BILL REQ. #:  H-1868.1 

READ FIRST TIME 03/01/13.   

     AN ACT Relating to creating clean energy jobs in Washington state through renewable energy incentives; amending RCW 82.16.120, 82.16.130, and 82.16.110; adding a new section to chapter 82.16 RCW; adding new sections to chapter 43.180 RCW; creating a new section; providing an effective date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that, in order to mitigate the negative consequences of greenhouse gas and particulate air emissions, every state and nation in the world must do its part to develop clean energy technology. The sooner that economies of scale are available for the manufacture and marketing of renewable energy technologies, the sooner these technologies will become cost-competitive or even less expensive than traditional polluting sources of energy. The legislature further finds that the clean technology sector of the economy is one that is growing rapidly, even in a time when other sectors have been stagnant or in a recession. In enacting this act, the legislature intends to attract to Washington a vibrant clean technology sector. The legislature further finds that the tax incentives created in this act can be an important economic development tool, increasing high wage employment both east and west of the Cascade mountains. It is the intent of the legislature, in modifying the existing renewable energy investment cost recovery incentive program, to improve utilization of the incentive by state residents and businesses and streamline program administration. In addition, the legislature seeks to incubate the development of clean energy technology through creation of a competitive application process that awards incentives to projects based on objective performance criteria, including cost-effectiveness, energy efficiency, impact on job creation, and the ability to leverage nonstate funds.

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, and ending June 30, 2013, for an investment cost recovery incentive for each kilowatt-hour generated from a customer-generated electricity renewable energy system. No incentive may be paid under this subsection for kilowatt-hours generated before July 1, 2005, or after June 30, 2020.
     (b) In the case of a community solar project as defined in RCW 82.16.110(((2))) (3)(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))) (3)(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))) To qualify for the incentive allowed under subsection (1) 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)) an application 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))) (3)(a)(i), the ((certification)) 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))) (3)(a)(iii), the ((certification)) application 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) 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; and
     (vi) The date that a production meter or other meter capable of determining the system's electricity production within a ninety-eight percent degree of accuracy became operable.
     (b) Within thirty days of receipt of the ((certification)) application 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)) applications 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 the light and power business serving the situs of the system 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))) An applicant, who has qualified to receive the incentive provided in subsection (1) of this section, is a certified participant. Except as provided pursuant to a waiver under (c) of this subsection, by August 1st of each year, in order to receive an annual incentive payment, the certified participant must submit to the light and power business serving the situs of the system a statement of the kilowatt-hours generated by the renewable energy system in the prior fiscal year. The statement must be in the form of a sworn affidavit signed by the system owners or, in the case of a community solar project, system administrators. The amount of kilowatt-hours generated by the system over the course of the year may be determined by reading a production meter, or any other meter that is ninety-eight percent accurate, including a meter that reads an inverter connected to the system.
     (b) Incentive certifications and the information contained therein are subject to disclosure under RCW 82.32.330(3)(l).
     (c) If the light and power business serving the situs of the system has the ability to remotely read the kilowatt-hours generated by the renewable energy system, it may apply for a waiver excusing a certified participant from filing the annual statement required in (a) of this subsection.
     (i) The light and power business must submit an application for the waiver in the form and manner prescribed by the department.
     (ii) The application must state the meter reading methods that will be used by the light and power business and state the estimated accuracy of such methods. If the stated accuracy of the meter reading method is ninety-eight percent or greater, the waiver must be granted unless the department proves a less accurate read rate.
     (iii) Upon notice that the department has granted the waiver, the light and power business must notify the certified participant that it is excused from the reporting requirement established in (a) of this subsection.
     (d) Within sixty days of receipt of the sworn statement described in (a) of this subsection, or, when a waiver is in place, by August 1st of each year, 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.
     (((c))) (e)(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 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))) (1) 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))) (3)(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) 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.
     (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.))

