HOUSE BILL REPORT

                 SSB 5301

                    As Passed Legislature

Title:  An act relating to public facilities.

Brief Description:  Authorizing certain cities and counties bordering the Pacific Ocean to levy a special excise tax to provide funding for public facilities.

Sponsor(s):  Senate Committee on Governmental Operations (originally sponsored by Senators Snyder and Conner).

Brief History:

  Reported by House Committee on:

Local Government, April 3, 1991, DP;

Revenue, April 6, 1991, DP;

House Amended;

Passed House, April 18, 1991, 77-20;

House receded;

Passed Legislature, 96-0.

HOUSE COMMITTEE ON

LOCAL GOVERNMENT

Majority Report: Do pass.  Signed by 14 members:  Representatives Haugen, Chair; Cooper, Vice Chair; Ferguson, Ranking Minority Member; Mitchell, Assistant Ranking Minority Member; Bray; Edmondson; Franklin; Horn; Nealey; Nelson; Rayburn; Wood; Wynne; and Zellinsky.

Staff:  Steve Lundin (786-7127).

HOUSE COMMITTEE ON

REVENUE

Majority Report: Do pass.  Signed by 15 members:  Representatives Wang, Chair; Fraser, Vice Chair; Holland, Ranking Minority Member; Wynne, Assistant Ranking Minority Member; Appelwick; Belcher; Brumsickle; Day; Leonard; Morris; Morton; Phillips; Rust; Silver; and Van Luven.

Staff:  Robin Appleford (786-7093).

Background:  Legislation has been enacted authorizing a variety of local governments to impose taxes on hotel or motel room rental charges to finance a variety of programs or facilities.  These taxes are in addition to the state and local sales and use taxes that are imposed on hotel or motel room rental charges.

The hotel/motel room rental excise taxes are as follows:

oEvery county, city and town is authorized to impose a hotel/motel room rental excise tax of up to 2 percent to finance a variety of facilities and programs, including the construction and operation of stadiums, convention center facilities, performing arts facilities, and visual arts center facilities, refurbishing and operating a steam railway for tourism purposes, and promoting tourism.  This tax is a credit against the state sales and use taxes that are imposed on hotel/motel room rental charges.

oBy a somewhat general description, Bellevue is authorized to impose a hotel/motel room rental excise tax of up to 3 percent to finance a convention and trade center.

oPierce County is authorized to impose a hotel/motel room rental excise tax of up to 2 percent to finance visitor and convention promotion and development purposes.

oPierce County is authorized to impose a hotel/motel room rental excise tax of up to 3 percent to finance the construction and operation of an indoor aquatic facility.

oA public facility district that is created in a county with a population of 300,000 or more, that is located at least 100 miles from a state convention center, i.e. Spokane County, is authorized to impose a hotel/motel room rental excise tax of up to 2 percent to finance the construction and operation of convention, sports, entertainment, trade, and related facilities.

oThurston County is authorized to impose a hotel/motel room rental excise tax of up to 3 percent to finance the construction and operation of an Olympic academy facility.

oBy a somewhat general description, Yakima County and the cities and towns in Yakima County, are authorized to impose a hotel/motel room rental excise tax of up to 2 percent to finance stadiums, convention centers, performing arts facilities, and visual arts facilities, and for advertising and publicizing for the promotion of tourism.

oOcean Shores is authorized to impose a hotel/motel room rental excise tax of up to 3 percent to finance anything.

oThe State imposes hotel/motel room rental excise taxes in Seattle, at a rate of 6 percent, and the remainder of King County, at a rate of 2.4 percent, to finance the state convention center.  On January 1, 1993, the rates will increase to 7 percent in Seattle and 2.8 percent in the rest of King County.

Summary of Bill:  The governing body of any city bordering the Pacific Ocean with a population of at least 1,000, and the county in which such city is located, may levy a special excise tax of up to 3 percent on hotel/motel room rental charges.  This classification appears to include Pacific County, Long Beach, Grays Harbor County, Ocean Shores, Westport, San Juan County, Friday Harbor, Whatcom County, and Blaine.  Receipts from this tax may be expended for the construction and operation of convention centers, performing arts centers, and visual arts facilities, and for promoting tourism.  Any city tax is credited against the county tax so that the total tax rate cannot exceed 3 percent.

The similar tax that is granted expressly to Ocean Shores is repealed.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  (Local Government) Given the current economic downturn in southwestern Washington, it would be of significant benefit to both employment and tourism if a multi-purpose joint convention center could be developed west of the downtown core of Long Beach.  It would seat approximately 700 for conferences and conventions, and would have restaurant facilities.  A roofed structure would be especially beneficial for events in the off season.

(Revenue) Long Beach would like to build a small convention center with the proceeds of the tax.  The city has done a lot to help itself along, but has been adversely affected by the crisis in the timber industry.  The city will be depending upon tourism to help revitalize the area, and will be assisted by this facility.

Testimony Against:  (Local Government) None.

(Revenue) None.

Witnesses:  (Local Government) (All pro):  Senator Sid Snyder, Prime Sponsor; Jim Neva, city of Westport; Dick Sande, Pacific County Commissioner; Nabiel Shawa, Pacific County Department of General Administration; David Glasson, city administrator, Long Beach; and Mayor Fred Rutherford, city of Long Beach.

(Revenue) Fred Rutherford, Mayor and David Glasson, City Administrator, Long Beach; Nabiel Shawa and Dick Sande, Pacific County; Jim Neva and Michael Kitchel, Westport; and Becky Bogard, Washington State Hotel Motel Association (all in favor).