BILL REQ. #:  H-2606.1 

Read first time 04/14/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to funding the basic health plan through a tax on the windfall profits of financial institutions; adding a new section to chapter 82.04 RCW; creating a new section; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that in the process of mitigating a revenue shortfall of approximately ten billion dollars for the 2009-2011 biennium, the state, only two years later, faces another projected revenue shortfall of at least five billion dollars. Many of the programs that were cut by the 2009 and 2010 legislative sessions and that are under the threat of further cuts during the 2011 legislative session, are due to the current economic recession and the fundamental inadequacies and unfairness of our current revenue structure. These budget cuts threaten the health, safety, and security of a civilized Washington state. Some examples of these cuts are: Dropping forty thousand people off the Washington basic health plan; cutting early childhood education for one thousand five hundred three year olds; cutting all-day kindergarten for children living in poverty; cutting assistance for thirty thousand disabled and unemployable persons; cutting prescription drug assistance for eighty-five thousand seniors; cutting maternity support for fifty thousand high-risk pregnant women; cutting terminal care hospices for two thousand six hundred people; cutting children's health care for sixteen thousand low-income kids; making tuition costs out of reach for average income students; cutting medicaid medical care; and cutting services for mental health care, chemical dependency, home care, child care, public health, foster care, tobacco use prevention, cancer screening, nursing home care, supporting people with developmental disabilities, home visiting, universal vaccinations, hospital care, affordable housing, adult day health, and family planning, among many others.
     (2) The legislature further finds that the federal stimulus money and accounting procedures used to balance the 2009-2011 budget will probably not be available to mitigate any projected revenue shortfall in the 2011-2013 budget. Therefore, it is in the best interests of the people of Washington state to mitigate the devastating effects of the aforementioned cuts by looking at new ways to raise revenue for the short term, and to look at long-term solutions to the state's revenue problems. This can be done while at the same time securing fairness, adequacy, and stability within our state revenue structure.
     (3) It is the legislature's intent with this act to move the state forward with two goals: (a) Raising immediate revenue to mitigate the cruel impacts of draconian budget cuts, with specific emphasis on the basic health plan; and (b) initiating inquiry and proceedings toward long-term solutions to the state's unfair, inadequate, and volatile revenue problems. These goals allow all the people of the state to: Collectively share the financial responsibilities of this recession so that everyone is pitching in to get us all through the recession together; ensure that we leave no one behind; and position our state for recovery by reforming our revenue structure to encourage healthy economic development.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.04 RCW to read as follows:
     (1) Subject to subsection (2) of this section, an additional tax is imposed on a banking business each year for business activities conducted within this state. The tax equals the taxable amount reported on the state combined excise tax return for the prior calendar year multiplied by the rate of 1.5 percent.
     (2) The tax under subsection (1) of this section only applies if the two following requirements are met for any year: (a) The banking business reported annual net income in the prior calendar year equal to or greater than one billion dollars; and (b) annual net income for the prior calendar year was at least five percent of its total revenue for that year. The requirements under this subsection must be evaluated based on information reported in the banking business's consolidated financial statements, as prepared according to generally accepted accounting principles, for the prior calendar year.
     (3) Chapter 82.32 RCW applies to this section except as otherwise provided in this section. The tax imposed under this section must be paid by the twenty-fifth of May, except taxes owed in 2011 are due by the twenty-fifth of September. The department may adopt rules necessary to implement and collect the tax imposed under this section.
     (4) Taxes collected under this section must be deposited into the general fund to be used exclusively for the basic health plan under chapter 70.47 RCW.
     (5) For the purpose of this section, "banking business" means a person engaging in business as a national or state-chartered bank, a mutual savings bank, a savings and loan association, a trust company, an alien bank, a foreign bank, a credit union, a stock savings bank, or a similar entity that is chartered under Title 30, 31, 32, or 33 RCW, or organized under Title 12 U.S.C.

NEW SECTION.  Sec. 3   This act takes effect August 1, 2011.