[atlas:bill]

AN ACT Relating to a sales and use tax deferral for natural gas-fired energy generating facilities sited in rural areas; adding a new chapter to Title 82 RCW; providing an effective date; and providing an expiration date.

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

NEW SECTION. Sec. 1. (1)(a) The owner of a qualifying generating facility may apply for deferral of taxes on the construction of a generating facility sited in a rural area.

(b) The deferral covers site preparation and construction of the facility and the acquisition and installation of equipment necessary and integral to the operation of the facility. The deferral does not cover ongoing maintenance or operation.

(c) The deferral does not cover equipment or structures located off-site and used to transport natural gas nor does it include equipment or structures located off-site and used to distribute electricity.

(2) Application shall be made to the department in a form and manner prescribed by the department. Application must be made before initiation of the construction of the facility or acquisition of equipment. The application shall contain information regarding the location of the facility, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department shall rule on the application within sixty days.

(3) The department shall issue a sales and use tax deferral certificate to the owner for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW and deferred under this section.

(4) The debt for deferred taxes is not extinguished by insolvency or other failure of the owner.

(5) As used in this section:

(a) "Equipment" means the gas powered turbines, and any equipment related to the exclusive support of the generation of electricity at the site. The term does not include equipment used by personnel for administrative functions, such as furniture, filing cabinets, or computers nor does it include property with a useful life of less than one year, such as consumables, supplies, and single-use items.

(b) "Generating facility" means a natural gas-fired combined cycle electrical generating facility of at least seven hundred megawatts owned by a person subject to tax under Title 84 RCW and not selling electricity directly to consumers. The facility includes structures that house, support, contain, or steady equipment essential to the generation of electricity, as well as structures used by personnel to provide exclusive support to the facility. It does not include structures, or parts of structures, used for administrative or sales functions.

(c) "Rural area" means a county with a population density of fewer than one hundred persons per square mile as determined annually by the office of financial management and published by the department of revenue effective for the period July 1st through June 30th.

NEW SECTION. Sec. 2. (1) Except as provided in subsection (2) of this section, taxes deferred under this chapter need not be repaid.

(2) If, on the basis of a report under section 3 of this act or other information, the department finds that a facility is no longer used for the generation of electricity or if it is sold or otherwise transferred to any person such that the facility would not meet all the qualifications under section 1 of this act, at any time during the calendar year in which the facility is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, that portion of the outstanding deferred taxes shall be immediately due according to the following repayment schedule.

Year in which facility becomes Percent of deferred taxes due

ineligible for deferral

1 100 percent

2 87.5 percent

3 75 percent

4 62.5 percent

5 50 percent

6 37.5 percent

7 25 percent

8 12.5 percent

The department shall assess interest at the rate provided for delinquent taxes, but not penalties, retroactively to the date of deferral.

NEW SECTION. Sec. 3. Each recipient of a deferral granted under this chapter shall submit a report to the department on December 31st of the year in which the facility is certified by the department as having been operationally completed, and on December 31st of each of the seven succeeding calendar years. The report shall contain information, as required by the department, from which the department may determine whether the recipient is meeting the requirements of this chapter. If the recipient fails to submit a report or submits an inadequate report, the department may declare the amount of deferred taxes outstanding to be immediately assessed and payable.

NEW SECTION. Sec. 4. This chapter expires July 1, 2002.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION. Sec. 6. This act takes effect August 1, 1999.