BILL REQ. #:  S-1218.2 



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SENATE BILL 5766
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State of Washington61st Legislature2009 Regular Session

By Senators Pridemore, Murray, Rockefeller, Regala, Kohl-Welles, and Kline

Read first time 01/30/09.   Referred to Committee on Ways & Means.



     AN ACT Relating to modifying pollution control tax incentives and providing additional funding for compensation and retraining of displaced workers; amending RCW 82.08.810 and 50.12.280; amending 1997 c 368 s 1 (uncodified); adding a new section to chapter 28C.18 RCW; adding a new section to chapter 43.31 RCW; repealing RCW 84.36.487, 82.12.810, 82.32.393, 82.08.811, and 82.12.811; making an appropriation; and providing an effective date.

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

Sec. 1   1997 c 368 s 1 (uncodified) is amended to read as follows:
     (((1) The legislature finds that:
     (a) Thermal electric generation facilities play an important role in providing jobs for residents of the communities where such plants are located; and
     (b) Taxes paid by thermal electric generation facilities help to support schools and local and state government operations.
     (2) It is the intent of the legislature to assist thermal electric generation facilities placed in operation after December 31, 1969, and before July 1, 1975, to update their air pollution control equipment and abate pollution by extending certain tax exemptions and credits so that such plants may continue to play a long-term vital economic role in the communities where they are located.)) (1) The legislature finds that the tax policy of the state should be consistent with the green house gas emissions reductions and clean energy jobs goals as established in chapter 14 (Engrossed Second Substitute House Bill No. 2815), Laws of 2008.
     (2) The legislature recognized the benefits of electric power and employment opportunities provided by thermal electric generation facilities when the legislature adopted tax incentives to encourage air pollution control equipment updates and pollution abatement. However, the unexpected closure of coal mining operations in the state in 2006 had an adverse impact on workers, families, and the economy of the state. The tax incentives were originally based on continued employment opportunities created by coal mining operations and, since these operations were closed in 2006, the tax benefits for thermal electric generation facilities are disproportionately high for the number of jobs they now provide.
     (3) The legislature finds that coal-powered thermal electric generation facilities located in the state contribute approximately twelve percent of the total greenhouse gas emissions of the state, according to the December 2007 study, "greenhouse gas inventory and reference case projections."
     (4) The legislature, considering the environmental and economic climate of the state, concludes that measures are necessary to address climate change and potential closures of thermal electric generation facilities in the state. Thus, it is the intent of the legislature that the state will: (a) Develop programs to create new economic opportunities in counties where coal-powered thermal electric generation facilities are located; (b) identify strategies to replace the energy generated by coal-powered thermal electric generation facilities, including the use of energy conservation and energy efficiency measures; and (c) repeal RCW 82.32.393 to provide funding for the activities in this subsection.

Sec. 2   RCW 82.08.810 and 1997 c 368 s 2 are each amended to read as follows:
     (1) For the purposes of this section, "air pollution control facilities" mean any treatment works, control devices and disposal systems, machinery, equipment, structures, property, property improvements, and accessories, that are installed or acquired for the primary purpose of reducing, controlling, or disposing of industrial waste that, if released to the outdoor atmosphere, could cause air pollution, or that are required to meet regulatory requirements applicable to their construction, installation, or operation.
     (2) The tax levied by RCW 82.08.020 ((does not apply to)) is deferred for:
     (a) Sales of tangible personal property to a light and power business, as defined in RCW 82.16.010, for construction or installation of air pollution control facilities at a thermal electric generation facility; or
     (b) Sales of, cost of, or charges made for labor and services performed in respect to the construction or installation of air pollution control facilities.
     (3) The ((exemption)) deferral provided under this section applies only to sales, costs, or charges:
     (a) Incurred for air pollution control facilities constructed or installed after May 15, 1997, and used in a thermal electric generation facility placed in operation after December 31, 1969, and before July 1, 1975;
     (b) If the air pollution control facilities are constructed or installed to meet applicable regulatory requirements established under state or federal law, including the Washington clean air act, chapter 70.94 RCW; and
     (c) For which the purchaser provides the seller with ((an exemption)) a deferral certificate, signed by the purchaser or purchaser's agent, that includes a description of items or services for which payment is made, the amount of the payment, and such additional information as the department reasonably may require.
     (4) This section does not apply to sales of tangible personal property purchased or to sales of, costs of, or charges made for labor and services used for maintenance or repairs of pollution control equipment.
     (5) ((If production of electricity at a thermal electric generation facility for any calendar year after 2002 and before 2023 falls below a twenty percent annual capacity factor for the generation facility, all or a portion of the tax previously exempted under this section in respect to construction or installation of air pollution control facilities at the generation facility shall be due as follows:

