Photovoltaic Module Stewardship and Takeback Program

CERTIFICATION OF ENROLLMENT ENGROSSED SUBSTITUTE SENATE BILL 5939 Chapter 36, Laws of 2017 65th Legislature 2017 3rd Special Session RENEWABLE ENERGY--TAX INCENTIVES--FEES EFFECTIVE DATE: July 7, 2017 Passed by the Senate June 30, 2017 Yeas 47 Nays 2 CYRUS HABIB President of the Senate Passed by the House June 30, 2017 Yeas 74 Nays 19 FRANK CHOPP Speaker of the House of Representatives CERTIFICATE I, Hunter G. Goodman, Secretary of the Senate of the State of Washington, do hereby certify that the attached is ENGROSSED SUBSTITUTE SENATE BILL 5939 as passed by Senate and the House of Representatives on the dates hereon set forth. HUNTER G. GOODMAN Secretary Approved July 7, 2017 1:50 PM FILED July 7, 2017 JAY INSLEE Governor of the State of Washington Secretary of State State of Washington AN ACT Relating to promoting a sustainable, local renewable1 energy industry through modifying renewable energy system tax2 incentives and providing guidance for renewable energy system3 component recycling; amending RCW 82.16.120, 82.16.130, 82.08.962,4 82.08.963, 82.12.962, and 82.12.963; adding new sections to chapter5 82.16 RCW; adding new sections to chapter 80.28 RCW; adding a new6 section to chapter 43.180 RCW; adding a new chapter to Title 70 RCW;7 creating a new section; and declaring an emergency.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:9 NEW SECTION. Sec. 1. The legislature finds and declares that10 stimulating local investment in distributed renewable energy11 generation is an important part of a state energy strategy, helping12 to increase energy independence from fossil fuels, promote economic13 development, hedge against the effects of climate change, and attain14 environmental benefits. The legislature intends to increase the15 effectiveness of the existing renewable energy investment cost16 recovery program by reducing the maximum incentive rate provided for17 each kilowatt-hour of electricity generated by a renewable energy18 system over the period of the program and by creating opportunities19 for broader participation by low-income individuals and others who20 may not own the premises where a renewable energy system may be21 ENGROSSED SUBSTITUTE SENATE BILL 5939 Passed Legislature - 2017 3rd Special Session State of Washington 65th Legislature 2017 3rd Special Session By Senate Ways & Means (originally sponsored by Senators Ericksen and Palumbo) READ FIRST TIME 06/30/17. p. 1 ESSB 5939.SL installed. The legislature intends to provide an incentive sufficient1 to promote installation of systems through 2021, at which point the2 legislature expects that the state's renewable energy industry will3 be capable of sustained growth and vitality without the cost recovery4 incentive. The legislature intends for the program to balance the5 deployment of community solar and shared commercial solar projects in6 order to support participation in renewable energy generation, and7 that deployment of community solar projects is balanced among8 eligible utilities, nonprofits, and local housing authorities, as9 doing so will support maximum deployment of renewable energy10 generation throughout the state. 11 NEW SECTION. Sec. 2. A new section is added to chapter 82.1612 RCW to read as follows: 13 (1) This section is the tax preference performance statement for14 the tax preference and incentives created under RCW 82.16.130 and15 section 6 of this act. This performance statement is only intended to16 be used for subsequent evaluation of the tax preference and17 incentives. It is not intended to create a private right of action by18 any party or be used to determine eligibility for preferential tax19 treatment. 20 (2) The legislature categorizes the tax preference created under21 RCW 82.16.130 and incentive payments authorized in section 6 of this22 act as intended to: 23 (a) Induce participating utilities to make incentive payments to24 utility customers who invest in renewable energy systems; and25 (b) By inducing utilities, nonprofit organizations, and utility26 customers to acquire and install renewable energy systems, retain27 jobs in the clean energy sector and create additional jobs.28 (3) The legislature's public policy objectives are to:29 (a) Increase energy independence from fossil fuels; and30 (b) Promote economic development through increasing and improving31 investment in, development of, and use of clean energy technology in32 Washington; and 33 (c) Increase the number of jobs in and enhance the sustainability34 of the clean energy technology industry in Washington.35 (4) It is the legislature's intent to provide the incentives in36 section 6 of this act and RCW 82.16.130 in order to ensure the37 sustainable job growth and vitality of the state's renewable energy38 sector. The purpose of the incentive is to reduce the costs39 p. 2 ESSB 5939.SL associated with installing and operating solar energy systems by1 persons or entities receiving the incentive. 2 (5) As part of its 2021 tax preference reviews, the joint3 legislative audit and review committee must review the tax4 preferences and incentives in section 6 of this act and RCW5 82.16.130. The legislature intends for the legislative auditor to6 determine that the incentive has achieved its desired outcomes if the7 following objectives are achieved: 8 (a) Installation of one hundred fifteen megawatts of solar9 photovoltaic capacity by participants in the incentive program10 between July 1, 2017, and June 30, 2021; and 11 (b) Growth of solar-related employment from 2015 levels, as12 evidenced by: 13 (i) An increased per capita rate of solar energy-related jobs in14 Washington, which may be determined by consulting a relevant trade15 association in the state; or 16 (ii) Achievement of an improved national ranking for solar17 energy-related employment and per capita solar energy-related18 employment, as reported in a nationally recognized report.19 (6) In order to obtain the data necessary to perform the review,20 the joint legislative audit and review committee may refer to data21 collected by the Washington State University extension energy program22 and may obtain employment data from the employment security23 department. 24 (7) The Washington State University extension energy program must25 collect, through the application process, data from persons claiming26 the tax credit under RCW 82.16.130 and persons receiving the27 incentive payments created in section 6 of this act, as necessary,28 and may collect data from other interested persons as necessary to29 report on the performance of this act. 30 (8) All recipients of tax credits or incentive payments awarded31 under this chapter must provide data necessary to evaluate the tax32 preference performance objectives in this section as requested by the33 Washington State University extension energy program or the joint34 legislative audit and review committee. Failure to comply may result35 in the loss of a tax credit award or incentive payment in the36 following year. 37 Sec. 3. RCW 82.16.120 and 2011 c 179 s 3 are each amended to38 read as follows: 39 p. 3 ESSB 5939.SL (1)(a) Any individual, business, local governmental entity, not1 in the light and power business or in the gas distribution business,2 or a participant in a community solar project may apply to the light3 and power business serving the situs of the system, each fiscal year4 beginning on July 1, 2005, and ending June 30, 2017, for an5 investment cost recovery incentive for each kilowatt-hour from a6 customer-generated electricity renewable energy system.7 (b) In the case of a community solar project as defined in RCW8 82.16.110(2)(a)(i), the administrator must apply for the investment9 cost recovery incentive on behalf of each of the other owners.10 (c) In the case of a community solar project as defined in RCW11 82.16.110(2)(a)(iii), the company owning the community solar project12 must apply for the investment cost recovery incentive on behalf of13 each member of the company. 14 (2)(a) Before submitting for the first time the application for15 the incentive allowed under subsection (4) of this section, the16 applicant must submit to the department of revenue and to the climate17 and rural energy development center at the Washington State18 University, established under RCW 28B.30.642, a certification in a19 form and manner prescribed by the department that includes, but is20 not limited to, the ((following)) information((:)) described in (c)21 of this subsection.22 (b) The department may not accept certifications submitted to the23 department under (a) of this subsection after September 30, 2017.24 (c) The certification must include:25 (i) The name and address of the applicant and location of the26 renewable energy system. 27 (A) If the applicant is an administrator of a community solar28 project as defined in RCW 82.16.110(2)(a)(i), the certification must29 also include the name and address of each of the owners of the30 community solar project. 31 (B) If the applicant is a company that owns a community solar32 project as defined in RCW 82.16.110(2)(a)(iii), the certification33 must also include the name and address of each member of the company;34 (ii) The applicant's tax registration number; 35 (iii) That the electricity produced by the applicant meets the36 definition of "customer-generated electricity" and that the renewable37 energy system produces electricity with: 38 (A) Any solar inverters and solar modules manufactured in39 Washington state; 40 p. 4 ESSB 5939.SL (B) A wind generator powered by blades manufactured in Washington1 state; 2 (C) A solar inverter manufactured in Washington state;3 (D) A solar module manufactured in Washington state;4 (E) A stirling converter manufactured in Washington state; or5 (F) Solar or wind equipment manufactured outside of Washington6 state; 7 (iv) That the electricity can be transformed or transmitted for8 entry into or operation in parallel with electricity transmission and9 distribution systems; and 10 (v) The date that the renewable energy system received its final11 electrical ((permit)) inspection from the applicable local12 jurisdiction. 13 (((b))) (d) Within thirty days of receipt of the certification14 the department of revenue must notify the applicant by mail, or15 electronically as provided in RCW 82.32.135, whether the renewable16 energy system qualifies for an incentive under this section. The17 department may consult with the climate and rural energy development18 center to determine eligibility for the incentive. System19 certifications and the information contained therein are not20 confidential tax information under RCW 82.32.330 and are subject to21 disclosure ((under RCW 82.32.330(3)(l))). 22 (3)(a) By August 1st of each year through August 1, 2017, the23 application for the incentive must be made to the light and power24 business serving the situs of the system by certification in a form25 and manner prescribed by the department that includes, but is not26 limited to, the following information: 27 (i) The name and address of the applicant and location of the28 renewable energy system. 29 (A) If the applicant is an administrator of a community solar30 project as defined in RCW 82.16.110(2)(a)(i), the application must31 also include the name and address of each of the owners of the32 community solar project. 33 (B) If the applicant is a company that owns a community solar34 project as defined in RCW 82.16.110(2)(a)(iii), the application must35 also include the name and address of each member of the company;36 (ii) The applicant's tax registration number; 37 (iii) The date of the notification from the department of revenue38 stating that the renewable energy system is eligible for the39 incentives under this section; and 40 p. 5 ESSB 5939.SL (iv) A statement of the amount of kilowatt-hours generated by the1 renewable energy system in the prior fiscal year. 2 (b) Within sixty days of receipt of the incentive certification3 the light and power business serving the situs of the system must4 notify the applicant in writing whether the incentive payment will be5 authorized or denied. The business may consult with the climate and6 rural energy development center to determine eligibility for the7 incentive payment. Incentive certifications and the information8 contained therein are not confidential tax information under RCW9 82.32.330 and are subject to disclosure ((under RCW10 82.32.330(3)(l))). 