.
     (2) Sellers must collect the tax on sales subject to this exemption. The buyer must apply for a refund directly from the department in a form and manner required by the department. The refund is for fifty percent of the state sales tax.
     (3)(a) A person claiming an exemption in the form of a remittance under subsection (1)(c) of this section must pay the tax imposed by RCW 82.12.020 and all applicable local use taxes imposed under the authority of chapters 82.14 and 81.104 RCW. The consumer may then apply to the department for remittance in a form and manner prescribed by the department. A consumer may not apply for a remittance under this section more frequently than once per quarter. The consumer must specify the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The consumer must retain, in adequate detail, records to enable the department to determine whether the consumer is entitled to an exemption under this section, including: Invoices; proof of tax paid; and documents describing the machinery and equipment.
     (b) The department must determine eligibility under this section based on the information provided by the consumer, which is subject to audit verification by the department. The department must on a quarterly basis remit exempted amounts to qualifying consumers who submitted applications during the previous quarter.
     (3) Purchases exempt under section 101 of this act are also exempt from the tax imposed under RCW 82.12.020.
     (4) The definitions in section 101 of this act apply to this section.
     (5) This section expires July 1, 2013.

NEW SECTION.  Sec. 103   A new section is added to chapter 82.32 RCW to read as follows:
     (1) The state treasurer must periodically transfer from the general fund to the green industries jobs training account created in RCW 43.330.310, the fifty percent portion of tax refund requests not subject to a refund under RCW 82.08.02567 or 82.12.02567.
     (2)(a) For the purposes of this section, "electricity generation sales and use tax exemption" means the sales and use tax exemption under RCW 82.08.02567 and 82.12.02567.
     (b) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information to evaluate whether the stated goals of legislation were achieved.
     (c)(i) A person who receives the benefit of an electricity generation sales and use tax exemption must make an annual report to the department detailing employment, wages, use of apprentices, and employer-provided health and retirement benefits. The report must detail employment by the total number of full-time, part-time, and temporary positions. The report must detail compliance with the prevailing wage requirements of chapter 39.12 RCW on all installations and the use of apprentices for all installations of electricity generation equipment and machinery that costs thirty-five thousand dollars or more.
     (ii) The report is due by March 31st following any year in which a tax exemption is claimed or used. The report may not include names of employees. The first report filed under this subsection must include employment, wage, benefit information, and use of apprentices for the twelve-month period immediately before first use of a tax exemption.
     (iii) Information in a report under this section is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (iv) If a person fails to submit an annual report under (a) of this subsection by the due date of the report, the department must declare the amount of taxes exempted for that year to be immediately due and payable. This information is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (d) The department must study the electricity generation sales and use tax exemption authorized under RCW 82.08.02567 and 82.12.02567. The department must submit a report to the finance committee of the house of representatives and the ways and means committee of the senate by December 1, 2011, and December 1, 2014. The report must detail employment, wages, and employer-provided health and retirement benefits. The report must measure compliance with the prevailing wage requirements on all installations and the use of apprentices for all installations of electricity generation equipment and machinery that costs thirty-five thousand dollars or more."