H-5539.1  _______________________________________________

                          HOUSE BILL 3136

          _______________________________________________

State of Washington      55th Legislature     1998 Regular Session

By Representatives Kastama, Gombosky, Dunshee, Doumit, Linville, Sullivan, Hatfield, Anderson, Morris, Eickmeyer, Mason, Keiser and Lantz

Read first time .  Referred to Committee on .

Providing for state and local government financing.

    AN ACT Relating to state and local government financing; amending RCW 82.44.020, 82.44.110, 82.44.150, 82.14.045, 82.14.200, 82.14.310, 82.14.330, 43.135.060, 82.50.410, 82.50.510, 35.58.273, 35.58.410, 43.160.070, 43.160.076, 43.160.080, 46.16.068, 70.94.015, 81.100.060, 82.08.020, 82.14.046, 82.44.023, 82.44.025, 82.44.155, 82.44.180, and 84.44.050; amending 1997 c 367 s 10 (uncodified); reenacting and amending RCW 82.14.320, 43.160.210, and 81.104.160; adding a new section to chapter 43.160 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 43.135 RCW; adding new sections to chapter 47.10 RCW; creating a new section; and providing an effective date.

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

NEW SECTION. Sec. 1.  The purpose of this act is to reallocate the general fund portion of the state's motor vehicle excise tax revenues among local governments and the state's transportation programs.  By reallocating motor vehicle excise taxes, the state revenue portion can be dedicated to increased transportation funding purposes.  Since the general fund currently has a budget surplus, due to a strong economy, the legislature feels that this reallocation is an appropriate short-term solution to the state's transportation needs and is a first step in meeting longer-term transportation funding needs.  These reallocated funds must be used to provide relief from traffic congestion, improve freight mobility, and increase traffic safety.

    In reallocating general fund resources, the legislature also ensures that other programs funded from the general fund are not adversely impacted by the reallocation of surplus general fund revenues.  The legislature also adopts this act to continue the general fund revenue and expenditure limitations contained in chapter 43.135 RCW after this one-time transfer of funds.

    Sec. 2.  RCW 82.44.020 and 1993 sp.s. c 23 s 61 are each amended to read as follows:

    (1) An excise tax is imposed for the privilege of using in the state any motor vehicle, except those operated under reciprocal agreements, the provisions of RCW 46.16.160 ((as now or hereafter amended)), or dealer's licenses.  The annual amount of such excise tax shall be two and two-tenths percent of the value of such vehicle.

    (2) ((An additional excise tax is imposed, in addition to any other tax imposed by this section, for the privilege of using in the state any such motor vehicle, and the annual amount of such additional excise shall be two-tenths of one percent of the value of such vehicle.

    (3) Effective with October 1992 motor vehicle registration expirations,)) A clean air excise tax is imposed in addition to any other tax imposed by this section for the privilege of using in the state any motor vehicle as defined in RCW 82.44.010, except that farm vehicles as defined in RCW 46.04.181 shall not be subject to the tax imposed by this subsection.  The ((annual amount of the additional excise tax shall be two dollars and twenty-five cents.  Effective with July 1994 motor vehicle registration expirations, the)) annual amount of additional excise tax shall be two dollars.

    (((4))) (3) An additional excise tax is imposed on truck-type power units that are used in combination with a trailer to transport loads in excess of forty thousand pounds combined gross weight.  The annual amount of such additional excise tax shall be fifty-eight one-hundredths of one percent of the value of the vehicle.

    The department shall distribute the additional tax collected under this subsection as follows:

    (a) For each trailing unit subject to subsection (((5))) (4) of this section, an amount equal to the clean air excise tax prescribed in subsection (((3))) (2) of this section shall be distributed in the manner prescribed in RCW 82.44.110(((3))) (2);

    (b) ((Of)) The remainder of the additional excise tax collected under this subsection((, ten percent shall be distributed in the manner prescribed in RCW 82.44.110(2) and ninety percent)) shall be distributed in the manner prescribed in RCW 82.44.110(1).  This tax shall not apply to power units used exclusively for hauling logs.

    (((5))) (4) The excise taxes imposed by subsections (1) ((through (3))) and (2) of this section shall not apply to trailing units which are used in combination with a power unit subject to the additional excise tax imposed by subsection (((4))) (3) of this section.  This subsection shall not apply to trailing units used for hauling logs. 

    (((6))) (5) In no case shall the total tax be less than two dollars except for proportionally registered vehicles.

    (((7))) (6) Washington residents, as defined in RCW 46.16.028, who license motor vehicles in another state or foreign country and avoid Washington motor vehicle excise taxes are liable for such unpaid excise taxes.  The department of revenue may assess and collect the unpaid excise taxes under chapter 82.32 RCW, including the penalties and interest provided therein.

    Sec. 3.  RCW 82.44.110 and 1997 c 338 s 68 are each amended to read as follows:

    The county auditor shall regularly, when remitting license fee receipts, pay over and account to the director of licensing for the excise taxes collected under the provisions of this chapter.  The director shall forthwith transmit the excise taxes to the state treasurer.

    (1) The state treasurer shall deposit the excise taxes collected under RCW 82.44.020(1) as follows:

    (a) ((1.60)) 1.455 percent into the motor vehicle fund to defray administrative and other expenses incurred by the department in the collection of the excise tax.

    (b) ((8.15)) 7.409 percent into the Puget Sound capital construction account in the motor vehicle fund.

    (c) ((4.07)) 3.70 percent into the Puget Sound ferry operations account in the motor vehicle fund.

    (d) ((5.88)) 5.345 percent into the ((general fund to be distributed)) city police and fire protection assistance account under RCW 82.44.155.

    (e) ((4.75)) 4.787 percent into the municipal sales and use tax equalization account ((in the general fund)) created in RCW 82.14.210.

    (f) ((1.60)) 1.455 percent into the county sales and use tax equalization account ((in the general fund)) created in RCW 82.14.200 through June 30, 1999, and 1.71 percent beginning July 1, 1999.

    (((g) 62.6440 percent into the general fund through June 30, 1995, and 57.6440 percent into the general fund beginning July 1, 1995.

    (h) 5)) 43.605 percent into the transportation fund created in RCW 82.44.180 ((beginning July 1, 1995)).

    (((i) 5.9686)) (h) 3.309 percent into the county criminal justice assistance account created in RCW 82.14.310 through June 30, 1999, and 3.892 percent beginning July 1, 1999.

    (((j) 1.1937)) (i) 0.662 percent into the municipal criminal justice assistance account for distribution under RCW 82.14.320.

    (((k) 1.1937)) (j) 0.662 percent into the municipal criminal justice assistance account for distribution under RCW 82.14.330.

    (((l) 2.95)) (k) 2.682 percent into the county public health account created in RCW 70.05.125.

(l) 23.758 percent into the motor vehicle fund.

(m) 1.171 percent into the distressed county assistance account under section 8 of this act.

    Notwithstanding (((i))) (h) through (((k))) (j) of this subsection, ((no more than sixty million dollars shall be deposited into the accounts specified in (i) through (k) of this subsection for the period January 1, 1994, through June 30, 1995.  Not more than five percent of the funds deposited to these accounts shall be available for appropriations for enhancements to the state patrol crime laboratory system and the continuing costs related to these enhancements.  Motor vehicle excise tax funds appropriated for such enhancements shall not supplant existing funds from the state general fund.  For the fiscal year ending June 30, 1998, and)) for each fiscal year ((thereafter)) through fiscal year 1999, the amounts deposited into the accounts specified in (((i))) (h) through (((k))) (j) of this subsection shall not increase by more than the amounts deposited into those accounts in the previous fiscal year increased by the implicit price deflator for the previous fiscal year.  Any revenues in excess of this amount shall be deposited into the violence reduction and drug enforcement account.

    (2) ((The state treasurer shall deposit the excise taxes collected under RCW 82.44.020(2) into the transportation fund.

    (3))) The state treasurer shall deposit the excise tax imposed by RCW 82.44.020(((3))) (2) into the air pollution control account created by RCW 70.94.015.

    Sec. 4.  RCW 82.44.150 and 1995 2nd sp.s. c 14 s 538 are each amended to read as follows:

    (1) The director of licensing shall, on the twenty-fifth day of February, May, August, and November of each year, advise the state treasurer of the total amount of motor vehicle excise taxes imposed by RCW 82.44.020 (1) ((and (2))) remitted to the department during the preceding calendar quarter ending on the last day of March, June, September, and December, respectively, except for those payable under RCW 82.44.030, from motor vehicle owners residing within each municipality which has levied a tax under RCW 35.58.273, which amount of excise taxes shall be determined by the director as follows:

    The total amount of motor vehicle excise taxes remitted to the department, except those payable under RCW 82.44.020(((3))) (2) and 82.44.030, from each county shall be multiplied by a fraction, the numerator of which is the population of the municipality residing in such county, and the denominator of which is the total population of the county in which such municipality or portion thereof is located.  The product of this computation shall be the amount of excise taxes from motor vehicle owners residing within such municipality or portion thereof.  Where the municipality levying a tax under RCW 35.58.273 is located in more than one county, the above computation shall be made by county, and the combined products shall provide the total amount of motor vehicle excise taxes from motor vehicle owners residing in the municipality as a whole.  Population figures required for these computations shall be supplied to the director by the office of financial management, who shall adjust the fraction annually.

