NOTICE: Formatting and page numbering in this document may be different

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SEVENTEENTH DAY

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MORNING SESSION

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Senate Chamber, Olympia, Wednesday, January 28, 2004

      The Senate was called to order at 10:00 a.m. by the President Pro Tempore. The Secretary called the roll and announced to the President Pro Tempore that all Senators were present.

      The Sergeant at Arms Color Guard consisting of Pages Kirk Lind and Katelyn Scobba presented the Colors. Pastor Greg White, pastor of the Arlington Assembly of God, offered the prayer.


MOTION


      On motion of Senator Esser, the reading of the Journal of the previous day was dispensed with and it was approved.


      There being no objection, the Senate advanced to the first order of business.


REPORTS OF STANDING COMMITTEES


January 27, 2004

SSB 5499           Prime Sponsor, Committee on Highways & Transportation: Transferring accident data processing to the department of transportation. Reported by Committee on Highways & Transportation

 

MAJORITY recommendation: That Second Substitute Senate Bill No. 5499 be substituted therefor, and the second substitute bill do pass. Signed by Senators Horn, Chair; Swecker, Vice Chair; Benton, Vice Chair; Haugen, Jacobsen, Asst Ranking Minority Member, Kastama, Murray, Oke, Poulsen and Spanel.


      Passed to Committee on Rules for second reading.


January 27, 2004

SB 5665             Prime Sponsor, Rasmussen: Changing irrigation district administration provisions. Reported by Committee on Agriculture

 

MAJORITY recommendation: That Substitute Senate Bill No. 5665 be substituted therefor, and the substitute bill do pass. Signed by Senators Swecker, Chair; Brandland, Vice Chair; Jacobsen, Rasmussen and Sheahan.


      Passed to Committee on Rules for second reading.


January 26, 2004

SB 6123             Prime Sponsor, Carlson: Modifying the public accountancy act. Reported by Committee on Financial Services, Insurance & Housing

 

MAJORITY recommendation: Do pass. Signed by Senators Benton, Chair; Winsley, Vice Chair; Berkey, Keiser, Murray and Prentice.


      Passed to Committee on Rules for second reading.


January 26, 2004

SB 6212             Prime Sponsor, Keiser: Providing for financial literacy. Reported by Committee on Financial Services, Insurance & Housing

 

MAJORITY recommendation: That Substitute Senate Bill No. 6212 be substituted therefor, and the substitute bill do pass. Signed by Senators Benton, Chair; Winsley, Vice Chair; Berkey, Keiser, Murray, Prentice and Roach.


      Passed to Committee on Ways & Means.


January 27, 2004

SB 6263             Prime Sponsor, Swecker: Permitting home-based driver training. Reported by Committee on Highways & Transportation

 

MAJORITY recommendation: That it be referred to Committee on Education without recommendation. Signed by Senators Horn, Chair; Swecker, Vice Chair; Benton, Vice Chair; Esser, Haugen, Jacobsen, Asst Ranking Minority Member, Kastama, Murray, Oke, Poulsen and Spanel.


      Passed to Committee on Education.


January 27, 2004

SB 6382             Prime Sponsor, Benton: Exempting certain insurance policy forms from filing requirements. Reported by Committee on Financial Services, Insurance & Housing

 

MAJORITY recommendation: Do pass. Signed by Senators Benton, Chair; Winsley, Vice Chair; Berkey, Keiser, Murray, Prentice and Roach.


      Passed to Committee on Rules for second reading.


January 27, 2004

SB 6439             Prime Sponsor, Horn: Enhancing motorcycle safety curriculum. Reported by Committee on Highways & Transportation

 

MAJORITY recommendation: Do pass. Signed by Senators Horn, Chair; Swecker, Vice Chair; Benton, Vice Chair; Esser, Haugen, Jacobsen, Asst Ranking Minority Member, Kastama, Murray, Oke, Poulsen and Spanel.


      Passed to Committee on Rules for second reading.


January 27, 2004

SB 6555             Prime Sponsor, Franklin: Eliminating credentialing barriers for sex offender treatment providers. Reported by Committee on Health & Long-Term Care

 

MAJORITY recommendation: That it be referred to Committee on Children & Family Services & Corrections without recommendation. Signed by Senators Deccio, Chair; Winsley, Vice Chair; Keiser, Parlette and Thibaudeau.


      Passed to Committee on Children & Family Services & Corrections.


MOTIONS


      On motion of Senator Esser, all measures listed on the Standing Committee report were referred to the committees as designated with the exception of Senate Bill No. 6212 which was referred to the Committee on Ways & Means.

      On motion of Senator Esser, the Senate advanced to the fifth order of business


INTRODUCTIONS AND FIRST READING

 

SB 6642             by Senators Stevens, Hargrove, Schmidt, Carlson, Mulliken, Hewitt, Roach and McAuliffe

 

AN ACT Relating to family group conferences following shelter care hearings; and amending RCW 13.34.067, 13.34.062, and 13.34.094.

 

Referred to Committee on Children & Family Services & Corrections.

 

SB 6643             by Senators Stevens, Hargrove, Schmidt and Carlson

 

AN ACT Relating to family visitation for dependent children; and amending RCW 13.34.136.

