Public utility tax credit

AN ACT Relating to a public utility tax credit for low-income 1
assistance; adding a new section to chapter 82.16 RCW; creating new 2
sections; and providing an effective date. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. A new section is added to chapter 82.16 5
RCW to read as follows: 6
(1) Subject to the limitations in this section, a light and power 7
business or a gas distribution business may take a credit each fiscal 8
year against the tax imposed under this chapter. 9
(a)(i) A credit may be taken for qualifying contributions if the 10
dollar amount of qualifying contributions for the fiscal year in 11
which the tax credit is taken is greater than 125 percent of the 12
dollar amount of qualifying contributions given in fiscal year 2000.13
(ii) If no qualifying contributions were given in fiscal year 14
2000, a credit is allowed for the first fiscal year that qualifying 15
contributions are given. Thereafter, credit is allowed if the 16
qualifying contributions given exceed 125 percent of qualifying 17
contributions given in the first fiscal year. 18
(iii) The amount of credit is 50 percent of the dollar amount of 19
qualifying contributions given in the fiscal year in which the tax 20
credit is taken. 21
H-3183.1
HOUSE BILL 2716
State of Washington 69th Legislature 2026 Regular Session
By Representatives Orcutt, Mena, Ryu, Parshley, Scott, and Fosse
Read first time 02/02/26. Referred to Committee on Finance.
p. 1 HB 2716
(b)(i) A credit may be taken for billing discounts if the dollar 1
amount of billing discounts for the fiscal year in which the tax 2
credit is taken is greater than 125 percent of the dollar amount of 3
billing discounts given in fiscal year 2000. 4
(ii) If no billing discounts were given in fiscal year 2000, a 5
credit is allowed in the first fiscal year that billing discounts are 6
given. Thereafter, credit is allowed if the dollar amount of billing 7
discounts given exceeds 125 percent of billing discounts given in the 8
first fiscal year. 9
(iii) The amount of credit is 50 percent of the dollar amount of 10
the billing discounts given in the fiscal year in which the tax 11
credit is taken. 12
(c) The total amount of credit that may be taken for qualifying 13
contributions and billing discounts in a fiscal year is limited to 14
the base credit for the same fiscal year. 15
(2)(a) The total amount of credit, statewide, that may be taken 16
in any fiscal year may not exceed $2,500,000. 17
(b) By May 1st of each year, the department of commerce shall 18
notify the department in writing of the grants received in the 19
current fiscal year by each light and power business and gas 20
distribution business. 21
(3) Within two weeks of May 8, 2027, the department of commerce 22
shall notify the department in writing of the grants received in 23
fiscal year 2027 by each light and power business and gas 24
distribution business. Within four weeks of May 8, 2027, the 25
department shall publish the base credit for each light and power 26
business and gas distribution business for fiscal year 2027. Within 27
eight weeks of May 8, 2027, application to the department must be 28
made showing the information required in subsection (4)(b) of this 29
section. Within 12 weeks of May 8, 2027, the department shall notify 30
each applicant of the amount of credit that may be taken in fiscal 31
year 2028. 32
(4)(a) Not later than June 1st of each year beginning in 2028, 33
the department shall publish the base credit for each light and power 34
business and gas distribution business for the next fiscal year.35
(b) Not later than July 1st of each year beginning in 2028, 36
application for credit must be made to the department including but 37
not limited to the following information: Billing discounts given by 38
the applicant in fiscal year 2000; qualifying contributions given by 39
the applicant in the prior fiscal year; the amount of money received 40
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in the prior fiscal year from customers for the purpose of assisting 1
other customers; the base credit for the next fiscal year for the 2
applicant; the qualifying contributions anticipated to be given in 3
the next fiscal year; and billing discounts anticipated to be given 4
in the next fiscal year. No credit under this section is allowed to a 5
light and power business or gas distribution business that does not 6
file the application by July 1st. 7
(c) Not later than August 1st of each year beginning in 2028, the 8
department shall notify each applicant of the amount of credit that 9
may be taken in that fiscal year. 10
(d) The balance of base credits not used by other light and power 11
businesses and gas distribution businesses must be ratably 12
distributed to applicants under the formula in subsection (6)(a) of 13
this section. The total amount of credit that may be taken by an 14
applicant is the base credit plus any ratable portion of unused base 15
credit. 16
(5) The credit taken under this section is limited to the amount 17