NEW SECTION.  Sec. 3   A new section is added to chapter 82.16 RCW to read as follows:
     (1) Beginning July 1, 2013, any person, as defined in RCW 82.04.030, and not in the light and power business may apply to the commission to receive a voucher entitling it to receive annual incentive payments from the light and power business serving the situs of a renewable energy system for a term of ten years, for each kilowatt-hour of electricity generated by the system.
     (2) The award of a voucher creates a contractually enforceable promise on behalf of the state to authorize the light and power business to receive a credit against the taxes due under this chapter for an amount equal to the annual incentive payments made under this section in any fiscal year.
     (3) The annual incentive payment is limited as follows:
     (a) No incentive may be paid for any kilowatt-hours generated in excess of the net kilowatt-hours consumed at the metered location;
     (b) No incentive may be paid for a system that has already received incentive payments under RCW 82.16.120; and
     (c) The annual incentive payment that a system may receive is capped at twenty-five thousand dollars.
     (4)(a) To be eligible to receive a voucher, the applicant must be the meter holder, meaning the party responsible to the light and power business for paying for electricity transmitted to the situs of an eligible renewable energy system. Eligibility may be further limited as established in section 6 of this act.
     (b) To be an eligible renewable energy system, the system's situs must be served by a light and power business that has chosen to participate in the incentive program established in this section.
     (c) The meter holder need not own or occupy the real property upon which the system is installed, but the meter holder is the payee who will receive incentive payments from the light and power business, unless the meter holder informs the utility that it has designated a different payee.
     (5) To receive incentive payments under this section, beginning July 1, 2013, an applicant must submit to the commission a completed application using the form established by the department in RCW 82.16.120(2), or a form later established by the commission, if applicable. The commission is authorized to develop and implement an application form different from the one developed by the department, but the form must at a minimum include the information required in RCW 82.16.120(2). If the renewable energy system is leased, the application must include a copy of the lease contract, setting forth the terms of the lease.     
     (6)(a) Within thirty days of receipt of the application, the commission must notify the applicant by mail, or electronically as provided in RCW 82.32.135, if it has determined that the renewable energy system qualifies for the voucher under this section. The commission must transmit the voucher to the light and power business serving the situs of the system within five days of its determination.
     (b) The voucher must state the first and last day of the ten-year term for which the applicant has qualified to receive production incentive payments from the light and power business. The term must begin on the interconnection date. For the purposes of this subsection, "interconnection date" means the first day that the customer-generated electricity renewable energy system begins producing energy at a meter connected to the power grid.
     (7) Applications, vouchers, and the information contained therein are subject to disclosure under RCW 82.32.330(3)(l).
     (8) A light and power business that chooses to participate in the voucher program created in this section may cease to accept vouchers for new systems at any time, but must continue to make payments pursuant to any existing voucher for its entire term, unless a court has declared the incentives provided under this section to be illegal.
     (a) The light and power business, upon receiving the voucher, must make incentive payments for each kilowatt-hour of electricity generated, at the rate established in subsection (14) or (15) of this section. In return, the light and power business must receive tax credits equal in value to the incentive payments, as provided in RCW 82.16.130(2).
     (b) If, during the ten-year term of the voucher, there is a change in the meter holder and a new party becomes financially responsible to the light and power business, the voucher is transferrable to the new meter holder, provided that the new meter holder is also a person eligible to receive payments under this section.
     (c) Throughout the duration of the voucher, the incentive must be paid at the same rate that is in effect on the first date of the ten-year term.
     (9) On or before July 1st of each year, the light and power business must provide a statement to the commission and to the department with the interconnection dates for any new systems that sought incentive payments pursuant to this section, as well as the names of the meter holders for those systems.
