This bill creates new statutory tax preferences by adding sections to chapters 82.08 and 82.12 RCW and by amending RCW 82.08.988. It establishes a sales and use tax exemption for sales to qualifying businesses and qualifying tenants of eligible server equipment installed without intervening use in an eligible computer data center (and related installation labor and services), and for sales of eligible power infrastructure and related construction services for such data centers. Exemption certificates must be applied for and issued by the department (agency not named in the extracted text), are effective on the department’s receipt of the application, generally expire two years unless construction has commenced, no new certificates may be issued on or after July 1, 2036, and the exemptions provided expire July 1, 2048 (with the new section in chapter 82.12 RCW noted as expiring July 1, 2053). The bill creates procedural conditions, reporting, and enforceable requirements tied to exemption certificates. Certificate holders must file an annual tax performance report under RCW 82.32.534 identifying construction firms and employment levels. Within six years of issuance a qualifying business or tenant must meet specified net employment increases assigned to the eligible data center (either 35 family wage positions or, if lower, three family wage positions per 20,000 square feet of newly dedicated server space) and must maintain those minimum positions while the certificate is valid; “family wage” positions are defined by weekly hours, a wage threshold tied to county per capita personal income, and employer-provided health insurance. If employment or other requirements are not met, previously exempted taxes become due, the certificate may be canceled, and repayments are proportional to the period of noncompliance, subject to department exceptions or extensions for events beyond control; the department may require records and seek assistance from the Department of Labor and Industries. The bill adds sustainability, transfer, utility, and oversight provisions and several definitions. Newly constructed eligible data centers must certify within three years after being placed in service that they meet one or more listed sustainable design or green building standards or face repayment, certificate cancellation, and an additional 10 percent penalty unless exceptions apply; the department may verify certification. Certificates are not freely assignable without the department’s written consent but must be allowed to transfer under specified corporate-acquisition or control conditions; purchasers in qualifying asset sales can be treated as acquiring equipment under a transferred certificate. The bill defines terms such as “eligible computer data center” (location, size, and construction date windows), “eligible server equipment” (original equipment installed on or after July 1, 2026, with certain exclusions), “eligible power infrastructure” (electrical transformation and distribution equipment with specified exclusions), “qualifying business” and “qualifying tenant,” and “emerging large energy use facility” (20 MW+ and specific NAICS code); it also requires 10-year utility service commitments for emerging large energy use facilities and authorizes generation or non-utility purchases. The Legislature directs JLARC to review the tax preference’s performance and includes a tax preference performance statement; the text available to me is incomplete in places (the department is not identified by name, portions of Sec. 3 are cut off, and some earlier or later provisions may be missing).

If enacted, the law would lower the upfront cost of building very large new data centers in specified eastern Washington counties by exempting sales and use tax on certain server equipment and power infrastructure, making those capital purchases cheaper for owners and tenants. In return, recipients must hit and keep specific “family wage” job targets within six years (either 35 jobs or a scale based on square footage), submit annual reports listing construction firms and employment, and for newly built centers certify compliance with listed green building or energy standards within three years or face repaying the tax benefit plus a 10% penalty. Certificates take effect when the application is received, must be used for construction begun within set windows, and new certificates stop being issued after mid-2036; the exemptions expire in 2048. The people most affected are owners and tenants planning eligible data centers, their construction contractors, and the utilities supplying large facilities: they would get lower acquisition costs but take on hiring, sustainability, reporting, and long-term utility commitment obligations, and they face the risk of having to repay taxes and penalties if they fail to meet those conditions. There is some uncertainty in the provided text about which specific agency administers the certificates and a few definitions and procedural details are missing, so how enforcement and some transfer or exception processes would work in practice is not fully clear.