of tax imposed under this chapter for the fiscal year. The credit 18
must be claimed in the fiscal year in which the billing reduction is 19
made. Any unused credit expires. Refunds may not be given in place of 20
credits. 21
(6) The definitions in this subsection apply throughout this 22
section unless the context clearly requires otherwise.23
(a) "Base credit" means the maximum amount of credit against the 24
tax imposed by this chapter that each light and power business or gas 25
distribution business may take each fiscal year as calculated by the 26
department. The base credit is equal to the proportionate share that 27
the total grants received by each light and power business or gas 28
distribution business in the prior fiscal year bears to the total 29
grants received by all light and power businesses and gas 30
distribution businesses in the prior fiscal year multiplied by 31
$2,500,000. 32
(b) "Billing discount" means a reduction in the amount charged 33
for providing service to qualifying persons in Washington made by a 34
light and power business or a gas distribution business. "Billing 35
discount" does not include grants received by the light and power 36
business or a gas distribution business. 37
(c) "Grant" means funds provided to a light and power business or 38
gas distribution business by the department of commerce or by a 39
qualifying organization. 40
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(d) "Low-income home energy assistance" means energy assistance 1
programs for low-income households as defined on December 31, 2000, 2
in the low-income home energy assistance act of 1981 as amended 3
August 1, 1999, 42 U.S.C. Sec. 8623 et seq. 4
(e) "Qualifying contribution" means money given by a light and 5
power business or a gas distribution business to a qualifying 6
organization, exclusive of money received in the prior fiscal year 7
from its customers for the purpose of assisting other customers.8
(f) "Qualifying person" means a Washington resident who applies 9
for assistance and qualifies for a grant regardless of whether that 10
person receives a grant. 11
(g) "Qualifying organization" means an entity that has a 12
contractual agreement with the department of commerce to administer 13
in a specified service area low-income home energy assistance funds 14
received from the federal government and such other funds that may be 15
received by the entity. 16
NEW SECTION. Sec. 2. (1) This section is the tax preference 17
performance statement for the tax preference contained in section 1, 18
chapter . . ., Laws of 2026 (section 1 of this act). This performance 19
statement is only intended to be used for subsequent evaluation of 20
the tax preference. It is not intended to create a private right of 21
action by any party or be used to determine eligibility for 22
preferential tax treatment.23
(2) The legislature categorizes the tax preference created under 24
this act as intended to induce certain designated behavior by 25
taxpayers as indicated in RCW 82.32.808(2)(a). 26
(3) It is the legislature's specific public policy objective to:27
(a) Induce participating utilities to enhance offerings of energy 28
assistance to customers who have exhausted other forms of energy 29
assistance; and 30
(b) To support the progress of making energy assistance funds 31
available to low-income households consistent with RCW 19.405.120.32
(4) As part of its 2030 tax preference reviews, the joint 33
legislative audit and review committee must review the tax preference 34
in section 1 of this act and formerly RCW 82.16.0497. The legislature 35
intends for the legislative auditor to determine that the incentive 36
has achieved its desired outcomes if the following objectives are 37
achieved: 38
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(a) Energy assistance is provided in an amount greater than 1
amounts otherwise provided under other state, federal, and utility 2
funded programs; or 3
(b) Proceeds from the tax credit provided under section 1 of this 4
act and formerly RCW 82.16.0497 are used to demonstrate progress 5
toward making energy assistance funds available to low-income 6
customers consistent the policies identified in RCW 19.405.120.7
(5) All recipients of tax credits or incentive payments awarded 8
under section 1 of this act must provide data necessary to evaluate 9
the tax preference performance objectives in this section as 10
requested by the joint legislative audit and review committee. 11
Failure to comply may result in the loss of a tax credit award or 12
incentive payment in the following fiscal year. The joint legislative 13
audit and review committee must notify the department of revenue by 14
June 30th of each year if a light and power business credit, as 15
established in section 1 of this act, is suspended due to failure to 16
comply with providing data as required in this subsection.17
NEW SECTION. Sec. 3. RCW 82.32.805 does not apply to this act.18
NEW SECTION. Sec. 4. This act takes effect July 1, 2026.19
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