BILL REQ. #:  S-0941.1 

Read first time 01/24/2005.   Referred to Committee on Government Operations & Elections.

     AN ACT Relating to tax preferences; and amending RCW 43.136.030, 43.136.040, and 43.136.050.

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

Sec. 1   RCW 43.136.030 and 1982 1st ex.s. c 35 s 41 are each amended to read as follows:
     (1) The joint legislative audit and review committee shall annually review four tax preferences selected from chapters 82.60, 82.61, 82.62, and 82.63 RCW. In selecting the four tax preferences for annual review, the joint legislative audit and review committee will consult with the department of revenue concerning availability of relevant information needed for review purposes.
     (2) The joint legislative ((budget)) audit and review committee shall review each selected tax preference for termination by the processes provided in this chapter. The review shall be completed and a report prepared on or before June 30th of the year prior to the date established for termination.
     (3) Upon completion of its report, the joint legislative ((budget)) audit and review committee shall transmit copies of the report to the department of revenue. The department of revenue may then conduct its own review of the tax preference scheduled for termination and shall prepare a report on or before September 30th of the year prior to the date established for termination. Upon completion of its report the department of revenue shall transmit copies of its report to the joint legislative ((budget)) audit and review committee. The joint legislative ((budget)) audit and review committee shall prepare a final report that includes the reports of both the department of revenue and the joint legislative ((budget)) audit and review committee. The joint legislative ((budget)) audit and review committee and the department of revenue shall, upon request, make available to each other all working papers, studies, and other documents which relate to reports required under this section. The joint legislative ((budget)) audit and review committee shall transmit the final report to all members of the legislature, to the governor, and to the state library.

Sec. 2   RCW 43.136.040 and 1982 1st ex.s. c 35 s 42 are each amended to read as follows:
     (1) In reviewing a tax preference, the joint legislative ((budget)) audit and review committee shall develop information needed by the legislature to determine if the tax preference should be terminated as scheduled, modified, or reestablished without modification. The joint legislative ((budget)) audit and review committee shall consider, but not be limited to, the following factors in the review.
     (((1))) (a) The persons or organizations whose state tax liabilities are directly affected by the tax preference.
     (((2))) (b) Legislative objectives, including business development, business expansion and job creation, and emphasizing the creation of higher wage jobs and growth in state and local revenue due to the tax preference, that might provide a justification for the tax preference.
     (((3))) (c) Evidence that the existence of the tax preference has contributed to the achievement of any of the objectives identified in ((subsection (2))) (b) of this subsection.
     (((4))) (d) The extent to which continuation of the tax preference beyond its scheduled termination date might contribute to any of the objectives identified in ((subsection (2))) (b) of this subsection.
     (((5))) (e) Fiscal impacts of the tax preference, including past impacts and expected future impacts if it is not terminated as scheduled.
     (((6))) (f) The extent to which termination of the tax preference would affect the distribution of liability for payment of state taxes.
     (2) As part of this audit, the joint legislative audit and review committee shall recommend to the legislature disclosure and accountability standards for future review of a tax preference.

Sec. 3   RCW 43.136.050 and 1982 1st ex.s. c 35 s 43 are each amended to read as follows:
     (1) Following receipt of the final report from the joint legislative ((budget)) audit and review committee, the ((ways and means)) fiscal committees of the house of representatives and the senate shall jointly hold a public hearing to consider the final report and any related data. The committees shall also receive testimony from the governor, or the governor's designee, and other interested parties, including the general public.
     (2) Following the joint hearing, the committees may separately hold additional meetings or hearings to come to a final determination as to whether a continuation, modification, or termination of a tax preference is in the public interest. If a committee determines that a tax preference should be continued or modified, it shall make the determination as a bill. No more than one tax preference shall be reestablished or modified in any one bill.