BILL REQ. #:  S-2107.3 

READ FIRST TIME 03/05/07.   

     AN ACT Relating to cooperative agreements concerning the timber harvest excise taxation of timber harvests on fee land within the boundaries of the Quinault Indian Reservation; amending RCW 84.33.081; adding a new section to chapter 43.06 RCW; adding a new section to chapter 84.33 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature finds that in certain areas of taxation, where both a tribe and the state have jurisdiction and where there are challenges to administering a tax, tax agreements between the state and a tribe are a sound approach to resolving issues and simplifying processes. The legislature specifically recognizes that in the area of the timber excise tax, within the boundaries of the Quinault Reservation, the state faces challenges due to access to land and access to taxpayers. The activity being taxed takes place entirely within the reservation and is regulated by the tribe and by the state. The legislature therefore finds that shifting from a state administered tax, to a tribal tax credited against the state tax, will bring benefits such as consistent taxation, improved forest practices and water quality, improved fisheries, and sustainability. The legislature intends to further the government-to-government relationship between the state of Washington and the Quinault Nation by authorizing the governor to enter into an agreement related to timber harvest excise taxes.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.06 RCW to read as follows:
     (1) The governor may enter into a timber harvest excise tax agreement with the Quinault Nation concerning the harvest of timber. The tax agreement must meet the requirements under this section.
     (2) The agreement shall be in regard to timber harvests on fee land within the exterior boundaries of the reservation of the Quinault Nation and are not in regard to timber harvests on trust land or land owned by the tribe within the exterior boundaries of the reservation.
     (3) The agreement must provide that the tribal tax shall be credited against the state and county taxes otherwise due under RCW 84.33.041 and 84.33.051 with respect to timber harvested on fee land within the exterior boundaries of the reservation of the Quinault Nation, and that the tribal tax rate be equal to the rate of the state tax imposed under RCW 84.33.041.
     (4) Tribal ordinances for timber harvest excise taxation, or other authorizing tribal laws, which implement the timber harvest excise tax agreement with the state, must incorporate or contain provisions identical to chapter 84.33 RCW that relate to the tax rates and measures, such as stumpage values.
     (5) The agreement must be for renewable periods of no more than eight years.
     (6) The agreement must include provisions for compliance, such as inspection procedures, recordkeeping, and audit requirements.
     (7) Tax revenue retained by the tribe must be used for essential government services. Use of tax revenue for subsidization of timber harvesters is prohibited.
     (8) The governor may delegate the power to negotiate the timber harvest excise tax agreement to the department of revenue.
     (9) Information received by the state or open to state review under the terms of the timber harvest excise tax agreement is subject to the provisions of RCW 82.32.330. The department of revenue may enter into an information sharing agreement with the tribe to facilitate sharing information to improve tax collection.
     (10) The timber harvest excise tax agreement must include dispute resolution procedures, contract termination procedures, and provisions delineating the respective roles and responsibilities of the tribe and the department of revenue. The timber harvest excise tax agreement may include provisions to resolve disputes using a nonjudicial process, such as mediation.
     (11) The timber harvest excise tax agreement must include provisions to require taxpayers to submit information that may be required by the department of revenue or tribe.
     (12) For the purposes of this section:
     (a) "Essential government services" means services such as forest land management; protection, enhancement, regulation, and stewardship of forested land; land consolidation; tribal administration; public facilities; fire; police; public health; education; job services; sewer; water; environmental and land use; transportation; utility services; and public facilities serving economic development purposes as those terms are defined in RCW 82.14.370(3)(c);
     (b) "Forest land" has the same meaning as in RCW 84.33.035;
     (c) "Harvester" has the same meaning as in RCW 84.33.035; and
     (d) "Timber" has the same meaning as in RCW 84.33.035.

