BILL REQ. #:  Z-0074.3 

Read first time 01/27/09.   Referred to Committee on Ways & Means.

     AN ACT Relating to improving the administration of state and local tax programs without impacting tax collections by providing greater consistency in numerous tax incentive programs, revising provisions relating to the confidentiality and disclosure of tax information, and amending statutes to improve clarity and consistency, eliminate obsolete provisions, and simplify administration; amending RCW 82.04.240, 82.04.2404, 82.04.250, 82.04.2909, 82.04.294, 82.04.426, 82.04.4266, 82.04.4268, 82.04.4269, 82.04.4452, 82.04.4461, 82.04.4463, 82.04.448, 82.04.4481, 82.04.4483, 82.04.4484, 82.04.449, 82.08.805, 82.08.965, 82.08.9651, 82.08.970, 82.08.980, 82.12.022, 82.12.805, 82.12.965, 82.12.9651, 82.12.970, 82.12.980, 82.16.0421, 82.29A.137, 82.60.020, 82.60.070, 82.63.020, 82.63.045, 82.74.040, 82.74.050, 82.75.010, 82.75.020, 82.75.040, 82.82.020, 82.82.040, 84.36.645, 84.36.655, 42.56.230, 82.16.120, 82.32.330, 82.32.480, 82.60.100, 82.62.080, 82.63.070, 82.74.070, 82.75.060, 83.100.210, 39.100.050, 82.36.440, 82.38.280, 82.04.3651, 82.08.02573, 82.08.0273, 82.08.0293, 82.08.865, 82.12.035, 82.12.040, 82.12.865, 82.80.120, 83.100.040, 83.100.046, 82.04.280, 82.04.280, 29A.36.210, 36.68.525, 36.69.145, 82.03.140, 84.34.020, 84.36.040, 84.36.381, 84.37.030, 84.37.902, 84.40.042, 84.48.050, 84.52.030, 84.52.070, 84.52.080, 84.56.070, 84.60.050, 86.09.490, 87.03.265, and 87.03.270; amending 2006 c 300 s 12 (uncodified); reenacting and amending RCW 82.04.260, 82.32.590, 82.32.600, 82.04.050, and 84.36.383; adding new sections to chapter 82.32 RCW; adding a new section to chapter 82.75 RCW; adding a new section to chapter 35.102 RCW; creating new sections; repealing RCW 82.32.535, 82.32.5351, 82.32.545, 82.32.560, 82.32.570, 82.32.610, 82.32.620, 82.32.630, 82.32.645, 82.32.650, 82.16.140, and 84.55.080; repealing 2005 c 301 s 5 (uncodified); providing a contingent effective date; and providing expiration dates.

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

NEW SECTION.  Sec. 101   (1) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information on how a tax preference is used. In recent years, the legislature has enacted or extended numerous tax preferences that require the reporting of information to the department of revenue. Although there are many similarities in the requirements, and only two distinct accountability documents, there is a lack of uniformity in the information reported, penalties for failure to file, due dates, filing extensions, and filing requirements. Greater uniformity in the data reported is necessary to adequately compare tax preference programs. The legislature intends to create two sets of uniform reporting requirements that apply to the existing tax preferences and can be used in future legislation granting additional tax preferences.
     (2) The legislative fiscal committees or the department of revenue are required to study many of the existing tax preferences and report to the legislature at least once. Because chapter 43.136 RCW now requires the joint legislative audit and review committee, with support from the department of revenue, to comprehensively review most tax preferences every ten years and provide a report to the legislature, a number of redundant studies by the legislative fiscal committees and the department of revenue have been eliminated. However, the department of revenue will continue to prepare summary descriptive statistics by category and report the statistics to the legislature each year.

NEW SECTION.  Sec. 102   A new section is added to chapter 82.32 RCW to read as follows:
     (1)(a) Every person claiming a tax preference that requires a survey under this section must file a complete annual survey with the department.
     (i) Except as provided in (a)(ii) of this subsection, the survey is due by April 30th of the year following any calendar year in which a person becomes eligible to claim the tax preference that requires a survey under this section.
     (ii) If the tax preference is a deferral of tax, the first survey must be filed by April 30th of the calendar year following the calendar year in which the investment project is certified by the department as operationally complete, and a survey must be filed by April 30th of each of the seven succeeding calendar years.
     (b) The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590.
     (2)(a) The survey must include the amount of the tax preference claimed for the calendar year covered by the survey.
     (b) The survey must also include the following information for employment positions in Washington, not to include names of employees, for the year that the tax preference was claimed:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) For persons claiming the tax preference provided under chapter 82.60 or 82.63 RCW, the survey must also include the number of new products or research projects by general classification, and the number of trademarks, patents, and copyrights associated with activities at the investment project.
     (d) For persons claiming the credit provided under RCW 82.04.4452, the survey must also include the qualified research and development expenditures during the calendar year for which the credit was claimed, the taxable amount during the calendar year for which the credit was claimed, the number of new products or research projects by general classification, the number of trademarks, patents, and copyrights associated with the research and development activities for which the credit was claimed, and whether the tax preference has been assigned, and who assigned the credit. The definitions in RCW 82.04.4452 apply to this subsection (2)(d).
     (e) If the person filing a survey under this section did not file a survey with the department in the previous calendar year, the survey filed under this section must also include the employment, wage, and benefit information required under (b)(i) through (iv) of this subsection for the calendar year immediately preceding the calendar year for which a tax preference was claimed.
     (3) As part of the annual survey, the department may request additional information necessary to measure the results of, or determine eligibility for, the tax preference.
     (4) All information collected under this section, except the amount of the tax preference claimed, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax preference claimed is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in subsection (5) of this section. If the amount of the tax preference claimed as reported on the survey is different than the amount actually claimed or otherwise allowed by the department based on the taxpayer's excise tax returns or other information known to the department, the amount actually claimed or allowed may be disclosed.
     (5) Persons for whom the actual amount of the tax reduced or saved is less than ten thousand dollars during the period covered by the survey may request the department to treat the amount of the tax reduction or savings as confidential under RCW 82.32.330.
     (6)(a) Except as otherwise provided by law, if a person claims a tax preference that requires an annual survey under this section but fails to submit a complete annual survey by the due date of the survey or any extension under RCW 82.32.590, the department must declare the amount of the tax preference claimed for the previous calendar year to be immediately due. If the tax preference is a deferral of tax, twelve and one-half percent of the deferred tax is immediately due. If the economic benefits of the deferral are passed to a lessee, the lessee is responsible for payment to the extent the lessee has received the economic benefit.
     (b) The department must assess interest, but not penalties, on the amounts due under this subsection. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and accrues until the taxes for which the tax preference was claimed are repaid. Amounts due under this subsection are not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (7) The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers may be included in any category. The department must report these statistics to the legislature each year by October 1st.
     (8) For the purposes of this section:
     (a) "Person" has the meaning provided in RCW 82.04.030 and also includes the state and its departments and institutions.
     (b) "Tax preference" has the meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a survey under this section.

NEW SECTION.  Sec. 103   A new section is added to chapter 82.32 RCW to read as follows:
     (1)(a) Every person claiming a tax preference that requires a report under this section must file a complete annual report with the department. The report is due by April 30th of the year following any calendar year in which a person becomes eligible to claim the tax preference that requires a report under this section. The department may extend the due date for timely filing of annual reports under this section as provided in RCW 82.32.590.
     (b) The report must include information detailing employment, wages, and employer-provided health and retirement benefits for employment positions in Washington for the year that the tax preference was claimed. However, persons engaged in manufacturing commercial airplanes or components of such airplanes may report employment, wage, and benefit information per job at the manufacturing site for the year that the tax preference was claimed. The report must not include names of employees. The report must also detail employment by the total number of full-time, part-time, and temporary positions for the year that the tax preference was claimed.
     (c) Persons receiving the benefit of the tax preference provided by RCW 82.16.0421 or claiming any of the tax preferences provided by RCW 82.04.2909, 82.04.4481, 82.08.805, 82.12.805, or 82.12.022(5) must indicate on the annual report the quantity of product produced in this state during the time period covered by the report.
     (d) If a person filing a report under this section did not file a report with the department in the previous calendar year, the report filed under this section must also include employment, wage, and benefit information for the calendar year immediately preceding the calendar year for which a tax preference was claimed.
     (2) As part of the annual report, the department may request additional information necessary to measure the results of, or determine eligibility for, the tax preference.
     (3) Other than information requested under subsection (2) of this section, the information contained in an annual report filed under this section is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
(4) Except as otherwise provided by law, if a person claims a tax preference that requires an annual report under this section but fails to submit a report by the due date or any extension under RCW 82.32.590, the department must declare the amount of the tax preference claimed for the previous calendar year to be immediately due and payable. The department must assess interest, but not penalties, on the amounts due under this subsection. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and accrues until the taxes for which the tax preference was claimed are repaid. Amounts due under this subsection are not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (5) The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers may be included in any category. The department must report these statistics to the legislature each year by October 1st.
     (6) For the purposes of this section:
     (a) "Person" has the meaning provided in RCW 82.04.030 and also includes the state and its departments and institutions.
     (b) "Tax preference" has the meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a survey under this section.

Sec. 104   RCW 82.04.240 and 2003 c 149 s 3 are each amended to read as follows:
     (1) Upon every person engaging within this state in business as a manufacturer, except persons taxable as manufacturers under other provisions of this chapter; as to such persons the amount of the tax with respect to such business ((shall be)) is equal to the value of the products, including byproducts, manufactured, multiplied by the rate of 0.484 percent.
     (2)(a) Upon every person engaging within this state in the business of manufacturing semiconductor materials, as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured, or, in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of 0.275 percent. For the purposes of this subsection "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips.
     (b) A person reporting under the tax rate provided in this subsection (2) must file a complete annual report with the department under section 103 of this act.
     (c) This subsection (2) expires twelve years after the effective date of this act.
     (3) The measure of the tax is the value of the products, including byproducts, so manufactured regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 105   RCW 82.04.2404 and 2006 c 84 s 2 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of manufacturing or processing for hire semiconductor materials, as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured, or, in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of 0.275 percent.
     (2) For the purposes of this section "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.
     (3) A person reporting under the tax rate provided in this section must file a complete annual report with the department under section 103 of this act.
     (4) This section expires ((twelve years after)) December 1, ((2006)) 2018.

Sec. 106   RCW 82.04.250 and 2008 c 81 s 5 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of making sales at retail, except persons taxable as retailers under other provisions of this chapter, as to such persons, the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent.
     (2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, except persons taxable under RCW 82.04.260(11) or subsection (3) of this section, as to such persons, the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.484 percent.
     (3)(a) Upon every person classified by the federal aviation administration as a federal aviation regulation part 145 certificated repair station and that is engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of the business, multiplied by the rate of .2904 percent.
     (b) A person reporting under the tax rate provided in this subsection (3) must file a complete annual report with the department under section 103 of this act.

Sec. 107   RCW 82.04.260 and 2008 c 296 s 1, 2008 c 217 s 100, and 2008 c 81 s 4 are each reenacted and amended to read as follows:
     (1) Upon every person engaging within this state in the business of manufacturing:
     (a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola byproducts, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the value of the flour, pearl barley, oil, canola meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;
     (b) Beginning July 1, 2012, seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; or selling manufactured seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing, to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the value of the products manufactured or the gross proceeds derived from such sales, multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (c) Beginning July 1, 2012, dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed ((shall be)) is equal to the value of the products manufactured or the gross proceeds derived from such sales multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (d) Beginning July 1, 2012, fruits or vegetables by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables, or selling at wholesale fruits or vegetables manufactured by the seller by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables and sold to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the value of the products manufactured or the gross proceeds derived from such sales multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (e) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business ((shall be)) is equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent; and
     (f) ((Alcohol fuel or)) Wood biomass fuel((,)) as ((those terms are)) defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business ((shall be)) is equal to the value of ((alcohol fuel or)) wood biomass fuel manufactured, multiplied by the rate of 0.138 percent.
     (2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.
     (3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities ((shall be)) is equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.
     (4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed ((shall be)) is equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.
     (5) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities ((shall be)) is equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (6) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities ((shall be)) is equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (7) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. Persons subject to taxation under this subsection ((shall be)) are exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.
     (8) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business ((shall be)) is equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
     If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state ((shall)) must be determined in accordance with the methods of apportionment required under RCW 82.04.460.
     (9) Upon every person engaging within this state as an insurance producer or title insurance agent licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities ((shall be)) is equal to the gross income of such business multiplied by the rate of 0.484 percent.
     (10) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities ((shall be)) is equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter. The moneys collected under this subsection ((shall)) must be deposited in the health services account created under RCW 43.72.900.
     (11)(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, or making sales, at retail or wholesale, of commercial airplanes or components of such airplanes, manufactured by the seller, as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of:
     (i) 0.4235 percent from October 1, 2005, through ((the later of)) June 30, 2007; and
     (ii) 0.2904 percent beginning July 1, 2007.
     (b) Beginning July 1, 2008, upon every person who is not eligible to report under the provisions of (a) of this subsection (11) and is engaging within this state in the business of manufacturing tooling specifically designed for use in manufacturing commercial airplanes or components of such airplanes, or making sales, at retail or wholesale, of such tooling manufactured by the seller, as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of 0.2904 percent.
     (c) For the purposes of this subsection (11), "commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
     (d) In addition to all other requirements under this title, a person ((eligible for)) reporting under the tax rate ((under)) provided in this subsection (11) must ((report as required)) file a complete annual report with the department under ((RCW 82.32.545)) section 103 of this act.
     (e) This subsection (11) does not apply on and after July 1, 2024.
     (12)(a) Until July 1, 2024, upon every person engaging within this state in the business of extracting timber or extracting for hire timber; as to such persons the amount of tax with respect to the business ((shall)) is, in the case of extractors, ((be)) equal to the value of products, including byproducts, extracted, or in the case of extractors for hire, be equal to the gross income of the business, multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.
     (b) Until July 1, 2024, upon every person engaging within this state in the business of manufacturing or processing for hire: (i) Timber into timber products or wood products; or (ii) timber products into other timber products or wood products; as to such persons the amount of the tax with respect to the business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of products, including byproducts, manufactured, or in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.
     (c) Until July 1, 2024, upon every person engaging within this state in the business of selling at wholesale: (i) Timber extracted by that person; (ii) timber products manufactured by that person from timber or other timber products; or (iii) wood products manufactured by that person from timber or timber products; as to such persons the amount of the tax with respect to the business ((shall be)) is equal to the gross proceeds of sales of the timber, timber products, or wood products multiplied by the rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30, 2024.
     (d) Until July 1, 2024, upon every person engaging within this state in the business of selling standing timber; as to such persons the amount of the tax with respect to the business ((shall be)) is equal to the gross income of the business multiplied by the rate of 0.2904 percent. For purposes of this subsection (12)(d), "selling standing timber" means the sale of timber apart from the land, where the buyer is required to sever the timber within thirty months from the date of the original contract, regardless of the method of payment for the timber and whether title to the timber transfers before, upon, or after severance.
     (e) For purposes of this subsection, the following definitions apply:
     (i) "Biocomposite surface products" means surface material products containing, by weight or volume, more than fifty percent recycled paper and that also use nonpetroleum-based phenolic resin as a bonding agent.
     (ii) "Paper and paper products" means products made of interwoven cellulosic fibers held together largely by hydrogen bonding. "Paper and paper products" includes newsprint; office, printing, fine, and pressure-sensitive papers; paper napkins, towels, and toilet tissue; kraft bag, construction, and other kraft industrial papers; paperboard, liquid packaging containers, containerboard, corrugated, and solid-fiber containers including linerboard and corrugated medium; and related types of cellulosic products containing primarily, by weight or volume, cellulosic materials. "Paper and paper products" does not include books, newspapers, magazines, periodicals, and other printed publications, advertising materials, calendars, and similar types of printed materials.
     (iii) "Recycled paper" means paper and paper products having fifty percent or more of their fiber content that comes from postconsumer waste. For purposes of this subsection (12)(e)(iii), "postconsumer waste" means a finished material that would normally be disposed of as solid waste, having completed its life cycle as a consumer item.
     (iv) "Timber" means forest trees, standing or down, on privately or publicly owned land. "Timber" does not include Christmas trees that are cultivated by agricultural methods or short-rotation hardwoods as defined in RCW 84.33.035.
     (v) "Timber products" means:
     (A) Logs, wood chips, sawdust, wood waste, and similar products obtained wholly from the processing of timber, short-rotation hardwoods as defined in RCW 84.33.035, or both;
     (B) Pulp, including market pulp and pulp derived from recovered paper or paper products; and
     (C) Recycled paper, but only when used in the manufacture of biocomposite surface products.
     (vi) "Wood products" means paper and paper products; dimensional lumber; engineered wood products such as particleboard, oriented strand board, medium density fiberboard, and plywood; wood doors; wood windows; and biocomposite surface products.
     (f) Except for small harvesters as defined in RCW 84.33.035, a person reporting under the tax rate provided in this subsection (12) must file a complete annual survey with the department under section 102 of this act.
     (13) Upon every person engaging within this state in inspecting, testing, labeling, and storing canned salmon owned by another person, as to such persons, the amount of tax with respect to such activities ((shall be)) is equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.

Sec. 108   RCW 82.04.2909 and 2006 c 182 s 1 are each amended to read as follows:
     (1) Upon every person who is an aluminum smelter engaging within this state in the business of manufacturing aluminum; as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured, or in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of .2904 percent.
     (2) Upon every person who is an aluminum smelter engaging within this state in the business of making sales at wholesale of aluminum manufactured by that person, as to such persons the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of the aluminum multiplied by the rate of .2904 percent.
     (3) A person reporting under the tax rate provided in this section must file a complete annual report with the department under section 103 of this act.
     (4) This section expires January 1, 2012.

Sec. 109   RCW 82.04.294 and 2007 c 54 s 8 are each amended to read as follows:
     (1) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing solar energy systems using photovoltaic modules, or of manufacturing solar grade silicon to be used exclusively in components of such systems; as to such persons the amount of tax with respect to such business ((shall)) is, in the case of manufacturers, ((be)) equal to the value of the product manufactured, or in the case of processors for hire, ((be)) equal to the gross income of the business, multiplied by the rate of 0.2904 percent.
     (2) Beginning October 1, 2005, upon every person engaging within this state in the business of making sales at wholesale of solar energy systems using photovoltaic modules and manufactured by the seller, or of solar grade silicon manufactured by the seller to be used exclusively in components of such systems((, manufactured by that person)); as to such persons the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of the solar energy systems using photovoltaic modules, or of the solar grade silicon to be used exclusively in components of such systems, multiplied by the rate of 0.2904 percent.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells and providing a single direct current electrical output.
     (b) "Photovoltaic cell" means a device that converts light directly into electricity without moving parts.
     (c) "Solar energy system" means any device or combination of devices or elements that rely upon direct sunlight as an energy source for use in the generation of electricity.
     (d) "Solar grade silicon" means high-purity silicon used exclusively in components of solar energy systems using photovoltaic modules to capture direct sunlight. "Solar grade silicon" does not include silicon used in semiconductors.
     (4) A person reporting under the tax rate provided in this section must file a complete annual report with the department under section 103 of this act.
     (5) This section expires June 30, 2014.

Sec. 110   RCW 82.04.426 and 2003 c 149 s 2 are each amended to read as follows:
     (1) The tax imposed by RCW 82.04.240(2) does not apply to any person in respect to the manufacturing of semiconductor microchips.
     (2) For the purposes of this section:
     (a) "Manufacturing semiconductor microchips" means taking raw polished semiconductor wafers and embedding integrated circuits on the wafers using processes such as masking, etching, and diffusion; and
     (b) "Integrated circuit" means a set of microminiaturized, electronic circuits.
     (3) A person reporting under the tax rate provided in this section must file a complete annual report with the department under section 103 of this act.
     (4) This section expires nine years after the effective date of this act.

Sec. 111   RCW 82.04.4266 and 2006 c 354 s 3 are each amended to read as follows:
     (1) This chapter ((shall)) does not apply to the value of products or the gross proceeds of sales derived from:
     (a) Manufacturing fruits or vegetables by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables; or
     (b) Selling at wholesale fruits or vegetables manufactured by the seller by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables and sold to purchasers who transport in the ordinary course of business the goods out of this state. A person taking an exemption under this subsection (1)(b) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state.
     (2) A person claiming the exemption provided in this section must file a complete annual survey with the department under section 102 of this act.
     (3) This section expires July 1, 2012.

Sec. 112   RCW 82.04.4268 and 2006 c 354 s 1 are each amended to read as follows:
     (1) This chapter ((shall)) does not apply to the value of products or the gross proceeds of sales derived from:
     (a) Manufacturing dairy products; or
     (b) Selling manufactured dairy products to purchasers who transport in the ordinary course of business the goods out of this state. A person taking an exemption under this subsection (1)(b) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state.
     (2) "Dairy products" means dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein.
     (3) A person claiming the exemption provided in this section must file a complete annual survey with the department under section 102 of this act.
     (4) This section expires July 1, 2012.

Sec. 113   RCW 82.04.4269 and 2006 c 354 s 2 are each amended to read as follows:
     (1) This chapter does not apply to the value of products or the gross proceeds of sales derived from:
     (a) Manufacturing seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; or
     (b) Selling manufactured seafood products that remain in a raw, raw frozen, or raw salted state to purchasers who transport in the ordinary course of business the goods out of this state. A person taking an exemption under this subsection (1)(b) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state.
     (2) A person claiming the exemption provided in this section must file a complete annual survey with the department under section 102 of this act.
     (3) This section expires July 1, 2012.

