BILL REQ. #:  S-2047.1 

Read first time 03/07/13.   Referred to Committee on Ways & Means.

     AN ACT Relating to extending the sales and use tax exemption for hog fuel used to produce electricity, steam, heat, or biofuel; amending RCW 82.08.956 and 82.12.956; adding a new section to chapter 82.32 RCW; adding a new section to chapter 43.136 RCW; creating a new section; providing an effective date; providing expiration dates; and declaring an emergency.

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

NEW SECTION.  Sec. 1   It is the intent of the legislature to retain and grow family wage jobs in rural, economically distressed areas; to promote healthy forests; and to utilize Washington's abundant natural resources to promote diversified renewable energy use in the state.

Sec. 2   RCW 82.08.956 and 2009 c 469 s 301 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales of hog fuel 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 the purposes of this section the following definitions apply:
     (a) "Hog fuel" means wood waste and other wood residuals including forest derived biomass. "Hog fuel" does not include firewood or wood pellets; and
     (b) "Biofuel" has the same meaning as provided in RCW 43.325.010.
     (3) If a taxpayer who claimed an exemption under this section closes a facility in Washington for which employment positions were reported under section 4 of this act, resulting in a loss of jobs located within the state, the department must declare the amount of the tax exemption claimed under this section for the previous two calendar years to be immediately due.
     (4) This section expires June 30, ((2013)) 2024.

Sec. 3   RCW 82.12.956 and 2009 c 469 s 302 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of hog fuel for production of electricity, steam, heat, or biofuel.
     (2) For the purposes of this section:
     (a) "Hog fuel" has the same meaning as provided in RCW 82.08.956; and
     (b) "Biofuel" has the same meaning as provided in RCW 43.325.010.
     (3) This section expires June 30, ((2013)) 2024.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.32 RCW to read as follows:
     (1) Every taxpayer claiming an exemption under RCW 82.08.956 or 82.12.956 must file with the department a complete annual survey as required under RCW 82.32.585, except that the taxpayer must file a separate survey for each facility owned or operated in the state of Washington.
     (2) This section expires June 30, 2024.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.136 RCW to read as follows:
     (1) The intent of the tax exemption provided in RCW 82.08.956 and 82.12.956 is to promote the retention of relatively high wage jobs in the counties where facilities who purchase and use hog fuel are located. Specifically, in a time when there is increasing pressure to close industrial facilities like mills and relocate this economic activity out of state or overseas, rural areas of the state are at risk of losing critical jobs that directly, or indirectly, support entire communities. The legislature, in enacting the hog fuel tax exemption, hopes to retain seventy five percent of the jobs at each facility in the state at which the exemption is claimed, between now and June 30, 2024.
     (2) The joint legislative audit and review committee must review the performance through July 1, 2018, of the tax preferences established in RCW 82.08.956 and 82.12.956, and prepare a report to the legislature by October 31, 2019.
     (3) The department of revenue must provide the committee with annual survey information and any other tax data necessary to conduct the review required in subsection (2) of this section. The employment security department and other agencies, as requested, must cooperate with the committee by providing information about the average wage of employment in the county where each facility owned or operated by a company claiming the exemption is located. The report is not limited to, but must include, the following information:
     (a) Identification of the baseline number of jobs existing as of January 1, 2013, in facilities where the preference has been claimed, as well as related wage and benefit information;
     (b) Identification of how the number of jobs at these facilities has changed during the duration of the credit;
     (c) Analysis of how the wages provided to employees at affected facilities compare to the average wages in the county in which the facility is located;
     (d) Analysis of how the benefits, including medical and other health care benefits, provided to employees at affected facilities compare to the average wages in the county in which the facility is located; and
     (e) Whether and to what extent the goal has been achieved, of retaining seventy-five percent of employment at the facilities at which the exemption has been claimed.
     (4) This section expires June 30, 2024.

NEW SECTION.  Sec. 6   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2013.