NEW SECTION.  Sec. 3   A new section is added to chapter 84.33 RCW to read as follows:
     A credit is allowed against the tax imposed under RCW 84.33.041 and 84.33.051, with respect to timber harvested on fee land within the exterior boundaries of the reservation of the Quinault Nation, for a tribal tax imposed on the same taxable activities under an agreement authorized by section 2 of this act. Refunds may not be given in place of credits. Credit may not be claimed in excess of the tax otherwise due.

Sec. 4   RCW 84.33.081 and 1985 c 184 s 1 are each amended to read as follows:
     (1) On the last business day of the second month of each calendar quarter, the state treasurer shall distribute from the timber tax distribution account to each county the amount of tax collected on behalf of each county under RCW 84.33.051, less each county's proportionate share of appropriations for collection and administration activities under RCW 84.33.051, and shall transfer to the state general fund the amount of tax collected on behalf of the state under RCW 84.33.041, less the amount of the distribution under subsection (7) of this section and the state's proportionate share of appropriations for collection and administration activities under RCW 84.33.041. The county treasurer shall deposit moneys received under this section in a county timber tax account which shall be established by each county. Following receipt of moneys under this section, the county treasurer shall make distributions from any moneys available in the county timber tax account to taxing districts in the county, except the state, under subsections (2) through (4) of this section.
     (2) From moneys available, there first shall be a distribution to each taxing district having debt service payments due during the calendar year, based upon bonds issued under authority of a vote of the people conducted pursuant to RCW 84.52.056 and based upon excess levies for a capital project fund authorized pursuant to RCW 84.52.053, of an amount equal to the timber assessed value of the district multiplied by the tax rate levied for payment of the debt service and capital projects: PROVIDED, That in respect to levies for a debt service or capital project fund authorized before July 1, 1984, the amount allocated shall not be less than an amount equal to the same percentage of such debt service or capital project fund represented by timber tax allocations to such payments in calendar year 1984. Distribution under this subsection (2) shall be used only for debt service and capital projects payments. The distribution under this subsection shall be made as follows: One-half of such amount shall be distributed in the first quarter of the year and one-half shall be distributed in the third quarter of the year.
     (3) From the moneys remaining after the distributions under subsection (2) of this section, the county treasurer shall distribute to each school district an amount equal to one-half of the timber assessed value of the district or eighty percent of the timber roll of such district in calendar year 1983 as determined under this chapter, whichever is greater, multiplied by the tax rate, if any, levied by the district under RCW 84.52.052 or 84.52.053 for purposes other than debt service payments and capital projects supported under subsection (2) of this section. The distribution under this subsection shall be made as follows: One-half of such amount shall be distributed in the first quarter of the year and one-half shall be distributed in the third quarter of the year.
     (4) After the distributions directed under subsections (2) and (3) of this section, if any, each taxing district shall receive an amount equal to the timber assessed value of the district multiplied by the tax rate, if any, levied as a regular levy of the district or as a special levy not included in subsection (2) or (3) of this section.
     (5) If there are insufficient moneys in the county timber tax account to make full distribution under subsection (4) of this section, the county treasurer shall multiply the amount to be distributed to each taxing district under that subsection by a fraction. The numerator of the fraction is the county timber tax account balance before making the distribution under that subsection. The denominator of the fraction is the account balance which would be required to make full distribution under that subsection.
     (6) After making the distributions under subsections (2) through (4) of this section in the full amount indicated for the calendar year, the county treasurer shall place any excess revenue up to twenty percent of the total distributions made for the year under subsections (2) through (4) of this section in a reserve status until the beginning of the next calendar year. Any moneys remaining in the county timber tax account after this amount is placed in reserve shall be distributed to each taxing district in the county in the same proportions as the distributions made under subsection (4) of this section.
     (7) On the last business day of the second month of each calendar quarter, the state treasurer shall distribute from the timber tax distribution account to the county an amount of tax collected by the state under RCW 84.33.041 equal to the amount of any tribal tax credited against the county's tax under an agreement entered into under section 2 of this act.