AN ACT Relating to the tax advisory commission; amending RCW 43.38.010, 43.38.020, and 43.38.040; and declaring an emergency.

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

Sec. 1. Section 11, chapter 2, Laws of 1983 and RCW 43.38.010 are each amended to read as follows:

There is hereby created a tax advisory council to consist of ((~~twelve~~)) fifteen members ((~~to be appointed by the governor~~)). ((~~Members shall be chosen who represent the~~)) The governor shall appoint one member to represent cities and towns, one member to represent counties, one member to represent labor, one member to represent small businesses, one member to represent large businesses, and three members to represent other major segments of the state's economy((~~, and~~)). At least one member shall be chosen from each congressional district of the state now or hereafter existing. The state economic development board shall designate one of its members or staff to serve as a member of the council. The governor and the director of revenue shall serve as ex officio members of the board. In addition, the president of the senate and the speaker of the house of representatives shall each appoint two members, one from each caucus of the respective house.

Members shall serve without pay at the pleasure of the governor but shall be paid travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended incurred in their travel to and from meetings of the council and while attending all meetings of the council. Legislative members shall be reimbursed for travel expenses as provided in RCW 44.04.120.

The council shall not be deemed to be unlawfully constituted and a member of the council shall not be deemed ineligible to serve on the board solely by reason of the establishment of new or revised boundaries for congressional districts. However, appointments made after the effective date of such establishment shall be from congressional districts which are not represented on the council.

Sec. 2. Section 43.38.020, chapter 8, Laws of 1965 as amended by section 2, chapter 41, Laws of 1982 1st ex. sess. and RCW 43.38.020 are each amended to read as follows:

(1) The council shall ((survey and analyze all aspects of state tax statutes and policies, including but not limited to: Improved efficiency in the administration and collection of state taxes, elasticity, equity of burden, adequacy of the state's tax structure, and)) research and analyze Washington's current tax system and other tax alternatives. Research and analysis shall include:

(a) The impact of the tax rates and the tax burden on business location and expansion decisions and on small business and economic development in general.

(b) The comparative impact of Washington's current tax system and alternative taxes on small business and economic development in the state of Washington.

(c) The elasticity, stability, efficiency, and regressivity of Washington's current tax system and alternative tax systems.

(d) The impact of Washington's sales tax on border area communities and on retail sales throughout the state.

(e) The desirability, effectiveness, and cost of existing tax exemptions.

From this research and analysis, the council shall annually develop a statement of tax policy for the state. The statement shall be in the form of proposed legislation which may be used as a guide in implementing existing statutes and rules and in proposing legislative changes to existing statutes. The council shall use the statement of tax policy in reviewing the impact of changes in Washington's tax statutes on economic development, small business, elasticity, stability, regressivity, and efficiency of the state tax system.

Based on this research and review and the statement of tax policy, the council shall make recommendations annually to the department of revenue and the ways and means committees of the senate and house of representatives as to needed technical, administrative, legal, and economic changes in the tax code.

(2) Recommendations of the council shall be submitted to the governor and the committees on ways and means of the senate and house of representatives at least one month prior to the convening of each regular session of the legislature. If the recommendations adopted by the council do not receive the unanimous approval of its members, the dissenting members shall have the privilege of submitting minority recommendations.

Sec. 3. Section 43.38.040, chapter 8, Laws of 1965 as amended by section 24, chapter 278, Laws of 1975 1st ex. sess. and RCW 43.38.040 are each amended to read as follows:

The governor shall designate one member to be chairman of the council. The council at its first meeting shall elect a vice chairman. Regular public meetings shall be held at times and places determined by the chairman, including during the interim between legislative sessions. The chairman shall appoint from the staff of the state department of revenue, an executive secretary, whose salary shall be paid by the department of revenue, who shall attend all meetings of the council and perform such duties as it shall direct.

NEW SECTION. Sec. 4. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.