    (2) On the first day of the months of January, April, July, and October of each year, the state treasurer based upon information provided by the department shall, from motor vehicle excise taxes deposited in the ((general fund, under RCW 82.44.110(1)(g))) transportation fund under RCW 82.44.110, make the following deposits:

    (a) To the high capacity transportation account created in RCW 47.78.010, a sum equal to four and five-tenths percent of the special excise tax levied under RCW 35.58.273 by those municipalities authorized to levy a special excise tax within each county that has a population of one hundred seventy-five thousand or more and has an interstate highway within its borders; except that in a case of a municipality located in a county that has a population of one hundred seventy-five thousand or more that does not have an interstate highway located within its borders, that sum shall be deposited in the passenger ferry account;

    (b) To the central Puget Sound public transportation account created in RCW 82.44.180, ((for revenues distributed after December 31, 1992,)) within a county with a population of one million or more and a county with a population of from two hundred thousand to less than one million bordering a county with a population of one million or more, a sum equal to the difference between (i) the special excise tax levied and collected under RCW 35.58.273 by those municipalities authorized to levy and collect a special excise tax subject to the requirements of subsections (3) and (4) of this section and (ii) the special excise tax that the municipality would otherwise have been eligible to levy and collect at a tax rate of .815 percent and been able to match with locally generated tax revenues, other than the excise tax imposed under RCW 35.58.273, budgeted for any public transportation purpose.  Before this deposit, the sum shall be reduced by an amount equal to the amount distributed under (a) of this subsection for each of the municipalities within the counties to which this subsection (2)(b) applies; however, any transfer under this subsection (2)(b) must be greater than zero; and

    (c) To the public transportation systems account created in RCW 82.44.180, ((for revenues distributed after December 31, 1992,)) within counties not described in (b) of this subsection, a sum equal to the difference between (i) the special excise tax levied and collected under RCW 35.58.273 by those municipalities authorized to levy and collect a special excise tax subject to the requirements of subsections (3) and (4) of this section and (ii) the special excise tax that the municipality would otherwise have been eligible to levy and collect at a tax rate of .815 percent and been able to match with locally generated tax revenues, other than the excise tax imposed under RCW 35.58.273, budgeted for any public transportation purpose.  Before this deposit, the sum shall be reduced by an amount equal to the amount distributed under (a) of this subsection for each of the municipalities within the counties to which this subsection (2)(c) applies; however, any transfer under this subsection (2)(c) must be greater than zero((; and

    (d) To the general fund, for revenues distributed after June 30, 1993, and to the transportation fund, for revenues distributed after June 30, 1995, a sum equal to the difference between (i) the special excise tax levied and collected under RCW 35.58.273 by those municipalities authorized to levy and collect a special excise tax subject to the requirements of subsections (3) and (4) of this section and (ii) the special excise tax that the municipality would otherwise have been eligible to levy and collect at a tax rate of .815 percent notwithstanding the requirements set forth in subsections (3) through (6) of this section, reduced by an amount equal to distributions made under (a), (b), and (c) of this subsection and RCW 82.14.046)).

    (3) On the first day of the months of January, April, July, and October of each year, the state treasurer, based upon information provided by the department, shall remit motor vehicle excise tax revenues imposed and collected under RCW 35.58.273 as follows:

    (a) The amount required to be remitted by the state treasurer to the treasurer of any municipality levying the tax shall not exceed in any calendar year the amount of locally-generated tax revenues, excluding (i) the excise tax imposed under RCW 35.58.273 for the purposes of this section, which shall have been budgeted by the municipality to be collected in such calendar year for any public transportation purposes including but not limited to operating costs, capital costs, and debt service on general obligation or revenue bonds issued for these purposes; and (ii) the sales and use tax equalization distributions provided under RCW 82.14.046; and

    (b) In no event may the amount remitted in a single calendar quarter exceed the amount collected on behalf of the municipality under RCW 35.58.273 during the calendar quarter next preceding the immediately preceding quarter, excluding the sales and use tax equalization distributions provided under RCW 82.14.046.

    (4) At the close of each calendar year accounting period, but not later than April 1, each municipality that has received motor vehicle excise taxes under subsection (3) of this section shall transmit to the director of licensing and the state auditor a written report showing by source the previous year's budgeted tax revenues for public transportation purposes as compared to actual collections.  Any municipality that has not submitted the report by April 1 shall cease to be eligible to receive motor vehicle excise taxes under subsection (3) of this section until the report is received by the director of licensing.  If a municipality has received more or less money under subsection (3) of this section for the period covered by the report than it is entitled to receive by reason of its locally-generated collected tax revenues, the director of licensing shall, during the next ensuing quarter that the municipality is eligible to receive motor vehicle excise tax funds, increase or decrease the amount to be remitted in an amount equal to the difference between the locally-generated budgeted tax revenues and the locally-generated collected tax revenues.  In no event may the amount remitted for a calendar year exceed the amount collected on behalf of the municipality under RCW 35.58.273 during that same calendar year excluding the sales and use tax equalization distributions provided under RCW 82.14.046.  At the time of the next fiscal audit of each municipality, the state auditor shall verify the accuracy of the report submitted and notify the director of licensing of any discrepancies.

    (5) The motor vehicle excise taxes imposed under RCW 35.58.273 and required to be remitted under this section and RCW 82.14.046 shall be remitted without legislative appropriation.

    (6) Any municipality levying and collecting a tax under RCW 35.58.273 which does not have an operating, public transit system or a contract for public transportation services in effect within one year from the initial effective date of the tax shall return to the state treasurer all motor vehicle excise taxes received under subsection (3) of this section.

    Sec. 5.  RCW 82.14.045 and 1991 c 363 s 158 are each amended to read as follows:

    (1) The legislative body of any city pursuant to RCW 35.92.060, of any county which has created an unincorporated transportation benefit area pursuant to RCW 36.57.100 and 36.57.110, of any public transportation benefit area pursuant to RCW 36.57A.080 and 36.57A.090, of any county transportation authority established pursuant to chapter 36.57 RCW, and of any metropolitan municipal corporation within a county with a population of one million or more pursuant to chapter 35.58 RCW, may, by resolution or ordinance for the sole purpose of providing funds for the operation, maintenance, or capital needs of public transportation systems and in lieu of the excise taxes authorized by RCW 35.95.040, submit an authorizing proposition to the voters or include such authorization in a proposition to perform the function of public transportation and if approved by a majority of persons voting thereon, fix and impose a sales and use tax in accordance with the terms of this chapter:  PROVIDED, That no such legislative body shall impose such a sales and use tax without submitting such an authorizing proposition to the voters and obtaining the approval of a majority of persons voting thereon:  PROVIDED FURTHER, That where such a proposition is submitted by a county on behalf of an unincorporated transportation benefit area, it shall be voted upon by the voters residing within the boundaries of such unincorporated transportation benefit area and, if approved, the sales and use tax shall be imposed only within such area.  Notwithstanding any provisions of this section to the contrary, any county in which a county public transportation plan has been adopted pursuant to RCW 36.57.070 and the voters of such county have authorized the imposition of a sales and use tax pursuant to the provisions of section 10, chapter 167, Laws of 1974 ex. sess., prior to July 1, 1975, shall be authorized to fix and impose a sales and use tax as provided in this section at not to exceed the rate so authorized without additional approval of the voters of such county as otherwise required by this section.

    The tax authorized pursuant to this section shall be in addition to the tax authorized by RCW 82.14.030 and shall be collected from those persons who are taxable by the state pursuant to chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within such city, public transportation benefit area, county, or metropolitan municipal corporation as the case may be.  The rate of such tax shall be one-tenth, two-tenths, three-tenths, four-tenths, five-tenths, or six-tenths of one percent of the selling price (in the case of a sales tax) or value of the article used (in the case of a use tax).  The rate of such tax shall not exceed the rate authorized by the voters unless such increase shall be similarly approved.

    (2)(a) In the event a metropolitan municipal corporation shall impose a sales and use tax pursuant to this chapter no city, county which has created an unincorporated transportation benefit area, public transportation benefit area authority, or county transportation authority wholly within such metropolitan municipal corporation shall be empowered to levy and/or collect taxes pursuant to RCW 35.58.273, 35.95.040, and/or 82.14.045, but nothing herein shall prevent such city or county from imposing sales and use taxes pursuant to any other authorization.

    (b) In the event a county transportation authority shall impose a sales and use tax pursuant to this section, no city, county which has created an unincorporated transportation benefit area, public transportation benefit area, or metropolitan municipal corporation, located within the territory of the authority, shall be empowered to levy or collect taxes pursuant to RCW 35.58.273, 35.95.040, or 82.14.045.

    (c) In the event a public transportation benefit area shall impose a sales and use tax pursuant to this section, no city, county which has created an unincorporated transportation benefit area, or metropolitan municipal corporation, located wholly or partly within the territory of the public transportation benefit area, shall be empowered to levy or collect taxes pursuant to RCW 35.58.273, 35.95.040, or 82.14.045.

