AN ACT Relating to distributing excise taxes on lodgings in counties that have, prior to June 26, 1975, pledged tax revenues or issued bonds for purposes of public stadium, convention, performing arts and/or visual arts center facilities; amending RCW 67.28.180; and providing an effective date.

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

Sec. 1. RCW 67.28.180 and 1987 c 483 s 1 are each amended to read as follows:

(1) Subject to the conditions set forth in subsections (2) and (3) of this section, the legislative body of any county or any city, is authorized to levy and collect a special excise tax of not to exceed two percent on the sale of or charge made for the furnishing of lodging by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property: PROVIDED, That it shall be presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or to enjoy the same.

(2) Any levy authorized by this section shall be subject to the following:

(a) Any county ordinance or resolution adopted pursuant to this section shall contain, in addition to all other provisions required to conform to this chapter, a provision allowing a credit against the county tax for the full amount of any city tax imposed pursuant to this section upon the same taxable event.

(b) In the event that any county has levied the tax authorized by this section and has, prior to June 26, 1975, either pledged the tax revenues for payment of principal and interest on city revenue or general obligation bonds authorized and issued pursuant to RCW 67.28.150 through 67.28.160 or has authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160, such county shall be exempt from the provisions of subsection (a), to the extent that the tax revenues are pledged for payment of principal and interest on bonds issued at any time, and maturing before January 1, 2013, pursuant to the provisions of RCW 67.28.150 through 67.28.160: PROVIDED, That so much of such pledged tax revenues, together with any investment earnings thereon, not immediately necessary for actual payment of principal and interest on such bonds may be used: (i) In class AA counties, for repayment either of limited tax levy general obligation bonds or of any county fund or account from which a loan was made, the proceeds from the bonds or loan being used to pay for constructing, installing, improving, and equipping stadium capital improvement projects, and to pay for any engineering, planning, financial, legal and professional services incident to the development of such stadium capital improvement projects, regardless of the date the debt for such capital improvement projects was or may be incurred; or (ii) in counties other than class AA counties, for county-owned facilities for agricultural promotion.

As used in this subsection (2)(b), "capital improvement projects" may include, but not be limited to a stadium restaurant facility, restroom facilities, artificial turf system, seating facilities, parking facilities and scoreboard and information system adjacent to or within a county owned stadium, together with equipment, utilities, accessories and appurtenances necessary thereto. The stadium restaurant authorized by this subsection (2)(b) shall be operated by a private concessionaire under a contract with the county.

(c) No city within a county exempt under subsection (2)(b) of this section may levy the tax authorized by this section so long as said county is so exempt: PROVIDED, That in the event that any city in such county has levied the tax authorized by this section and has, prior to June 26, 1975, authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160, such city may levy the tax so long as and to the extent that the tax revenues are pledged for payment of principal and interest on bonds issued pursuant to the provisions of RCW 67.28.150 through 67.28.160.

(3) Any levy authorized by this section by a county that has levied the tax authorized by this section and has, prior to June 26, 1975, either pledged the tax revenues for payment of principal and interest on city revenue or general obligation bonds authorized and issued pursuant to RCW 67.28.150 through 67.28.160 or has authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160 shall be subject to the following:

(a) From January 1, 1992, through December 31, 2000, taxes collected under this section in any calendar year in excess of five million three hundred thousand dollars and not exceeding the limits specified in this subsection (3) shall only be used for art ((~~museums,~~)) and cultural museums, the arts, ((~~and/or~~)) and the performing arts.

((~~(b)~~)) (i) For the calendar year ending December 31, 1992, the limit is $828,000.

(ii) For the calendar year ending December 31, 1993, the limit is $1,318,000.

(iii) For the calendar year ending December 31, 1994, the limit is $1,848,000.

(iv) For the calendar year ending December 31, 1995, the limit is $2,420,000.

(v) For the calendar year ending December 31, 1996, the limit is $3,037,000.

(vi) For the calendar year ending December 31, 1997, the limit is $3,704,000.

(vii) For the calendar year ending December 31, 1998, the limit is $4,424,000.

(viii) For the calendar year ending December 31, 1999, the limit is $5,202,000.

(ix) For the calendar year ending December 31, 2000, the limit is $6,042,000.

