BILL REQ. #:  S-3994.1 

Read first time 01/21/10.   Referred to Committee on Economic Development, Trade & Innovation.

     AN ACT Relating to creating the Washington global health technologies and product development competitiveness program and allowing certain tax credits for program contributions; reenacting and amending RCW 43.84.092; adding a new section to chapter 82.04 RCW; adding a new section to chapter 48.14 RCW; adding a new chapter to Title 43 RCW; and providing expiration dates.

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

NEW SECTION.  Sec. 1   The legislature finds that the global health sector develops new technologies and products for the improvement of health delivery locally and worldwide and that Washington is home to the world's richest collection of global health research and education programs creating new and innovative technologies on a daily basis. It is the intent of the legislature to stimulate our economy and foster job creation in the emerging field of global health while improving the health of people in our state and the world. The purpose of this act is to create a funding mechanism and a grant program to ensure that Washington remains competitive in global health innovation and to guarantee that the development, manufacture, and delivery of global health products will become an even more dynamic part of the state's economy.

NEW SECTION.  Sec. 2   (1) The Washington global health technologies and product development competitiveness program is created.
     (2)(a) The program must be administered by a board of directors appointed by the governor. The governor must make the appointments after consultation with a state-wide alliance of global health research, nonprofit, and private entities. The board consists of the following members:
     (i) Three members representing private companies engaged in the provision of global health products or services;
     (ii) Three members representing nonprofit organizations supporting global health research or providing global health products or services;
     (iii) Three members representing public research institutions engaged in global health research and education; and
     (iv) One member who is a former state-wide elected official.
     (b) The governor must appoint the chair of the board from among the members. The governor must appoint the members to staggered terms and each appointment may not last more than three years, but an appointee may serve more than one term.
     (3) The board must contract with the department of health for management services to assist the board in implementing the program.
     (4) The board must solicit and receive gifts, grants, bequests, royalty payments, licensing income, and other funds from businesses, foundations, and the federal government to promote the development and delivery of global health technologies and products. All such funds received must be deposited in the Washington global health technologies and product development account created in section 3 of this act.
     (5) The board must establish eligibility criteria for global health technologies and product development grants and adopt policies and procedures to facilitate the orderly process of grant application, review, and reward.
     (6) The board must make grants to entities pursuant to contract for the development, production, promotion, and delivery of global health technologies and products considering the following:
     (a) The quality of the proposed research or the proposed technical assistance in product development or production process design. Any grant funds awarded for research activities must be awarded for nonbasic research which will assist in commercialization or manufacture of global health technologies;
     (b) The potential for the grant recipient to improve global health outcomes;
     (c) The potential for the grant to leverage additional funding for the development of global health technologies;
     (d) The potential for the grant to stimulate, or promote technical skills training for, employment in the development of global health technologies in the state;
     (e) The willingness of the grant recipient, when appropriate, to enter into royalty or licensing income agreements with the board; and
     (f) Any other factors, as the board determines.
     (7) Grant contracts must specify that award recipients must conduct their research, development, and any subsequent production activities within Washington and that a failure to comply with this requirement will obligate the recipient to return the amount of the award plus interest as determined by the board.
     (8) Upon the recommendation of the Washington economic development commission, the board may provide funding for the recruitment and employment by public research institutions in the state of global health researchers with a history of commercialization of global health technologies.