 

Referred to Committee on Children & Family Services & Corrections.

 

SB 6644             by Senators Rasmussen, Thibaudeau, Winsley, Carlson, Deccio, Shin, Keiser, Franklin, B. Sheldon, Kohl-Welles and McAuliffe

 

AN ACT Relating to educational staff associate positions; and amending RCW 28A.150.410.

 

Referred to Committee on Education.

 

SB 6645             by Senators Kastama, Rasmussen, Haugen and Shin

 

AN ACT Relating to health care liability; amending RCW 4.24.250, 43.70.510, 70.41.200, 43.70.110, 43.70.250, 18.122.080, 18.122.140, 18.71.350, 18.57.245, 7.70.020, and 7.70.100; adding new sections to chapter 43.70 RCW; adding new sections to chapter 7.70 RCW; adding a new section to chapter 70.41 RCW; adding a new section to chapter 48.46 RCW; adding new sections to chapter 48.02 RCW; adding a new section to chapter 48.05 RCW; adding a new section to chapter 4.44 RCW; adding a new section to chapter 48.19 RCW; creating a new section; and prescribing penalties.

 

Referred to Committee on Judiciary.

 

SB 6646             by Senators Murray, Kline, Sheahan, Poulsen, Swecker, Kohl-Welles and Benton

 

AN ACT Relating to tax incentives for alternative fuels; amending RCW 82.68.010, 82.68.030, 82.04.4334, 82.08.955, and 82.12.955; reenacting and amending RCW 82.04.260 and 82.04.260; adding a new chapter to Title 82 RCW; creating a new section; repealing RCW 82.68.040; providing an effective date; and providing contingent expiration dates.

 

Referred to Committee on Natural Resources, Energy & Water.

 

SB 6647             by Senators Murray, Kline, Sheahan, Poulsen, Swecker, Rasmussen and McAuliffe

 

AN ACT Relating to protecting student health by providing incentives for the use of clean-burning alternative fuels in school buses; amending RCW 82.38.080; and providing an effective date.

 

Referred to Committee on Natural Resources, Energy & Water.

 

SB 6648             by Senators Murray, Kline, Sheahan, Poulsen and Swecker

 

AN ACT Relating to use of high-occupancy vehicle lanes by low-emission vehicles; amending RCW 46.61.165, 47.52.025, and 81.100.020; adding new sections to chapter 46.04 RCW; adding a new section to chapter 46.16 RCW; creating a new section; and providing an effective date.

 

Referred to Committee on Highways & Transportation.

 

SB 6649             by Senators Benton, Keiser, Berkey and Winsley; by request of Department of Labor & Industries

 

AN ACT Relating to retaining fees for mobile/manufactured homes and factory built housing and commercial structures; amending RCW 43.22.434; providing an effective date; and declaring an emergency.

 

Referred to Committee on Financial Services, Insurance & Housing.

 

SB 6650             by Senators Keiser and Hewitt; by request of Department of Labor & Industries

 

AN ACT Relating to providing the department of labor and industries with the rule-making authority to address recommendations of the elevator safety advisory committee relating to the licensing of private residence conveyance work; amending RCW 70.87.240; adding a new section to chapter 70.87 RCW; and creating a new section.

 

Referred to Committee on Commerce & Trade.

 

SB 6651             by Senators Deccio and Parlette

 

AN ACT Relating to requiring the department of social and health services to establish an evidence-based medical necessity definition and decision-making process for its medical assistance programs; adding a new section to chapter 74.09 RCW; and declaring an emergency.

 

Referred to Committee on Health & Long-Term Care.

 

SB 6652             by Senators Poulsen, Keiser, Fraser, Kline, Franklin, Kohl-Welles, Prentice, Doumit, Regala, B. Sheldon, Spanel and Brown

 

AN ACT Relating to tax expenditure reports; and amending RCW 43.06.400 and 43.88.030.

 

Referred to Committee on Ways & Means.

 

SB 6653             by Senators Schmidt, McAuliffe and Stevens

 

AN ACT Relating to the use of Paine Field for commercial passenger air service; creating a new section; and making an appropriation.

 

Referred to Committee on Ways & Means.

 

SB 6654             by Senators Horn and Haugen

 

AN ACT Relating to transit agencies self-insuring for industrial insurance; and amending RCW 51.14.150.

 

Referred to Committee on Commerce & Trade.

 

SB 6655             by Senators Hewitt, Keiser and Rasmussen

 

AN ACT Relating to certificates of approval for authorized representatives of beer and wine manufacturers and distributors; and amending RCW 66.04.010, 66.24.206, 66.24.270, 66.28.010, 66.28.030, 66.28.040, 66.28.042, 66.28.043, 66.28.150, 66.28.155, 66.28.160, 66.28.170, 66.28.180, and 19.126.020.

 

Referred to Committee on Commerce & Trade.

 

SB 6656             by Senators Schmidt and Esser; by request of Utilities & Transportation Commission and Department of Social and Health Services

 

AN ACT Relating to the Washington telephone assistance program; amending RCW 80.36.410, 80.36.420, 80.36.430, 80.36.450, 80.36.460, 80.36.470, 80.36.475, and 80.36.005; adding new sections to chapter 80.36 RCW; repealing RCW 80.36.440; and providing an effective date.

