BILL REQ. #:  H-1448.1 

Read first time 02/14/2005.   Referred to Committee on Finance.

     AN ACT Relating to the excise taxation of trail maintenance and construction services; reenacting and amending RCW 82.04.190; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.08 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that the state is home to an extensive trail network that accommodates a physically active and demographically diverse public. An important community resource, this network of trails provides pathways through which people can experience our unique wilderness lands. The legislature further finds that nonprofit organizations play a vital role in building and maintaining Washington's hiking trail network. The legislature declares that it is in the public interest to encourage these nonprofit organizations through the provision of tax relief. The tax relief provided by this act reduces the tax burden on nonprofit organizations that build and maintain trails and increases the impact and effectiveness of trail building and maintenance activities provided by these organizations.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.04 RCW to read as follows:
     (1) This chapter does not apply to amounts received by nonprofit organizations, as defined in subsection (2) of this section, from the United States or any of its instrumentalities, the state of Washington or any of its municipal corporations or political subdivisions, or from another nonprofit organization for the constructing or reconstructing of trails or trail maintenance activities.
     (2) For purposes of this section, the following definitions apply:
     (a) "Nonprofit organization" means an organization exempt from tax under section 501(c)(3) or (4) of the federal internal revenue code (26 U.S.C. Sec. 501(c)(3) or (4)).
     (b) "Trail maintenance activities" include removing plants or tree limbs encroaching on the trailway; restoring tread, including the removal of slough from a trail, returning a trail to its proper width, removing organic matter, removing protruding roots and rocks, restoring the outslope of a trail, and removing berms from the outside edge of a trail; constructing, repairing, or improving raised trail structures such as turnpikes or puncheon; clearing ditches, drain-dips, and culverts, constructing, installing, repairing, and improving drainage structures such as culverts, drain-dips, waterbars, and check-dams; clearing puncheon, turnpikes, curb logs, and bridges of dirt and plants; blocking off social trails; rerouting trails; postexcavation cleanup; naturalizing abandoned trails, removing trash near trailheads; and recruiting volunteers, educating and training the volunteers in techniques of trail maintenance, and supervising and monitoring the volunteers.

Sec. 3   RCW 82.04.190 and 2004 c 174 s 4 and 2004 c 2 s 8 are each reenacted and amended to read as follows:
     "Consumer" means the following:
     (1) Any person who purchases, acquires, owns, holds, or uses any article of tangible personal property irrespective of the nature of the person's business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than for the purpose (a) of resale as tangible personal property in the regular course of business or (b) of incorporating such property as an ingredient or component of real or personal property when installing, repairing, cleaning, altering, imprinting, improving, constructing, or decorating such real or personal property of or for consumers or (c) of consuming such property in producing for sale a new article of tangible personal property or a new substance, of which such property becomes an ingredient or component or as a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale or (d) purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon;
     (2)(a) Any person engaged in any business activity taxable under RCW 82.04.290 or 82.04.2908; (b) any person who purchases, acquires, or uses any telephone service as defined in RCW 82.04.065, other than for resale in the regular course of business; (c) any person who purchases, acquires, or uses any service defined in RCW 82.04.050(2)(a) or any amusement and recreation service defined in RCW 82.04.050(3)(a), other than for resale in the regular course of business; and (d) any person who is an end user of software;
     (3) Any person engaged in the business of contracting for the building, repairing or improving of any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state of Washington or by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind as defined in RCW 82.04.280, in respect to tangible personal property when such person incorporates such property as an ingredient or component of such publicly owned street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle by installing, placing or spreading the property in or upon the right of way of such street, place, road, highway, easement, bridge, tunnel, or trestle or in or upon the site of such mass public transportation terminal or parking facility;
     (4) Any person who is an owner, lessee or has the right of possession to or an easement in real property which is being constructed, repaired, decorated, improved, or otherwise altered by a person engaged in business, excluding only (a) municipal corporations or political subdivisions of the state in respect to labor and services rendered to their real property which is used or held for public road purposes, and (b) the United States, instrumentalities thereof, and county and city housing authorities created pursuant to chapter 35.82 RCW in respect to labor and services rendered to their real property. Nothing contained in this or any other subsection of this definition shall be construed to modify any other definition of "consumer";
     (5) Any person who is an owner, lessee, or has the right of possession to personal property which is being constructed, repaired, improved, cleaned, imprinted, or otherwise altered by a person engaged in business;
     (6) Any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation; also, any person engaged in the business of clearing land and moving earth of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW. Any such person shall be a consumer within the meaning of this subsection in respect to tangible personal property incorporated into, installed in, or attached to such building or other structure by such person, except that consumer does not include any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon, or above real property of or for the United States, or any instrumentality thereof, if the investment project would qualify for sales and use tax deferral under chapter 82.63 RCW if undertaken by a private entity;
     (7) Any person who is a lessor of machinery and equipment, the rental of which is exempt from the tax imposed by RCW 82.08.020 under RCW 82.08.02565, with respect to the sale of or charge made for tangible personal property consumed in respect to repairing the machinery and equipment, if the tangible personal property has a useful life of less than one year. Nothing contained in this or any other subsection of this section shall be construed to modify any other definition of "consumer"; and
     (8) Any person engaged in the business of cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development.
     "Consumer" does not include any person exempt from the tax imposed by this chapter under section 2 of this act with respect to tangible personal property incorporated as an ingredient or component of real or personal property under a contract to construct or reconstruct trails or to perform trail maintenance activities as defined in section 2 of this act.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to the sale of or charge made for labor and services rendered in respect to the construction or reconstruction of trails or to trail maintenance activities by a nonprofit organization.
     (2) For the purposes of this section, "trail maintenance activities" and "nonprofit organization" have the same meaning as provided in section 2 of this act.

NEW SECTION.  Sec. 5   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 immediately.