11 (c)(i) Persons, administrators of community solar projects, and12 companies receiving incentive payments must keep and preserve, for a13 period of five years, suitable records as may be necessary to14 determine the amount of incentive applied for and received. Such15 records must be open for examination at any time upon notice by the16 light and power business that made the payment or by the department.17 If upon examination of any records or from other information obtained18 by the business or department it appears that an incentive has been19 paid in an amount that exceeds the correct amount of incentive20 payable, the business may assess against the person for the amount21 found to have been paid in excess of the correct amount of incentive22 payable and must add thereto interest on the amount. Interest is23 assessed in the manner that the department assesses interest upon24 delinquent tax under RCW 82.32.050. 25 (ii) If it appears that the amount of incentive paid is less than26 the correct amount of incentive payable the business may authorize27 additional payment. 28 (4) Except for community solar projects, the investment cost29 recovery incentive may be paid fifteen cents per economic development30 kilowatt-hour unless requests exceed the amount authorized for credit31 to the participating light and power business. For community solar32 projects, the investment cost recovery incentive may be paid thirty33 cents per economic development kilowatt-hour unless requests exceed34 the amount authorized for credit to the participating light and power35 business. For the purposes of this section, the rate paid for the36 investment cost recovery incentive may be multiplied by the following37 factors: 38 p. 6 ESSB 5939.SL (a) For customer-generated electricity produced using solar1 modules manufactured in Washington state or a solar stirling2 converter manufactured in Washington state, two and four-tenths;3 (b) For customer-generated electricity produced using a solar or4 a wind generator equipped with an inverter manufactured in Washington5 state, one and two-tenths; 6 (c) For customer-generated electricity produced using an7 anaerobic digester, or by other solar equipment or using a wind8 generator equipped with blades manufactured in Washington state, one;9 and 10 (d) For all other customer-generated electricity produced by11 wind, eight-tenths. 12 (5)(a) No individual, household, business, or local governmental13 entity is eligible for incentives provided under subsection (4) of14 this section for more than five thousand dollars per year.15 (b) Except as provided in (c) through (e) of this subsection (5),16 each applicant in a community solar project is eligible for up to17 five thousand dollars per year. 18 (c) Where the applicant is an administrator of a community solar19 project as defined in RCW 82.16.110(2)(a)(i), each owner is eligible20 for an incentive but only in proportion to the ownership share of the21 project, up to five thousand dollars per year. 22 (d) Where the applicant is a company owning a community solar23 project that has applied for an investment cost recovery incentive on24 behalf of its members, each member of the company is eligible for an25 incentive that would otherwise belong to the company but only in26 proportion to each ownership share of the company, up to five27 thousand dollars per year. The company itself is not eligible for28 incentives under this section. 29 (e) In the case of a utility-owned community solar project, each30 ratepayer that contributes to the project is eligible for an31 incentive in proportion to the contribution, up to five thousand32 dollars per year. 33 (6) ((If requests for the investment cost recovery incentive34 exceed the amount of funds available for credit to the participating35 light and power business, the incentive payments must be reduced36 proportionately.37 (7))) The climate and rural energy development center at38 Washington State University energy program may establish guidelines39 and standards for technologies that are identified as Washington40 p. 7 ESSB 5939.SL manufactured and therefore most beneficial to the state's1 environment. 2 (((8))) (7) The environmental attributes of the renewable energy3 system belong to the applicant, and do not transfer to the state or4 the light and power business upon receipt of the investment cost5 recovery incentive. 6 (((9))) (8) No incentive may be paid under this section for7 kilowatt-hours generated before July 1, 2005, or after June 30,8 ((2020)) 2017, except as provided in subsections (10) through (12) of9 this section. 10 (9) Beginning October 1, 2017, program management, technical11 review, and tracking responsibilities of the department under this12 section are transferred to the Washington State University extension13 energy program. At the earliest date practicable and no later than14 September 30, 2017, the department must transfer all records15 necessary for the administration of the remaining incentive payments16 due under this section to the Washington State University extension17 energy program.18 (10) Participants in the renewable energy investment cost19 recovery program under this section will continue to receive payments20 for electricity produced through June 30, 2020, at the same rates21 their utility paid to participants for electricity produced between22 July 1, 2015, and June 30, 2016.23 (11) In order to continue to receive the incentive payment24 allowed under subsection (4) of this section, a person or community25 solar project administrator who has, by September 30, 2017, submitted26 a complete certification to the department under subsection (2) of27 this section must apply to the Washington State University extension28 energy program by April 30, 2018, for a certification authorizing the29 utility serving the situs of the renewable energy system to annually30 remit the incentive payment allowed under subsection (4) of this31 section for each kilowatt-hour generated by the renewable energy32 system through June 30, 2020.33 (12)(a) The Washington State University extension energy program34 must establish an application process and form by which to collect35 the system operation data described in section 6 (7)(a)(iii) of this36 act from each person or community solar project administrator37 applying for a certification under subsection (11) of this section.38 The Washington State University extension energy program must notify39 any applicant that providing this data is a condition of40 p. 8 ESSB 5939.SL certification and that any certification issued pursuant to this1 section is void as of June 30, 2018, if the applicant has failed to2 provide the data by that date. 3 (b) Beginning July 1, 2018, the Washington State University4 extension energy program must, in a form and manner that is5 consistent with the roles and processes established under section 66 (19) and (20) of this act, calculate for the year and provide to the7 utility the amount of the incentive payment due to each participant8 under subsection (11) of this section.9 Sec. 4. RCW 82.16.130 and 2010 c 202 s 3 are each amended to10 read as follows: 11 (1) A light and power business ((shall be)) is allowed a credit12 against taxes due under this chapter in an amount equal to13 ((investment cost recovery)):14 (a) Incentive payments made in any fiscal year under RCW15 82.16.120 and section 6 of this act; and16 (b) Any fees a utility is allowed to recover pursuant to section17 6(5) of this act. 18 (2) The credits ((shall)) must be taken in a form and manner as19 required by the department. The credit taken under this section for20 the fiscal year may not exceed one and one-half percent of the21 businesses' taxable power sales generated in calendar year 2014 and22 due under RCW 82.16.020(1)(b) or ((one)) two hundred fifty thousand23 dollars, whichever is greater. ((Incentive payments to participants24 in a utility-owned community solar project as defined in RCW25 82.16.110(2)(a)(ii) may only account for up to twenty-five percent of26 the total allowable credit. Incentive payments to participants in a27 company-owned community solar project as defined in RCW28 82.16.110(2)(a)(iii) may only account for up to five percent of the29 total allowable credit.))30 (3) The credit may not exceed the tax that would otherwise be due31 under this chapter. Refunds ((shall)) may not be granted in the place32 of credits. Expenditures not used to earn a credit in one fiscal year33 may not be used to earn a credit in subsequent years.34 (((2))) (4) For any business that has claimed credit for amounts35 that exceed the correct amount of the incentive payable under RCW36 82.16.120, the amount of tax against which credit was claimed for the37 excess payments ((shall be )) is immediately due and payable. The38 p. 9 ESSB 5939.SL department may deduct amounts due from future credits claimed by the1 business. 2 (a) Except as provided in (b) of this subsection, t he department3 ((shall)) must assess interest but not penalties on the taxes against4 which the credit was claimed. Interest ((shall)) must be assessed at5 the rate provided for delinquent excise taxes under chapter 82.326 RCW, retroactively to the date the credit was claimed, and ((shall))7 accrues until the taxes against which the credit was claimed are8 repaid. 9 (((3))) (b) A business is not liable for excess payments made in10 reliance on amounts reported by the Washington State University11 extension energy program as due and payable as provided under section12 6(20) of this act, if such amounts are later found to be abnormal or13 inaccurate due to no fault of the business.14 (5) The amount of credit taken under this section is not15 confidential taxpayer information under RCW 82.32.330 and is subject16 to disclosure.17 (6) The right to earn tax credits ((under this section )) for18 incentive payments made under RCW 82.16.120 expires June 30, 2020.19 Credits may not be claimed after June 30, 2021.20 (7) The right to earn tax credits for incentive payments made21 under section 6 of this act expires June 30, ((2020)) 2029. Credits22 may not be claimed after June 30, ((2021)) 2030. 23 NEW SECTION. Sec. 5. A new section is added to chapter 82.1624 RCW to read as follows: 25 The definitions in this section apply throughout this section and26 sections 6 through 8 of this act unless the context clearly requires27 otherwise. 28 (1) "Administrator" means the utility, nonprofit, or other local29 housing authority that organizes and administers a community solar30 project as provided in sections 6 and 7 of this act.31 (2) "Certification" means the authorization issued by the32 Washington State University extension energy program establishing a33 person's eligibility to receive annual incentive payments from the34 person's utility for the program term. 35 (3) "Commercial-scale system" means a renewable energy system or36 systems other than a community solar project or a shared commercial37 solar project with a combined nameplate capacity greater than twelve38 p. 10 ESSB 5939.SL kilowatts that meets the applicable system eligibility requirements1 established in section 6 of this act. 2 (4) "Community solar project" means a solar energy system that3 has a direct current nameplate generating capacity that is no larger4 than one thousand kilowatts and meets the applicable eligibility5 requirements established in sections 6 and 7 of this act.6 (5) "Consumer-owned utility" has the same meaning as in RCW7 19.280.020. 8 (6) "Customer-owner" means the owner of a residential-scale or9 commercial-scale renewable energy system, where such owner is not a10 utility and such owner is a customer of the utility and either owns11 the premises where the renewable energy system is installed or12 occupies the premises. 13 (7) "Electric utility" or "utility" means a consumer-owned14 utility or investor-owned utility as those terms are defined in RCW15 19.280.020. 16 (8) "Governing body" has the same meaning as provided in RCW17 19.280.020. 