Sec. 114   RCW 82.04.4452 and 2005 c 514 s 1003 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for each person whose research and development spending during the year in which the credit is claimed exceeds 0.92 percent of the person's taxable amount during the same calendar year.
     (2) The credit ((shall be)) is calculated as follows:
     (a) Determine the greater of the amount of qualified research and development expenditures of a person or eighty percent of amounts received by a person other than a public educational or research institution in compensation for the conduct of qualified research and development;
     (b) Subtract 0.92 percent of the person's taxable amount from the amount determined under (a) of this subsection;
     (c) Multiply the amount determined under (b) of this subsection by the following:
     (i) For the period June 10, 2004, through December 31, 2006, the person's average tax rate for the calendar year for which the credit is claimed;
     (ii) For the calendar year ending December 31, 2007, the greater of the person's average tax rate for that calendar year or 0.75 percent;
     (iii) For the calendar year ending December 31, 2008, the greater of the person's average tax rate for that calendar year or 1.0 percent;
     (iv) For the calendar year ending December 31, 2009, the greater of the person's average tax rate for that calendar year or 1.25 percent;
     (v) For the calendar year ending December 31, 2010, and thereafter, 1.50 percent.
     For purposes of calculating the credit, if a person's reporting period is less than annual, the person may use an estimated average tax rate for the calendar year for which the credit is claimed by using the person's average tax rate for each reporting period. A person who uses an estimated average tax rate must make an adjustment to the total credit claimed for the calendar year using the person's actual average tax rate for the calendar year when the person files its last return for the calendar year for which the credit is claimed.
     (3) Any person entitled to the credit provided in subsection (2) of this section as a result of qualified research and development conducted under contract may assign all or any portion of the credit to the person contracting for the performance of the qualified research and development.
     (4) The credit, including any credit assigned to a person under subsection (3) of this section, ((shall)) must be claimed against taxes due for the same calendar year in which the qualified research and development expenditures are incurred. The credit, including any credit assigned to a person under subsection (3) of this section, for each calendar year ((shall)) may not exceed the lesser of two million dollars or the amount of tax otherwise due under this chapter for the calendar year.
     (5) For any person claiming the credit, including any credit assigned to a person under subsection (3) of this section, whose research and development spending during the calendar year in which the credit is claimed fails to exceed 0.92 percent of the person's taxable amount during the same calendar year or who is otherwise ineligible, the department ((shall)) must declare the taxes against which the credit was claimed to be immediately due and payable. The department ((shall)) must assess interest, but not penalties, on the taxes against which the credit was claimed. Interest ((shall)) must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, retroactively to the date the credit was claimed, and ((shall)) accrues until the taxes against which the credit was claimed are repaid. Any credit assigned to a person under subsection (3) of this section that is disallowed as a result of this section may be claimed by the person who performed the qualified research and development subject to the limitations set forth in subsection (4) of this section.
     (6)(((a) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.
     (b))) A person claiming the credit ((shall)) provided in this section must file a complete annual survey with the department under section 102 of this act. ((The survey is due by March 31st following any year in which a credit is claimed. The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey shall include the amount of the tax credit claimed, the qualified research and development expenditures during the calendar year for which the credit is claimed, the taxable amount during the calendar year for which the credit is claimed, the number of new products or research projects by general classification, the number of trademarks, patents, and copyrights associated with the research and development activities for which a credit was claimed, and whether the credit has been assigned under subsection (3) of this section and who assigned the credit. The survey shall also include the following information for employment positions in Washington:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) The department may request additional information necessary to measure the results of the tax credit program, to be submitted at the same time as the survey.
     (d)(i) All information collected under this subsection, except the amount of the tax credit claimed, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax credit claimed is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in this subsection (6)(d). If the amount of the tax credit as reported on the survey is different than the amount actually claimed on the taxpayer's tax returns or otherwise allowed by the department, the amount actually claimed or allowed may be disclosed.
     (ii) Persons for whom the actual amount of the tax credit claimed on the taxpayer's returns or otherwise allowed by the department is less than ten thousand dollars during the period covered by the survey may request the department to treat the tax credit amount as confidential under RCW 82.32.330.
     (e) If a person fails to file a complete annual survey required under this subsection with the department by the due date or any extension under RCW 82.32.590, the person entitled to the credit provided in subsection (2) of this section is not eligible to claim or assign the credit provided in subsection (2) of this section in the year the person failed to timely file a complete survey.
     (7) The department shall use the information from subsection (6) of this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.
     (8) The department shall use the information from subsection (6) of this section to study the tax credit program authorized under this section. The department shall report to the legislature by December 1, 2009, and December 1, 2013. The reports shall measure the effect of the program on job creation, the number of jobs created for Washington residents, company growth, the introduction of new products, the diversification of the state's economy, growth in research and development investment, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects.
     (9))) (7) For the purpose of this section:
     (a) "Average tax rate" means a person's total tax liability under this chapter for the calendar year for which the credit is claimed divided by the taxpayer's total taxable amount under this chapter for the calendar year for which the credit is claimed.
     (b) "Qualified research and development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined under rules adopted by the department, benefits, supplies, and computer expenses, directly incurred in qualified research and development by a person claiming the credit provided in this section. The term does not include amounts paid to a person other than a public educational or research institution to conduct qualified research and development. Nor does the term include capital costs and overhead, such as expenses for land, structures, or depreciable property.
     (c) "Qualified research and development" shall have the same meaning as in RCW 82.63.010.
     (d) "Research and development spending" means qualified research and development expenditures plus eighty percent of amounts paid to a person other than a public educational or research institution to conduct qualified research and development.
     (e) "Taxable amount" means the taxable amount subject to the tax imposed in this chapter required to be reported on the person's combined excise tax returns for the calendar year for which the credit is claimed, less any taxable amount for which a credit is allowed under RCW 82.04.440.
     (((10))) (8) This section expires January 1, 2015.

Sec. 115   RCW 82.04.4461 and 2008 c 81 s 7 are each amended to read as follows:
     (1)(a)(i) In computing the tax imposed under this chapter, a credit is allowed for each person for qualified aerospace product development. For a person who is a manufacturer or processor for hire of commercial airplanes or components of such airplanes, credit may be earned for expenditures occurring after December 1, 2003. For all other persons, credit may be earned only for expenditures occurring after June 30, 2008.
     (ii) For purposes of this subsection, "commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
     (b) Before July 1, 2005, any credits earned under this section must be accrued and carried forward and may not be used until July 1, 2005. These carryover credits may be used at any time thereafter, and may be carried over until used. Refunds may not be granted in the place of a credit.
     (2) The credit is equal to the amount of qualified aerospace product development expenditures of a person, multiplied by the rate of 1.5 percent.
     (3) Except as provided in subsection (1)(b) of this section the credit ((shall)) must be ((taken)) claimed against taxes due for the same calendar year in which the qualified aerospace product development expenditures are incurred. Credit earned on or after July 1, 2005, may not be carried over. The credit for each calendar year ((shall)) may not exceed the amount of tax otherwise due under this chapter for the calendar year. Refunds may not be granted in the place of a credit.
     (4) Any person claiming the credit ((shall)) must file a form prescribed by the department that ((shall)) must include the amount of the credit claimed, an estimate of the anticipated aerospace product development expenditures during the calendar year for which the credit is claimed, an estimate of the taxable amount during the calendar year for which the credit is claimed, and such additional information as the department may prescribe.
     (5) The definitions in this subsection apply throughout this section.
     (a) "Aerospace product" has the meaning given in RCW 82.08.975.
     (b) "Aerospace product development" means research, design, and engineering activities performed in relation to the development of an aerospace product or of a product line, model, or model derivative of an aerospace product, including prototype development, testing, and certification. The term includes the discovery of technological information, the translating of technological information into new or improved products, processes, techniques, formulas, or inventions, and the adaptation of existing products and models into new products or new models, or derivatives of products or models. The term does not include manufacturing activities or other production-oriented activities, however the term does include tool design and engineering design for the manufacturing process. The term does not include surveys and studies, social science and humanities research, market research or testing, quality control, sale promotion and service, computer software developed for internal use, and research in areas such as improved style, taste, and seasonal design.
     (c) "Qualified aerospace product development" means aerospace product development performed within this state.
     (d) "Qualified aerospace product development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined by the department, benefits, supplies, and computer expenses, directly incurred in qualified aerospace product development by a person claiming the credit provided in this section. The term does not include amounts paid to a person or to the state and any of its departments and institutions, other than a public educational or research institution to conduct qualified aerospace product development. The term does not include capital costs and overhead, such as expenses for land, structures, or depreciable property.
     (e) "Taxable amount" means the taxable amount subject to the tax imposed in this chapter required to be reported on the person's tax returns during the year in which the credit is claimed, less any taxable amount for which a credit is allowed under RCW 82.04.440.
     (6) In addition to all other requirements under this title, a person ((taking)) claiming the credit under this section must file a complete annual report ((as required)) with the department under ((RCW 82.32.545)) section 103 of this act.
     (7) Credit may not be claimed for expenditures for which a credit is claimed under RCW 82.04.4452.
     (8) This section expires July 1, 2024.

Sec. 116   RCW 82.04.4463 and 2008 c 81 s 8 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for property taxes and leasehold excise taxes paid during the calendar year.
     (2) The credit is equal to:
     (a)(i)(A) Property taxes paid on buildings, and land upon which the buildings are located, constructed after December 1, 2003, and used exclusively in manufacturing commercial airplanes or components of such airplanes; and
     (B) Leasehold excise taxes paid with respect to buildings constructed after January 1, 2006, the land upon which the buildings are located, or both, if the buildings are used exclusively in manufacturing commercial airplanes or components of such airplanes; and
     (C) Property taxes or leasehold excise taxes paid on, or with respect to, buildings constructed after June 30, 2008, the land upon which the buildings are located, or both, and used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(i)(A) and (B) of this subsection (2) and are((: (I) Engaged in manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components; or (II))) taxable under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); or
     (ii) Property taxes attributable to an increase in assessed value due to the renovation or expansion, after: (A) December 1, 2003, of a building used exclusively in manufacturing commercial airplanes or components of such airplanes; and (B) June 30, 2008, of buildings used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(ii)(A) of this subsection (2) and are((: (I) Engaged in manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components; or (II))) taxable under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); and
     (b) An amount equal to:
     (i)(A) Property taxes paid, by persons taxable under RCW 82.04.260(11)(a), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
     (B) Property taxes paid, by persons taxable under RCW 82.04.260(11)(b), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after June 30, 2008; or
     (C) Property taxes paid, by persons taxable under RCW ((82.04.0250(3) [82.04.250(3)])) 82.04.250(3) or 82.04.290(3), on computer hardware, computer peripherals, and software exempt under RCW 82.08.975 or 82.12.975 and acquired after June 30, 2008.
     (ii) For purposes of determining the amount eligible for credit under (i)(A) and (B) of this subsection (2)(b), the amount of property taxes paid is multiplied by a fraction.
     (((I))) (A) The numerator of the fraction is the total taxable amount subject to the tax imposed under RCW 82.04.260(11) (a) or (b) on the applicable business activities of manufacturing commercial airplanes, components of such airplanes, or tooling specifically designed for use in the manufacturing of commercial airplanes or components of such airplanes.
     (((II))) (B) The denominator of the fraction is the total taxable amount subject to the tax imposed under all manufacturing classifications in chapter 82.04 RCW.
     (((III))) (C) For purposes of both the numerator and denominator of the fraction, the total taxable amount refers to the total taxable amount required to be reported on the person's returns for the calendar year before the calendar year in which the credit under this section is earned. The department may provide for an alternative method for calculating the numerator in cases where the tax rate provided in RCW 82.04.260(11) for manufacturing was not in effect during the full calendar year before the calendar year in which the credit under this section is earned.
     (((IV))) (D) No credit is available under (b)(i)(A) or (B) of this subsection (2) if either the numerator or the denominator of the fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
     (((V))) (E) As used in (((III))) (C) of this subsection (2)(b)(ii)(((C))), "returns" means the tax returns for which the tax imposed under this chapter is reported to the department.
     (3) The definitions in this subsection apply throughout this section, unless the context clearly indicates otherwise.
     (a) "Aerospace product development" has the same meaning as provided in RCW 82.04.4461.
     (b) "Aerospace services" has the same meaning given in RCW 82.08.975.
     (c) "Commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
     (4) A credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year, but may not be carried over a second year. No refunds may be granted for credits under this section.
     (5) In addition to all other requirements under this title, a person ((taking)) claiming the credit under this section must file a complete annual report ((as required)) with the department under ((RCW 82.32.545)) section 103 of this act.
     (6) This section expires July 1, 2024.

Sec. 117   RCW 82.04.448 and 2003 c 149 s 9 are each amended to read as follows:
     (1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under RCW 82.04.240(2) for persons engaged in the business of manufacturing semiconductor materials. For the purposes of this section "semiconductor materials" has the same meaning as provided in RCW 82.04.240(2).
     (2)(a) The credit under this section ((shall)) equals three thousand dollars for each employment position used in manufacturing production that takes place in a new building exempt from sales and use tax under RCW 82.08.965 and 82.12.965. A credit is earned for the calendar year a person fills a position. Additionally a credit is earned for each year the position is maintained over the subsequent consecutive years, up to eight years. Those positions that are not filled for the entire year are eligible for fifty percent of the credit if filled less than six months, and the entire credit if filled more than six months.
     (b) To qualify for the credit, the manufacturing activity of the person must be conducted at a new building that qualifies for the exemption from sales and use tax under RCW 82.08.965 and 82.12.965.
     (c) In those situations where a production building in existence on the effective date of this section will be phased out of operation, during which time employment at the new building at the same site is increased, the person is eligible for credit for employment at the existing building and new building, with the limitation that the combined eligible employment not exceed full employment at the new building. "Full employment" has the same meaning as in RCW 82.08.965. The credit may not be earned until the commencement of commercial production, as that term is used in RCW 82.08.965.
     (3) No application is necessary for the tax credit. The person is subject to all of the requirements of chapter 82.32 RCW. In no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. No refunds may be granted for credits under this section.
     (4) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been claimed ((shall be)) is immediately due. The department ((shall)) must assess interest, but not penalties, on the taxes for which the person is not eligible. The interest ((shall)) must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, ((shall be)) is retroactive to the date the tax credit was taken, and ((shall)) accrues until the taxes for which a credit has been used are repaid.
     (5) A person ((taking)) claiming the credit under this section must file a complete annual report with the department under ((RCW 82.32.535)) section 103 of this act.
     (6) Credits may be ((taken)) claimed after twelve years after the effective date of this act, for those buildings at which commercial production began before twelve years after the effective date of this act, subject to all of the eligibility criteria and limitations of this section.
     (7) This section expires twelve years after the effective date of this act.

Sec. 118   RCW 82.04.4481 and 2006 c 182 s 2 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for all property taxes paid during the calendar year on property owned by a direct service industrial customer and reasonably necessary for the purposes of an aluminum smelter.
     (2) A person ((taking)) claiming the credit under this section is subject to all the requirements of chapter 82.32 RCW. A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year, but may not be carried over a second year. Credits carried over must be applied to tax liability before new credits. No refunds may be granted for credits under this section.
     (3) Credits may not be claimed under this section for property taxes levied for collection in 2012 and thereafter.
     (4) A person claiming the credit provided in this section must file a complete annual report with the department under section 103 of this act.

Sec. 119   RCW 82.04.4483 and 2004 c 25 s 1 are each amended to read as follows:
     (1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under this chapter for persons engaged in a rural county in the business of manufacturing computer software or programming, as those terms are defined in this section.
     (2) A person who partially or totally relocates a business from one rural county to another rural county is eligible for any new qualifying employment positions created as a result of the relocation but is not eligible to receive credit for the jobs moved from one county to the other.
     (3)(a) To qualify for the credit, the qualifying activity of the person must be conducted in a rural county and the new qualified employment position must be located in the rural county.
     (b) If an activity is conducted both from a rural county and outside of a rural county, the credit is available if at least ninety percent of the qualifying activity is conducted within a rural county. If the qualifying activity is a service taxable activity, the place where the work is performed is the place at which the activity is conducted.
     (4)(a) The credit under this section shall equal one thousand dollars for each new qualified employment position created after January 1, 2004, in an eligible area. A credit is earned for the calendar year the person is hired to fill the position. Additionally a credit is earned for each year the position is maintained over the subsequent consecutive years, up to four years. The county must meet the definition of a rural county at the time the position is filled. If the county does not have a rural county status the following year or years, the position is still eligible for the remaining years if all other conditions are met.
     (b) Participants who claimed credit under RCW 82.04.4456 for qualified employment positions created before December 31, 2003, are eligible to earn credit for each year the position is maintained over the subsequent consecutive years, for up to four years, which four years include any years claimed under RCW 82.04.4456. Those persons who did not receive a credit under RCW 82.04.4456 before December 31, 2003, are not eligible to earn credit for qualified employment positions created before December 31, 2003.
     (c) Credit is authorized for new employees hired for new qualified employment positions created on or after January 1, 2004. New qualified employment positions filled by existing employees are eligible for the credit under this section only if the position vacated by the existing employee is filled by a new hire. A business that is a sole proprietorship without any employees is equivalent to one employee position and this type of business is eligible to receive credit for one position.
     (d) If a position is filled before July 1st, the position is eligible for the full yearly credit for that calendar year. If it is filled after June 30th, the position is eligible for half of the credit for that calendar year.
     (5) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section. This information includes information relating to description of qualifying activity conducted in the rural county and outside the rural county by the person as well as detailed records on positions and employees.
     (6) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been claimed ((shall be)) is immediately due. The department ((shall)) must assess interest, but not penalties, on the taxes for which the person is not eligible. The interest ((shall)) must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, ((shall be assessed)) applies retroactively to the date the tax credit was taken, and ((shall accrue)) accrues until the taxes for which a credit has been used are repaid.
     (7) The credit under this section may be used against any tax due under this chapter, but in no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. A person is not eligible to receive a credit under this section if the person is receiving credit for the same position under chapter 82.62 RCW or RCW 82.04.44525 or is taking a credit under this chapter for information technology help desk services conducted from a rural county. No refunds may be granted for credits under this section.
     (8) Transfer of ownership does not affect credit eligibility. However, the successive credits are available to the successor for remaining periods in the five years only if the eligibility conditions of this section are met.
     (9) A person ((taking)) claiming a tax credit((s)) under this section ((shall make an)) must file a complete annual ((report to)) survey with the department under section 102 of this act. ((The report shall be in a letter form and shall include the following information: Number of positions for which credit is being claimed, type of position for which credit is being claimed, type of activity in which the person is engaged in the county, how long the person has been located in the county, and taxpayer name and registration number. The report must be filed by January 30th of each year for which credit was claimed during the previous year. Failure to file a report will not result in the loss of eligibility under this section. However, the department, through its research division, shall contact taxpayers who have not filed the report and obtain the data from the taxpayer or assist the taxpayer in the filing of the report, so that the data and information necessary to measure the program's effectiveness is maintained.))
     (10) As used in this section:
     (a) "Computer software" has the meaning as defined in RCW 82.04.215 after June 30, 2004, and includes "software" as defined in RCW 82.04.215 before July 1, 2004.
     (b) "Manufacturing" means the same as "to manufacture" under RCW 82.04.120. Manufacturing includes the activities of both manufacturers and processors for hire.
     (c) "Programming" means the activities that involve the creation or modification of computer software, as that term is defined in this chapter, and that are taxable as a service under RCW 82.04.290(2) or as a retail sale under RCW 82.04.050.
     (d) "Qualifying activity" means manufacturing of computer software or programming.
     (e) "Qualified employment position" means a permanent full-time position doing programming of computer software or manufacturing of computer software. This excludes administrative, professional, service, executive, and other similar positions. If an employee is either voluntarily or involuntarily separated from employment, the employment position is considered filled on a full-time basis if the employer is either training or actively recruiting a replacement employee. Full-time means a position for at least thirty-five hours a week.
     (f) "Rural county" means the same as in RCW 82.14.370.
     (11) No credit may be taken or accrued under this section on or after January 1, 2011.
     (12) This section expires January 1, 2011.

Sec. 120   RCW 82.04.4484 and 2004 c 25 s 2 are each amended to read as follows:
     (1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under this chapter for persons engaged in a rural county in the business of providing information technology help desk services to third parties.
     (2) To qualify for the credit, the help desk services must be conducted from a rural county.
     (3) The amount of the tax credit for persons engaged in the activity of providing information technology help desk services in rural counties ((shall be)) is equal to one hundred percent of the amount of tax due under this chapter that is attributable to providing the services from the rural county. In order to qualify for the credit under this subsection, the county must meet the definition of rural county at the time the person begins to conduct qualifying business in the county.
     (4) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section. These records include information relating to description of activity engaged in a rural county by the person.
     (5) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used is immediately due. The department ((shall)) must assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest ((shall)) must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, ((shall be assessed)) retroactively to the date the tax credit was taken, and ((shall)) will accrue until the taxes for which a credit has been used are repaid.
     (6) The credit under this section may be used against any tax due under this chapter, but in no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. No refunds may be granted for credits under this section.
     (7) Transfer of ownership does not affect credit eligibility. However, the credit is available to the successor only if the eligibility conditions of this section are met.
     (8) A person ((taking)) claiming a tax credit((s)) under this section ((shall make an)) must file a complete annual ((report to)) survey with the department under section 102 of this act. ((The report shall be in a letter form and shall include the following information: Type of activity in which the person is engaged in the county, number of employees in the rural county, how long the person has been located in the county, and taxpayer name and registration number. The report must be filed by January 30th of each year for which credit was claimed during the previous year. Failure to file a report will not result in the loss of eligibility under this section. However, the department, through its research division, shall contact taxpayers who have not filed the report and obtain the data from the taxpayer or assist the taxpayer in the filing of the report, so that the data and information necessary to measure the program's effectiveness is maintained.))
     (9) As used in this section:
     (a) "Information technology help desk services" means the following services performed using electronic and telephonic communication:
     (i) Software and hardware maintenance;
     (ii) Software and hardware diagnostics and troubleshooting;
     (iii) Software and hardware installation;
     (iv) Software and hardware repair;
     (v) Software and hardware information and training; and
     (vi) Software and hardware upgrade.
     (b) "Rural county" means the same as in RCW 82.14.370.
     (10) This section expires January 1, 2011.

Sec. 121   RCW 82.04.449 and 2006 c 112 s 5 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for participants in the Washington customized employment training program created in RCW 28B.67.020. The credit allowed under this section is equal to fifty percent of the value of a participant's payments to the employment training finance account created in RCW 28B.67.030. If a participant in the program does not meet the qualifications in RCW 28B.67.020(2)(b)(ii), the participant must remit to the department the value of any credits taken plus interest. The credit earned by a participant in one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year. No credit may be allowed for repayment of training allowances received from the Washington customized employment training program on or after July 1, 2016.
     (2) A person claiming the credit provided in this section must file a complete annual survey with the department under section 102 of this act.

Sec. 122   RCW 82.08.805 and 2006 c 182 s 3 are each amended to read as follows:
     (1) A person who has paid tax under RCW 82.08.020 for tangible personal property used at an aluminum smelter, tangible personal property that will be incorporated as an ingredient or component of buildings or other structures at an aluminum smelter, or for labor and services rendered with respect to such buildings, structures, or tangible personal property, is eligible for an exemption from the state share of the tax in the form of a credit, as provided in this section. A person claiming an exemption must pay the tax and may then take a credit equal to the state share of retail sales tax paid under RCW 82.08.020. The person ((shall)) must submit information, in a form and manner prescribed by the department, specifying the amount of qualifying purchases or acquisitions for which the exemption is claimed and the amount of exempted tax.
     (2) For the purposes of this section, "aluminum smelter" has the same meaning as provided in RCW 82.04.217.
     (3) A person claiming the tax preference provided in this section must file a complete annual report with the department under section 103 of this act.
     (4) Credits may not be claimed under this section for taxable events occurring on or after January 1, 2012.

