AN ACT Relating to
extending dates by which construction must be commenced, or machinery and
equipment must be acquired, in order to qualify as an eligible investment
project for tax deferrals for manufacturing, research, and development
projects; and amending RCW 82.61.010.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 82.61.010 and 1988 c
41 s 1 are each amended to read as follows:
Unless the context
clearly requires otherwise, the definitions in this section apply throughout
this chapter.
(1)
"Applicant" means a person applying for a tax deferral under this
chapter.
(2) "Person"
has the meaning given in RCW 82.04.030.
(3)
"Department" means the department of revenue.
(4) "Eligible
investment project" means:
(a) Construction of new
buildings and the acquisition of new related machinery and equipment when the
buildings, machinery, and equipment are to be used for either manufacturing or
research and development activities, which construction is commenced prior to
December 31, ((1994)) 1998; or
(b) Acquisition prior to
December 31, ((1994)) 1998, of new machinery and equipment to be
used for either manufacturing or research and development if the machinery and
equipment is housed in a new leased structure((: PROVIDED, That)).
The lessor/owner of the structure is not eligible for a deferral unless the
underlying ownership of the buildings, machinery, and equipment vests
exclusively in the same person; or
(c) Acquisition of all
new or used machinery, equipment, or other personal property for use in the
production or casting of aluminum at an aluminum smelter or at facilities related
to an aluminum smelter, if the plant was in operation prior to 1975 and has
ceased operations or is in imminent danger of ceasing operations for economic
reasons, as determined by the department, and if the person applying for a
deferral (i) has consulted with any collective bargaining unit that represented
employees of the plant pursuant to a collective bargaining agreement that was
in effect either immediately prior to the time the plant ceased operations or
during the period when the plant was in imminent danger of ceasing operations,
on the proposed operation of the plant and on the terms and conditions of
employment for wage and salaried employees and (ii) has obtained a written
concurrence from the bargaining unit on the decision to apply for a deferral
under this chapter; or
(d) Modernization
projects involving construction, acquisition, or upgrading of equipment or
machinery, including services and labor, which are commenced after May 19,
1987, and are intended to increase the operating efficiency of existing plants
which are either aluminum smelters or aluminum rolling mills or of facilities
related to such plants, if the plant was in operation prior to 1975, and if the
person applying for a deferral (i) has consulted with any collective bargaining
unit that represents employees of the plant on the proposed operation of the
plant and the terms and conditions of employment for wage and salaried
employees and (ii) has obtained a written concurrence from the bargaining unit
on the decision to apply for a deferral under this chapter.
(5)
"Manufacturing" means all activities of a commercial or industrial
nature wherein labor or skill is applied, by hand or machinery, to materials so
that as a result thereof a new, different, or useful substance or article of
tangible personal property is produced for sale or commercial or industrial use
and includes the production or fabrication of specially made or custom-made
articles.
(6) "Research and
development" means the development, refinement, testing, marketing, and
commercialization of a product, service, or process before commercial sales
have begun.
(7)
"Buildings" means only those new structures used for either
manufacturing or research and development activities, including plant offices
and warehouses or other facilities for the storage of raw materials or finished
goods if such facilities are an essential or an integral part of a factory,
mill, plant, or laboratory used for manufacturing or research and development
purposes. If a building is used partly for manufacturing or research and
development and partly for other purposes, the applicable tax deferral shall be
determined by apportionment of the costs of construction under rules adopted by
the department.
(8) "Machinery and
equipment" means all industrial and research fixtures, equipment, and
support facilities that are an integral and necessary part of a manufacturing
or research and development operation. "Qualified machinery and equipment"
includes computers; software; data processing equipment; laboratory equipment;
manufacturing components such as belts, pulleys, shafts, and moving parts;
molds, tools, and dies; operating structures; and all equipment used to control
or operate the machinery. For purposes of this chapter, new machinery and
equipment means either new to the taxing jurisdiction of the state or new to
the certificate holder. Used machinery and equipment may be treated as new
equipment and machinery if the certificate holder either brings the machinery
and equipment into Washington or makes a retail purchase of the machinery and
equipment in Washington or elsewhere.
(9) "Qualified
employment position" means a permanent full-time employee employed in the
eligible investment project during the entire tax year.
(10)
"Recipient" means a person receiving a tax deferral under this
chapter.
(11) "Certificate
holder" means an applicant to whom a tax deferral certificate has been
issued.
(12) "Operationally
complete" means constructed or improved to the point of being functionally
useable for the intended purpose.
(13)
"Initiation of construction" means that date upon which on-site
construction commences.