18 (9) "Person" means any individual, firm, partnership,19 corporation, company, association, agency, or any other legal entity.20 (10) "Program term" means: (a) For community solar projects,21 eight years or until cumulative incentive payments for electricity22 produced by the project reach fifty percent of the total system23 price, including applicable sales tax, whichever occurs first; and24 (b) for other renewable energy systems, including shared commercial25 solar projects, eight years or until cumulative incentive payments26 for electricity produced by a system reach fifty percent of the total27 system price, including applicable sales tax, whichever occurs first.28 (11) "Renewable energy system" means a solar energy system,29 including a community solar project, an anaerobic digester as defined30 in RCW 82.08.900, or a wind generator used for producing electricity.31 (12) "Residential-scale system" means a renewable energy system32 or systems located at a single situs with combined nameplate capacity33 of twelve kilowatts or less that meets the applicable system34 eligibility requirements established in section 6 of this act.35 (13) "Shared commercial solar project" means a solar energy36 system, owned or administered by an electric utility, with a combined37 nameplate capacity of greater than one megawatt and not more than38 five megawatts and meets the applicable eligibility requirements39 established in sections 6 and 8 of this act. 40 p. 11 ESSB 5939.SL NEW SECTION. Sec. 6. A new section is added to chapter 82.161 RCW to read as follows: 2 (1) Beginning July 1, 2017, the following persons may submit a3 one-time application to the Washington State University extension4 energy program to receive a certification authorizing the utility5 serving the situs of a renewable energy system in the state of6 Washington to remit an annual production incentive for each kilowatt-7 hour of alternating current electricity generated by the renewable8 energy system: 9 (a) The utility's customer who is the customer-owner of a10 residential-scale or commercial-scale renewable energy system;11 (b) An administrator of a community solar project meeting the12 eligibility requirements outlined in section 7 of this act and13 applies for certification on behalf of each of the project14 participants; or 15 (c) A utility or a business under contract with a utility that16 administers a shared commercial solar project that meets the17 eligibility requirements in section 8 of this act and applies for18 certification on behalf of each of the project participants.19 (2) No person, business, or household is eligible to receive20 incentive payments provided under subsection (1) of this section of21 more than five thousand dollars per year for residential systems or22 community solar projects, twenty-five thousand dollars per year for23 commercial-scale systems, or thirty-five thousand dollars per year24 for shared commercial solar projects. 25 (3)(a) No new certification may be issued under this section to26 an applicant who submits a request for or receives an annual27 incentive payment for a renewable energy system that was certified28 under RCW 82.16.120, or for a renewable energy system served by a29 utility that has elected not to participate in the incentive program,30 as provided in subsection (4) of this section. 31 (b) The Washington State University extension energy program may32 issue a new certification for an additional system installed at a33 situs with a previously certified system so long as the new system34 meets the requirements of this section and its production can be35 measured separately from the previously certified system.36 (c) The Washington State University extension energy program may37 issue a recertification for a residential-scale or commercial-scale38 system if a customer makes investments resulting in an expansion of39 the system's nameplate capacity. Such recertification expires on the40 p. 12 ESSB 5939.SL same day as the original certification for the residential-scale or1 commercial-scale system and applies to the entire system the2 incentive rates and program rules in effect as of the date of the3 recertification. 4 (4) A utility's participation in the incentive program provided5 in this section is voluntary. 6 (a) A utility electing to participate in the incentive program7 must notify the Washington State University extension energy program8 of such election in writing. 9 (b) The utility may terminate its voluntary participation in the10 production incentive program by providing notice in writing to the11 Washington State University extension energy program to cease issuing12 new certifications for renewable energy systems that would be served13 by that utility. 14 (c) Such notice of termination of participation is effective15 after fifteen days, at which point the Washington State University16 extension energy program may not accept new applications for17 certification of renewable energy systems that would be served by18 that utility. 19 (d) Upon receiving a utility's notice of termination of20 participation in the incentive program, the Washington State21 University extension energy program must report on its web site that22 customers of that utility are no longer eligible to receive new23 certifications under the program. 24 (e) A utility's termination of participation does not affect the25 utility's obligation to continue to make annual incentive payments26 for electricity generated by systems that were certified prior to the27 effective date of the notice. The Washington State University28 extension energy program must continue to process and issue29 certifications for renewable energy systems that were received by the30 Washington State University extension energy program before the31 effective date of the notice of termination. 32 (f) A utility that has terminated participation in the program33 may resume participation upon filing notice with the Washington State34 University extension energy program. 35 (5)(a) The Washington State University extension energy program36 may certify a renewable energy system that is connected to equipment37 capable of measuring the electricity production of the system and38 interconnecting with the utility's system in a manner that allows the39 utility, or the customer at the utility's option, to measure and40 p. 13 ESSB 5939.SL report to the Washington State University extension energy program1 the total amount of electricity produced by the renewable energy2 system. 3 (b) The Washington State University extension energy program must4 establish a reporting and fee-for-service system to accept5 electricity production data from the utility or the customer that is6 not reported electronically and with the reporting entity selected at7 the utility's option as described in subsection (19) of this section.8 The fee-for-service agreement must allow for electronic reporting or9 reporting by mail, may be specific to individual utilities, and must10 recover only the program's costs of obtaining the electricity11 production data and incorporating it into an electronic format. A12 statement of the amount due for the fee-for-service must be provided13 to the utility by the Washington State University extension energy14 program with the report provided to the utility pursuant to15 subsection (20)(a) of this section. The utility may determine how to16 assess and remit the fee, and the utility may be allowed a credit for17 fees paid under this subsection (5) against taxes due, as provided in18 RCW 82.16.130(1). 19 (6) The Washington State University extension energy program may20 issue a certification authorizing annual incentive payments up to the21 following annual dollar limits: 22 (a) For community solar projects, five thousand dollars per23 project participant; 24 (b) For residential-scale systems, five thousand dollars;25 (c) For commercial-scale systems, twenty-five thousand dollars;26 and 27 (d) For shared commercial solar projects, up to thirty-five28 thousand dollars a year per participant, as determined by the terms29 of subsection (15) of this section. 30 (7)(a) To obtain certification under this section, a person must31 submit to the Washington State University extension energy program an32 application, including: 33 (i) A signed statement that the applicant has not previously34 received a notice of eligibility from the department under RCW35 82.16.120 entitling the applicant to receive annual incentive36 payments for electricity generated by the renewable energy system at37 the same meter location; 38 (ii) A signed statement of the total price, including applicable39 sales tax, paid by the applicant for the renewable energy system;40 p. 14 ESSB 5939.SL (iii) System operation data including global positioning system1 coordinates, tilt, estimated shading, and azimuth; 2 (iv) Any other information the Washington State University3 extension energy program deems necessary in determining eligibility4 and incentive levels, administering the program, tracking progress5 toward achieving the limits on program participation established in6 RCW 82.16.130, or facilitating the review of the performance of the7 tax preferences by the joint legislative audit and review committee,8 as described in section 2 of this act; and 9 (v)(A) Except as provided in (a)(v)(B) of this subsection (7),10 the date that the renewable energy system received its final11 electrical inspection from the applicable local jurisdiction, as well12 as a copy of the permit or, if the permit is available online, the13 permit number; 14 (B) The Washington State University extension energy program may15 waive the requirement in (a)(v)(A) of this subsection (7), accepting16 an application and granting provisional certification prior to proof17 of final electrical inspection. Provisional certification expires one18 hundred eighty days after issuance, unless the applicant submits19 proof of the final electrical inspection from the applicable local20 jurisdiction or the Washington State University extension energy21 program extends the certification, for a term or terms of thirty22 days, due to extenuating circumstances; and 23 (b)(i) Prior to obtaining certification under this subsection, a24 community solar project or shared commercial solar project must apply25 for precertification against the remaining funds available for26 incentive payments under subsection (13)(d) of this section in order27 to be guaranteed an incentive payment under this section;28 (ii) A project applicant of a community solar project or shared29 commercial solar project must complete an application for30 certification with the Washington State University extension energy31 program within less than one year to retain the precertification32 status described in this subsection; and 33 (iii) The Washington State University extension energy program34 may design a reservation or precertification system for an applicant35 of a residential-scale or commercial-scale renewable energy system.36 (8) No incentive payments may be authorized or accrued until the37 final electrical inspection and executed interconnection agreement38 are submitted to the Washington State University extension energy39 program. 40 p. 15 ESSB 5939.SL (9) Within thirty days of receipt of the application for1 certification, the Washington State University extension energy2 program must notify the applicant and, except when a utility is the3 applicant, the utility serving the situs of the renewable energy4 system, by mail or electronically, whether certification has been5 granted. The certification notice must state the rate to be paid per6 kilowatt-hour of electricity generated by the renewable energy7 system, as provided in subsection (12) of this section, subject to8 any applicable cap on total annual payment provided in subsection (6)9 of this section. 10 (10) Certification is valid for the program term and entitles the11 applicant or, in the case of a community solar project or shared12 commercial solar project, the participant, to receive incentive13 payments for electricity generated from the date the renewable energy14 system commences operation, or the date the system is certified,15 whichever date is later. For purposes of this subsection, the16 Washington State University extension energy program must define when17 a renewable energy system commences operation and provide notice of18 such date to the recipient and the utility serving the situs of the19 system. Certification may not be retroactively changed except to20 correct later discovered errors that were made during the original21 application or certification process. 22 (11)(a) System certification follows the system if the following23 conditions are met using procedures established by the Washington24 State University extension energy program: 25 (i) The renewable energy system is transferred to a new owner who26 notifies the Washington State University extension energy program of27 the transfer; and 28 (ii) The new owner provides an executed interconnection agreement29 with the utility serving the premises. 