Senate bill would benefit manufacturing

By Kristi Pihl, Tri-City HeraldFebruary 17, 2014 

Sen. Sharon Brown and Kennewick Mayor Steve Young hope a proposed pilot program will help the Tri-Cities and other areas draw in more manufacturers.

Together, they came up with an idea that would allow manufacturers to reinvest some of what they would normally pay in business and occupation tax back into their business.

The pilot program laid out in Senate Bill 6515 would allow five new manufacturing facilities statewide to receive a tax credit for a portion of each of their construction costs. At least two would have to be in Eastern Washington.

The goal, Young said, is to address Washington's lack of incentives for attracting businesses. And when it comes to bringing in new and expanding businesses, it's a competition with the rest of the U.S.

Each company would get a tax credit equal to their state and local retail sales taxes on the construction. The credit will max out after a project reaches $10 million.

The project must be a new building or multiple new buildings at a single site that are used primarily for manufacturing.

Today at 5 p.m. is the cutoff for voting on bills in their house of origin. The bill for the pilot program has passed the Trade & Economic Development committee and the Senate Committee on Ways & Means but still needs to be taken to a floor vote.

Businesses would have the flexibility to invest some of their business and occupation tax back into the company to hire more employees or to expand, Brown, R-Kennewick, told the Trade & Economic Development committee.

"This is just smart economic development which results in jobs," she said.

Young said the proposal came out of an idea to have zones where business could locate and be exempt from paying business and occupation taxes as long as they reinvest that money to expand their business.

For example, New York has created tax free zones where businesses can open and expand. According to the Start-Up NY initiative, those businesses can be free from business, corporate, state, local, sales and property taxes for a decade.

Young said Washington can't go quite that far because the state does not have an income tax.

But "we needed to have something that gave us an incentive to get businesses in here."

The Tri-Cities needs to stop relying on Hanford and work on creating the future of the local economy, Young said. Bringing in more manufacturing also means bringing in jobs that pay well enough to support a family.

As mayor, Young's goal is to see 1,000 new jobs created in Kennewick's urban growth area. The city is in the process of getting that area expanded by 1,263 acres south of Interstate 82 and west of Highway 395 specifically for industrial development.

Benton County commissioners have not voted on the proposal yet. And Young said the city still will need to put in infrastructure to the area. City officials are in discussions with the state Department of Transportation on adding an interchange to connect Hildebrand Boulevard across I-82.

The pilot program was supported by the Tri-City Development Council, the city of Kennewick and the Tri-City Regional Chamber of Commerce.

Carl Adrian, TRIDEC's president and CEO, told the Trade & Economic Development committee that it represents a measured approach that is a good step forward to addressing what the state needs to encourage businesses to choose Washington communities.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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