Portion of previously
Year event occursexempted tax due
2003 100% 
2004 95% 
2005 90% 
2006 85% 
2007 80% 
2008 75% 
2009 70% 
2010 65% 
2011 60% 
2012 55% 
2013 50% 
2014 45% 
2015 40% 
2016 35% 
2017 30% 
2018 25% 
2019 20% 
2020 15% 
2021 10% 
2022 5% 
2023 0% 


     (6) RCW 82.32.393 applies to this section.)) A taxpayer receiving a deferral under this section must begin paying the deferred taxes on July 1, 2013, with subsequent annual payments due on July 1st of the succeeding four years. All taxes previously exempted under this section are deferred as of August 1, 2009, and must be repaid under the schedule in this subsection. The amounts of payment scheduled are as follows:

Repayment Year% of Deferred Tax
to Repay
120%
220%
320%
420%
520%


     (6) Interest is charged on any taxes deferred under this chapter for the period of deferral. The provisions of chapter 82.32 RCW apply to the deferrals in this section, including penalties and interest for assessed taxes and delinquent payments. The debt for deferred taxes is not extinguished by insolvency or other failure of the recipient.
     (7) If a taxpayer receiving the deferral ceases operation and decommissions the thermal electric generation facility before the first payment of the deferral is due, the debt for deferred taxes need not be repaid. However, any transfer of ownership occurring after August 1, 2009, terminates the deferral provided under this section and all deferred taxes plus interest are immediately due.

Sec. 3   RCW 50.12.280 and 1997 c 368 s 13 are each amended to read as follows:
     The displaced workers account is established. ((All moneys from RCW 82.32.393 must be deposited into the account.)) Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only to provide for compensation and retraining of displaced workers of the thermal electric generation facility and of the coal mine that supplied coal to the facility. The benefits from the account are in addition to all other compensation and retraining benefits to which the displaced workers are entitled under existing state law. The employment security department shall administer the distribution of moneys from the account. Any funds remaining in the account on June 30, 2020, must be deposited into the general fund.

NEW SECTION.  Sec. 4   A new section is added to chapter 28C.18 RCW to read as follows:
     The workforce training and education coordinating board, and local associate development organizations, must develop a comprehensive plan to increase employment opportunities for displaced workers receiving assistance under section 5 of this act and improve the economic well-being in the county in which the thermal electric generation facility is located. The plan is due to the governor and the legislature by December 31, 2010. At minimum, the plan must consider:
     (1) The need for increased investment for public infrastructure, such as roads, rail, water systems, or sewer systems to support new economic investments; and
     (2) Opportunities and strategies to implement recommendations from the studies related to the green economy jobs growth initiative established in chapter 14, Laws of 2008.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.31 RCW to read as follows:
     The department of community, trade, and economic development must conduct an analysis to determine how the state can meet its energy needs without using energy currently generated by thermal electric generation facilities placed in operation after December 31, 1969, and before July 1, 1975. The analysis must include strategies and recommendations that are consistent with the state's greenhouse gas emissions reductions and clean energy jobs goals established in chapter 14, Laws of 2008. The report is due to the governor and the legislature by December 31, 2010.

NEW SECTION.  Sec. 6   The following acts or parts of acts are each repealed:
     (1) RCW 84.36.487 (Air pollution control equipment in thermal electric generation facilities -- Records -- Payments on cessation of operation) and 1997 c 368 s 11;
     (2) RCW 82.12.810 (Exemptions -- Air pollution control facilities at a thermal electric generation facility -- Exceptions -- Payments on cessation of operation) and 2003 c 5 s 12 & 1997 c 368 s 3;
     (3) RCW 82.32.393 (Thermal electric generation facilities with tax exemptions for air pollution control equipment -- Payments upon cessation of operation) and 1997 c 368 s 12;
     (4) RCW 82.08.811 (Exemptions -- Coal used at coal-fired thermal electric generation facility -- Application -- Demonstration of progress in air pollution control -- Notice of emissions violations -- Reapplication--Payments on cessation of operation) and 1997 c 368 s 4; and
     (5) RCW 82.12.811 (Exemptions -- Coal used at coal-fired thermal electric generation facility -- Application -- Demonstration of progress in air pollution control -- Notice of emissions violations -- Reapplication--Payments on cessation of operation) and 1997 c 368 s 6.

NEW SECTION.  Sec. 7   The sum of ten million dollars, which reflects the increased revenue receipts from taxes repealed in section 6 of this act, or as much of the ten million dollars as may be necessary, is appropriated for the biennium ending June 30, 2011, from the general fund into the displaced workers account in RCW 50.12.280 for the purposes of this act.

NEW SECTION.  Sec. 8   This act takes effect August 1, 2009.

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