    (3) Any local sales and use tax revenue collected pursuant to this section by any city or by any county for transportation purposes pursuant to RCW 36.57.100 and 36.57.110 shall not be counted as locally generated tax revenues for the purposes of apportionment and distribution, in the manner prescribed by chapter 82.44 RCW, of the proceeds of the motor vehicle excise tax authorized pursuant to RCW 35.58.273, except that the local sales and use tax revenue collected under this section by a city with a population greater than sixty thousand that as of January 1, 1998, owns and operates a municipal public transportation system shall be counted as locally generated tax revenues for the purposes of apportionment and distribution, in the manner prescribed by chapter 82.44 RCW, of the proceeds of the motor vehicle excise tax authorized under RCW 35.58.273 as follows:

(a) For fiscal year 2000, revenues collected under this section shall be counted as locally generated tax revenues for up to 25 percent of the tax collected under RCW 35.58.273;

(b) For fiscal year 2001, revenues collected under this section shall be counted as locally generated tax revenues for up to 50 percent of the tax collected under RCW 35.58.273;

(c) For fiscal year 2002, revenues collected under this section shall be counted as locally generated tax revenues for up to 75 percent of the tax collected under RCW 35.58.273; and

(d) For fiscal year 2003 and thereafter, revenues collected under this section shall be counted as locally generated tax revenues for up to 100 percent of the tax collected under RCW 35.58.273.

    Sec. 6.  RCW 82.14.200 and 1997 c 333 s 2 are each amended to read as follows:

    There is created in the state treasury a special account to be known as the "county sales and use tax equalization account."  Into this account shall be placed a portion of all motor vehicle excise tax receipts as provided in RCW 82.44.110(((1)(f))).  Funds in this account shall be allocated by the state treasurer according to the following procedure:

    (1) Prior to April 1st of each year the director of revenue shall inform the state treasurer of the total and the per capita levels of revenues for the unincorporated area of each county and the state-wide weighted average per capita level of revenues for the unincorporated areas of all counties imposing the sales and use tax authorized under RCW 82.14.030(1) for the previous calendar year.

    (2) At such times as distributions are made under RCW 82.44.150, ((as now or hereafter amended,)) the state treasurer shall apportion to each county imposing the sales and use tax under RCW 82.14.030(1) at the maximum rate and receiving less than one hundred fifty thousand dollars from the tax for the previous calendar year, an amount from the county sales and use tax equalization account sufficient, when added to the amount of revenues received the previous calendar year by the county, to equal one hundred fifty thousand dollars.

    The department of revenue shall establish a governmental price index as provided in this subsection.  The base year for the index shall be the end of the third quarter of 1982.  Prior to November 1, 1983, and prior to each November 1st thereafter, the department of revenue shall establish another index figure for the third quarter of that year.  The department of revenue may use the implicit price deflators for state and local government purchases of goods and services calculated by the United States department of commerce to establish the governmental price index.  Beginning on January 1, 1984, and each January 1st thereafter, the one hundred fifty thousand dollar base figure in this subsection shall be adjusted in direct proportion to the percentage change in the governmental price index from 1982 until the year before the adjustment.  Distributions made under this subsection for 1984 and thereafter shall use this adjusted base amount figure.

    (3) Subsequent to the distributions under subsection (2) of this section and at such times as distributions are made under RCW 82.44.150, ((as now or hereafter amended,)) the state treasurer shall apportion to each county imposing the sales and use tax under RCW 82.14.030(1) at the maximum rate and receiving less than seventy percent of the state-wide weighted average per capita level of revenues for the unincorporated areas of all counties as determined by the department of revenue under subsection (1) of this section, an amount from the county sales and use tax equalization account sufficient, when added to the per capita level of revenues for the unincorporated area received the previous calendar year by the county, to equal seventy percent of the state-wide weighted average per capita level of revenues for the unincorporated areas of all counties determined under subsection (1) of this section, subject to reduction under subsections (6) and (7) of this section.  When computing distributions under this section, any distribution under subsection (2) of this section shall be considered revenues received from the tax imposed under RCW 82.14.030(1) for the previous calendar year.

    (4) Subsequent to the distributions under subsection (3) of this section and at such times as distributions are made under RCW 82.44.150, ((as now or hereafter amended,)) the state treasurer shall apportion to each county imposing the sales and use tax under RCW 82.14.030(2) at the maximum rate and receiving a distribution under subsection (2) of this section, a third distribution from the county sales and use tax equalization account.  The distribution to each qualifying county shall be equal to the distribution to the county under subsection (2) of this section, subject to the reduction under subsections (6) and (7) of this section.  To qualify for the total distribution under this subsection, the county must impose the tax under RCW 82.14.030(2) for the entire calendar year.  Counties imposing the tax for less than the full year shall qualify for prorated allocations under this subsection proportionate to the number of months of the year during which the tax is imposed.

    (5) Subsequent to the distributions under subsection (4) of this section and at such times as distributions are made under RCW 82.44.150, ((as now or hereafter amended,)) the state treasurer shall apportion to each county imposing the sales and use tax under RCW 82.14.030(2) at the maximum rate and receiving a distribution under subsection (3) of this section, a fourth distribution from the county sales and use tax equalization account.  The distribution to each qualifying county shall be equal to the distribution to the county under subsection (3) of this section, subject to the reduction under subsections (6) and (7) of this section.  To qualify for the distributions under this subsection, the county must impose the tax under RCW 82.14.030(2) for the entire calendar year.  Counties imposing the tax for less than the full year shall qualify for prorated allocations under this subsection proportionate to the number of months of the year during which the tax is imposed.

    (6) Revenues distributed under subsections (2) through (5) of this section in any calendar year shall not exceed an amount equal to seventy percent of the state-wide weighted average per capita level of revenues for the unincorporated areas of all counties during the previous calendar year.  If distributions under subsections (3) through (5) of this section cannot be made because of this limitation, then distributions under subsections (3) through (5) of this section shall be reduced ratably among the qualifying counties.

    (7) If inadequate revenues exist in the county sales and use tax equalization account to make the distributions under subsections (3) through (5) of this section, then the distributions under subsections (3) through (5) of this section shall be reduced ratably among the qualifying counties.  At such time during the year as additional funds accrue to the county sales and use tax equalization account, additional distributions shall be made under subsections (3) through (5) of this section to the counties.

    (8) If the level of revenues in the county sales and use tax equalization account exceeds the amount necessary to make the distributions under subsections (2) through (5) of this section, at such times as distributions are made under RCW 82.44.150, the state treasurer shall apportion an amount to the county public health account created in RCW 70.05.125 equal to the adjustment under RCW 70.05.125(2)(b).

    (9) If the level of revenues in the county sales and use tax equalization account exceeds the amount necessary to make the distributions under subsections (2) through (5) and (8) of this section, then the additional revenues shall be credited and transferred ((to the state general fund)) as follows:

(a) Fifty percent to the public facilities construction loan revolving account under RCW 43.160.080; and

(b) Fifty percent to the distressed county public facilities construction loan account under section 7 of this act, or so much thereof as will not cause the balance in the account to exceed twenty-five million dollars.  Any remaining funds shall be deposited into the public facilities construction loan revolving account.

NEW SECTION. Sec. 7.  A new section is added to chapter 43.160 RCW to read as follows:

    The distressed county public facilities construction loan account is created in the state treasury.  All funds provided under RCW 82.14.200 shall be deposited in the account.  Moneys in the account may be spent only after appropriation.  Moneys in the account shall only be used to provide financial assistance under this chapter to distressed counties that have experienced extraordinary costs due to the location of a major new business facility or the substantial expansion of an existing business facility in the county.

    For purposes of this section, the term "distressed counties" includes any county in which the average level of unemployment for the three years before the year in which an application for financial assistance is filed exceeds the average state employment for those years by twenty percent.

NEW SECTION. Sec. 8.  A new section is added to chapter 82.14 RCW to read as follows:

    (1) The distressed county assistance account is created in the state treasury.  Into this account shall be placed a portion of all motor vehicle excise tax receipts as provided in RCW 82.44.110.  At such times as distributions are made under RCW 82.44.150, the state treasurer shall distribute the funds in the distressed county assistance account to each county imposing the sales and use tax authorized under RCW 82.14.370 in the same proportions as distributions of the tax imposed under RCW 82.14.370 for the previous quarter.

    (2) Funds distributed from the distressed county assistance account shall be expended by the counties for criminal justice and other purposes.

    Sec. 9.  RCW 82.14.310 and 1995 c 398 s 11 are each amended to read as follows:

    (1) The county criminal justice assistance account is created in the state treasury.  Beginning in fiscal year 2000, the state treasurer shall transfer into the county criminal justice assistance account from the general fund the sum of twenty-three million two hundred thousand dollars divided into four equal deposits occurring on July 1, October 1, January 1, and April 1.  For each fiscal year thereafter, the state treasurer shall increase the total transfer by the fiscal growth factor, as defined in RCW 43.135.025, forecast for that fiscal year by the office of financial management in November of the preceding year.

    (2) The moneys deposited in the county criminal justice assistance account for distribution under this section, less any moneys appropriated for purposes under ((RCW 82.44.110)) subsection (4) of this section, shall be distributed at such times as distributions are made under RCW 82.44.150 and on the relative basis of each county's funding factor as determined under this subsection.