 

Referred to Committee on Technology & Communications.

 

SB 6657             by Senators Esser, Benton, Schmidt, Sheahan, Roach, Rasmussen, Keiser, Doumit, Prentice, Haugen and Shin

 

AN ACT Relating to clarifying collective bargaining processes for individual providers; amending RCW 74.39A.270 and 74.39A.300; adding a new section to chapter 41.04 RCW; and adding a new section to chapter 43.01 RCW.

 

Referred to Committee on Health & Long-Term Care.

 

SB 6658             by Senators Keiser, Oke and Kohl-Welles

 

AN ACT Relating to protecting workers from harmful airborne particles; and amending RCW 49.17.050 and 49.17.060.

 

Referred to Committee on Commerce & Trade.

 

SB 6659             by Senator Honeyford

 

AN ACT Relating to the county credit exemption against city lodging taxes; and amending RCW 67.28.180.

 

Referred to Committee on Economic Development.

 

SB 6660             by Senators Hewitt, Doumit, Rasmussen and Murray

 

AN ACT Relating to allowing light and power businesses to qualify for the manufacturing machinery and equipment sales and use tax exemption; and amending RCW 82.08.02565.

 

Referred to Committee on Ways & Means.

 

SB 6661             by Senators Esser, T. Sheldon and Mulliken

 

AN ACT Relating to assumption by a code city with a population greater than one hundred thousand of a water-sewer district with fewer than two hundred fifty customers; adding a new section to chapter 35.13A RCW; and providing an expiration date.

 

Referred to Committee on Land Use & Planning.

 

SB 6662             by Senators Morton, Honeyford and Mulliken

 

AN ACT Relating to providing certainty and clarity in the administration of water rights; amending RCW 90.03.380, 90.14.010, 90.14.130, 90.14.160, 90.14.170, 90.14.180, and 90.14.210; and declaring an emergency.

 

Referred to Committee on Natural Resources, Energy & Water.

 

SB 6663             by Senators Hewitt, Rasmussen, Honeyford, Prentice, Kastama, Doumit and Sheahan

 

AN ACT Relating to promoters duties with respect to vendor tax registration; and amending RCW 82.32.033.

 

Referred to Committee on Commerce & Trade.

 

SB 6664             by Senators Franklin, Stevens, Fairley, Kline, Hargrove, Keiser, Regala, Rasmussen, Fraser, Kohl-Welles, Brown, McAuliffe and Winsley

 

AN ACT Relating to guardianship bond requirements; and amending RCW 11.88.105.

 

Referred to Committee on Judiciary.

 

SB 6665             by Senators Hewitt, Mulliken, Honeyford, Hale, Parlette, Rasmussen and Sheahan

 

AN ACT Relating to the excise taxation of fruit and vegetable processing and storage; amending RCW 82.08.820 and 82.12.820; reenacting and amending RCW 82.04.260; adding a new section to chapter 82.04 RCW; adding a new chapter to title 82 RCW; providing an effective date; and providing an expiration date.

 

Referred to Committee on Ways & Means.

 

SB 6666             by Senator Morton

 

AN ACT Relating to requirements for licensure of respiratory care practitioners; amending RCW 18.89.050 and 18.89.110; and declaring an emergency.

 

Referred to Committee on Health & Long-Term Care.

 

SJM 8046           by Senators Swecker, Rasmussen, Sheahan, Parlette, Jacobsen and Shin

 

Requesting federal consultation on pest control products.

 

Referred to Committee on Agriculture.

 

SJM 8047           by Senators Sheahan, Hewitt, Honeyford, Swecker, Hale, Murray and T. Sheldon

 

Requesting the implementation of the plan to maintain the navigation channel and loading docks on the lower Snake River.

 

Referred to Committee on Commerce & Trade.

 

SJM 8048           by Senators Rasmussen and Swecker

 

Requesting compliance with the labeling requirements in the Farm Security and Rural Investment Act of 2002.

 

Referred to Committee on Agriculture.

 

SJR 8223           by Senators Haugen, Winsley, Kastama, Oke, Prentice, Spanel, Fairley, Eide, Kline, Berkey, McCaslin, Brown, Jacobsen, Rasmussen, Kohl-Welles, Benton and Shin

 

Providing a tax credit on owner-occupied residential property.

 

Referred to Committee on Ways & Means.

 

SJR 8224           by Senators Honeyford, Morton, Mulliken and T. Sheldon

 

Amending the Constitution to authorize a water court.

 

Referred to Committee on Natural Resources, Energy & Water.


MOTIONS


      On motion of Senator Esser, all measures listed on the Introduction and First Reading report were referred to the committees as designated.

      On motion of Senator Esser, the Senate advanced to the eighth order of business.


