State of Washington | 62nd Legislature | 2012 Regular Session |
READ FIRST TIME 03/01/11.
AN ACT Relating to renewable energy investment cost recovery program; and amending RCW 82.16.110, 82.16.120, and 82.16.130.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.16.110 and 2011 c 179 s 2 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Administrator" means an owner and assignee of a community
solar project as defined in subsection (2)(a)(i) of this section that
is responsible for applying for the investment cost recovery incentive
on behalf of the other owners and performing such administrative tasks
on behalf of the other owners as may be necessary, such as receiving
investment cost recovery incentive payments, and allocating and paying
appropriate amounts of such payments to the other owners.
(2)(a) "Community solar project" means:
(i) A solar energy system that is capable of generating up to
seventy-five kilowatts of electricity and is owned by local
individuals, households, nonprofit organizations, nonprofit housing
organization, or nonutility businesses that is placed on the property
owned by a cooperating local governmental entity ((that)), a nonprofit
organization, or a nonprofit housing organization if the cooperating
entity, nonprofit organization, or nonprofit housing organization is
not in the light and power business or in the gas distribution
business;
(ii) A utility-owned solar energy system that is capable of
generating up to seventy-five kilowatts of electricity and that is
voluntarily funded by the utility's ratepayers where, in exchange for
their financial support, the utility gives contributors a payment or
credit on their utility bill for the value of the electricity produced
by the project; or
(iii) A solar energy system, placed on the property owned by a
cooperating local governmental entity ((that)), a nonprofit
organization, or a nonprofit housing organization if the cooperating
entity, nonprofit organization, or nonprofit housing organization is
not in the light and power business or in the gas distribution
business, ((that)) and the solar energy system is capable of generating
up to seventy-five kilowatts of electricity((,)) and ((that)) is owned
by a company whose members are each eligible for an investment cost
recovery incentive for the same customer-generated electricity as
provided in RCW 82.16.120.
(b) For the purposes of "community solar project" as defined in (a)
of this subsection:
(i) "Company" means an entity that is:
(A)(I) A limited liability company;
(II) A cooperative formed under chapter 23.86 RCW; or
(III) A mutual corporation or association formed under chapter
24.06 RCW; and
(B) Not a "utility" as defined in this subsection (2)(b); and
(ii) "Nonprofit organization" means an organization exempt from
taxation under 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue
code of 1986, as amended, as of January 1, 2009; ((and))
(iii) "Nonprofit housing organization" means an entity eligible for
assistance under RCW 43.185A.040 and engaged in activities eligible for
assistance under RCW 43.185A.030, including an entity materially
participating as a managing member of a limited liability company,
general partner of a partnership, or as an equivalent organization for
the purposes of accessing assistance from the Washington state housing
finance commission under chapter 43.180 RCW; and
(iv) "Utility" means a light and power business, an electric
cooperative, or a mutual corporation that provides electricity service.
(3) "Customer-generated electricity" means a community solar
project or the alternating current electricity that is generated from
a renewable energy system located in Washington and installed on an
individual's, businesses', or local government's real property that is
also provided electricity generated by a light and power business.
Except for community solar projects, a system located on a leasehold
interest does not qualify under this definition. Except for utility-owned community solar projects, "customer-generated electricity" does
not include electricity generated by a light and power business with
greater than one thousand megawatt hours of annual sales or a gas
distribution business.
(4) "Economic development kilowatt-hour" means the actual kilowatt-hour measurement of customer-generated electricity multiplied by the
appropriate economic development factor.
(5) "Local governmental entity" means any unit of local government
of this state including, but not limited to, counties, cities, towns,
municipal corporations, quasi-municipal corporations, special purpose
districts, and school districts.
(6) "Photovoltaic cell" means a device that converts light directly
into electricity without moving parts.
(7) "Renewable energy system" means a solar energy system, a
hydrokinetic energy system, an anaerobic digester as defined in RCW
82.08.900, or a wind generator used for producing electricity.
(8) "Solar energy system" means any device or combination of
devices or elements that rely upon direct sunlight as an energy source
for use in the generation of electricity.
(9) "Solar inverter" means the device used to convert direct
current to alternating current in a solar energy system.
(10) "Solar module" means the smallest nondivisible self-contained
physical structure housing interconnected photovoltaic cells and
providing a single direct current electrical output.
(11) "Stirling converter" means a device that produces electricity
by converting heat from a solar source utilizing a stirling engine.
(12) "Hydrokinetic energy system" means a device that generates
electricity from waves or directly from the flow of water in ocean
currents, tides, inland waterways, nonfish-bearing canals, or
irrigation districts, that does not require the impoundment or
diversion of water.
Sec. 2 RCW 82.16.120 and 2011 c 179 s 3 are each amended to read
as follows:
(1)(a) Any individual, business, local governmental entity, not in
the light and power business or in the gas distribution business, or a
participant in a community solar project may apply to the light and
power business serving the situs of the system, each fiscal year
beginning on July 1, 2005, for an investment cost recovery incentive
for each kilowatt-hour from a customer-generated electricity renewable
energy system.