    (a) A county's funding factor is the sum of:

    (i) The population of the county, divided by one thousand, and multiplied by two-tenths;

    (ii) The crime rate of the county, multiplied by three-tenths; and

    (iii) The annual number of criminal cases filed in the county superior court, for each one thousand in population, multiplied by five-tenths.

    (b) Under this section and RCW 82.14.320 and 82.14.330:

    (i) The population of the county or city shall be as last determined by the office of financial management;

    (ii) The crime rate of the county or city is the annual occurrence of specified criminal offenses, as calculated in the most recent annual report on crime in Washington state as published by the Washington association of sheriffs and police chiefs, for each one thousand in population;

    (iii) The annual number of criminal cases filed in the county superior court shall be determined by the most recent annual report of the courts of Washington, as published by the office of the administrator for the courts;

    (iv) Distributions and eligibility for distributions in the 1989‑91 biennium shall be based on 1988 figures for both the crime rate as described under (ii) of this subsection and the annual number of criminal cases that are filed as described under (iii) of this subsection.  Future distributions shall be based on the most recent figures for both the crime rate as described under (ii) of this subsection and the annual number of criminal cases that are filed as described under (iii) of this subsection.

    (3) Moneys distributed under this section shall be expended exclusively for criminal justice purposes and shall not be used to replace or supplant existing funding.  Criminal justice purposes are defined as activities that substantially assist the criminal justice system, which may include circumstances where ancillary benefit to the civil justice system occurs, and which includes domestic violence services such as those provided by domestic violence programs, community advocates, and legal advocates, as defined in RCW 70.123.020.  Existing funding for purposes of this subsection is defined as calendar year 1989 actual operating expenditures for criminal justice purposes.  Calendar year 1989 actual operating expenditures for criminal justice purposes exclude the following:  Expenditures for extraordinary events not likely to reoccur, changes in contract provisions for criminal justice services, beyond the control of the local jurisdiction receiving the services, and major nonrecurring capital expenditures.

(4) Not more than five percent of the funds deposited to the county criminal justice assistance account shall be available for appropriations for enhancements to the state patrol crime laboratory system and the continuing costs related to these enhancements.  Funds appropriated from this account for such enhancements shall not supplant existing funds from the state general fund.

    Sec. 10.  RCW 82.14.320 and 1995 c 398 s 12 and 1995 c 312 s 84 are each reenacted and amended to read as follows:

    (1) The municipal criminal justice assistance account is created in the state treasury.  Beginning in fiscal year 2000, the state treasurer shall transfer into the municipal criminal justice assistance account for distribution under this section from the general fund the sum of four million six hundred thousand dollars divided into four equal deposits occurring on July 1, October 1, January 1, and April 1.  For each fiscal year thereafter, the state treasurer shall increase the total transfer by the fiscal growth factor, as defined in RCW 43.135.025, forecast for that fiscal year by the office of financial management in November of the preceding year.

    (2) No city may receive a distribution under this section from the municipal criminal justice assistance account unless:

    (a) The city has a crime rate in excess of one hundred twenty-five percent of the state-wide average as calculated in the most recent annual report on crime in Washington state as published by the Washington association of sheriffs and police chiefs;

    (b) The city has levied the tax authorized in RCW 82.14.030(2) at the maximum rate or the tax authorized in RCW 82.46.010(3) at the maximum rate; and

    (c) The city has a per capita yield from the tax imposed under RCW 82.14.030(1) at the maximum rate of less than one hundred fifty percent of the state-wide average per capita yield for all cities from such local sales and use tax.

    (3) The moneys deposited in the municipal criminal justice assistance account for distribution under this section, less any moneys appropriated for purposes under ((RCW 82.44.110)) subsection (7) of this section, shall be distributed at such times as distributions are made under RCW 82.44.150.  The distributions shall be made as follows:

    (a) Unless reduced by this subsection, thirty percent of the moneys shall be distributed ratably based on population as last determined by the office of financial management to those cities eligible under subsection (2) of this section that have a crime rate determined under subsection (2)(a) of this section which is greater than one hundred seventy-five percent of the state-wide average crime rate.  No city may receive more than fifty percent of any moneys distributed under this subsection (a) but, if a city distribution is reduced as a result of exceeding the fifty percent limitation, the amount not distributed shall be distributed under (b) of this subsection.

    (b) The remainder of the moneys, including any moneys not distributed in subsection (2)(a) of this section, shall be distributed to all cities eligible under subsection (2) of this section ratably based on population as last determined by the office of financial management.

    (4) No city may receive more than thirty percent of all moneys distributed under subsection (3) of this section.

    (5) Notwithstanding other provisions of this section, the distributions to any city that substantially decriminalizes or repeals its criminal code after July 1, 1990, and that does not reimburse the county for costs associated with criminal cases under RCW 3.50.800 or 3.50.805(2), shall be made to the county in which the city is located.

    (6) Moneys distributed under this section shall be expended exclusively for criminal justice purposes and shall not be used to replace or supplant existing funding.  Criminal justice purposes are defined as activities that substantially assist the criminal justice system, which may include circumstances where ancillary benefit to the civil justice system occurs, and which includes domestic violence services such as those provided by domestic violence programs, community advocates, and legal advocates, as defined in RCW 70.123.020, and publications and public educational efforts designed to provide information and assistance to parents in dealing with runaway or at-risk youth.  Existing funding for purposes of this subsection is defined as calendar year 1989 actual operating expenditures for criminal justice purposes.  Calendar year 1989 actual operating expenditures for criminal justice purposes exclude the following:  Expenditures for extraordinary events not likely to reoccur, changes in contract provisions for criminal justice services, beyond the control of the local jurisdiction receiving the services, and major nonrecurring capital expenditures.

(7) Not more than five percent of the funds deposited to the municipal criminal justice assistance account shall be available for appropriations for enhancements to the state patrol crime laboratory system and the continuing costs related to these enhancements.  Funds appropriated from this account for such enhancements shall not supplant existing funds from the state general fund.

    Sec. 11.  RCW 82.14.330 and 1995 c 398 s 13 are each amended to read as follows:

    (1) Beginning in fiscal year 2000, the state treasurer shall transfer into the municipal criminal justice assistance account for distribution under this section from the general fund the sum of four million six hundred thousand dollars divided into four equal deposits occurring on July 1, September 1, January 1, and March 1.  For each fiscal year thereafter, the state treasurer shall increase the total transfer by the fiscal growth factor, as defined in RCW 43.135.025, forecast for that fiscal year by the office of financial management in November of the preceding year.  The moneys deposited in the municipal criminal justice assistance account for distribution under this section, less any moneys appropriated for purposes under ((RCW 82.44.110)) subsection (4) of this section, shall be distributed to the cities of the state as follows:

    (a) Twenty percent appropriated for distribution shall be distributed to cities with a three-year average violent crime rate for each one thousand in population in excess of one hundred fifty percent of the state-wide three-year average violent crime rate for each one thousand in population.  The three-year average violent crime rate shall be calculated using the violent crime rates for each of the preceding three years from the annual reports on crime in Washington state as published by the Washington association of sheriffs and police chiefs.  Moneys shall be distributed under this subsection (1)(a) ratably based on population as last determined by the office of financial management, but no city may receive more than one dollar per capita.  Moneys remaining undistributed under this subsection at the end of each calendar year shall be distributed to the criminal justice training commission to reimburse participating city law enforcement agencies with ten or fewer full-time commissioned patrol officers the cost of temporary replacement of each officer who is enrolled in basic law enforcement training, as provided in RCW 43.101.200.

    (b) Sixteen percent shall be distributed to cities ratably based on population as last determined by the office of financial management, but no city may receive less than one thousand dollars.

    The moneys deposited in the municipal criminal justice assistance account for distribution under this subsection shall be distributed at such times as distributions are made under RCW 82.44.150.

    Moneys distributed under this subsection shall be expended exclusively for criminal justice purposes and shall not be used to replace or supplant existing funding.  Criminal justice purposes are defined as activities that substantially assist the criminal justice system, which may include circumstances where ancillary benefit to the civil justice system occurs, and which includes domestic violence services such as those provided by domestic violence programs, community advocates, and legal advocates, as defined in RCW 70.123.020.  Existing funding for purposes of this subsection is defined as calendar year 1989 actual operating expenditures for criminal justice purposes.  Calendar year 1989 actual operating expenditures for criminal justice purposes exclude the following:  Expenditures for extraordinary events not likely to reoccur, changes in contract provisions for criminal justice services, beyond the control of the local jurisdiction receiving the services, and major nonrecurring capital expenditures.

    (2) In addition to the distributions under subsection (1) of this section:

    (a) Fourteen percent shall be distributed to cities that have initiated innovative law enforcement strategies, including alternative sentencing and crime prevention programs.  No city may receive more than one dollar per capita under this subsection (2)(a).

    (b) Twenty percent shall be distributed to cities that have initiated programs to help at-risk children or child abuse victim response programs.  No city may receive more than fifty cents per capita under this subsection (2)(b).

    (c) Twenty percent shall be distributed to cities that have initiated programs designed to reduce the level of domestic violence within their jurisdictions or to provide counseling for domestic violence victims.  No city may receive more than fifty cents per capita under this subsection (2)(c).