30 (b) In the event that a community solar project participant31 terminates their participation in a community solar project, the32 system certification follows the system and participation may be33 transferred to a new participant. The administrator of a community34 solar project must provide notice to the Washington State University35 extension energy program of any changes or transfers in project36 participation. 37 (12) The Washington State University extension energy program38 must determine the total incentive rate for a new renewable energy39 system certification by adding to the base rate any applicable made-40 p. 16 ESSB 5939.SL in-Washington bonus rate. A made-in-Washington bonus rate is provided1 for a renewable energy system or a community solar project with solar2 modules made in Washington or with a wind turbine or tower that is3 made in Washington. Both the base rates and bonus rate vary,4 depending on the fiscal year in which the system is certified and the5 type of renewable energy system being certified, as provided in the6 following table: 7 8 9 10 Fiscal year of system certification Base rate - residential-scale Base rate - commercial-scale Base rate - community solar Base rate - shared commercial solar Made in Washington bonus 11 2018 $0.16 $0.06 $0.16 $0.06 $0.05 12 2019 $0.14 $0.04 $0.14 $0.04 $0.04 13 2020 $0.12 $0.02 $0.12 $0.02 $0.03 14 2021 $0.10 $0.02 $0.10 $0.02 $0.02 (13) The Washington State University extension energy program15 must cease to issue new certifications: 16 (a) For community solar projects and shared commercial solar17 projects in any fiscal year for which the Washington State University18 extension energy program estimates that fifty percent of the19 remaining funds for credit available to a utility for renewable20 energy systems certified under this section as of July 1, 2017, have21 been allocated to community solar projects and shared commercial22 solar projects combined; 23 (b) For commercial-scale systems in any fiscal year for which the24 Washington State University extension energy program estimates that25 twenty-five percent of the remaining funds for credit available to a26 utility for renewable energy systems certified under this section as27 of July 1, 2017, have been allocated to commercial-scale systems;28 (c) For any renewable energy system served by a utility, if29 certification is likely to result in incentive payments by that30 utility, including payments made under RCW 82.16.120, exceeding the31 utility's available funds for credit under RCW 82.16.130; and32 (d) For any renewable energy system, if certification is likely33 to result in total incentive payments under this section exceeding34 one hundred ten million dollars. 35 (14) If the Washington State University extension energy program36 ceases issuing new certifications during a fiscal year or biennium as37 provided in subsection (13) of this section, in the following fiscal38 p. 17 ESSB 5939.SL year or biennium, or when additional funds are available for credit1 such that the thresholds described in subsection (13) of this section2 are no longer exceeded, the Washington State University extension3 energy program must resume issuing new certifications using a method4 of awarding certifications that results in equitable and orderly5 allocation of benefits to applicants. 6 (15) A customer who is a participant in a shared commercial solar7 project may not receive incentive payments associated with the8 project greater than the difference between the levelized cost of9 energy output of the system over its production life and the retail10 rate for the rate class to which the customer belongs. The levelized11 cost of the output of the energy must be determined by the utility12 that administers the shared commercial solar project and must be13 disclosed, along with an explanation of the limitations on incentive14 payments contained in this subsection (15), in the contractual15 agreement with the shared commercial solar project participants.16 (16) In order to begin to receive annual incentive payments, a17 person who has been issued a certification for the incentive as18 provided in subsection (9) of this section must obtain an executed19 interconnection agreement with the utility serving the situs of the20 renewable energy system. 21 (17) The Washington State University extension energy program22 must establish a list of equipment that is eligible for the bonus23 rates described in subsection (12) of this section. The Washington24 State University extension energy program must, in consultation with25 the department of commerce, develop technical specifications and26 guidelines to ensure consistent and predictable determination of27 eligibility. A solar module is made in Washington for purposes of28 receiving the bonus rate only if the lamination of the module takes29 place in Washington. A wind turbine is made in Washington only if it30 is powered by a turbine or built with a tower manufactured in31 Washington. 32 (18) The manufacturer of a renewable energy system component33 subject to a bonus rate under subsection (12) of this section may34 apply to the Washington State University extension energy program to35 receive a determination of eligibility for such bonus rates. The36 Washington State University extension energy program must publish a37 list of components that have been certified as eligible for such38 bonus rates. The Washington State University extension energy program39 may assess an equipment certification fee to recover its costs. The40 p. 18 ESSB 5939.SL Washington State University extension energy program must deposit all1 revenue generated by this fee into the state general fund.2 (19) Annually, the utility must report electronically to the3 Washington State University extension energy program the amount of4 gross kilowatt-hours generated by each renewable energy system since5 the prior annual report. For the purposes of this section, to report6 electronically means to submit statistical or factual information in7 alphanumeric form through a web site established by the Washington8 State University extension energy program or in a list, table,9 spreadsheet, or other nonnarrative format that can be digitally10 transmitted or processed. The utility may instead opt to report by11 mail or require program participants to report individually, but if12 the utility exercises one or more of these options it must negotiate13 with the Washington State University extension energy program the14 fee-for-service arrangement described in subsection (5)(b) of this15 section. 16 (20)(a) The Washington State University extension energy program17 must calculate for the year and provide to the utility the amount of18 the incentive payment due to each participant and the total amount of19 credit against tax due available to the utility under RCW 82.16.13020 that has been allocated as annual incentive payments. Upon notice to21 the Washington State University extension energy program, a utility22 may opt to directly perform this calculation and provide its results23 to the Washington State University extension energy program.24 (b) If the Washington State University extension energy program25 identifies an abnormal production claim, it must notify the utility,26 the department of revenue, and the applicant, and must recommend27 withholding payment until the applicant has demonstrated that the28 production claim is accurate and valid. The utility is not liable to29 the customer for withholding payments pursuant to such recommendation30 unless and until the Washington State University extension energy31 program notifies the utility to resume incentive payments.32 (21)(a) The utility must issue the incentive payment within33 ninety days of receipt of the information required under subsection34 (20)(a) of this section from the Washington State University35 extension energy program. The utility must resume the incentive36 payments withheld under subsection (20)(b) of this section within37 thirty days of receiving notice from the Washington State University38 extension energy program that the claim has been demonstrated39 accurate and valid and payment should be resumed. 40 p. 19 ESSB 5939.SL (b) A utility is not liable for incentive payments to a customer-1 owner if the utility has disconnected the customer due to a violation2 of a customer service agreement, such as nonpayment of the customer's3 bill, or a violation of an interconnection agreement.4 (22) Beginning January 1, 2018, the Washington State University5 extension energy program must post on its web site and update at6 least monthly a report, by utility, of: 7 (a) The number of certifications issued for renewable energy8 systems, including estimated system sizes, costs, and annual energy9 production and incentive yields for various system types; and10 (b) An estimate of the amount of credit that has not yet been11 allocated for incentive payments under each utility's credit limit12 and remains available for new renewable energy system certifications.13 (23) Persons receiving incentive payments under this section must14 keep and preserve, for a period of five years for the duration of the15 consumer contract, suitable records as may be necessary to determine16 the amount of incentive payments applied for and received. The17 Washington State University extension energy program may direct a18 utility to cease issuing incentive payments if the records are not19 made available for examination upon request. A utility receiving such20 a directive is not liable to the applicant for any incentive payments21 or other damages for ceasing payments pursuant to the directive.22 (24) The nonpower attributes of the renewable energy system23 belong to the utility customer who owns or hosts the system or, in24 the case of a community solar project or a shared commercial solar25 project, the participant, and can be kept, sold, or transferred at26 the utility customer's discretion unless, in the case of a utility-27 owned community solar or shared commercial solar project, a contract28 between the customer and the utility clearly specifies that the29 attributes will be retained by the utility. 30 (25) All lists, technical specifications, determinations, and31 guidelines developed under this section must be made publicly32 available online by the Washington State University extension energy33 program. 34 (26) No certification may be issued under this section after June35 30, 2021. 36 (27) The Washington State University extension energy program37 must collect a one-time fee for applications submitted under38 subsection (1) of this section of one hundred twenty-five dollars per39 applicant. The Washington State University extension energy program40 p. 20 ESSB 5939.SL must deposit all revenue generated by this fee into the state general1 fund. The Washington State University extension energy program must2 administer and budget for the program established in RCW 82.16.120,3 this section, and section 7 of this act in a manner that ensures its4 administrative costs through June 30, 2022, are completely met by the5 revenues from this fee. If the Washington State University extension6 energy program determines that the fee authorized in this subsection7 is insufficient to cover the administrative costs through June 30,8 2022, the Washington State University extension energy program must9 report to the legislature on costs incurred and fees collected and10 demonstrate why a different fee amount or funding mechanism should be11 authorized. 12 (28) The Washington State University extension energy program13 may, through a public process, develop any program requirements,14 policies, and processes necessary for the administration or15 implementation of this section, RCW 82.16.120, and sections 2 and 716 of this act. The department is authorized, in consultation with the17 Washington State University extension energy program, to adopt any18 rules necessary for administration or implementation of the program19 established under this section and section 7 of this act.20 (29) Applications, certifications, requests for incentive21 payments under this section, and the information contained therein22 are not deemed tax information under RCW 82.32.330 and are subject to23 disclosure. 