     (10) In order to receive incentive payments from the light and power business, by August 1st, and unless excused from this requirement under subsection (11) of this section, the meter holder must submit to the light and power business a statement of the kilowatt-hours generated by the renewable energy system in the prior fiscal year.
     (a) The statement must be in the form of a sworn affidavit signed by the meter holder.
     (b) The amount of kilowatt-hours generated by the system over the course of the year may be determined by reading a production meter, or by any other meter that in the commission's determination is ninety-eight percent accurate, including a meter that reads an inverter connected to the system.
     (11) If the light and power business serving the situs of the system has the ability to remotely read the kilowatt-hours generated by the renewable energy system, it may apply to the commission for a waiver excusing a customer from filing the annual statement required in subsection (8) of this section.
     (a) The light and power business must submit an application in the form and manner prescribed by the commission, stating the meter reading methods that will be used by the light and power business and the estimated accuracy of such methods.
     (b) If the commission grants the waiver, it must notify the utility and the meter holder that it is excused from the reporting requirement established in subsection (10) of this section.
     (12) Within sixty days of receipt of the sworn statement described in subsection (10) of this section, or, when a waiver is in place, by October 1st of each year, the light and power business must transmit the incentive payment to the meter holder, or inform the meter holder that the payment is denied, describing the basis for denial of the payment.
     (13) Meter holders receiving incentive payments and light and power businesses making 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.
     (a) Such records must be open for examination at any time upon notice by the light and power business that made the payment, the commission, or the department.
     (b) If, upon examination of any records or other information obtained by the utility, commission, or department it appears that an incentive has been paid in an amount that exceeds the correct amount of incentive payable, the light and power 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.
     (c) If it appears that the amount of incentive paid is less than the correct amount of incentive payable, the light and power business may authorize additional payment.
     (14) Beginning July 1, 2013, and until at least June 30, 2018, the incentive must be paid at a base rate of fifteen cents per economic development kilowatt-hour. The base 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 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.
     (15)(a) The commission is authorized to adjust the base rate and multipliers, effective July 1, 2018, and applicable to any vouchers awarded after that date. The rate may be adjusted to reflect decreases in the capital costs of purchasing and installing a renewable energy system, changes in the levelized costs of such systems, or other factors that the commission deems relevant to fulfilling the purpose of incentivizing job growth and the environmental and economic benefits of renewable energy in the state.
     (b) Notwithstanding any provisions of this section to the contrary, the commission may, prior to awarding the voucher, calculate the total incentive payment to be awarded by the voucher, based on an engineering analysis of the anticipated production of the renewable energy system, over the entire ten-year term of the voucher. The commission must report in the voucher the total anticipated production of the system and the annual incentive payment to which the meter holder is entitled. Incentives awarded through this process, if adopted by the commission, may be capped at the amount estimated, even if actual production over the ten-year term exceeds the estimated production.
     (16) The commission must award vouchers under this section on a first-come, first-served basis. The total cap on credits that may be awarded pursuant to RCW 82.16.120 and this section, combined, is established in RCW 82.16.130(7).
     (a) The commission is authorized to award vouchers under this section for a statewide annual amount that is equal to, at most, the difference between the credit cap established in RCW 82.16.130(7) and the amount allocated in RCW 82.16.120.
     (b) Furthermore, it is the intent of the legislature that enough credits be allocated under this section to allow for full development of the eligible systems. Therefore, as necessary to ensure the availability of credits under this section to a utility that is reaching the credit cap established in RCW 82.16.130(7), the commission must reserve and make available additional credits that otherwise would have been made available for the competitive pool program established under section 5 of this act, in the manner described in section 5(4) of this act.
     (17) The commission's authority to award a voucher pursuant to this section expires June 30, 2023.