    (d) Ten percent shall be distributed to cities that contract with another governmental agency for a majority of the city's law enforcement services.

    Moneys distributed under this subsection shall be distributed to those cities that submit funding requests under this subsection to the department of community, trade, and economic development based on criteria developed under RCW 82.14.335.  Allocation of funds shall be in proportion to the population of qualified jurisdictions, but the distribution to a city shall not exceed the amount of funds requested.  Cities shall submit requests for program funding to the department of community, trade, and economic development by November 1 of each year for funding the following year.  The department shall certify to the state treasurer the cities eligible for funding under this subsection and the amount of each allocation.

    The moneys deposited in the municipal criminal justice assistance account for distribution under this subsection, less any moneys appropriated for purposes under ((RCW 82.44.110)) subsection (4) of this section, shall be distributed at the times as distributions are made under RCW 82.44.150.  Moneys remaining undistributed under this subsection at the end of each calendar year shall be distributed to the criminal justice training commission to reimburse participating city law enforcement agencies with ten or fewer full-time commissioned patrol officers the cost of temporary replacement of each officer who is enrolled in basic law enforcement training, as provided in RCW 43.101.200.

    If a city is found by the state auditor to have expended funds received under this subsection in a manner that does not comply with the criteria under which the moneys were received, the city shall be ineligible to receive future distributions under this subsection until the use of the moneys are justified to the satisfaction of the director or are repaid to the state general fund.  The director may allow noncomplying use of moneys received under this subsection upon a showing of hardship or other emergent need.

    (3) Notwithstanding other provisions of this section, the distributions to any city that substantially decriminalizes or repeals its criminal code after July 1, 1990, and that does not reimburse the county for costs associated with criminal cases under RCW 3.50.800 or 3.50.805(2), shall be made to the county in which the city is located.

(4) Not more than five percent of the funds deposited to the municipal criminal justice assistance account shall be available for appropriations for enhancements to the state patrol crime laboratory system and the continuing costs related to these enhancements.  Funds appropriated from this account for such enhancements shall not supplant existing funds from the state general fund.

NEW SECTION. Sec. 12.  A new section is added to chapter 43.135 RCW to read as follows:

    (1) Initiative Measure No. 601 (chapter 43.135 RCW, as amended by chapter . . ., Laws of 1998 (this act) and the amendatory changes enacted by section 6, chapter 2, Laws of 1994) is hereby reenacted and reaffirmed.  The legislature also adopts this act to continue the general fund revenue and expenditure limitations contained in this chapter 43.135 RCW after this one-time transfer of funds.

    (2) RCW 43.135.035(4) does not apply to sections 3 through 11, chapter . . ., Laws of 1998 (sections 3 through 11 of this act).

    Sec. 13.  RCW 43.135.060 and 1994 c 2 s 5 are each amended to read as follows:

    (1) After July 1, 1995, the legislature shall not impose responsibility for new programs or increased levels of service under existing programs on any political subdivision of the state unless the subdivision is fully reimbursed ((by specific appropriation)) by the state for the costs of the new programs or increases in service levels.  Reimbursement by the state may be made by:  (a) A specific appropriation; or (b) increases in state distributions of revenue to political subdivisions occurring after January 1, 1998.

    (2) If by order of any court, or legislative enactment, the costs of a federal or local government program are transferred to or from the state, the otherwise applicable state expenditure limit shall be increased or decreased, as the case may be, by the dollar amount of the costs of the program.

    (3) The legislature, in consultation with the office of financial management or its successor agency, shall determine the costs of any new programs or increased levels of service under existing programs imposed on any political subdivision or transferred to or from the state.

    (4) Subsection (1) of this section does not apply to the costs incurred for voting devices or machines under RCW 29.04.200.

NEW SECTION. Sec. 14.  In order to provide funds necessary for the location, design, right of way, and construction of state and local highway improvements, there shall be issued and sold upon the request of the Washington state transportation commission a maximum of one billion four hundred million dollars of general obligation bonds of the state of Washington.

NEW SECTION. Sec. 15.  Upon the request of the transportation commission, the state finance committee shall supervise and provide for the issuance, sale, and retirement of the bonds authorized by sections 14 through 19 of this act in accordance with chapter 39.42 RCW.  Bonds authorized by sections 14 through 19 of this act shall be sold in such manner, at such time or times, in such amounts, and at such price as the state finance committee shall determine.  No such bonds may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.

    The state finance committee shall consider the issuance of short-term obligations in lieu of long-term obligations for the purposes of more favorable interest rates, lower total interest costs, and increased marketability and for the purpose of retiring the bonds during the life of the project for which they were issued.

NEW SECTION. Sec. 16.  The proceeds from the sale of bonds authorized by sections 14 through 19 of this act shall be deposited in the motor vehicle fund.  The proceeds shall be available only for the purposes enumerated in section 14 of this act, for the payment of bond anticipation notes, if any, and for the payment of bond issuance costs, including the costs of underwriting.

NEW SECTION. Sec. 17.  Bonds issued under the authority of sections 14 through 19 of this act shall distinctly state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay such principal and interest as the same shall become due.  The principal and interest on the bonds shall be first payable in the manner provided in sections 14 through 19 of this act from the proceeds of the state excise taxes on motor vehicle and special fuels imposed by chapters 82.36 and 82.38 RCW.  Proceeds of such excise taxes are hereby pledged to the payment of any bonds and the interest thereon issued under the authority of sections 14 through 19 of this act, and the legislature agrees to continue to impose these excise taxes on motor vehicle and special fuels in amounts sufficient to pay, when due, the principal and interest on all bonds issued under the authority of sections 14 through 19 of this act.

NEW SECTION. Sec. 18.  Both principal and interest on the bonds issued for the purposes of sections 14 through 19 of this act shall be payable from the highway bond retirement fund.  The state finance committee may provide that a special account be created in the fund to facilitate payment of the principal and interest.  The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount required for principal and interest on the bonds in accordance with the bond proceedings.  The state treasurer shall withdraw revenues from the motor vehicle fund and deposit in the highway bond retirement fund, or a special account in the fund, such amounts, and at such times, as are required by the bond proceedings.

    Any funds required for bond retirement or interest on the bonds authorized by sections 14 through 19 of this act shall be taken from that portion of the motor vehicle fund that results from the imposition of excise taxes on motor vehicle and special fuels and which is, or may be, appropriated to the department of transportation for state highway purposes.  Funds required shall never constitute a charge against any other allocations of motor vehicle fuel and special fuel tax revenues to the state, counties, cities and towns unless the amount arising from excise taxes on motor vehicle and special fuels distributed to the state in the motor vehicle fund proves insufficient to meet the requirements for bond retirement or interest on any such bonds.

    Any payments for bond retirement or interest on the bonds taken from other revenues from the motor vehicle fuel or special fuel taxes that are distributable to the state, counties, cities, and towns, shall be repaid from the first revenues from the motor vehicle fuel or special fuel taxes distributed to the motor vehicle fund not required for bond retirement or interest on the bonds.

NEW SECTION. Sec. 19.  Bonds issued under the authority of sections 14 through 18 of this act and this section and any other general obligation bonds of the state of Washington that have been or that may be authorized and that pledge motor vehicle and special fuels excise taxes for the payment of principal and interest thereon shall be an equal charge against the revenues from such motor vehicle and special fuels excise taxes.

    Sec. 20.  RCW 82.50.410 and 1991 c 199 s 225 are each amended to read as follows:

    The rate and measure of tax imposed by RCW 82.50.400 for each registration year shall be one and one-tenth percent((, and a surcharge of one-tenth of one percent,)) of the value of the travel trailer or camper, as determined in the manner provided in this chapter:  PROVIDED, That the excise tax upon a travel trailer or camper licensed for the first time in this state after the last day of any registration month may only be levied for the remaining months of the registration year including the month in which the travel trailer or camper is first licensed:  PROVIDED FURTHER, That the minimum amount of tax payable shall be two dollars:  PROVIDED FURTHER, That every dealer in mobile homes or travel trailers, for the privilege of using any mobile home or travel trailer eligible to be used under a dealer's license plate, shall pay an excise tax of two dollars, and such tax shall be collected upon the issuance of each original dealer's license plate, and also a similar tax shall be collected upon the issuance of each dealer's duplicate license plate, which taxes shall be in addition to any tax otherwise payable under this chapter.

    A travel trailer or camper shall be deemed licensed for the first time in this state when such vehicle was not previously licensed by this state for the registration year or any part thereof immediately preceding the registration year in which application for license is made or when it has been registered in another jurisdiction subsequent to any prior registration in this state.

    Sec. 21.  RCW 82.50.510 and 1991 c 199 s 227 are each amended to read as follows:

    The county auditor shall regularly, when remitting motor vehicle excise taxes, pay to the state treasurer the excise taxes imposed by RCW 82.50.400.  The treasurer shall then distribute such funds quarterly on the first day of the month of January, April, July and October of each year in the following amount:

    (1) ((For the one percent tax imposed under RCW 82.50.410, fifteen)) 13.64 percent to cities and towns for the use thereof apportioned ratably among such cities and towns on the basis of population; ((fifteen))

(2) 13.64 percent to counties for the use thereof to be apportioned ratably among such counties on the basis of moneys collected in such counties from the excise taxes imposed under this chapter; ((and seventy))

(3) 63.64 percent for schools to be deposited in the state general fund; and

    (((2) for the one-tenth of one percent surcharge imposed under RCW 82.50.410, one hundred)) (4) 9.08 percent to the transportation fund created in RCW 82.44.180.

