AN
ACT Relating to the taxation of coal-fired thermal electric generating
facilities placed in operation before July 1, 1975; amending RCW 43.79A.040 and
80.04.130; adding new sections to chapter 82.08 RCW; adding new sections to
chapter 82.12 RCW; adding new sections to chapter 82.32 RCW; adding a new section
to chapter 70.94 RCW; adding a new section to chapter 84.36 RCW; adding a new
section to chapter 50.12 RCW; creating new sections; providing an expiration
date; and declaring an emergency.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. (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.
NEW
SECTION. Sec. 2. A
new section is added to chapter 82.08 RCW 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:
(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 provided under this section applies only to sales, costs, or
charges:
(a)
Incurred for air pollution control facilities constructed or installed after
the effective date of this act 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 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 occurs exempted 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)
Section 12 of this act applies to this section.
NEW
SECTION. Sec. 3. A
new section is added to chapter 82.12 RCW 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 provisions of this chapter do not apply in respect to the use of air
pollution control facilities installed and used by a light and power business,
as defined in RCW 82.16.010, in generating electric power.
(3)
The exemption provided under this section applies only to air pollution control
facilities that are:
(a)
Constructed or installed after the effective date of this act and used in a thermal
electric generation facility placed in operation after December 31, 1969, and
before July 1, 1975; and
(b)
Constructed or installed to meet applicable regulatory requirements established
under state or federal law, including the Washington clean air act, chapter
70.94 RCW.
(4)
This section does not apply to the use of tangible personal property for
maintenance or repairs of the 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 according to the schedule provided in section 2(5) of this act.
(6)
Section 12 of this act applies to this section.
NEW
SECTION. Sec. 4. A
new section is added to chapter 82.08 RCW to read as follows:
(1)
For the purposes of this section:
(a)
"Air pollution control facilities" means any treatment works, control
devices and disposal systems, machinery, equipment, structure, 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; and
(b)
"Generation facility" means a coal-fired thermal electric generation
facility placed in operation after December 3, 1969, and before July 1, 1975.
(2)
Beginning January 1, 1999, the tax levied by RCW 82.08.020 does not apply to
sales of coal used to generate electric power at a generation facility operated
by a business if the following conditions are met:
(a)
The owners must make an application to the department of revenue for a tax
exemption;
(b)
The owners must make a demonstration to the department of ecology that the
owners have made reasonable initial progress to install air pollution control
facilities to meet applicable regulatory requirements established under state
or federal law, including the Washington clean air act, chapter 70.94 RCW;
(c)
Continued progress must be made on the development of air pollution control
facilities to meet the requirements of the permit; and
(d)
The generation facility must emit no more than ten thousand tons of sulfur dioxide
during a previous consecutive twelve-month period.
(3)
During a consecutive twelve-month period, if the generation facility is found
to be in violation of excessive sulfur dioxide emissions from a regional air
pollution control authority or the department of ecology, the department of
ecology shall notify the department of revenue and the owners of the generation
facility shall lose their tax exemption under this section. The owners of a
generation facility may reapply for the tax exemption when they have once again
met the conditions of subsection (2)(d) of this section.
(4)
Section 12 of this act applies to this section.
NEW
SECTION. Sec. 5. A
new section is added to chapter 82.08 RCW to read as follows:
Any
business that has received a tax exemption under section 4 of this act forfeits
the exemption if, except for reasons or factors beyond the control of the
owners or operator of the thermal electric generation facility, less than
seventy percent of the coal consumed at the thermal electric generation
facility during the previous calendar year was produced by a mine located in
the same county as the facility or in a county contiguous to the county. The
department of revenue may reinstate the exemption under section 4 of this act
when the owners provide documentation that the seventy-percent requirement has
been met during a subsequent calendar year. The definitions in section 4 of
this act apply to this section.
NEW
SECTION. Sec. 6. A
new section is added to chapter 82.12 RCW to read as follows:
(1)
For the purposes of this section:
(a)
"Air pollution control facilities" means any treatment works, control
devices and disposal systems, machinery, equipment, structure, 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; and
(b)
"Generation facility" means a coal-fired thermal electric generation
facility placed in operation after December 3, 1969, and before July 1, 1975.