Sec. 4   RCW 82.16.130 and 2010 c 202 s 3 are each amended to read as follows:
     (1) A light and power business ((shall be)) is allowed a credit against taxes due under this chapter in an amount equal to the investment cost recovery incentive payments made in any fiscal year under RCW 82.16.120. The credit shall 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.))
     (2) A light and power business is allowed a credit against taxes due under this chapter in an amount equal to the investment cost recovery incentive payments made in any fiscal year under section 3 of this act.
     (3) A light and power business is allowed a credit against taxes due under this chapter in an amount equal to payments made in any fiscal year under the competitive pool program established in section 5 of this act.
     (4) No entity may claim double credit by seeking or retaining payment or credit for the same electricity generation pursuant to more than one of the programs established in RCW 82.16.120 and section 3 and 5 of this act.
     (5) Incentive payments to participants in a utility-owned community solar project as defined in RCW 82.16.110(((2))) (3)(a)(ii) may only account for up to twenty-five percent of the total allowable credit. Incentive payments to participants in a company-owned community solar project as defined in RCW 82.16.110(((2))) (3)(a)(iii) may only account for up to five percent of the total allowable credit.
     (6) The total credit claimed under this section 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))) (7) The total credit available to a light and power business under RCW 82.16.120 and section 3 of this act is capped at 0.4 percent of the total of all participating light and power businesses' annual taxable power sales, except as otherwise provided in sections 3(16) and 5(4) of this act.
     (8) For any light and power business that has claimed credit for amounts that exceed the correct amount of the incentive payable under RCW 82.16.120((,)) or, section 3 or 5 of this act 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) The right to earn tax credits under this section expires June 30, 2020. Credits may not be claimed after June 30, 2021.)) (9) For incentive payments made pursuant to RCW 82.16.120, the right to earn tax credits under this section expires June 30, 2020, and credits may not be claimed after June 30, 2021. For incentive payments made pursuant to sections 3 and 5 of this act, the authority of the housing finance commission to issue a voucher expires June 30, 2023.

