Engrossed Senate Bill 5849 - Tax Incentives (2022 Regular Session)

Summary

Engrossed Senate Bill 5849, State of Washington, 67th Legislature, 2022 Regular Session, by Senator Warnick, relating to tax incentives. Read first time 01/13/22, it was referred to the Committee on Business, Financial Services & Trade. Section 1 amends definitions, including a "family living wage job" with an average wage of $23 an hour or more, working 2,080 hours per year, and industrial/manufacturing facilities of 10,000 square feet or larger with a minimum improvement valuation of $800,000. Section 2 amends RCW 82.04.294 on manufacturing solar energy systems. A later section states the legislature's intent to extend by five years the preferential tax rates for manufacturers and wholesalers of specific solar energy material and parts. Section 4 states that the act takes effect July 1, 2022.

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Full text

                           ENGROSSED SENATE BILL 5849


     State of Washington        67th Legislature        2022 Regular Session

     By Senator Warnick

     Read first time 01/13/22.      Referred   to   Committee   on   Business,
     Financial Services & Trade.




1        AN ACT Relating to tax incentives; amending RCW 82.25.030 and
2    82.04.294; creating a new section; providing an effective date; and
3    providing an expiration date.


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


 5       Sec. 1.   RCW 84.25.030 and 2021 c 218 s 1 are each amended to
 6   read as follows:
 7       The definitions in this section apply throughout this chapter
 8   unless the context clearly requires otherwise.
 9       (1) "City" means any city or town.
10       (2) "Family living wage job" means a job that offers health care
11   benefits with a wage that is sufficient for raising a family. A
12   family living wage job must have an average wage of $23 an hour or
13   more, working 2,080 hours per year on the subject site, as adjusted
14   annually for inflation by the consumer price index. The family living
15   wage may be increased by the local authority based on regional
16   factors and wage conditions.
17       (3) "Governing authority" means the local legislative authority
18   of a city or county having jurisdiction over the property for which
19   an exemption may be applied for under this chapter.
20       (4) "Growth management act" means chapter 36.70A RCW.


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 1       (5)   "Industrial/manufacturing    facilities"   means   building
 2   improvements that are 10,000 square feet or larger, representing a
 3   minimum improvement valuation of $800,000 for uses categorized as
 4   "division D: manufacturing" or "division E: transportation (major
 5   groups 40-42, 45, or 47-48)" by the United States department of labor
 6   in the occupation safety and health administration's standard
 7   industrial classification manual, provided, a city may limit the tax
 8   exemption to manufacturing uses.
 9       (6) "Lands zoned for industrial and manufacturing uses" means
10   lands in a city zoned ((as of December 31, 2014,)) for an industrial
11   or manufacturing use consistent with the city's comprehensive plan
12   where the lands are designated for industry.
13       (7) "Owner" means the property owner of record.
14       (8) "Targeted area" means an area of undeveloped lands zoned for
15   industrial and manufacturing uses in the city that is located within
16   or contiguous to an innovation partnership zone, foreign trade zone,
17   or EB-5 regional center, and designated for possible exemption under
18   the provisions of this chapter.
19       (9) "Undeveloped or underutilized" means that there are no
20   existing building improvements on the portions of the property
21   targeted for new or expanded industrial or manufacturing uses.


