|
Server : Apache/2.4.62 System : FreeBSD fbsdweb2.web.rcn.net 14.1-RELEASE FreeBSD 14.1-RELEASE releng/14.1-n267679-10e31f0946d8 GENERIC amd64 User : www ( 80) PHP Version : 8.3.8 Disable Function : NONE Directory : /domains/enrgy/statelin/ |
Upload File : |
<html>
<head>
<title>Washington's Governor Proposes Legislation To Provide Tax Incentives For
Electricity Supply Development</title>
</head>
<body style="font-family: Arial" vlink="#808080">
<div align="center"><center>
<table border="0" cellpadding="8" cellspacing="0" width="98%" bgcolor="#000000">
<tr>
<td width="100%" valign="middle"><a name="top"></a>
<img src="../images/pmamagsm.gif" alt="PMA Online Magazine" border="0" align="right" width="229" height="100"></td>
</tr>
</table>
</center></div><div align="center"><center>
<table border="0" cellpadding="8" width="98%">
<tr>
<td width="15%" valign="top" align="center">
<!--webbot bot="Include" U-Include="sl_sidebar.htm" TAG="BODY" startspan -->
<table border="2" cellpadding="8" width="15%" id="table1" bordercolor="#FFFF00" bgcolor="#C0C0C0">
<tr>
<td width="100%" valign="top" align="center"><map name="FPMap0_I1">
<area href="http://www.powermarketers.com/adrates.html" shape="rect" coords="14, 297, 97, 322">
<area href="http://www.powermarketers.com/pmajobs.htm" shape="rect" coords="11, 230, 95, 257">
<area href="http://www.powermarketers.com/main.htm" target="_parent" shape="rect" coords="12, 163, 96, 189">
<area href="http://www.powermarketers.com/power2.htm" target="_blank" shape="rect" coords="12, 95, 96, 121">
<area href="../pmamag.htm" shape="rect" coords="11, 29, 96, 54"></map><img rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" usemap="#FPMap0_I1" width="110" height="350"><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<p><a href="#top"><img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></td>
</tr>
</table>
<!--webbot bot="Include" i-checksum="45188" endspan --></td>
<td width="70%" valign="top">
<img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" width="375" height="75"><p align="left"><b><u><br>
February 2001<br>
</u><font face="Arial" size="6" color="#000000">Washington's
Governor Proposes Legislation To Provide Tax Incentives
For Electricity
Supply Development<br>
</font>
</b><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>1/03/30)</font></p><center>
<p ALIGN="JUSTIFY"><font face="Arial">Washington’s governor, Gary Locke,
introduced legislation on January 24, 2001 which seeks to promote electrical
generation through the use of tax incentives. Locke introduced several bills
proposing amendments to Washington’s current tax laws which will either add or
extend certain exemptions pertaining to renewable electric generating sources.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Senate Bill 5541 amends existing state law
that exempts machinery and equipment from state sales and use taxes if the
equipment is used directly in generating electricity from either wind, solar
energy or landfill gas. The amended bill lowers the minimum generating capacity
required for tax exemption from 200 kilowatts to 200 watts. The proposed bill
also expands the type of property eligible for the exemption to include
machinery and equipment used for electrical storage in addition to that used for
transmitting electricity into an electric transmission and distribution system.
The bill also contains sales and use tax exemptions for machinery and equipment
operated in parallel with electric systems. The bill extends the expiration
period of the exemptions an additional four years, from June 30, 2005 to 2009.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">A second bill, SB 5542, addresses tax
exemptions for pollution control facilities. This bill provides a sales and use
tax exemption for the cost of air pollution control facilities installed or
acquired for natural gas-fired thermal electric peaking plants.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">A third bill, SB 5646, provides a broader
income tax deduction to public utilities for the cost of generation from
cogeneration facilities. Current law provides a tax deduction to utilities for
the cost of energy produced or generated from cogeneration or renewable energy
plants whose construction commenced between June 12, 1980 and January 1, 1990.
Under the proposed bill, the deduction would also apply to the cost of energy
purchased from cogeneration facilities whose construction or expansion commenced
between July 1, 2001 and January 1, 2011.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Another bill introduced by Governor Locke,
SB 5539, provides tax credits and deferrals on taxes for new facilities that
provide electricity for direct service industrial customers ("DSIs").
DSIs are defined as large, industrial, electrical consumers that historically
purchased their power directly from the federal Bonneville Power Administration.
DSIs also purchase power from the wholesale market and from out-of-state
sources. SB 5539 adds three new sections to Washington’s current excise tax
law. The first section creates a business and occupation tax credit for DSIs for
the purchase of gas for use in their own new generation facilities from gas
distribution companies subject to the public utility tax. The second section
creates a public utility tax credit for sales of power to DSIs from new
electrical generation facilities under certain conditions. The generating
facility is eligible for this credit if it did not exist as of the effective
date of law, and if the term of the contract between the generating facility and
the DSI is at least ten years. Credit eligibility also requires that the price
of the electricity sold to the DSIs must be reduced by the amount of the credit.
(Furthermore, the DSIs must not reduce their average level of employment for
five years). If any of these conditions fail, then the DSI must repay the
credit.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">The third section proposed in SB 5539
provides for a deferral of the use tax levied on DSIs’s purchase of natural
gas for use in their own new generating facilities. The use tax is deferred for
five years, after which is repaid, interest free, on an amortized schedule. If
the DSIs average annual employment over the five year period does not decrease,
it is not required to pay the deferred taxes.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">Two additional bills, similar to Governor
Locke’s, were recently introduced in both the House and the Senate and propose
further sales and use tax exemptions. HB 1191 provides a sales and use tax
exemption for site preparation, construction, expansion, or renovation of an
electrical generating facility of at least 200 watts, and for acquisition and
installation of equipment necessary for the operation of such a facility.
Similarly, the second bill, SB 5731 provides a sales and use tax exemption for
tangible personal property sold to or used in the construction or improvement of
either a new or existing generating facility including charges for labor and
services performed in the construction or renovation process. Senate bills have
been referred to the Committee on Environment, Energy and Water and the House
bill to the Committee on Technology, Telecommunications and Energy.</font></p>
<!--webbot bot="Include" U-Include="sl_bottom.htm" TAG="BODY" startspan -->
<hr color="#FFFF00">
<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
<!--webbot bot="Include" i-checksum="27861" endspan --></tr>
</table>
</div>
<p align="center"><a href="#top">
<img src="../images/b-t-top.gif" alt="Back To Top" border="0" width="71" height="35"></a></p>
</body>
</html>