NEW SECTION.  Sec. 3   The Washington global health technologies and product development account is created in the custody of the state treasurer. Only the board of directors of the Washington global health technologies and product development competitiveness program or the board's designee may authorize expenditures from the account. All receipts from the solicitations required in section 2 of this act must be deposited in the account. Expenditures from the account may be used only for funding activities of the Washington global health technologies and product development competitiveness program created in section 2 of this act. The account is subject to the allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures. No state or local governmental funds may be deposited in the account and moneys in the account do not constitute public funds for the purposes of any constitutional or statutory limitation on the use of public funds. Of the total amounts deposited into the account the department of health may use up to three percent for management services and administrative expenses related to the program.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.04 RCW to read as follows:
     (1) A person is allowed a credit against taxes due under this chapter in an amount equal to fifty percent of contributions made in any fiscal year directly to the Washington global health technologies and product development account created in section 3 of this act. The credit must be taken in a form and manner as required by the department.
     (2) A person claiming the credit under this section must make a contribution to the Washington global health technologies and product development account before claiming a credit under this section.
     (3) The credit under this section may not exceed five hundred thousand dollars per fiscal year per person. The credit may not exceed the tax that would otherwise be due under this chapter.      
     (4) Refunds are not be granted in the place of credits.
     (5) Except as provided under subsection (6) of this section, a tax credit claimed under this section may not be carried over to another year.
     (6) Any amount of tax credit otherwise allowable under this section not claimed by a person in any calendar year may be carried over and claimed against the tax liability for the next succeeding calendar year. Any credit remaining unused in the next succeeding calendar year may be carried forward and claimed against the tax liability for the second succeeding calendar year; and any credit not used in that second succeeding calendar year may be carried over and claimed against the tax liability for the third succeeding calendar year, but may not be carried over for any calendar year thereafter.
     (7) Credits under this section are available on a first in-time basis. The department must disallow any credit, or portion thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed five million dollars. The department must provide written notice to any person that has claimed tax credits in excess of the five-million dollar limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of such a notice. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
     (8) To claim a credit under this section, a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
     (9) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
     (10) The Washington global health technologies and product development competitiveness program created in section 2 of this act must provide to the department, upon request, information needed to verify eligibility for credit under this section, including information regarding contributions received by the program.
     (11) The department may not allow any credit under this section before July 1, 2010.
     (12) This section expires June 30, 2018.

NEW SECTION.  Sec. 5   A new section is added to chapter 48.14 RCW to read as follows:
     (1) An insurer earns a vested credit against taxes due under this chapter in an amount equal to fifty percent of the contributions made by the insurer in any fiscal year directly to the Washington global health technologies and product development account created in section 3 of this act.
      (2) Any amount of tax credit otherwise allowable under this section not claimed by an insurer in any calendar year may be carried over and claimed against the tax liability for the next succeeding calendar year. Any credit remaining unused in the next succeeding calendar year may be carried forward and claimed against the tax liability for the second succeeding calendar year. Any credit not used in that second succeeding calendar year may be carried over and claimed against the tax liability for the third succeeding calendar year, but may not be carried over for any calendar year thereafter.
     (3) Credits are available on a first in-time basis. The commissioner must disallow any credit, or portion thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed five million dollars. The commissioner must provide written notice to any person that has claimed tax credits in excess of the five-million dollar limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within thirty days from the date of such a notice. The commissioner may not assess penalties and interest on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
     (4) An insurer taking the credit under this section is subject to all the requirements of chapter 82.32 RCW. The tax credit that may be applied against state premium tax liability in any one tax year may not exceed the state premium tax liability of the certified investor for such tax year. All unused tax credits against state premium tax liability may be carried forward indefinitely and used in any subsequent year until the tax credits are utilized in full.
     (5) No application is necessary for the tax credit under this section. An insurer taking the tax credit under this section must keep records necessary for the commissioner to verify eligibility for the credit.
     (6) The Washington global health technologies and product development competitiveness program created in section 2 of this act must provide to the commissioner, upon request, information needed to verify eligibility for credit under this section, including information regarding contributions received by the program.
     (7) An insurer claiming a tax credit against state premium tax liability earned through a donation to the Washington global health technologies account is not required to pay any additional retaliatory tax levied pursuant to RCW 48.14.040 as a result of claiming that tax credit.
     (8) An insurer is not required to reduce the amount of tax pursuant to the state premium tax liability included by the insurer in connection with ratemaking for any insurance contract written in Washington because of a reduction in the insurer's tax liability based on the tax credit allowed under this act.
     (9) If the taxes paid by an insurer with respect to its state premium tax liability constitute a credit against any other tax which is imposed by Washington, the certified investor's credit against such other tax will not be reduced by virtue of the reduction in the insurer's tax liability based on the tax credit allowed under this act.
     (10) This section expires June 30, 2018.

Sec. 6   RCW 43.84.092 and 2009 c 479 s 31, 2009 c 472 s 5, and 2009 c 451 s 8 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the budget stabilization account, the capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the cleanup settlement account, the Columbia river basin water supply development account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the personal health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk account, the special category C account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the state patrol highway account, the state route number 520 corridor account, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the urban arterial trust account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington global health technologies and product development account, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 7   Sections 1 through 3 of this act constitute a new chapter in Title 43 RCW.