Sec. 123   RCW 82.08.965 and 2003 c 149 s 5 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 ((shall)) does not apply to charges made for labor and services rendered in respect to the constructing of new buildings used for the manufacturing of semiconductor materials, to sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller ((shall)) must retain a copy of the certificate for the seller's files.
     (2) To be eligible under this section the manufacturer or processor for hire must meet the following requirements for an eight-year period, such period beginning the day the new building commences commercial production, or a portion of tax otherwise due ((shall)) will be immediately due and payable pursuant to subsection (3) of this section:
     (a) The manufacturer or processor for hire must maintain at least seventy-five percent of full employment at the new building for which the exemption under this section is claimed.
     (b) Before commencing commercial production at a new facility the manufacturer or processor for hire must meet with the department to review projected employment levels in the new buildings. The department, using information provided by the taxpayer, ((shall)) must make a determination of the number of positions that would be filled at full employment. This number ((shall)) must be used throughout the eight-year period to determine whether any tax is to be repaid. This information is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (c) In those situations where a production building in existence on the effective date of this section will be phased out of operation during which time employment at the new building at the same site is increased, the manufacturer or processor for hire ((shall)) must maintain seventy-five percent of full employment at the manufacturing site overall.
     (d) No application is necessary for the tax exemption. The person is subject to all the requirements of chapter 82.32 RCW. A person ((taking)) claiming the exemption under this section must file a complete annual report ((as required)) with the department under ((RCW 82.32.535)) section 103 of this act.
     (3) If the employment requirement is not met for any one calendar year, one-eighth of the exempt sales and use taxes ((shall)) will be due and payable by April 1st of the following year. The department ((shall)) must assess interest to the date the tax was imposed, but not penalties, on the taxes for which the person is not eligible.
     (4) The exemption applies to new buildings, or parts of buildings, that are used exclusively in the manufacturing of semiconductor materials, including the storage of raw materials and finished product.
     (5) For the purposes of this section:
     (a) "Commencement of commercial production" is deemed to have occurred when the equipment and process qualifications in the new building are completed and production for sale has begun; and
     (b) "Full employment" is the number of positions required for full capacity production at the new building, for positions such as line workers, engineers, and technicians.
     (c) "Semiconductor materials" has the same meaning as provided in RCW 82.04.240(2).
     (6) No exemption may be taken after twelve years after the effective date of this act, however all of the eligibility criteria and limitations are applicable to any exemptions claimed before that date.
     (7) This section expires twelve years after the effective date of this act.

Sec. 124   RCW 82.08.9651 and 2006 c 84 s 3 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 ((shall)) does not apply to sales of gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials. This exemption is limited to gases and chemicals used in the production process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the production process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For the purposes of this section, "semiconductor materials" has the meaning provided in RCW 82.04.2404.
     (2) A person ((taking)) claiming the exemption under this section must file a complete annual report with the department under ((RCW 82.32.5351)) section 103 of this act. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
     (3) This section expires ((twelve years after)) December 1, ((2006)) 2018.

Sec. 125   RCW 82.08.970 and 2003 c 149 s 7 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 ((shall)) does not apply to sales of gases and chemicals used by a manufacturer or processor for hire in the manufacturing of semiconductor materials. This exemption is limited to gases and chemicals used in the manufacturing process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the manufacturing process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For the purposes of this section, "semiconductor materials" has the same meaning as provided in RCW 82.04.240(2).
     (2) A person ((taking)) claiming the exemption under this section must file a complete annual report with the department under ((RCW 82.32.535)) section 103 of this act. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
     (3) This section expires twelve years after the effective date of this act.

Sec. 126   RCW 82.08.980 and 2003 2nd sp.s. c 1 s 11 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 ((shall)) does not apply to charges made for labor and services rendered in respect to the constructing of new buildings by a manufacturer engaged in the manufacturing of superefficient airplanes or by a port district, to be leased to a manufacturer engaged in the manufacturing of superefficient airplanes, to sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller ((shall)) must retain a copy of the certificate for the seller's files.
     (2) No application is necessary for the tax exemption in this section, however in order to qualify under this section before starting construction the port district must have entered into an agreement with the manufacturer to build such a facility. A person ((taking)) claiming the exemption under this section is subject to all the requirements of chapter 82.32 RCW. In addition, the person must file a complete annual report ((as required)) with the department under ((RCW 82.32.545)) section 103 of this act.
     (3) The exemption in this section applies to buildings, or parts of buildings, that are used exclusively in the manufacturing of superefficient airplanes, including buildings used for the storage of raw materials and finished product.
     (4) For the purposes of this section, "superefficient airplane" has the meaning given in RCW 82.32.550.
     (5) This section expires July 1, 2024.

Sec. 127   RCW 82.12.022 and 2006 c 182 s 5 are each amended to read as follows:
     (1) ((There is hereby levied and there shall be collected from)) A use tax is levied on every person in this state ((a use tax)) for the privilege of using natural gas or manufactured gas within this state as a consumer.
     (2) The tax ((shall)) must be levied and collected in an amount equal to the value of the article used by the taxpayer multiplied by the rate in effect for the public utility tax on gas distribution businesses under RCW 82.16.020. The "value of the article used" does not include any amounts that are paid for the hire or use of a gas distribution business as defined in RCW 82.16.010(7) in transporting the gas subject to tax under this subsection if those amounts are subject to tax under that chapter.
     (3) The tax levied in this section ((shall)) does not apply to the use of natural or manufactured gas delivered to the consumer by other means than through a pipeline.
     (4) The tax levied in this section ((shall)) does not apply to the use of natural or manufactured gas if the person who sold the gas to the consumer has paid a tax under RCW 82.16.020 with respect to the gas for which exemption is sought under this subsection.
     (5)(a) The tax levied in this section ((shall)) does not apply to the use of natural or manufactured gas by an aluminum smelter as that term is defined in RCW 82.04.217 before January 1, 2012.
     (b) A person claiming the exemption provided in this subsection (5) must file a complete annual report with the department under section 103 of this act.
     (6) There ((shall be)) is a credit against the tax levied under this section in an amount equal to any tax paid by:
     (a) The person who sold the gas to the consumer when that tax is a gross receipts tax similar to that imposed pursuant to RCW 82.16.020 by another state with respect to the gas for which a credit is sought under this subsection; or
     (b) The person consuming the gas upon which a use tax similar to the tax imposed by this section was paid to another state with respect to the gas for which a credit is sought under this subsection.
     (7) The use tax ((hereby)) imposed ((shall)) in this section must be paid by the consumer to the department.
     (8) There is imposed a reporting requirement on the person who delivered the gas to the consumer to make a quarterly report to the department. Such report ((shall)) must contain the volume of gas delivered, name of the consumer to whom delivered, and such other information as the department ((shall)) may require by rule.
     (9) The department may adopt rules under chapter 34.05 RCW for the administration and enforcement of sections 1 through 6, chapter 384, Laws of 1989.

Sec. 128   RCW 82.12.805 and 2006 c 182 s 4 are each amended to read as follows:
     (1) A person who is subject to tax under RCW 82.12.020 for tangible personal property used at an aluminum smelter, or for tangible personal property that will be incorporated as an ingredient or component of buildings or other structures at an aluminum smelter, or for labor and services rendered with respect to such buildings, structures, or tangible personal property, is eligible for an exemption from the state share of the tax in the form of a credit, as provided in this section. The amount of the credit ((shall be)) equals ((to)) the state share of use tax computed to be due under RCW 82.12.020. The person ((shall)) must submit information, in a form and manner prescribed by the department, specifying the amount of qualifying purchases or acquisitions for which the exemption is claimed and the amount of exempted tax.
     (2) For the purposes of this section, "aluminum smelter" has the same meaning as provided in RCW 82.04.217.
     (3) A person reporting under the tax rate provided in this section must file a complete annual report with the department under section 103 of this act.
     (4) Credits may not be claimed under this section for taxable events occurring on or after January 1, 2012.

Sec. 129   RCW 82.12.965 and 2003 c 149 s 6 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of tangible personal property that will be incorporated as an ingredient or component of new buildings used for the manufacturing of semiconductor materials during the course of constructing such buildings or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
     (2) The eligibility requirements, conditions, and definitions in RCW 82.08.965 apply to this section, including the filing of a complete annual report with the department under section 103 of this act.
     (3) No exemption may be taken twelve years after the effective date of this act, however all of the eligibility criteria and limitations are applicable to any exemptions claimed before that date.
     (4) This section expires twelve years after the effective date of this act.

Sec. 130   RCW 82.12.9651 and 2006 c 84 s 4 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials. This exemption is limited to gases and chemicals used in the production process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the production process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For purposes of this section, "semiconductor materials" has the meaning provided in RCW 82.04.2404.
     (2) A person ((taking)) claiming the exemption under this section must file a complete annual report with the department under ((RCW 82.32.5351)) section 103 of this act. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
     (3) This section expires ((twelve years after)) December 1, ((2006)) 2018.

Sec. 131   RCW 82.12.970 and 2003 c 149 s 8 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of gases and chemicals used by a manufacturer or processor for hire in the manufacturing of semiconductor materials. This exemption is limited to gases and chemicals used in the manufacturing process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the manufacturing process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For purposes of this section, "semiconductor materials" has the same meaning as provided in RCW 82.04.240(2).
     (2) A person ((taking)) claiming the exemption under this section must file a complete annual report with the department under ((RCW 82.32.535)) section 103 of this act. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
     (3) This section expires twelve years after the effective date of this act.

Sec. 132   RCW 82.12.980 and 2003 2nd sp.s. c 1 s 12 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of tangible personal property that will be incorporated as an ingredient or component of new buildings by a manufacturer engaged in the manufacturing of superefficient airplanes or owned by a port district and to be leased to a manufacturer engaged in the manufacturing of superefficient airplanes, during the course of constructing such buildings, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
     (2) The eligibility requirements, conditions, and definitions in RCW 82.08.980 apply to this section, including the filing of a complete annual report with the department under section 103 of this act.
     (3) This section expires July 1, 2024.

Sec. 133   RCW 82.16.0421 and 2004 c 240 s 1 are each amended to read as follows:
     (1) For the purposes of this section:
     (a) "Chlor-alkali electrolytic processing business" means a person who is engaged in a business that uses more than ten average megawatts of electricity per month in a chlor-alkali electrolytic process to split the electrochemical bonds of sodium chloride and water to make chlorine and sodium hydroxide. A "chlor-alkali electrolytic processing business" does not include direct service industrial customers or their subsidiaries that contract for the purchase of power from the Bonneville power administration as of June 10, 2004.
     (b) "Sodium chlorate electrolytic processing business" means a person who is engaged in a business that uses more than ten average megawatts of electricity per month in a sodium chlorate electrolytic process to split the electrochemical bonds of sodium chloride and water to make sodium chlorate and hydrogen. A "sodium chlorate electrolytic processing business" does not include direct service industrial customers or their subsidiaries that contract for the purchase of power from the Bonneville power administration as of June 10, 2004.
     (2) Effective July 1, 2004, the tax levied under this chapter does not apply to sales of electricity made by a light and power business to a chlor-alkali electrolytic processing business or a sodium chlorate electrolytic processing business for the electrolytic process if the contract for sale of electricity to the business contains the following terms:
     (a) The electricity to be used in the electrolytic process is separately metered from the electricity used for general operations of the business;
     (b) The price charged for the electricity used in the electrolytic process will be reduced by an amount equal to the tax exemption available to the light and power business under this section; and
     (c) Disallowance of all or part of the exemption under this section is a breach of contract and the damages to be paid by the chlor-alkali electrolytic processing business or the sodium chlorate electrolytic processing business are the amount of the tax exemption disallowed.
     (3) The exemption provided for in this section does not apply to amounts received from the remarketing or resale of electricity originally obtained by contract for the electrolytic process.
     (4) In order to claim an exemption under this section, the chlor-alkali electrolytic processing business or the sodium chlorate electrolytic processing business must provide the light and power business with an exemption certificate in a form and manner prescribed by the department.
     (5) A person receiving the benefit of the exemption provided in this section must file a complete annual report with the department under section 103 of this act.
     (6)(a) This section does not apply to sales of electricity made after December 31, 2010.
     (b) This section expires June 30, 2011.

Sec. 134   RCW 82.29A.137 and 2003 2nd sp.s. c 1 s 13 are each amended to read as follows:
     (1) All leasehold interests in port district facilities exempt from tax under RCW 82.08.980 or 82.12.980 and used by a manufacturer engaged in the manufacturing of superefficient airplanes, as defined in RCW 82.32.550, are exempt from tax under this chapter. A person ((taking)) claiming the credit under RCW 82.04.4463 is not eligible for the exemption under this section.
     (2) In addition to all other requirements under this title, a person ((taking)) claiming the exemption under this section must file a complete annual report ((as required)) with the department under ((RCW 82.32.545)) section 103 of this act.
     (3) This section expires July 1, 2024.

Sec. 135   RCW 82.32.590 and 2008 c 81 s 13 and 2008 c 15 s 7 are each reenacted and amended to read as follows:
     (1) If the department finds that the failure of a taxpayer to file an annual survey under section 102 of this act or annual report under ((RCW 82.04.4452, 82.32.5351, 82.32.650, 82.32.630, 82.32.610, 82.82.020, or 82.74.040)) section 103 of this act by the due date was the result of circumstances beyond the control of the taxpayer, the department ((shall)) must extend the time for filing the survey or report. Such extension ((shall)) must be for a period of thirty days from the date the department issues its written notification to the taxpayer that it qualifies for an extension under this section. The department may grant additional extensions as it deems proper.
     (2) In making a determination whether the failure of a taxpayer to file an annual survey or annual report by the due date was the result of circumstances beyond the control of the taxpayer, the department ((shall)) must be guided by rules adopted by the department for the waiver or cancellation of penalties when the underpayment or untimely payment of any tax was due to circumstances beyond the control of the taxpayer.

Sec. 136   RCW 82.32.600 and 2008 c 81 s 14 and 2008 c 15 s 8 are each reenacted and amended to read as follows:
     (1) Persons required to file annual surveys or annual reports under ((RCW 82.04.4452, 82.32.5351, 82.32.545, 82.32.610, 82.32.630, 82.82.020, or 82.74.040)) section 102 or 103 of this act must electronically file with the department all surveys, reports, returns, and any other forms or information the department requires in an electronic format as provided or approved by the department. As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.
     (2) Any survey, report, return, or any other form or information required to be filed in an electronic format under subsection (1) of this section is not filed until received by the department in an electronic format.
     (3) The department may waive the electronic filing requirement in subsection (1) of this section for good cause shown.

Sec. 137   RCW 82.60.020 and 2006 c 142 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Applicant" means a person applying for a tax deferral under this chapter.
     (2) "Department" means the department of revenue.
     (3) "Eligible area" means a rural county as defined in RCW 82.14.370.
     (4)(a) "Eligible investment project" means an investment project in an eligible area as defined in subsection (3) of this section.
     (b) The lessor or owner of a qualified building is not eligible for a deferral unless:
     (i) The underlying ownership of the buildings, machinery, and equipment vests exclusively in the same person; or
     (ii)(A) The lessor by written contract agrees to pass the economic benefit of the deferral to the lessee;
     (B) The lessee that receives the economic benefit of the deferral agrees in writing with the department to complete the annual survey required under RCW 82.60.070; and
     (C) The economic benefit of the deferral passed to the lessee is no less than the amount of tax deferred by the lessor and is evidenced by written documentation of any type of payment, credit, or other financial arrangement between the lessor or owner of the qualified building and the lessee.
     (c) "Eligible investment project" does not include any portion of an investment project undertaken by a light and power business as defined in RCW 82.16.010(5), other than that portion of a cogeneration project that is used to generate power for consumption within the manufacturing site of which the cogeneration project is an integral part, or investment projects which have already received deferrals under this chapter.
     (5) "Initiation of construction" has the same meaning as in RCW 82.63.010.
     (6) "Investment project" means an investment in qualified buildings or qualified machinery and equipment, including labor and services rendered in the planning, installation, and construction of the project.
     (((6))) (7) "Manufacturing" means the same as defined in RCW 82.04.120. "Manufacturing" also includes computer programming, the production of computer software, and other computer-related services, the activities performed by research and development laboratories and commercial testing laboratories, and the conditioning of vegetable seeds.
     (((7))) (8) "Person" has the meaning given in RCW 82.04.030.
     (((8))) (9) "Qualified buildings" means construction of new structures, and expansion or renovation of existing structures for the purpose of increasing floor space or production capacity used for manufacturing and research and development activities, including plant offices and warehouses or other facilities for the storage of raw material or finished goods if such facilities are an essential or an integral part of a factory, mill, plant, or laboratory used for manufacturing or research and development. If a building is used partly for manufacturing or research and development and partly for other purposes, the applicable tax deferral ((shall)) must be determined by apportionment of the costs of construction under rules adopted by the department.
     (((9))) (10) "Qualified employment position" means a permanent full-time employee employed in the eligible investment project during the entire tax year. The term "entire tax year" means a full-time position that is filled for a period of twelve consecutive months. The term "full-time" means at least thirty-five hours a week, four hundred fifty-five hours a quarter, or one thousand eight hundred twenty hours a year.
     (((10))) (11) "Qualified machinery and equipment" means all new industrial and research fixtures, equipment, and support facilities that are an integral and necessary part of a manufacturing or research and development operation. "Qualified machinery and equipment" includes: Computers; software; data processing equipment; laboratory equipment; manufacturing components such as belts, pulleys, shafts, and moving parts; molds, tools, and dies; operating structures; and all equipment used to control or operate the machinery.
     (((11))) (12) "Recipient" means a person receiving a tax deferral under this chapter.
     (((12))) (13) "Research and development" means the development, refinement, testing, marketing, and commercialization of a product, service, or process before commercial sales have begun. As used in this subsection, "commercial sales" excludes sales of prototypes or sales for market testing if the total gross receipts from such sales of the product, service, or process do not exceed one million dollars.

Sec. 138   RCW 82.60.070 and 2004 c 25 s 7 are each amended to read as follows:
     (1)(a) ((The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.
     (b))) Each recipient of a deferral of taxes granted under this chapter ((after June 30, 1994, shall)) must file a complete ((an)) annual survey with the department under section 102 of this act. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.60.020(4), the lessee ((shall agree to)) must file a complete ((the)) annual survey, and the applicant is not required to file a complete ((the)) annual survey. ((The survey is due by March 31st of the year following the calendar year in which the investment project is certified by the department as having been operationally complete and the seven succeeding calendar years. The survey shall include the amount of tax deferred, the number of new products or research projects by general classification, and the number of trademarks, patents, and copyrights associated with activities at the investment project. The survey shall also include the following information for employment positions in Washington:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) The department may request additional information necessary to measure the results of the deferral program, to be submitted at the same time as the survey.
     (d) All information collected under this subsection, except the amount of the tax deferral taken, is deemed taxpayer information under RCW 82.32.330 and is not disclosable. Information on the amount of tax deferral taken is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (e) The department shall use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.
     (f))) (b) The department ((shall also)) must use the information reported on the annual survey required by this section to study the tax deferral program authorized under this chapter. The department ((shall)) must report to the legislature by December 1, 2009. The report ((shall)) must measure the effect of the program on job creation, the number of jobs created for residents of eligible areas, company growth, the introduction of new products, the diversification of the state's economy, growth in research and development investment, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects.
     (2)(((a))) If, on the basis of a survey under ((this)) section 102 of this act or other information, the department finds that an investment project is not eligible for tax deferral under this chapter, the amount of deferred taxes outstanding for the project ((shall be)) is immediately due.
     (((b) If a recipient of the deferral fails to complete the annual survey required under subsection (1) of this section by the date due, twelve and one-half percent of the deferred tax shall be immediately due. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.60.020(4), the lessee shall be responsible for payment to the extent the lessee has received the economic benefit.))
     (3) ((Notwithstanding any other subsection of this section, deferred taxes need not be repaid on machinery and equipment for lumber and wood products industries, and sales of or charges made for labor and services, of the type which qualifies for exemption under RCW 82.08.02565 or 82.12.02565 to the extent the taxes have not been repaid before July 1, 1995)) A recipient who must repay deferred taxes under subsection (2) of this section because the department has found that an investment project is not eligible for tax deferral under this chapter is no longer required to file annual surveys under section 102 of this act beginning on the date an investment project is used for nonqualifying purposes.
     (4) Notwithstanding any other ((subsection)) provision of this section or section 102 of this act, deferred taxes on the following need not be repaid:
     (a) Machinery and equipment, and sales of or charges made for labor and services, which at the time of purchase would have qualified for exemption under RCW 82.08.02565; and
     (b) Machinery and equipment which at the time of first use would have qualified for exemption under RCW 82.12.02565.

Sec. 139   RCW 82.63.020 and 2004 c 2 s 4 are each amended to read as follows:
     (1) Application for deferral of taxes under this chapter must be made before initiation of construction of, or acquisition of equipment or machinery for the investment project. The application ((shall)) must be made to the department in a form and manner prescribed by the department. The application ((shall)) must contain information regarding the location of the investment project, the applicant's average employment in the state for the prior year, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department ((shall)) must rule on the application within sixty days.
     (2)(((a) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.
     (b) Applicants for)) Each recipient of a deferral of taxes under this chapter ((shall agree to)) must file a complete ((an)) annual survey with the department under section 102 of this act. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.63.010(7), the lessee ((shall agree to)) must file a complete ((the)) annual survey, and the applicant is not required to ((complete)) file the annual survey. ((The survey is due by March 31st of the year following the calendar year in which the investment project is certified by the department as having been operationally complete and the seven succeeding calendar years. The survey shall include the amount of tax deferred, the number of new products or research projects by general classification, and the number of trademarks, patents, and copyrights associated with activities at the investment project. The survey shall also include the following information for employment positions in Washington:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) The department may request additional information necessary to measure the results of the deferral program, to be submitted at the same time as the survey.
     (d) All information collected under this subsection, except the amount of the tax deferral taken, is deemed taxpayer information under RCW 82.32.330 and is not disclosable. Information on the amount of tax deferral taken is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (3) The department shall use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.
     (4))) (3) The department ((shall)) must use the information reported on the annual survey required by this section to study the tax deferral program authorized under this chapter. The department ((shall)) must report to the legislature by December 1, 2009, and December 1, 2013. The reports ((shall)) must measure the effect of the program on job creation, the number of jobs created for Washington residents, company growth, the introduction of new products, the diversification of the state's economy, growth in research and development investment, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects.
     (4) A recipient who must repay deferred taxes under RCW 82.63.045 because the department has found that an investment project is used for purposes other than research and development performed within this state in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, and environmental technology is no longer required to file annual surveys under section 102 of this act beginning on the date an investment project is used for nonqualifying purposes.

Sec. 140   RCW 82.63.045 and 2004 c 2 s 6 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section and section 102 of this act, taxes deferred under this chapter need not be repaid.
     (2)(a) If, on the basis of the survey under ((RCW 82.63.020)) section 102 of this act or other information, the department finds that an investment project is used for purposes other than qualified research and development or pilot scale manufacturing at any time during the calendar year in which the investment project is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, a portion of deferred taxes ((shall be)) is immediately due according to the following schedule:

Sec. 141   RCW 82.74.040 and 2006 c 354 s 8 are each amended to read as follows:
     (1)(((a) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.
     (b))) Each recipient of a deferral of taxes granted under this chapter ((shall)) must file a complete ((an)) annual survey with the department under section 102 of this act. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.74.010(6), the lessee ((shall)) must file a complete ((the)) annual survey, and the applicant is not required to ((complete)) file the annual survey. ((The survey is due by March 31st of the year following the calendar year in which the investment project is certified by the department as having been operationally complete and each of the seven succeeding calendar years. The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey shall include the amount of tax deferred. The survey shall also include the following information for employment positions in Washington:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) The department may request additional information necessary to measure the results of the deferral program, to be submitted at the same time as the survey.
     (d) All information collected under this subsection, except the amount of the tax deferral taken, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax deferral taken is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (e) The department shall use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.
     (f) The department shall also use the information to study the tax deferral program authorized under this chapter. The department shall report to the legislature by December 1, 2011. The report shall measure the effect of the program on job creation, company growth, the introduction of new products, the diversification of the state's economy, growth in research and development investment, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects.
     (2)(a) If a recipient of the deferral fails to complete the annual survey required under subsection (1) of this section by the date due or any extension under RCW 82.32.590, twelve and one-half percent of the deferred tax shall be immediately due. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.74.010(6), the lessee shall be responsible for payment to the extent the lessee has received the economic benefit. The department shall assess interest, but not penalties, on the amounts due under this section. The interest shall be assessed at the rate provided for delinquent taxes under chapter 82.32 RCW, and shall accrue until the amounts due are repaid.
     (b))) (2) A recipient who must repay deferred taxes under RCW 82.74.050(2) because the department has found that an investment project is used for purposes other than fresh fruit and vegetable processing, dairy product manufacturing, seafood product manufacturing, cold storage warehousing, or research and development is no longer required to file annual surveys under ((this)) section 102 of this act beginning on the date an investment project is used for nonqualifying purposes.

