HOUSE BILL REPORT

                  HB 1420

                    As Passed Legislature

Title:  An act relating to local public health financing.

Brief Description:  Modifying local public health financing.

Sponsors:  By House Committee on Appropriations (originally sponsored by  Representatives McDonald, Regala, Huff, Talcott, Conway, Smith, Mitchell, Fisher and Bush).

Brief History:

Committee Activity:

Appropriations:  3/3/97, 4/2/97 [DP].

Floor Activity:

Passed House:  4/14/97, 88‑9.

Passed Legislature.

HOUSE COMMITTEE ON APPROPRIATIONS

Majority Report:  Do pass.  Signed by 31 members:  Representatives Huff, Chairman; Alexander, Vice Chairman; Clements, Vice Chairman; Wensman, Vice Chairman; H. Sommers, Ranking Minority Member; Doumit, Assistant Ranking Minority Member; Gombosky, Assistant Ranking Minority Member; Benson; Carlson; Chopp; Cody; Cooke; Crouse; Dyer; Grant; Keiser; Kenney; Kessler; Lambert; Linville; Lisk; Mastin; McMorris; Parlette; Poulsen; Regala; D. Schmidt; Sehlin; Sheahan; Talcott and Tokuda.

Staff:  Jim Lux (786-7152).

Background:  The Health Services Act of 1993 amended the distribution of Motor Vehicle Excise Taxes (MVET) between cities and counties for local public health purposes.  The MVET distribution percentage to cities for public health was reduced by 2.95 percent and the counties' distribution percentage was increased by the same percentage.  The change in the city and county distribution percentages was originally scheduled to take effect July 1, 1995.  An analysis using the revised distribution percentage identified that the 2.95 percent shift from cities to counties would result in certain cities contributing less funding to support local public health services than they were providing before the 2.95 percent shift.  The effect was that certain local health jurisdictions would receive less funding for public health services using the new distribution percentages.  The statewide funding shortfall was estimated to be $2.25 million.  The additional $2.25 million would enable county health departments and local public health districts to continue current levels of service after July 1, 1995, the effective date of the shift.

The county and local public health district funding problem was thought to be resolved during the 1995 session with the passage of SSB 6058 C15 L 95 E1).  SSB 6058 included the establishment of a funding benchmark that would ensure that no city contribution was less than the calendar year 1995 level expended for public health purposes.  The implementation date of the revised distribution percentages was also extended to January 1, 1996.  The 1995-97 Appropriations Act contained the funding to ensure that city contributions met the required calendar year 1995 levels.  This was accomplished by a $2.25 million state treasurer transfer from the state Public Health Services Account to the county Public Health Account.  The county Public Health Account was created to provide a means to distribute funds to local public health entities.   The situation that was not contemplated in SSB 6058 was the inclusion of  populations in cities that were in the process of incorporating at the time the 2.95 percent shift problem was being corrected.  The population in these newly incorporated cities was not recognized in the new distribution formula and, as a result, certain local public health jurisdictions were still underfunded.

The director of the Department of Community, Trade and Economic Development is required to certify the amounts for distribution to each local public health jurisdiction using actual 1995 city public health contributions as a base.

A portion of all Motor Vehicle Excise Tax receipts are deposited into the county Sales and Use Tax Equalization Account for allocation by the state treasurer to counties meeting certain criteria.  Currently, after all county equalization allocations are made, the unexpended balance from the county Sales and Use Tax Equalization Account is deposited in the state general fund.

Summary of Bill:  Newly incorporated city populations are included in the calculation of city contributions to counties for public health purposes.  This corrects the funding calculation contained in SSB 6058, as adopted by the 1995 Legislature.  The unexpended balance in the county Sales and Use Tax Equalization Account is used to cover the cost of including the excluded city populations in the local public health funding calculation.  The two local public health jurisdictions affected by this funding correction are Seattle/King and Tacoma/Pierce.  After the allocation for local public health, the remaining balance in the county Sales and Use Tax Equalization Account is deposited in the state general fund.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  The bill contains an emergency clause and takes effect on July 1, 1997.

Testimony For:  The underfunding due to the exclusion of newly incorporated city populations in the funding formula for local public health services has caused the Tacoma/Pierce County health department to use its reserves.  This funding is needed to continue important local public health services.

Testimony Against:  None.

Testified:  Representative McDonald, prime sponsor; and Federico Cruz and Leonard Sanderson, Tacoma/Pierce County Health Department.