MOTION


      On motion of Senator Brown, the following resolution was adopted:


SENATE RESOLUTION NO. 8693

By Senator Brown


      WHEREAS, Susie Stephens, an avid bicyclist and pedestrian advocate, sparked bicycle advocacy across the United States; and

      WHEREAS, Stephens was a founding director of Thunderhead Alliance, a national coalition of bicycle advocacy organizations that promotes bike safety and the benefits of bicycling to American communities; and

      WHEREAS, She was a former executive director of Bicycle Alliance of Washington, an organization of bicyclists that promotes bicycling for everyday transportation, through education and advocacy; and

      WHEREAS, In 1998, Stephens helped push bike safety laws under the Cooper Jones Bicycle and Pedestrian Safety Education Act, named for a 13-year-old boy who was killed by a negligent driver during a bicycle race; and

      WHEREAS, Motor vehicles kill more than 40,000 people every year; 14 on an average day; and

      WHEREAS, On March 21, 2002, Susie Stephens was fatally struck and killed while crossing a downtown intersection in St. Louis; and

      WHEREAS, Stephens will always be remembered for her courageous spirit, and the passion, enthusiasm, and dedication to bicycle advocacy that made her a shining star;

      NOW, THEREFORE, BE IT RESOLVED, That the Washington State Senate honor and celebrate the life of Susie Stephens and recognize her devotion to bicycle safety issues; and

      BE IT FURTHER RESOLVED, That copies of this resolution be immediately transmitted by the Secretary of the Senate to Susie's mother, Nancy MacKerrow and Barbara Culp, executive director of the Bicycle Alliance of Washington.

      Senator Brown spoke in favor of adoption of the resolution.

      The President Pro Tempore declared the question before the Senate to be the adoption of Senate Resolution No. 8693.

      The motion by Senator Brown carried and the resolution was adopted by voice vote.


INTRODUCTION OF SPECIAL GUESTS


      The President Pro Tempore welcomed and introduced members of the Bicyclists of Washington, Nancy MacKerrow, Susie’s mother; Becky Miller, Susie’s sister; and Barbara Culp and Louise McGrody, from the Bicycle Alliance of Washington who were seated in the gallery.


MOTION


      At 10:18 a.m., on motion of Senator Esser, the Senate was declared to be at ease subject to the Call of the President for the purposes of a Rules meeting and caucuses.


      The Senate was called to order at 11:00 a.m. by the President Pro Tempore.


MOTION


      On motion of Senator Esser, Rule 20 was suspended for the remainder of the day for the purpose of allowing consideration of additional floor resolutions.


MOTION


      On motion of Senator Esser, the following resolution was adopted:


SENATE RESOLUTION NO. 8696


By Senators Esser and Jacobsen


      WHEREAS, Dick Spady co-founded Dick's Drive-in Restaurants; and

      WHEREAS, Dick's Drive-in Restaurants have served the greater Seattle community for 50 years since its opening day on January 28, 1954; and

      WHEREAS, The people of the State of Washington have enjoyed countless numbers of Dick's mouth-watering hamburgers, fresh fries, and hand-dipped shakes served by the hands of a friendly staff; and

      WHEREAS, Dick's has maintained its principles of quality food and customer service at a low price throughout its 50 years and expansion to five restaurants; and

      WHEREAS, Dick's gives back to the greater Seattle community through its outstanding consideration for its 120 employees, as evidenced by the company's high wages, frequent pay raises, health insurance benefits, paid time off for community service, subsidized day care, and $12,000 college scholarships; and

      WHEREAS, Customers have come to know Dick's Drive-in Restaurant as a place to go to experience camaraderie, spark up a romance, and feel a sense of community among workers and customers alike; and

      WHEREAS, Apart from his business, Dick Spady has given back to the community through his work with the Forum Foundation to create a "symbolic dialogue" between citizens and elected officials; and

      WHEREAS, Dick Spady has worked to incorporate this symbolic dialogue in all his interpersonal relations, from his work with his staff and suppliers to his work with state legislators;

      NOW, THEREFORE, BE IT RESOLVED, That the Washington State Senate officially recognize Dick Spady for his service to the greater Seattle community as a small business owner and community activist on the 50th anniversary of Dick's Drive-in Restaurant's opening day; and

      BE IT FURTHER RESOLVED, That the Washington State Senate does hereby celebrate January 28, 2004, Dick's Drive-in Appreciation Day, and wishes the "Dick's family" a happy 50th anniversary.

      Senators Esser, Hargrove, Jacobsen, Fraser, Thibaudeau, McAuliffe, Kohl-Welles, Stevens and Shin spoke in favor of adoption of the resolution.

      The President Pro Tempore declared the question before the Senate to be the adoption of Senate Resolution No. 8696.

      The motion by Senator Esser carried and the resolution was adopted by voice vote.


POINT OF INQUIRY


      Senator Deccio: “Would Senator Esser yield to a question? Is that the Dick Spady, the founder in the back row?

      Senator Esser: “Yes it is, Senator.”

      Senator Deccio: “How old was he, about four, when he started.”

      Senator Esser: “I believe he was a child prodigy.”


INTRODUCTION OF SPECIAL GUESTS


      The President Pro Tempore welcomed and introduced members of the Dick’s Drive-In, Mr. Dick Spady, co-founder of the original Dick’s Drive-In and his son, Jim who were seated in the gallery.


MOTION


      On motion of Senator Esser, the Senate reverted to the sixth order of business.


SECOND READING


      SENATE BILL NO. 6240, by Senators T. Sheldon, Zarelli, Benton, Hale, McAuliffe, Prentice, Rasmussen, Murray and Haugen; by request of Governor Locke

 

Providing tax incentives in rural counties. Revised for 1st Substitute: Modifying tax incentive provisions for rural counties.