NEW SECTION.  Sec. 5   A new section is added to chapter 43.180 RCW to read as follows:
     (1) There is hereby created within the sustainable energy trust program a competitive pool program. The purpose of the competitive pool is to award incentive payments by a competitive process that will promote installation of renewable energy systems in the state of Washington, giving preference to systems that present the highest economic and environmental value to the state.
     (2) Beginning July 1, 2014, any person, as defined in RCW 82.04.030, who owns a renewable energy system with a generating capacity of up to one hundred kilowatts may apply to the commission to be awarded a voucher, entitling that person to receive payments from the light and power business serving that system for a term of ten years. No voucher may be granted or used to confer or receive incentive payments for electricity generated by a system that has already been subsidized by incentive payments pursuant to RCW 82.16.120 or section 3 of this act. The award of a voucher creates a contractually enforceable promise on behalf of the state to authorize the light and power business to receive a credit against the taxes due under this chapter for an amount equal to the annual incentive payments made under this section in any fiscal year. A utility that chooses to participate in the voucher program created in this section may cease to accept new vouchers at any time, but must continue to make payments pursuant to any existing voucher for its entire term, unless a court has declared the incentives provided under this section to be illegal.
     (a) By November 1, 2013, the commission must establish objective, competitive criteria for awarding a voucher, consistent with the goals established in section 7 of this act. The identity of the light and power business serving the applicant may not be given weight in the award of applications. The commission must give weight and preference to applicants that are a nonprofit, educational, charitable, or other entities exempt from taxation under Title 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code of 1986, as amended, as of the effective date of this section. A preference must also be given to community projects that encourage a large number of community members to participate in ownership of the system. In priority order, the criteria must include, but are not limited to:
     (i) The amount of payment, in cents per kilowatt-hour, the applicant is seeking;
     (ii) The effective carbon footprint of transportation, materials, and labor, and the degree to which the system contains components manufactured in compliance with state environmental and labor laws;
     (iii) The system's estimated levelized cost per kilowatt-hour generated;
     (iv) The degree to which installation of the system or type of system contributes to verifiable job creation in the state of Washington; and
     (v) The degree to which the state investment of tax credits for incentive payments made pursuant to the voucher leverages nonstate funds.
     (b) The commission must develop a form to be used by applicants seeking to obtain a voucher from the competitive pool program. The form must include, but is not limited to, the following information:
     (i) The name and address of the applicant;
     (ii) The name, address, and tax registration numbers of each of the legal owners of the system, if different from the applicant;
     (iii) The nonprofit status of any of the entities owning the system, if applicable;
     (iv) The location, capacity, and anticipated power generation of the renewable energy system;
     (v) Specifications for the system, including:
     (A) The system's estimated levelized cost per kilowatt-hour generated; and
     (B) The place of manufacture of any solar inverters, solar modules; wind generators, wind generator blades, stirling converters, or other identifiable components;
     (vi) A certification that the electricity can be transformed or transmitted for entry into or operation in parallel with electricity transmission and distribution systems;
     (vii) A list of any nonstate incentives that the applicant is planning to seek to further subsidize the system costs;
     (viii) The date that the renewable energy system received or expects to receive its final electrical permit from the applicable local jurisdiction and the date that a production meter or other meter capable of determining the system's electricity production within a ninety-eight percent degree of accuracy became or is expected to become operable;
     (ix) The amount of payment, in cents per kilowatt-hour, the applicant is seeking; and
     (x) Any other information as necessary to collect or produce the data required to be reported to the legislature in section 7 of this act.
     (c) Upon determining that a person is to be awarded the voucher provided in this section, the commission must notify the applicant that the system has been certified to receive the incentive for a ten-year term. The term begins on the day after the date that the system has been certified by the commission, or the day that the system is interconnected with the light and power business and a production meter or other accurate meter becomes operable on site, whichever date is later. The commission must also present a certificate to the light and power business serving the situs of the system, which must include, but is not limited to, the following information:
     (i) The amount of incentive payment that the applicant is bidding to receive from the utility, in cents per kilowatt-hour for electricity generated by the renewable energy system; and
     (ii) The first and last day of the ten-year term for which the light and power business must make incentive payments pursuant to the voucher.
     (3) No new vouchers may be awarded pursuant to this section after June 30, 2023.
     (4)(a) Each year, the commission must calculate the amount of voucher credits available to be awarded under this section.
     (b) The upper limit of the amount of credits available to be awarded under the competitive pool program each year is determined by aggregating 0.1 percent of the taxable sales due under RCW 82.16.020(1)(b) for each of the utilities who participated in the investment cost recovery program established in RCW 82.16.120. However, if necessary to ensure that every utility has enough credits available to meet all the demand in the utility's service area for incentive payments under section 3 of this act, the commission must deduct from the total credits available to the competitive pool as many credits as required, and transfer these credits back to the utility that is reaching the credit limit established in section 3(16) of this act.
     (i) By July 1, 2014, the commission must establish and publicize a process and objective standards by which it will determine if a light and power business is approaching the limit, established in RCW 82.16.130(7), for credits available under the phase II program.
     (ii) If the commission determines that a light and power business is approaching this limit and as a result, there is a negative impact on the growth and development of new renewable energy systems served by that light and power business, the commission must transfer credits from the competitive pool back to the light and power business.
     (iii) By December 1st of each year, beginning in 2015, the commission must announce whether it is reserving and making available additional credits to any light and power business for the renewable investment cost recovery incentive program established in section 3 of this act.
     (5) The commission is authorized to fix, revise, and collect fees and charges in connection with the creation and implementation of the incentive programs, reporting requirements, performance evaluation, and other activities established in this act, in addition to exercising any general power already set forth in RCW 43.180.080(6). After June 30, 2023, the commission's authority is limited to reporting to the legislature on the progress of the programs in this act, any actions necessary to collect, assemble, and analyze the data required for this reporting, and assessment and collection of fees in connection with the reporting requirement.

