AN ACT Relating to economic development; amending RCW 15.66.010, 82.27.020, and 84.33.041; reenacting and amending RCW 15.65.020; and adding new sections to chapter 43.31 RCW.

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

NEW SECTION. Sec. 1. Washington state's economy has for many years been based on natural resource dependent industries. Agriculture, forestry, and aquaculture are all important to the overall health of the state economy. These industries also provide higher paying wages on average than do many of the newer high technology industries and the service industry. The promotion of the natural resource based industries will help to reduce the decline in the average level of personal income the state has experienced in recent years. In addition, many communities in Washington have suffered major economic dislocations because the traditional industry has declined. Increasing trade in resource based industries will help these communities to recover their economic stability.

It is the intent of the legislature that the board created by section 2 of this act should assist small and medium-sized natural resource based firms which do not have the financial resources to develop and promote out-of-state trade. This assistance will come through a strategic market analysis of these natural resource based industries and through financial and technical assistance to businesses and industries with the potential to reduce unemployment in distressed areas. It is further the intent of the legislature that the board should: Work towards programs that involve regional cooperation; work closely with other public and private organizations with similar purposes; work towards the creation of counter-cyclical employment opportunities during periods of recession; and create programs with increased revenue for the state of Washington.

NEW SECTION. Sec. 2. (1) The natural resource market development board is hereby created to exercise the powers granted under this chapter.

(2) The board shall consist of fifteen members appointed by the governor. Five members shall be appointed from owners and operators of small and medium-sized natural resource based industries, five members shall be appointed from employees of small and medium-sized natural resource based industries, and five members shall be appointed from the public at large but who have knowledge of and understanding of natural resource industries and markets. The commissioner of public lands, the directors of the departments of agriculture, trade and economic development, and community development shall serve as ex officio members of the board. The members of the board shall be appointed to represent all regions of the state and the various resource based industries.

(3) Staff support shall be provided by the department of trade and economic development to assist the board in establishing itself.

(4) All appointive members of the board shall be compensated under RCW 43.03.240 and shall be reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 3. The board has the following powers and duties:

(1) Provide matching funds to support market development feasibility studies;

(2) Administer funds for specific industry assessments for trade promotion;

(3) Accept, receive, disburse, and administer grants, loans, or gifts from any source for the purpose of carrying out the provisions of this chapter;

(4) Provide an annual report of its activities to the governor and the legislature;

(5) Form technical and market development committees in industry areas such as aquaculture, fisheries, agriculture, and forest products;

(6) Employ or contract with such staff and consultants as are necessary to carry out the duties of the board;

(7) Promote specific products and producers as decided upon by the board within the purposes of this chapter;

(8) Establish coordination with other public and private agencies in a manner to avoid duplication of effort and competition with private promotion efforts; and

(9) Provide loans or grants to small businesses developing natural resource based projects in a manner which is consistent with the state Constitution.

NEW SECTION. Sec. 4. The board shall conduct a strategic assessment of market potential, investment requirements, and potential solutions in areas not sufficiently serviced or analyzed by other public or private organizations. The areas to be considered by the board shall include, but not be limited to, small mills, aquaculture, and value-added agricultural products.

NEW SECTION. Sec. 5. The board shall develop programs to assist the start-up of natural resource based businesses through the promotion of seed and start-up capital projects.

NEW SECTION. Sec. 6. The board shall develop programs which provide for employment or reemployment for displaced workers in natural resource conservation areas in times of recession. These programs may include, but are not limited to, reforestation, stream enhancement, and improving water quality.

Sec. 7. Section 2, chapter 256, Laws of 1961 as last amended by section 1, chapter 261, Laws of 1985 and by section 13, chapter 457, Laws of 1985 and RCW 15.65.020 are each reenacted and amended to read as follows:

The following terms are hereby defined:

(1) "Director" means the director of agriculture of the state of Washington or his duly appointed representative. The phrase "director or his designee" means the director unless, in the provisions of any marketing agreement or order, he has designated an administrator, board or other designee to act for him in the matter designated, in which case "director or his designee" means for such order or agreement the administrator, board or other person(s) so designated and not the director.

