H-1577.2
SUBSTITUTE HOUSE BILL 1768
State of Washington 68th Legislature 2023 Regular Session
By House Finance (originally sponsored by Representatives Shavers,
Barnard, Chapman, and Ramel)
READ FIRST TIME 03/13/23.
1 AN ACT Relating to exempting certain sales of electricity to
2 qualifying green businesses from the public utilities tax; adding a
3 new section to chapter 82.16 RCW; creating a new section; providing
4 an effective date; and providing an expiration date.
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
6 NEW SECTION. Sec. 1. A new section is added to chapter 82.16
7 RCW to read as follows:
8 (1) Subject to the restrictions in this section, beginning
9 October 1, 2023, the tax levied under this chapter does not apply to
10 sales of electricity from a renewable resource or nonemitting
11 electric generation made by a light and power business to a
12 qualifying business if:
13 (a) The qualifying activity commences no later than July 1, 2033;
14 and
15 (b) The contract for sale of electricity to the business contains
16 the following terms:
17 (i) The electricity to be used in the qualifying activities is
18 separately metered from the electricity used for general operations
19 of the business; and
20 (ii) The price charged for the electricity used in the qualifying
21 activities is reduced by an amount, not to exceed $100,000 per year,
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 1 equal to the tax exemption available to the light and power business
2 under this section.
3 (2)(a) The maximum annual exemption amount per qualifying
4 business is $100,000. The light and power business must remit to the
5 department the value of any exemptions taken plus interest if the
6 total amount of the exemption claimed for sales of electricity to a
7 qualifying business exceeds $100,000 in a calendar year.
8 (b) The exemption provided for in this section does not apply to
9 amounts received from the remarketing or resale of electricity
10 originally obtained by contract for the qualifying activities.
11 (3) In order to claim an exemption under this section, a
12 qualifying business must provide the light and power business with an
13 exemption certificate in a form and manner prescribed by the
14 department.
15 (4) In order to claim an exemption under this section, the
16 qualifying business must demonstrate that at least 60 percent of the
17 hydrogen produced by its qualifying activity is used in qualifying
18 projects. The end use of the hydrogen does not need to be at a
19 facility owned by the qualifying business receiving the benefit of
20 the exemption provided in this section.
21 (5) A qualifying business receiving the benefit of the exemption
22 provided in this section must file a complete annual tax performance
23 report with the department under RCW 82.32.534, and include a
24 certification that the qualifying projects met the requirements of
25 this section for the year in which the exemption is given. Every
26 person receiving the benefit of the exemption under subsection (1) of
27 this section must preserve, for a period of five years, any
28 documentation to substantiate the amount of the exemption received.
29 (6) The definitions in this subsection apply throughout this
30 section unless the context clearly requires otherwise.
31 (a) "Commercial motor vehicles" has the same meaning as in RCW
32 46.25.010.
33 (b) "Compression" means compressing a gas, or a gas compressed,
34 to a pressure above ambient atmospheric pressure for processing,
35 storage, or transportation.
36 (c) "Green electrolytic hydrogen" has the same meaning as
37 provided in RCW 82.89.010.
38 (d) "Nonemitting electric generation" has the same meaning as in
39 RCW 19.405.020.
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 1 (e) "Qualifying activities" means the green electrolytic hydrogen
2 production process, the renewable hydrogen production process, and
3 the compression, liquification, storage, or dispensing of green
4 electrolytic hydrogen or renewable hydrogen.
5 (f) "Qualifying business" means a business using electricity in
6 qualifying activities where at least 60 percent of the hydrogen is
7 used in one or more qualifying projects.
8 (g) "Qualifying projects" means one or more of the following
9 prioritized uses:
10 (i) High heat industrial processes using hydrogen as a fuel and
11 industrial processes using hydrogen as feedstock, including refining
12 and fertilizer production;
13 (ii) Fuel for commercial motor vehicles, aviation, maritime
14 transportation, drayage, mass transit, rail, or off-road agricultural
15 or industrial equipment;
16 (iii) Generation of electricity using a hydrogen fuel cell or
17 using a combustion turbine operating no more than 500 hours per year;
18 or
19 (iv) Production of a green hydrogen carrier if the green hydrogen
20 carrier is used in one or more of the prioritized uses in (g)(i),
21 (ii), or (iii) of this subsection (6). For the purposes of this
22 subsection (6)(g)(iv), "green hydrogen carrier" has the same meaning
23 as provided in RCW 82.89.010.
24 (h) "Renewable hydrogen" means hydrogen produced using renewable
25 resources both as the source for the hydrogen and the source for the
26 energy input into the production process.
27 (i) "Renewable resource" has the same meaning as in RCW
28 19.405.020.
29 (7) This section expires January 1, 2034.
30 NEW SECTION. Sec. 2. RCW 82.32.808 does not apply to this act.
31 NEW SECTION. Sec. 3. This act takes effect October 1, 2023.
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