BILL REQ. #:  S-3928.5 

Read first time 01/30/14.   Referred to Committee on Trade & Economic Development.

     AN ACT Relating to a pilot program that provides incentives for investments in Washington state job creation and economic development; adding a new section to chapter 82.04 RCW; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   Businesses that invest capital create jobs and generate economic activity that supports a healthy Washington economy. The legislature finds that these investments result in future revenues that support schools and our communities. Therefore, the legislature finds that a pilot program must be conducted to evaluate the effectiveness of an incentive program for businesses that recognize the value of job creation and capital investments in Washington for its citizens.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.04 RCW to read as follows:
     (1) The department with the assistance of the department of commerce must create a pilot program that provides an incentive for businesses to create eligible new jobs and invest capital in Washington. The pilot program must include businesses with eligible projects that allow a business tax credit against the actual revenues generated from the investment. The pilot program is expected to generate investments that would most likely otherwise not have occurred without the incentive program. The incentive program is intended to be tax neutral by offsetting tax credits against new tax revenues created by eligible projects. The department and the department of commerce must develop the program for the purpose of evaluating its economic effectiveness. The program must include up to five eligible projects including but not limited to industrial and manufacturing projects across the state.
     (2) A business is allowed a credit against the tax due under this chapter as provided in this section. In computing the tax imposed under this chapter, a credit is allowed for employers participating in the jobs and economic development incentive pilot program created in subsection (1) of this section. The credit applies to eligible new jobs or new capital investments made by a business. The credit may not exceed the actual new tax revenues created by eligible projects, and the business must reinvest the value of the tax credit in their business in Washington. If at any time the department finds that a person is not eligible for a tax credit under this section, the amount of taxes for which a credit has been used are immediately due. The department must assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW.
     (3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Eligible project" means a project that would add at least two hundred fifty thousand dollars of capital investment or will create at least three full-time jobs, and will generate additional tax revenues to the state or the local government, which would not have been generated without the incentive program provided in this section.
     (b) "Eligible new job" means a job that did not exist in the business in this state prior to the subject business's application to the department under this section for an eligible project.
     (c) "New tax revenues created by eligible projects" means tax revenue generated as a result of the incentive program including taxes due under this chapter and chapters 82.08 and 82.12 RCW.
     (4) The department and the department of commerce must develop performance metrics including the number of eligible new jobs created, capital investments made, and new tax revenues created by eligible projects. The department of commerce must provide annual updates and report its findings and recommendations on the effectiveness of the pilot program to the appropriate committees of the legislature by December 1, 2020.
     (5) This act expires December 31, 2021.