BILL REQ. #:  H-4643.2 

Read first time 01/22/08.   Referred to Committee on Finance.

     AN ACT Relating to extending the sales and use tax exemptions related to machinery and equipment used in generating electricity to machinery and equipment used to produce electricity using certain organic materials and byproducts of pulping or wood manufacturing processes; amending RCW 82.08.02567 and 82.12.02567; providing an effective date; and providing expiration dates.

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

Sec. 1   RCW 82.08.02567 and 2004 c 152 s 1 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 shall not apply to sales of machinery and equipment used directly in generating electricity using fuel cells, wind, sun, biomass, or landfill gas as the principal source of power, or to sales of or charges made for labor and services rendered in respect to installing such machinery and equipment, but only if the purchaser develops with such machinery, equipment, and labor a facility capable of generating not less than two hundred watts of electricity ((and provides)).
     (2) If a buyer claims an exemption under this section at the time of purchase, the buyer must provide the seller with an exemption certificate in a form and manner prescribed by the department. The seller ((shall)) must retain a copy of the exemption certificate for the seller's files.
     (((2))) (3) For purposes of this section and RCW 82.12.02567:
     (a) "Landfill gas" means biomass fuel of the type qualified for federal tax credits under 26 U.S.C. Sec. 29 collected from a landfill. "Landfill" means a landfill as defined under RCW 70.95.030;
     (b) "Machinery and equipment" means industrial fixtures, devices, and support facilities that are integral and necessary to the generation of electricity using fuel cells, wind, sun, biomass, or landfill gas as the principal source of power;
     (c) "Machinery and equipment" does not include: (i) Hand-powered tools; (ii) property with a useful life of less than one year; (iii) repair parts required to restore machinery and equipment to normal working order; (iv) replacement parts that do not increase productivity, improve efficiency, or extend the useful life of machinery and equipment; (v) buildings; or (vi) building fixtures that are not integral and necessary to the generation of electricity that are permanently affixed to and become a physical part of a building;
     (d) Machinery and equipment is "used directly" in generating electricity with fuel cells or by wind energy, solar energy, biomass, or landfill gas power if it provides any part of the process that captures the energy of the wind, sun, biomass, or landfill gas, converts that energy to electricity, and stores, transforms, or transmits that electricity for entry into or operation in parallel with electric transmission and distribution systems;
     (e) "Fuel cell" means an electrochemical reaction that generates electricity by combining atoms of hydrogen and oxygen in the presence of a catalyst; and
     (f) "Biomass" means: (i) Animal waste; (ii) food waste; (iii) solid organic fuels from wood, forest, or field residues or dedicated energy crops that do not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome-arsenic; or (iv) byproducts of pulping or wood manufacturing processes, including but not limited to bark, wood chips, sawdust, and lignin in spent pulping liquors, where wood pieces were not treated with chemical preservatives. "Biomass" does not include any wood from harvesting old growth forests.
     (((3))) (4) This section expires June 30, ((2009)) 2014.

Sec. 2   RCW 82.12.02567 and 2004 c 152 s 2 are each amended to read as follows:
     (1) The provisions of this chapter shall not apply with respect to machinery and equipment used directly in generating not less than two hundred watts of electricity using fuel cells, wind, sun, biomass, or landfill gas as the principal source of power, or to the use of labor and services rendered in respect to installing such machinery and equipment.
     (2) The definitions in RCW 82.08.02567 apply to this section.
     (3) This section expires June 30, ((2009)) 2014.

NEW SECTION.  Sec. 3   This act takes effect July 1, 2008.