BILL REQ. #:  S-4812.1 

Read first time 01/29/08.   Referred to Committee on Ways & Means.

     AN ACT Relating to a business and occupation tax credit for qualified preproduction development expenditures for polysilicon manufacturers; adding a new section to chapter 82.04 RCW; and creating a new section.

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)(a) In computing the tax imposed under this chapter, a credit is allowed for each person for qualified preproduction development expenditures occurring after January 1, 2008.
     (b) Any credits earned under this section must be accrued and carried forward and may not be used until July 1, 2009 and until a polysilicon manufacturer expends five hundred million dollars on qualified preproduction development expenditures. These carryover credits may be used at any time thereafter, and may be carried over until used. Refunds may not be granted in the place of a credit.
     (2) The credit is equal to the amount of qualified preproduction development expenditures of a person, multiplied by the rate of one and one-half percent.
     (3) Except as provided in subsection (1)(b) of this section, the credit must be taken against taxes due for the same calendar year in which the qualified preproduction development expenditures are incurred. Credit earned on or after July 1, 2009, may not be carried over. The credit for each calendar year must not exceed the amount of tax otherwise due under this chapter for the calendar year. Refunds may not be granted in the place of a credit.
     (4) Any person claiming the credit must file an affidavit form prescribed by the department that includes the amount of the credit claimed and such additional information as the department may prescribe.
     (5) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Person" means a person as defined in RCW 82.04.030, who is a manufacturer or processor for hire of commercial airplanes, or components of such airplanes, as those terms are defined in RCW 82.32.550.
     (b) "Qualified preproduction development" means preproduction development performed in the field of polysilicon manufacturing in a county along the boundary line between Washington and Oregon with a population greater than fifty thousand but less than one hundred thousand.
     (c) "Qualified preproduction development expenditures" means expenses including wages and benefits directly incurred in the design and engineering of a polysilicon plant, including associated workforce training requirements and utility extensions associated thereto. The term includes capital costs and overhead, such as expenses for land, structures, or depreciable property.
     (d) "Taxable amount" means the taxable amount subject to the tax imposed in this chapter required to be reported on the person's tax returns during the year in which the credit is claimed, less any taxable amount for which a credit is allowed under RCW 82.04.440.
     (6) In addition to all other requirements under this title, a person taking the credit under this section must report as required under RCW 82.32.545.
     (7) Credit may not be claimed for expenditures for which a credit is claimed under RCW 82.04.4452.

NEW SECTION.  Sec. 2   If a port in a county along the boundary line between Washington and Oregon with a population greater than fifty thousand but less than one hundred thousand and a polysilicon manufacturer do not sign a memorandum of understanding to site a polysilicon plant that meets the definition of "qualified preproduction development" in section 1 of this act by October 1, 2008, section 1 of this act is null and void.