Port districts are special purpose districts empowered to acquire, construct, maintain, operate, develop, and regulate harbor improvements; rail or motor transfer and terminal facilities; water transfer and terminal facilities; air transfer or terminal facilities; other commercial transportation, transfer, handling, storage, and terminal facilities; and industrial improvements.
A port district can be formed if at least 10 percent of the registered voters within a county petition for the formation of the district, and the district's formation is approved by voters at an election. A port district may be coextensive with a county. Port districts are governed by commissions of either three or five commissioners.
Port districts can charge service fees for the use of their facilities, and can also raise revenue through property tax levies. A property tax is a tax levied on all real and personal property based on the value of the property, unless the property is subject to an exemption. There are two significant limitations on property tax in Washington. The first is a constitutional limitation. Article VII, section 2 of the state Constitution limits the amount of annual tax, from all sources, that may be levied upon property to 1 percent of the total value of that property. This limitation means that, without specific authorization from voters, the maximum tax that can be imposed per $1,000 of value is $10. The other limit is statutory. Generally, the amount of property tax levied by a taxing district cannot be increased by more than 1 percent of the amount that was levied the prior year. In other words, the maximum annual levy is 101 percent of the prior year's levy. There are additional limits on the aggregate amount of property tax that taxing districts can impose.
A port district can impose an annual levy of up to 45 cents per $1,000 of assessed value of the taxable property within the district for general port purposes. An additional levy, with voter approval, can be imposed for dredging, canal construction, and land leveling or filling at a rate of up to 45 cents per $1,000 of assessed value. If a port has created an industrial development district within the port, it may also impose a levy for six years at up to the same 45 cents per $1,000 of assessed value to be used for harbor improvements and industrial development. This levy can be reimposed for a subsequent six years with voter approval, and port districts in counties bordering the Pacific Ocean can reimpose the levy for a third and final six-year period with voter approval.
Port districts are authorized to enter into a mutual agreement to jointly exercise the powers granted to each individual district.
In addition to operating jointly, port districts can consolidate. Consolidation can be initiated in two ways. First, the commissioners of the districts to be consolidated can agree to present a joint consolidation resolution to the voters for approval. Alternatively, at least 10 percent of the voters in each district can petition for consolidation. In either case, the petition or resolution must identify, among other things, the assets and liabilities of the districts, the proposed number of commissioners, and the proposed name of the consolidated district. If a majority of voters in both districts approve consolidation, then the districts are consolidated. The consolidated district has all the powers, including the power to levy and collect taxes, that each of the districts possessed.
If the consolidated port district includes areas from two or more counties, then the principal county auditor and county treasurer of the district are those of the county which has the largest assessed taxable property valuation. When levying taxes within the consolidated district, the ratio of tax imposed within each county must be the same as the ratio of the value of the property in each county.
Two or more port districts that are jointly operating under a mutual agreement may levy and collect property taxes jointly if:
When levying the property tax, the port district commissioners must certify the levy amounts to each county auditor, who then provide a certificate to the county commissions of each county specifying the proportion of the taxes to be levied within that county. The county commissioners must then levy a tax to meet their county's proportionate share of the levy. The portion of the tax levied in each county must be proportional to the value of the property within each county, as compared to the value of the property within the jointly taxing port districts as a whole.
Two or more port districts conducting a joint levy are considered a taxing district for the purposes of property taxation.
If port districts that were operating together cease to operate jointly, any debts and assets must be divided between the districts as provided for in the agreement for joint operation. If no provision was made in the agreement, then the debts and assets must be divided in the same proportion as the property tax assessments were divided among the districts.
(In support) This bill is important for a specific set of counties that have joined into a regional port authority. The bill is written generally, but it is unlikely to be widely applied as most port districts are not countywide. The functional consolidation of the regional port authority was recommended by a citizen panel. It allowed a merger of management and made the ports' operations more efficient. The ports did not fully consolidate so they could keep the same number of commissioners. Instead, they have agreed to manage ports together, using a joint operating agreement, and with a required supermajority of commissioners to take action. This bill allows tax assessments to be made in both counties equally and equitably. This bill does not allow the ports to go beyond what is currently collected, and the ports would still be constrained by the 1 percent annual levy increase limitation. The taxes would still be levied separately, but this bill would allow for the rates to be fair and unified. The current rates levied are lower than the total legal authority. This bill would require a joint levy to be approved by two-thirds of both boards. These commissioners are directly accountable to voters. This allows for improved management of the ports, would strengthen regional port operations, and lets both counties feel that they have the same stake in the process. This would benefit taxpayers in both counties. There is new development occurring within these communities that will drive rates down. This bill would allow the ports to continue investing in development and the airport going forward. Functional consolidation is a boost to the creditworthiness and credit of both ports. The ports plan together, manage together, and a single approved budget is an advantage if they choose to enter into financial markets. Labor has benefited from functional consolidation, and new investments are being made in the county because of the ports. This investment creates family wage careers.
(Opposed) None.