    Sec. 22.  RCW 35.58.273 and 1992 c 194 s 11 are each amended to read as follows:

    (1) ((Through June 30, 1992, any municipality, as defined in this subsection, is authorized to levy and collect a special excise tax not exceeding .7824 percent and beginning July 1, 1992, .725 percent on the value, as determined under chapter 82.44 RCW, of every motor vehicle owned by a resident of such municipality for the privilege of using such motor vehicle provided that in no event shall the tax be less than one dollar and, subject to RCW 82.44.150 (3) and (4), the amount of such tax shall be credited against the amount of the excise tax levied by the state under RCW 82.44.020(1).  As used in this subsection, the term "municipality" means a municipality that is located within (a) each county with a population of two hundred ten thousand or more and (b) each county with a population of from one hundred twenty-five thousand to less than two hundred ten thousand except for those counties that do not border a county with a population as described under subsection (a) of this subsection.

    (2) Through June 30, 1992, any other)) A municipality is authorized to levy and collect a special excise tax not exceeding ((.815 percent, and beginning July 1, 1992,)) .725 percent on the value, as determined under chapter 82.44 RCW, of every motor vehicle owned by a resident of such municipality for the privilege of using such motor vehicle provided that in no event shall the tax be less than one dollar and, subject to RCW 82.44.150 (3) and (4), the amount of such tax shall be credited against the amount of the excise tax levied by the state under RCW 82.44.020(1).  Before utilization of any excise tax moneys collected under authorization of this section for acquisition of right of way or construction of a mass transit facility on a separate right of way the municipality shall adopt rules affording the public an opportunity for "corridor public hearings" and "design public hearings" as herein defined, which rule shall provide in detail the procedures necessary for public participation in the following instances:  (a) Prior to adoption of location and design plans having a substantial social, economic or environmental effect upon the locality upon which they are to be constructed or (b) on such mass rapid transit systems operating on a separate right of way whenever a substantial change is proposed relating to location or design in the adopted plan.  In adopting rules the municipality shall adhere to the provisions of the Administrative Procedure Act.

    (((3))) (2) A "corridor public hearing" is a public hearing that:  (a) Is held before the municipality is committed to a specific mass transit route proposal, and before a route location is established; (b) is held to afford an opportunity for participation by those interested in the determination of the need for, and the location of, the mass rapid transit system; (c) provides a public forum that affords a full opportunity for presenting views on the mass rapid transit system route location, and the social, economic and environmental effects on that location and alternate locations:  PROVIDED, That such hearing shall not be deemed to be necessary before adoption of an overall mass rapid transit system plan by a vote of the electorate of the municipality.

    (((4))) (3) A "design public hearing" is a public hearing that:  (a) Is held after the location is established but before the design is adopted; and (b) is held to afford an opportunity for participation by those interested in the determination of major design features of the mass rapid transit system; and (c) provides a public forum to afford a full opportunity for presenting views on the mass rapid transit system design, and the social, economic, environmental effects of that design and alternate designs.

    (((5))) (4) A municipality imposing a tax under subsection (1) ((or (2))) of this section may also impose a sales and use tax, in addition to the tax authorized by RCW 82.14.030, upon retail car rentals within the municipality that are taxable by the state under chapters 82.08 and 82.12 RCW.  The rate of tax shall not exceed 1.944 percent.  The rate of tax imposed under this subsection shall bear the same ratio to the 1.944 percent rate authorized that the rate imposed under ((RCW 82.08.020(2) as the excise tax rate imposed under)) subsection (1) of this section bears to the ((excise tax)) rate ((imposed under RCW 82.44.020 (1) and (2))) authorized under subsection (1) of this section.  The base of the tax shall be the selling price in the case of a sales tax or the rental value of the vehicle used in the case of a use tax.  The tax imposed under this section shall be deducted from the amount of tax otherwise due under RCW 82.08.020(2).  The revenue collected under this subsection shall be distributed in the same manner as special excise taxes under subsection((s)) (1) ((and (2))) of this section.

    Sec. 23.  RCW 35.58.410 and 1993 c 240 s 11 are each amended to read as follows:

    (1) On or before the third Monday in June of each year, each metropolitan municipal corporation shall adopt a budget for the following calendar year.  Such budget shall include a separate section for each authorized metropolitan function.  Expenditures shall be segregated as to operation and maintenance expenses and capital and betterment outlays.  Administrative and other expense general to the corporation shall be allocated between the authorized metropolitan functions.  The budget shall contain an estimate of all revenues to be collected during the following budget year, including any surplus funds remaining unexpended from the preceding year.  The metropolitan council shall not be required to confine capital or betterment expenditures made from bond proceeds or emergency expenditures to items provided in the budget.  The affirmative vote of three-fourths of all members of the metropolitan council shall be required to authorize emergency expenditures.

    (2) Subsection (1) of this section shall not apply to a county that has assumed the rights, powers, functions, and obligations of a metropolitan municipal corporation under chapter 36.56 RCW.  This subsection (2) shall apply only to each county that has assumed the rights, powers, functions, and obligations of a metropolitan municipal corporation under chapter 36.56 RCW.

    Each county that has assumed the rights, powers, functions, and obligations of a metropolitan municipal corporation under chapter 36.56 RCW shall, on or before the third Monday in June of each year, prepare an estimate of all revenues to be collected during the following calendar year, including any surplus funds remaining unexpended from the preceding year for each authorized metropolitan function.

    By June 30 of each year, the county shall adopt the rate for sewage disposal that will be charged to component cities and sewer districts during the following budget year.

    As long as any general obligation indebtedness remains outstanding that was issued by the metropolitan municipal corporation prior to the assumption by the county, the county shall continue to impose the taxes authorized by RCW 82.14.045 and 35.58.273(((5))) (4) at the maximum rates and on all of the taxable events authorized by law.  If, despite the continued imposition of those taxes, the estimate of revenues made on or before the third Monday in June shows that estimated revenues will be insufficient to make all debt service payments falling due in the following calendar year on all general obligation indebtedness issued by the metropolitan municipal corporation prior to the assumption by the county of the rights, powers, functions, and obligations of the metropolitan municipal corporation, the remaining amount required to make the debt service payments shall be designated as "supplemental income" and shall be obtained from component cities and component counties as provided under RCW 35.58.420.

    The county shall prepare and adopt a budget each year in accordance with applicable general law or county charter.  If supplemental income has been designated under this subsection, the supplemental income shall be reflected in the budget that is adopted.  If during the budget year the actual tax revenues from the taxes imposed under the authority of RCW 82.14.045 and 35.58.273(((5))) (4) exceed the estimates upon which the supplemental income was based, the difference shall be refunded to the component cities and component counties in proportion to their payments promptly after the end of the budget year.  A county that has assumed the rights, powers, functions, and obligations of a metropolitan municipal corporation under chapter 36.56 RCW shall not be required to confine capital or betterment expenditures for authorized metropolitan functions from bond proceeds or emergency expenditures to items provided in the budget.

    Sec. 24.  RCW 43.160.070 and 1997 c 235 s 721 are each amended to read as follows:

    Public facilities financial assistance, when authorized by the board, is subject to the following conditions:

    (1) The moneys in the public facilities construction loan revolving ((fund)) account and the distressed county public facilities construction loan account shall be used solely to fulfill commitments arising from financial assistance authorized in this chapter or, during the 1989-91 fiscal biennium, for economic development purposes as appropriated by the legislature.  The total outstanding amount which the board shall dispense at any time pursuant to this section shall not exceed the moneys available from the ((fund)) accounts.  The total amount of outstanding financial assistance in Pierce, King, and Snohomish counties shall never exceed sixty percent of the total amount of outstanding financial assistance disbursed by the board under this chapter without reference to financial assistance provided under section 7 of this act.

    (2) On contracts made for public facilities loans the board shall determine the interest rate which loans shall bear.  The interest rate shall not exceed ten percent per annum.  The board may provide reasonable terms and conditions for repayment for loans as the board determines.  The loans shall not exceed twenty years in duration.

    (3) Repayments of loans made from the public facilities construction loan revolving account under the contracts for public facilities construction loans shall be paid into the public facilities construction loan revolving ((fund)) account.  Repayments of loans made from the distressed county public facilities construction loan account under the contracts for public facilities construction loans shall be paid into the distressed county public facilities construction loan account.  Repayments of loans from moneys from the new appropriation from the public works assistance account for the fiscal biennium ending June 30, 1999, shall be paid into the public works assistance account.

    (4) When every feasible effort has been made to provide loans and loans are not possible, the board may provide grants upon finding that unique circumstances exist.

    Sec. 25.  RCW 43.160.076 and 1997 c 367 s 9 are each amended to read as follows:

    (1) Except as authorized to the contrary under subsection (2) of this section, from all funds available to the board for financial assistance in a biennium under this chapter without reference to financial assistance provided under section 7 of this act, the board shall spend at least seventy-five percent for financial assistance for projects in distressed counties or rural natural resources impact areas.  For purposes of this section, the term "distressed counties" includes any county, in which the average level of unemployment for the three years before the year in which an application for financial assistance is filed, exceeds the average state employment for those years by twenty percent.

