BILL REQ. #:  S-3392.1 

Read first time 01/21/10.   Referred to Committee on Environment, Water & Energy.

     AN ACT Relating to providing forest derived biomass tax incentives; amending RCW 82.04.4494, 82.08.957, and 82.12.957; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; and providing expiration dates.

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

Sec. 1   RCW 82.04.4494 and 2009 c 469 s 401 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, harvesters are allowed a credit against the amount of tax otherwise due under this chapter, as provided in this section. The credit per harvested green ton of forest derived biomass sold, transferred, or used for production of electricity, steam, heat, or biofuel is as follows:
     (a) For forest derived biomass harvested October 1, 2009, through June 30, 2010, zero dollars;
     (b) For forest derived biomass harvested July 1, 2010, through June 30, 2013, ((three)) five dollars;
     (c) For forest derived biomass harvested July 1, 2013, through June 30, ((2015)) 2020, ((five)) ten dollars.     
     (2) Credit may not be claimed for forest derived biomass sold, transferred, or used before July 1, 2009. The amount of credit allowed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period. Any unused excess credit in a reporting period may be carried forward to future reporting periods for a maximum of two years.
     (3) For the purposes of this section, "harvested" and "harvesters" are defined in RCW 84.33.035, and "biofuel" is defined in RCW 43.325.010.
     (4) This section expires June 30, ((2015)) 2020.

Sec. 2   RCW 82.08.957 and 2009 c 469 s 402 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales of forest derived biomass used to produce electricity, steam, heat, or biofuel. This exemption is available only if the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
     (2) For purposes of this section, "biofuel" is defined in RCW 43.325.010.
     (3) This section expires June 30, ((2013)) 2020.

Sec. 3   RCW 82.12.957 and 2009 c 469 s 403 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of forest derived biomass for production of electricity, steam, heat, or biofuel.
     (2) For purposes of this section, "biofuel" is defined in RCW 43.325.010.
     (3) This section expires June 30, ((2013)) 2020.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales of machinery and equipment used exclusively to recover forest derived biomass for the production of electricity, steam, heat, or biofuel.
     (2) A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
     (3) For the purposes of this section, the following definitions apply:
     (a) "Biofuel" is defined in RCW 43.325.010.
     (b) "Machinery and equipment" means machines, equipment, and devices, including repair parts and replacement parts, that are integral and necessary for the recovery of forest derived biomass used to produce electricity, steam, heat, or biofuel.

NEW SECTION.  Sec. 5   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use of machinery and equipment used exclusively to recover forest derived biomass for the production of electricity, steam, heat, or biofuel.
     (2) A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
     (3) For the purposes of this section, the definitions in section 4 of this act apply.