S 1722

S‑1722.2 _____________________________________________

SUBSTITUTE SENATE BILL 5514

_____________________________________________

State of Washington 57th Legislature 2001 Regular Session

By Senate Committee on State & Local Government (originally sponsored by Senators Spanel, Carlson, Hale, Gardner, Rasmussen, Winsley, Regala, Costa and Fraser)

READ FIRST TIME 02/22/01.

_1 AN ACT Relating to public facilities districts; amending RCW

_2 35.57.010, 35.57.020, 36.100.030, and 82.14.390; adding new

_3 sections to chapter 35.57 RCW; and adding new sections to chapter

_4 36.100 RCW.

_5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_6 Sec. 1. RCW 35.57.010 and 1999 c 165 s 1 are each amended to read

_7 as follows:

_8 (1) The legislative authority of any town or city located in a

_9 county with a population of less than one million may create a

10 public facilities district. The legislative authorities of any

11 contiguous group of towns or cities located in a county or

12 counties each with a population of less than one million may enter

13 an agreement under chapter 39.34 RCW for the creation and joint

14 operation of a public facilities district. The legislative

15 authority of any town or city, or any contiguous group of towns or

16 cities, located in a county with a population of less than one

17 million and the legislative authority of the county or counties in

18 which the towns or cities are located may enter into an agreement

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_1 under chapter 39.34 RCW for the creation and joint operation of a

_2 public facilities district.

_3 (2) A public facilities district shall be coextensive with the

_4 boundaries of the city or town or contiguous group of cities or

_5 towns that created the district. A public facilities district

_6 created by an agreement between a town or city, or a contiguous

_7 group of towns or cities, and the county in which they are located

_8 shall be coextensive with the boundaries of the towns or cities,

_9 and the boundaries of the county or counties as to the

10 unincorporated areas of the county or counties. The boundaries

11 shall not include incorporated towns or cities that are not

12 parties to the agreement for the creation and joint operation of

13 the district.

14 (3)(a) A public facilities district created by a single city or

15 town shall be governed by a board of directors consisting of five

16 members selected as follows: (i) Two members appointed by the

17 legislative authority of the city or town; and (ii) three members

18 appointed by legislative authority based on recommendations from

19 local organizations. The members appointed under (a)(i) of this

20 subsection, shall not be members of the legislative authority of

21 the city or town. The members appointed under (a)(ii) of this

22 subsection, shall be based on recommendations received from local

23 organizations that may include, but are not limited to the local

24 chamber of commerce, local economic development council, and local

25 labor council. The members shall serve four-year terms. Of the

26 initial members, one must be appointed for a one-year term, one

27 must be appointed for a two-year term, one must be appointed for a

28 three-year term, and the remainder must be appointed for four-year

29 terms.

30 (b) A public facilities district created by ((~~[a]~~)) a

31 contiguous group of cities and towns shall be governed by a board

32 of directors consisting of seven members selected as follows: (i)

33 Three members appointed by the legislative authorities of the

34 cities and towns; and (ii) four members appointed by the

35 legislative authority based on recommendations from local

36 organizations. The members appointed under (b)(i) of this

37 subsection shall not be members of the legislative authorities of

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_1 the cities and towns. The members appointed under (b)(ii) of this

_2 subsection, shall be based on recommendations received from local

_3 organizations that include, but are not limited to the local

_4 chamber of commerce, local economic development council, local

_5 labor council, and a neighborhood organization that is directly

_6 affected by the location of the regional center in their area. The

_7 members of the board of directors shall be appointed in accordance

_8 with the terms of the agreement under chapter 39.34 RCW for the

_9 joint operation of the district and shall serve four-year terms. Of

10 the initial members, one must be appointed for a one- year term,

11 one must be appointed for a two-year term, one must be appointed

12 for a three-year term, and the remainder must be appointed for

13 four-year terms.

14 (c) A public facilities district created by a town or city, or

15 a contiguous group of towns or cities, and the county or counties

16 in which they are located shall be governed by a board of

17 directors consisting of seven members selected as follows: (i)

18 Three members appointed by the legislative authorities of the

19 cities, towns, and county; and (ii) four members appointed by the

20 legislative authority based on recommendations from local

21 organizations. The members appointed under (c)(i) of this

22 subsection shall not be members of the legislative authorities of

23 the cities, towns, or county. The members appointed under (c)(ii)

24 of this subsection shall be based on recommendations received from

25 local organizations that include, but are not limited to, the

26 local chamber of commerce, local economic development council,

27 local labor council, and a neighborhood organization that is

28 directly affected by the location of the regional center in their

29 area. The members of the board of directors shall be appointed in

30 accordance with the terms of the agreement under chapter 39.34 RCW

31 for the joint operation of the district and shall serve four-year

32 terms. Of the initial members, one must be appointed for a one-year

33 term, one must be appointed for a two-year term, one must be

34 appointed for a three-year term, and the remainder must be

35 appointed for four-year terms.