MOTIONS


      On motion of Senator Zarelli, Substitute Senate Bill No. 6240 was substituted for Senate Bill No. 6240 and the substitute bill was placed on second reading and read the second time.

      On motion of Senator T. Sheldon, the rules were suspended, Substitute Senate Bill No. 6240 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      The President Pro Tempore declared the question before the Senate to be the final passage of Substitute Senate Bill No. 6240.


      Senators T. Sheldon, Haugen, Hewitt and Kastama spoke in favor of passage of the bill.


ROLL CALL


      The Secretary called the roll on the final passage of Substittue Senate Bill No. 6240 and the bill passed the Senate by the following vote: Yeas, 49; Nays, 0; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Berkey, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Honeyford, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Murray, Oke, Parlette, Pflug, Poulsen, Prentice, Rasmussen, Regala, Roach, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Stevens, Swecker, Thibaudeau, Winsley and Zarelli - 49.

      SUBSTITUTE SENATE BILL NO. 6240, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.


SECOND READING


      ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 5364, by Senate Committee on Ways & Means (originally sponsored by Senators Zarelli, T. Sheldon, Regala, B. Sheldon, Winsley, McAuliffe, Hale and Rasmussen; by request of Governor Locke)

 

Promoting economic development and community revitalization.


MOTIONS


      On motion of Senator Zarelli, Third Substitute Senate Bill No. 5364 was substituted for Engrossed Second Substitute Senate Bill No. 5364 and the substitute bill was placed on second reading and read the second time.


      Senator Zarelli moved that the following amendment by Senator Zarelli be adopted:

       On page 6, line 24, after "would" insert "more than likely"

      Senator Zarelli spoke in favor of adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Zarelli on page 6, line 24 to Third Substitute Senate Bill No. 5364.

      The motion by Senator Zarelli carried and the amendment was adopted by voice vote.


MOTION


      On motion of Senator Zarelli, the rules were suspended, Engrossed Third Substitute Senate Bill No. 5364 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      The President Pro Tempore declared the question before the Senate to be the final passage of Engrossed Third Substitute Senate Bill No. 5364.

Senators Zarelli and Prentice spoke in favor of passage of the bill.


ROLL CALL


      The Secretary called the roll on the final passage of Engrossed Third Substitute Senate Bill No. 5364 and the bill passed the Senate by the following vote:Yeas, 44; Nays, 5; Absent, 0; Excused, 0.

     Voting yea: Senators Benton, Berkey, Brandland, Brown, Carlson, Deccio, Doumit, Eide, Fairley, Finkbeiner, Franklin, Fraser, Hale, Hargrove, Haugen, Hewitt, Horn, Jacobsen, Johnson, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Murray, Oke, Parlette, Pflug, Poulsen, Prentice, Rasmussen, Regala, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Spanel, Swecker, Winsley and Zarelli - 44.

     Voting nay: Senators Esser, Honeyford, Roach, Stevens and Thibaudeau - 5.

      ENGROSSED THIRD SUBSTITUTE SENATE BILL NO. 5364, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.


NOTICE

 

      Senator Jacobsen gave notice, as required by Senate Rule 35, of his intent to move adoption of Senate Resolution 8695 which would change Senate Rule 22 by adding a new section. A copy of this resolution was delivered to each members desk.


      President Pro Tempore declared the message received.


EDITOR’S NOTE: Senate Rule 35 required one day’s notice prior to changes to permanent rules of the Senate.


SECOND READING


SENATE BILL NO. 6239, by Senators Zarelli, Benton, Carlson, Hale, McAuliffe, Prentice, Rasmussen, Murray, Haugen and Poulsen; by request of Governor Locke

 

Modifying high technology and research and development tax incentive provisions. Revised for 1st Substitute: Hi-tech tax incentives


MOTIONS


      On motion of Senator Zarelli, Substitute Senate Bill No. 6239 was substituted for Senate Bill No. 6239 and the substitute bill was placed on second reading and read the second time.


MOTION


      Senator Fraser moved that the following amendment by Senators Poulsen and Fraser be adopted:

      On page 2, beginning on line 20, strike all material down through line 5 on page 5 and insert the following:

      "(2) The credit is equal to the greater of the amount of qualified research and development expenditures of a person or eighty percent of amounts received by a person other than a public educational or research institution in compensation for the conduct of qualified research and development, multiplied by the rate provided in RCW 82.04.260(3) in the case of a nonprofit corporation or nonprofit association engaging within this state in research and development, and the ((rate provided in RCW 82.04.290(2))) person's average tax rate for every other person.

      (3) Any person entitled to the credit provided in subsection (2) of this section as a result of qualified research and development conducted under contract may assign all or any portion of the credit to the person contracting for the performance of the qualified research and development.

      (4) The credit, including any credit assigned to a person under subsection (3) of this section, shall be taken against taxes due for the same calendar year in which the qualified research and development expenditures are incurred. The credit, including any credit assigned to a person under subsection (3) of this section, for each calendar year shall not exceed the lesser of two million dollars or the amount of tax otherwise due under this chapter for the calendar year.

