SUBSTITUTE SENATE BILL 5260
State of Washington 55th Legislature 1997 Regular Session
By Senate Committee on Commerce & Labor (originally sponsored by Senators Schow, Wojahn, Haugen, Winsley, Roach, Sellar and Long)
Read first time 02/24/97.
AN ACT Relating to urban stabilization; and adding a new chapter to Title 84 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature finds that:
(1) In many areas of the state deteriorating buildings and vacant brownfield infill sites pose significant health and safety problems to tenants and pedestrians;
(2) Many of these buildings were constructed before 1961 when laws were enacted that require buildings to be designed and constructed to resist seismic loads;
(3) Many of these buildings do not meet the requirements of the federal Americans with Disabilities Act and laws governing the removal of environmental hazards;
(4) Adaptive reuse of these blighted lands and buildings often require a significant investment to correct necessary life-safety problems; and
(5) It is in the best interest of the state of Washington to stop the decay of urban areas and to promote and facilitate the orderly redevelopment of these areas.
NEW SECTION. Sec. 2. It is the purpose of this chapter to provide for the allocation of a portion of state and local retail sales and business and occupation taxes for a limited period of time to assist in the financing of needed health and safety improvements, public improvements, and other public investments in urban areas that are needed to encourage private development.
NEW SECTION. Sec. 3. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Apportionment district" means the geographic area, within a city, from which excise taxes are to be appropriated to finance an urban stabilization project.
(2) "Excise taxes" means:
(a) Retail sales taxes levied under chapter 82.08 RCW;
(b) Local retail sales taxes levied under chapter 82.14 RCW, except those taxes levied under RCW 82.14.360;
(c) Business and occupation taxes levied under chapter 82.04 RCW; and
(d) Use taxes levied under chapter 82.12 RCW.
(3) "Local government" means a city, code city, or town.
(4) "Ordinance" means any appropriate method of taking legislative action by a local government.
(5) "Sponsor" means a local government initiating and undertaking an urban stabilization project.
(6) "Tax allocation revenues" means those tax revenues allocated to a sponsor under this chapter.
(7) "Taxing districts" means any governmental entity which levies an excise tax which is collected within a proposed or approved apportionment district.
(8) "Urban stabilization project" means:
(a) Health and safety improvements authorized to be publicly financed under chapter 35.80 or 35.81 RCW;
(b) Publicly owned or leased facilities in a local government which the sponsor has authority to provide; and
(c) Expenditure for any of the following purposes:
(i) Providing environmental analysis professional management, planning, and promotion within the apportionment district, including the management and promotion of retail trade activities in the apportionment district;
(ii) Providing maintenance and security for common or public areas in the apportionment district; or
(iii) Historic preservation activities authorized under RCW 35.21.395.
(9) "Urban stabilization project costs" means: The costs of land use planning and associated environmental analysis, project design and planning, acquisition, site preparation, construction, reconstruction, rehabilitation, improvement, operation, and installation of the urban stabilization project; the costs of relocation, maintenance, and operation of property pending construction of the urban stabilization project; the costs of financing, including interest during construction, legal and other professional services, taxes, and insurance; the costs of apportioning the taxes and complying with this chapter and other applicable law; and the administrative costs reasonably necessary and related to these costs.
(10) "Urban stabilization project ordinance" means the ordinance passed under section 6 of this act.
NEW SECTION. Sec. 4. Apportionment of excise tax revenues to finance an urban stabilization project is subject to the following limitations:
(1) For each urban stabilization project, the revenue apportioned under this chapter shall not exceed five million dollars annually. All revenue in excess of five million dollars in any given year shall be distributed to the appropriate taxing district as though an apportionment district had not been created;
(2) Regardless of the number of urban stabilization projects approved by local governments, the aggregate total of revenue available for apportionment is annually limited to thirty million dollars;
(3) An apportionment district may not be established that includes a geographic area included within a previously established apportionment district that has outstanding bonds payable in whole or in part from tax allocation revenues; and
(4) Taxes, other than excise taxes, may not be appropriated under this chapter.
NEW SECTION. Sec. 5. An urban stabilization project may be undertaken and coordinated with other programs or efforts undertaken by the sponsor or others and may be funded in whole or in part from sources other than those provided by this chapter.