NEW SECTION.  Sec. 6   A new section is added to chapter 43.180 RCW to read as follows:
     (1) Except as otherwise provided by the commission pursuant to subsection (2) of this section, to be eligible to receive the incentive created in section 3 or 5 of this act, the applicant for the voucher must be an owner of the renewable energy system.
     (2) After December 31, 2015, if in compliance with other applicable law or rule, the commission may authorize renewable energy systems owned by third parties to qualify for the incentives created under sections 3 and 5 of this act. Renewable energy systems owned by third parties may only be authorized to receive the incentives if, in the commission's determination, based on objective criteria, such ownership is consistent with the legislature's goals established in section 7(1) of this act. The commission, in making its determination, must hold meetings with interested parties, hold at least one public hearing at a commission meeting with commissioners present, and provide opportunity for public comment.

NEW SECTION.  Sec. 7   A new section is added to chapter 82.16 RCW to read as follows:
     (1) The legislature finds that accountability and the effectiveness of attempts to foster job creation and retention are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs to know how the incentives are used, and the degree to which they meet the legislature's intent.
     (a) The legislature intends to achieve the following performance milestones as a result of the incentives awarded under RCW 82.16.120, 82.16.130, and section 5 of this act:
     (i) An increase in the total number and per capita rate of solar-related jobs in Washington;
     (ii) Achievement of a top ten national ranking for solar-related employment and a top nine ranking for per capita solar-related employment;
     (iii) A one hundred percent increase in the number of solar energy systems installed and receiving the incentive, from the 2012 baseline;
     (iv) A one hundred percent increase in the total generating capacity of installed systems, from the 2012 baseline;
     (v) A decrease over time in the levelized cost of the systems receiving the tax preferences; and
     (vi) An increase in renewable-related employment and in the utilization of the other renewable generating resources covered in RCW 82.16.120, 82.16.130, and sections 3, 5, and 6 of this act.
     (b) In addition, the legislature intends to achieve the following performance milestones within and as a result of the competitive pool program created in section 5 of this act:
     (i) A decrease in the average price per kilowatt-hour of electricity generated, as compared to the average price per kilowatt-hour of electricity generated by systems that received or are receiving the incentive under RCW 82.16.120;
     (ii) Leveraging of nonstate funds, as measured by a report of the total dollar value of tax credits awarded under section 5 of this act within each county, and the total amount of nonstate funds leveraged within each county.
     (2) The commission must collect data from persons receiving the tax preferences created in this act as necessary to report on progress toward achieving the performance milestones listed in subsection (1) of this section. In determining the number of solar-related and other renewable energy-related jobs in the state, Washington's relative ranking among states, and otherwise as necessary, the commission may consult with the Washington State University energy program. Data and methodologies may be derived from the "national solar jobs census" produced by the solar foundation, or from an equivalent study.
     (3) All recipients of tax credits or incentive payments awarded under this chapter must provide the commission with any data requested for reporting purposes. Failure to comply may result in the loss of a tax credit award or incentive payment in the following year.
     (4) By December 1st of every odd-numbered year, beginning in 2015, and in compliance with RCW 43.01.036, the commission must submit a report to the legislature that details the progress achieved in the immediately preceding biennium in reaching the intended outcomes specified in this section.
     (5) As part of its 2022 tax preference reviews conducted under chapter 43.136 RCW, the joint legislative audit and review committee must assess the performance of the incentives created in this act, with reference to the performance milestones established in this section.

Sec. 8   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))) (3)(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) "Commission" means the Washington state housing finance commission as defined in RCW 43.180.020.
     (3)(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, or nonutility businesses that is placed on the property owned by a cooperating local governmental entity that 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 is not in the light and power business or in the gas distribution business, that 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))) (3)(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) "Utility" means a light and power business, an electric cooperative, or a mutual corporation that provides electricity service.
     (((3))) (4) "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))) (5) "Economic development kilowatt-hour" means the actual kilowatt-hour measurement of customer-generated electricity multiplied by the appropriate economic development factor.
     (((5))) (6) "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))) (7) "Photovoltaic cell" means a device that converts light directly into electricity without moving parts.
     (((7))) (8) "Renewable energy system" means a solar energy system, an anaerobic digester as defined in RCW 82.08.900, or a wind generator used for producing electricity.
     (((8))) (9) "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))) (10) "Solar inverter" means the device used to convert direct current to alternating current in a solar energy system.
     (((10))) (11) "Solar module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells and providing a single direct current electrical output.
     (((11))) (12) "Stirling converter" means a device that produces electricity by converting heat from a solar source utilizing a stirling engine.

NEW SECTION.  Sec. 9   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. 10   If a state, federal, or international tribunal determines that the application of specific substantive criteria established in section 3 or 5 of this act for awarding incentives is a violation of state, federal, or international law, the housing finance commission may cease to apply the specific criteria found to be illegal but continue to award incentives under this program by substituting new criteria, adopted after notice and in consultation with stakeholders and state agencies. These criteria must be chosen in light of the legislature's intent to increase the wage level of jobs in our state, inure to our state the environmental benefits of clean energy, and minimize the state's carbon footprint. Consequently, the new criteria must award systems that were manufactured in compliance with state environmental standards and occupational health and safety regulations to the fullest extent feasible under law.

NEW SECTION.  Sec. 11   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.