BILL REQ. #:  H-2897.2 

Read first time 01/15/14.   Referred to Committee on Agriculture & Natural Resources.

     AN ACT Relating to the sales and use tax exemption for qualifying livestock nutrient management equipment and facilities; amending RCW 82.08.890; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) It is the intent of this act to extend the retail sales and use tax exemption for nutrient management equipment to nutrient handling businesses that contract with farmers as part of the farm plan relating to nutrient management. The legislature finds that the equipment required for nutrient management is costly and therefore has provided farmers with a sales and use tax exemption for this equipment, including labor and materials required for proper installation, repairing, and cleaning of this equipment. The legislature further finds that farmers that do not own this equipment need to contract with nutrient handling businesses for this specific service as part of their nutrient management plan. These nutrient handling businesses are currently not afforded the same tax treatment as farmers for the nutrient management equipment used for the proper handling of livestock manure required under every farm plan. Therefore, the legislature intends to incentivize nutrient handling businesses to adopt the latest technology for effective and environmentally healthy application of livestock manure and to make compliance with the nutrient management portion of a farm plan more affordable for farmers by reducing the overall cost of the equipment needed for proper compliance.
     (2) It is the intent of this act to extend the sales and use tax exemption for nutrient management equipment to nutrient handling businesses for the purpose described under RCW 82.32.808(2)(e). The legislature further intends to review the tax exemption and its actual fiscal impact on state revenues to determine if the fiscal impact to state revenues reasonably conforms to the fiscal estimate in the fiscal note for this act.

Sec. 2   RCW 82.08.890 and 2010 1st sp.s. c 23 s 601 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales to eligible persons of:
     (a) Qualifying livestock nutrient management equipment;
     (b) Labor and services rendered in respect to installing, repairing, cleaning, altering, or improving qualifying livestock nutrient management equipment; and
     (c)(i) Labor and services rendered in respect to repairing, cleaning, altering, or improving of qualifying livestock nutrient management facilities, or to tangible personal property that becomes an ingredient or component of qualifying livestock nutrient management facilities in the course of repairing, cleaning, altering, or improving of such facilities.
     (ii) The exemption provided in this subsection (1)(c) does not apply to the sale of or charge made for: (A) Labor and services rendered in respect to the constructing of new, or replacing previously existing, qualifying livestock nutrient management facilities; or (B) tangible personal property that becomes an ingredient or component of qualifying livestock nutrient management facilities during the course of constructing new, or replacing previously existing, qualifying livestock nutrient management facilities.
     (2) The exemption provided in subsection (1) of this section applies to sales made after the livestock nutrient management plan is: (a) Certified under chapter 90.64 RCW; (b) approved as part of the permit issued under chapter 90.48 RCW; or (c) approved as required under subsection (4)(c)(((iii))) (i)(C) of this section.
     (3)(a) The department of revenue must provide an exemption certificate to an eligible person upon application by that person. The department of agriculture must provide a list of eligible persons, as defined in subsection (4)(c)(i)(A) and (((ii))) (B) of this section, to the department of revenue. Conservation districts must maintain lists of eligible persons as defined in subsection (4)(c)(((iii))) (i)(C) of this section to allow the department of revenue to verify eligibility. The application must be in a form and manner prescribed by the department and must contain information regarding the location of the dairy or animal feeding operation and other information the department may require.
     (b) A person claiming an exemption under this section must keep records necessary for the department to verify eligibility under this section. The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
     (4) The definitions in this subsection apply to this section and RCW 82.12.890 unless the context clearly requires otherwise:
     (a) "Animal feeding operation" means a lot or facility, other than an aquatic animal production facility, where the following conditions are met:
     (i) Animals, other than aquatic animals, have been, are, or will be stabled or confined and fed or maintained for a total of forty-five days or more in any twelve-month period; and
     (ii) Crops, vegetation, forage growth, or postharvest residues are not sustained in the normal growing season over any portion of the lot or facility.
     (b) "Conservation district" means a subdivision of state government organized under chapter 89.08 RCW.
     (c) "Eligible person" means a person:
     (i)(A) Licensed to produce milk under chapter 15.36 RCW who has a certified dairy nutrient management plan, as required by chapter 90.64 RCW;
     (((ii))) (B) Who owns an animal feeding operation and has a permit issued under chapter 90.48 RCW; or
     (((iii))) (C) Who owns an animal feeding operation and has a nutrient management plan approved by a conservation district as meeting natural resource conservation service field office technical guide standards and who possesses an exemption certificate under RCW 82.08.855.
     (ii)(A) That has a contract with an "eligible person" described under (c)(i) of this subsection (4) to assume temporary control or possession of livestock manure and arranges for transport to, and utilization at, an importing operation or other location; or
     (B) That transports or land applies livestock manure as a contract agent for an "eligible person" described under (c)(i) or (c)(ii)(A) of this subsection (4) under the direction of such eligible person.
     (d) "Handling and treatment of livestock manure" means the activities of collecting, storing, moving, or transporting livestock manure, separating livestock manure solids from liquids, or applying livestock manure to the agricultural lands of an eligible person other than through the use of pivot or linear type traveling irrigation systems.
     (e) "Permit" means either a state waste discharge permit or a national pollutant discharge elimination system permit, or both.
     (f) "Qualifying livestock nutrient management equipment" means the following tangible personal property for exclusive use in the handling and treatment of livestock manure, including repair and replacement parts for such equipment: (i) Aerators; (ii) agitators; (iii) augers; (iv) conveyers; (v) gutter cleaners; (vi) hard-hose reel traveler irrigation systems; (vii) lagoon and pond liners and floating covers; (viii) loaders; (ix) manure composting devices; (x) manure spreaders; (xi) manure tank wagons; (xii) manure vacuum tanks; (xiii) poultry house cleaners; (xiv) poultry house flame sterilizers; (xv) poultry house washers; (xvi) poultry litter saver machines; (xvii) pipes; (xviii) pumps; (xix) scrapers; (xx) separators; (xxi) slurry injectors and hoses; and (xxii) wheelbarrows, shovels, and pitchforks.
     (g) "Qualifying livestock nutrient management facilities" means the following structures and facilities for exclusive use in the handling and treatment of livestock manure: (i) Flush systems; (ii) lagoons; (iii) liquid livestock manure storage structures, such as concrete tanks or glass-lined steel tanks; and (iv) structures used solely for the dry storage of manure, including roofed stacking facilities.
     (5) The exemption under this section does not apply to sales made from July 1, 2010, through June 30, 2013.

NEW SECTION.  Sec. 3   This act expires July 1, 2024.