(2)
Beginning January 1, 1999, the provisions of this chapter do not apply in
respect to the use of coal to generate electric power at a generation facility
operated by a business if the following conditions are met:
(a)
The owners must make an application to the department of revenue for a tax
exemption;
(b)
The owners must make a demonstration to the department of ecology that the
owners have made reasonable initial progress to install air pollution control
facilities to meet applicable regulatory requirements established under state
or federal law, including the Washington clean air act, chapter 70.94 RCW;
(c)
Continued progress must be made on the development of air pollution control
facilities to meet the requirements of the permit; and
(d)
The generation facility must emit no more than ten thousand tons of sulfur
dioxide during a previous consecutive twelve-month period.
(3)
During a consecutive twelve-month period, if the generation facility is found
to be in violation of excessive sulfur dioxide emissions from a regional air
pollution control authority or the department of ecology, the department of
ecology shall notify the department of revenue and the owners of the generation
facility shall lose their tax exemption under this section. The owners of a
generation facility may reapply for the tax exemption when they have once again
met the conditions of subsection (2)(d) of this section.
(4)
Section 12 of this act applies to this section.
NEW
SECTION. Sec. 7. A
new section is added to chapter 82.12 RCW to read as follows:
Any
business that has received a tax exemption under section 6 of this act forfeits
the exemption if, except for reasons or factors beyond the control of the
owners or operator of the thermal electric generation facility, less than
seventy percent of the coal consumed at the thermal electric generation
facility during the previous calendar year was produced by a mine located in
the same county as the facility or in a county contiguous to the county. The
department of revenue may reinstate the exemption under section 6 of this act
when the owners provide documentation that the seventy-percent requirement has
been met during a subsequent calendar year. The definitions in section 6 of
this act apply to this section.
Sec.
8. RCW
43.79A.040 and 1996 c 253 s 409 are each amended to read as follows:
(1)
Money in the treasurer's trust fund may be deposited, invested and reinvested
by the state treasurer in accordance with RCW 43.84.080 in the same manner and
to the same extent as if the money were in the state treasury.
(2)
All income received from investment of the treasurer's trust fund shall be set
aside in an account in the treasury trust fund to be known as the investment
income account.
(3)
The investment income account may be utilized for the payment of purchased
banking services on behalf of treasurer's trust funds including, but not
limited to, depository, safekeeping, and disbursement functions for the state
treasurer or affected state agencies. The investment income account is subject
in all respects to chapter 43.88 RCW, but no appropriation is required for
payments to financial institutions. Payments shall occur prior to distribution
of earnings set forth in subsection (4) of this section.
(4)(a)
Monthly, the state treasurer shall distribute the earnings credited to the
investment income account to the state general fund except under (b) and (c) of
this subsection.
(b)
The following accounts and funds shall receive their proportionate share of
earnings based upon each account's or fund's average daily balance for the
period: The agricultural local fund, the American Indian scholarship endowment
fund, the Washington international exchange scholarship endowment fund, the
energy account, the fair fund, the game farm alternative account, the grain
inspection revolving fund, the rural rehabilitation account, ((and)) the
self-insurance revolving fund, and the sulfur dioxide abatement account.
However, the earnings to be distributed shall first be reduced by the
allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
(c)
The following accounts and funds shall receive eighty percent of their
proportionate share of earnings based upon each account's or fund's average daily
balance for the period: The advanced right of way revolving fund, the federal
narcotics asset forfeitures account, the high occupancy vehicle account, and
the local rail service assistance account.
(5)
In conformance with Article II, section 37 of the state Constitution, no trust
accounts or funds shall be allocated earnings without the specific affirmative
directive of this section.
NEW
SECTION. Sec. 9. A
new section is added to chapter 82.32 RCW to read as follows:
An
amount equal to all sales and use taxes paid under chapters 82.08, 82.12, and
82.14 RCW, that were obtained from the sales of coal to, or use of coal by, a
business for use at a generation facility, and that meet the requirements of
section 10 of this act, shall be deposited in the sulfur dioxide abatement
account under section 10 of this act.
NEW
SECTION. Sec. 10. A
new section is added to chapter 70.94 RCW to read as follows:
(1)
The sulfur dioxide abatement account is created. All receipts from subsection
(2) of this section must be deposited in the account. Expenditures in the
account may be used only for the purposes of subsection (3) of this section.
