BILL REQ. #:  S-0720.3 

Read first time 02/01/2005.   Referred to Committee on Agriculture & Rural Economic Development.

     AN ACT Relating to repealing and narrowing tax incentives for machinery and equipment used to reduce agricultural burning of cereal grains and grass grown for seed for air quality purposes; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; repealing RCW 82.08.840, 82.12.840, 82.04.4459, and 84.36.580; providing an effective date; providing expiration dates; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that rules enacted to improve air quality in selected parts of eastern Washington created a financial hardship for some growers of cereal grains and grass grown for seed. As stated in RCW 70.94.656, it is "the policy of this state ...to promote the development of economical and practical alternate agricultural practices to such burning...". The legislature provided tax incentives in 2000 to assist such growers transition to alternative management systems while further improving air quality. Because those incentives have been difficult to administer, the legislature finds that it is necessary to refine and narrow those incentives.

NEW SECTION.  Sec. 2   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:
     (a) Sales of the following machinery and equipment to qualified farmers: No-till drills, sprayers, discs, cultivators, harrows, mowers, swathers, power rakes, balers, bale handlers, shredders, tractors two hundred fifty horsepower and over designed to pull conservation equipment on steep hills and highly erodible lands, and combine components limited to straw choppers, chaff spreaders, and stripper headers;
     (b) Labor and services rendered in respect to constructing hay sheds for qualified farmers or to sales of tangible personal property to qualified farmers that becomes an ingredient or component of hay sheds during the course of the constructing; and
     (c) If recommended by the department of ecology or the department of agriculture and exempted by rule of the department, new types of equipment based on newly developed technology.
     (2) No application is necessary for the tax exemption in this section. A person taking the exemption under this section must keep records necessary for the department to verify eligibility. The department may request from a qualified farmer, copies of farm service agency or crop insurance records for verification purposes, however information obtained from farm service agency or crop insurance records is deemed taxpayer information under RCW 82.32.330 and is not disclosable.
     (3) The definitions in this subsection apply to this section.
     (a) "Qualified farmer" means a farmer as defined in RCW 82.04.213 who has more than fifty percent of his or her tillable acres in cereal grains and/or field and turf grass grown for seed in qualified counties.
     (b) "Qualified counties" means those counties in Washington state where cereal grain production within the county exceeds fifteen thousand acres, and cereal grain production from nonirrigated acreage exceeds cereal grain production from irrigated acreage.
     (4) This section expires January 1, 2011.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The tax levied by RCW 82.12.020 does not apply in respect to:
     (a) The use of the following machinery and equipment by qualified farmers: No-till drills, sprayers, plows, discs, cultivators, harrows, mowers, swathers, power rakes, balers, bale handlers, shredders, tractors two hundred fifty horsepower and over designed to pull conservation equipment on steep hills and highly erodible lands, and combine components limited to straw choppers, chaff spreaders, and stripper headers; and
     (b) The use of tangible personal property that will be incorporated as an ingredient or component of hay sheds by a qualified farmer, during the course of constructing such hay sheds;
     (2) The eligibility requirements, conditions, and definitions in section 2 of this act apply to this section.
     (3) This section expires January 1, 2011.

NEW SECTION.  Sec. 4   The following acts or parts of acts are each repealed:
     (1) RCW 82.08.840 (Exemptions -- Machinery, equipment, or structures that reduce field burning) and 2000 c 40 s 2;
     (2) RCW 82.12.840 (Exemptions -- Machinery, equipment, or structures that reduce field burning) and 2003 c 5 s 14 & 2000 c 40 s 3;
     (3) RCW 82.04.4459 (Credit -- Field burning reduction costs) and 2000 c 40 s 4; and
     (4) RCW 84.36.580 (Property used to reduce field burning) and 2000 c 40 s 5.

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 July 1, 2005.