Sec. 142   RCW 82.74.050 and 2006 c 354 s 9 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section and section 102 of this act, taxes deferred under this chapter need not be repaid.
     (2)(a) If, on the basis of the survey under ((RCW 82.74.040)) section 102 of this act or other information, the department finds that an investment project is used for purposes other than fresh fruit and vegetable processing, dairy product manufacturing, seafood product manufacturing, cold storage warehousing, or research and development at any time during the calendar year in which the investment project is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, a portion of deferred taxes ((shall be)) is immediately due according to the following schedule:

NEW SECTION.  Sec. 143   A new section is added to chapter 82.75 RCW to read as follows:
     (1) Each recipient of a deferral of taxes granted under this chapter must file a complete annual survey with the department under section 102 of this act. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.75.010(5), the lessee must file a complete annual survey, and the applicant is not required to file the annual survey.
     (2) A recipient who must repay deferred taxes under RCW 82.75.040(2) because the department has found that an investment project is used for purposes other than qualified biotechnology product manufacturing or medical device manufacturing activities is no longer required to file annual surveys under section 102 of this act beginning on the date an investment project is used for nonqualifying purposes.

Sec. 144   RCW 82.75.010 and 2006 c 178 s 2 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Applicant" means a person applying for a tax deferral under this chapter.
     (2) "Biotechnology" means a technology based on the science of biology, microbiology, molecular biology, cellular biology, biochemistry, or biophysics, or any combination of these, and includes, but is not limited to, recombinant DNA techniques, genetics and genetic engineering, cell fusion techniques, and new bioprocesses, using living organisms, or parts of organisms.
     (3) "Biotechnology product" means any virus, therapeutic serum, antibody, protein, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product produced through the application of biotechnology that is used in the prevention, treatment, or cure of diseases or injuries to humans.
     (4) "Department" means the department of revenue.
     (5)(a) "Eligible investment project" means an investment in qualified buildings or qualified machinery and equipment, including labor and services rendered in the planning, installation, and construction of the project.
     (b) The lessor or owner of a qualified building is not eligible for a deferral unless:
     (i) The underlying ownership of the buildings, machinery, and equipment vests exclusively in the same person; or
     (ii)(A) The lessor by written contract agrees to pass the economic benefit of the deferral to the lessee;
     (B) The lessee that receives the economic benefit of the deferral agrees in writing with the department to complete the annual survey required under ((RCW 82.32.645)) section 143 of this act; and
     (C) The economic benefit of the deferral passed to the lessee is no less than the amount of tax deferred by the lessor and is evidenced by written documentation of any type of payment, credit, or other financial arrangement between the lessor or owner of the qualified building and the lessee.
     (6)(a) "Initiation of construction" means the date that a building permit is issued under the building code adopted under RCW 19.27.031 for:
     (i) Construction of the qualified building, if the underlying ownership of the building vests exclusively with the person receiving the economic benefit of the deferral;
     (ii) Construction of the qualified building, if the economic benefits of the deferral are passed to a lessee as provided in subsection (5)(b)(ii)(A) of this section; or
     (iii) Tenant improvements for a qualified building, if the economic benefits of the deferral are passed to a lessee as provided in subsection (5)(b)(ii)(A) of this section.
     (b) "Initiation of construction" does not include soil testing, site clearing and grading, site preparation, or any other related activities that are initiated before the issuance of a building permit for the construction of the foundation of the building.
     (c) If the investment project is a phased project, "initiation of construction" ((shall apply)) applies separately to each phase.
     (7) "Manufacturing" has the meaning provided in RCW 82.04.120.
     (8) "Medical device" means an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, that is designed or developed and:
     (a) Recognized in the national formulary, or the United States pharmacopeia, or any supplement to them;
     (b) Intended for use in the diagnosis of disease, or in the cure, mitigation, treatment, or prevention of disease or other conditions in human beings or other animals; or
     (c) Intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its principal intended purposes.
     (9) "Person" has the meaning provided in RCW 82.04.030.
     (10) "Qualified buildings" means construction of new structures, and expansion or renovation of existing structures for the purpose of increasing floor space or production capacity used for biotechnology product manufacturing or medical device manufacturing activities, including plant offices, commercial laboratories for process development, quality assurance and quality control, and warehouses or other facilities for the storage of raw material or finished goods if the facilities are an essential or an integral part of a factory, plant, or laboratory used for biotechnology product manufacturing or medical device manufacturing. If a building is used partly for biotechnology product manufacturing or medical device manufacturing and partly for other purposes, the applicable tax deferral ((shall)) must be determined by apportionment of the costs of construction under rules adopted by the department.
     (11) "Qualified machinery and equipment" means all new industrial and research fixtures, equipment, and support facilities that are an integral and necessary part of a biotechnology product manufacturing or medical device manufacturing operation. "Qualified machinery and equipment" includes: Computers; software; data processing equipment; laboratory equipment; manufacturing components such as belts, pulleys, shafts, and moving parts; molds, tools, and dies; operating structures; and all equipment used to control or operate the machinery.
     (12) "Recipient" means a person receiving a tax deferral under this chapter.

Sec. 145   RCW 82.75.020 and 2006 c 178 s 3 are each amended to read as follows:
     Application for deferral of taxes under this chapter must be made ((and approved)) before initiation of the construction of the investment project or acquisition of equipment or machinery. The application ((shall)) must be made to the department in a form and manner prescribed by the department. The application ((shall)) must contain information regarding the location of the investment project, the applicant's average employment in the state for the prior year, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department ((shall)) must rule on the application within sixty days.

Sec. 146   RCW 82.75.040 and 2006 c 178 s 5 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section and ((RCW 82.32.645)) section 102 of this act, taxes deferred under this chapter need not be repaid.
     (2)(a) If, on the basis of the survey under ((RCW 82.32.645)) section 102 of this act or other information, the department finds that an investment project is used for purposes other than qualified biotechnology product manufacturing or medical device manufacturing activities at any time during the calendar year in which the eligible investment project is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, a portion of deferred taxes ((shall be)) is immediately due and payable according to the following schedule:

Sec. 147   RCW 82.82.020 and 2008 c 15 s 2 are each amended to read as follows:
     (1) Application for deferral of taxes under this chapter can be made at any time prior to completion of construction of a qualified building or buildings, but tax liability incurred prior to the department's receipt of an application may not be deferred. The application must be made to the department in a form and manner prescribed by the department. The application must contain information regarding the location of the investment project, the applicant's average employment in the state for the prior year, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department must rule on the application within sixty days.
     (2)(((a) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources the legislature needs information on how a tax incentive is used.
     (b) Applicants for deferral of taxes under this chapter must agree to complete an annual survey. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.82.010(5), the lessee must agree to complete the annual survey and the applicant is not required to complete the annual survey. The survey is due by March 31st of the year following the calendar year in which the investment project is certified by the department as having been operationally complete and the seven succeeding calendar years. The survey must include the amount of tax deferred. The survey must also include the following information for employment positions in Washington:
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) The department may request additional information necessary to measure the results of the deferral program, to be submitted at the same time as the survey.
     (d) All information collected under this subsection, except the amount of the tax deferral taken, is deemed taxpayer information under RCW 82.32.330 and is not disclosable. Information on the amount of tax deferral taken is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (3) The department must use the information to study the tax deferral program authorized under this chapter. The department must report to the legislature by December 1, 2014, and December 1, 2018. The reports must measure the effect of the program on job creation, the number of jobs created for Washington residents, company growth, the introduction of new products, the diversification of the state's economy, growth in research and development investment, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects. If fewer than three deferrals are granted under this chapter, the department may not report statistical information.
     (4))) Applications for deferral of taxes under this section may not be made after December 31, 2020.
     (3) Each recipient of a deferral of taxes under this chapter must file a complete annual survey with the department under section 102 of this act. If the economic benefits of the deferral are passed to a lessee as provided in RCW 82.82.010(5), the lessee must file a complete annual survey, and the applicant is not required to file the annual survey.
     (4) A recipient who must repay deferred taxes under RCW 82.82.040 because the department has found that an investment project is no longer an eligible investment project is no longer required to file annual surveys under section 102 of this act beginning on the date an investment project is used for nonqualifying purposes.

Sec. 148   RCW 82.82.040 and 2008 c 15 s 5 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section and section 102 of this act, taxes deferred under this chapter need not be repaid.
     (2)(a) If, on the basis of the survey under ((RCW 82.82.020)) section 102 of this act or other information, the department finds that an investment project is no longer an "eligible investment project" under RCW 82.82.010 at any time during the calendar year in which the investment project is certified by the department as having been operationally completed, or at any time during any of the seven succeeding calendar years, a portion of deferred taxes are immediately due according to the following schedule:

Sec. 149   RCW 84.36.645 and 2003 c 149 s 10 are each amended to read as follows:
     (1) Machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 used in manufacturing semiconductor materials at a building exempt from sales and use tax and in compliance with the employment requirement under RCW 82.08.965 and 82.12.965 are ((tax)) exempt from property taxation. "Semiconductor materials" has the same meaning as provided in RCW 82.04.240(2).
     (2) A person seeking this exemption must make application to the county assessor, on forms prescribed by the department.
     (3) A person ((receiving)) claiming an exemption under this section must file a complete annual report ((in the manner prescribed in RCW 82.32.535)) with the department under section 103 of this act.
     (4) This section is effective for taxes levied for collection one year after the effective date of this act and thereafter.
     (5) This section expires December 31st of the year occurring twelve years after the effective date of this act, for taxes levied for collection in the following year.

Sec. 150   RCW 84.36.655 and 2003 2nd sp.s. c 1 s 14 are each amended to read as follows:
     (1) Effective January 1, 2005, all buildings, machinery, equipment, and other personal property of a lessee of a port district eligible under RCW 82.08.980 and 82.12.980, used exclusively in manufacturing superefficient airplanes, are exempt from property taxation. A person taking the credit under RCW 82.04.4463 is not eligible for the exemption under this section. For the purposes of this section, "superefficient airplane" and "component" have the meanings given in RCW 82.32.550.
     (2) In addition to all other requirements under this title, a person ((taking)) claiming the exemption under this section must file a complete annual report ((as required)) with the department under ((RCW 82.32.545)) section 103 of this act.
     (3) Claims for exemption authorized by this section ((shall)) must be filed with the county assessor on forms prescribed by the department and furnished by the assessor. The assessor ((shall)) must verify and approve claims as the assessor determines to be justified and in accordance with this section. No claims may be filed after December 31, 2023. The department may adopt rules, under the provisions of chapter 34.05 RCW, as necessary to properly administer this section.
     (4) This section applies to taxes levied for collection in 2006 and thereafter.
     (5) This section expires July 1, 2024.

NEW SECTION.  Sec. 151   The following acts or parts of acts are each repealed:
     (1) RCW 82.32.535 (Annual report by semiconductor businesses) and 2003 c 149 s 11;
     (2) RCW 82.32.5351 (Annual report by semiconductor businesses--Report to legislature) and 2006 c 84 s 5;
     (3) RCW 82.32.545 (Annual report for airplane manufacturing tax preferences) and 2008 c 283 s 2, 2008 c 81 s 10, 2007 c 54 s 19, & 2003 2nd sp.s. c 1 s 16;
     (4) RCW 82.32.560 (Electrolytic processing business tax exemption--Annual report) and 2004 c 240 s 2;
     (5) RCW 82.32.570 (Smelter tax incentives -- Goals -- Annual report) and 2006 c 182 s 6 & 2004 c 24 s 14;
     (6) RCW 82.32.610 (Annual survey for fruit and vegetable business tax incentive -- Report to legislature) and 2006 c 354 s 5 & 2005 c 513 s 3;
     (7) RCW 82.32.620 (Annual report for tax incentives under RCW 82.04.294) and 2005 c 301 s 4;
     (8) RCW 82.32.630 (Annual survey for timber tax incentives) and 2007 c 48 s 6 & 2006 c 300 s 9;
     (9) RCW 82.32.645 (Annual survey for biotechnology and medical device manufacturing business tax incentive -- Report to legislature) and 2006 c 178 s 8;
     (10) RCW 82.32.650 (Annual survey -- Customized employment training--Report to legislature) and 2006 c 112 s 6;
     (11) RCW 82.16.140 (Renewable energy system cost recovery -- Report to legislature) and 2005 c 300 s 5; and
     (12) 2005 c 301 s 5 (uncodified).

NEW SECTION.  Sec. 152   The repeals in section 151 of this act do not affect any existing right acquired or liability or obligation incurred under the statutes repealed or under any rule or order adopted under those statutes, nor do they affect any proceeding instituted under those statutes.

NEW SECTION.  Sec. 201   A new section is added to chapter 35.102 RCW to read as follows:
     A city that imposes a business and occupation tax may by ordinance provide that return or tax information is confidential, privileged, and subject to disclosure in the manner provided by RCW 82.32.330.

Sec. 202   RCW 42.56.230 and 2008 c 200 s 5 are each amended to read as follows:
     The following personal information is exempt from public inspection and copying under this chapter:
     (1) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients;
     (2) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy;
     (3) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would: (a) Be prohibited to such persons by RCW 84.08.210, 82.32.330, 84.40.020, ((or)) 84.40.340, or any ordinance authorized under section 201 of this act; or (b) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer;
     (4) Credit card numbers, debit card numbers, electronic check numbers, card expiration dates, or bank or other financial account numbers, except when disclosure is expressly required by or governed by other law; and
     (5) Documents and related materials and scanned images of documents and related materials used to prove identity, age, residential address, social security number, or other personal information required to apply for a driver's license or identicard.

Sec. 203   RCW 82.16.120 and 2007 c 111 s 101 are each amended to read as follows:
     (1) Any individual, business, or local governmental entity, not in the light and power business or in the gas distribution business, may apply to the light and power business serving the situs of the system, each fiscal year beginning on July 1, 2005, for an investment cost recovery incentive for each kilowatt-hour from a customer-generated electricity renewable energy system installed on its property that is not interconnected to the electric distribution system. No incentive may be paid for kilowatt-hours generated before July 1, 2005, or after June 30, 2014.
     (2) When light and power businesses serving eighty percent of the total customer load in the state adopt uniform standards for interconnection to the electric distribution system, any individual, business, or local governmental entity, not in the light and power business or in the gas distribution business, may apply to the light and power business serving the situs of the system, each fiscal year, for an investment cost recovery incentive for each kilowatt-hour from a customer-generated electricity renewable energy system installed on its property that is not interconnected to the electric distribution system and from a customer-generated electricity renewable energy system installed on its property that is interconnected to the electric distribution system. Uniform standards for interconnection to the electric distribution system means those standards established by light and power businesses that have ninety percent of total requirements the same. No incentive may be paid for kilowatt-hours generated before July 1, 2005, or after June 30, 2014.
     (3)(a) Before submitting for the first time the application for the incentive allowed under this section, the applicant ((shall)) must submit to the department of revenue and to the climate and rural energy development center at the Washington State University, established under RCW 28B.30.642, a certification in a form and manner prescribed by the department that includes, but is not limited to, the following information:
     (i) The name and address of the applicant and location of the renewable energy system;
     (ii) The applicant's tax registration number;
     (iii) That the electricity produced by the applicant meets the definition of "customer-generated electricity" and that the renewable energy system produces electricity with:
     (A) Any solar inverters and solar modules manufactured in Washington state;
     (B) A wind generator powered by blades manufactured in Washington state;
     (C) A solar inverter manufactured in Washington state;
     (D) A solar module manufactured in Washington state; or
     (E) Solar or wind equipment manufactured outside of Washington state;
     (iv) That the electricity can be transformed or transmitted for entry into or operation in parallel with electricity transmission and distribution systems;
     (v) The date that the renewable energy system received its final electrical permit from the applicable local jurisdiction.
     (b) Within thirty days of receipt of the certification the department of revenue ((shall)) must notify the applicant by mail, or electronically as provided in RCW 82.32.135, whether the renewable energy system qualifies for an incentive under this section. The department may consult with the climate and rural energy development center to determine eligibility for the incentive. System certifications and the information contained therein are subject to disclosure under RCW 82.32.330(3)(((m))) (l).
     (4)(a) By August 1st of each year application for the incentive ((shall)) must be made to the light and power business serving the situs of the system by certification in a form and manner prescribed by the department that includes, but is not limited to, the following information:
     (i) The name and address of the applicant and location of the renewable energy system;
     (ii) The applicant's tax registration number;
     (iii) The date of the notification from the department of revenue stating that the renewable energy system is eligible for the incentives under this section;
     (iv) A statement of the amount of kilowatt-hours generated by the renewable energy system in the prior fiscal year.
     (b) Within sixty days of receipt of the incentive certification the light and power business serving the situs of the system ((shall)) must notify the applicant in writing whether the incentive payment will be authorized or denied. The business may consult with the climate and rural energy development center to determine eligibility for the incentive payment. Incentive certifications and the information contained therein are subject to disclosure under RCW 82.32.330(3)(((m))) (l).
     (c)(i) Persons receiving incentive payments ((shall)) must keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of incentive applied for and received. Such records ((shall)) must be open for examination at any time upon notice by the light and power business that made the payment or by the department. If upon examination of any records or from other information obtained by the business or department it appears that an incentive has been paid in an amount that exceeds the correct amount of incentive payable, the business may assess against the person for the amount found to have been paid in excess of the correct amount of incentive payable and ((shall)) must add thereto interest on the amount. Interest ((shall)) must be assessed in the manner that the department assesses interest upon delinquent tax under RCW 82.32.050.
     (ii) If it appears that the amount of incentive paid is less than the correct amount of incentive payable the business may authorize additional payment.
     (5) The investment cost recovery incentive may be paid fifteen cents per economic development kilowatt-hour unless requests exceed the amount authorized for credit to the participating light and power business. For the purposes of this section, the rate paid for the investment cost recovery incentive may be multiplied by the following factors:
     (a) For customer-generated electricity produced using solar modules manufactured in Washington state, two and four-tenths;
     (b) For customer-generated electricity produced using a solar or a wind generator equipped with an inverter manufactured in Washington state, one and two-tenths;
     (c) For customer-generated electricity produced using an anaerobic digester, or by other solar equipment or using a wind generator equipped with blades manufactured in Washington state, one; and
     (d) For all other customer-generated electricity produced by wind, eight-tenths.
     (6) No individual, household, business, or local governmental entity is eligible for incentives for more than two thousand dollars per year.
     (7) If requests for the investment cost recovery incentive exceed the amount of funds available for credit to the participating light and power business, the incentive payments ((shall)) must be reduced proportionately.
     (8) The climate and rural energy development center at Washington State University energy program may establish guidelines and standards for technologies that are identified as Washington manufactured and therefore most beneficial to the state's environment.
     (9) The environmental attributes of the renewable energy system belong to the applicant, and do not transfer to the state or the light and power business upon receipt of the investment cost recovery incentive.

