5740-S2 AMH BUCK H3306.1
2SSB 5740 - H COMM AMD 757
By Representative Buck
Strike everything after the enacting clause and insert the following:
"PART I
LEGISLATIVE INTENT
NEW SECTION. Sec. 1. LEGISLATIVE RECOGNITION AND INTENT. The legislature recognizes the economic hardship that rural distressed areas throughout the state have undergone in recent years. Numerous rural distressed areas across the state have encountered serious economic downturns resulting in significant job loss and business failure. In 1991 the legislature enacted two major pieces of legislation to promote economic development and job creation, with particular emphasis on worker training, income, and emergency services support, along with community revitalization through planning services and infrastructure assistance. However even though these programs have been of assistance, rural distressed areas still face serious economic problems including: Above-average unemployment rates from job losses and below-average employment growth; low rate of business start-ups; and persistent erosion of vitally important resource-driven industries.
The legislature also recognizes that rural distressed areas in Washington have an abiding ability and consistent will to overcome these economic obstacles by building upon their historic foundations of business enterprise, local leadership, and outstanding work ethic.
The legislature intends to assist rural distressed areas in their ongoing efforts to address these difficult economic problems by providing a comprehensive and significant array of economic tools, necessary to harness the persistent and undaunted spirit of enterprise that resides in the citizens of rural distressed areas throughout the state.
The further intent of this act is to provide:
(1) A strategically designed plan of assistance, emphasizing state, local, and private sector leadership and partnership;
(2) A comprehensive and significant array of business assistance, services, and tax incentives that are accountable and performance driven;
(3) An array of community assistance including infrastructure development and business retention, attraction, and expansion programs that will provide a competitive advantage to rural distressed areas throughout Washington; and
(4) Regulatory relief to reduce and streamline zoning, permitting, and regulatory requirements in order to enhance the capability of businesses to grow and prosper in rural distressed areas.
NEW SECTION. Sec. 2. GOALS. The primary goals of chapter . . ., Laws of 1997 (this act) are to:
(1) Promote the ongoing operation of business in rural distressed areas;
(2) Promote the expansion of existing businesses in rural distressed areas;
(3) Attract new businesses to rural distressed areas;
(4) Assist in the development of new businesses from within rural distressed areas;
(5) Provide family wage jobs to the citizens of rural distressed areas; and
(6) Promote the development of communities of excellence in rural distressed areas.
PART II
TAX INCENTIVES
NEW SECTION. Sec. 3. A new section is added to chapter 82.14 RCW to read as follows:
(1) The legislative authority of a distressed county may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax shall not exceed 0.04 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.
(2) The tax imposed under subsection (1) of this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department of revenue shall perform the collection of such taxes on behalf of the county at no cost to the county.
(3) Moneys collected under this section shall only be used for the purpose of financing public facilities in rural counties.
(4) No tax may be collected under this section before July 1, 1998. No tax may be collected under this section by a county more than twenty-five years after the date that a tax is first imposed under this section.
(5) For purposes of this section, "distressed county" means a county in which the average level of unemployment for the three years before the year in which a tax is first imposed under this section exceeds the average state employment for those years by twenty percent.
Sec. 4. RCW 82.62.010 and 1996 c 290 s 5 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 credit 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 county that has a median household income that is less than seventy-five percent of the state median household income for the previous three years; (c) 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; (d) a designated community empowerment zone approved under RCW 43.63A.700; or (e) subcounty areas in those counties that are not covered under (a) of this subsection that are timber impact areas as defined in RCW 43.31.601.
(4)(a)
"Eligible business project" means manufacturing or research and
development activities which are conducted by an applicant in an eligible area
at a specific facility, provided the applicant's average full-time qualified
employment positions at the specific facility will be ((at least fifteen
percent)) greater in the year for which the credit is being sought than the
applicant's average full-time qualified employment positions at the same
facility in the immediately preceding year.
