BILL REQ. #:  H-2101.1 

READ FIRST TIME 02/20/09.   

     AN ACT Relating to providing a credit under the public utility tax for sales and use taxes paid for the development of eligible renewable resources in the state that provide renewable energy to a qualifying utility; adding new sections to chapter 82.16 RCW; providing an effective date; providing an expiration date; 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) A light and power business that is a qualifying utility is allowed a credit against taxes due under this chapter in an amount equal to the taxes paid by it or any other person under RCW 82.08.020 or 82.12.020 on machinery and equipment used directly in generating electricity from an eligible renewable resource that is used as the principal source of power, and sales of or charges made for labor and services rendered in respect to installing such machinery and equipment. One-quarter of the amount of credit earned under this section may be claimed against taxes due for the fiscal year in which the eligible renewable resource, in respect to which the credit was earned, becomes operational. The remaining credit may be claimed against taxes due under this chapter for the subsequent three years in an amount equal to one-quarter of the amount of credit for each successive fiscal year. Unused credit may not be carried forward and claimed against liability incurred under this chapter in subsequent fiscal years.
     (2) The credit under this section may not exceed the tax that was paid under RCW 82.08.020 and 82.12.020 on the machinery, equipment, labor, and services. Credit under this section may not be claimed for sales and use taxes imposed by any local government under the authority of chapter 82.14 or 81.104 RCW, or any other provision of law.
     (3) The credit under this section is available only if the renewable resource on which taxes were paid under RCW 82.08.020 and 82.12.020 is owned or operated by the qualifying utility or the electrical energy produced by the resource is contractually obligated to the qualifying utility at the time the credit is claimed under this subsection.
     (4) Credit under this section may only be claimed on returns filed electronically using the department's online tax filing service. No application is required to claim the credit.
     (5) The amount of credit claimed under this section in any reporting period may not exceed the amount of tax otherwise due under this chapter for the reporting period. No refunds may be granted for unused credits.
     (6) Credit may not be earned for tax liability incurred under RCW 82.08.020 and 82.12.020 before the effective date of this section.
     (7) Qualified utilities claiming the credit under this section must keep records necessary to verify eligibility for the credit and the amount of credit the utility is entitled to. For qualified utilities claiming credit based on state sales and use taxes paid by another person, such records must include copies of invoices, contracts, and other documents detailing the amount of sales and use taxes paid by the other person on machinery and equipment used directly in generating electricity from an eligible renewable resource and any labor and services rendered in respect to installing such machinery and equipment.
     (8) The following definitions apply to this section, unless the context clearly requires otherwise:
     (a) "Qualifying utility" has the same meaning as provided in RCW 19.285.030.
     (b) "Eligible renewable resource" has the same meaning as in RCW 19.285.030.
     (c) "Machinery and equipment" means industrial fixtures, devices, and support facilities that are integral and necessary to the generation of electricity from an eligible renewable resource.
     (d) "Machinery and equipment" does not include: (i) Hand-powered tools; (ii) property with a useful life of less than one year; (iii) repair parts required to restore machinery and equipment to normal working order; (iv) replacement parts that do not increase productivity, improve efficiency, or extend the useful life of machinery and equipment; (v) buildings; or (vi) 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) Machinery and equipment is "used directly" in generating electricity from an eligible renewable resource if it provides any part of the process that captures the energy, converts that energy to electricity, or stores, transforms, or transmits that electricity for entry into or operation in parallel with electric transmission and distribution systems.
     (9) This section expires July 1, 2019.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.16 RCW to read as follows:
     On the 25th of February, May, August, and November of each year, the department must advise the state treasurer of the amount of credit claimed under section 1 of this act during the preceding calendar quarter ending on the last day of December, March, June, and September, respectively.

NEW SECTION.  Sec. 3   Sections 1 and 2 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect July 1, 2009.