Sec. 204   RCW 82.32.330 and 2008 c 81 s 11 are each amended to read as follows:
     (1) For purposes of this section:
     (a) "Disclose" means to make known to any person in any manner whatever a return or tax information;
     (b) "Return" means a tax or information return or claim for refund required by, or provided for or permitted under, the laws of this state which is filed with the department of revenue by, on behalf of, or with respect to a person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists that are supplemental to, or part of, the return so filed;
     (c) "Tax information" means (i) a taxpayer's identity, (ii) the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability deficiencies, overassessments, or tax payments, whether taken from the taxpayer's books and records or any other source, (iii) whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, (iv) a part of a written determination that is not designated as a precedent and disclosed pursuant to RCW 82.32.410, or a background file document relating to a written determination, and (v) other data received by, recorded by, prepared by, furnished to, or collected by the department of revenue with respect to the determination of the existence, or possible existence, of liability, or the amount thereof, of a person under the laws of this state for a tax, penalty, interest, fine, forfeiture, or other imposition, or offense: PROVIDED, That data, material, or documents that do not disclose information related to a specific or identifiable taxpayer do not constitute tax information under this section. Except as provided by RCW 82.32.410, nothing in this chapter ((shall)) requires any person possessing data, material, or documents made confidential and privileged by this section to delete information from such data, material, or documents so as to permit its disclosure;
     (d) "State agency" means every Washington state office, department, division, bureau, board, commission, or other state agency;
     (e) "Taxpayer identity" means the taxpayer's name, address, telephone number, registration number, or any combination thereof, or any other information disclosing the identity of the taxpayer; and
     (f) "Department" means the department of revenue or its officer, agent, employee, or representative.
     (2) Returns and tax information ((shall be)) are confidential and privileged, and except as authorized by this section, neither the department of revenue nor any other person may disclose any return or tax information.
     (3) This section does not prohibit the department of revenue from:
     (a) Disclosing such return or tax information in a civil or criminal judicial proceeding or an administrative proceeding:
     (i) In respect of any tax imposed under the laws of this state if the taxpayer or its officer or other person liable under Title 82 RCW or chapter 83.100 RCW is a party in the proceeding; ((or))
     (ii) In which the taxpayer about whom such return or tax information is sought and another state agency are adverse parties in the proceeding; or
     (iii) Brought by the department under RCW 18.27.040 or 19.28.071;
     (b) Disclosing, subject to such requirements and conditions as the director ((shall)) prescribes by rules adopted pursuant to chapter 34.05 RCW, such return or tax information regarding a taxpayer to such taxpayer or to such person or persons as that taxpayer may designate in a request for, or consent to, such disclosure, or to any other person, at the taxpayer's request, to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person: PROVIDED, That tax information not received from the taxpayer ((shall)) must not be so disclosed if the director determines that such disclosure would compromise any investigation or litigation by any federal, state, or local government agency in connection with the civil or criminal liability of the taxpayer or another person, or that such disclosure would identify a confidential informant, or that such disclosure is contrary to any agreement entered into by the department that provides for the reciprocal exchange of information with other government agencies which agreement requires confidentiality with respect to such information unless such information is required to be disclosed to the taxpayer by the order of any court;
     (c) Disclosing the name of a taxpayer ((with a deficiency greater than five thousand dollars and)) against whom a warrant under RCW 82.32.210 has been either issued or filed and remains outstanding for a period of at least ten working days. The department ((shall not be)) is not required to disclose any information under this subsection if a taxpayer((: (i) Has been issued a tax assessment; (ii) has been issued a warrant that has not been filed; and (iii))) has entered a deferred payment arrangement with the department of revenue for the payment of a warrant that has not been filed and is making payments upon such deficiency that will fully satisfy the indebtedness within twelve months;
     (d) ((Disclosing the name of a taxpayer with a deficiency greater than five thousand dollars and against whom a warrant under RCW 82.32.210 has been filed with a court of record and remains outstanding;
     (e))) Publishing statistics so classified as to prevent the identification of particular returns or reports or items thereof;
     (((f))) (e) Disclosing such return or tax information, for official purposes only, to the governor or attorney general, or to any state agency, or to any committee or subcommittee of the legislature dealing with matters of taxation, revenue, trade, commerce, the control of industry or the professions;
     (((g))) (f) Permitting the department of revenue's records to be audited and examined by the proper state officer, his or her agents and employees;
     (((h))) (g) Disclosing any such return or tax information to a peace officer as defined in RCW 9A.04.110 or county prosecuting attorney, for official purposes. The disclosure may be made only in response to a search warrant, subpoena, or other court order, unless the disclosure is for the purpose of criminal tax enforcement. A peace officer or county prosecuting attorney who receives the return or tax information may disclose that return or tax information only for use in the investigation and a related court proceeding, or in the court proceeding for which the return or tax information originally was sought;
     (((i))) (h) Disclosing any such return or tax information to the proper officer of the internal revenue service of the United States, the Canadian government or provincial governments of Canada, or to the proper officer of the tax department of any state or city or town or county, for official purposes, but only if the statutes of the United States, Canada or its provincial governments, or of such other state or city or town or county, as the case may be, grants substantially similar privileges to the proper officers of this state;
     (((j))) (i) Disclosing any such return or tax information to the United States Department of Justice, including the Bureau of Alcohol, Tobacco, Firearms and Explosives ((within the Department of Justice)), the Department of Defense, the Immigration and Customs Enforcement and the Customs and Border Protection agencies of the United States Department of Homeland Security, the United States Coast Guard ((of the United States)), the Alcohol and Tobacco Tax and Trade Bureau of the United States Department of Treasury, and the United States Department of Transportation, or any authorized representative ((thereof)) of these federal agencies, for official purposes;
     (((k))) (j) Publishing or otherwise disclosing the text of a written determination designated by the director as a precedent pursuant to RCW 82.32.410;
     (((l))) (k) Disclosing, in a manner that is not associated with other tax information, the taxpayer name, entity type, business address, mailing address, revenue tax registration numbers, North American industry classification system or standard industrial classification code of a taxpayer, and the dates of opening and closing of business. This subsection ((shall)) must not be construed as giving authority to the department to give, sell, or provide access to any list of taxpayers for any commercial purpose;
     (((m))) (l) Disclosing such return or tax information that is also maintained by another Washington state or local governmental agency as a public record available for inspection and copying under the provisions of chapter 42.56 RCW or is a document maintained by a court of record and is not otherwise prohibited from disclosure;
     (((n))) (m) Disclosing such return or tax information to the United States department of agriculture for the limited purpose of investigating food stamp fraud by retailers;
     (((o))) (n) Disclosing to a financial institution, escrow company, or title company, in connection with specific real property that is the subject of a real estate transaction, current amounts due the department for a filed tax warrant, judgment, or lien against the real property;
     (((p))) (o) Disclosing to a person against whom the department has asserted liability as a successor under RCW 82.32.140 return or tax information pertaining to the specific business of the taxpayer to which the person has succeeded;
     (((q))) (p) Disclosing ((such return or tax information)) real estate excise tax affidavit forms filed under RCW 82.45.150 in the possession of the department ((relating to the administration or enforcement of the real estate excise tax imposed under chapter 82.45 RCW)), including ((information)) real estate excise tax affidavit forms regarding transactions exempt or otherwise not subject to tax; ((or
     (r))) (q) Disclosing to local taxing jurisdictions the identity of sellers granted relief under RCW 82.32.430(5)(b)(i) and the period for which relief is granted;
     (r) Disclosing to a person against whom the department has asserted liability under RCW 83.100.120 return or tax information pertaining to that person's liability for tax under chapter 83.100 RCW; or
     (s) Disclosing any such return or tax information to the streamlined sales tax governing board for official board purposes.
     (4)(a) The department may disclose return or taxpayer information to a person under investigation or during any court or administrative proceeding against a person under investigation as provided in this subsection (4). The disclosure must be in connection with the department's official duties relating to an audit, collection activity, or a civil or criminal investigation. The disclosure may occur only when the person under investigation and the person in possession of data, materials, or documents are parties to the return or tax information to be disclosed. The department may disclose return or tax information such as invoices, contracts, bills, statements, resale or exemption certificates, or checks. However, the department may not disclose general ledgers, sales or cash receipt journals, check registers, accounts receivable/payable ledgers, general journals, financial statements, expert's workpapers, income tax returns, state tax returns, tax return workpapers, or other similar data, materials, or documents.
     (b) Before disclosure of any tax return or tax information under this subsection (4), the department ((shall)) must, through written correspondence, inform the person in possession of the data, materials, or documents to be disclosed. The correspondence ((shall)) must clearly identify the data, materials, or documents to be disclosed. The department may not disclose any tax return or tax information under this subsection (4) until the time period allowed in (c) of this subsection has expired or until the court has ruled on any challenge brought under (c) of this subsection.
     (c) The person in possession of the data, materials, or documents to be disclosed by the department has twenty days from the receipt of the written request required under (b) of this subsection to petition the superior court of the county in which the petitioner resides for injunctive relief. The court ((shall)) may limit or deny the request of the department if the court determines that:
     (i) The data, materials, or documents sought for disclosure are cumulative or duplicative, or are obtainable from some other source that is more convenient, less burdensome, or less expensive;
     (ii) The production of the data, materials, or documents sought would be unduly burdensome or expensive, taking into account the needs of the department, the amount in controversy, limitations on the petitioner's resources, and the importance of the issues at stake; or
     (iii) The data, materials, or documents sought for disclosure contain trade secret information that, if disclosed, could harm the petitioner.
     (d) The department ((shall)) must reimburse reasonable expenses for the production of data, materials, or documents incurred by the person in possession of the data, materials, or documents to be disclosed.
     (e) Requesting information under (b) of this subsection that may indicate that a taxpayer is under investigation does not constitute a disclosure of tax return or tax information under this section.
     (5) Any person acquiring knowledge of any return or tax information in the course of his or her employment with the department of revenue and any person acquiring knowledge of any return or tax information as provided under subsection (3)(((f), (g), (h), (i), (j), or (n))) (e), (f), (g), (h), (i), or (m) of this section, who discloses any such return or tax information to another person not entitled to knowledge of such return or tax information under the provisions of this section, is guilty of a misdemeanor. If the person guilty of such violation is an officer or employee of the state, such person ((shall)) must forfeit such office or employment and ((shall be)) is incapable of holding any public office or employment in this state for a period of two years thereafter.

Sec. 205   RCW 82.32.480 and 2001 c 314 s 20 are each amended to read as follows:
     The forest products commission, created pursuant to chapter 15.100 RCW, constitutes a state agency for purposes of applying the exemption contained in RCW 82.32.330(3)(((f))) (e) for the disclosure of taxpayer information by the department. Disclosure of return or tax information may be made only to employees of the commission and not to commission members. Employees are authorized to use this information in accordance with RCW 15.100.100(4). Employees are subject to all civil and criminal penalties provided under RCW 82.32.330 for disclosures made to another person not entitled under the provisions of this section or RCW 15.100.100 to knowledge of such information.

Sec. 206   RCW 82.60.100 and 1987 c 49 s 1 are each amended to read as follows:
     Applications, reports, and any other information received by the department under this chapter ((shall)), except applications not approved by the department, are not ((be)) confidential and ((shall be)) are subject to disclosure.

Sec. 207   RCW 82.62.080 and 1987 c 49 s 3 are each amended to read as follows:
     Applications, reports, and any other information received by the department under this chapter ((shall)), except applications not approved by the department, are not ((be)) confidential and ((shall be)) are subject to disclosure.

Sec. 208   RCW 82.63.070 and 2004 c 2 s 7 are each amended to read as follows:
     Applications ((received)) approved by the department under this chapter are not confidential and are subject to disclosure.

Sec. 209   RCW 82.74.070 and 2005 c 513 s 10 are each amended to read as follows:
     Applications ((received)) approved by the department under this chapter are not confidential and are subject to disclosure.

Sec. 210   RCW 82.75.060 and 2006 c 178 s 7 are each amended to read as follows:
     Applications ((received)) approved by the department under this chapter are not confidential and are subject to disclosure.

Sec. 211   RCW 83.100.210 and 2005 c 516 s 15 are each amended to read as follows:
     (1) The following provisions of chapter 82.32 RCW have full force and application with respect to the taxes imposed under this chapter unless the context clearly requires otherwise: RCW 82.32.110, 82.32.120, 82.32.130, 82.32.320, 82.32.330, and 82.32.340. The definitions in this chapter have full force and application with respect to the application of chapter 82.32 RCW to this chapter unless the context clearly requires otherwise.
     (2) The department may enter into closing agreements as provided in RCW 82.32.350 and 82.32.360.

Sec. 301   RCW 39.100.050 and 2007 c 266 s 6 are each amended to read as follows:
     (1) A local government that creates a benefit zone and has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465 may use annually any excess local excise taxes received by it from taxable activity within the benefit zone to finance public improvement costs associated with the public improvements financed in whole or in part by hospital benefit zone financing. The use of excess local excise taxes must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any participating taxing authority is authorized to allocate excess local excise taxes to the local government as long as the local government has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465. The legislature declares that it is a proper purpose of a local government or participating taxing authority to allocate excess local excise taxes for purposes of financing public improvements under this chapter.
     (2) A local government ((shall)) must provide the department accurate information describing the geographical boundaries of the benefit zone at least seventy-five days before the effective date of the ordinance creating the benefit zone. The local government ((shall)) must ensure that the boundary information provided to the department is kept current.
     (3) The department ((shall)) must provide the necessary information to calculate excess local excise taxes to each local government that has provided boundary information to the department as provided in this section and that has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465.
     (4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Base year" means the calendar year immediately following the creation of a benefit zone.
     (b) "Excess local excise taxes" means the amount of local excise taxes received by the local government during the measurement year from taxable activity within the benefit zone over and above the amount of local excise taxes received by the local government during the base year from taxable activity within the benefit zone. However, if a local government creates the benefit zone and reasonably determines that no activity subject to tax under chapters 82.08 and 82.12 RCW occurred in the twelve months immediately preceding the creation of the benefit zone within the boundaries of the area that became the benefit zone, "excess local excise taxes" means the entire amount of local excise taxes received by the local government during a calendar year period beginning with the calendar year immediately following the creation of the benefit zone and continuing with each measurement year thereafter.
     (c) "Local excise taxes" means local revenues derived from the imposition of sales and use taxes authorized in RCW 82.14.030 at the tax rate that was in effect at the time the hospital benefit zone is approved by the department, except that if a local government reduces the rate of such tax after the ((revenue development area)) hospital benefit zone was approved, "local excise taxes" means the local revenues derived from the imposition of the sales and use taxes authorized in RCW 82.14.030 at the lower tax rate.
     (d) "Measurement year" means a calendar year, beginning with the calendar year following the base year and each calendar year thereafter, that is used annually to measure the amount of excess state excise taxes and excess local excise taxes required to be used to finance public improvement costs associated with public improvements financed in whole or in part by hospital benefit zone financing.

Sec. 302   RCW 82.36.440 and 2003 c 350 s 5 are each amended to read as follows:
     (1) The tax levied in this chapter is in lieu of any excise, privilege, or occupational tax upon the business of manufacturing, selling, or distributing motor vehicle fuel, and no city, town, county, township or other subdivision or municipal corporation of the state ((shall)) may levy or collect any excise tax upon or measured by the sale, receipt, distribution, or use of motor vehicle fuel, except as provided in chapter 82.80 RCW and RCW 82.47.020.
     (2) This section does not apply to any tax imposed by the state.

Sec. 303   RCW 82.38.280 and 2003 c 350 s 6 are each amended to read as follows:
     (1) The tax levied in this chapter is in lieu of any excise, privilege, or occupational tax upon the business of manufacturing, selling, or distributing special fuel, and no city, town, county, township or other subdivision or municipal corporation of the state ((shall)) may levy or collect any excise tax upon or measured by the sale, receipt, distribution, or use of special fuel, except as provided in chapter 82.80 RCW and RCW 82.47.020.
     (2) This section does not apply to any tax imposed by the state.

Sec. 304   RCW 82.04.050 and 2007 c 54 s 4 and 2007 c 6 s 1004 are each reenacted and amended to read as follows:
     (1)(a) "Sale at retail" or "retail sale" means every sale of tangible personal property (including articles produced, fabricated, or imprinted) to all persons irrespective of the nature of their 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 a sale to a person who presents a resale certificate under RCW 82.04.470 and who:
     (((a))) (i) Purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person, but a purchase for the purpose of resale by a regional transit authority under RCW 81.112.300 is not a sale for resale; or
     (((b))) (ii) Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates real or personal property of or for consumers, if such tangible personal property becomes an ingredient or component of such real or personal property without intervening use by such person; or
     (((c))) (iii) Purchases for the purpose of consuming the property purchased in producing for sale a new article of tangible personal property or substance, of which such property becomes an ingredient or component or is 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))) (iv) 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; or
     (((e))) (v) Purchases for the purpose of providing the property to consumers as part of competitive telephone service, as defined in RCW 82.04.065. ((The term shall include every sale of tangible personal property which is used or consumed or to be used or consumed in the performance of any activity classified as a "sale at retail" or "retail sale" even though such property is resold or utilized as provided in (a), (b), (c), (d), or (e) of this subsection following such use. The term also means every sale of tangible personal property to persons engaged in any business which is taxable under RCW 82.04.280 (2) and (7), 82.04.290, and 82.04.2908)); or
     (((f))) (vi) Purchases for the purpose of satisfying the person's obligations under an extended warranty as defined in subsection (7) of this section, if such tangible personal property replaces or becomes an ingredient or component of property covered by the extended warranty without intervening use by such person.
     (b) The term includes every sale of tangible personal property that is used or consumed or to be used or consumed in the performance of any activity defined as a "sale at retail" or "retail sale" even though such property is resold or used as provided in (a)(i) through (vi) of this subsection following such use.
     (c) The term also means every sale of tangible personal property to persons engaged in any business that is taxable under RCW 82.04.280 (2) and (7), 82.04.290, and 82.04.2908.
     (2) The term "sale at retail" or "retail sale" ((shall)) includes the sale of or charge made for tangible personal property consumed and/or for labor and services rendered in respect to the following:
     (a) The installing, repairing, cleaning, altering, imprinting, or improving of tangible personal property of or for consumers, including charges made for the mere use of facilities in respect thereto, but excluding charges made for the use of self-service laundry facilities, and also excluding sales of laundry service to nonprofit health care facilities, and excluding services rendered in respect to live animals, birds and insects;
     (b) The constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for consumers, 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, and ((shall)) also includes the sale of services or charges made for the clearing of land and the moving of earth excepting the mere leveling of land used in commercial farming or agriculture;
     (c) The constructing, repairing, or improving of any structure upon, above, or under any real property owned by an owner who conveys the property by title, possession, or any other means to the person performing such construction, repair, or improvement for the purpose of performing such construction, repair, or improvement and the property is then reconveyed by title, possession, or any other means to the original owner;
     (d) The cleaning, fumigating, razing, or moving of existing buildings or structures, but ((shall)) does not include the charge made for janitorial services; and for purposes of this section the term "janitorial services" ((shall)) means those cleaning and caretaking services ordinarily performed by commercial janitor service businesses including, but not limited to, wall and window washing, floor cleaning and waxing, and the cleaning in place of rugs, drapes and upholstery. The term "janitorial services" does not include painting, papering, repairing, furnace or septic tank cleaning, snow removal or sandblasting;
     (e) Automobile towing and similar automotive transportation services, but not in respect to those required to report and pay taxes under chapter 82.16 RCW;
     (f) The furnishing of lodging and all other services by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property, and it ((shall)) must be presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same. For the purposes of this subsection, it ((shall)) must be presumed that the sale of and charge made for the furnishing of lodging for a continuous period of one month or more to a person is a rental or lease of real property and not a mere license to enjoy the same;
     (g) Persons taxable under (a), (b), (c), (d), (e), and (f) of this subsection when such sales or charges are for property, labor and services which are used or consumed in whole or in part by such persons in the performance of any activity defined as a "sale at retail" or "retail sale" even though such property, labor and services may be resold after such use or consumption. Nothing contained in this subsection ((shall)) may be construed to modify subsection (1) of this section and nothing contained in subsection (1) of this section ((shall)) may be construed to modify this subsection.
     (3) The term "sale at retail" or "retail sale" ((shall)) includes the sale of or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admission, and other service emoluments however designated, received by persons engaging in the following business activities:
     (a) Amusement and recreation services including but not limited to golf, pool, billiards, skating, bowling, ski lifts and tows, day trips for sightseeing purposes, and others, when provided to consumers;
     (b) Abstract, title insurance, and escrow services;
     (c) Credit bureau services;
     (d) Automobile parking and storage garage services;
     (e) Landscape maintenance and horticultural services but excluding (i) horticultural services provided to farmers and (ii) pruning, trimming, repairing, removing, and clearing of trees and brush near electric transmission or distribution lines or equipment, if performed by or at the direction of an electric utility;
     (f) Service charges associated with tickets to professional sporting events; and
     (g) The following personal services: Physical fitness services, tanning salon services, tattoo parlor services, steam bath services, turkish bath services, escort services, and dating services.
     (4)(a) The term ((shall)) also includes:
     (i) The renting or leasing of tangible personal property to consumers; and
     (ii) Providing tangible personal property along with an operator for a fixed or indeterminate period of time. A consideration of this is that the operator is necessary for the tangible personal property to perform as designed. For the purpose of this subsection (4)(a)(ii), an operator must do more than maintain, inspect, or set up the tangible personal property.
     (b) The term ((shall)) does not include the renting or leasing of tangible personal property where the lease or rental is for the purpose of sublease or subrent.
     (5) The term ((shall)) also includes the providing of "competitive telephone service," "telecommunications service," or "ancillary services," as those terms are defined in RCW 82.04.065, to consumers.
     (6) The term ((shall)) also includes the sale of prewritten computer software other than a sale to a person who presents a resale certificate under RCW 82.04.470, regardless of the method of delivery to the end user, but ((shall)) does not include custom software or the customization of prewritten computer software.
     (7) The term ((shall)) also includes the sale of or charge made for an extended warranty to a consumer. For purposes of this subsection, "extended warranty" means an agreement for a specified duration to perform the replacement or repair of tangible personal property at no additional charge or a reduced charge for tangible personal property, labor, or both, or to provide indemnification for the replacement or repair of tangible personal property, based on the occurrence of specified events. The term "extended warranty" does not include an agreement, otherwise meeting the definition of extended warranty in this subsection, if no separate charge is made for the agreement and the value of the agreement is included in the sales price of the tangible personal property covered by the agreement. For purposes of this subsection, "sales price" has the same meaning as in RCW 82.08.010.
     (8) The term ((shall)) does not include the sale of or charge made for labor and services rendered in respect to 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 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.
     (9) The term ((shall)) also does not include sales of chemical sprays or washes to persons for the purpose of postharvest treatment of fruit for the prevention of scald, fungus, mold, or decay, nor ((shall)) does it include sales of feed, seed, seedlings, fertilizer, agents for enhanced pollination including insects such as bees, and spray materials to: (a) Persons who participate in the federal conservation reserve program, the environmental quality incentives program, the wetlands reserve program, and the wildlife habitat incentives program, or their successors administered by the United States department of agriculture; (b) farmers for the purpose of producing for sale any agricultural product; and (c) farmers acting under cooperative habitat development or access contracts with an organization exempt from federal income tax under 26 U.S.C. Sec. 501(c)(3) or the Washington state department of fish and wildlife to produce or improve wildlife habitat on land that the farmer owns or leases.
     (10) The term ((shall)) does not include the sale of or charge made for labor and services rendered in respect to the constructing, repairing, decorating, or improving of 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. Nor ((shall)) does the term include the sale of services or charges made for the clearing of land and the moving of earth of or for the United States, any instrumentality thereof, or a county or city housing authority. Nor ((shall)) does the term include the sale of services or charges made for cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development.
     (11) The term ((shall)) does not include the sale of or charge made for labor, services, or tangible personal property pursuant to agreements providing maintenance services for bus, rail, or rail fixed guideway equipment when a regional transit authority is the recipient of the labor, services, or tangible personal property, and a transit agency, as defined in RCW 81.104.015, performs the labor or services.

Sec. 305   RCW 82.04.3651 and 1999 c 358 s 3 are each amended to read as follows:
     (1) This chapter does not apply to amounts received from fundraising activities by nonprofit organizations, as defined in subsection (2) of this section, ((for fund-raising activities)) and libraries as defined in RCW 27.12.010.
     (2) As used in this section, a "nonprofit organization" means:
     (a) An organization exempt from tax under section 501(c) (3), (4), or (10) of the federal internal revenue code (26 U.S.C. Sec. 501(c) (3), (4), or (10));
     (b) A nonprofit organization that would qualify under (a) of this subsection except that it is not organized as a nonprofit corporation; or
     (c) A nonprofit organization that meets all of the following criteria:
     (i) The members, stockholders, officers, directors, or trustees of the organization do not receive any part of the organization's gross income, except as payment for services rendered;
     (ii) The compensation received by any person for services rendered to the organization does not exceed an amount reasonable under the circumstances; and
     (iii) The activities of the organization do not include a substantial amount of political activity, including but not limited to influencing legislation and participation in any campaign on behalf of any candidate for political office.
     (3) As used in this section, the term "fund-raising activity" means soliciting or accepting contributions of money or other property or activities involving the anticipated exchange of goods or services for money between the soliciting organization and the organization or person solicited, for the purpose of furthering the goals of the nonprofit organization. "Fund-raising activity" does not include the operation of a regular place of business in which sales are made during regular hours such as a bookstore, thrift shop, restaurant, or similar business or the operation of a regular place of business from which services are provided or performed during regular hours such as the provision of retail, personal, or professional services. The sale of used books, used videos, used sound recordings, or similar used information products in a library, as defined in RCW 27.12.010, is not the operation of a regular place of business for the purposes of this section, if the proceeds of the sales are used to support the library.

Sec. 306   RCW 82.08.02573 and 1998 c 336 s 3 are each amended to read as follows:
     The tax levied by RCW 82.08.020 does not apply to a sale made by a nonprofit organization or a library, if the gross income from the sale is exempt under RCW 82.04.3651.