(b) "Eligible business project" does not include any portion of a business project undertaken by a light and power business as defined in RCW 82.16.010(5) or that portion of a business project creating qualified full-time employment positions outside an eligible area or those recipients of a sales tax deferral under chapter 82.61 RCW.
(5) "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.
(6) "Person" has the meaning given in RCW 82.04.030.
(7) "Qualified employment position" means a permanent full-time employee employed in the eligible business project during the entire tax year.
(8) "Tax year" means the calendar year in which taxes are due.
(9) "Recipient" means a person receiving tax credits under this chapter.
(10) "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. 5. RCW 82.62.030 and 1996 c 1 s 3 are each amended to read as follows:
(1) A person shall be allowed a credit against the tax due under chapter 82.04 RCW as provided in this section. For an application approved before January 1, 1996, the credit shall equal one thousand dollars for each qualified employment position directly created in an eligible business project. For an application approved on or after January 1, 1996, the credit shall equal two thousand dollars for each qualified employment position directly created in an eligible business project. For an application approved on or after July 1, 1997, the credit shall equal four thousand dollars for each qualified employment position with wages and benefits greater than forty thousand dollars annually that is directly created in an eligible business. For an application approved on or after July 1, 1997, the credit shall equal two thousand dollars for each qualified employment position with wages and benefits less than or equal to forty thousand dollars annually that is directly created in an eligible business.
(2)
The department shall keep a running total of all credits granted under this
chapter during each fiscal ((biennium)) year. The department
shall not allow any credits which would cause the tabulation ((for a
biennium)) to exceed ((fifteen)) five million five hundred
thousand dollars in fiscal year 1998 or 1999 or seven million five
hundred thousand dollars in any fiscal year thereafter. If all or part of
an application for credit is disallowed under this subsection, the disallowed
portion shall be carried over for approval the next ((biennium)) fiscal
year. However, the applicant's carryover into the next ((biennium))
fiscal year is only permitted if the tabulation for the next ((biennium))
fiscal year does not exceed ((fifteen million dollars)) the
cap for that fiscal year as of the date on which the department has
disallowed the application.
(3)
((No recipient is eligible for tax credits in excess of three hundred
thousand dollars.
(4))) No
recipient may use the tax credits to decertify a union or to displace existing
jobs in any community in the state.
(((5)))
(4) No recipient may receive a tax credit on taxes which have not been
paid during the taxable year.
Sec. 6. RCW 67.28.210 and 1996 c 159 s 4 are each amended to read as follows:
All
taxes levied and collected under RCW 67.28.180, 67.28.240, and 67.28.260 shall
be credited to a special fund in the treasury of the county or city imposing
such tax. Such taxes shall be levied only for the purpose of paying all or any
part of the cost of acquisition, construction, or operating of stadium
facilities, convention center facilities, performing arts center facilities,
and/or visual arts center facilities or to pay or secure the payment of all or
any portion of general obligation bonds or revenue bonds issued for such
purpose or purposes under this chapter, or to pay for advertising, publicizing,
or otherwise distributing information for the purpose of attracting visitors
and encouraging tourist expansion when a county or city has imposed such tax
for such purpose, or as one of the purposes hereunder, and until withdrawn for
use, the moneys accumulated in such fund or funds may be invested in interest
bearing securities by the county or city treasurer in any manner authorized by
law. In addition such taxes may be used to develop strategies to expand
tourism: PROVIDED, That any county, and any city within a county, bordering
upon Grays Harbor may use the proceeds of such taxes for construction and
maintenance of a movable tall ships tourist attraction in cooperation with a
tall ships restoration society, except to the extent that such proceeds are
used for payment of principal and interest on debt incurred prior to June 11,
1986: PROVIDED FURTHER, That any city or county may use the proceeds of such
taxes for the refurbishing and operation of a steam railway or historic
maritime vessels used primarily for passenger transportation for tourism
promotion purposes: PROVIDED FURTHER, That any city bordering on the Pacific
Ocean or on Baker Bay with a population of not less than eight hundred and the
county in which such a city is located, a city bordering on the Skagit river
