READ FIRST TIME 02/08/05.   

     AN ACT Relating to repealing outdated and unused tax preferences; amending RCW 15.76.165, 43.52.460, 82.08.0255, and 82.12.0256; reenacting and amending RCW 82.04.260; creating a new section; repealing RCW 82.35.010, 82.35.020, 82.35.040, 82.35.050, 82.35.070, 82.35.080, 82.35.900, 82.61.010, 82.61.030, 82.61.050, 82.61.060, 82.61.080, 82.61.090, 82.61.900, 82.61.901, 48.14.029, 82.04.4329, 82.08.0276, 82.08.0295, 82.12.0295, 82.12.02545, and 84.56.450; and providing an effective date.

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

NEW SECTION.  Sec. 1   The legislature finds that a number of tax exemptions, deductions, credits, and other preferences have outlived their usefulness. State records show no taxpayers have claimed relief under these tax preferences in recent years. The intent of this act is to update and simplify the tax statutes by repealing these outdated tax preferences.

Sec. 2   RCW 15.76.165 and 1973 c 117 s 1 are each amended to read as follows:
     Any county which owns or leases property from another governmental agency and provides such property for area or county and district agricultural fair purposes may apply to the director for special assistance in carrying out necessary capital improvements to such property and maintenance of the appurtenances thereto((, and in the event such property and capital improvements are leased to any organization conducting an agricultural fair pursuant to chapter 15.76 RCW and chapter 257 of the Laws of 1955, such leasehold and such leased property shall be exempt from real and personal property taxation)).

Sec. 3   RCW 43.52.460 and 1971 ex.s. c 75 s 1 are each amended to read as follows:
     Any joint operating agency formed under this chapter shall pay in lieu of taxes payments in the same amounts as paid by public utility districts. Such payments shall be distributed in accordance with the provisions applicable to public utility districts((: PROVIDED, HOWEVER, That such tax shall not apply to steam generated electricity produced by a nuclear steam powered electric generating facility constructed or acquired by a joint operating agency and in operation prior to May 17, 1971)).

Sec. 4   RCW 82.04.260 and 2003 2nd sp.s. c 1 s 4 and 2003 2nd sp.s. c 1 s 3 are each reenacted and amended to read as follows:
     (1) Upon every person engaging within this state in the business of manufacturing:
     (a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola byproducts, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, oil, canola meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;
     (b) Seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of 0.138 percent;
     (c) By canning, preserving, freezing, processing, or dehydrating fresh fruits and vegetables, or selling at wholesale fresh fruits and vegetables canned, preserved, frozen, processed, or dehydrated by the seller and sold to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business shall be equal to the value of the products canned, preserved, frozen, processed, or dehydrated multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record;
     (d) Dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed shall be equal to the value of the products manufactured multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record;
     (e) Alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent. This subsection (1)(e) expires July 1, 2009; and
     (f) Alcohol fuel or wood biomass fuel, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel or wood biomass fuel manufactured, multiplied by the rate of 0.138 percent.
     (2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.
     (3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.
     (4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.
     (5) ((Upon every person engaging within this state in the business of making sales, at retail or wholesale, of nuclear fuel assemblies manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the assemblies multiplied by the rate of 0.275 percent.
     (6) Upon every person engaging within this state in the business of manufacturing nuclear fuel assemblies, as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured multiplied by the rate of 0.275 percent.
     (7))) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (((8))) (6) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (((9))) (7) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.
     (((10))) (8) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
     If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.
     (((11))) (9) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of 0.484 percent.
     (((12))) (10) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities shall be equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter. The moneys collected under this subsection shall be deposited in the health services account created under RCW 43.72.900.
     (((13))) (11)(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, as to such persons the amount of tax with respect to such business shall, in the case of manufacturers, be equal to the value of the product manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of:
     (i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and
     (ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.
     (b) Beginning October 1, 2005, upon every person engaging within this state in the business of making sales, at retail or wholesale, of commercial airplanes, or components of such airplanes, manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the airplanes or components multiplied by the rate of:
     (i) 0.4235 percent from October 1, 2005, through the later of June 30, 2007, or the day preceding the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550; and
     (ii) 0.2904 percent beginning on the later of July 1, 2007, or the date final assembly of a superefficient airplane begins in Washington state, as determined under RCW 82.32.550.
     (c) For the purposes of this subsection (((13))) (11), "commercial airplane," "component," and "final assembly of a superefficient airplane" have the meanings given in RCW 82.32.550.
     (d) In addition to all other requirements under this title, a person eligible for the tax rate under this subsection (((13))) (11) must report as required under RCW 82.32.545.
     (e) This subsection (((13))) (11) does not apply after the earlier of: July 1, 2024; or December 31, 2007, if assembly of a superefficient airplane does not begin by December 31, 2007, as determined under RCW 82.32.550.

Sec. 5   RCW 82.08.0255 and 1998 c 176 s 4 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 shall not apply to sales of((:
     (a) Motor vehicle fuel used in aircraft by the manufacturer thereof for research, development, and testing purposes; and
     (b))) motor vehicle and special fuel if:
     (((i))) (a) The fuel is purchased for the purpose of public transportation and the purchaser is entitled to a refund or an exemption under RCW 82.36.275 or 82.38.080(3); or
     (((ii))) (b) The fuel is purchased by a private, nonprofit transportation provider certified under chapter 81.66 RCW and the purchaser is entitled to a refund or an exemption under RCW 82.36.285 or 82.38.080(1)(h); or
     (((iii))) (c) The fuel is taxable under chapter 82.36 or 82.38 RCW.
     (2) Any person who has paid the tax imposed by RCW 82.08.020 on the sale of special fuel delivered in this state shall be entitled to a credit or refund of such tax with respect to fuel subsequently established to have been actually transported and used outside this state by persons engaged in interstate commerce. The tax shall be claimed as a credit or refunded through the tax reports required under RCW 82.38.150.

