6143-S2.E AMH SPRI PETE 151

E2SSB 6143 - H AMD TO H AMD (H-5824.1/10) 1722

By Representative Springer

WITHDRAWN 3/20/2010

    On page 30, after line 27 of the amendment, insert the following:

    "Sec. 213.  A new section is added to chapter 82.32 RCW to read as follows:

    (1) There is hereby created a joint tax avoidance rules review committee which shall be a bipartisan committee consisting of two members of the senate, one from each of the two largest caucuses of the senate, and two members of the house of representatives, one from each of the two largest caucuses of the house of representatives.  The senate members of the committee shall be appointed by the majority leader of the senate, and the house members of the committee shall be appointed by the speaker of the house.  The appointing authorities shall also appoint one alternate member from each of the two largest caucuses of each legislative chamber.

    (2)(a) Members and alternates shall be appointed as soon as possible after the effective date of this section, and their terms shall continue until such persons no longer wish to serve on the committee or no longer serve in the legislature, whichever occurs first. 

    (b) A vacancy shall be filled by the appointment of a legislator from the same legislative chamber and caucus as the original appointment.  The appropriate appointing authority shall make the appointment within thirty days of the vacancy occurring.  Former committee members and alternates may be reappointed to the committee.

    (3) The committee shall choose its chair and vice chair from among its membership.  The chair of the committee shall cause all meeting notices and committee documents to be sent to the committee members and alternates.

    (4)  Staff support for the committee must be provided by the senate committee services and the house of representatives office of program research. 

    (5)  Among its functions, the committee may recommend to the legislature, in such manner as the committee deems advisable, statutory changes relating to tax avoidance transactions.

Sec. 214.  A new section is added to chapter 82.32 RCW to read as follows:

(1)(a) The department must notify the joint tax avoidance rules review committee of any proposed rule relating to tax avoidance transactions.

    (b)  If the joint tax avoidance rules review committee finds by a majority vote of its members that a proposed rule relating to tax avoidance transactions is not within the intent of the legislature, the committee shall give the department written notice of its objection.  The notice must be given at least seven days prior to any hearing scheduled for consideration of or adoption of the proposed rule pursuant to RCW 34.05.320.  The notice must include a statement of the joint tax avoidance rules review committee's findings and the reasons for its objection.  When the department holds a hearing on the proposed rule, the department must consider the joint tax avoidance rules review committee's objection.       

    (2)(a) Within seven days following a department hearing held after notification is made to the department by the joint tax avoidance rules review committee under subsection (1) of this section, the department must notify the committee of its intended action on the proposed tax avoidance rule to which the committee objected.

    (b) If the joint tax avoidance rules review committee finds by a majority vote of its members that the proposed tax avoidance rule in question will not be modified or withdrawn by the department so as to conform with the intent of the legislature, the committee may, within thirty days from notification by the department of its intended action, file with the code reviser notice of its objections together with a concise statement of the reasons therefor.  The notice and statement must also be provided to the department by the committee.

    (c)  In addition to the action described in (b) of this subsection, if the committee makes an adverse finding regarding an existing tax avoidance rule, the committee may, by a majority vote of its members, recommend suspension of the rule. Within seven days of such vote the committee shall transmit to the appropriate standing committees of the legislature, the governor, the code reviser, and the department written notice of its objection and recommended suspension and the concise reasons therefor. Within thirty days of receipt of the notice, the governor shall transmit to the committee, the code reviser, and the department written approval or disapproval of the recommended suspension. If the suspension is approved by the governor, it is effective from the date of that approval and continues until ninety days after the expiration of the next regular legislative session.

    (3)(a) The code reviser shall publish transmittals from the committee or the governor issued pursuant to subsection (2)(b) or (c) of this section in the Washington state register and shall publish in the next supplement and compilation of the Washington administrative code, and in the Washington state register in which the full text of the rule appears, a reference to the committee's objection or recommended suspension and the governor's action on it.

    (b) The reference provided for in (a) of this subsection must be removed from a rule published in the Washington administrative code if a subsequent adjudicatory proceeding determines that the rule is within the intent of the legislature."

    Renumber the remaining sections consecutively and correct any internal references accordingly.  Correct the title.

EFFECT:   (1) Creates the Joint Tax Avoidance Rules Review Committee with four legislator members, and four legislator alternates. 

     (2)  Requires the Department of Revenue to notify the Joint Committee of any proposed rules relating to tax avoidance.

     (3)  Allows the Joint Committee to determine that a proposed tax avoidance rule is not within legislative intent and give notice of its objection to the DOR; following notice to the Joint Committee of DOR's intended action after its rule hearing, allows the Joint Committee to file objections with the Code Reviser.

     (4)  Allows the Joint Committee, after an adverse finding regarding an existing rule, to make a recommendation that the tax avoidance rule should be suspended and give notice to the legislature, the Governor, the Code Reviser, and the DOR.

     (5)  Allows the Governor to approve the rule suspension, to take effect from the date of approval until 90 days after the next regular legislative session.

     (6)  Requires the Code Reviser to publish transmittals from the Joint Committee and the Governor in the Washington Administrative Code and the Washington Register.

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