(2) "Department" means the department of agriculture of the state of Washington.

(3) "Marketing order" means an order issued by the director pursuant to this chapter.

(4) "Marketing agreement" means an agreement entered into and issued by the director pursuant to this chapter.

(5) "Agricultural commodity" means any animal or any distinctive type of agricultural, horticultural, viticultural, floricultural, vegetable, or animal product, including private sector cultured aquatic products as defined in RCW 15.85.020, either in its natural or processed state, including bees and honey ((~~but not~~)) and including timber or timber products. The director is hereby authorized to determine (on the basis of common usage and practice) what kinds, types or sub-types should be classed together as an agricultural commodity for the purposes of this chapter.

(6) "Production area" and "marketing area" means any area defined as such in any marketing order or agreement in accordance with RCW 15.65.350. "Affected area" means the marketing or production area so defined in such order, agreement or proposal.

(7) "Unit" of an agricultural commodity means a unit of volume, weight, quantity, or other measure in which such commodity is commonly measured. The director shall designate in each marketing order and agreement the unit to be used therein.

(8) "Affected unit" means in the case of marketing agreements and orders drawn on the basis of a production area, any unit of the commodity specified in or covered by such agreement or order which is produced in such area and sold or marketed or delivered for sale or marketing; and "affected unit" means, in the case of marketing agreements and orders drawn on the basis of marketing area, any unit of the commodity specified in or covered by such agreement or order which is stored in frozen condition or sold or marketed or delivered for sale or marketing within such marketing area: PROVIDED, That in the case of marketing agreements "affected unit" shall include only those units which are produced by producers or handled by handlers who have assented to such agreement.

(9) "Affected commodity" means that part or portion of any agricultural commodity which is covered by or forms the subject matter of any marketing agreement or order or proposal, and includes all affected units thereof as herein defined and no others.

(10) "Producer" means any person engaged in the business of producing any agricultural commodity for market in commercial quantities. "Affected producer" means any producer of an affected commodity. "To produce" means to act as a producer. For the purposes of RCW 15.65.140 and 15.65.160 as now or hereafter amended "producer" shall include bailees who contract to produce or grow any agricultural product on behalf of a bailor who retains title to the seed and its resulting agricultural product or the agricultural product delivered for further production or increase.

(11) "Handler" means any person who acts, either as principal, agent or otherwise, in processing, selling, marketing or distributing an agricultural commodity or storage of a frozen agricultural commodity which was not produced by him. "Handler" does not mean a common carrier used to transport an agricultural commodity. "Affected handler" means any handler of an affected commodity. "To handle" means to act as a handler.

(12) "Producer-handler" means any person who acts both as a producer and as a handler with respect to any agricultural commodity. A producer-handler shall be deemed to be a producer with respect to the agricultural commodities which he produces, and a handler with respect to the agricultural commodities which he handles, including those produced by himself.

(13) "Cooperative association" means any incorporated or unincorporated association of producers which conforms to the qualifications set out in the act of congress of the United States of February 18, 1922 as amended, known as the "Capper-Volstead Act" and which is engaged in making collective sales or in marketing any agricultural commodity or product thereof or in rendering service for or advancing the interests of the producers of such commodity on a nonprofit cooperative basis.

(14) "Member of a cooperative association" means any producer who markets his product through such cooperative association and who is a voting stockholder of or has a vote in the control of or is a party to a marketing agreement with such cooperative association with respect to such product.

(15) "Producer marketing" or "marketed by producers" means any or all operations performed by any producer or cooperative association of producers in preparing for market and marketing, and shall include: (a) selling any agricultural commodity produced by such producer(s) to any handler; (b) delivering any such commodity or otherwise disposing of it for commercial purposes to or through any handler.