24 (30)(a) By November 1, 2019, and in compliance with RCW25 43.01.036, the Washington State University extension energy program26 must submit a report to the legislature that includes the following:27 (i) The number and types of renewable energy systems that have28 been certified under this section as of July 1, 2019, both statewide29 and per participating utility; 30 (ii) The number of utilities that are approaching or have reached31 the credit limit established under RCW 82.16.130(2) or the thresholds32 established under section 6(13) of this act; 33 (iii) The share of renewable energy systems by type that34 contribute to each utility's threshold under subsection (13) of this35 section; 36 (iv) An assessment of the deployment of community solar projects37 in the state, including but not limited to the following:38 (A) An evaluation of whether or not community solar projects are39 being deployed in low-income and moderate-income communities, as40 p. 21 ESSB 5939.SL those terms are defined in RCW 43.63A.510, including a description of1 any barriers to project deployment in these communities;2 (B) A description of the share of community solar projects by3 administrator type that contribute to each utility's threshold under4 subsection (13)(a) of this section; and 5 (C) A description of any barriers to participation by nonprofits6 and local housing authorities in the incentive program established7 under this section and under section 7 of this act;8 (v) The total dollar amount of incentive payments that have been9 made to participants in the incentive program established under this10 section to date; and 11 (vi) The total number of megawatts of solar photovoltaic capacity12 installed to date by participants in the incentive program13 established under this section. 14 (b) By December 31, 2019, the legislature must review the report15 submitted under (a) of this subsection and determine whether the16 credit limit established under RCW 82.16.130(2) should be increased17 to two percent of a light and power business' taxable power sales18 generated in calendar year 2014 and due under RCW 82.16.020(1)(b) or19 two hundred fifty thousand dollars, whichever is greater, in order to20 achieve the legislative intent under section 1 of this act.21 NEW SECTION. Sec. 7. A new section is added to chapter 82.1622 RCW to read as follows: 23 (1) The purpose of community solar programs is to facilitate24 broad, equitable community investment in and access to solar power.25 Beginning July 1, 2017, a community solar administrator may organize26 and administer a community solar project as provided in this section.27 (2) A community solar project must have a direct current28 nameplate capacity that is no more than one thousand kilowatts and29 must have at least ten participants or one participant for every ten30 kilowatts of direct current nameplate capacity, whichever is greater.31 A community solar project that has a direct current nameplate32 capacity greater than five hundred kilowatts must be subject to a33 standard interconnection agreement with the utility serving the situs34 of the community solar project. Except for community solar projects35 authorized under subsection (9) of this section, each participant36 must be a customer of the utility providing service at the situs of37 the community solar project. 38 p. 22 ESSB 5939.SL (3) The administrator of a community solar project must1 administer the project in a transparent manner that allows for fair2 and nondiscriminatory opportunity for participation by utility3 customers. 4 (4) The administrator of a community solar project may establish5 a reasonable fee to cover costs incurred in organizing and6 administering the community solar project. Project participants,7 prior to making the commitment to participate in the project, must be8 given clear and conspicuous notice of the portion of the incentive9 payment that will be used for this purpose. 10 (5) The administrator of a community solar project must maintain11 and update annually through June 30, 2030, the following information12 for each project it operates or administers: 13 (a) Ownership information; 14 (b) Contact information for technical management questions;15 (c) Business address; 16 (d) Project design details, including project location, output17 capacity, equipment list, and interconnection information; and18 (e) Subscription information, including rates, fees, terms, and19 conditions. 20 (6) The administrator of a community solar project must provide21 the information required in subsection (5) of this section to the22 Washington State University extension energy program at the time it23 submits the application allowed under section 6(1) of this act.24 (7) The administrator of a community solar project must provide25 each project participant with a disclosure form containing all26 material terms and conditions of participation in the project,27 including but not limited to the following: 28 (a) Plain language disclosure of the terms under which the29 project participant's share of any incentive payment will be30 calculated by the Washington State University extension energy31 program over the life of the contract; 32 (b) Contract provisions regulating the disposition or transfer of33 the project participant's interest in the project, including any34 potential costs associated with such a transfer; 35 (c) All recurring and nonrecurring charges; 36 (d) A description of the billing and payment procedures;37 (e) A description of any compensation to be paid in the event of38 project underperformance; 39 p. 23 ESSB 5939.SL (f) Current production projections and a description of the1 methodology used to develop the projections; 2 (g) Contact information for questions and complaints; and3 (h) Any other terms and conditions of the services provided by4 the administrator. 5 (8) A utility may not adopt rates, terms, conditions, or6 standards that unduly or unreasonably discriminate between utility-7 administered community solar projects and those administered by8 another entity. 9 (9) A public utility district that is engaged in distributing10 electricity to more than one retail electric customer in the state11 and a joint operating agency organized under chapter 43.52 RCW on or12 before January 1, 2017, may enter into an agreement with each other13 to construct and own a community solar project that is located on14 property owned by a joint operating agency or on property that15 receives electric service from a participating public utility16 district. Each participant of a community solar project under this17 subsection must be a customer of at least one of the public utility18 districts that is a party to the agreement with a joint operating19 agency to construct and own a community solar project.20 (10) The Washington utilities and transportation commission must21 publish, without disclosing proprietary information, a list of the22 following: 23 (a) Entities other than utilities, including affiliates or24 subsidiaries of utilities, that organize and administer community25 solar projects; and 26 (b) Community solar projects and related programs and services27 offered by investor-owned utilities. 28 (11) If a consumer-owned utility opts to provide a community29 solar program or contracts with a nonutility administrator to offer a30 community solar program, the governing body of the consumer-owned31 utility must publish, without disclosing proprietary information, a32 list of the nonutility administrators contracted by the utility as33 part of its community solar program. 34 (12) Except for parties engaged in actions and transactions35 regulated under laws administered by other authorities and exempted36 under RCW 19.86.170, a violation of this section constitutes an37 unfair or deceptive act in trade or commerce in violation of chapter38 19.86 RCW, the consumer protection act. Acts in violation of this act39 are not reasonable in relation to the development and preservation of40 p. 24 ESSB 5939.SL business, and constitute matters vitally affecting the public1 interest for the purpose of applying the consumer protection act,2 chapter 19.86 RCW. 3 (13) Nothing in this section may be construed as intending to4 preclude persons from investing in or possessing an ownership5 interest in a community solar project, or from applying for and6 receiving federal investment tax credits. 7 NEW SECTION. Sec. 8. A new section is added to chapter 82.168 RCW to read as follows: 9 (1) The purpose of a shared commercial solar project is to10 provide an entry point in solar utilization by large load customers11 in a manner that achieves economies of scale and maximizes system12 performance without limitations posed by on-site systems where sun13 exposure is not optimal or structural and other site deficiencies14 preclude solar development. 15 (2) Beginning July 1, 2017, a utility may, at its discretion,16 organize and administer a shared commercial solar project as provided17 in this section. 18 (3) A shared commercial solar project must have a direct current19 nameplate capacity greater than one megawatt and no more than five20 megawatts and must have at least five participants. To receive21 incentive payments under section 6 of this act, each participant must22 be a customer of the utility providing service at the situs of the23 shared commercial solar project and must be located in the state of24 Washington. 25 (4) The administrator of a shared commercial solar project must26 administer the project in a transparent manner. 27 (5) The administrator of a shared commercial solar project may28 establish a reasonable fee to cover costs incurred in organizing and29 administering the shared commercial solar project. Project30 participants, prior to making the commitment to participate in the31 project, must be given clear and conspicuous notice of the fees32 charged by the administrator as authorized under this subsection.33 (6) The administrator of a shared commercial solar project must34 submit to the Washington State University extension energy program at35 the time it submits an application allowed under section 6 (1) of this36 act project design details, including project location, output37 capacity, equipment list, and interconnection information.38 p. 25 ESSB 5939.SL (7) The administrator of a shared commercial solar project must1 provide each project participant with a disclosure form containing2 all material terms and conditions of participation in the project,3 including but not limited to the following: 4 (a) All recurring and nonrecurring charges; 5 (b) A description of the billing and payment procedures;6 (c) Production projections and a description of the methodology7 used to develop the projections; 8 (d) An estimate of the project participant's share of any9 incentive payment over the life of the contract; 10 (e) A description of contract terms that relate to project11 underperformance; 12 (f) Contract provisions regulating the disposition or transfer of13 the project participant's interest in the project, including any14 potential costs associated with such a transfer; 15 (g) Contact information for questions and complaints; and16 (h) Any other terms and conditions of the services provided by17 the administrator. 18 (8) If a utility opts to contract with a nonutility administrator19 to offer a shared commercial solar program, the utility must publish,20 without disclosing proprietary information, the name of the21 nonutility administrator contracted by the utility as part of its22 shared commercial solar program. 23 (9) In order to meet the intent of this act of promoting a24 sustainable, local renewable energy industry, the legislature prefers25 award of the majority of the installation of shared commercial solar26 projects be given to contractors based in Washington state. In the27 event the majority of the installation of a shared commercial solar28 project is awarded to out-of-state contractors, the administrator29 must submit to the Washington State University extension energy30 program the reasons for using out-of-state contractors, the31 percentage of installation work performed by out-of-state32 contractors, and a cost comparison of the installation services33 performed by out-of-state contractors against the same services34 performed by Washington-based contractors. 