Sec. 307   RCW 82.08.0273 and 2007 c 135 s 2 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 ((shall)) does not apply to sales to nonresidents of this state of tangible personal property for use outside this state when the purchaser (a) is a bona fide resident of a state or possession or Province of Canada other than the state of Washington and such state, possession, or Province of Canada does not impose a retail sales tax or use tax of three percent or more or, if imposing such a tax, permits Washington residents exemption from otherwise taxable sales by reason of their residence, and (b) agrees, when requested, to grant the department of revenue access to such records and other forms of verification at his or her place of residence to assure that such purchases are not first used substantially in the state of Washington.
     (2) Notwithstanding anything to the contrary in this chapter, if parts or other tangible personal property are installed by the seller during the course of repairing, cleaning, altering, or improving motor vehicles, trailers, or campers and the seller makes a separate charge for the tangible personal property, the tax levied by RCW 82.08.020 does not apply to the separately stated charge to a nonresident purchaser for the tangible personal property but only if the separately stated charge does not exceed either the seller's current publicly stated retail price for the tangible personal property or, if no ((separately)) publicly stated retail price is available, the seller's cost for the tangible personal property. However, the exemption provided by this section does not apply if tangible personal property is installed by the seller during the course of repairing, cleaning, altering, or improving motor vehicles, trailers, or campers and the seller makes a single nonitemized charge for providing the tangible personal property and service. All of the requirements in subsections (1) and (3) through (6) of this section apply to this subsection.
     (3)(a) Any person claiming exemption from retail sales tax under the provisions of this section must display proof of his or her current nonresident status as provided in this section.
     (b) Acceptable proof of a nonresident person's status ((shall include)) includes one piece of identification such as a valid driver's license from the jurisdiction in which the out-of-state residency is claimed or a valid identification card which has a photograph of the holder and is issued by the out-of-state jurisdiction. Identification under this subsection (3)(b) must show the holder's residential address and have as one of its legal purposes the establishment of residency in that out-of-state jurisdiction.
     (4) Nothing in this section requires the vendor to make tax exempt retail sales to nonresidents. A vendor may choose to make sales to nonresidents, collect the sales tax, and remit the amount of sales tax collected to the state as otherwise provided by law. If the vendor chooses to make a sale to a nonresident without collecting the sales tax, the vendor ((shall)) must, in good faith, examine the proof of nonresidence, determine whether the proof is acceptable under subsection (3)(b) of this section, and maintain records for each nontaxable sale which ((shall)) must show the type of proof accepted, including any identification numbers where appropriate, and the expiration date, if any.
     (5)(a) Any person making fraudulent statements, which includes the offer of fraudulent identification or fraudulently procured identification to a vendor, in order to purchase goods without paying retail sales tax is guilty of perjury under chapter 9A.72 RCW.
     (b) Any person making tax exempt purchases under this section by displaying proof of identification not his or her own, or counterfeit identification, with intent to violate the provisions of this section, is guilty of a misdemeanor and, in addition, ((shall be)) is liable for the tax and subject to a penalty equal to the greater of one hundred dollars or the tax due on such purchases.
     (6)(a) Any vendor who makes sales without collecting the tax to a person who does not hold valid identification establishing out-of-state residency, and any vendor who fails to maintain records of sales to nonresidents as provided in this section, ((shall be)) is personally liable for the amount of tax due.
     (b) Any vendor who makes sales without collecting the retail sales tax under this section and who has actual knowledge that the purchaser's proof of identification establishing out-of-state residency is fraudulent is guilty of a misdemeanor and, in addition, ((shall be)) is liable for the tax and subject to a penalty equal to the greater of one thousand dollars or the tax due on such sales. In addition, both the purchaser and the vendor ((shall be)) are liable for any penalties and interest assessable under chapter 82.32 RCW.

Sec. 308   RCW 82.08.0293 and 2004 c 153 s 201 are each amended to read as follows:
     (1) Except as otherwise provided in this section or any other provision of this chapter, the tax levied by RCW 82.08.020 ((shall)) does not apply to sales of food and food ingredients other than prepared food, soft drinks, and dietary supplements. (("Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food and food ingredients" does not include:
     (a) "Alcoholic beverages," which means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume; and
     (b) "Tobacco," which means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco.
     (2) The exemption of "food and food ingredients" provided for in subsection (1) of this section shall not apply to prepared food, soft drinks, or dietary supplements.
     (a) "Prepared food" means:
     (i) Food sold in a heated state or heated by the seller;
     (ii) Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food; or
     (iii) Two or more food ingredients mixed or combined by the seller for sale as a single item, except:
     (A) Food that is only cut, repackaged, or pasteurized by the seller; or
     (B) Raw eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal food and drug administration in chapter 3, part 401.11 of The Food Code, published by the food and drug administration, as amended or renumbered as of January 1, 2003, so as to prevent foodborne illness.
     (b) "Prepared food" does not include the following food or food ingredients, if the food or food ingredients are sold without eating utensils provided by the seller:
     (i) Food sold by a seller whose proper primary North American industry classification system (NAICS) classification is manufacturing in sector 311, except subsector 3118 (bakeries), as provided in the "North American industry classification system -- United States, 2002";
     (ii) Food sold in an unheated state by weight or volume as a single item; or
     (iii) Bakery items. The term "bakery items" includes bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.
     (c) "Soft drinks" means nonalcoholic beverages that contain natural or artificial sweeteners. Soft drinks do not include beverages that contain: Milk or milk products; soy, rice, or similar milk substitutes; or greater than fifty percent of vegetable or fruit juice by volume.
     (d) "Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:
     (i) Contains one or more of the following dietary ingredients:
     (A) A vitamin;
     (B) A mineral;
     (C) An herb or other botanical;
     (D) An amino acid;
     (E) A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or
     (F) A concentrate, metabolite, constituent, extract, or combination of any ingredient described in this subsection;
     (ii) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and
     (iii) Is required to be labeled as a dietary supplement, identifiable by the "supplement facts" box found on the label as required pursuant to 21 C.F.R. Sec. 101.36, as amended or renumbered as of January 1, 2003.
     (3))) (2) Notwithstanding anything in this section to the contrary, the exemption of "food and food ingredients" provided in this section ((shall apply)) applies to the sale of food and food ingredients that are furnished, prepared, or served as meals:
     (a) Under a state administered nutrition program for the aged as provided for in the Older Americans Act (P.L. 95-478 Title III) and RCW 74.38.040(6); or
     (b) That are provided to senior citizens, ((disabled persons)) individuals with disabilities, or low-income persons by a not-for-profit organization organized under chapter 24.03 or 24.12 RCW.
     (((4))) (3)(a) Subsection (1) of this section notwithstanding, the retail sale of food and food ingredients is subject to sales tax under RCW 82.08.020 if the food and food ingredients are sold through a vending machine, and in this case the selling price for purposes of RCW 82.08.020 is fifty-seven percent of the gross receipts.
     (b) This subsection (((4))) (3) does not apply to ((hot)) sales of the following items through a vending machine: (i) Soft drinks; (ii) dietary supplements; and (iii) prepared food ((and food ingredients, other than)). The exclusion for prepared food in this subsection (3)(b)(iii) does not apply to food and food ingredients ((which)) not meeting the definition of prepared food and that are heated after they have been dispensed from the vending machine.
     (c) For tax collected under this subsection (((4))) (3), the requirements that the tax be collected from the buyer and that the amount of tax be stated as a separate item are waived.
     (4) For purposes of this section, the following definitions apply:
     (a) "Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:
     (i) Contains one or more of the following dietary ingredients:
     (A) A vitamin;
     (B) A mineral;
     (C) An herb or other botanical;
     (D) An amino acid;
     (E) A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or
     (F) A concentrate, metabolite, constituent, extract, or combination of any ingredient described in this subsection;
     (ii) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and
     (iii) Is required to be labeled as a dietary supplement, identifiable by the "supplement facts" box found on the label as required pursuant to 21 C.F.R. Sec. 101.36, as amended or renumbered as of January 1, 2003.
     (b)"Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food and food ingredients" does not include:
     (i) "Alcoholic beverages," which means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume; and
     (ii) "Tobacco," which means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco.
     (c)(i) "Prepared food" means:
     (A) Food sold in a heated state or heated by the seller;
     (B) Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food; or
     (C) Two or more food ingredients mixed or combined by the seller for sale as a single item, except:
     (I) Food that is only cut, repackaged, or pasteurized by the seller; or
     (II) Raw eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal food and drug administration in chapter 3, part 401.11 of The Food Code, published by the food and drug administration, as amended or renumbered as of January 1, 2003, so as to prevent foodborne illness.
     (ii) "Prepared food" does not include the following food or food ingredients, if the food or food ingredients are sold without eating utensils provided by the seller:
     (A) Food sold by a seller whose proper primary North American industry classification system (NAICS) classification is manufacturing in sector 311, except subsector 3118 (bakeries), as provided in the "North American industry classification system -- United States, 2002";
     (B) Food sold in an unheated state by weight or volume as a single item; or
     (C) Bakery items. The term "bakery items" includes bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.
     (d) "Soft drinks" means nonalcoholic beverages that contain natural or artificial sweeteners. Soft drinks do not include beverages that contain: Milk or milk products; soy, rice, or similar milk substitutes; or greater than fifty percent of vegetable or fruit juice by volume.

Sec. 309   RCW 82.08.865 and 2007 c 443 s 1 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales of diesel fuel, biodiesel fuel, or aircraft fuel, to a farm fuel user for ((nonhighway use)) agricultural purposes. This exemption applies to a fuel blend if all of the component fuels of the blend would otherwise be exempt under this subsection if the component fuels were sold as separate products. This exemption is available only if the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. ((Fuel used for space or water heating for human habitation is not exempt under this section.))
     (2) The definitions in RCW 82.04.213 and this subsection apply to this section.
     (a)(i) "Agricultural purposes" means the performance of activities directly related to the growing, raising, or producing of agricultural products.
(ii) "Agricultural purposes" does not include: (A) Heating space for human habitation or water for human consumption; or (B) Transporting on public roads individuals, agricultural products, farm machinery or equipment, or other tangible personal property, except when the transportation is incidental to transportation on private property and the fuel used for such transportation is not subject to tax under chapter 82.38 RCW.
     (b) "Aircraft fuel" is defined as provided in RCW 82.42.010.
     (((b))) (c) "Biodiesel fuel" is defined as provided in RCW 19.112.010.
     (((c))) (d) "Diesel fuel" is defined as provided in 26 U.S.C. 4083, as amended or renumbered as of January 1, 2006.
     (((d))) (e) "Farm fuel user" means: (i) A farmer; or (ii) a person who provides horticultural services for farmers, such as soil preparation services, crop cultivation services, and crop harvesting services.

Sec. 310   RCW 82.12.035 and 2007 c 6 s 1203 are each amended to read as follows:
     A credit ((shall be)) is allowed against the taxes imposed by this chapter upon the use of tangible personal property, extended warranty, or services taxable under RCW 82.04.050 (2)(a) or (3)(a), in the state of Washington in the amount that the present user thereof or his or her bailor or donor has paid a legally imposed retail sales or use tax with respect to such property, extended warranty, or service to any other state, possession, territory, or commonwealth of the United States, any political subdivision thereof, the District of Columbia, and any foreign country or political subdivision thereof((, prior to the use of such property, extended warranty, or service in Washington)).

Sec. 311   RCW 82.12.040 and 2005 c 514 s 109 are each amended to read as follows:
     (1) Every person who maintains in this state a place of business or a stock of goods, or engages in business activities within this state, ((shall)) must obtain from the department a certificate of registration, and ((shall)) must, at the time of making sales of tangible personal property, extended warranties, or sales of any service defined as a retail sale in RCW 82.04.050 (2)(a) or (3)(a), or making transfers of either possession or title, or both, of tangible personal property for use in this state, collect from the purchasers or transferees the tax imposed under this chapter. The tax to be collected under this section ((shall)) must be in an amount equal to the purchase price multiplied by the rate in effect for the retail sales tax under RCW 82.08.020. For the purposes of this chapter, the phrase "maintains in this state a place of business" ((shall)) includes the solicitation of sales and/or taking of orders by sales agents or traveling representatives. For the purposes of this chapter, "engages in business activity within this state" includes every activity which is sufficient under the Constitution of the United States for this state to require collection of tax under this chapter. The department ((shall)) must in rules specify activities which constitute engaging in business activity within this state, and ((shall)) must keep the rules current with future court interpretations of the Constitution of the United States.
     (2) Every person who engages in this state in the business of acting as an independent selling agent for persons who do not hold a valid certificate of registration, and who receives compensation by reason of sales of tangible personal property, extended warranties, or sales of any service defined as a retail sale in RCW 82.04.050 (2)(a) or (3)(a), of his or her principals for use in this state, ((shall)) must, at the time such sales are made, collect from the purchasers the tax imposed on the purchase price under this chapter, and for that purpose ((shall be)) is deemed a retailer as defined in this chapter.
     (3) The tax required to be collected by this chapter ((shall be)) is deemed to be held in trust by the retailer until paid to the department and any retailer who appropriates or converts the tax collected to the retailer's own use or to any use other than the payment of the tax provided herein to the extent that the money required to be collected is not available for payment on the due date as prescribed ((shall be)) is guilty of a misdemeanor. In case any seller fails to collect the tax herein imposed or having collected the tax, fails to pay the same to the department in the manner prescribed, whether such failure is the result of the seller's own acts or the result of acts or conditions beyond the seller's control, the seller ((shall)) is nevertheless, ((be)) personally liable to the state for the amount of such tax, unless the seller has taken from the buyer in good faith a copy of a direct pay permit issued under RCW 82.32.087.
     (4) Any retailer who refunds, remits, or rebates to a purchaser, or transferee, either directly or indirectly, and by whatever means, all or any part of the tax levied by this chapter ((shall be)) is guilty of a misdemeanor.
     (5) Notwithstanding subsections (1) through (4) of this section, any person making sales is not obligated to collect the tax imposed by this chapter if:
     (a) The person's activities in this state, whether conducted directly or through another person, are limited to:
     (i) The storage, dissemination, or display of advertising;
     (ii) The taking of orders; or
     (iii) The processing of payments; and
     (b) The activities are conducted electronically via a web site on a server or other computer equipment located in Washington that is not owned or operated by the person making sales into this state nor owned or operated by an affiliated person. "Affiliated persons" has the same meaning as provided in RCW 82.04.424.
     (6) Subsection (5) of this section expires when: (a) The United States congress grants individual states the authority to impose sales and use tax collection duties on remote sellers; or (b) it is determined by a court of competent jurisdiction, in a judgment not subject to review, that a state can impose sales and use tax collection duties on remote sellers.
     (7) Notwithstanding subsections (1) through (4) of this section, any person making sales is not obligated to collect the tax imposed by this chapter if the person would have been obligated to collect retail sales tax on the sale absent a specific exemption provided in chapter 82.08 RCW, and there is no corresponding use tax exemption in this chapter. Nothing in this section may be construed as relieving purchasers from liability for reporting and remitting the tax due under this chapter directly to the department.

Sec. 312   RCW 82.12.865 and 2007 c 443 s 2 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the ((nonhighway)) use of diesel fuel, biodiesel fuel, or aircraft fuel, by a farm fuel user for agricultural purposes. This exemption applies to a fuel blend if all of the component fuels of the blend would otherwise be exempt under this subsection if the component fuels were acquired as separate products. ((Fuel used for space or water heating for human habitation is not exempt under this section.))
     (2) The definitions in RCW 82.08.865 apply to this section.

Sec. 313   RCW 82.80.120 and 2006 c 311 s 18 are each amended to read as follows:
     (1) For purposes of this section:
     (a) "Distributor" means every person who imports, refines, manufactures, produces, or compounds motor vehicle fuel and special fuel as defined in RCW 82.36.010 and 82.38.020, respectively, and sells or distributes the fuel into a county;
     (b) "Person" has the same meaning as in RCW 82.04.030;
     (c) "District" means a regional transportation investment district under chapter 36.120 RCW.
     (2) A regional transportation investment district under chapter 36.120 RCW, subject to the conditions of this section, may levy additional excise taxes equal to ten percent of the statewide motor vehicle fuel tax rate under RCW 82.36.025 on each gallon of motor vehicle fuel as defined in RCW 82.36.010 and on each gallon of special fuel as defined in RCW 82.38.020 sold within the boundaries of the district. The additional excise tax is subject to the approval of a majority of the voters within the district boundaries. Vehicles paying an annual license fee under RCW 82.38.075 are exempt from the district's fuel excise tax. The additional excise taxes are subject to the same exceptions and rights of refund as applicable to other motor vehicle fuel and special fuel excise taxes levied under chapters 82.36 and 82.38 RCW. The proposed tax may not be levied less than one month from the date the election results are certified. The commencement date for the levy of any tax under this section will be the first day of January, April, July, or October.
     (3) The local option motor vehicle fuel tax on each gallon of motor vehicle fuel and on each gallon of special fuel is imposed upon the distributor of the fuel.
     (4) A taxable event for the purposes of this section occurs upon the first distribution of the fuel within the boundaries of the district to a retail outlet, bulk fuel user, or ultimate user of the fuel.
     (5) All administrative provisions in chapters 82.01, 82.03, and 82.32 RCW, insofar as they are applicable, apply to local option fuel taxes imposed under this section.
     (6) Before the effective date of the imposition of the fuel taxes under this section, a district ((shall)) must contract with the department of ((licensing)) revenue for the administration and collection of the taxes. The contract must provide that a percentage amount, not to exceed one percent of the taxes imposed under this section, will be deposited into the local tax administration account created in the custody of the state treasurer. The department of ((licensing)) revenue may spend money from this account, upon appropriation, for the administration of the local taxes imposed under this section.
     (7) The state treasurer ((shall)) must distribute monthly to the district levying the tax as part of the regional transportation investment district plan, after the deductions for payments and expenditures as provided in RCW 46.68.090(1) (a) and (b).
     (8) The proceeds of the additional taxes levied by a district in this section, to be used as a part of a regional transportation investment district plan, must be used in accordance with chapter 36.120 RCW, but only for those areas that are considered "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.
     (9) A district may only levy the tax under this section if the district is comprised of boundaries identical to the boundaries of a county or counties. A district may not levy the tax in this section if a member county is levying the tax in RCW 82.80.010 or 82.80.110.

Sec. 314   RCW 83.100.040 and 2005 c 516 s 3 are each amended to read as follows:
     (1) A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington. For the purposes of this section, any intangible property owned by a resident is located in Washington.
     (2)(a) Except as provided in (b) of this subsection, the amount of tax is the amount provided in the following table:

Sec. 315   RCW 83.100.046 and 2005 c 514 s 1201 are each amended to read as follows:
     (1) For the purposes of determining the Washington taxable estate, a deduction is allowed from the federal taxable estate for:
     (a) The value of qualified real property reduced by any amounts allowable as a deduction in respect of the qualified real property ((and tangible personal property)) under section 2053(a)(4) of the internal revenue code, if the decedent was at the time of his or her death a citizen or resident of the United States.
     (b) The value of any tangible personal property used by the decedent or a member of the decedent's family for a qualified use on the date of the decedent's death, reduced by any amounts allowable as a deduction in respect of the tangible personal property under section 2053(a)(4) of the internal revenue code, if all of the requirements of subsection (10)(f)(i)(A) of this section are met and the decedent was at the time of his or her death a citizen or resident of the United States.
     (c) The value of real property that is not deductible under (a) of this subsection solely by reason of subsection (10)(f)(i)(B) of this section, reduced by any amounts allowable as a deduction in respect of the ((qualified)) real property ((and tangible personal property)) under section 2053(a)(4) of the internal revenue code, if the requirements of subsection (10)(f)(i)(C) of this section are met with respect to the property and the decedent was at the time of his or her death a citizen or resident of the United States.
     (2) Property ((shall)) will be considered to have been acquired from or to have passed from the decedent if:
     (a) The property is so considered under section 1014(b) of the internal revenue code;
     (b) The property is acquired by any person from the estate; or
     (c) The property is acquired by any person from a trust, to the extent the property is includible in the gross estate of the decedent.
     (3) If the decedent and the decedent's surviving spouse at any time held qualified real property as community property, the interest of the surviving spouse in the property ((shall)) must be taken into account under this section to the extent necessary to provide a result under this section with respect to the property which is consistent with the result which would have obtained under this section if the property had not been community property.
     (4) In the case of any qualified woodland, the value of trees growing on the woodland may be deducted if otherwise qualified under this section.
     (5) If property is qualified real property with respect to a decedent, hereinafter in this subsection referred to as the "first decedent," and the property was acquired from or passed from the first decedent to the surviving spouse of the first decedent, active management of the farm by the surviving spouse ((shall)) must be treated as material participation by the surviving spouse in the operation of the farm.
     (6) Property owned indirectly by the decedent may qualify for a deduction under this section if owned through an interest in a corporation, partnership, or trust as the terms corporation, partnership, or trust are used in section 2032A(g) of the internal revenue code. In order to qualify for a deduction under this subsection, the interest, in addition to meeting the other tests for qualification under this section, must qualify under section 6166(b)(1) of the internal revenue code as an interest in a closely held business on the date of the decedent's death and for sufficient other time, combined with periods of direct ownership, to equal at least five years of the eight-year period preceding the death.
     (7)(a) If, on the date of the decedent's death, the requirements of subsection (10)(f)(i)(C)(II) of this section with respect to the decedent for any property are not met, and the decedent (i) was receiving old age benefits under Title II of the social security act for a continuous period ending on such date, or (ii) was disabled for a continuous period ending on this date, then subsection (10)(f)(i)(C)(II) of this section ((shall)) must be applied with respect to the property by substituting "the date on which the longer of such continuous periods began" for "the date of the decedent's death" in subsection (10)(f)(i)(C) of this section.
     (b) For the purposes of (a) of this subsection, an individual ((shall be)) is disabled if the individual has a mental or physical impairment which renders that individual unable to materially participate in the operation of the farm.
     (8) Property may be deducted under this section whether or not special valuation is elected under section 2032A of the internal revenue code on the federal return. For the purposes of determining the deduction under this section, the value of property is its value as used to determine the value of the gross estate.
     (9)(a) In the case of any qualified replacement property, any period during which there was ownership, qualified use, or material participation with respect to the replaced property by the decedent or any member of the decedent's family ((shall)) must be treated as a period during which there was ownership, use, or material participation, as the case may be, with respect to the qualified replacement property.
     (b) Subsection (9)(a) of this section ((shall)) does not apply to the extent that the fair market value of the qualified replacement property, as of the date of its acquisition, exceeds the fair market value of the replaced property, as of the date of its disposition.
     (c) For the purposes of this subsection (9), the following definitions apply:
     (i) "Qualified replacement property" means any real property:
     (A) Which is acquired in an exchange which qualifies under section 1031 of the internal revenue code; or
     (B) The acquisition of which results in the nonrecognition of gain under section 1033 of the internal revenue code.
     The term "qualified replacement property" only includes property which is used for the same qualified use as the replaced property was being used before the exchange.
     (ii) "Replaced property" means the property was:
     (A) Transferred in the exchange which qualifies under section 1031 of the internal revenue code; or
     (B) Compulsorily or involuntarily converted within the meaning of section 1033 of the internal revenue code.
     (10) For the purposes of this section, the following definitions apply:
     (a) "Active management" means the making of the management decisions of a farm, other than the daily operating decisions.
     (b) "Farm" includes stock, dairy, poultry, fruit, furbearing animal, and truck farms; plantations; ranches; nurseries; ranges; greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities; and orchards and woodlands.
     (c) "Farming purposes" means:
     (i) Cultivating the soil or raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of animals on a farm;
     (ii) Handling, drying, packing, grading, or storing on a farm any agricultural or horticultural commodity in its unmanufactured state, but only if the owner, tenant, or operator of the farm regularly produces more than one-half of the commodity so treated; and
     (iii)(A) The planting, cultivating, caring for, or cutting of trees; or
     (B) The preparation, other than milling, of trees for market.
     (d) "Member of the family" means, with respect to any individual, only:
     (i) An ancestor of the individual;
     (ii) The spouse of the individual;
     (iii) A lineal descendant of the individual, of the individual's spouse, or of a parent of the individual; or
     (iv) The spouse of any lineal descendant described in (d)(iii) of this subsection.
     For the purposes of this subsection (10)(d), a legally adopted child of an individual ((shall)) must be treated as the child of such individual by blood.
     (e) "Qualified heir" means, with respect to any property, a member of the decedent's family who acquired property, or to whom property passed, from the decedent.
     (f)(i) "Qualified real property" means real property which was acquired from or passed from the decedent to a qualified heir of the decedent and which, on the date of the decedent's death, was being used for a qualified use by the decedent or a member of the decedent's family, but only if:
     (A) Fifty percent or more of the adjusted value of the gross estate consists of the adjusted value of real or personal property which:
     (I) On the date of the decedent's death, was being used for a qualified use by the decedent or a member of the decedent's family; and
     (II) Was acquired from or passed from the decedent to a qualified heir of the decedent;
     (B) Twenty-five percent or more of the adjusted value of the gross estate consists of the adjusted value of real property which meets the requirements of (f)(i)(A)(II) and (f)(i)(C) of this subsection; and
     (C) During the eight-year period ending on the date of the decedent's death there have been periods aggregating five years or more during which:
     (I) The real property was owned by the decedent or a member of the decedent's family and used for a qualified use by the decedent or a member of the decedent's family; and
     (II) There was material participation by the decedent or a member of the decedent's family in the operation of the farm. For the purposes of this subsection (f)(i)(C)(II), material participation ((shall)) must be determined in a manner similar to the manner used for purposes of section 1402(a)(1) of the internal revenue code.
     (ii) For the purposes of this subsection, the term "adjusted value" means:
     (A) In the case of the gross estate, the value of the gross estate, determined without regard to any special valuation under section 2032A of the internal revenue code, reduced by any amounts allowable as a deduction under section 2053(a)(4) of the internal revenue code; or
     (B) In the case of any real or personal property, the value of the property for purposes of chapter 11 of the internal revenue code, determined without regard to any special valuation under section 2032A of the internal revenue code, reduced by any amounts allowable as a deduction in respect of such property under section 2053(a)(4) of the internal revenue code.
     (g) "Qualified use" means the property is used as a farm for farming purposes. In the case of real property which meets the requirements of (f)(i)(C) of this subsection, residential buildings and related improvements on the real property occupied on a regular basis by the owner or lessee of the real property or by persons employed by the owner or lessee for the purpose of operating or maintaining the real property, and roads, buildings, and other structures and improvements functionally related to the qualified use ((shall)) must be treated as real property devoted to the qualified use. For tangible personal property eligible for a deduction under subsection (1)(b) of this section, "qualified use" means the property is used primarily for farming purposes on a farm.
     (h) "Qualified woodland" means any real property which:
     (i) Is used in timber operations; and
     (ii) Is an identifiable area of land such as an acre or other area for which records are normally maintained in conducting timber operations.
     (i) "Timber operations" means:
     (i) The planting, cultivating, caring for, or cutting of trees; or
     (ii) The preparation, other than milling, of trees for market.

