BILL REQ. #: S-0318.1
State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 01/16/09. Referred to Committee on Economic Development, Trade & Innovation.
AN ACT Relating to modifying the electrolytic processing business tax exemption; and amending RCW 82.16.0421 and 82.32.560.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.16.0421 and 2004 c 240 s 1 are each amended to read
as follows:
(1) For the purposes of this section:
(a) "Chlor-alkali electrolytic processing business" means a person
who is engaged in a business that uses more than ten average megawatts
of electricity per month in a chlor-alkali electrolytic process to
split the electrochemical bonds of sodium chloride and water to make
chlorine and sodium hydroxide. A "chlor-alkali electrolytic processing
business" does not include direct service industrial customers or their
subsidiaries that contract for the purchase of power from the
Bonneville power administration as of June 10, 2004.
(b) "Sodium chlorate electrolytic processing business" means a
person who is engaged in a business that uses more than ten average
megawatts of electricity per month in a sodium chlorate electrolytic
process to split the electrochemical bonds of sodium chloride and water
to make sodium chlorate and hydrogen. A "sodium chlorate electrolytic
processing business" does not include direct service industrial
customers or their subsidiaries that contract for the purchase of power
from the Bonneville power administration as of June 10, 2004.
(2) Effective July 1, 2004, the tax levied under this chapter does
not apply to sales of electricity made by a light and power business to
a chlor-alkali electrolytic processing business or a sodium chlorate
electrolytic processing business for the electrolytic process if the
contract for sale of electricity to the business contains the following
terms:
(a) The electricity to be used in the electrolytic process is
separately metered from the electricity used 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 chlor-alkali
electrolytic processing business or the sodium chlorate 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 chlor-alkali electrolytic processing business or the sodium chlorate
electrolytic processing business must provide the light and power
business with an exemption certificate in a form and manner prescribed
by the department.
(((5)(a) This section does not apply to sales of electricity made
after December 31, 2010.))
(b) This section expires June 30, 2011.
Sec. 2 RCW 82.32.560 and 2004 c 240 s 2 are each amended to read
as follows:
(1) For the purposes of this section, "electrolytic processing
business tax exemption" means the exemption and preferential tax rate
under RCW 82.16.0421.
(2) 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.
(3) The goals of the electrolytic processing business tax exemption
are:
(a) To retain family wage jobs by enabling electrolytic processing
businesses to maintain production of chlor-alkali and sodium chlorate
at a level that will preserve at least seventy-five percent of the jobs
that were on the payroll effective January 1, 2004; and
(b) To allow the electrolytic processing industries to continue
production in this state ((through 2011)) so that the industries will
remain competitive and be positioned to preserve and create new jobs
((when the anticipated reduction of energy costs occur)).
(4)(a) A person who receives the benefit of an electrolytic
processing business tax exemption ((shall)) must make an annual report
to the department detailing employment, wages, and employer-provided
health and retirement benefits per job at the manufacturing site. The
report is due by March 31st following any year in which a tax exemption
is claimed or used. The report ((shall)) may not include names of
employees. The report ((shall)) must detail employment by the total
number of full-time, part-time, and temporary positions. The report
((shall)) must indicate the quantity of product produced at the plant
during the time period covered by the report. The first report filed
under this subsection ((shall)) must include employment, wage, and
benefit information for the twelve-month period immediately before
first use of a tax exemption. Employment reports shall include data
for actual levels of employment and identification of the number of
jobs affected by any employment reductions that have been publicly
announced at the time of the report. 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.
(b) If a person fails to submit an annual report under (a) of this
subsection by the due date of the report, the department ((shall)) must
declare the amount of taxes exempted for that year to be immediately
due and payable. Public utility taxes payable under this subsection
are subject to interest but not penalties, as provided under this
chapter. This information is not subject to the confidentiality
provisions of RCW 82.32.330 and may be disclosed to the public upon
request.
(5) ((By December 1, 2007, and by December 1, 2010, the fiscal
committees of the house of representatives and the senate, in
consultation with the department, shall report to the legislature on
the effectiveness of the tax incentive under RCW 82.16.0421. The
report shall measure)) Pursuant to chapter 43.136 RCW, the citizen
commission for performance measurement of tax preferences shall
schedule the electrolytic processing business tax exemption under RCW
82.16.0421 for a tax preference review by the joint legislative audit
and review committee. In addition to any of the factors in RCW
43.136.055(1), the committee must also study and report on the effect
of the incentive on job retention for Washington residents, and other
factors as the committees select. The report ((shall)) must also
discuss expected trends or changes to electricity prices as they affect
the industries that benefit from the incentives.