[atlas:bill]

AN ACT Relating to tax credits for businesses doing new hiring in distressed rural communities; and adding a new chapter to Title 82 RCW.

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

NEW SECTION. Sec. 1. The legislature intends to provide tax credits to businesses that permanently hire current residents of distressed counties. The credit is to equal the first year's wages of the new hire, not to exceed the total business and occupation tax liability of the business in the following year.

NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Applicant" means a person applying for a tax credit under this chapter.

(2) "Department" means the department of revenue.

(3) "Eligible area" means an eligible area as defined in RCW 82.62.010.

(4) "Person" has the meaning given in RCW 82.04.030.

(5) "Qualified employment position" means a new permanent full-time employee employed by the recipient at a minimum wage of at least eight dollars per hour during the entire year prior to the tax year. The employee must have been a resident of the county in which the employment occurs prior to employment. The employment position must be a new position which adds to the total employment level of the recipient and may not be the result of a prior staff reduction, retirement, dismissal, or personnel turnover.

(6) "Tax year" means the calendar year in which taxes are due.

(7) "Recipient" means a person receiving tax credits under this chapter.

NEW SECTION. Sec. 3. Application for tax credits under this chapter must be made before the actual hiring of qualified employment positions. The application shall be made to the department in a form and manner prescribed by the department. The application shall contain information regarding the location of the employee, the residency of the employee, the applicant's average employment, if any, at the facility for the prior year, estimated or actual wages of employees related to the position, and other information required by the department. The department shall rule on the application within sixty days.

NEW SECTION. Sec. 4. (1) A person shall be allowed a credit against the tax due under chapter 82.04 RCW as provided in this section. The credit shall equal the wages paid for each qualified employment position in the prior year. The amount of credit that may be taken in the tax year is the lesser of the wages paid for the qualified employment position or the recipient's total tax liability. Credits must be taken in the tax year and may not be carried over to future years.

(2) No recipient may use the tax credits to decertify a union or to displace existing jobs in any community in the state.

(3) No recipient may receive a tax credit on taxes which have not been paid during the taxable year.

NEW SECTION. Sec. 5. (1) Each recipient shall submit a report to the department on December 31st of each year. The report shall contain information, as required by the department, from which the department may determine whether the recipient is meeting the requirements of this chapter. If the recipient fails to submit a report or submits an inadequate report, the department may declare the amount of taxes for which a credit has been used to be immediately assessed and payable.

(2) If, on the basis of a report under this section or other information, the department finds that a recipient is not eligible for tax credit under this chapter for reasons other than failure to create a qualified employment position, the amount of taxes for which a credit has been used for the project shall be immediately due.

(3) If, on the basis of a report under this section or other information, the department finds that a recipient has failed to create the qualified employment position, the department shall assess interest, but not penalties, on the credited taxes for which a credit has been used. The interest shall be assessed at the rate provided for delinquent excise taxes, shall be assessed retroactively to the date of the tax credit, and shall accrue until the taxes for which a credit has been used are repaid.

NEW SECTION. Sec. 6. The employment security department shall make, and certify to the department of revenue, all determinations of employment and wages required under this chapter.

NEW SECTION. Sec. 7. Applications, reports, and any other information received by the department under this chapter are not confidential and are subject to disclosure.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act constitute a new chapter in Title 82 RCW.