    (2) If at any time during the last six months of a biennium the board finds that the actual and anticipated applications for qualified projects in distressed counties or rural natural resources impact areas are clearly insufficient to use up the seventy-five percent allocation under subsection (1) of this section, then the board shall estimate the amount of the insufficiency and during the remainder of the biennium may use that amount of the allocation for financial assistance to projects not located in distressed counties or rural natural resources impact areas.

    Sec. 26.  1997 c 367 s 10 (uncodified) is amended to read as follows:

    RCW 43.160.076 and section 25 of this act, 1997 c 367 s 9, 1996 c 51 s 7, 1995 c 226 s 15, 1993 c 320 s 5, 1991 c 314 s 24, & 1985 c 446 s 6 are each repealed effective June 30, 2000.

    Sec. 27.  RCW 43.160.080 and 1992 c 235 s 10 are each amended to read as follows:

    There shall be a fund in the state treasury known as the public facilities construction loan revolving account, which shall consist of all moneys collected under this chapter, except moneys of the board collected in connection with the issuance of industrial development revenue bonds and moneys deposited in the distressed county public facilities construction loan account under section 7 of this act, and any moneys appropriated to it by law:  PROVIDED, That seventy-five percent of all principal and interest payments on loans made with the proceeds deposited in the account under section 901, chapter 57, Laws of 1983 1st ex. sess. shall be deposited in the general fund as reimbursement for debt service payments on the bonds authorized in RCW 43.83.184.   Disbursements from the revolving account shall be on authorization of the board.  In order to maintain an effective expenditure and revenue control, the public facilities construction loan revolving account shall be subject in all respects to chapter 43.88 RCW.

    Sec. 28.  RCW 43.160.210 and 1996 c 290 s 1 and 1996 c 51 s 10 are each reenacted and amended to read as follows:

    (1) Except as authorized to the contrary under subsection (2) of this section, from all funds available to the board for financial assistance under this chapter without reference to financial assistance provided under section 7 of this act, the board shall designate at least twenty percent for financial assistance for projects in distressed counties.  For purposes of this section, the term "distressed counties" includes any county, in which:  (a) The average level of unemployment for the three years before the year in which an application for financial assistance is filed, exceeds the average state employment for those years by twenty percent; or (b) a county that has a median household income that is less than seventy‑five percent of the state median household income for the previous three years.

    (2) If at any time during the last six months of a biennium the board finds that the actual and anticipated applications for qualified projects in distressed counties are clearly insufficient to use up the twenty percent allocation under subsection (1) of this section, then the board shall estimate the amount of the insufficiency and during the remainder of the biennium may use that amount of the allocation for financial assistance for projects not located in distressed counties.

    Sec. 29.  RCW 46.16.068 and 1993 c 123 s 4 are each amended to read as follows:

    Trailing units which are subject to RCW 82.44.020(((5))) (4) shall, upon application, be issued a permanent license plate that is valid until the vehicle is sold, permanently removed from the state, or otherwise disposed of by the registered owner.  The fee for this license plate is thirty-six dollars.  Upon the sale, permanent removal from the state, or other disposition of a trailing unit bearing a permanent license plate the registered owner is required to return the license plate and registration certificate to the department.  Violations of this section or misuse of a permanent license plate may subject the registered owner to prosecution or denial, or both, of future permanent registration of any trailing units.  This section does not apply to any trailing units subject to the annual excise taxes prescribed in RCW 82.44.020.  The department is authorized to adopt rules to implement this section for leased vehicles and other applications as necessary.

    Sec. 30.  RCW 70.94.015 and 1993 c 252 s 1 are each amended to read as follows:

    (1) The air pollution control account is established in the state treasury.  All receipts collected by or on behalf of the department from RCW 70.94.151(2), and receipts from nonpermit program sources under RCW 70.94.152(1) and 70.94.154(7), and all receipts from RCW 70.94.650, 70.94.660, 82.44.020(((3))) (2), and 82.50.405 shall be deposited into the account.  Moneys in the account may be spent only after appropriation.  Expenditures from the account may be used only to develop and implement the provisions of chapters 70.94 and 70.120 RCW.

    (2) The amounts collected and allocated in accordance with this section shall be expended upon appropriation except as otherwise provided in this section and in accordance with the following limitations:

    Portions of moneys received by the department of ecology from the air pollution control account shall be distributed by the department to local authorities based on:

    (a) The level and extent of air quality problems within such authority's jurisdiction;

    (b) The costs associated with implementing air pollution regulatory programs by such authority; and

    (c) The amount of funding available to such authority from other sources, whether state, federal, or local, that could be used to implement such programs.

    (3) The air operating permit account is created in the custody of the state treasurer.  All receipts collected by or on behalf of the department from permit program sources under RCW 70.94.152(1), 70.94.161, 70.94.162, and 70.94.154(7) shall be deposited into the account.  Expenditures from the account may be used only for the activities described in RCW 70.94.152(1), 70.94.161, 70.94.162, and 70.94.154(7).  Moneys in the account may be spent only after appropriation.

    Sec. 31.  RCW 81.100.060 and 1992 c 194 s 12 are each amended to read as follows:

    A county with a population of one million or more and a county with a population of from two hundred ten thousand to less than one million that is adjoining a county with a population of one million or more, having within their boundaries existing or planned high occupancy vehicle lanes on the state highway system may, with voter approval, impose a local surcharge of not more than ((fifteen)) 13.64 percent on the state motor vehicle excise tax paid under RCW 82.44.020(1) on vehicles registered to a person residing within the county and on the state sales and use taxes paid under the rate in RCW 82.08.020(2) on retail car rentals within the county.  No surcharge may be imposed on vehicles licensed under RCW 46.16.070 except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16.079, ((46.16.080,)) 46.16.085, or 46.16.090.

    Counties imposing a tax under this section shall contract, before the effective date of the resolution or ordinance imposing a surcharge, administration and collection to the state department of licensing, and department of revenue, as appropriate, which shall deduct an amount, as provided by contract, for administration and collection expenses incurred by the department.  All administrative provisions in chapters 82.03, 82.32, and 82.44 RCW shall, insofar as they are applicable to state motor vehicle excise taxes, be applicable to surcharges imposed under this section.  All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW shall, insofar as they are applicable to state sales and use taxes, be applicable to surcharges imposed under this section.

    If the tax authorized in RCW 81.100.030 is also imposed by the county, the total proceeds from tax sources imposed under this section and RCW 81.100.030 each year shall not exceed the maximum amount which could be collected under this section.

    Sec. 32.  RCW 81.104.160 and 1992 c 194 s 13 and 1992 c 101 s 27 are each reenacted and amended to read as follows:

    (1) Cities that operate transit systems, county transportation authorities, metropolitan municipal corporations, public transportation benefit areas, and regional transit authorities may submit an authorizing proposition to the voters, and if approved, may levy and collect an excise tax, at a rate approved by the voters, but not exceeding eighty one-hundredths of one percent on the value, under chapter 82.44 RCW, of every motor vehicle owned by a resident of the taxing district, solely for the purpose of providing high capacity transportation service.  In any county imposing a motor vehicle excise tax surcharge pursuant to RCW 81.100.060, the maximum tax rate under this section shall be reduced to a rate equal to eighty one-hundredths of one percent on the value less the equivalent motor vehicle excise tax rate of the surcharge imposed pursuant to RCW 81.100.060.  This rate shall not apply to vehicles licensed under RCW 46.16.070 except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16.079, ((46.16.080,)) 46.16.085, or 46.16.090.

    (2) An agency imposing a tax under subsection (1) of this section may also impose a sales and use tax solely for the purpose of providing high capacity transportation service, in addition to the tax authorized by RCW 82.14.030, upon retail car rentals within the agency's jurisdiction that are taxable by the state under chapters 82.08 and 82.12 RCW.  The rate of tax shall not exceed 2.172 percent.  The rate of tax imposed under this subsection shall bear the same ratio to the 2.172 percent rate authorized that the rate imposed under ((RCW 82.08.020(2) as the excise tax rate imposed under)) subsection (1) of this section bears to the ((excise tax)) rate ((imposed under RCW 82.44.020 (1) and (2))) authorized under subsection (1) of this section.  The base of the tax shall be the selling price in the case of a sales tax or the rental value of the vehicle used in the case of a use tax.  The revenue collected under this subsection shall be used in the same manner as excise taxes under subsection (1) of this section.

    Sec. 33.  RCW 82.08.020 and 1992 c 194 s 9 are each amended to read as follows:

    (1) There is levied and there shall be collected a tax on each retail sale in this state equal to six and five-tenths percent of the selling price.

    (2) There is levied and there shall be collected an additional tax on each retail car rental, regardless of whether the vehicle is licensed in this state, equal to five and nine-tenths percent of the selling price.  ((Ninety-one percent of)) The revenue collected under this subsection shall be deposited and distributed in the same manner as motor vehicle excise tax revenue collected under RCW 82.44.020(1).  ((Nine percent of the revenue collected under this subsection shall be deposited in the transportation fund and distributed in the same manner as motor vehicle excise tax revenue collected under RCW 82.44.020(2).))

