PUBLIC UTILITY TAX CREDITS

82.16.045 POLLUTION CONTROL CREDIT

82.34.060(2)

Description: Credit is allowed for up to 50 percent of the installation cost of required pollution control facilities, taken at no more than two percent per year. Credits may also be taken against B&O and use taxes.

Purpose: The purpose of the program was to encourage pollution control and to compensate existing companies, since Washington standards were more stringent than national standards in 1967.

Category/Year Enacted: Economic development; 1967 (new applications are not allowable after 1981).

Primary Beneficiaries: Utilities that were required to install pollution control facilities. A total of 151 firms applied for the B&O, public or use tax credits; 60 firms have a remaining credit balance which totals $46.2 million at the end of FY 1999.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 3,311 2,888 2,462 2,312
Local taxes - - - - - - - -

If the credit were repealed, would the estimated revenue be realized?

Unlikely; it would be difficult to rescind the credits already granted.

82.16.048 RIDE-SHARING INCENTIVES

Description: Tax credits are provided to employers in any county who participate in a commute trip reduction program and provide financial incentives to their employees to ride-share. The credit is limited to $60 per employee and $100,000 per calendar year per business. The overall public utility tax credit is limited to $2.25 million annually statewide. Under current law the credit will expire on December 31, 2000. (Funding sources for the credit were effectively repealed by Initiative 695, effective January 1, 2000.)

Purpose: The purpose is to provide an incentive for employers to encourage their employees to reduce the number of vehicles on Washington's highways by carpooling or vanpooling so as to reduce related air pollution, energy consumption and traffic congestion and forestall the need for capital improvements to roads, parking facilities and transportation systems.

Category/Year Enacted: Economic development; 1994; revised and extended in 1996.

Primary Beneficiaries: Approximately 15 utilities utilized the credit in 1998 and their employees whose carpooling is subsidized by the company.

Conflict With Other Programs: None evident.

Tax Savings ($000): Minimal. The funding for this program comes from the Clean Air Fund, which is funded by a $2 fee on motor vehicle licenses, and amounts from transportation accounts. These funds depend upon motor vehicle excise tax revenues. Since this tax source was largely eliminated by Initiative 695, it is presumed that funding for the ride-share programs will be curtailed.

82.16.0491 RURAL ELECTRIC UTILITY CONTRIBUTIONS

Description: A tax credit is provided for 50 percent of the contributions made to an electric utility rural economic development revolving fund. In order to qualify a rural county must have a population density of fewer than 100 persons per mile. Utilities must have fewer than 26 meters per mile of distribution line. Total credits are limited to $350,000 annually, and there is a maximum of $25,000 in credits per utility.

Purpose: To encourage economic development in rural areas.

Category/Year Enacted: Economic development; 1999.

Primary Beneficiaries: Approximately 41 utility firms are expected to utilize the credit.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 350 350 350 350
Local taxes - - - - - - - -
If the credit were repealed, would the estimated revenue be realized? Yes.