Sec. 316   RCW 82.04.280 and 2006 c 300 s 6 are each amended to read as follows:
     Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines; (2) building, repairing or improving 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 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 and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW ((48.05.310)); (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent.
     As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.
     As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.

Sec. 317   RCW 82.04.280 and 2006 c 300 s 7 are each amended to read as follows:
     Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines; (2) building, repairing or improving 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 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 and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW ((48.05.310)); (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent.
     As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.
     As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.

Sec. 401   RCW 29A.36.210 and 2004 c 80 s 2 are each amended to read as follows:
     (1) The ballot proposition authorizing a taxing district to impose the regular property tax levies authorized in RCW 36.68.525, 36.69.145, 67.38.130, 84.52.069, or 84.52.135 ((shall)) must contain in substance the following:

     "((Shall)) Will the . . . . . . (insert the name of the taxing district) be authorized to impose regular property tax levies of . . . . . . (insert the maximum rate) or less per thousand dollars of assessed valuation for each of . . . . . . (insert the maximum number of years allowable) consecutive years?
     Yes. . . . . . . . . . . . □
     No . . . . . . . . . . . . □"
     Each voter ((shall)) may indicate either "Yes" or "No" on his or her ballot in accordance with the procedures established under this title.

     (2) The ballot proposition authorizing a taxing district to impose a permanent regular tax levy under RCW 84.52.069 ((shall)) must contain in substance the following:

     "((Shall)) Will the . . . . . (insert the name of the taxing district) be authorized to impose a PERMANENT regular property levy of . . . . . (insert the maximum rate) or less per thousand dollars of assessed valuation?
     Yes. . . . . . . . . . . . □
     No . . . . . . . . . . . . □"

Sec. 402   RCW 36.68.525 and 1994 c 156 s 5 are each amended to read as follows:
     A park and recreation service area may impose regular property tax levies in an amount equal to sixty cents or less per thousand dollars of assessed value of property in the service area in each year for six consecutive years when specifically authorized so to do by a majority of at least three-fifths of the voters thereof approving a proposition authorizing the levies submitted not more than twelve months prior to the date on which the proposed initial levy is to be made and not oftener than twice in such twelve month period, either at a special election or at the regular election of the service area, at which election the number of voters voting "yes" on the proposition ((shall)) must constitute three-fifths of a number equal to forty percent of the number of voters voting in the service area at the last preceding general election when the number of voters voting on the proposition does not exceed forty percent of the number of voters voting in such taxing district in the last preceding general election; or by a majority of at least three-fifths of the voters thereof voting on the proposition if the number of voters voting on the proposition exceeds forty per centum of the number of voters voting in such taxing district in the last preceding general election. A proposition authorizing such tax levies ((shall)) may not be submitted by a park and recreation service area more than twice in any twelve-month period. Ballot propositions ((shall)) must conform with RCW ((29.30.111)) 29A.36.210. If a park and recreation service area is levying property taxes, which in combination with property taxes levied by other taxing districts result in taxes in excess of the ((nine-dollar and fifteen cents per thousand dollars of assessed valuation)) limitation provided for in RCW 84.52.043(2), the park and recreation service area property tax levy ((shall)) must be reduced or eliminated ((before the property tax levies of other taxing districts are reduced)) as provided in RCW 84.52.010.

Sec. 403   RCW 36.69.145 and 1994 c 156 s 3 are each amended to read as follows:
     (1) A park and recreation district may impose regular property tax levies in an amount equal to sixty cents or less per thousand dollars of assessed value of property in the district in each year for six consecutive years when specifically authorized so to do by a majority of at least three-fifths of the voters thereof approving a proposition authorizing the levies submitted at a special election or at the regular election of the district, at which election the number of voters voting "yes" on the proposition ((shall)) must constitute three-fifths of a number equal to forty per centum of the number of voters voting in such district at the last preceding general election when the number of voters voting on the proposition does not exceed forty per centum of the number of voters voting in such taxing district in the last preceding general election; or by a majority of at least three-fifths of the voters thereof voting on the proposition if the number of voters voting on the proposition exceeds forty per centum of the number of voters voting in such taxing district in the last preceding general election. A proposition authorizing the tax levies ((shall)) may not be submitted by a park and recreation district more than twice in any twelve-month period. Ballot propositions ((shall)) must conform with RCW ((29.30.111)) 29A.36.210. In the event a park and recreation district is levying property taxes, which in combination with property taxes levied by other taxing districts subject to the one percent limitation provided for in Article 7, section 2, of our state Constitution result in taxes in excess of the limitation provided for in RCW 84.52.043(2), the park and recreation district property tax levy ((shall)) must be reduced or eliminated ((before the property tax levies of other taxing districts are reduced)) as provided in RCW 84.52.010.
     (2) The limitation in RCW 84.55.010 ((shall)) does not apply to the first levy imposed under this section following the approval of the levies by the voters under subsection (1) of this section.

Sec. 404   RCW 82.03.140 and 2000 c 103 s 1 are each amended to read as follows:
     (1) In all appeals over which the board has jurisdiction under RCW 82.03.130, a party ((taking)) filing an appeal may elect either a formal or an informal hearing((, such election to be made)). The election must be made according to rules of practice and procedure to be promulgated by the board((: PROVIDED, That)).
     (2)(a) Nothing ((shall)) in subsection (1) of this section prevents the department of revenue, taxing unit, county assessor, or taxpayer, as a party to an appeal ((pursuant to)) under RCW 84.08.130((, within twenty days from the date of the receipt of the notice of appeal)), from filing with the clerk of the board notice of intention that the hearing be a formal one((: PROVIDED, HOWEVER, That nothing herein shall be construed to modify the provisions of RCW 82.03.190: AND PROVIDED FURTHER, That upon an)). Except as provided in (b) of this subsection, the notice under this subsection must be filed within twenty days from the date that the party received the notice of appeal.
     (b) For appeals under RCW 82.03.130(1)(e), the ((director)) department of revenue may, within ten days from the date of its receipt of the notice of appeal, file with the clerk of the board notice of its intention that the hearing be held pursuant to chapter 34.05 RCW.
     (3) In the event that appeals ((are taken from)) of the same decision, order, or determination, as the case may be, are filed by different parties and only one of ((such)) the parties elects a formal hearing, the board must grant a formal hearing ((shall be granted)).
     (4) This section does not apply to appeals governed by RCW 82.03.190.

Sec. 405   RCW 84.34.020 and 2005 c 57 s 1 are each amended to read as follows:
     As used in this chapter, unless a different meaning is required by the context:
     (1) "Open space land" means (a) any land area so designated by an official comprehensive land use plan adopted by any city or county and zoned accordingly, or (b) any land area, the preservation of which in its present use would (i) conserve and enhance natural or scenic resources, or (ii) protect streams or water supply, or (iii) promote conservation of soils, wetlands, beaches or tidal marshes, or (iv) enhance the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations or sanctuaries or other open space, or (v) enhance recreation opportunities, or (vi) preserve historic sites, or (vii) preserve visual quality along highway, road, and street corridors or scenic vistas, or (viii) retain in its natural state tracts of land not less than one acre situated in an urban area and open to public use on such conditions as may be reasonably required by the legislative body granting the open space classification, or (c) any land meeting the definition of farm and agricultural conservation land under subsection (8) of this section. As a condition of granting open space classification, the legislative body may not require public access on land classified under (b)(iii) of this subsection for the purpose of promoting conservation of wetlands.
     (2) "Farm and agricultural land" means:
     (a) Any parcel of land that is twenty or more acres or multiple parcels of land that are contiguous and total twenty or more acres:
     (i) Devoted primarily to the production of livestock or agricultural commodities for commercial purposes;
     (ii) Enrolled in the federal conservation reserve program or its successor administered by the United States department of agriculture; or
     (iii) Other similar commercial activities as may be established by rule;
     (b)(i) Any parcel of land that is five acres or more but less than twenty acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to, as of January 1, 1993:
     (A) One hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter for all parcels of land that are classified under this subsection or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993; and
     (B) On or after January 1, 1993, two hundred dollars or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter;
     (ii) For the purposes of (b)(i) of this subsection, "gross income from agricultural uses" includes, but is not limited to, the wholesale value of agricultural products donated to nonprofit food banks or feeding programs;
     (c) Any parcel of land of less than five acres devoted primarily to agricultural uses which has produced a gross income as of January 1, 1993, of:
     (i) One thousand dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter for all parcels of land that are classified under this subsection or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993; and
     (ii) On or after January 1, 1993, fifteen hundred dollars or more per year for three of the five calendar years preceding the date of application for classification under this chapter.
Parcels of land described in (b)(i)(A) and (c)(i) of this subsection ((shall)) will, upon any transfer of the property excluding a transfer to a surviving spouse or surviving domestic partner, be subject to the limits of (b)(i)(B) and (c)(ii) of this subsection;
     (d) Any lands including incidental uses as are compatible with agricultural purposes, including wetlands preservation, provided such incidental use does not exceed twenty percent of the classified land and the land on which appurtenances necessary to the production, preparation, or sale of the agricultural products exist in conjunction with the lands producing such products. Agricultural lands ((shall)) also include any parcel of land of one to five acres, which is not contiguous, but which otherwise constitutes an integral part of farming operations being conducted on land qualifying under this section as "farm and agricultural lands"; or
     (e) The land on which housing for employees and the principal place of residence of the farm operator or owner of land classified pursuant to (a) of this subsection is sited if: The housing or residence is on or contiguous to the classified parcel; and the use of the housing or the residence is integral to the use of the classified land for agricultural purposes.
     (3) "Timber land" means any parcel of land that is five or more acres or multiple parcels of land that are contiguous and total five or more acres which is or are devoted primarily to the growth and harvest of timber for commercial purposes. Timber land means the land only and does not include a residential homesite. The term includes land used for incidental uses that are compatible with the growing and harvesting of timber but no more than ten percent of the land may be used for such incidental uses. It also includes the land on which appurtenances necessary for the production, preparation, or sale of the timber products exist in conjunction with land producing these products.
     (4) "Current" or "currently" means as of the date on which property is to be listed and valued by the assessor.
     (5) "Owner" means the party or parties having the fee interest in land, except that where land is subject to real estate contract "owner" ((shall mean)) means the contract vendee.
     (6) "Contiguous" means land adjoining and touching other property held by the same ownership. Land divided by a public road, but otherwise an integral part of a farming operation, ((shall be)) is considered contiguous.
     (7) "Granting authority" means the appropriate agency or official who acts on an application for classification of land pursuant to this chapter.
     (8) "Farm and agricultural conservation land" means either:
     (a) Land that was previously classified under subsection (2) of this section, that no longer meets the criteria of subsection (2) of this section, and that is reclassified under subsection (1) of this section; or
     (b) Land that is traditional farmland that is not classified under chapter 84.33 or 84.34 RCW, that has not been irrevocably devoted to a use inconsistent with agricultural uses, and that has a high potential for returning to commercial agriculture.

Sec. 406   RCW 84.36.040 and 2001 c 126 s 1 are each amended to read as follows:
     (1) The real and personal property used by ((nonprofit)), and for the purposes of, the following nonprofit organizations is exempt from property taxation:
     (a) Child day care centers as defined ((pursuant to RCW 74.15.020)) in subsection (4) of this section;
     (b) Free public libraries;
     (c) Orphanages and orphan asylums;
     (d) Homes for the sick or infirm;
     (e) Hospitals for the sick; and
     (f) Outpatient dialysis facilities((, which are used for the purposes of such organizations shall be exempt from taxation: PROVIDED, That the benefit of the exemption inures to the user)).
     (2) The real and personal property leased to and used by a hospital((,)) for hospital purposes is exempt from property taxation if the hospital is established under chapter 36.62 RCW or is owned and operated by a public hospital district established under chapter 70.44 RCW((, for hospital purposes is exempt from taxation. The benefit of the exemption must inure to the user)).
     (3) To be exempt under this section, the property must be used exclusively for the purposes for which exemption is granted, except as provided in RCW 84.36.805, and the benefit of the exemption must inure to the user.
     (4) For purposes of subsection (1) of this section, "child day care center" means a nonprofit organization that regularly provides child day care and early learning services for a group of children for periods of less than twenty-four hours.

Sec. 407   RCW 84.36.381 and 2008 c 6 s 706 are each amended to read as follows:
     A person ((shall be)) is exempt from any legal obligation to pay all or a portion of the amount of excess and regular real property taxes due and payable in the year following the year in which a claim is filed, and thereafter, in accordance with the following:
     (1) The property taxes must have been imposed upon a residence which was occupied by the person claiming the exemption as a principal place of residence as of the time of filing: PROVIDED, That any person who sells, transfers, or is displaced from his or her residence may transfer his or her exemption status to a replacement residence, but no claimant ((shall)) may receive an exemption on more than one residence in any year: PROVIDED FURTHER, That confinement of the person to a hospital, nursing home, boarding home, or adult family home ((shall)) does not disqualify the claim of exemption if:
     (a) The residence is temporarily unoccupied;
     (b) The residence is occupied by a spouse or a domestic partner and/or a person financially dependent on the claimant for support; or
     (c) The residence is rented for the purpose of paying nursing home, hospital, boarding home, or adult family home costs;
     (2) The person claiming the exemption must have owned, at the time of filing, in fee, as a life estate, or by contract purchase, the residence on which the property taxes have been imposed or if the person claiming the exemption lives in a cooperative housing association, corporation, or partnership, such person must own a share therein representing the unit or portion of the structure in which he or she resides. For purposes of this subsection, a residence owned by a marital community or state registered domestic partnership or owned by cotenants ((shall be)) is deemed to be owned by each spouse or each domestic partner or each cotenant, and any lease for life ((shall be)) is deemed a life estate;
     (3) The person claiming the exemption must be (a) sixty-one years of age or older on December 31st of the year in which the exemption claim is filed, or must have been, at the time of filing, retired from regular gainful employment by reason of disability, or (b) a veteran of the armed forces of the United States with one hundred percent service-connected disability as provided in 42 U.S.C. Sec. 423 (d)(1)(A) as amended prior to January 1, 2005, or such subsequent date as the department may provide by rule consistent with the purpose of this section. However, any surviving spouse or surviving domestic partner of a person who was receiving an exemption at the time of the person's death ((shall)) will qualify if the surviving spouse or surviving domestic partner is fifty-seven years of age or older and otherwise meets the requirements of this section;
     (4) The amount that the person ((shall be)) is exempt from an obligation to pay ((shall be)) is calculated on the basis of combined disposable income, as defined in RCW 84.36.383. If the person claiming the exemption was retired for two months or more of the assessment year, the combined disposable income of such person ((shall)) must be calculated by multiplying the average monthly combined disposable income of such person during the months such person was retired by twelve. If the income of the person claiming exemption is reduced for two or more months of the assessment year by reason of the death of the person's spouse or the person's domestic partner, or when other substantial changes occur in disposable income that are likely to continue for an indefinite period of time, the combined disposable income of such person ((shall)) must be calculated by multiplying the average monthly combined disposable income of such person after such occurrences by twelve. If it is necessary to estimate income to comply with this subsection, the assessor may require confirming documentation of such income prior to May 31 of the year following application;
     (5)(a) A person who otherwise qualifies under this section and has a combined disposable income of thirty-five thousand dollars or less ((shall be)) is exempt from all excess property taxes; and
     (b)(i) A person who otherwise qualifies under this section and has a combined disposable income of thirty thousand dollars or less but greater than twenty-five thousand dollars ((shall be)) is exempt from all regular property taxes on the greater of fifty thousand dollars or thirty-five percent of the valuation of his or her residence, but not to exceed seventy thousand dollars of the valuation of his or her residence; or
     (ii) A person who otherwise qualifies under this section and has a combined disposable income of twenty-five thousand dollars or less ((shall be)) is exempt from all regular property taxes on the greater of sixty thousand dollars or sixty percent of the valuation of his or her residence;
     (6) For a person who otherwise qualifies under this section and has a combined disposable income of thirty-five thousand dollars or less, the valuation of the residence ((shall be)) is the assessed value of the residence on the later of January 1, 1995, or January 1st of the assessment year the person first qualifies under this section. If the person subsequently fails to qualify under this section only for one year because of high income, this same valuation ((shall)) must be used upon requalification. If the person fails to qualify for more than one year in succession because of high income or fails to qualify for any other reason, the valuation upon requalification ((shall be)) is the assessed value on January 1st of the assessment year in which the person requalifies. If the person transfers the exemption under this section to a different residence, the valuation of the different residence ((shall be)) is the assessed value of the different residence on January 1st of the assessment year in which the person transfers the exemption.
     In no event may the valuation under this subsection be greater than the true and fair value of the residence on January 1st of the assessment year.
     This subsection does not apply to subsequent improvements to the property in the year in which the improvements are made. Subsequent improvements to the property ((shall)) must be added to the value otherwise determined under this subsection at their true and fair value in the year in which they are made.

Sec. 408   RCW 84.36.383 and 2008 c 182 s 1 and 2008 c 6 s 709 are each reenacted and amended to read as follows:
     As used in RCW 84.36.381 through 84.36.389, except where the context clearly indicates a different meaning:
     (1) The term "residence" means a single family dwelling unit whether such unit be separate or part of a multiunit dwelling, including the land on which such dwelling stands not to exceed one acre, except that a residence includes any additional property up to a total of five acres that comprises the residential parcel if this larger parcel size is required under land use regulations. The term ((shall)) also includes a share ownership in a cooperative housing association, corporation, or partnership if the person claiming exemption can establish that his or her share represents the specific unit or portion of such structure in which he or she resides. The term ((shall)) also includes a single family dwelling situated upon lands the fee of which is vested in the United States or any instrumentality thereof including an Indian tribe or in the state of Washington, and notwithstanding the provisions of RCW 84.04.080 and 84.04.090, such a residence ((shall be)) is deemed real property.
     (2) The term "real property" ((shall)) also includes a mobile home which has substantially lost its identity as a mobile unit by virtue of its being fixed in location upon land owned or leased by the owner of the mobile home and placed on a foundation (posts or blocks) with fixed pipe, connections with sewer, water, or other utilities. A mobile home located on land leased by the owner of the mobile home is subject, for tax billing, payment, and collection purposes, only to the personal property provisions of chapter 84.56 RCW and RCW 84.60.040.
     (3) "Department" means the state department of revenue.
     (4) "Combined disposable income" means the disposable income of the person claiming the exemption, plus the disposable income of his or her spouse or domestic partner, and the disposable income of each cotenant occupying the residence for the assessment year, less amounts paid by the person claiming the exemption or his or her spouse or domestic partner during the assessment year for:
     (a) Drugs supplied by prescription of a medical practitioner authorized by the laws of this state or another jurisdiction to issue prescriptions;
     (b) The treatment or care of either person received in the home or in a nursing home, boarding home, or adult family home; and
     (c) Health care insurance premiums for medicare under Title XVIII of the social security act.
     (5) "Disposable income" means adjusted gross income as defined in the federal internal revenue code, as amended prior to January 1, 1989, or such subsequent date as the director may provide by rule consistent with the purpose of this section, plus all of the following items to the extent they are not included in or have been deducted from adjusted gross income:
     (a) Capital gains, other than gain excluded from income under section 121 of the federal internal revenue code to the extent it is reinvested in a new principal residence;
     (b) Amounts deducted for loss;
     (c) Amounts deducted for depreciation;
     (d) Pension and annuity receipts;
     (e) Military pay and benefits other than attendant-care and medical-aid payments;
     (f) Veterans benefits, other than:
     (i) Attendant-care payments;
     (ii) Medical-aid payments;
     (iii) Disability compensation, as defined in Title 38, part 3, section 3.4 of the code of federal regulations, as of January 1, 2008; and
     (iv) Dependency and indemnity compensation, as defined in Title 38, part 3, section 3.5 of the code of federal regulations, as of January 1, 2008;
     (g) Federal social security act and railroad retirement benefits;
     (h) Dividend receipts; and
     (i) Interest received on state and municipal bonds.
     (6) "Cotenant" means a person who resides with the person claiming the exemption and who has an ownership interest in the residence.
     (7) "Disability" has the same meaning as provided in 42 U.S.C. Sec. 423(d)(1)(A) as amended prior to January 1, ((2004)) 2005, or such subsequent date as the ((director)) department may provide by rule consistent with the purpose of this section.

