Z-1000.6  _______________________________________________

                          HOUSE BILL 2383

          _______________________________________________

State of Washington      57th Legislature     2002 Regular Session

By Representatives Berkey, Gombosky and Haigh; by request of Department of Revenue

Read first time 01/16/2002.  Referred to Committee on Finance.

Revising tax exemptions for entities organized solely as a blood, bone, or tissue bank.

    AN ACT Relating to tax exemptions for entities organized solely for the purposes of transplanting or replacing human blood, bone, or tissue; amending RCW 82.04.324; and creating a new section.

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

    Sec. 1.  RCW 82.04.324 and 1995 2nd sp.s. c 9 s 3 are each amended to read as follows:

    (1) As used in this section:

    (a) "Blood" includes human whole blood, plasma, blood derivatives, and related products.

    (b) "Bone" includes human bone, bone marrow, and related products.

    (c)(i) Before January 1, 2001, "tissue" includes human musculoskeletal tissue, musculoskeletal tissue derivatives, and related products.

(ii) On and after January 1, 2001, "tissue" includes human musculoskeletal tissue, musculoskeletal tissue derivatives, organs, body parts, and related products.

    (d) "Blood, bone, or tissue bank" means an organization exempt from federal income tax under section 501(c)(3) of the federal internal revenue code, organized solely for the purpose of transplanting or replacing human blood, bone, or tissue, and can include performing research on, procuring, testing, processing, storing, packaging, distributing, transporting, retrieving, or using blood, bone, or tissue, when those activities are integrally related to the transplanting or replacing of human blood, bone, or tissue.

    (e) "Medical supplies" means any item of tangible personal property, including any repair and replacement parts for such tangible personal property, used by a blood, tissue, or bone bank for the purpose of performing research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue.  The term includes tangible personal property used to:

    (i) Provide preparatory treatment of blood, bone, or tissue;

    (ii) Control, guide, measure, tune, verify, align, regulate, test, or physically support blood, bone, or tissue; and

    (iii) Protect the health and safety of employees or others present during research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue.

    (f) "Chemical" means any catalyst, solvent, water, acid, oil, or other additive that physically or chemically interacts with blood, bone, or tissue.

    (g) "Materials" means any item of tangible personal property, including, but not limited to, bags, packs, collecting sets, filtering materials, testing reagents, antisera, and refrigerants used or consumed in performing research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue.

    (h) "Research" means basic and applied research that has as its objective the design, development, refinement, testing, marketing, or commercialization of a product, service, or process.

    (2) This chapter does not apply to amounts received by blood, bone, or tissue banks, to the extent the amounts are exempt from federal income tax.

NEW SECTION. Sec. 2.  The amendment to RCW 82.04.324(1)(d) by this act is a clarification of the original intent of the legislature and is retroactive.  The remainder of this act is retroactive to January 1, 2001.

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