NEW SECTION. Sec. 6. In order to establish an apportionment district and secure an allocation of excise taxes to finance an urban stabilization project:
(1) A sponsor shall propose by ordinance a plan for the urban stabilization project that includes a description of the contemplated urban stabilization project, the estimated cost of the urban stabilization project, the boundaries of the apportionment district, the estimated period during which tax revenue apportionment is contemplated, and ways in which the sponsor plans to use tax allocation revenues to finance the urban stabilization project;
(2) At least sixty days in advance of a public hearing at which the ordinance creating the apportionment district is first considered, the local government shall deliver notice of the hearing and the information required in subsection (1) of this section to the department of community, trade, and economic development and the department of revenue. The department of revenue shall review the information and determine whether there is sufficient revenue under the revenue apportionment cap in section 5 of this act to accommodate the proposed urban stabilization project. The department of community, trade, and economic development shall review the proposed urban stabilization project and evaluate the project using the following criteria: (a) The urban stabilization project must be consistent with the local comprehensive plan; (b) the urban stabilization project will result in reuse of existing unused or underutilized buildings; (c) the urban stabilization project will eliminate blight or reduce public safety expenditures within the apportionment district; (d) the urban stabilization project must be reasonably expected to cause private investment within the district that would probably not have occurred without formation of the apportionment district; (e) the urban stabilization project will result in a net increase in employment within the apportionment district; and (f) the revenue apportioned is likely to be sufficient to finance the portion of the public expenditures proposed to be paid from the sources. In addition to these criteria, if a local government applies for a subsequent apportionment district following the creation of a first district within its corporate limits, the department of community, trade, and economic development shall determine, if a previously approved apportionment district still exists within the corporate limits of the sponsor, whether the revenue apportioned in the district equaled or exceeded the revenue projected to be apportioned;
(3) A proposed project must satisfy at least five of the six criteria in subsection (2) of this section. A project in a jurisdiction where an apportionment district still exists must satisfy six of the criteria in subsection (2) of this section;
(4) The department of revenue and the department of community, trade, and economic development shall notify the sponsoring local government, and either the county legislative authority or, in a charter county, the county executive, of the results of the evaluation of the project at least fifteen days in advance of the public hearing required in subsection (1) of this section;
(5) If there are more projects proposed than apportioned revenue is available in a given year under the limit in section 4 of this act, the department of community, trade, and economic development shall establish rules to determine how the available revenue will be allocated among qualified projects;
(6) At the time and place fixed for the hearing under subsection (2) of this section, and at such times to which the hearing may be adjourned, a sponsor shall receive and consider all statements and materials as might be submitted, and objections and letters filed before and within ten days after the hearing. Any time during the process leading to the establishment of the apportionment district, the county legislative authority may notify the sponsor that it does not wish to participate in the district. All taxes due the county from the apportionment district remain the county's and may not be used for the urban stabilization project;
(7) Within one hundred twenty days after completion of the public hearing, a sponsor shall pass an ordinance establishing the apportionment district and authorizing the proposed urban stabilization project, including any modifications that in the sponsor's opinion the hearing indicated should be made, that includes the boundaries of the apportionment, a description of the urban stabilization project, the estimated cost of the urban stabilization project, the portion of the estimated cost of the urban stabilization project to be paid from tax allocation revenues, the estimated time during which the excise taxes are to be apportioned, the date when the apportionment of excise taxes is to commence, and a finding that the urban stabilization project meets the conditions of section 3 of this act.
NEW SECTION. Sec. 7. (1) Upon the date established in the urban stabilization project ordinance, but not sooner than the first day of the calendar year following the passage of the ordinance, the excise taxes levied upon the sales and business activities within the apportionment district subject to taxation must be divided as follows:
(a) That portion of excise taxes collected for a taxing district in each year within an apportionment district that is equal to the taxes collected for such taxing district within such apportionment district in the year preceding the formation of the apportionment district, must be allocated to and paid to such taxing district; and
(b) That portion of the excise taxes collected for a taxing district in each year within an apportionment district that is in excess of the excise tax collected in the year preceding the formation of the apportionment district must be allocated and paid to the sponsor, or the sponsor's designated agent, until all urban stabilization project costs to be paid from the tax allocation revenues have been paid, except that the sponsor may agree to receive less than the full amount of such portion, in which case the balance of the excise taxes must be allocated to the respective taxing districts in proportion to their excise tax levies due for the year in which the funds are returned.
(2) The date upon which the apportionment district was established is considered the date that the urban stabilization project ordinance was enacted by the sponsor.
(3) The apportionment of excise taxes under this section must cease when the tax allocation revenues are no longer necessary or obligated to pay urban stabilization property costs or to pay principal and interest on bonds issued to finance urban stabilization project costs to which tax allocation revenues are pledged. At the time of termination of the apportionment, any excess money and any earnings held by the sponsor must be distributed to the taxing districts that were subject to the allocation in proportion to their excise tax receipts due for the year in which the funds are returned.
(4) The amount of excise taxes determined to be collected in the year preceding the formation of the apportionment district must be adjusted upward to reflect increases in the rate of taxation.
NEW SECTION. Sec. 8. (1) Tax allocation revenues may be applied as follows:
(a) To pay urban stabilization costs;
(b) To pay into bond funds established to pay the principal and interest on general obligation bonds issued to finance an urban stabilization project that is specified in the urban stabilization project ordinance and constructed following the establishment of the apportionment district; or
(c) To pay any combination of (a) and (b) of this section.
(2) Tax allocation revenues may be pledged to the payment of bonds issued to finance an urban stabilization project.
NEW SECTION. Sec. 9. This chapter supplements and neither restricts nor limits any powers that the state or any municipal corporation might otherwise have under laws of this state.
NEW SECTION. Sec. 10. The authority to establish an apportionment district under this chapter expires July 1, 2007.
NEW SECTION. Sec. 11. This chapter may be known and cited as the urban stabilization act.
NEW SECTION. Sec. 12. 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. 13. Sections 1 through 12 of this act constitute a new chapter in Title 84 RCW.
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