with a population of not less than twenty thousand, or any city within a county
made up entirely of islands may use the proceeds of such taxes for funding
special events or festivals, or for the acquisition, construction, or operation
of publicly owned tourist promotional infrastructures, structures, or buildings
including but not limited to an ocean beach boardwalk, public docks, and
viewing towers: PROVIDED FURTHER, That any county which imposes a tax under
RCW 67.28.182 or any city with a population less than fifty thousand in such
county may use the proceeds of the tax levied and collected under RCW 67.28.180
to provide public restroom facilities available to and intended for use by
visitors: PROVIDED FURTHER, That any county made up entirely of islands, ((and))
any city or town that has a population less than five thousand, and any
county that is a rural distressed area as defined under RCW 43.31.601 or any
city within that county, may use the proceeds of the tax levied and
collected under RCW 67.28.180 to provide public restroom facilities, parking
facilities, or public lighting including sport field lighting that is
available to and intended for use by visitors: PROVIDED FURTHER, That any city
or county may use the proceeds of such taxes for funding a civic festival, if
the following conditions are met: The festival is a community-wide event held
not more than once annually; the festival is approved by the city, town, or
county in which it is held; the festival is sponsored by an exempt organization
defined in section 501(c)(3), (4), or (6) of the federal internal revenue code;
the festival provides family-oriented events suiting a broad segment of the
community; and the proceeds of such taxes are used solely for advertising and
promotional materials intended to attract overnight visitors: PROVIDED
FURTHER, That any city may use the proceeds of such taxes for street banners to
attract and welcome tourists.
NEW SECTION. Sec. 7. RCW 82.62.040 and 1993 sp.s. c 25 s 411, 1988 c 41 s 4, & 1986 c 116 s 22 are each repealed.
PART III
BUSINESS ASSISTANCE
NEW SECTION. Sec. 8. BUSINESS ASSISTANCE AND RECRUITMENT FOR RURAL DISTRESSED AREAS. The department of community, trade, and economic development is directed to emphasize business assistance and recruitment for rural distressed areas within its trade and economic sectors, and local development assistance. The primary goal of the rural initiative is to coordinate and administer a comprehensive and effective set of business assistance programs and services including:
(1) Business recruitment. The department of community, trade, and economic development shall: Provide a comprehensive and aggressive program to attract viable businesses to rural distressed areas; work with local communities to identify select industry sectors that have a competitive advantage in specific rural distressed areas; collaborate with state and local officials to modify their infrastructure plans and priorities to facilitate business growth; and assist rural distressed areas in developing strategic business recruitment plans.
(2) Business permitting and zoning one-stop shop. The department of community, trade, and economic development shall: Provide a streamlined and customer driven siting service to businesses in order to promote their attraction and expansion in rural distressed areas; provide preliminary permit application and zoning information and services for businesses in order to attract firms and facilitate business growth in rural distressed areas.
(3) Business regulatory assistance and ombudsman services. The department of community, trade, and economic development shall: Provide comprehensive business regulatory services to assist businesses in addressing and responding to local, state, and federal regulations; and provide recommendations on streamlining and modifying government regulations.
(a) The department of community, trade, and economic development is authorized to review state zoning, permitting, or regulatory requirements that pose difficulty for businesses wishing or likely to site in a rural enterprise area. In situations where the department of community, trade, and economic development considers the zoning, permitting, or regulatory requirements placed on a business in a rural enterprise area unfairly burdensome the director may petition the regulatory agency or agencies for regulatory relief. In addition the director may petition the agency or agencies for relief under the regulatory fairness act, chapter 19.85 RCW.
(b) In situations where a business or entity in a rural enterprise area is encountering regulatory oversight from more than one state agency and is experiencing conflicting direction or confusing process, the business or entity may petition the director to intercede. The director upon review of the circumstances involved is authorized to designate a lead agency to collaborate with other state agencies in order to streamline and reduce the regulatory difficulties.
