BP BHEAD INT H [atlas:bill]

AN ACT Relating to a business and occupation or public utility tax credit for persons making contributions to public institutions of higher education in this state; adding a new chapter to Title 82 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature finds that innovations in technology lead to a flow of new ideas, products, and jobs essential to the economic, intellectual, and social well-being of the state and its people.

The legislature further finds that technological innovations often begin at institutions of higher education, which provide the academic environment for research and development together with training for a highly skilled work force.

The legislature further finds that a decline in public funding negatively impacts the ability of institutions of higher education to meet the technology challenge and that encouraging high‑technology companies to finance public research and scientific training will protect the state's competitiveness.

Therefore, it is the policy of the legislature to provide incentives for private contributions to the state's institutions of higher education.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Contribution" means a gift to an eligible institution of higher education of cash or tangible personal property that qualifies as a charitable contribution as defined in 26 U.S.C. 170(c) and that is used by the eligible institution of higher education for the purposes of promoting study or research in the fields of aerospace, advanced computing, advanced materials, agriculture, biotechnology, electronic device technology, or environmental technology, or academic disciplines related to these fields, including, but not limited to, biology, chemistry, electrical engineering, mathematics, and physics. The term does not include gifts for research in which the person making the gift has a proprietary interest. For the purposes of this subsection, "promoting study or research" includes, but is not limited to, funding basic research, endowing a faculty chair, funding recruitment and retention, and establishing scholarships.

(2) "Eligible institution of higher education" means a public institution of higher education as that term is defined in RCW 28B.10.016(4)and 28B.20.287, and the joint center for higher education established under chapter 28B.25 RCW.

(3) "Fair market value" in the case of a contribution of tangible personal property means the price the donor would have received if the property were sold in the customary market at the time of the contribution.

NEW SECTION. Sec. 3. (1) A person may not receive a credit under this chapter unless the person first files an application with the department and receives approval of the application before making the contribution. The application must be in a form and manner prescribed by the department, and must be signed by the person making the contribution and an authorized representative of the eligible institution of higher education. The application must contain information regarding the identity of the eligible institution of higher education, the amount of the contribution, and other information required by the department.

(2) The eligible institution of higher education shall certify on the application that the contribution qualifies as a contribution as defined in 26 U.S.C. 170(c) and that the contribution will be used for the purposes specified in subsection (1) of this section. If the contribution is tangible personal property, the eligible institution shall also certify the fair market value of the tangible personal property and that the tangible personal property is needed for and will aid in carrying out the purposes specified in subsection (1) of this section.

(3) The application for credit may be made for more than one year if the identified eligible institution of higher education receiving the contribution agrees to accept the contribution in the years for which application is made. An application for more than one year must specify the date upon which the contribution will be made in years following the application year. Credit may not be allowed for any year after termination of the credit authorized by this chapter.

(4) The department may not approve an application that would cause the total amount of credits claimed by all persons claiming credits under this chapter to exceed sixty million dollars in a biennium. The department may approve an application in part in order to avoid exceeding this amount.

(5) The department shall approve applications on a first-come, first-served basis. If two or more persons file applications at the same time, which if approved would cause the total amount of credits by all persons claiming tax credits under this chapter to exceed sixty million dollars in any biennium, the department shall approve the applications in part on a pro rata basis in order to avoid exceeding this amount.

(6) Within ninety days after receiving approval of the application from the department, the person making a contribution for which a credit is claimed under this chapter shall file an affidavit with the department signed by an authorized representative of the eligible institution of higher education receiving the contribution certifying the date of receipt. For an application for credit of more than one year, the affidavit must be filed within ninety days of each date specified in the application. Failure to file the affidavit required by this section will result in denial of the credit.

NEW SECTION. Sec. 4. (1) Subject to section 3 of this act, a person is allowed a credit against taxes imposed under chapter 82.04 or 82.16 RCW for a contribution given by the person directly to an eligible institution of higher education.

(2) For contributions made in the year ending December 31, 1997, the credit is equal to the amount by which contributions in the current year exceed charitable gifts made to eligible institutions in the year ending December 31, 1996.

(3) For contributions made in the year ending December 31, 1998, and in subsequent calendar years, the credit is computed as follows:

(a) If contributions in the current year are equal to or less than contributions in the previous year, the credit is equal to sixty percent of contributions in the current year; and

(b) If contributions in the current year are greater than contributions in the previous year, the credit is equal to sixty percent of contributions in the prior year plus the amount by which contributions in the current year exceed contributions in the prior year.

(4) A person may only take the credit against taxes due for the same calendar year in which the contribution is made, and must be claimed by the due date of the last tax return for the calendar year in which the contribution is made. The credit may not exceed the amount of taxes otherwise due under chapter 82.04 or 82.16 RCW after the application of any other available credits.

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

NEW SECTION. Sec. 6. The department may adopt such rules as are necessary or desirable to carry out the purposes of this chapter.

NEW SECTION. Sec. 7. Applications, reports, and other information received by the department under this chapter are not confidential and are subject to disclosure.

NEW SECTION. Sec. 8. 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. 9. (1) The department shall perform an assessment of the tax credit authorized by this chapter and deliver a report on the assessment to the governor and the legislature by September 1, 2005. The assessment must identify the institutions of higher education receiving contributions subsequent to the enactment of this credit, the amount of cash or tangible personal property contributed, the name of the persons making contributions, whether fluctuations in contribution trends give rise to concerns, and an analysis of costs incurred by the department in administering the credit established by this section, and such other factors as the department selects.

(2) The higher education coordinating board established in chapter 28B.80 RCW shall perform an assessment of the impact on institutions of higher education by the credit authorized in this chapter and deliver a report on the assessment to the governor and the legislature by September 1, 2005. The assessment must analyze fluctuations in student enrollment in specified programs at eligible institutions of higher education, impact on career opportunities for students attending eligible institutions of higher education, identify benefits and negatives, if any, experienced by the eligible institutions of higher education by reason of the credit, and such other factors as the board selects.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION. Sec. 11. 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 takes effect July 1, 1997.