35 NEW SECTION. Sec. 9. A new section is added to chapter 82.1636 RCW to read as follows: 37 (1) Any person who sells a solar module to a customer-owner, or38 who receives compensation from a customer-owner in exchange for39 p. 26 ESSB 5939.SL installing a solar module for use in a residential-scale system or1 commercial-scale system in Washington must provide to the customer-2 owner current information regarding the tax incentives available to3 the customer-owner under Washington law, including the scheduled4 expiration date of any tax incentives and the maximum period of time5 during which the customer-owner may benefit from any tax incentives,6 based on the law as it existed on the date of sale or installation of7 the solar module. 8 (2) The definitions in section 5 of this act apply to this9 section. 10 (3) For the purposes of this section, "solar module" has the same11 meaning as provided in RCW 82.16.110. 12 (4) The legislature finds that the practices covered by this13 section are matters vitally affecting the public interest for the14 purpose of applying the consumer protection act, chapter 19.86 RCW. A15 violation of this section is not reasonable in relation to the16 development and preservation of business and is an unfair or17 deceptive act or practice in the conduct of trade or commerce and an18 unfair method of competition. Violations of this section may be19 enforced by the attorney general under the consumer protection act,20 chapter 19.86 RCW. 21 NEW SECTION. Sec. 10. A new section is added to chapter 80.2822 RCW to read as follows: 23 The definitions in this section apply throughout this section and24 section 11 of this act unless the context clearly requires otherwise.25 (1) "Community solar company" means a person, firm, or26 corporation, other than an electric utility or a community solar27 cooperative, that owns a community solar project and provides28 community solar project services to project participants.29 (2) "Community solar project" means a solar energy system that30 has a direct current nameplate generating capacity that is no larger31 than one thousand kilowatts. 32 (3) "Community solar project services" means the provision of33 electricity generated by a community solar project, or the provision34 of the financial benefits associated with electricity generated by a35 community solar project, to multiple project participants, and may36 include other services associated with the use of the community solar37 project such as system monitoring and maintenance, warranty38 provisions, performance guarantees, and customer service.39 p. 27 ESSB 5939.SL (4) "Electric utility" means a consumer-owned utility or1 investor-owned utility as those terms are defined in RCW 19.280.020.2 (5) "Project participant" means a customer who enters into a3 lease, power purchase agreement, loan, or other financial agreement4 with a community solar company in order to obtain a beneficial5 interest in, other than direct ownership of, a community solar6 project. 7 (6) "Solar energy system" means any device or combination of8 devices or elements that rely upon direct sunlight as an energy9 source for use in the generation of electricity. 10 NEW SECTION. Sec. 11. A new section is added to chapter 80.2811 RCW to read as follows: 12 (1) No community solar company may engage in business in this13 state except in accordance with the provisions of this chapter.14 Engaging in business as a community solar company includes15 advertising, soliciting, offering, or entering into an agreement to16 own a community solar project and provide community solar project17 services to electric utility customers. 18 (2) A community solar company must register with the commission19 before engaging in business in this state or applying for20 certification from the Washington State University extension energy21 program under section 6 (1) of this act. Registration with the22 commission as a community solar company must occur on an annual23 basis. The registration must be on a form prescribed by the24 commission and contain that information as the commission may by rule25 require, but must include at a minimum: 26 (a) The name and address of the community solar company;27 (b) The name and address of the community solar company's28 registered agent, if any; 29 (c) The name, address, and title of each officer or director;30 (d) The community solar company's most current balance sheet;31 (e) The community solar company's latest annual report, if any;32 (f) A description of the services the community solar company33 offers or intends to offer, including financing models; and34 (g) Disclosure of any pending litigation against it.35 (3) As a precondition to registration, the commission may require36 the procurement of a performance bond or other mechanism sufficient37 to cover any advances or deposits the community solar company may38 p. 28 ESSB 5939.SL collect from project participants or order that the advances or1 deposits be held in escrow or trust. 2 (4) The commission may deny registration to any community solar3 company that: 4 (a) Does not provide the information required by this section;5 (b) Fails to provide a performance bond or other mechanism, if6 required; 7 (c) Does not possess adequate financial resources to provide the8 proposed service; or 9 (d) Does not possess adequate technical competency to provide the10 proposed service. 11 (5) The commission must take action to approve or issue a notice12 of hearing concerning any application for registration within thirty13 days after receiving the application. The commission may approve an14 application with or without a hearing. The commission may deny an15 application after a hearing. 16 (6) The commission may charge a community solar company an annual17 application fee to recover the cost of processing applications for18 registration under this section. 19 (7) The commission may adopt rules that describe the manner by20 which it will register a community solar company, ensure that the21 terms and conditions of community solar projects or community solar22 project services comply with the requirements of this act, establish23 the community solar company's responsibilities for responding to24 customer complaints and disputes, and adopt annual reporting25 requirements. In addition to the application fee authorized under26 subsection (6) of this section, the commission may adopt regulatory27 fees applicable to community solar companies pursuant to RCW28 80.04.080, 80.24.010, and 80.24.020. Such fees may not exceed the29 cost of ensuring compliance with this chapter. 30 (8) The commission may suspend or revoke a registration upon31 complaint by any interested party, or upon the commission's own32 motion after notice and opportunity for hearing, when it finds that a33 registered community solar company or its agent has violated this34 chapter or the rules of the commission, or that the community solar35 company or its agent has been found by a court or governmental agency36 to have violated the laws of a state or the United States.37 (9) For the purpose of ensuring compliance with this chapter, the38 commission may issue penalties against community solar companies for39 p. 29 ESSB 5939.SL violations of this chapter as provided for public service companies1 pursuant to chapter 80.04 RCW. 2 (10) Upon request of the commission, a community solar company3 registered under this section must provide information about its4 community solar projects or community solar project services.5 (11) A violation of this section constitutes an unfair or6 deceptive act in trade or commerce in violation of chapter 19.86 RCW,7 the consumer protection act. Acts in violation of this act are not8 reasonable in relation to the development and preservation of9 business, and constitute matters vitally affecting the public10 interest for the purpose of applying the consumer protection act,11 chapter 19.86 RCW. 12 (12) For the purposes of RCW 19.86.170, actions or transactions13 of a community solar company may not be deemed otherwise permitted,14 prohibited, or regulated by the commission. 15 NEW SECTION. Sec. 12. (1) Findings. The legislature finds that16 a convenient, safe, and environmentally sound system for the17 recycling of photovoltaic modules, minimization of hazardous waste,18 and recovery of commercially valuable materials must be established.19 The legislature further finds that the responsibility for this system20 must be shared among all stakeholders, with manufacturers financing21 the takeback and recycling system.22 (2) Definitions. For purposes of this section the following23 definitions apply: 24 (a) "Consumer electronic device" means any device containing an25 electronic circuit board that is intended for everyday use by26 individuals, such as a watch or calculator. 27 (b) "Department" means the department of ecology.28 (c) "Manufacturer" means any person in business or no longer in29 business but having a successor in interest who, irrespective of the30 selling technique used, including by means of distance or remote31 sale: 32 (i) Manufactures or has manufactured a photovoltaic module under33 its own brand names for sale in or into this state;34 (ii) Assembles or has assembled a photovoltaic module that uses35 parts manufactured by others for sale in or into this state under the36 assembler's brand names; 37 (iii) Resells or has resold in or into this state under its own38 brand names a photovoltaic module produced by other suppliers,39 p. 30 ESSB 5939.SL including retail establishments that sell photovoltaic modules under1 their own brand names; 2 (iv) Manufactures or has manufactured a cobranded photovoltaic3 module product for sale in or into this state that carries the name4 of both the manufacturer and a retailer; 5 (v) Imports or has imported a photovoltaic module into the United6 States that is sold in or into this state. However, if the imported7 photovoltaic module is manufactured by any person with a presence in8 the United States meeting the criteria of manufacturer under (a)9 through (d) of this subsection, that person is the manufacturer;10 (vi) Sells at retail a photovoltaic module acquired from an11 importer that is the manufacturer and elects to register as the12 manufacturer for those products; or 13 (vii) Elects to assume the responsibility and register in lieu of14 a manufacturer as defined under (b)(i) through (vi) of this15 subsection. 16 (d) "Photovoltaic module" means the smallest nondivisible,17 environmentally protected assembly of photovoltaic cells or other18 photovoltaic collector technology and ancillary parts intended to19 generate electrical power under sunlight, except that "photovoltaic20 module" does not include a photovoltaic cell that is part of a21 consumer electronic device for which it provides electricity needed22 to make the consumer electronic device function. "Photovoltaic23 module" includes but is not limited to interconnections, terminals,24 and protective devices such as diodes that: 25 (i) Are installed on, connected to, or integral with buildings;26 or 27 (ii) Are used as components of freestanding, off-grid, power28 generation systems, such as for powering water pumping stations,29 electric vehicle charging stations, fencing, street and signage30 lights, and other commercial or agricultural purposes.31 (e) "Rare earth element" means lanthanum, cerium, praseodymium,32 neodymium, promethium, samarium, europium, gadolinium, terbium,33 dysprosium, holmium, erbium, thulium, ytterbium, lutetium, yttrium,34 or scandium. 35 (f) "Reuse" means any operation by which a photovoltaic module or36 a component of a photovoltaic module changes ownership and is used37 for the same purpose for which it was originally purchased.38 p. 31 ESSB 5939.SL (g) "Stewardship plan" means the plan developed by a manufacturer1 or its designated stewardship organization for a self-directed2 stewardship program. 