The bill amends existing Washington tax law by changing RCW 82.08.986 (and by header reference RCW 82.08.9861) and by adding a new section with legislative findings. It continues to provide a retail sales tax exemption for sales to qualifying businesses and qualifying tenants of eligible server equipment and eligible power infrastructure, and for labor and services to install that equipment, but it imposes new issuance limits, expiration dates, and other program rules. The act directs “the department” to issue exemption certificates, makes certificates effective on the date an application is received, generally limits certificates to two-year terms unless construction has commenced, requires sellers to retain copies of presented certificates, and creates numerical and timing limits on certificates (including special limits for refurbishments and caps on the number of eligible data centers). The bill also includes an effective date provision stating that Sections 2 and 3 take effect July 1, 2026. The bill creates employment and environmental compliance conditions tied to certificates. It requires qualifying businesses or tenants to create and maintain a specified net increase in “family wage” positions within six years (either 35 positions or a formula tied to every 20,000 square feet of server space), with family wage positions subject to hourly/wage thresholds and employer-provided health insurance; failure to meet these requirements makes previously exempted sales and use taxes immediately due and cancels the certificate. For certificates issued on or after June 9, 2022, newly constructed data centers must obtain specified green building or sustainable design certifications within three years after being placed in service, and failure to certify can trigger tax repayment, cancellation of the certificate, and an additional 10 percent penalty, although the administering department may grant exceptions or extensions for circumstances beyond the applicant’s control and may prorate any tax repayment by the period of noncompliance. The Department of Labor and Industries is directed to assist the administering department on employment compliance questions. The bill also changes procedures for administration and reporting. It authorizes the administering department to require records and to verify compliance, to approve transfers of certificates only with prior written consent under specified conditions, and to allow limited transfers incident to qualified asset or corporate transactions. Certificate holders must file an annual tax performance report identifying construction firms and employment levels; that information is not protected by RCW 82.32.330 and may be disclosed on request. The text of some definitions and provisions is incomplete or inconsistent across the extracted material: for example, there are conflicting cutoff and expiration dates cited (one set shows no new certificates after July 1, 2028 with an expiration of July 1, 2038; another shows no new certificates after July 1, 2036 with an expiration of July 1, 2048), portions of the replacement‑equipment rules and certain subsection text are truncated, and the specific identity of “the department” administering the program is not named in the extracted facts.

If enacted, the bill keeps a sales tax exemption for certain data center server equipment and power infrastructure but tightens and phases it out: new exemption certificates will stop being issued after a deadline in the bill, the exemption itself will expire on a later expiration date, and the program adds stiffer conditions such as strict employment minimums (hiring and maintaining “family wage” jobs within six years), wage and health-insurance thresholds, green-building certification for new data centers within three years of service, limits on refurbishment eligibility and on the number and timing of certificates, annual public reporting of construction firms and employment, and penalties or repayment of taxes (with a possible 10% penalty) if requirements aren’t met. The department that issues and enforces certificates can require records, grant limited exceptions for events beyond a business’s control, and must approve transfers under narrow conditions. The parties most affected are owners of data centers (qualifying businesses) and businesses leasing space (qualifying tenants), who will face new obligations, verification and reporting duties, potential added costs to meet wage, benefit, and certification rules, and the risk of retroactive tax bills and penalties if they fail to comply; sellers must retain exemption certificates presented by buyers. State agencies (the administering department, Department of Labor and Industries, Employment Security Department, and Department of Revenue) will take on increased administrative, compliance, and reporting roles. The extracted text leaves some important details unclear—most notably which specific agency is the administering “department” and there are conflicting dates and incomplete provisions in the excerpts—so the exact deadlines and some implementation mechanics are uncertain from the provided material.