1869-S AMH ROAD BROW 7

SHB 1869 - H AMD 0143 FAILED 03-18-03

By Representative Roach

On page 1, line 7, beginning with "However," strike the remainder of the bill and insert the following: "The legislature further recognizes that these preferences are a tool to recruit new job-providing businesses to our state and to retain current Washington state employers. Given the fact that some bordering states and many other states across the country offer a more business-friendly environment, the legislature finds that it would be in our best interest to have periodic performance audits of tax incentives offered by other states and to determine if similar incentives could be enacted in Washington in order to make us more competitive.

NEW SECTION. Sec. 2 As used in this chapter, "tax preference" means an exemption, exclusion, or deduction from the base of a state tax; a credit against a state tax; a deferral of a state tax; or a preferential state tax rate; which is used as an incentive to attract and retain businesses and jobs.

NEW SECTION. Sec. 3. (1) The citizen commission for performance measurement of tax preferences is created.

(2) The commission has thirteen voting members, appointed by the governor as follows:

(a) Two persons representing small business;

(b) One person representing the biotechnology industry;

(d) One person representing the software industry;

(e) One person representing the aerospace industry;

(f) One person representing the insurance industry;

(g) One person representing the building industry;

(h) One person representing the research and development industry;

(i) One person representing the internet industry;

(k) One person representing the retail industry;

(l) One person representing the farming industry;

(m) One person representing labor.

(3) The commission has five nonvoting members, one appointed by the governor, and one appointed by each chair of the two largest caucuses of the senate and the two largest caucuses of the house of representatives.

(4)(a) Appointees representing small business must be filled from lists of nominees submitted by statewide business organizations representing a cross-section of industries.

(b) Appointees representing the other industries must be filled from lists of nominees submitted by statewide organizations representing the specified industry.

(c) The appointee representing labor must be filled from lists of nominees submitted by statewide labor organizations representing a cross-section of industries.

(5) The commission shall elect a chair from among its voting or nonvoting members. Decisions of the commission must be made using the sufficient consensus model. For the purposes of this subsection, "sufficient consensus" means the point at which the vast majority of the commission favors taking a particular action. If the commission determines that sufficient consensus cannot be reached, a vote must be taken. The commission must allow a minority report to be included with a decision of the commission, if requested by a member of the commission.

(6) Members serve for terms of four years, with the terms expiring on June 30th on the fourth year of the term. However, in the case of the initial members, four members shall serve four-year terms, four members shall serve three-year terms, and five members shall serve a two-year term, with each of the terms expiring on June 30th of the applicable year. Appointees may be reappointed to serve more than one term.

(7) The joint legislative audit and review committee shall provide clerical, technical, and management personnel to the commission to serve as the commission's staff. The department of revenue shall provide necessary support and information to the joint legislative audit and review committee.

(8) The commission shall meet at least once a quarter and may hold additional meetings at the call of the chair or by a majority vote of the members of the commission. The members of the commission shall be compensated in accordance with RCW 43.03.220 and reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 4. (1) The citizen commission for performance measurement of tax preferences shall develop a schedule to accomplish an orderly review of tax preferences. The commission shall schedule the review of other states' tax preferences in the order that they deem most appropriate, taking into consideration the business climates of those states. The commission shall analyze the different tax preferences and determine: (1) If the tax preference could be applied in Washington; (2) if the preference would help attract businesses to our state; and (3) if the preference would create jobs in Washington, directly or indirectly. For each tax preference that is considered, the committee shall provide a recommendation as to whether the tax preference should be implemented in Washington.

(2) The commission shall prepare a report that includes the comments of the commission and submit a final report to the finance committee of the house of representatives and the ways and means committee of the senate by November 30, 2003 and every year thereafter.

(3) Following receipt of a report under this section, the finance committee of the house of representatives and the ways and means committee of the senate shall jointly hold a public hearing to consider the final report and any related data.

NEW SECTION. Sec. 5. Upon request of the citizen commission for performance measurement of tax preferences or the joint legislative audit and review committee, the department of revenue and the department of employment security shall provide information needed by the commission or committee to meet its responsibilities under this chapter."

Correct the title.

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EFFECT: Changes the intent of the tax preference commission to audit and evaluate tax preferences in other states to see if such incentives could be effective in attracting jobs to Washington. Adds to the definition of tax preferences language that defines them as incentives to attract and retain businesses. Changes the make-up of the committee to include representatives of the main business sectors in our state. Requires the commission to evaluate tax preferences in other states and determine if such preferences were applied in our state if they would attract businesses and create jobs. Requires the commission to report to the House Finance Committee and the Senate Ways and Means Committee by November 30, 2003 and every year thereafter.