(c) Businesses or entities in a rural enterprise zone may petition the director for an accelerated zoning, permitting, or regulatory process. The director upon reviewing the petition and the circumstances involved may make a finding of regulatory unfairness and may direct the state agency or agencies to process the business or entities application in an expeditious manner with a maximum timeline of six months from the director's receipt of the petition.
The director shall establish a pilot process in cooperation with other state agencies to implement this subsection (3) during 1997 and 1998 and report annually to the legislature on the impact of the program.
(4) "Brown Fields" Program. The department of community, trade, and economic development shall develop with the department of ecology and recommend to the legislature a streamlined and cost-effective process to redevelop hazardous industrial sites in order to promote business growth in rural distressed areas.
(5) Rural enterprise zone development and foreign trade zone. The department of community, trade, and economic development is authorized to provide technical assistance to local governments in rural distressed areas to establish rural enterprise zones and foreign trade zones. The department of community, trade, and economic development shall target rural enterprise zones and foreign trade zones in the delivery of its services in order to maximize the impact of its economic development assistance to businesses and rural distressed areas.
NEW SECTION. Sec. 9. RURAL INITIATIVE ADMINISTRATION. The rural initiative shall be administered by a director appointed by the director of community, trade, and economic development, in consultation with the rural distressed areas economic recovery coordination board. The rural initiative director shall coordinate activities with the rural community assistance team and report on the activities and performance of the rural initiative to the legislature on a quarterly basis.
PART IV
RURAL ENTERPRISE ZONES
NEW SECTION. Sec. 10. A new section is added to chapter 43.63A RCW to read as follows:
RURAL ENTERPRISE ZONES. The legislature recognizes the unique difficulties encountered by communities in rural distressed areas wishing to promote business development, increase employment opportunities, and provide a high quality of life for its citizens. In response the legislature authorizes the establishment of rural enterprise zones that will allow the targeting of state services and resources in the form of business, industry recruitment, regulatory relief, and infrastructure development. It is the intent of the legislature to provide the critical level of resources and services to businesses and entities located in these rural enterprise zones that they will be the catalyst for economic prosperity and diversity throughout rural distressed areas in Washington.
(1) The department in cooperation with the department of revenue and other state agencies shall approve applications submitted by local governments in rural distressed areas. The application shall be in the form and manner and contain the necessary information designated by the department. The application shall:
(a) Be submitted on behalf of the local government by the chief elected official or, if none, by the governing body of the local government;
(b) Outline the purpose for the economic development enterprise zone and the process in which the application was developed;
(c) Demonstrate the level of government and community support for the enterprise zone;
(d) Outline the manner in which the enterprise zone will be governed and report its activities to the local government and the department; and
(e) Designate the geographic area in which the rural enterprise zone will exist.
(2) Rural enterprise zones are authorized to:
(a) Hire a director or designate an individual to oversee operations;
(b) Seek federal, state, and local government support in its efforts to target, develop, and attract viable businesses;
(c) Work with the office of business assistance and recruitment for rural distressed areas in the pursuit of its economic development activities;
(d) Provide a local one-stop shop for businesses intending to locate, retain, expand, or start their businesses within its zone; and
(e) Provide comprehensive permitting, zoning, and regulatory assistance to businesses or entities within the zone.
(3) Rural enterprise zones are authorized to receive the services and funding resources as provided under the rural area marketing plan and other resources assisting rural distressed areas.
(4) Rural enterprise zones may be established in conjunction with a foreign trade zone.
PART V
EVALUATION
NEW SECTION. Sec. 11. REVIEW AND EVALUATION. The joint legislative audit and review committee shall design an evaluation mechanism for economically distressed counties under this act and undertake an evaluation of the act's effectiveness by November 1, 1999. The agencies implementing the programs under this act shall assist the joint legislative audit and review committee evaluation.
PART VI
MISCELLANEOUS
NEW SECTION. Sec. 12. 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. 13. Section captions and part headings used in this act are not any part of the law."
Correct the title.
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