(b) In the case of a community solar project as defined in RCW
82.16.110(2)(a)(i), the administrator must apply for the investment
cost recovery incentive on behalf of each of the other owners.
(c) In the case of a community solar project as defined in RCW
82.16.110(2)(a)(iii), the company owning the community solar project
must apply for the investment cost recovery incentive on behalf of each
member of the company.
(2)(a) Before submitting for the first time the application for the
incentive allowed under subsection (4) of this section, the applicant
must submit to the department of revenue and to the climate and rural
energy development center at the Washington State University,
established under RCW 28B.30.642, a certification in a form and manner
prescribed by the department that includes, but is not limited to, the
following information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(2)(a)(i), the certification must
also include the name and address of each of the owners of the
community solar project.
(B) If the applicant is a company that owns a community solar
project as defined in RCW 82.16.110(2)(a)(iii), the certification must
also include the name and address of each member of the company;
(ii) The applicant's tax registration number;
(iii) That the electricity produced by the applicant meets the
definition of "customer-generated electricity" and that the renewable
energy system produces electricity with:
(A) Any solar inverters and solar modules manufactured in
Washington state;
(B) A wind generator powered by blades manufactured in Washington
state;
(C) A solar inverter manufactured in Washington state;
(D) A solar module manufactured in Washington state;
(E) A stirling converter manufactured in Washington state; ((or))
(F) A hydrokinetic energy system manufactured in Washington state;
or
(G) Solar or wind equipment manufactured outside of Washington
state;
(iv) That the electricity can be transformed or transmitted for
entry into or operation in parallel with electricity transmission and
distribution systems; and
(v) The date that the renewable energy system received its final
electrical permit from the applicable local jurisdiction.
(b) The Washington State University may charge for services to
cover the cost of processing applications and related technical
assistance to effectively administer the cost recovery program. If the
Washington State University charges for these activities, an applicant
must submit a payment along with the initial application. Application
charges may not exceed fair and reasonable costs associated with the
necessary and effective oversight of the cost recovery program.
(c) Within thirty days of receipt of the certification the
department of revenue must notify the applicant by mail, or
electronically as provided in RCW 82.32.135, whether the renewable
energy system qualifies for an incentive under this section. The
department may consult with the climate and rural energy development
center to determine eligibility for the incentive. System
certifications and the information contained therein are subject to
disclosure under RCW 82.32.330(3)(l).
(3)(a) ((By August 1st of each year application for the incentive
must be made to)) If required by the light and power business serving
the situs of the system, persons receiving incentive payments must
apply to the light and power by August 1st of each year by
certification in a form and manner prescribed by the department that
includes, but is not limited to, the following information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(2)(a)(i), the application must also
include the name and address of each of the owners of the community
solar project.
(B) If the applicant is a company that owns a community solar
project as defined in RCW 82.16.110(2)(a)(iii), the application must
also include the name and address of each member of the company;
(ii) The applicant's tax registration number;
(iii) The date of the notification from the department of revenue
stating that the renewable energy system is eligible for the incentives
under this section; and
(iv) A statement of the amount of kilowatt-hours generated by the
renewable energy system in the prior fiscal year.
(b) Within sixty days of receipt of the incentive certification the
light and power business serving the situs of the system must notify
the applicant in writing whether the incentive payment will be
authorized or denied. The business may consult with the climate and
rural energy development center to determine eligibility for the
incentive payment. Incentive certifications and the information
contained therein are subject to disclosure under RCW 82.32.330(3)(l).
(c)(i) Persons, administrators of community solar projects, and
companies receiving incentive payments must keep and preserve, for a
period of five years, suitable records as may be necessary to determine
the amount of incentive applied for and received. Such records must be
open for examination at any time upon notice by the light and power
business that made the payment or by the department. If upon
examination of any records or from other information obtained by the
business or department it appears that an incentive has been paid in an
amount that exceeds the correct amount of incentive payable, the
business may assess against the person for the amount found to have
been paid in excess of the correct amount of incentive payable and must
add thereto interest on the amount. Interest is assessed in the manner
that the department assesses interest upon delinquent tax under RCW
82.32.050.
(ii) If it appears that the amount of incentive paid is less than
the correct amount of incentive payable the business may authorize
additional payment.
(4) Except for community solar projects, the investment cost
recovery incentive may be paid fifteen cents per economic development
kilowatt-hour unless requests exceed the amount authorized for credit
to the participating light and power business. For community solar
projects, the investment cost recovery incentive may be paid thirty
cents per economic development kilowatt-hour unless requests exceed the
amount authorized for credit to the participating light and power
business. For the purposes of this section, the rate paid for the
investment cost recovery incentive may be multiplied by the following
factors:
(a) For customer-generated electricity produced using solar modules
manufactured in Washington state, a hydrokinetic energy system
manufactured in Washington state, or a solar stirling converter
manufactured in Washington state, two and four-tenths;
(b) For customer-generated electricity produced using a solar or a
wind generator equipped with an inverter manufactured in Washington
state, one and two-tenths;
(c) For customer-generated electricity produced using an anaerobic
digester, or by other solar equipment or using a wind generator
equipped with blades manufactured in Washington state, one; and
(d) For all other customer-generated electricity produced by wind,
eight-tenths.