3 (h) "Stewardship program" means the activities conducted by a4 manufacturer or a stewardship organization to fulfill the5 requirements of this chapter and implement the activities described6 in its stewardship plan. 7 (3) Program guidance, review, and approval. The department must8 develop guidance for a photovoltaic module stewardship and takeback9 program to guide manufacturers in preparing and implementing a self-10 directed program to ensure the convenient, safe, and environmentally11 sound takeback and recycling of photovoltaic modules and their12 components and materials. By January 1, 2018, the department must13 establish a process to develop guidance for photovoltaic module14 stewardship plans by working with manufacturers, stewardship15 organizations, and other stakeholders on the content, review, and16 approval of stewardship plans. The department's process must be fully17 implemented and stewardship plan guidance completed by July 1, 2019.18 (4) Stewardship organization as agent of manufacturer. A19 stewardship organization may be designated to act as an agent on20 behalf of a manufacturer or manufacturers in operating and21 implementing the stewardship program required under this chapter. Any22 stewardship organization that has obtained such designation must23 provide to the department a list of the manufacturers and brand names24 that the stewardship organization represents within sixty days of its25 designation by a manufacturer as its agent, or within sixty days of26 removal of such designation. 27 (5) Stewardship plans. Each manufacturer must prepare and submit28 a stewardship plan to the department by the later of January 1, 2020,29 or within thirty days of its first sale of a photovoltaic module in30 or into the state. 31 (a) A stewardship plan must, at a minimum: 32 (i) Describe how manufacturers will finance the takeback and33 recycling system, and include an adequate funding mechanism to34 finance the costs of collection, management, and recycling of35 photovoltaic modules and residuals sold in or into the state by the36 manufacturer with a mechanism that ensures that photovoltaic modules37 can be delivered to takeback locations without cost to the last owner38 or holder; 39 p. 32 ESSB 5939.SL (ii) Accept all photovoltaic modules sold in or into the state1 after July 1, 2017; 2 (iii) Describe how the program will minimize the release of3 hazardous substances into the environment and maximize the recovery4 of other components, including rare earth elements and commercially5 valuable materials; 6 (iv) Provide for takeback of photovoltaic modules at locations7 that are within the region of the state in which the photovoltaic8 modules were used and are as convenient as reasonably practicable,9 and if no such location within the region of the state exists,10 include an explanation for the lack of such location;11 (v) Identify how relevant stakeholders, including consumers,12 installers, building demolition firms, and recycling and treatment13 facilities, will receive information required in order for them to14 properly dismantle, transport, and treat the end-of-life photovoltaic15 modules in a manner consistent with the objectives described in16 (a)(iii) of this subsection; 17 (vi) Establish performance goals, including a goal for the rate18 of combined reuse and recycling of collected photovoltaic modules as19 a percentage of the total weight of photovoltaic modules collected,20 which rate must be no less than eighty-five percent.21 (b) A manufacturer must implement the stewardship plan.22 (c) A manufacturer may periodically amend its stewardship plan.23 The department must approve the amendment if it meets the24 requirements for plan approval outlined in the department's guidance.25 When submitting proposed amendments, the manufacturer must include an26 explanation of why such amendments are necessary. 27 (6) Plan approval. The department must approve a stewardship plan28 if it determines the plan addresses each element outlined in the29 department's guidance. 30 (7) Annual report. (a) Beginning April 1, 2022, and by April 1st31 in each subsequent year, a manufacturer, or its designated32 stewardship organization, must provide to the department a report for33 the previous calendar year that documents implementation of the plan34 and assesses achievement of the performance goals established in35 subsection (5)(a)(vi) of this section. 36 (b) The report may include any recommendations to the department37 or the legislature on modifications to the program that would enhance38 the effectiveness of the program, including management of program39 p. 33 ESSB 5939.SL costs and mitigation of environmental impacts of photovoltaic1 modules. 2 (c) The manufacturer or stewardship organization must post this3 report on a publicly accessible web site. 4 (8) Enforcement. Beginning January 1, 2021, no manufacturer may5 sell or offer for sale a photovoltaic module in or into the state6 unless the manufacturer has submitted to the department a stewardship7 plan and received plan approval. The department must send a written8 warning to a manufacturer that is not participating in a plan. The9 written warning must inform the manufacturer that it must submit a10 plan or participate in a plan within thirty days of the notice. The11 department may assess a penalty of up to ten thousand dollars for12 each sale of a photovoltaic module in or into the state that occurs13 after the initial written warning. A manufacturer may appeal a14 penalty issued under this section to the superior court of Thurston15 county within one hundred eighty days of receipt of the notice.16 (9) Fee. The department may collect a flat fee from participating17 manufacturers to recover costs associated with the plan guidance,18 review, and approval process described in subsection (3) of this19 section. Other administrative costs incurred by the department for20 program implementation activities, including stewardship plan review21 and approval, enforcement, and any rule making, may be recovered by22 charging every manufacturer an annual fee calculated by dividing23 department administrative costs by the manufacturer's pro rata share24 of the Washington state photovoltaic module sales in the most recent25 preceding calendar year, based on best available information. The26 sole purpose of assessing the fees authorized in this subsection is27 to predictably and adequately fund the department's costs of28 administering the photovoltaic module recycling program.29 (10) Account. The photovoltaic module recycling account is30 created in the custody of the state treasurer. All fees collected31 from manufacturers under this chapter must be deposited in the32 account. Expenditures from the account may be used only for33 administering this chapter. Only the director of the department or34 the director's designee may authorize expenditures from the account.35 The account is subject to the allotment procedures under chapter36 43.88 RCW, but an appropriation is not required for expenditures.37 Funds in the account may not be diverted for any purpose or activity38 other than those specified in this section. 39 p. 34 ESSB 5939.SL (11) Rule making. The department may adopt rules as necessary for1 the purpose of implementing, administering, and enforcing this2 chapter. 3 (12) National program. In lieu of preparing a stewardship plan4 and as provided by subsection (5) of this section, a manufacturer may5 participate in a national program for the convenient, safe, and6 environmentally sound takeback and recycling of photovoltaic modules7 and their components and materials, if substantially equivalent to8 the intent of the state program. The department may determine9 substantial equivalence if it determines that the national program10 adequately addresses and fulfills each of the elements of a11 stewardship plan outlined in subsection (5)(a) of this section and12 includes an enforcement mechanism reasonably calculated to ensure a13 manufacturer's compliance with the national program. Upon issuing a14 determination of substantial equivalence, the department must notify15 affected stakeholders including the manufacturer. If the national16 program is discontinued or the department determines the national17 program is no longer substantially equivalent to the state program in18 Washington, the department must notify the manufacturer and the19 manufacturer must provide a stewardship plan as described in20 subsection (5)(a) of this section to the department for approval21 within thirty days of notification. 22 NEW SECTION. Sec. 13. A new section is added to chapter 43.18023 RCW to read as follows: 24 (1) It is the intent of the legislature to investigate methods by25 which the state may establish or facilitate financing models that26 allow electric utilities in the state to maximize federal tax27 incentives and monetize the depreciation of renewable energy systems28 and other distributed energy assets, with the goal of providing29 improved access to the benefits of these assets to low and moderate30 income households as well as broad system benefits to utility31 ratepayers and state taxpayers. 32 (2) By December 31, 2017, the commission must prepare and submit33 to the appropriate committees of the legislature a report that34 assesses financing tools or models for the aggregation, by public or35 private entities, of federal tax incentives and other financial36 benefits accruing from the installation, ownership, and operation of37 renewable energy systems and other distributed energy resources. The38 report must: 39 p. 35 ESSB 5939.SL (a) Assess the legal, financial, and economic feasibility of one1 or more financing tools or models for the aggregation of federal tax2 incentives and other financial benefits accruing from the3 installation, ownership, and operation of renewable energy systems4 and other distributed energy resources; 5 (b) Consider the state and federal legal aspects of such a6 financing tool or model, including considerations of how to structure7 the role of the state or any subdivision of the state in a manner8 that is consistent with the Constitution of the state of Washington;9 and 10 (c) Describe any legislation that may be necessary to facilitate,11 implement, or create incentives for the private sector to implement12 such a financing tool or model within the state. 13 (3) Beginning July 1, 2018, the commission may implement a14 financing tool or model for the aggregation, by public or private15 entities, of federal tax incentives and other financial benefits16 accruing from the installation, ownership, and operation of renewable17 energy systems and other distributed energy resources if the18 commission determines that it is legally, financially, and19 economically feasible and that it would further the public policy20 goals set forth in subsection (1) of this section.21 Sec. 14. RCW 82.08.962 and 2013 2nd sp.s. c 13 s 1502 are each22 amended to read as follows: 23 (1)(a) Except as provided in RCW 82.08.963, purchasers who have24 paid the tax imposed by RCW 82.08.020 on machinery and equipment used25 directly in generating electricity using fuel cells, wind, sun,26 biomass energy, tidal or wave energy, geothermal resources, anaerobic27 digestion, technology that converts otherwise lost energy from28 exhaust, or landfill gas as the principal source of power, or to29 sales of or charges made for labor and services rendered in respect30 to installing such machinery and equipment, are eligible for an31 exemption as provided in this section, but only if the purchaser32 develops with such machinery, equipment, and labor a facility capable33 of generating not less than one thousand watts of electricity.34 (b) Beginning on July 1, 2009, through June 30, 2011, the tax35 levied by RCW 82.08.020 does not apply to the sale of machinery and36 equipment described in (a) of this subsection that are used directly37 in generating electricity or to sales of or charges made for labor38 p. 36 ESSB 5939.SL and services rendered in respect to installing such machinery and1 equipment. 2 (c) Beginning on July 1, 2011, through January 1, 2020, the3 amount of the exemption under this subsection (1) is equal to4 seventy-five percent of the state and local sales tax paid. The5 purchaser is eligible for an exemption under this subsection (1)(c)6 in the form of a remittance. 7 (2) For purposes of this section and RCW 82.12.962, the following8 definitions apply: 9 (a) "Biomass energy" includes: (i) By-products of pulping and10 wood manufacturing process; (ii) animal waste; (iii) solid organic11 fuels from wood; (iv) forest or field residues; (v) wooden demolition12 or construction debris; (vi) food waste; (vii) liquors derived from13 algae and other sources; (viii) dedicated energy crops; (ix)14 biosolids; and (x) yard waste. "Biomass energy" does not include wood15 pieces that have been treated with chemical preservatives such as16 creosote, pentachlorophenol, or copper-chrome-arsenic; wood from old17 growth forests; or municipal solid waste. 18 (b) "Fuel cell" means an electrochemical reaction that generates19 electricity by combining atoms of hydrogen and oxygen in the presence20 of a catalyst. 