AN
ACT Relating to the rural area marketing plan; amending RCW 82.62.010 and
82.62.030; adding a new section to chapter 82.14 RCW; adding a new section to
chapter 43.63A RCW; creating new sections; and repealing RCW 82.62.040.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
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. 4 was vetoed. See message at end of chapter.
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.
NEW
SECTION. Sec. 6. 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. 7.
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.
*Sec. 7 was vetoed. See message at end of chapter.
*NEW
SECTION. Sec. 8.
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.
*Sec. 8 was vetoed. See message at end of chapter.
PART
IV
RURAL
ENTERPRISE ZONES
NEW
SECTION. Sec. 9. 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. 10.
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. 11. 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. 12.
Section captions and part headings used in this act are not any part of the
law.