Only the director of revenue or the director's designee may authorize
expenditures from the account. The account is subject to allotment procedures
under chapter 43.88 RCW, but an appropriation is not required for expenditures.
(2)
Upon application by the owners of a generation facility, the department of
ecology shall make a determination of whether the owners are making initial
progress in the construction of air pollution control facilities. Evidence of
initial progress may include, but is not limited to, engineering work,
agreements to proceed with construction, contracts to purchase, or contracts
for construction of air pollution control facilities. However, if the owners'
progress is impeded due to actions caused by regulatory delays or by defensive
litigation, certification of initial progress may not be withheld.
Upon
certification of initial progress by the department of ecology and after
January 1, 1999, an amount equal to all sales and use taxes paid under chapters
82.08, 82.12, and 82.14 RCW, that were obtained from the sales of coal to, or
use of coal by, a business for use at a generation facility shall be deposited
in the account under section 9 of this act.
By
June 1st of each year during construction of the air pollution control
facilities and during the verification period required in sections 4(2)(d) and
6(2)(d) of this act, the department of ecology shall make an assessment
regarding the continued progress of the pollution control facilities. Evidence
of continued progress may include, but is not limited to, acquisition of
construction material, visible progress on construction, or other actions that
have occurred that would verify progress under general construction time
tables. The treasurer shall continue to deposit an amount equal to the tax
revenues to the sulfur dioxide abatement account unless the department of
ecology fails to certify that reasonable progress has been made during the
previous year. The operator of a generation facility shall file documentation
accompanying its combined monthly excise tax return that identifies all sales and
use tax payments made by the owners for coal used at the generation facility
during the reporting period.
(3)
When a generation facility emits no more than ten thousand tons of sulfur
dioxide during a consecutive twelve-month period, the department of ecology
shall certify this to the department of revenue and the state treasurer by the
end of the following month. Within thirty days of receipt of certification
under this subsection, the department of revenue shall approve the tax
exemption application and the director or the director's designee shall
authorize the release of any moneys in the sulfur dioxide abatement account to
the operator of the generation facility. The operator shall disburse the
payment among the owners of record according to the terms of their contractual
agreement.
(4)(a)
If the department of revenue has not approved a tax exemption under sections 4
and 6 of this act by March 1, 2005, any moneys in the sulfur dioxide abatement
account shall be transferred to the general fund and the appropriate local
governments in accordance with chapter 82.14 RCW, and the sulfur dioxide
abatement account shall cease to exist after March 1, 2005.
(b)
The dates in (a) of this subsection must be extended if the owners of a
generation facility have experienced difficulties in complying with this
section, or sections 4 through 7 and 9 of this act, due to actions caused by
regulatory delays or by defensive litigation.
(5)
For the purposes of this section:
(a)
"Air pollution control facilities" means any treatment works, control
devices and disposal systems, machinery, equipment, structure, 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; and
(b)
"Generation facility" means a coal-fired thermal electric generation
facility placed in operation after December 3, 1969, and before July 1, 1975.
NEW
SECTION. Sec. 11. A
new section is added to chapter 84.36 RCW to read as follows:
(1)
Air pollution control equipment constructed or installed after the effective
date of this act, by businesses engaged in the generation of electric energy at
thermal electric generation facilities first placed in operation after December
31, 1969, and before July 1, 1975, shall be exempt from property taxation. The
owners shall maintain the records in such a manner that the annual beginning
and ending asset balance of the pollution control facilities and depreciation
method can be identified.
(2)
For the purposes of this section, "air pollution control equipment"
means 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.
(3)
Section 12 of this act applies to this section.
NEW
SECTION. Sec. 12. A
new section is added to chapter 82.32 RCW to read as follows:
If
a business is allowed an exemption under section 2, 3, 4, 6, or 11 of this act,
and the business ceases operation of the facility for which the exemption is
allowed, the business shall deposit into the displaced workers account
established in section 13 of this act an amount equal to the fair market value
of one-quarter of the total sulfur dioxide allowances authorized by federal law
available to the facility at the time of cessation of operation of the
generation facility as if the allowances were sold for a period of ten years
following the time of cessation of operation of the generation facility. This
section expires December 31, 2015.