21 (c) "Landfill gas" means biomass fuel, of the type qualified for22 federal tax credits under Title 26 U.S.C. Sec. 29 of the federal23 internal revenue code, collected from a "landfill" as defined under24 RCW 70.95.030. 25 (d)(i) "Machinery and equipment" means fixtures, devices, and26 support facilities that are integral and necessary to the generation27 of electricity using fuel cells, wind, sun, biomass energy, tidal or28 wave energy, geothermal resources, anaerobic digestion, technology29 that converts otherwise lost energy from exhaust, or landfill gas as30 the principal source of power. 31 (ii) "Machinery and equipment" does not include: (A) Hand-powered32 tools; (B) property with a useful life of less than one year; (C)33 repair parts required to restore machinery and equipment to normal34 working order; (D) replacement parts that do not increase35 productivity, improve efficiency, or extend the useful life of36 machinery and equipment; (E) buildings; or (F) building fixtures that37 are not integral and necessary to the generation of electricity that38 are permanently affixed to and become a physical part of a building.39 p. 37 ESSB 5939.SL (3)(a) Machinery and equipment is "used directly" in generating1 electricity by wind energy, solar energy, biomass energy, tidal or2 wave energy, geothermal resources, anaerobic digestion, technology3 that converts otherwise lost energy from exhaust, or landfill gas4 power if it provides any part of the process that captures the energy5 of the wind, sun, biomass energy, tidal or wave energy, geothermal6 resources, anaerobic digestion, technology that converts otherwise7 lost energy from exhaust, or landfill gas, converts that energy to8 electricity, and stores, transforms, or transmits that electricity9 for entry into or operation in parallel with electric transmission10 and distribution systems. 11 (b) Machinery and equipment is "used directly" in generating12 electricity by fuel cells if it provides any part of the process that13 captures the energy of the fuel, converts that energy to electricity,14 and stores, transforms, or transmits that electricity for entry into15 or operation in parallel with electric transmission and distribution16 systems. 17 (4)(a) A purchaser claiming an exemption in the form of a18 remittance under subsection (1)(c) of this section must pay the tax19 imposed by RCW 82.08.020 and all applicable local sales taxes imposed20 under the authority of chapters 82.14 and 81.104 RCW. The purchaser21 may then apply to the department for remittance in a form and manner22 prescribed by the department. A purchaser may not apply for a23 remittance under this section more frequently than once per quarter.24 The purchaser must specify the amount of exempted tax claimed and the25 qualifying purchases for which the exemption is claimed. The26 purchaser must retain, in adequate detail, records to enable the27 department to determine whether the purchaser is entitled to an28 exemption under this section, including: Invoices; proof of tax paid;29 and documents describing the machinery and equipment.30 (b) The department must determine eligibility under this section31 based on the information provided by the purchaser, which is subject32 to audit verification by the department. The department must on a33 quarterly basis remit exempted amounts to qualifying purchasers who34 submitted applications during the previous quarter.35 (5) The exemption provided by this section expires September 30,36 2017, as it applies to: (a) Machinery and equipment that is used37 directly in the generation of electricity using solar energy and38 capable of generating no more than five hundred kilowatts of39 p. 38 ESSB 5939.SL electricity; or (b) sales of or charges made for labor and services1 rendered in respect to installing such machinery and equipment.2 (6) This section expires January 1, 2020. 3 Sec. 15. RCW 82.08.963 and 2013 2nd sp.s. c 13 s 1602 are each4 amended to read as follows: 5 (1) The tax levied by RCW 82.08.020 does not apply to sales of6 machinery and equipment used directly in generating electricity or7 producing thermal heat using solar energy, or to sales of or charges8 made for labor and services rendered in respect to installing such9 machinery and equipment, but only if the purchaser develops with such10 machinery, equipment, and labor a facility capable of generating not11 more than ten kilowatts of electricity or producing not more than12 three million British thermal units per day and provides the seller13 with an exemption certificate in a form and manner prescribed by the14 department. The seller must retain a copy of the certificate for the15 seller's files. For sellers who electronically file their taxes, the16 department must provide a separate tax reporting line for exemption17 amounts claimed by a buyer under this section. 18 (2) For purposes of this section and RCW 82.12.963:19 (a) "Machinery and equipment" means industrial fixtures, devices,20 and support facilities that are integral and necessary to the21 generation of electricity or production and use of thermal heat using22 solar energy; 23 (b) "Machinery and equipment" does not include: (i) Hand-powered24 tools; (ii) property with a useful life of less than one year; (iii)25 repair parts required to restore machinery and equipment to normal26 working order; (iv) replacement parts that do not increase27 productivity, improve efficiency, or extend the useful life of28 machinery and equipment; (v) buildings; or (vi) building fixtures29 that are not integral and necessary to the generation of electricity30 that are permanently affixed to and become a physical part of a31 building; 32 (c) Machinery and equipment is "used directly" in generating33 electricity with solar energy if it provides any part of the process34 that captures the energy of the sun, converts that energy to35 electricity, and stores, transforms, or transmits that electricity36 for entry into or operation in parallel with electric transmission37 and distribution systems; and 38 p. 39 ESSB 5939.SL (d) Machinery and equipment is "used directly" in producing1 thermal heat with solar energy if it uses a solar collector or a2 solar hot water system that (i) meets the certification standards for3 solar collectors and solar hot water systems developed by the solar4 rating and certification corporation; or (ii) is determined by the5 Washington State University extension whether a solar collector or6 solar hot water system is an equivalent collector or system.7 (3) The exemption provided by this section for the sales of8 machinery and equipment that is used directly in the generation of9 electricity using solar energy, or for sales of or charges made for10 labor or services rendered in respect to installing such machinery11 and equipment, expires September 30, 2017.12 (4) This section expires June 30, 2018. 13 Sec. 16. RCW 82.12.962 and 2013 2nd sp.s. c 13 s 1505 are each14 amended to read as follows: 15 (1)(a) Except as provided in RCW 82.12.963, consumers who have16 paid the tax imposed by RCW 82.12.020 on machinery and equipment used17 directly in generating electricity using fuel cells, wind, sun,18 biomass energy, tidal or wave energy, geothermal resources, anaerobic19 digestion, technology that converts otherwise lost energy from20 exhaust, or landfill gas as the principal source of power, or to21 sales of or charges made for labor and services rendered in respect22 to installing such machinery and equipment, are eligible for an23 exemption as provided in this section, but only if the purchaser24 develops with such machinery, equipment, and labor a facility capable25 of generating not less than one thousand watts of electricity.26 (b) Beginning on July 1, 2009, through June 30, 2011, the27 provisions of this chapter do not apply in respect to the use of28 machinery and equipment described in (a) of this subsection that are29 used directly in generating electricity or to sales of or charges30 made for labor and services rendered in respect to installing such31 machinery and equipment. 32 (c) Beginning on July 1, 2011, through January 1, 2020, the33 amount of the exemption under this subsection (1) is equal to34 seventy-five percent of the state and local sales tax paid. The35 consumer is eligible for an exemption under this subsection (1)(c) in36 the form of a remittance. 37 (2)(a) A person claiming an exemption in the form of a remittance38 under subsection (1)(c) of this section must pay the tax imposed by39 p. 40 ESSB 5939.SL RCW 82.12.020 and all applicable local use taxes imposed under the1 authority of chapters 82.14 and 81.104 RCW. The consumer may then2 apply to the department for remittance in a form and manner3 prescribed by the department. A consumer may not apply for a4 remittance under this section more frequently than once per quarter.5 The consumer must specify the amount of exempted tax claimed and the6 qualifying purchases or acquisitions for which the exemption is7 claimed. The consumer must retain, in adequate detail, records to8 enable the department to determine whether the consumer is entitled9 to an exemption under this section, including: Invoices; proof of tax10 paid; and documents describing the machinery and equipment.11 (b) The department must determine eligibility under this section12 based on the information provided by the consumer, which is subject13 to audit verification by the department. The department must on a14 quarterly basis remit exempted amounts to qualifying consumers who15 submitted applications during the previous quarter.16 (3) Purchases exempt under RCW 82.08.962 are also exempt from the17 tax imposed under RCW 82.12.020. 18 (4) The definitions in RCW 82.08.962 apply to this section.19 (5) The exemption provided in subsection (1) of this section does20 not apply:21 (a) To machinery and equipment used directly in the generation of22 electricity using solar energy and capable of generating no more than23 five hundred kilowatts of electricity, or to sales of or charges made24 for labor and services rendered in respect to installing such25 machinery and equipment, when first use within this state of such26 machinery and equipment, or labor and services, occurs after27 September 30, 2017; and28 (b) To any other machinery and equipment described in subsection29 (1)(a) of this section, or to sales of or charges made for labor and30 services rendered in respect to installing such machinery or31 equipment, when first use within this state of such machinery and32 equipment, or labor and services, occurs after December 31, 2019.33 (6) This section expires January 1, 2020. 34 Sec. 17. RCW 82.12.963 and 2013 2nd sp.s. c 13 s 1603 are each35 amended to read as follows: 36 (1) The provisions of this chapter do not apply with respect to37 machinery and equipment used directly in generating not more than ten38 kilowatts of electricity or producing not more than three million39 p. 41 ESSB 5939.SL British thermal units per day using solar energy, or to the use of1 labor and services rendered in respect to installing such machinery2 and equipment. 3 (2) The definitions in RCW 82.08.963 apply to this section.4 (3) The exemption provided by this section does not apply:5 (a) To the use of machinery and equipment used directly in the6 generation of electricity using solar energy, or to the use of labor7 and services rendered in respect to installing such machinery and8 equipment, when first use within this state of such machinery and9 equipment, or labor and services, occurs after September 30, 2017;10 and11 (b) To the use of any machinery or equipment used directly in12 producing thermal heat using solar energy, or to the use of labor and13 services rendered in respect to installing such machinery or14 equipment, when first use within this state of such machinery and15 equipment, or labor and services, occurs after June 30, 2018.16 (4) This section expires June 30, 2018. 17 NEW SECTION. Sec. 18. Section 12 of this act constitutes a new18 chapter in Title 70 RCW.19 NEW SECTION. Sec. 19. This act is necessary for the immediate20 preservation of the public peace, health, or safety, or support of21 the state government and its existing public institutions, and takes22 effect immediately.23 Passed by the Senate June 30, 2017. Passed by the House June 30, 2017. Approved by the Governor July 7, 2017. Filed in Office of Secretary of State July 7, 2017. --- END --- p. 42 ESSB 5939.SL