BILL REQ. #:  S-4041.1 

Read first time 01/26/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to improving accountability by requiring that new tax preferences have a net benefit to the state; and adding new sections to chapter 43.135 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 43.135 RCW to read as follows:
     (1) For any bill introduced in either the house of representatives or the senate that adopts a new tax preference or expands or extends an existing tax preference, the bill must require that the tax preference have a net benefit to the state.
     (2) "Net benefit to the state" means the amount of economic benefit to the state in jobs created or retained, if the stated legislative intent of the tax preference was job creation or retention, plus the amount of increased economic activity directly related to the tax preference claimed, measured by the amount of taxes paid by the increased economic activity claimed, minus the annual amount of taxpayer savings.
     (a) For purposes of this subsection (2), the amount of economic benefit to the state in jobs created or retained must be measured by state and local taxes paid by an employee, which must be calculated as a percentage of the annual wage for each employment position as follows:
     (i) For an annual wage of less than twenty thousand dollars, the percentage is 17.3 percent;
     (ii) For an annual wage of more than twenty thousand dollars and less than thirty-seven thousand dollars, the percentage is 12.7 percent;
     (iii) For an annual wage of more than thirty-seven thousand dollars and less than sixty-two thousand dollars, the percentage is 11.2 percent;
     (iv) For an annual wage of more than sixty-two thousand dollars and less than ninety-nine thousand dollars, the percentage is 9.5 percent; and
     (v) For an annual wage of more than ninety-nine thousand dollars, the percentage is 7.6 percent.
     (b) For purposes of this subsection (2), the amount of increased economic activity directly related to the tax preference claimed must be measured by the increased taxes paid by the taxpayer annually on the activity directly related to the tax preference minus the annual amount of taxpayer savings.
     (3) For purposes of this section, "tax preference" has the same meaning as in RCW 43.136.021.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.135 RCW to read as follows:
     (1) Any bill that is enacted without the net benefit to the state provisions required by section 1 of this act does not take effect.
     (2) The department of revenue must provide written notice that such bill did not take effect to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.