5280-S2

AN ACT Relating to tax deferrals for a new thoroughbred race track facility; adding a new chapter to Title 82 RCW; and declaring an emergency.

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

NEW SECTION. Sec. 1. 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) "Person" has the meaning given in RCW 82.04.030.

(3) "Department" means the department of revenue.

(4) "Investment project" means construction of buildings, site preparation, and the acquisition of related machinery and equipment when the buildings, machinery, and equipment are to be used in the operation of a new thoroughbred race track.

(5) "New thoroughbred race track" means a site for thoroughbred horse racing located west of the Cascade mountains on which construction is commenced after the effective date of this act and prior to July 1, 1998.

(6) "Buildings" means only those new structures such as ticket offices, concession areas, grandstands, stables, and other structures that are an essential or an integral part of a thoroughbred race track. If a building is used partly for use as an essential or integral part of a thoroughbred race track 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.

(7) "Machinery and equipment" means all fixtures, equipment, and support facilities that are an integral and necessary part of a thoroughbred race track.

(8) "Recipient" means a person receiving a tax deferral under this chapter.

(9) "Certificate holder" means an applicant to whom a tax deferral certificate has been issued.

(10) "Operationally complete" means constructed or improved to the point of being functionally useable for thoroughbred horse racing.

(11) "Initiation of construction" means that date upon which on-site construction commences.

NEW SECTION. Sec. 2. Application for deferral of taxes under this chapter shall be made before initiation of construction of buildings or acquisition of machinery and equipment. 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, 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.

NEW SECTION. Sec. 3. (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 investment project. The use of the certificate shall be governed by rules established by the department.

(2) This section shall expire July 1, 1998.

NEW SECTION. Sec. 4. (1) The recipient shall begin paying the deferred taxes in the third year after the date certified by the department as the date on which the investment project is operationally complete. The first payment is due on December 31st of the third calendar year after such certified date, with subsequent annual payments due on December 31st of the following four years with amounts of payment scheduled as follows:

Repayment Year % of Deferred Tax Repaid

1 20%

2 20%

3 20%

4 20%

5 20%

(2) The department may authorize an accelerated repayment schedule upon request of the recipient.

(3) Interest shall not be charged on any taxes deferred under this chapter for the period of deferral, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed for delinquent payments under this chapter. The debt for deferred taxes is not extinguished by insolvency or other failure of the recipient.

NEW SECTION. Sec. 5. Chapter 82.32 RCW applies to the administration of this chapter.

NEW SECTION. Sec. 6. Applications and any other information received by the department under this chapter is not confidential and is subject to disclosure.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 82 RCW.

NEW SECTION. Sec. 9. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.