(16) "Commercial quantities" as applied to producers and/or production means such quantities per year (or other period of time) of an agricultural commodity as the director finds are not less than the minimum which a prudent man engaged in agricultural production would produce for the purpose of making such quantity of such commodity a substantial contribution to the economic operation of the farm on which such commodity is produced. "Commercial quantities" as applied to handlers and/or handling means such quantities per year (or other period of time) of an agricultural commodity or product thereof as the director finds are not less than the minimum which a prudent man engaged in such handling would handle for the purpose of making such quantity a substantial contribution to the handling operation in which such commodity or product thereof is so handled. In either case the director may in his discretion: (a) determine that substantial quantity is any amount above zero; and (b) apply the quantity so determined on a uniform rule applicable alike to all persons which he finds to be similarly situated.

(17) "Commodity board" means any board established pursuant to RCW 15.65.220. "Board" means any such commodity board unless a different board is expressly specified.

(18) "Sell" includes offer for sale, expose for sale, have in possession for sale, exchange, barter or trade.

(19) "Section" means a section of this chapter unless some other statute is specifically mentioned. The present includes the past and future tenses, and the past or future the present. The masculine gender includes the feminine and neuter. The singular number includes the plural and the plural includes the singular.

(20) "Represented in a referendum" means that a written document evidencing approval or assent or disapproval or dissent is duly and timely filed with or mailed to the director by or on behalf of an affected producer and/or a volume of production of an affected commodity in a form which the director finds meets the requirements of this chapter.

(21) "Person" as used in this chapter shall mean any person, firm, association or corporation.

Sec. 8. Section 15.66.010, chapter 11, Laws of 1961 as last amended by section 14, chapter 457, Laws of 1985 and RCW 15.66.010 are each amended to read as follows:

For the purposes of this chapter:

(1) "Director" means the director of agriculture of the state of Washington or any qualified person or persons designated by the director of agriculture to act for him concerning some matter under this chapter.

(2) "Department" means the department of agriculture of the state of Washington.

(3) "Marketing order" means an order issued by the director pursuant to this chapter.

(4) "Agricultural commodity" means any distinctive type of agricultural, horticultural, viticultural, vegetable, and/or animal product, including private sector cultured aquatic products as defined in RCW 15.85.020, within its natural or processed state, including bees and honey ((~~but not~~)) and including timber or timber products. The director is authorized to determine what kinds, types or subtypes should be classed together as an agricultural commodity for the purposes of this chapter.

(5) "Producer" means any person engaged in the business of producing or causing to be produced for market in commercial quantities any agricultural commodity. For the purposes of RCW 15.66.060, 15.66.090, and 15.66.120, as now or hereafter amended "producer" shall include bailees who contract to produce or grow any agricultural product on behalf of a bailor who retains title to the seed and its resulting agricultural product or the agricultural product delivered for further production or increase.

(6) "Affected producer" means any producer of an affected commodity.

(7) "Affected commodity" means any agricultural commodity for which the director has established a list of producers pursuant to RCW 15.66.060.

(8) "Commodity commission" or "commission" means a commission formed to carry out the purposes of this chapter under a particular marketing order concerning an affected commodity.

(9) "Unit" means a unit of volume, quantity or other measure in which an agricultural commodity is commonly measured.

(10) "Unfair trade practice" means any practice which is unlawful or prohibited under the laws of the state of Washington including but not limited to Titles 15, 16 and 69 RCW and chapters 9.16, 19.77, 19.80, 19.84, and 19.83 RCW, or any practice, whether concerning interstate or intrastate commerce that is unlawful under the provisions of the act of Congress of the United States, September 26, 1914, chapter 311, section 5, 38 U.S. Statutes at Large 719 as amended, known as the "Federal Trade Commission Act of 1914", or the violation of or failure accurately to label as to grades and standards in accordance with any lawfully established grades or standards or labels.

(11) "Person" includes any individual, firm, corporation, trust, association, partnership, society, or any other organization of individuals.

(12) "Cooperative association" means any incorporated or unincorporated association of producers which conforms to the qualifications set out in the act of Congress of the United States, Feb. 18, 1922, chapter 57, sections 1 and 2, 42 U.S. Statutes at Large 388 as amended, known as the "Capper-Volstead Act" and which is engaged in making collective sales or in marketing any agricultural commodity or product thereof or in rendering service for or advancing the interests of the producers of such commodity on a nonprofit cooperative basis.