36 (4) A public facilities district is a municipal corporation, an

37 independent taxing "authority" within the meaning of Article VII,

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_1 section 1 of the state Constitution, and a "taxing district"

_2 within the meaning of Article VII, section 2 of the state

_3 Constitution.

_4 (5) A public facilities district shall constitute a body

_5 corporate and shall possess all the usual powers of a corporation

_6 for public purposes as well as all other powers that may now or

_7 hereafter be specifically conferred by statute, including, but not

_8 limited to, the authority to hire employees, staff, and services,

_9 to enter into contracts, and to sue and be sued.

10 (6) A public facilities district may acquire and transfer real

11 and personal property by lease, sublease, purchase, or sale. No

12 direct or collateral attack on any ((~~metropolitan~~)) public

13 facilities district purported to be authorized or created in

14 conformance with this chapter may be commenced more than thirty

15 days after creation by the city and/or county legislative

16 authority.

17 Sec. 2. RCW 35.57.020 and 1999 c 165 s 2 are each amended to read

18 as follows:

19 (1) A public facilities district is authorized to acquire,

20 construct, own, remodel, maintain, equip, reequip, repair,

21 finance, and operate one or more regional centers. For purposes of

22 this chapter, "regional center" means a convention, conference, or

23 special events center, or any combination of facilities, and

24 related parking facilities, serving a regional population

25 constructed, improved, or rehabilitated after July 25, 1999, at a

26 cost of at least ten million dollars, including debt service. A

27 "special events center" is a facility or combination of

28 facilities, the primary purpose of which is the presentation of

29 events, activities, performances, or exhibits for the enjoyment of

30 the general public. "Regional center" also includes an existing

31 convention, conference, or special events center, and related

32 parking facilities, serving a regional population, that is

33 improved or rehabilitated after July 25, 1999, where the costs of

34 improvement or rehabilitation are at least ten million dollars,

35 including debt service. A regional center is conclusively presumed

36 to serve a regional population if state and local government

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_1 investment in the construction, improvement, or rehabilitation of

_2 the regional center is equal to or greater than ten million

_3 dollars.

_4 (2) A public facilities district created under RCW 36.100.010

_5 and a public facilities district created under RCW 35.57.010

_6 located in the same county may enter into agreements under chapter

_7 39.34 RCW to jointly acquire, construct, own, remodel, maintain,

_8 equip, reequip, repair, finance, and operate one or more regional

_9 centers.

10 (3) A public facilities district may impose charges and fees

11 for the use of its facilities, and may accept and expend or use

12 gifts, grants, and donations for the purpose of a regional center.

13 ((~~(3)~~)) (4) A public facilities district may impose charges,

14 fees, and taxes authorized in RCW 35.57.040, and use revenues

15 derived therefrom for the purpose of paying principal and interest

16 payments on bonds issued by the public facilities district to

17 construct a regional center.

18 ((~~(4)~~)) (5) Notwithstanding the establishment of a career,

19 civil, or merit service system, a public facilities district may

20 contract with a public or private entity for the operation or

21 management of its public facilities.

22 ((~~(5)~~)) (6) A public facilities district is authorized to use

23 the supplemental alternative public works contracting procedures

24 set forth in chapter 39.10 RCW in connection with the design,

25 construction, reconstruction, remodel, or alteration of any

26 regional center.

27 Sec. 3. RCW 36.100.030 and 1999 c 165 s 16 are each amended to

28 read as follows:

29 (1) A public facilities district is authorized to acquire,

30 construct, own, remodel, maintain, equip, reequip, repair, and

31 operate sports facilities, entertainment facilities, convention

32 facilities, or regional centers as defined in RCW 35.57.020,

33 together with contiguous parking facilities. The taxes that are

34 provided for in this chapter may only be imposed for these

35 purposes.

36 (2) A public facilities district created under RCW 36.100.010

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_1 and a public facilities district created under RCW 35.57.010

_2 located in the same county may enter into agreements under chapter

_3 39.34 RCW to jointly acquire, construct, own, remodel, maintain,

_4 equip, reequip, repair, finance, and operate one or more regional

_5 centers.

_6 (3) A public facilities district may enter into agreements

_7 under chapter 39.34 RCW for the joint provision and operation of

_8 such facilities and may enter into contracts under chapter 39.34

_9 RCW where any party to the contract provides and operates such

10 facilities for the other party or parties to the contract.

11 ((~~(3)~~)) (4) Notwithstanding the establishment of a career,

12 civil, or merit service system, a public ((~~facility [facilities]~~))

13 facilities district may contract with a public or private entity

14 for the operation or management of its public facilities.