      (5) Any person taking the credit, including any credit assigned to a person under subsection (3) of this section, whose research and development spending during the calendar year in which the credit is claimed fails to exceed 0.92 percent of the person's taxable amount during the same calendar year shall be liable for payment of the additional taxes represented by the amount of credit taken together with interest, but not penalties. Interest shall be due at the rate provided for delinquent excise taxes retroactively to the date the credit was taken until the taxes are paid. Any credit assigned to a person under subsection (3) of this section that is disallowed as a result of this section may be taken by the person who performed the qualified research and development subject to the limitations set forth in subsection (4) of this section.

      (6) Any person claiming the credit, and any person assigning a credit as provided in subsection (3) of this section, shall file an affidavit form prescribed by the department which shall include the amount of the credit claimed, ((an estimate of)) the ((anticipated)) qualified research and development expenditures during the calendar year for which the credit is claimed, ((an estimate of)) and the taxable amount during the calendar year for which the credit is claimed, and such additional information as the department may prescribe. The report is due by March 31st following any year a credit is taken.

      (7)(a) A person claiming the credit shall agree to supply the department with information ((necessary to measure the results of the tax credit program for qualified research and development expenditures)) on research and development spending, and product development, which may be measured by a proxy such as research projects, copyrights, trademarks, or patents issued. The survey information is deemed tax information under RCW 82.32.330.

      (b) If a person fails to provide the information required under this subsection by the due date, the person entitled to the credit provided in subsection (2) of this section is not eligible to take or assign the credit provided in subsection (2) of this section in the year the person failed to complete the survey.

      (8) The ((department)) joint legislative audit and review committee shall use the information ((required under)) from subsection (7) of this section and from other state agency sources to ((perform three assessments on)) study the tax credit program authorized under this section. ((The assessments will take place in 1997, 2000, and 2003. The department shall prepare reports on each assessment and deliver their reports by September 1, 1997, September 1, 2000, and September 1, 2003. The assessments)) The committee shall report to the legislature by December 1, 2013. The study shall measure the effect of the program on ((job creation, the number of jobs created for Washington residents,)) company growth, the introduction of new products as measured by copyrights, trademarks, and overall patent issuance, the diversification of the state's economy, growth in research and development investment, and the movement of firms or the consolidation of firms' operations into the state((, and such other factors as the department selects)). In conducting this evaluation, the committee shall:

      (a) Use a generally accepted econometric model and contract with outside experts; and

      (b) Evaluate the direct, indirect, and induced impacts of this program together with the program authorized under RCW 82.63.020.

      (9) For the purpose of this section:

      (a) "Average tax rate" means a person's total tax under this chapter for the reporting period divided by the taxpayer's total taxable income under this chapter for the reporting period.

      (b) "Qualified research and development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined under rules adopted by the department, benefits, supplies, and computer expenses, directly incurred in qualified research and development by a person claiming the credit provided in this section. The term does not include amounts paid to a person other than a public educational or research institution to conduct qualified research and development. Nor does the term include capital costs and overhead, such as expenses for land, structures, or depreciable property.

      (((b))) (c) "Qualified research and development" shall have the same meaning as in RCW 82.63.010.

      (((c))) (d) "Research and development spending" means qualified research and development expenditures plus eighty percent of amounts paid to a person other than a public educational or research institution to conduct qualified research and development.

      (((d))) (e) "Taxable amount" means the taxable amount subject to the tax imposed in this chapter required to be reported on the person's combined excise tax returns during the year in which the credit is claimed, less any taxable amount for which a credit is allowed under RCW 82.04.440."

      Senators Fraser and Zarelli spoke in favor of adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Poulsen and Fraser on page 2, beginning on line 20 to Substitute Senate Bill No. 6239.

      The motion by Senator Fraser carried and the amendment was adopted by voice vote.


MOTION


      Senator Hargrove moved that the following amendment by Senator Hargrove be adopted:

      On page 2, after line 20, strike all material down through line 27 and insert the following:

      "(2) The credit is equal to ((the greater of the amount of qualified research and development expenditures of a person or eighty percent of amounts received by a person other than a public educational or research institution in compensation for the conduct of qualified research and development, multiplied by the rate provided in RCW 82.04.260(3) in the case of a nonprofit corporation or nonprofit association engaging within this state in research and development, and the rate provided in RCW 82.04.290(2) for every other person)) one thousand dollars for each new full-time employment position created in the business."

      Senators Hargrove and Prentice spoke in favor of adoption of the amendment.

      Senators Zarelli and T. Sheldon spoke against adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Hargrove on page 2, after line 20 to Substitute Senate Bill No. 6239.

      The motion by Senator Hargrove failed and the amendment was not adopted by voice vote.


MOTION


      Senator Poulsen moved that the following amendment by Senators Poulsen and Prentice be adopted.

      On page 2, line 27, after "person", insert "and multiplied by the percentage the person's full-time equivalent employment positions in the United States bears to the person's total full-time equivalent employment positions in the world

      Senators Poulsen, Prentice, Shin, Brown and Hargrove spoke in favor of adoption of the amendment.

      Senators Zarelli, Deccio, Finkbeiner and Brandland spoke against adoption of the amendment.

