BILL REQ. #:  H-3532.1 

Read first time 01/27/2004.   Referred to Committee on Finance.

     AN ACT Relating to the six-year review of property tax exemptions; and amending RCW 43.136.030 and 43.136.040.

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

Sec. 1   RCW 43.136.030 and 1982 1st ex.s. c 35 s 41 are each amended to read as follows:
     (1) The joint legislative ((budget)) audit and review committee shall review each tax preference for termination by the processes provided in this chapter. The review shall be completed and a report prepared on or before June 30th of the year prior to the date established for termination. Upon completion of its report, the joint legislative ((budget)) audit and review committee shall transmit copies of the report to the department of revenue. The department of revenue may then conduct its own review of the tax preference scheduled for termination and shall prepare a report on or before September 30th of the year prior to the date established for termination. Upon completion of its report the department of revenue shall transmit copies of its report to the joint legislative ((budget)) audit and review committee. The joint legislative ((budget)) audit and review committee shall prepare a final report that includes the reports of both the department of revenue and the joint legislative ((budget)) audit and review committee. The joint legislative ((budget)) audit and review committee and the department of revenue shall, upon request, make available to each other all working papers, studies, and other documents which relate to reports required under this section. The joint legislative ((budget)) audit and review committee shall transmit the final report to all members of the legislature, to the governor, and to the state library.
     (2) The joint legislative audit and review committee shall review all tax preferences in chapter 84.36 RCW that have not been reviewed under subsection (1) of this section beginning in 2005 and every six years thereafter. The review shall be completed and a report prepared on or before June 30th of the year a review is required. Tax preferences that have been in effect less than two years from June 30th of the year a review is required do not need to be evaluated. Upon completion of the report, the committee shall transmit the report to each member of the legislature. The report shall address the following:
     (a) The persons or organizations whose state tax liabilities are directly affected;
     (b) The additional amount of taxes that state and local governments would collect if the tax preference is eliminated;
     (c) The change in the distribution of property taxes if the tax preference is eliminated;
     (d) The fiscal, societal, and other legislative objectives that have occurred because of the tax preference;
     (e) Expected fiscal, societal, and other legislative objectives if the tax preference is continued.

Sec. 2   RCW 43.136.040 and 1982 1st ex.s. c 35 s 42 are each amended to read as follows:
     In reviewing a tax preference under RCW 43.136.030(1), the joint legislative ((budget)) audit and review committee shall develop information needed by the legislature to determine if the tax preference should be terminated as scheduled, modified, or reestablished without modification. The joint legislative ((budget)) audit and review committee shall consider, but not be limited to, the following factors in the review.
     (1) The persons or organizations whose state tax liabilities are directly affected by the tax preference.
     (2) Legislative objectives that might provide a justification for the tax preference.
     (3) Evidence that the existence of the tax preference has contributed to the achievement of any of the objectives identified in subsection (2) of this section.
     (4) The extent to which continuation of the tax preference beyond its scheduled termination date might contribute to any of the objectives identified in subsection (2) of this section.
     (5) Fiscal impacts of the tax preference, including past impacts and expected future impacts if it is not terminated as scheduled.
     (6) The extent to which termination of the tax preference would affect the distribution of liability for payment of state taxes.