Sec. 6   RCW 82.12.0256 and 1998 c 176 s 5 are each amended to read as follows:
     The provisions of this chapter shall not apply in respect to the use of:
     (1) ((Motor vehicle fuel used in aircraft by the manufacturer thereof for research, development, and testing purposes; and
     (2))) Special fuel purchased in this state upon which a refund is obtained as provided in RCW 82.38.180(2); and
     (((3))) (2) Motor vehicle and special fuel if:
     (a) The fuel is used for the purpose of public transportation and the purchaser is entitled to a refund or an exemption under RCW 82.36.275 or 82.38.080(3); or
     (b) The fuel is purchased by a private, nonprofit transportation provider certified under chapter 81.66 RCW and the purchaser is entitled to a refund or an exemption under RCW 82.36.285 or 82.38.080(1)(h); or
     (c) The fuel is taxable under chapter 82.36 or 82.38 RCW: PROVIDED, That the use of motor vehicle and special fuel upon which a refund of the applicable fuel tax is obtained shall not be exempt under this subsection (((3))) (2)(c), and the director of licensing shall deduct from the amount of such tax to be refunded the amount of tax due under this chapter and remit the same each month to the department of revenue.

NEW SECTION.  Sec. 7   The following acts or parts of acts are each repealed:
     (1) RCW 82.35.010 (Intent) and 1979 ex.s. c 191 s 1;
     (2) RCW 82.35.020 (Definitions) and 1996 c 186 s 521 & 1979 ex.s. c 191 s 2;
     (3) RCW 82.35.040 (Issuance of certificate -- Limitations -- Tabulation of costs incurred -- Administrative rules) and 1982 1st ex.s. c 2 s 3 & 1979 ex.s. c 191 s 4;
     (4) RCW 82.35.050 (Credit against taxes -- Conditions -- Amount -- Limitations) and 1982 1st ex.s. c 2 s 1 & 1979 ex.s. c 191 s 5;
     (5) RCW 82.35.070 (Issuance of certificate or supplement and notice of refusal to issue certificate or supplement -- Certified mail) and 1979 ex.s. c 191 s 7;
     (6) RCW 82.35.080 (Revocation of certificate -- Grounds -- Continuance of certificate -- Liability for money saved -- Technical assistance) and 1999 c 358 s 15, 1996 c 186 s 522, & 1979 ex.s. c 191 s 8;
     (7) RCW 82.35.900 (Severability -- 1979 ex.s. c 191) and 1979 ex.s. c 191 s 13;
     (8) RCW 82.61.010 (Definitions) and 1995 1st sp.s. c 3 s 10, 1994 c 125 s 1, 1988 c 41 s 1, 1987 c 497 s 1, 1986 c 116 s 9, & 1985 ex.s. c 2 s 1;
     (9) RCW 82.61.030 (Tax deferral -- Eligibility) and 1987 c 497 s 3 & 1985 ex.s. c 2 s 3;
     (10) RCW 82.61.050 (Issuance of tax deferral certificate) and 1985 ex.s. c 2 s 4;
     (11) RCW 82.61.060 (Repayment schedule) and 1987 c 497 s 4 & 1985 ex.s. c 2 s 5;
     (12) RCW 82.61.080 (Applicability of general administrative provisions) and 1985 ex.s. c 2 s 7;
     (13) RCW 82.61.090 (Applications and information subject to disclosure) and 1987 c 49 s 2;
     (14) RCW 82.61.900 (Severability -- 1987 c 497) and 1987 c 497 s 5;
     (15) RCW 82.61.901 (Severability -- 1988 c 41) and 1988 c 41 s 6;
     (16) RCW 48.14.029 (Premium tax credit -- New employment for international service activities in eligible areas -- Designation of census tracts for eligibility -- Records -- Tax due upon ineligibility -- Interest assessment -- Information from employment security department) and 2003 c 248 s 3 & 1998 c 313 s 3;
     (17) RCW 82.04.4329 (Deductions -- Health insurance pool members -- Deficit assessments) and 1987 c 431 s 24;
     (18) RCW 82.08.0276 (Exemptions -- Sales of wearing apparel for use only as a sample for display for sale) and 1980 c 37 s 42;
     (19) RCW 82.08.0295 (Exemptions -- Lease amounts and repurchase amount for certain property under sale/leaseback agreement) and 1986 c 231 s 3;
     (20) RCW 82.12.0295 (Exemptions -- Lease amounts and repurchase amount for certain property under sale/leaseback agreement) and 1986 c 231 s 4;
     (21) RCW 82.12.02545 (Exemption -- Use of naval aircraft training equipment transferred due to base closure) and 1995 c 128 s 1; and
     (22) RCW 84.56.450 (Year 2000 failure -- No interest or penalties -- Payment of tax) and 1999 c 369 s 6.

NEW SECTION.  Sec. 8   This act takes effect July 1, 2006.