      Senator B. Sheldon demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Poulsen and Prentice on page 2, line 27 to Substitute Senate Bill No. 6239.


ROLL CALL


      The Secretary called the roll on the amendment by Senator Poulsen to Substitute Senate Bill No. 6239 and the amendment was not adopted by the following vote: Yeas, 23; Nays, 26; Absent, 0; Excused, 0.

     Voting yea: Senators Berkey, Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Regala, Sheldon, B., Shin, Spanel and Thibaudeau - 23.

     Voting nay: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, McCaslin, Morton, Mulliken, Murray, Oke, Parlette, Pflug, Roach, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker, Winsley and Zarelli - 26.


MOTION


      Senator Keiser moved that the following amendment by Senators Keiser and Poulsen be adopted:

       On page 3, line 33, after "information is", strike "deemed tax information under RCW 82.32.330", and insert "not deemed tax information under RCW 82.32.330 and is disclosable"

       On page 9, line 6, after "information is", strike "deemed tax information under RCW 82.32.330", and insert "not deemed tax information under RCW 82.32.330 and is disclosable"

      Senators Keiser and Prentice spoke in favor of the amendment.

      Senator Zarelli spoke against adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Keiser and Poulsen on page 3, line 33 to Substitute Senate Bill No. 6239.

      The motion by Senator Keiser failed and the amendment was not adopted by voice vote.


MOTION


      Senator Hargrove moved that the following amendment by Senator Hargrove be adopted:

      On page 4, line 9 strike “2013" and insert “2009"

       On page 5, line 10, strike “2015" and insert “2011"

       On page 9, line 14, strike “2013" and insert “2009"

       On page 10, line 3, strike “2015" and insert “2011"

       Senators Hargrove, Kohl-Welles and Brown spoke in favor of adoption of the amendment.

      Senator Zarelli spoke against adoption of the amendment.

      Senator Sheldon, B. demanded a roll call and the demand was sustained.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senator Hargrove on page 4, line 9 to Substitue Senate Bill No. 6239.


ROLL CALL


      The Secretary called the roll on the amendment by Senator Hargrove to Substitute Senate Bill No. 6239 and the amendment was not adopted by the following vote: Yeas, 24; Nays, 25; Absent, 0; Excused, 0.

     Voting yea: Senators Berkey, Brown, Doumit, Eide, Fairley, Franklin, Fraser, Hargrove, Haugen, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Poulsen, Prentice, Rasmussen, Regala, Sheldon, B., Shin, Spanel, Thibaudeau and Winsley - 24.

     Voting nay: Senators Benton, Brandland, Carlson, Deccio, Esser, Finkbeiner, Hale, Hewitt, Honeyford, Horn, Johnson, McCaslin, Morton, Mulliken, Murray, Oke, Parlette, Pflug, Roach, Schmidt, Sheahan, Sheldon, T., Stevens, Swecker and Zarelli - 25.


MOTION


      Senator Zarelli moved that the following amendment by Senators Zarelli, Kohl-Welles and Sheahan be adopted:

       On page 6, line 20, after "82.04.030", insert "and includes state universities as defined in RCW 28B.10.016"

       On page 11, after line 18, insert the following:

       "Sec. 8. RCW 82.04.190 and 2002 c 367 s 2 are each amended to read as follows:

       "Consumer" means the following:

       (1) Any person who purchases, acquires, owns, holds, or uses any article of tangible personal property irrespective of the nature of the person's business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than for the purpose (a) of resale as tangible personal property in the regular course of business or (b) of incorporating such property as an ingredient or component of real or personal property when installing, repairing, cleaning, altering, imprinting, improving, constructing, or decorating such real or personal property of or for consumers or (c) of consuming such property in producing for sale a new article of tangible personal property or a new substance, of which such property becomes an ingredient or component or as a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale or (d) purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon;

       (2)(a) Any person engaged in any business activity taxable under RCW 82.04.290; (b) any person who purchases, acquires, or uses any telephone service as defined in RCW 82.04.065, other than for resale in the regular course of business; (c) any person who purchases, acquires, or uses any service defined in RCW 82.04.050(2)(a) or any amusement and recreation service defined in RCW 82.04.050(3)(a), other than for resale in the regular course of business; and (d) any person who is an end user of software;

       (3) Any person engaged in the business of contracting for the building, repairing or improving of any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state of Washington or by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind as defined in RCW 82.04.280, in respect to tangible personal property when such person incorporates such property as an ingredient or component of such publicly owned street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle by installing, placing or spreading the property in or upon the right of way of such street, place, road, highway, easement, bridge, tunnel, or trestle or in or upon the site of such mass public transportation terminal or parking facility;

       (4) Any person who is an owner, lessee or has the right of possession to or an easement in real property which is being constructed, repaired, decorated, improved, or otherwise altered by a person engaged in business, excluding only (a) municipal corporations or political subdivisions of the state in respect to labor and services rendered to their real property which is used or held for public road purposes, and (b) the United States, instrumentalities thereof, and county and city housing authorities created pursuant to chapter 35.82 RCW in respect to labor and services rendered to their real property. Nothing contained in this or any other subsection of this definition shall be construed to modify any other definition of "consumer";