    (3) The taxes imposed under this chapter shall apply to successive retail sales of the same property.

    (4) The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

    Sec. 34.  RCW 82.14.046 and 1995 c 298 s 1 are each amended to read as follows:

    Beginning with distributions made to municipalities under RCW 82.44.150 on January 1, 1996, municipalities as defined in RCW 35.58.272 imposing local transit taxes, which for purposes of this section include the sales and use tax under RCW 82.14.045, the business and occupation tax under RCW 35.95.040, and excise taxes under RCW 35.95.040, shall be eligible for sales and use tax equalization payments from motor vehicle excise taxes distributed under RCW 82.44.150 as follows:

    (1) Prior to January 1st of each year the department of revenue shall determine the total and the per capita levels of revenues for each municipality imposing local transit taxes and the state-wide weighted average per capita level of sales and use tax revenues imposed under chapters 82.08 and 82.12 RCW for the previous calendar year calculated for a sales and use tax rate of one-tenth percent.  For purposes of this section, the department of revenue shall determine a local transit tax rate for each municipality for the previous calendar year.  The tax rate shall be equivalent to the sales and use tax rate for the municipality that would have generated an amount of revenue equal to the amount of local transit taxes collected by the municipality.

    (2) For each tenth of one percent of the local transit tax rate, the state treasurer shall apportion to each municipality receiving less than eighty percent of the state-wide weighted average per capita level of sales and use tax revenues imposed under chapters 82.08 and 82.12 RCW as determined by the department of revenue under subsection (1) of this section, an amount when added to the per capita level of revenues received the previous calendar year by the municipality, to equal eighty percent of the state-wide weighted average per capita level of revenues determined under subsection (1) of this section.  In no event may the sales and use tax equalization distribution to a municipality in a single calendar year exceed:  (a) Fifty percent of the amount of local transit taxes collected during the prior calendar year; or (b) the maximum amount of revenue that could have been collected at a local transit tax rate of three-tenths percent in the prior calendar year.

    (3) For a municipality established after January 1, 1995, sales and use tax equalization distributions shall be made according to the procedures in this subsection.  Sales and use tax equalization distributions to eligible new municipalities shall be made at the same time as distributions are made under subsection (2) of this section.  The department of revenue shall follow the estimating procedures outlined in this subsection until the new municipality has received a full year's worth of local transit tax revenues as of the January sales and use tax equalization distribution.

    (a) Whether a newly established municipality determined to receive funds under this subsection receives its first equalization payment at the January, April, July, or October sales and use tax equalization distribution shall depend on the date the system first imposes local transit taxes.

    (i) A newly established municipality imposing local transit taxes taking effect during the first calendar quarter shall be eligible to receive funds under this subsection beginning with the July sales and use tax equalization distribution of that year.

    (ii) A newly established municipality imposing local transit taxes taking effect during the second calendar quarter shall be eligible to receive funds under this subsection beginning with the October sales and use tax equalization distribution of that year.

    (iii) A newly established municipality imposing local transit taxes taking effect during the third calendar quarter shall be eligible to receive funds under this subsection beginning with the January sales and use tax equalization distribution of the next year.

    (iv) A newly established municipality imposing local transit taxes taking effect during the fourth calendar quarter shall be eligible to receive funds under this subsection beginning with the April sales and use tax equalization distribution of the next year.

    (b) For purposes of calculating the amount of funds the new municipality should receive under this subsection, the department of revenue shall:

    (i) Estimate the per capita amount of revenues from local transit taxes that the new municipality would have received had the municipality received revenues from the tax the entire calendar year;

    (ii) Calculate the amount provided under subsection (2) of this section based on the per capita revenues determined under (b)(i) of this subsection;

    (iii) Prorate the amount determined under (b)(ii) of this subsection by the number of months the local transit taxes have been imposed.

    (c) The department of revenue shall advise the state treasurer of the amounts calculated under (b) of this subsection and the state treasurer shall distribute these amounts to the new municipality from the motor vehicle excise tax ((distributed under RCW 82.44.150(2)(d))) deposited into the transportation fund under RCW 82.44.110.

    (4) A municipality whose governing body implements a tax change that reduces its local transit tax rate after January 1, 1994, may not receive distributions under this section.

    Sec. 35.  RCW 82.44.023 and 1994 c 227 s 3 are each amended to read as follows:

    Rental cars as defined in RCW 46.04.465 are exempt from the taxes imposed in RCW 82.44.020(1) ((and (2))).  When a rental car ceases to be used for rental car purposes and at the time of its retail sale, the excise tax imposed in RCW 82.44.020(1) ((and (2))) shall be imposed in an amount equal to one-twelfth of the annual excise tax then in effect, for each full month remaining in the vehicle's registration year.

    Sec. 36.  RCW 82.44.025 and 1996 c 139 s 3 are each amended to read as follows:

    Motor vehicles licensed under RCW 46.16.374 are exempt from the ((taxes)) tax imposed in RCW 82.44.020(1) ((and (2))).  When the motor vehicle ceases to be used for the purposes of RCW 46.16.374 or at the time of its retail sale, the excise tax imposed in RCW 82.44.020(1) ((and (2))) must be imposed for twelve full months from the date of application of the new owner.

    Sec. 37.  RCW 82.44.155 and 1993 c 492 s 254 are each amended to read as follows:

The city police and fire protection assistance account is created in the state treasury.  When distributions are made under RCW 82.44.150, the state treasurer shall apportion and distribute the motor vehicle excise taxes deposited into the ((general fund)) city police and fire protection assistance account under RCW 82.44.110(((1)(d))) to the cities and towns ratably on the basis of population as last determined by the office of financial management.  When so apportioned, the amount payable to each such city and town shall be transmitted to the city treasurer thereof, and shall be used by the city or town for the purposes of police and fire protection in the city or town, and not otherwise.  If it is adjudged that revenue derived from the excise ((taxes)) tax imposed by RCW 82.44.020(1) ((and (2))) cannot lawfully be apportioned or distributed to cities or towns, all moneys directed by this section to be apportioned and distributed to cities and towns shall be credited and transferred to the state general fund.

    Sec. 38.  RCW 82.44.180 and 1995 c 269 s 2601 are each amended to read as follows:

    (1) The transportation fund is created in the state treasury.  Revenues under RCW ((82.44.020 (1) and (2),)) 82.44.110((, 82.44.150,)) and ((the surcharge under RCW)) 82.50.510 shall be deposited into the fund as provided in those sections.

    Moneys in the fund may be spent only after appropriation.  Expenditures from the fund may be used only for transportation purposes and activities and operations of the Washington state patrol not directly related to the policing of public highways and that are not authorized under Article II, section 40 of the state Constitution.

    (2) There is hereby created the central Puget Sound public transportation account within the transportation fund.  Moneys deposited into the account under RCW 82.44.150(2)(b) shall be appropriated to the transportation improvement board and allocated by the transportation improvement board to public transportation projects within the region from which the funds are derived, solely for:

    (a) Planning;

    (b) Development of capital projects;

    (c) Development of high capacity transportation systems as defined in RCW 81.104.015;

    (d) Development of high occupancy vehicle lanes and related facilities as defined in RCW 81.100.020; and

    (e) Public transportation system contributions required to fund projects under federal programs and those approved by the transportation improvement board from other fund sources.

    (3) There is hereby created the public transportation systems account within the transportation fund.  Moneys deposited into the account under RCW 82.44.150(2)(c) shall be appropriated to the transportation improvement board and allocated by the transportation improvement board to public transportation projects submitted by the public transportation systems from which the funds are derived, solely for:

    (a) Planning;

    (b) Development of capital projects;

    (c) Development of high capacity transportation systems as defined in RCW 81.104.015;

    (d) Development of high occupancy vehicle lanes and related facilities as defined in RCW 81.100.020;

    (e) Other public transportation system-related roadway projects on state highways, county roads, or city streets; and

    (f) Public transportation system contributions required to fund projects under federal programs and those approved by the transportation improvement board from other fund sources.

    Sec. 39.  RCW 84.44.050 and 1993 c 123 s 3 are each amended to read as follows:

    The personal property of automobile transportation companies owning, controlling, operating or managing any motor propelled vehicle used in the business of transporting persons and/or property for compensation over any public highway in this state between fixed termini or over a regular route, shall be listed and assessed in the various counties where such vehicles are operated, in proportion to the mileage of their operations in such counties:  PROVIDED, That vehicles subject to chapter 82.44 RCW and trailer units exempt under RCW 82.44.020(((5))) (4) shall not be listed or assessed for ad valorem taxation so long as chapter 82.44 RCW remains in effect.  All vessels of every class which are by law required to be registered, licensed or enrolled, must be assessed and the taxes thereon paid only in the county of their actual situs:  PROVIDED, That such interest shall be taxed but once.  All boats and small craft not required to be registered must be assessed in the county of their actual situs.

NEW SECTION. Sec. 40.  Sections 14 through 19 of this act are each added to chapter 47.10 RCW.

NEW SECTION. Sec. 41.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 42.  This act takes effect July 1, 1998.

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