(13) "Member of a cooperative association" or "member" means any producer of an agricultural commodity who markets his product through such cooperative association and who is a voting stockholder of or has a vote in the control of or is under a marketing agreement with such cooperative association with respect to such product.

NEW SECTION. Sec. 9. There shall be a fund known as the natural resources development revolving fund which shall consist of all assessments, fees, penalties, forfeitures, and all other moneys, income, or revenue received or collected under this chapter. None of the provisions of RCW 43.01.050 shall apply to such fund nor to any of the moneys so received or collected.

NEW SECTION. Sec. 10. The board and each of its designees shall deposit or cause to be deposited all moneys that are collected or otherwise received by them under this chapter in a separate account or accounts separately allocated to each marketing order or agreement under which such moneys are collected or received, and such deposits and accounts shall be in the name of and withdrawable by the check or draft of the administrator or board or designated employee thereof established by order or agreement. All expenses and disbursements incurred and made under the provisions of any marketing agreement or order, including a pro rata share of the administrative expenses of the department of agriculture incurred in the general administration of this chapter and all orders and agreements issued pursuant thereto, shall be paid from, and only from, moneys collected and received under such order or agreement. All moneys deposited for the account of any order or agreement in the marketing act revolving fund shall be paid from the account of such fund by check, draft, or voucher in the form and in the manner and upon the signature of the person as is prescribed by the director or his or her designee.

Sec. 11. Section 2, chapter 98, Laws of 1980 as last amended by section 2, chapter 413, Laws of 1985 and RCW 82.27.020 are each amended to read as follows:

(1) In addition to all other taxes, licenses, or fees provided by law there is established an excise tax on the commercial possession of enhanced food fish as provided in this chapter. The tax is levied upon and shall be collected from the owner of the enhanced food fish whose possession constitutes the taxable event. The taxable event is the first possession in Washington by an owner. Processing and handling of enhanced food fish by a person who is not the owner is not a taxable event to the processor or handler.

(2) A person in possession of enhanced food fish and liable to this tax may deduct from the price paid to the person from which the enhanced food fish (except oysters) are purchased an amount equal to a tax at one-half the rate levied in this section upon these products.

(3) The measure of the tax is the value of the enhanced food fish at the point of landing.

(4) The tax shall be equal to the measure of the tax multiplied by the rates for enhanced food fish as follows:

(a) Chinook, coho, and chum salmon and anadromous game fish: Five percent.

(b) Pink and sockeye salmon: Three percent.

(d) Oysters: Seven one-hundredths of one percent.

(5) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (4) of this section.

(6) An additional tax is imposed equal to the measure of the tax multiplied by one-quarter of one percent. The additional tax provided for by this subsection shall be deposited in the natural resources marketing revolving fund created by section 9 of this 1986 act.

Sec. 12. Section 2, chapter 204, Laws of 1984 as amended by section 87, chapter 57, Laws of 1985 and RCW 84.33.041 are each amended to read as follows:

(1) An excise tax is imposed on every person engaging in this state in business as a harvester of timber on privately or publicly owned land. The tax is equal to the stumpage value of timber harvested for sale or for commercial or industrial use multiplied by the rate provided in this chapter.

(2) A credit is allowed against the tax imposed under this section for any tax paid under RCW 84.33.051.

(3) (a) Except as provided in (b) of this subsection, moneys received as payment for the tax imposed under this section and RCW 84.33.051 shall be deposited in the timber tax distribution account hereby established in the state treasury.

(b) That percentage of tax imposed under this section which exceeds five percent shall be deposited in the natural resources marketing revolving fund created by section 9 of this 1986 act.

(4) All earnings of investments of balances in the timber tax distribution account shall be credited to the general fund.

NEW SECTION. Sec. 13. Sections 1 through 6, 9, and 10 of this act are each added to chapter 43.31 RCW.