       (5) Any person who is an owner, lessee, or has the right of possession to personal property which is being constructed, repaired, improved, cleaned, imprinted, or otherwise altered by a person engaged in business;

       (6) Any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation; also, any person engaged in the business of clearing land and moving earth of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW. Any such person shall be a consumer within the meaning of this subsection in respect to tangible personal property incorporated into, installed in, or attached to such building or other structure by such person, except that consumer does not include any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, if the investment project would qualify for sales and use tax deferral under chapter 82.63 RCW if undertaken by a private entity;

       (7) Any person who is a lessor of machinery and equipment, the rental of which is exempt from the tax imposed by RCW 82.08.020 under RCW 82.08.02565, with respect to the sale of or charge made for tangible personal property consumed in respect to repairing the machinery and equipment, if the tangible personal property has a useful life of less than one year. Nothing contained in this or any other subsection of this section shall be construed to modify any other definition of "consumer";

       (8) Any person engaged in the business of cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development; and

       (9) Until July 1, 2003, any person engaged in the business of conducting environmental remedial action as defined in *RCW 82.04.2635(2)."

      Senators Zarelli and Kohl-Welles spoke in favor of adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Zarelli, Kohl-Welles and Sheahan on page 6, line 20 to Substitute Senate Bill No. 6239.

      The motion by Senator Zarelli carried and the amendment was adopted by voice vote.


MOTION


     On motion of Senator Zarelli the following title amendment was adopted.

     On page 1, on line 3 of the title, strike "and 82.63.070" and insert "82.63.070, and 82.04.190"


POINT OF INQUIRY


     Senator Keiser: “Thank you Madam President. Would Senator Zarelli yield to a question? My question relates to this amendment because in a previous amendment put forward we talked about whether or not these tax breaks were discloseable and whether or not it was open to the public. Now, this particular amendment would allow our public university research universities to receive these public tax subsidies. Would those also be confidential or would those be discloseable to the public.”

      Senator Zarelli: “I believe because they are a public institution everything that happens inside either one of these universities, just like in this body, is public information so there would be no change in the law governing oversight of how those public institutions are run.”


MOTION


     Senator McAuliffe moved that the following amendment by Senators McAuliffe and Poulsen be adopted:

       On page 8, line 29, after "days.", insert "No application for deferral of sales and use taxes under this chapter may be made after June 30, 2005, unless school district employee cost-of-living increases under RCW 28A.400.205 (Initiative 732), as enacted by the voters, are fully funded for the 2005-2007 biennium."

     Senators McAuliffe, Prentice and Kline spoke in favor of adoption of the amendment.

      Senators Zarelli and Honeyford spoke against adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators McAuliffe and Poulsen on page 8, line 29 to Substitute Senate Bill No. 6239.

      The motion by Senator McAuliffe failed and the amendment was not adopted by voice vote.


MOTION


     Senator Regala moved that the following amendment by Senators Regala and Poulsen be adopted:

       On page 8, line 34, strike "may", and insert "shall"

     Senator Regala spoke in favor of adoption of the amendment.

      Senator Zarelli spoke against adoption of the amendment.

      The President Pro Tempore declared the question before the Senate to be the adoption of the amendment by Senators Regala and Poulsen on page 8, line 34 to Substitute Senate Bill No. 6239.

      The motion by Senator Regala failed and the amendment was not adopted by voice vote.


MOTION


     On motion of Senator Zarelli, the rules were suspended, Engrossed Substitute Senate Bill No. 6239 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Senators Zarelli, T. Sheldon, Kastama, Eide, Kohl-Welles and Morton spoke in favor of passage of the bill.

      Senators Prentice, Poulsen, Franklin spoke against passage of the bill.

      The President Pro Tempore declared the question before the Senate to be the final passage of Engrossed Substitute Senate Bill No. 6239.


MOTION


     On motion of Senator Eide, Senator Thibaudeau was excused.


ROLL CALL


     The Secretary called the roll on the final passage of Engrossed Substitute Senate Bill No. 6239 and the bill passed the Senate by the following vote: Yeas, 35; Nays, 13; Absent, 00; Excused, 01.

   Voting yea: Senators Benton, Brandland, Berkey, Carlson, Deccio, Doumit, Eide, Esser, Finkbeiner, Hale, Haugen, Hewitt, Honeyford, Horn, Johnson, Kohl-Welles, McAuliffe, McCaslin, Morton, Mulliken, Murray, Oke, Parlette, Pflug, Rasmussen, Roach, Schmidt, Sheahan, Sheldon, B., Sheldon, T., Shin, Stevens, Swecker, Winsley, Zarelli

       Voting nay: Senators Brown, Fairley, Franklin, Fraser, Hargrove, Jacobsen, Kastama, Keiser, Kline, Poulsen, Prentice, Regala, Spanel

       Excused: Senator Thibaudeau

     ENGROSSED SUBSTITUTE SENATE BILL NO. 6239, having received the constitutional majority, was declared passed. There being no objection, the title of the bill was ordered to stand as the title of the act.


MOTION


     At 12:48 p.m., on motion of Senator Esser, the Senate adjourned until 12:00 noon, January 29, 2004.


BRAD OWEN, President of the Senate


MILTON H. DOUMIT, JR., Secretary of the Senate