[atlas:bill]

AN ACT Relating to subsidy disclosure; adding new sections to chapter 42.17 RCW; creating a new section; and prescribing penalties.

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

NEW SECTION. Sec. 1. The definitions in this section apply throughout this act unless the context clearly requires otherwise.

(1) "Benefit date" means the date that the recipient receives the business subsidy. If the business subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date begins when the recipient puts the equipment into service. If the business subsidy is for improvements to property, then the benefit date refers to the earliest date of either:

(a) When the improvements are finished for the entire project; or

(b) When a business occupies the property. If a business occupies the property and the subsidy grantor expects that other businesses will also occupy the same property, the grantor may assign a separate benefit date for each business when it first occupies the property.

(2) "Business subsidy" or "subsidy" means a state or local government agency grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, and guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business.

The following forms of financial assistance are not business subsidies:

(a) A grant of less than twenty-five thousand dollars; and

(b) Tax reductions resulting from conformity with federal tax law.

(3) "Grantor" means any state or local government agency with the authority to grant a business subsidy.

(4) "Local government agency" includes a statutory or home rule charter city, housing and redevelopment authority, town, county, port authority, economic development authority, community development agency, nonprofit entity created by a local government agency, or any other entity created by or authorized by a local government with authority to provide business subsidies.

(5) "Recipient" means any for-profit or nonprofit business entity that receives a business subsidy. Only nonprofit entities with at least one hundred full-time equivalent positions and a ratio of highest to lowest paid employees that exceeds ten to one, determined on the basis of full-time equivalent positions, are included in this definition.

(6) "State government agency" means any state agency that has the authority to award business subsidies.

(7) "Wage bands" means the following five grouping of wage rates: (a) Up to seventeen dollars per hour; (b) seventeen dollars and one cent to twenty-two dollars per hour; (c) twenty-two dollars and one cent to twenty-seven dollars per hour; (d) twenty-seven dollars and one cent to thirty-five dollars per hour; and (e) thirty-five dollars and one cent per hour and above. These amounts shall be indexed to the state average wage as determined annually by the employment security department.

NEW SECTION. Sec. 2. (1) A recipient must provide information to grantors. The information must be filed on forms developed by the department of revenue in cooperation with representatives of local government. Copies of the completed forms must be sent to the department of revenue and the local government agency that provided the business subsidy. The report must include:

(a) The type, public purpose, and amount of all subsidies, and type of district if the subsidy is tax increment financing.

(b) The hourly wage of each job created with separate bands of wages;

(d) The recipient's standard industrial code;

(e) The sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages;

(f) The location of the recipient prior to receiving the business subsidy;

(g) The name and address of the parent corporation of the recipient, if any;

(h) A list of all financial assistance by all grantors for the project including name of grantor, amount of assistance, how long assistance was received, and what the assistance was used for; and

(i) Other information the department of revenue may request.

(2) A report under subsection (1) of this section must be filed by August 1st of each year for the previous fiscal year.

(3) If the recipient does not submit its report, the local government agency must mail the recipient a warning within one week of the required filing date. If, after fourteen days of the postmarked date of the warning, the recipient fails to provide a report, the recipient must pay to the grantor a penalty of five hundred dollars for each subsequent day until the report is filed. The maximum penalty may not exceed fifty thousand dollars. If the recipient does not submit its report by November 1st, it shall be ineligible for subsidies until the report has been satisfactorily completed and submitted.

NEW SECTION. Sec. 3. (1) Local government agencies and state government agencies, regardless of whether or not they have awarded any business subsidies, must file a report by September 1st of each year with the department of revenue. The local government agency must include a list of recipients that did not complete the report required under section 2 of this act, recipients that have not met their job and wage goals within two years, and the steps being taken to bring them into compliance or to recoup the subsidy.

(2) If the department of revenue has not received the report under subsection (1) of this section by September 1st from an entity required to report, the department of revenue shall issue a warning to the government agency. If the department of revenue has still not received the report by November 1st of that same year from an entity required to report, then that government agency may not award any business subsidies until the report has been filed.

(3) The department of revenue must provide information on reporting requirements to state and local government agencies.

NEW SECTION. Sec. 4. (1) The department of revenue must publish a compilation and summary of the results of the reports for the previous calendar year by December 1st of each year. The reports of the recipients and government agencies to the department of revenue and the compilation and summary report of the department of revenue must be made available to the public.

(2) The department of revenue must coordinate the production of reports so that useful comparisons across time periods and across grantors can be made. The department of revenue may add other information to the report as the department of revenue deems necessary to evaluate business subsidies. Among the information in the summary and compilation report, the department of revenue must include:

(a) Total amount of subsidies awarded in each development region of the state;

(b) Distribution of business subsidy amounts by size of the business subsidy;

(d) Distribution of subsidies by type and by public purpose;

(e) Number of part-time and full-time jobs within separate bands of wages; and

(f) Benefits paid within separate bands of wages.

(3) The department of revenue shall forward the compilation and summary report to the house of representatives committee on trade and economic development and the senate committee on economic development and telecommunications by December 31st of each year.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act are each added to chapter 42.17 RCW.

NEW SECTION. Sec. 6. This act applies to all business subsidies entered into or state appropriations authorized after September 30, 2001.