S-3969.3

SENATE BILL 6243

BySenators Mullet, Billig, Lovick, Nguyen, and Shewmake

AN ACT Relating to providing a state business and occupation tax exemption to encourage clean technology manufacturing in Washington; adding a new section to chapter 82.04 RCW; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:

(1) Beginning January 1, 2025, this chapter does not apply to any manufacturer primarily engaged in clean technology manufacturing.

(2) A manufacturer claiming the exemption under this section must submit an annual tax performance report under RCW 82.32.534.

(3) RCW 82.32.808(6) does not apply to the tax preference created in this section.

(4) For purposes of this section, the following definitions apply unless the context requires otherwise.

(a) "Alternative energy resource," "storage facility," "renewable hydrogen," and "green electrolytic hydrogen" have the same meanings as in RCW 80.50.020.

(b) "Clean fuels" means fuels meeting the specifications provided in RCW 70A.25.120.

(c) "Clean technology manufacturing" means manufacturing tangible personal property exclusively or primarily used in the following:

(i) Vehicles, vessels, and other modes of transportation that emit no exhaust gas from the onboard source of power, other than water vapor;

(ii) Charging and fueling infrastructure for electric, hydrogen, or other types of vehicles that emit no exhaust gas from the onboard source of power, other than water vapor;

(iii) Generation of renewable or green electrolytic hydrogen;

(iv) Production of energy from alternative energy resources;

(v) Retrofitting of megawatt-class diesel vehicles, vessels, and other modes of transportation to hybrid diesel-electric;

(vi) Production of clean fuels; and

(vii) Storage facilities.

(5) This section expires January 1, 2035.

(2) The legislature categorizes this tax preference as one intended to induce certain designated behavior by taxpayers, improve industry competitiveness, and create jobs, as indicated in RCW 82.32.808(2) (a), (b), and (c).

(3) It is the legislature's specific public policy objective to provide broad state-level support to the clean technology sector and supplement federal incentives, including potential federal funding through the Pacific Northwest's designation as a hydrogen hub.

(4) To measure the effectiveness of the tax preference in this act, the joint legislative audit and review committee must evaluate the first eight years of available data, reporting its findings to the legislature by December 31, 2033. The review must include evaluation of:

(a) The average construction wages for eligible projects;

(b) The number of jobs created in the clean technology sector;

(c) The use of apprenticeship programs, and women, minority, or veteran-owned businesses by eligible projects;

(d) The degree to which the preference encouraged manufacturing and component production for technologies that reduce greenhouse gas emissions;

(e) Whether facilities benefiting from the tax preference would have been developed without the tax preference; and

(f) Any other relevant metric.

(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any data collected by the state.

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