BILL REQ. #:  S-0594.1 

Read first time 01/22/2007.   Referred to Committee on Economic Development, Trade & Management.

     AN ACT Relating to creating a tax credit against the business and occupation tax for persons who make contributions to the economic development strategic reserve account; amending RCW 43.330.250; and adding a new section to chapter 82.04 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     (1) Subject to the limitations in this section, a credit is allowed against the tax imposed under this chapter for contributions made by a person to the state treasurer for deposit in the economic development strategic reserve account created in RCW 43.330.250.
     (2) The person must make the contribution before claiming a credit authorized under this section. Credits earned under this section may be claimed against taxes due for the calendar year in which the contribution is made. The amount of credit claimed for a reporting period shall not exceed the tax otherwise due under this chapter for that reporting period. No person may claim more than two hundred fifty dollars of credit in any calendar year, including credit carried over from a previous calendar year. No refunds may be granted for any unused credits.
     (3) Any amount of tax credit otherwise allowable under this section not claimed by the person in any calendar year may be carried over and claimed against the person's tax liability for the next succeeding calendar year. Any credit remaining unused in the next succeeding calendar year may be carried forward and claimed against the person's tax liability for the second succeeding calendar year; and any credit not used in that second succeeding calendar year may be carried over and claimed against the person's tax liability for the third succeeding calendar year, but may not be carried over for any calendar year thereafter.
     (4) Credits are available on a first in-time basis. The department shall disallow any credits, or portions thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed two million dollars. If this limitation is reached, the department shall notify any person who has claimed tax credits in excess of the two million dollar limitation in this subsection. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice. The department shall not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice, if the amount due is paid by the due date specified in the notice, or any extension thereof.
     (5) To claim a credit under this section, a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
     (6) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
     (7) The state treasurer and any person making contributions under the provisions of this section shall provide to the department, upon request, such information needed to verify eligibility for credit under this section, including information regarding contributions received by the treasurer for deposit into the economic development strategic reserve account.
     (8) The department shall not allow any credit under this section before July 1, 2007.
     (9) No credit may be earned for contributions made on or after July 1, 2017.

Sec. 2   RCW 43.330.250 and 2005 c 427 s 1 are each amended to read as follows:
     (1) The economic development strategic reserve account is created in the state treasury to be used only for the purposes of this section.
     (2) Only the governor, with the recommendation of the director of the department of community, trade, and economic development and the economic development commission, may authorize expenditures from the account.
     (3) Expenditures from the account shall be made in an amount sufficient to fund ((a minimum of one)) the executive director and such other staff positions for the economic development commission, as the commission determines are necessary, and to cover any other operational costs of the commission.
     (4) Expenditures from the account may be made to prevent closure of a business or facility, to prevent relocation of a business or facility in the state to a location outside the state, or to recruit a business or facility to the state. Expenditures may be authorized for:
     (a) Workforce development;
     (b) Public infrastructure needed to support or sustain the operations of the business or facility; and
     (c) Other lawfully provided assistance((,)) including, but not limited to, technical assistance, environmental analysis, relocation assistance, and planning assistance. Funding may be provided for such assistance only when it is in the public interest and may only be provided under a contractual arrangement ensuring that the state will receive appropriate consideration, such as an assurance of job creation or retention.
     (5) The funds shall not be expended from the account unless:
     (a) The circumstances are such that time does not permit the director of the department of community, trade, and economic development or the business or facility to secure funding from other state sources;
     (b) The business or facility produces or will produce significant long-term economic benefits to the state, a region of the state, or a particular community in the state;
     (c) The business or facility does not require continuing state support;
     (d) The expenditure will result in new jobs, job retention, or higher incomes for citizens of the state;
     (e) The expenditure will not supplant private investment; and
     (f) The expenditure is accompanied by private investment.
     (6) No more than three million dollars per year may be expended from the account for the purpose of assisting an individual business or facility pursuant to the authority specified in this section.
     (7) If the account balance in the strategic reserve account exceeds ((fifteen)) twenty million dollars at any time, the amount in excess of ((fifteen)) twenty million dollars shall be transferred to the education construction account.