(b) From January 1, 1992, through December 31, 2000, taxes collected under this section in any calendar year in excess of the limits specified in (a)(i) through (ix) of this subsection shall be distributed as follows:

(i) Fifty percent to art and cultural museums, the arts, and the performing arts.

(ii) Fifty percent to one or more of the following: Stadium capital improvement projects, as defined in subsection (2)(b) of this section, tourism promotion that is intended to attract visitors for overnight stays, recreational sports activities, or promotion of professional and amateur sports. The legislative body of the county levying the tax in this section shall direct a portion of any moneys used for tourism and lodging promotion to benefit areas of the county outside of any city with a population greater than five hundred thousand.

(c) At least seventy percent of moneys spent under subsections (3)(a) and (3)(b)(i) of this section shall be used only for the purchase, design, construction, and remodeling of performing arts, visual arts, and cultural facilities, and for the purchase of fixed assets that will benefit art and cultural organizations. For purposes of this subsection, fixed assets are tangible objects such as machinery and other equipment intended to be held or used for ten years or more. Arts organizations receiving moneys under this subsection must be financially stable and have at least the following:

(i) A legally constituted and working board of directors;

(ii) A record of artistic and cultural accomplishments;

(iii) Been in existence and operating for at least two years;

(iv) Demonstrated ability to maintain net current liabilities at less than thirty percent of general operating expenses;

(v) Demonstrated ability to sustain operational capacity subsequent to completion of projects or purchase of machinery and equipment; and

(vi) Evidence that there has been independent financial review of the organization.

(d) From January 1, 2001, through December 31, 2012, taxes collected under this section in any calendar year in excess of five million three hundred thousand dollars and not exceeding eleven million three hundred forty-two thousand dollars shall be used only for art and cultural museums, the arts, and the performing arts.

(e) From January 1, 2001, through December 31, 2012, taxes collected under this section in any calendar year in excess of eleven million three hundred forty-two thousand dollars shall be distributed as follows:

(i) Sixty percent to art and cultural museums, the arts, and the performing arts.

(ii) Forty percent to one or more of the following: Stadium capital improvement projects, as defined in subsection (2)(b) of this section, tourism promotion that is intended to attract visitors for overnight stays, recreational sports activities, or promotion of professional and amateur sports. The legislative body of the county levying the tax in this section shall direct a portion of any moneys used for tourism and lodging promotion to benefit areas of the county outside of any city with a population greater than five hundred thousand.

(f) At least forty percent of the revenues distributed pursuant to subsections (3)(d) and (3)(e)(i) of this section shall be deposited in an account and shall be used to establish an endowment. Principal in the account shall remain permanent and irreducible. The earnings from investments of balances in the account may only be used for the purposes of subsections (3)(d) and (3)(e)(i) of this section.

(g) Moneys distributed to art and cultural museums, the arts, and performing arts shall be in addition to and may not be used to replace or supplant any other arts or cultural funding by the legislative body of the county.

(h) No taxes collected under this section may be used for the operation or maintenance of a public stadium that is financed directly or indirectly by bonds to which the tax is pledged. Expenditures for operation or maintenance include all expenditures other than expenditures that directly result in new fixed assets or that directly increase the capacity, life span, or operating economy of existing fixed assets.

((~~(c)~~)) (i) No ad valorem property taxes may be used for debt service on bonds issued for a public stadium that is financed by bonds to which the tax is pledged, unless the taxes collected under this section are or are projected to be insufficient to meet debt service requirements on such bonds.

((~~(d)~~)) (j) If a substantial part of the operation and management of a public stadium that is financed directly or indirectly by bonds to which the tax is pledged is performed by a nonpublic entity or if a public stadium is sold that is financed directly or indirectly by bonds to which the tax is pledged, any bonds to which the tax is pledged shall be retired.

((~~(e)~~)) (k) The county shall not lease a public stadium that is financed directly or indirectly by bonds to which the tax is pledged to, or authorize the use of the public stadium by, a professional major league sports franchise unless the sports franchise gives the right of first refusal to purchase the sports franchise, upon its sale, to local government. This subsection (3)((~~(e)~~)) (k) does not apply to contracts in existence on April 1, 1986.

If a court of competent jurisdiction declares any provision of this subsection (3) invalid, then that invalid provision shall be null and void and the remainder of this section is not affected.

NEW SECTION. Sec. 2. This act shall take effect January 1, 1992.