22       Sec. 2.   RCW 82.04.294 and 2017 3rd sp.s. c 37 s 403 are each
23   amended to read as follows:
24       (1) Upon every person engaging within this state in the business
25   of manufacturing solar energy systems using photovoltaic modules or
26   stirling converters, or of manufacturing solar grade silicon, silicon
27   solar wafers, silicon solar cells, thin film solar devices, or
28   compound semiconductor solar wafers to be used exclusively in
29   components of such systems; as to such persons the amount of tax with
30   respect to such business is, in the case of manufacturers, equal to
31   the value of the product manufactured, or in the case of processors
32   for hire, equal to the gross income of the business, multiplied by
33   the rate of 0.275 percent.
34       (2) Upon every person engaging within this state in the business
35   of making sales at wholesale of solar energy systems using
36   photovoltaic modules or stirling converters, or of solar grade
37   silicon, silicon solar wafers, silicon solar cells, thin film solar
38   devices, or compound semiconductor solar wafers to be used
39   exclusively in components of such systems, manufactured by that
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 1   person; as to such persons the amount of tax with respect to such
 2   business is equal to the gross proceeds of sales of the solar energy
 3   systems using photovoltaic modules or stirling converters, or of the
 4   solar grade silicon to be used exclusively in components of such
 5   systems, multiplied by the rate of 0.275 percent.
 6       (3) Silicon solar wafers, silicon solar cells, thin film solar
 7   devices, solar grade silicon, or compound semiconductor solar wafers
 8   are "semiconductor materials" for the purposes of RCW 82.08.9651 and
 9   82.12.9651.
10       (4) The definitions in this subsection apply throughout this
11   section.
12       (a) "Compound semiconductor solar wafers" means a semiconductor
13   solar wafer composed of elements from two or more different groups of
14   the periodic table.
15       (b) "Module" means the smallest nondivisible self-contained
16   physical structure housing interconnected photovoltaic cells and
17   providing a single direct current electrical output.
18       (c) "Photovoltaic cell" means a device that converts light
19   directly into electricity without moving parts.
20       (d) "Silicon solar cells" means a photovoltaic cell manufactured
21   from a silicon solar wafer.
22       (e) "Silicon solar wafers" means a silicon wafer manufactured for
23   solar conversion purposes.
24       (f) "Solar energy system" means any device or combination of
25   devices or elements that rely upon direct sunlight as an energy
26   source for use in the generation of electricity.
27       (g) "Solar grade silicon" means high-purity silicon used
28   exclusively in components of solar energy systems using photovoltaic
29   modules to capture direct sunlight. "Solar grade silicon" does not
30   include silicon used in semiconductors.
31       (h) "Stirling converter" means a device that produces electricity
32   by converting heat from a solar source utilizing a stirling engine.
33       (i) "Thin film solar devices" means a nonparticipating substrate
34   on which various semiconducting materials are deposited to produce a
35   photovoltaic cell that is used to generate electricity.
36       (5) A person reporting under the tax rate provided in this
37   section must file a complete annual tax performance report with the
38   department under RCW 82.32.534.
39       (6) This section expires July 1, ((2027)) 2032.


                                     p. 3                         ESB 5849
 1       NEW SECTION.   Sec. 3.   (1) This section is the tax preference
 2   performance statement for the tax preference contained in section 2,
 3   chapter . . ., Laws of 2022 (section 2 of this act). This performance
 4   statement is only intended to be used for subsequent evaluation of
 5   the tax preference. It is not intended to create a private right of
 6   action by any party or be used to determine eligibility for
 7   preferential tax treatment.
 8       (2) The legislature categorizes this tax preference as one
 9   intended to improve industry competitiveness and to create and retain
10   jobs as indicated in RCW 82.32.808(2) (b) and (c).
11       (3) It is the legislature's specific public policy objective to
12   maintain and grow jobs in the solar silicon industry. Trade disputes
13   currently threaten employment in this sector. It is the legislature's
14   intent to extend by five years the preferential tax rates for
15   manufacturers and wholesalers of specific solar energy material and
16   parts in order to maintain and grow jobs in the solar silicon
17   industry.
18       (4) If a review finds that the number of people employed by the
19   solar silicon industry in Washington is the same or more than in
20   2019, and that at least 60 percent of employees earn $60,000 a year
21   or more, then the legislature intends to extend the expiration date
22   of the tax preference.
23       (5) In order to obtain the data necessary to perform the review
24   in subsection (4) of this section, the joint legislative audit and
25   review committee may refer to the department of revenue's annual
26   survey data.


27      NEW SECTION.   Sec. 4.   This act takes effect July 1, 2022.

                                   --- END ---




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