(5)(a) No individual, household, business, or local governmental
entity is eligible for incentives provided under subsection (4) of this
section for more than five thousand dollars per year.
(b) Except as provided in (c) through (e) of this subsection (5),
each applicant in a community solar project is eligible for up to five
thousand dollars per year.
(c) Where the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(2)(a)(i), each owner is eligible
for an incentive but only in proportion to the ownership share of the
project, up to five thousand dollars per year.
(d) Where the applicant is a company owning a community solar
project that has applied for an investment cost recovery incentive on
behalf of its members, each member of the company is eligible for an
incentive that would otherwise belong to the company but only in
proportion to each ownership share of the company, up to five thousand
dollars per year. The company itself is not eligible for incentives
under this section.
(e) In the case of a utility-owned community solar project, each
ratepayer that contributes to the project is eligible for an incentive
in proportion to the contribution, up to five thousand dollars per
year.
(6)(a) If requests for the investment cost recovery incentive
exceed the amount of funds available for credit to the participating
light and power business, ((the incentive payments must be reduced
proportionately)) no new applications may be approved for the light and
power business, except as provided in (b) of this subsection.
(b) A new application may be approved for a light and power
business when requests for the investment cost recovery incentive
exceed the amount of funds available for credit to the participating
light and power business, if the light and power business meets the
requirements in RCW 82.16.130(1)(c) and the incentive payments are
reduced proportionately.
(7) The climate and rural energy development center at Washington
State University energy program may establish guidelines and standards
for technologies that are identified as Washington manufactured and
therefore most beneficial to the state's environment.
(8) The environmental attributes of the renewable energy system
belong to the applicant, and do not transfer to the state or the light
and power business upon receipt of the investment cost recovery
incentive.
(9) No incentive may be paid under this section for kilowatt-hours
generated before July 1, 2005, or after June 30, 2020.
(10) A local government entity that qualifies for the community
solar incentive program has an option to purchase a solar energy system
located on its property from the owner at fair market value after the
expiration of the cost recovery incentive program. The fair market
value must take into consideration the following:
(a) The energy production from the solar energy system over its
remaining useful life;
(b) The cost of the lease for the property that the solar energy
system is located; and
(c) Maintenance, insurance, and cost of removal of the solar energy
system if the host facility decides not to renew the lease.
Sec. 3 RCW 82.16.130 and 2010 c 202 s 3 are each amended to read
as follows:
(1)(a) A light and power business ((shall be)) is allowed a credit
against taxes due under this chapter in an amount equal to investment
cost recovery incentive payments made in any fiscal year under RCW
82.16.120. The credit ((shall)) must be taken in a form and manner as
required by the department. The credit under this section for the
fiscal year may not exceed one-half percent of the businesses' taxable
power sales due under RCW 82.16.020(1)(b) or one hundred thousand
dollars, whichever is greater.
(b) Except as provided in (c) of this subsection:
(i) Incentive payments to participants in a utility-owned community
solar project as defined in RCW 82.16.110(2)(a)(ii) may only account
for up to ((twenty-five)) fifteen percent of the total allowable
credit((.)); and
(ii) Incentive payments to participants in a company-owned
community solar project as defined in RCW 82.16.110(2)(a)(iii), except
for a limited liability company with a nonprofit housing organization
participating as a managing member for the purposes of accessing
assistance from the Washington state housing finance commission under
chapter 43.180 RCW, may only account for up to ((five)) fifteen percent
of the total allowable credit.
(c) For light and power businesses providing electrical service
solely within a county with a population between thirty-nine thousand
and forty-three thousand five hundred, incentive payments to
participants in a utility-owned community solar project as defined in
RCW 82.16.110(2)(a)(ii) and incentive payments to participants in a
company-owned community solar project as defined in RCW
82.16.110(2)(a)(iii), other than a company-owned community solar
project that has as its owner a limited liability company with a
nonprofit housing organization participating as a managing member for
the purposes of accessing assistance from the Washington state housing
finance commission under chapter 43.180 RCW, may only account for up to
thirty percent of the total allowable credit.
(2) The credit may not exceed the tax that would otherwise be due
under this chapter. Refunds ((shall)) may not be granted in the place
of credits. Expenditures not used to earn a credit in one fiscal year
may not be used to earn a credit in subsequent years.
(((2))) (3) For any business that has claimed credit for amounts
that exceed the correct amount of the incentive payable under RCW
82.16.120, the amount of tax against which credit was claimed for the
excess payments ((shall be)) is immediately due and payable. The
department ((shall)) must assess interest but not penalties on the
taxes against which the credit was claimed. Interest ((shall be)) is
assessed at the rate provided for delinquent excise taxes under chapter
82.32 RCW, retroactively to the date the credit was claimed, and
((shall)) accrues until the taxes against which the credit was claimed
are repaid.
(((3))) (4) The right to earn tax credits under this section
expires June 30, 2020. Credits may not be claimed after June 30, 2021.