Sec. 409   RCW 84.37.030 and 2007 sp.s. c 2 s 2 are each amended to read as follows:
     A claimant may defer payment of fifty percent of special assessments or real property taxes, or both, listed on the annual tax statement in any year in which all of the following conditions are met:
     (1) The special assessments or property taxes must be imposed upon a residence that was occupied by the claimant as a principal place of residence as of January 1st of the year in which the assessments and taxes are due, subject to the exceptions allowed under RCW 84.36.381(1);
     (2) The claimant must have combined disposable income, as defined in RCW 84.36.383, of fifty-seven thousand dollars or less in the calendar year preceding the filing of the declaration;
     (3) The claimant must have paid one-half of the total amount of special assessments and property taxes listed on the annual tax statement for the year in which the deferral claim is made;
     (4) A deferral is not allowed for special assessments ((or)), property taxes, or both, levied for collection in the first five calendar years in which the person owns the residence;
     (5) The claimant who defers payment of special assessments or real property taxes, or both, listed on the annual tax statement under this section must also meet the conditions of RCW 84.38.030 (4) and (5);
     (6) The total amount deferred by a claimant under this chapter must not exceed forty percent of the amount of the claimant's equity value in the claimant's residence; and
     (7) The claimant may not defer taxes under both this chapter and chapter 84.38 RCW((; and
     (8) In the case of deferred special assessments, the claimant must have opted for payment of the assessments on the installment method if this method was available)) in the same tax year.

Sec. 410   RCW 84.37.902 and 2007 sp.s. c 2 s 13 are each amended to read as follows:
     (1) ((During calendar year 2011, the joint legislative audit and review committee shall review the property tax deferral program under chapter 84.37 RCW.)) Pursuant to chapter 43.136 RCW, the citizen commission for performance measurement of tax preferences must schedule the property tax deferral program under this chapter for a tax preference review by the joint legislative audit and review committee in 2011. The department of revenue and county assessors shall provide the committee with any data within its purview that the committee considers necessary to conduct the review. ((By December 1, 2011, the joint legislative audit and review committee shall report to the legislature the results of its review.))
     (2) ((As part of its review under subsection (1) of this section)) In addition to the factors in RCW 43.136.055(1), the committee shall also study and report on:
     (a) The effectiveness of the property tax deferral program in assisting families in economic distress in remaining in their homes;
     (b) The effectiveness of the property tax deferral program in decreasing the default rate on residential mortgages for the statewide population within the income threshold of the program;
     (c) The number of potential participants per thousand population by geographic region;
     (d) The ratio of actual deferral program participants to potential deferral program participants by geographic region;
     (e) The ratio of average annual household property taxes for deferral program participants and average annual income of deferral program participants by geographic region;
     (f) Economic conditions in the housing and lending markets for the prior three years and the forecasted economic conditions for the current biennium and the next succeeding biennium;
     (g) Annual costs specific to the administration of the deferral program; and
     (h) Total annual costs of the deferral program((;
     (i) Recommended changes to the deferral program that would increase program participation;
     (j) Any other recommendations the committee may have to improve the deferral program; and
     (k) Any other factors that the committee considers necessary to properly evaluate the deferral program)).
     (3) This section expires January 1, 2012.

Sec. 411   RCW 84.40.042 and 2008 c 17 s 1 are each amended to read as follows:
     (1) When real property is divided in accordance with chapter 58.17 RCW, the assessor ((shall)) must carefully investigate and ascertain the true and fair value of each lot and assess each lot on that same basis, unless specifically provided otherwise by law. For purposes of this section, "lot" has the same definition as in RCW 58.17.020.
     (a) For each lot on which an advance tax deposit has been paid in accordance with RCW 58.08.040, the assessor ((shall)) must establish the true and fair value by October ((30th)) 31st of the year following the recording of the plat, replat, or altered plat. The value established ((shall)) must be the value of the lot as of January 1st of the year the original parcel of real property was last revalued. ((An)) No additional property tax ((shall not be)) is due on the land until the calendar year following the year for which the advance tax deposit was paid if the deposit was sufficient to pay the full amount of the taxes due on the property.
     (b) For each lot on which an advance tax deposit has not been paid, the assessor ((shall)) must establish the true and fair value not later than the calendar year following the recording of the plat, map, subdivision, or replat. For purposes of this section, "subdivision" means a division of land into two or more lots.
     (c) For each subdivision, all current year and delinquent taxes and assessments on the entire tract must be paid in full in accordance with RCW 58.17.160 and 58.08.030 except when property is being acquired by a government for public use. For purposes of this section, "current year taxes" means taxes that are collectible under RCW 84.56.010 subsequent to ((February 14th)) completing the tax roll for current year collection.
     (2) When the assessor is required by law to segregate any part or parts of real property, assessed before or after July 27, 1997, as one parcel or when the assessor is required by law to combine parcels of real property assessed before or after July 27, 1997, as two or more parcels, the assessor ((shall)) must carefully investigate and ascertain the true and fair value of each part or parts of the real property and each combined parcel and assess each part or parts or each combined parcel on that same basis.

Sec. 412   RCW 84.48.050 and 1995 c 134 s 15 are each amended to read as follows:
     (1) The county assessor ((shall)) must, on or before the fifteenth day of January in each year, ((make out and transmit to the state auditor, in such form as may be prescribed,)) prepare a complete abstract of the tax rolls of the county, showing the number of acres that have been assessed and the total value of the real property, including the structures on the real property; the total value of all taxable personal property in the county; the aggregate amount of all taxable property in the county; the total amount as equalized and the total amount of taxes levied in the county for state, county, city, and other taxing district purposes, for that year. ((Should the))
     (2) If an assessor of any county fails to transmit to the department of revenue the abstract provided for in RCW 84.48.010, and if((, by reason of such failure to transmit such abstract, any)) a county ((shall)) fails to collect and pay to the state its due proportion of the state tax for any year because of that failure, the department of revenue ((shall)) must ascertain what amount of state tax ((said)) the county ((has)) failed to collect((, and)). The department must certify ((the same)) to the state auditor((, who shall)) the amount of state tax the county failed to collect. The state auditor must charge the amount to the proper county and notify the auditor of ((said)) the county of the amount ((of said charge; said)) due. This sum ((shall be)) is due and payable immediately by warrant in favor of the state on the current expense fund of ((said)) the county.

Sec. 413   RCW 84.52.030 and 1994 c 124 s 38 are each amended to read as follows:
     For the purpose of raising revenue for state, county, and other taxing district purposes, the county legislative authority of each county ((at its October session)), and all other officials or boards authorized by law to levy taxes for taxing district purposes, ((shall)) must levy taxes on all the taxable property in the county or district, as the case may be, sufficient for such purposes, and within the limitations permitted by law.

Sec. 414   RCW 84.52.070 and 1994 c 81 s 86 are each amended to read as follows:
     (1) It ((shall be)) is the duty of the county legislative authority of each county, on or before the thirtieth day of November in each year, to certify to the county assessor ((of the county)) the amount of taxes levied upon the property in the county for county purposes, and the respective amounts of taxes levied by the board for each taxing district, within or coextensive with the county, for district purposes((, and)).
     (2) It ((shall be)) is the duty of the council of each city having a population of three hundred thousand or more, and of the council of each town, and of all officials or boards of taxing districts within or coextensive with the county, authorized by law to levy taxes directly and not through the county legislative authority, on or before the thirtieth day of November in each year, to certify to the county assessor ((of the county)) the amount of taxes levied upon the property within the city, town, or district for city, town, or district purposes.
     (3) If a levy amount is ((not)) certified to the county assessor ((by)) after the thirtieth day of November, the county assessor ((shall)) may use no more than the certified levy amount for the previous year for the taxing district((: PROVIDED, That)). This ((shall)) subsection (3) does not apply to the state levy or when the assessor has not certified assessed values as required by RCW 84.48.130 at least twelve working days ((prior to)) before November 30th.

Sec. 415   RCW 84.52.080 and 1989 c 378 s 16 are each amended to read as follows:
     (1) The county assessor ((shall)) must extend the taxes upon the tax rolls in the form ((herein)) prescribed in this section. The rate percent necessary to raise the amounts of taxes levied for state and county purposes, and for purposes of taxing districts coextensive with the county, ((shall)) must be computed upon the assessed value of the property of the county((;)). The rate percent necessary to raise the amount of taxes levied for any taxing district within the county ((shall)) must be computed upon the assessed value of the property of the district((;)). All taxes assessed against any property ((shall)) must be added together and extended on the rolls in a column headed consolidated or total tax. In extending any tax, whenever ((it)) the tax amounts to a fractional part of a cent greater than ((five mills)) one-half of a cent it ((shall)) must be ((made)) rounded up to one cent, and whenever it amounts to ((five mills)) one-half of a cent or less ((than five mills)) it ((shall)) must be dropped. The amount of all taxes ((shall)) must be entered in the proper columns, as shown by entering the rate percent necessary to raise the consolidated or total tax and the total tax assessed against the property.
     (2) For the purpose of computing the rate necessary to raise the amount of any excess levy in a taxing district ((which has classified or designated forest land under chapter 84.33 RCW)) entitled to a distribution under RCW 84.33.081, other than the state, the county assessor ((shall)) must add the district's timber assessed value, as defined in RCW 84.33.035, to the assessed value of the property((: PROVIDED, That)). However, for school districts maintenance and operations levies, only one-half of the district's timber assessed value or eighty percent of the timber roll of ((such)) the district in calendar year 1983 as determined under chapter 84.33 RCW, whichever is greater, ((shall)) must be added to the assessed value of the property.
     (3) Upon the completion of such tax extension, it ((shall be)) is the duty of the county assessor to make in each assessment book, tax roll or list a certificate in the following form:

NEW SECTION.  Sec. 416   RCW 84.55.080 (Adjustment to tax limitation) and 2006 c 184 s 5 & 1982 1st ex.s. c 42 s 12 are each repealed.

Sec. 417   RCW 84.56.070 and 2007 c 295 s 5 are each amended to read as follows:
     ((On the fifteenth day of February succeeding the levy of taxes,))(1) The county treasurer ((shall)) must proceed to collect all personal property taxes after first completing the tax roll for the current year's collection. The treasurer ((shall)) must give notice by mail to all persons charged with personal property taxes((, and if such)).
     (2) If the taxes are not paid before they become delinquent, the treasurer ((shall forthwith)) must immediately proceed to collect the ((same)) delinquent taxes. In the event that he or she is unable to collect the ((same)) taxes when due, the treasurer ((shall)) may prepare papers in distraint, which ((shall)) must contain a description of the personal property, the amount of taxes, the amount of the accrued interest at the rate provided by law from the date of delinquency, and the name of the owner or reputed owner. The treasurer ((shall)) may without demand or notice distrain sufficient goods and chattels belonging to the person charged with ((such taxes to pay the same)) paying the taxes, with interest at the rate provided by law from the date of delinquency, together with all accruing costs((, and shall)). Following the distraint, the treasurer must proceed to advertise the ((same)) sale of the distrained property by posting written notices ((in three)) at the county courthouse and two other public places in the county in which ((such)) the property ((has been)) was distrained((, one of which places shall be at the county court house, such)). The notice ((to)) must state the time when and place where ((such)) the property will be sold. The county treasurer, or the treasurer's deputy, ((shall tax)) must assess the same fees for making the distraint and sale of goods and chattels for the payment of taxes as are allowed by law to sheriffs for making levy and sale of property on execution; traveling fees to be computed from the county seat of the county to the place of making distraint.
     (3) If the taxes for which ((such)) the property is distrained, and the interest and costs accruing thereon, are not paid before the date appointed for ((such)) the sale, which ((shall)) may be not less than ten days after the taking of ((such)) the property, ((such)) the treasurer or treasurer's designee ((shall)) must proceed to sell ((such)) the property at public auction, or so much ((thereof)) of the property as ((shall)) will be sufficient to pay ((such)) the taxes, with interest and costs((, and)). If there ((be)) is any excess of money arising from the sale of any personal property, the treasurer ((shall)) must pay ((such)) the excess less any cost of the auction to the owner of the property so sold or to his or her legal representative((: PROVIDED, That whenever it shall)).
     (4) If it becomes necessary to distrain any standing timber owned separately from the ownership of the land upon which the ((same)) timber may stand, or any fish trap, pound net, reef net, set net or drag seine fishing location, or any other personal property as the treasurer ((shall)) determines to be incapable or reasonably impracticable of manual delivery, it ((shall)) will be deemed to have been distrained and taken into possession when the treasurer ((shall have)) has, at least thirty days before the date fixed for the sale ((thereof)) of the property, filed with the auditor of the county ((wherein such)) where the property is located a notice in writing reciting that the treasurer has distrained ((such)) the property((, describing it, giving)). The notice must include a description of the property, the name of the owner or reputed owner, the amount of the tax due, with interest, and the time and place of sale((;)). A copy of the notice ((shall)) must also be sent to the owner or reputed owner at his or her last known address, by ((registered letter)) certified mail, return receipt requested, at least thirty days ((prior to)) before the date of the sale((: AND PROVIDED FURTHER, That)).
     (5) If the county treasurer has reasonable grounds to believe that any personal property, including mobile homes, manufactured homes, or park model trailers, upon which taxes have been levied, but not paid, is about to be removed from the county where the ((same has been)) property was assessed, or is about to be destroyed, sold or disposed of, the county treasurer may demand ((such)) payment of the taxes, without the notice provided for in this section, and if necessary may ((forthwith)) immediately distrain sufficient goods and chattels to pay the ((same)) taxes.

Sec. 418   RCW 84.60.050 and 1994 c 301 s 54 are each amended to read as follows:
     (1) When real property is acquired by purchase or condemnation by the state of Washington, any county or municipal corporation or is placed under a recorded agreement for immediate possession and use or an order of immediate possession and use ((pursuant to)) under RCW 8.04.090, ((such)) the property ((shall)) will continue to be subject to the tax lien for the years prior to the year in which the property is so acquired or placed under ((such)) the agreement or order, of any tax levied by the state, county, municipal corporation, or other tax levying public body, except as is otherwise provided in RCW 84.60.070.
     (2) The lien for taxes applicable to the real property being acquired or placed under immediate possession and use for the year in which ((such)) the real property is so acquired or placed under immediate possession and use ((shall)) will be for only the pro rata portion of taxes allocable to that portion of the year ((prior to)) before the date of execution of the instrument vesting title, date of recording ((such)) the agreement of immediate possession and use, date of ((such)) the order of immediate possession and use, or date of judgment. No taxes levied or tax lien on ((such)) the property allocable to a period ((subsequent to)) following the dates identified in this subsection ((shall)) will be valid and any ((such)) taxes levied ((shall)) must be canceled as provided in RCW 84.48.065. In the event the owner has paid taxes allocable to that portion of the year ((subsequent to)) following the dates identified in this subsection ((he or she shall be)) that person is entitled to a pro rata refund of the amount paid on the property so acquired or placed under a recorded agreement or an order of immediate possession and use. If the dates identified in this subsection precede ((February 15th of the year in which such taxes become payable)) the completion of the property tax rolls for the current year's collection, no lien for ((such)) the taxes ((shall)) will be valid and any ((such)) taxes levied but not payable ((shall)) must be canceled as provided in RCW 84.48.065.

Sec. 419   RCW 86.09.490 and 1937 c 72 s 164 are each amended to read as follows:
     The assessment upon real property ((shall be)) is a lien against the property assessed, from and after the first day of January in the year in which the assessment becomes due and payable, but as between grantor and grantee ((such)) the lien ((shall)) does not attach until the ((fifteenth day of February of such year, which)) county treasurer has completed the property tax roll for the current year's collection and provided the notification required by RCW 84.56.020 in the year in which the assessment is payable. The lien ((shall be)) is paramount and superior to any other lien ((theretofore or thereafter)) created before or after the lien provided in this section, whether by mortgage or otherwise, except a lien for undelinquent flood control district assessments, diking or drainage district assessments, or diking or drainage improvement((,)) district assessments, and for unpaid and outstanding general ad valorem taxes((, and such)). The lien ((shall)) will not be removed until the assessments are paid or the property sold for the payment ((thereof)) of the delinquent assessments as provided by law.

Sec. 420   RCW 87.03.265 and 1939 c 171 s 2 are each amended to read as follows:
     (1) The assessment upon real property ((shall be)) is a lien against the property assessed, from and after the first day of January in the year in which it is levied, but as between grantor and grantee ((such)) the lien ((shall)) does not attach until the ((fifteenth day of February of)) county treasurer has completed the property tax roll for the current year's collection and provided the notification required by RCW 84.56.020 in the year in which the assessment is payable((, which)). The lien ((shall be)) is paramount and superior to any other lien ((theretofore or thereafter)) created before or after the lien provided in this section, whether by mortgage or otherwise, except for a lien for prior assessments((, and such)). The lien ((shall)) will not be removed until the assessments are paid or the property sold for the payment ((thereof)) of the delinquent assessment as provided by law. ((And))
     (2) The lien for the bonds of any issue ((shall be)) is a preferred lien to that of any subsequent issue. Also, the lien for all payments due or to become due under any contract with the United States, or the state of Washington, accompanying which bonds of the district have not been deposited with the United States or the state of Washington, as in RCW 87.03.140 provided, ((shall be)) is a preferred lien to any issue of bonds ((subsequent to)) after the date of ((such)) the contract.

Sec. 421   RCW 87.03.270 and 1988 c 134 s 13 are each amended to read as follows:
     (1) The assessment roll, before its equalization and adoption, ((shall)) must be checked and compared as to descriptions and ownerships, with the county treasurer's land rolls. On or before the fifteenth day of January in each year the secretary must deliver the assessment roll or the respective segregation ((thereof)) of the assessment roll to the county treasurer of each respective county in which the lands ((therein)) described in the assessment roll are located((, and said)). The assessments ((shall become)) reflected in the assessment roll are due and payable ((on the fifteenth day of February following)) after the county treasurer has subsequently completed the property tax roll for the current year's collection and provided the notification required by RCW 84.56.020.
     (2) All assessments on ((said)) the assessment roll ((shall)) will become delinquent on the first day of May following the filing of the roll unless the assessments are paid ((on or)) before ((the thirtieth day of April of said year: PROVIDED,)) that date. If an assessment is ten dollars or more for ((said)) the current year and if one-half of the assessment is paid on or before the thirtieth day of April, the remainder ((shall be)) is due and payable on or before the thirty-first day of the following October ((following)) and ((shall be)) is delinquent after that date. All delinquent assessments ((shall)) bear interest at the rate of twelve percent per annum, computed on a monthly basis and without compounding, from the date of delinquency until paid.
     (3) Upon receiving the assessment roll the county treasurer ((shall)) must prepare ((therefrom)) an assessment book ((in which shall be)). The assessment book must contain a written ((the)) description of the land as it appears in the assessment roll, the name of the owner or owners where known, and if assessed to the unknown owners, then the word "unknown", and the total assessment levied against each tract of land. Proper space ((shall)) must be left in ((said)) the assessment book for the entry ((therein)) of all subsequent proceedings relating to the payment and collection of ((said)) the assessments.
     (4) On or before April 1st of each year, the treasurer of the district ((shall)) must send a statement of assessments due. County treasurers who collect irrigation district assessments may send the statement of irrigation district assessments together with the statement of general taxes.
     (5) Upon payment of any assessment the county treasurer must enter the date of ((said)) the payment in ((said)) the assessment book opposite the description of the land and the name of the person paying and give a receipt to such person specifying the amount of the assessment and the amount paid with the description of the property assessed.
     (6) It ((shall be)) is the duty of the treasurer of the district to furnish upon request of the owner, or any person interested, a statement showing any and all assessments levied as shown by the assessment roll in his or her office upon land described in ((such)) the request. All statements of irrigation district assessments covering any land in the district ((shall)) must show the amount of the irrigation district assessment, the dates on which the assessment is due, the place of payment, and, if the property was sold for delinquent assessments in a prior year, the amount of the delinquent assessment and the notation "certificate issued."((: PROVIDED, That)) The failure of the treasurer to render any statement ((herein)) required of him ((shall)) or her by this section does not render invalid any assessments made by any irrigation district.
     (7) It ((shall be)) is the duty of the county treasurer of any county, other than the county in which the office of the board of directors is located, to make monthly remittances to the county treasurer of the county in which the office of the board of directors is located covering all amounts collected by him or her for the irrigation district during the preceding month.
     (8) When the treasurer collects a delinquent assessment, the treasurer ((shall)) must collect any other amounts due by reason of the delinquency, including accrued costs, which ((shall)) must be deposited to the treasurer's operation and maintenance fund.

Sec. 501   2006 c 300 s 12 (uncodified) is amended to read as follows:
     (1)(a) ((This act and)) Chapter 149, Laws of 2003; section 7, chapter 300, Laws of 2006; and sections 104, 110, 117, 123, 125, 129, 131, 149, and 317, chapter ..., Laws of 2009 (sections 104, 110, 117, 123, 125, 129, 131, 149, and 317 of this act) are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.
     (b) For the purposes of this section:
     (i) "Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965.
     (ii) "Semiconductor microchip fabrication" means "manufacturing semiconductor microchips" as defined in RCW 82.04.426.
     (iii) "Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least one billion dollars.
     (2) This act takes effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, as determined by the director of the department of revenue.
     (3)(a) The department of revenue ((shall)) must provide notice of the effective date of ((this act)) chapter 149, Laws of 2003 to affected taxpayers, the legislature, and others as deemed appropriate by the department.
     (b) If, after making a determination that a contract has been signed and this act is effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department ((shall)) must make a determination that this act is no longer effective, and all taxes that would have been otherwise due ((shall be)) are deemed deferred taxes and are immediately assessed and payable from any person reporting tax under RCW 82.04.240(2) or claiming an exemption or credit under section 2 or 5 through 10 ((of this act)), chapter 149, Laws of 2003. The department is not authorized to make a second determination regarding the effective date of ((this act)) chapter 149, laws of 2003.

NEW SECTION.  Sec. 502   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 503   Those provisions of sections 101 through 103, 105 through 109, 111 through 116, 118 through 122, 124, 126 through 128, 130, 132 through 148, and 150 through 152 of this act that relate to annual surveys and annual reports apply beginning with annual surveys and annual reports due in 2010 and thereafter.

NEW SECTION.  Sec. 504   Section 106 of this act expires July 1, 2011.

NEW SECTION.  Sec. 505   Sections 204(3) (a)(i) and (r) and 211 of this act apply to return or tax information in respect to the tax imposed under chapter 83.100 RCW in the possession of the department of revenue on or after the effective date of this section.

NEW SECTION.  Sec. 506   Sections 314 and 315 of this act apply both retroactively and prospectively to estates of decedents dying on or after May 17, 2005.

NEW SECTION.  Sec. 507   Section 406 of this act applies both prospectively and retroactively beginning with taxes levied for collection in 2002 and thereafter.

NEW SECTION.  Sec. 508   2009 c . . . s 501 (section 501 of this act), 2006 c 300 s 12, and 2003 c 149 s 12 (uncodified) are codified as a section within chapter 82.32 RCW.

NEW SECTION.  Sec. 509   Part headings used in this act are not any part of the law.