NEW
SECTION. Sec. 13. A
new section is added to chapter 50.12 RCW to read as follows:
The
displaced workers account is established. All moneys from section 12 of this
act 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.
Sec.
14. RCW
80.04.130 and 1993 c 311 s 1 are each amended to read as follows:
(1)
Whenever any public service company shall file with the commission any
schedule, classification, rule or regulation, the effect of which is to change
any rate, charge, rental or toll theretofore charged, the commission shall have
power, either upon its own motion or upon complaint, upon notice, to enter upon
a hearing concerning such proposed change and the reasonableness and justness
thereof, and pending such hearing and the decision thereon the commission may
suspend the operation of such rate, charge, rental or toll for a period not
exceeding ten months from the time the same would otherwise go into effect, and
after a full hearing the commission may make such order in reference thereto as
would be provided in a hearing initiated after the same had become effective.
The commission shall not suspend a tariff that makes a decrease in a rate,
charge, rental, or toll filed by a telecommunications company pending
investigation of the fairness, justness, and reasonableness of the decrease
when the filing does not contain any offsetting increase to another rate,
charge, rental, or toll and the filing company agrees to not file for an
increase to any rate, charge, rental, or toll to recover the revenue deficit
that results from the decrease for a period of one year. The filing company
shall file with any decrease sufficient information as the commission by rule
may require to demonstrate the decreased rate, charge, rental, or toll is above
the long run incremental cost of the service. A tariff decrease that results
in a rate that is below long run incremental cost, or is contrary to commission
rule or order, or the requirements of this chapter, shall be rejected for
filing and returned to the company. The commission may prescribe a different
rate to be effective on the prospective date stated in its final order after
its investigation, if it concludes based on the record that the originally
filed and effective rate is unjust, unfair, or unreasonable.
For
the purposes of this section, tariffs for the following telecommunications
services, that temporarily waive or reduce charges for existing or new
subscribers for a period not to exceed sixty days in order to promote the use
of the services shall be considered tariffs that decrease rates, charges,
rentals, or tolls:
(a)
Custom calling service;
(b)
Second access lines; or
(c)
Other services the commission specifies by rule.
The
commission may suspend any promotional tariff other than those listed in (a)
through (c) of this subsection.
The
commission may suspend the initial tariff filing of any water company removed
from and later subject to commission jurisdiction because of the number of
customers or the average annual gross revenue per customer provisions of RCW
80.04.010. The commission may allow temporary rates during the suspension
period. These rates shall not exceed the rates charged when the company was
last regulated. Upon a showing of good cause by the company, the commission
may establish a different level of temporary rates.
(2)
At any hearing involving any change in any schedule, classification, rule or
regulation the effect of which is to increase any rate, charge, rental or toll
theretofore charged, the burden of proof to show that such increase is just and
reasonable shall be upon the public service company.
(3)
The implementation of mandatory local measured telecommunications service is a
major policy change in available telecommunications service. The commission
shall not accept for filing or approve, prior to June 1, 1998, a tariff filed
by a telecommunications company which imposes mandatory local measured service
on any customer or class of customers, except that, upon finding that it is in
the public interest, the commission may accept for filing and approve a tariff
that imposes mandatory measured service for a telecommunications company's
extended area service or foreign exchange service. This subsection does not
apply to land, air, or marine mobile service, or to pay telephone service, or
to any service which has been traditionally offered on a measured service
basis.
(4)
The implementation of Washington telephone assistance program service is a
major policy change in available telecommunications service. The
implementation of Washington telephone assistance program service will aid in
achieving the stated goal of universal telephone service.
(5)
If a utility claims a sales or use tax exemption on the pollution control
equipment for an electrical generation facility and abandons the generation
facility before the pollution control equipment is fully depreciated, any
tariff filing for a rate increase to recover abandonment costs for the
pollution control equipment shall be considered unjust and unreasonable for the
purposes of this section.
NEW
SECTION. Sec. 15. The
department of revenue and the department of ecology may adopt rules to
implement this act.
NEW
SECTION. Sec. 16. If
any provision of this act or its application to any person or circumstance is
held invalid, the remainder of the act or the application of the provision to
other persons or circumstances is not affected.
NEW SECTION. Sec. 17. 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 immediately.
