wa-law.org > bill > 2023-24 > HB 1768 > Substitute Bill

HB 1768 - Green businesses/utility tax

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Section 1

  1. Subject to the restrictions in this section, beginning October 1, 2023, the tax levied under this chapter does not apply to sales of electricity from a renewable resource or nonemitting electric generation made by a light and power business to a qualifying business if:

    1. The qualifying activity commences no later than July 1, 2033; and

    2. The contract for sale of electricity to the business contains the following terms:

      1. The electricity to be used in the qualifying activities is separately metered from the electricity used for general operations of the business; and

      2. The price charged for the electricity used in the qualifying activities is reduced by an amount, not to exceed $100,000 per year, equal to the tax exemption available to the light and power business under this section.

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    1. The maximum annual exemption amount per qualifying business is $100,000. The light and power business must remit to the department the value of any exemptions taken plus interest if the total amount of the exemption claimed for sales of electricity to a qualifying business exceeds $100,000 in a calendar year.

    2. The exemption provided for in this section does not apply to amounts received from the remarketing or resale of electricity originally obtained by contract for the qualifying activities.

  3. In order to claim an exemption under this section, a qualifying business must provide the light and power business with an exemption certificate in a form and manner prescribed by the department.

  4. In order to claim an exemption under this section, the qualifying business must demonstrate that at least 60 percent of the hydrogen produced by its qualifying activity is used in qualifying projects. The end use of the hydrogen does not need to be at a facility owned by the qualifying business receiving the benefit of the exemption provided in this section.

  5. A qualifying business receiving the benefit of the exemption provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534, and include a certification that the qualifying projects met the requirements of this section for the year in which the exemption is given. Every person receiving the benefit of the exemption under subsection (1) of this section must preserve, for a period of five years, any documentation to substantiate the amount of the exemption received.

  6. The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

    1. "Commercial motor vehicles" has the same meaning as in RCW 46.25.010.

    2. "Compression" means compressing a gas, or a gas compressed, to a pressure above ambient atmospheric pressure for processing, storage, or transportation.

    3. "Green electrolytic hydrogen" has the same meaning as provided in RCW 82.89.010.

    4. "Nonemitting electric generation" has the same meaning as in RCW 19.405.020.

    5. "Qualifying activities" means the green electrolytic hydrogen production process, the renewable hydrogen production process, and the compression, liquification, storage, or dispensing of green electrolytic hydrogen or renewable hydrogen.

    6. "Qualifying business" means a business using electricity in qualifying activities where at least 60 percent of the hydrogen is used in one or more qualifying projects.

    7. "Qualifying projects" means one or more of the following prioritized uses:

      1. High heat industrial processes using hydrogen as a fuel and industrial processes using hydrogen as feedstock, including refining and fertilizer production;

      2. Fuel for commercial motor vehicles, aviation, maritime transportation, drayage, mass transit, rail, or off-road agricultural or industrial equipment;

      3. Generation of electricity using a hydrogen fuel cell or using a combustion turbine operating no more than 500 hours per year; or

      4. Production of a green hydrogen carrier if the green hydrogen carrier is used in one or more of the prioritized uses in (g)(i), (ii), or (iii) of this subsection (6). For the purposes of this subsection (6)(g)(iv), "green hydrogen carrier" has the same meaning as provided in RCW 82.89.010.

    8. "Renewable hydrogen" means hydrogen produced using renewable resources both as the source for the hydrogen and the source for the energy input into the production process.

    9. "Renewable resource" has the same meaning as in RCW 19.405.020.

  7. This section expires January 1, 2034.

Section 2

RCW 82.32.808 does not apply to this act.

Section 3

This act takes effect October 1, 2023.

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