2664.E AAS 3/3/94 S5742.3
EHB 2664 - S COMM AMD
By Committee on Ways & Means
ADOPTED 3/3/94
Strike everything after the enacting clause and insert the following:
"Sec. 1. RCW 82.60.020 and 1993 sp.s. c 25 s 403 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) "Department" means the department of revenue.
(3) "Eligible
area" means: (a) A county in which the average level of unemployment for
the three years before the year in which an application is filed under this
chapter exceeds the average state unemployment for those years by twenty
percent; (b) a metropolitan statistical area, as defined by the office of
federal statistical policy and standards, United States department of commerce,
in which the average level of unemployment for the calendar year immediately
preceding the year in which an application is filed under this chapter exceeds
the average state unemployment for such calendar year by twenty percent; ((or))
(c) a designated neighborhood reinvestment area approved under RCW 43.63A.700;
(d) subcounty areas within a city with a population of less than twelve hundred
persons in those counties that are not covered under (a) of this subsection
that are timber impact areas as defined in RCW 43.31.601; or (e) counties where
thirty percent or more of total employment is federal department of defense
related.
(4)(a) "Eligible investment project" means that portion of an investment project which:
(i) Is directly utilized to create at least one new full-time qualified employment position for each three hundred thousand dollars of investment on which a deferral is requested in an application approved before July 1, 1994, and for each one million dollars of investment on which a deferral is requested in an application approved after June 30, 1994; and
(ii) Either initiates a
new operation, or expands or diversifies a current operation by expanding,
equipping, or renovating an existing ((building)) facility
with costs in excess of twenty-five percent of the true and fair value of the
((plant complex)) facility prior to improvement((; or
(iii) Acquires
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)). The lessor/owner of ((the structure))
a qualified building is not eligible for a deferral unless the
underlying ownership of the buildings, machinery, and equipment vests
exclusively in the same person, or unless the lessor by written contract
agrees to pass the economic benefit of the deferral to the lessee in the form
of reduced rent payments.
(b) "Eligible investment project" does not include any portion of an investment project undertaken by a light and power business as defined in RCW 82.16.010(5), other than cogeneration projects that are both an integral part of a manufacturing facility and owned at least fifty percent by the manufacturer, or investment projects which have already received deferrals under this chapter.
(5) "Investment
project" means an investment in qualified buildings ((and)) or
qualified machinery and equipment, including labor and services rendered in the
planning, installation, and construction of the project.
(6) "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 shall include the production or fabrication of specially made or custom made articles. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, and the activities performed by research and development laboratories and commercial testing laboratories.
(7) "Person" has the meaning given in RCW 82.04.030.
(8) "Qualified
buildings" means ((new)) structures used for manufacturing and research
and development activities, including plant offices and warehouses or other
facilities for the storage of raw material 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. 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.
(9) "Qualified employment position" means a permanent full-time employee employed in the eligible investment project during the entire tax year.
(10) "Qualified machinery and equipment" means all new 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.
(11) "Recipient" means a person receiving a tax deferral under this chapter.
(12) "Research and development" means the development, refinement, testing, marketing, and commercialization of a product, service, or process before commercial sales have begun. As used in this subsection, "commercial sales" excludes sales of prototypes or sales for market testing if the total gross receipts from such sales of the product, service, or process do not exceed one million dollars.
Sec. 2. RCW 82.60.030 and 1985 c 232 s 3 are each amended to read as follows:
Application for deferral of taxes under this chapter must be made before July 1, 1997, and before initiation of the construction of the investment project or acquisition of equipment or machinery. The application shall be made to the department in a form and manner prescribed by the department. The application shall contain information regarding the location of the investment project, the applicant's average employment in the state for the prior year, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department shall rule on the application within sixty days.
Sec. 3. RCW 82.60.040 and 1986 c 116 s 13 are each amended to read as follows:
(1) The department shall issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW on each eligible investment project that:
(a) Is located in an eligible area;
(b) Is located in any county if seventy-five percent of the new qualified employment positions are to be filled by residents of a contiguous county that qualifies as an eligible area; or
(c) Is located in a county containing a designated neighborhood reinvestment area approved under RCW 43.63A.700 if seventy-five percent of the new qualified employment positions are to be filled by residents of the neighborhood reinvestment area.
(2) A recipient of a tax deferral under subsection (1) (b) or (c) of this section shall maintain the required percentage of qualified employment positions filled by residents of the contiguous county or neighborhood reinvestment area for three calendar years after the date on which the department certifies the investment project as having been operationally completed.
(3) The department shall keep a running total of all deferrals granted under this chapter during each fiscal biennium.
(4) No certificate may be issued unless the application is received by July 1, 1997.
Sec. 4. RCW 82.60.050 and 1993 sp.s. c 25 s 404 are each amended to read as follows:
RCW 82.60.030 and
82.60.040 shall expire July 1, ((1998)) 1997.
NEW SECTION. Sec. 5. This act shall take effect July 1, 1994."
EHB 2664 - S COMM AMD
By Committee on Ways & Means
ADOPTED 3/3/94
On page 1, line 2 of the title, after "areas;" strike the remainder of the title and insert "amending RCW 82.60.020, 82.60.030, 82.60.040, and 82.60.050; and providing an effective date."
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