15 ((~~(4)~~)) (5) A public facilities district is authorized to use

16 the supplemental alternative public works contracting procedures

17 set forth in chapter 39.10 RCW in connection with the design,

18 construction, reconstruction, remodel, or alteration of any of its

19 public facilities.

20 ((~~(5)~~)) (6) A public facilities district may impose charges and

21 fees for the use of its facilities, and may accept and expend or

22 use gifts, grants, and donations.

23 Sec. 4. RCW 82.14.390 and 1999 c 165 s 13 are each amended to read

24 as follows:

25 (1) Except as provided in subsection (6) of this section, the

26 governing body of a public facilities district created under

27 chapter 35.57 or 36.100 RCW that commences construction of a new

28 regional center, or improvement or rehabilitation of an existing

29 new regional center, before January 1, ((~~2003~~)) 2004, may impose a

30 sales and use tax in accordance with the terms of this chapter. The

31 tax is in addition to other taxes authorized by law and shall be

32 collected from those persons who are taxable by the state under

33 chapters 82.08 and 82.12 RCW upon the occurrence of any taxable

34 event within the public facilities district. The rate of tax shall

35 not exceed 0.033 percent of the selling price in the case of a

36 sales tax or value of the article used in the case of a use tax.

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_1 (2) The tax imposed under subsection (1) of this section shall

_2 be deducted from the amount of tax otherwise required to be

_3 collected or paid over to the department of revenue under chapter

_4 82.08 or 82.12 RCW. The department of revenue shall perform the

_5 collection of such taxes on behalf of the county at no cost to the

_6 public facilities district.

_7 (3) No tax may be collected under this section before August 1,

_8 2000. The tax imposed in this section shall expire when the bonds

_9 issued for the construction of the regional center and related

10 parking facilities are retired, but not more than twenty-five

11 years after the tax is first collected.

12 (4) Moneys collected under this section shall only be used for

13 the purposes set forth in RCW 35.57.020 and must be matched with

14 an amount from other public or private sources equal to thirty-

15 three percent of the amount collected under this section, provided

16 that amounts generated from nonvoter approved taxes authorized

17 under chapter 35.57 RCW or nonvoter approved taxes authorized

18 under chapter 36.100 RCW shall not constitute a public or private

19 source. For the purpose of this section, public or private sources

20 includes, but is not limited to cash or in-kind contributions used

21 in all phases of the development or improvement of the regional

22 center, land that is donated and used for the siting of the

23 regional center, cash or in-kind contributions from public or

24 private foundations, or amounts attributed to private sector

25 partners as part of a public and private partnership agreement

26 negotiated by the public facilities district.

27 (5) The combined total tax levied under this section shall not

28 be greater than 0.033 percent. If both a public facilities district

29 created under chapter 35.57 RCW and a public facilities district

30 created under chapter 36.100 RCW impose a tax under this section,

31 the tax imposed by a public facilities district created under

32 chapter 35.57 RCW shall be credited against the tax imposed by a

33 public facilities district created under chapter 36.100 RCW.

34 (6) A public facilities district created under chapter 36.100

35 RCW is not eligible to impose the tax under this section if the

36 legislative authority of the county where the public facilities

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_1 district is located has imposed a sales and use tax under RCW

_2 82.14.0485 or 82.14.0494.

_3 NEW SECTION. Sec. 5. A new section is added to chapter 35.57

_4 RCW to read as follows:

_5 A public facilities district established in accordance with

_6 this chapter will be dissolved and its affairs liquidated by

_7 either of the following methods:

_8 (1) When directed by a majority of persons in the district

_9 voting on the question. An election placing the question before the

10 voters may be called in the following manner:

11 (a) By resolution of the public facilities district governing

12 authority;

13 (b) By resolution of the county legislative body or bodies with

14 the concurrence by resolution of the city council of a component

15 city; or

16 (c) By petition calling for an election signed by at least ten

17 percent of the qualified voters residing within the public

18 facilities district filed with the auditor of the county where the

19 largest portion of the district is located. The auditor will

20 examine and certify the sufficiency of the signatures, however,

21 the signatures must have been collected within a ninety-day period

22 as designated by the petition sponsors.

23 With dissolution of the public facilities district, any

24 outstanding obligations and bonded indebtedness of the district

25 will be satisfied or allocated by mutual agreement to the county

26 or counties and component cities of the district.

27 (2) By submission of a petition signed by at least two-thirds

28 of the legislative bodies who have representatives on the public

29 facilities district governing body for an order of dissolution to

30 the superior court of a county of the district. All of the

31 signatures must have been collected within one hundred twenty days

32 of the date of submission to the court. The procedures for

33 dissolution provided in RCW 53.48.030 through 53.48.120 apply,

34 except that the balance of any assets, after payment of all costs

35 and expenses, will be divided among the county or counties and

36 component cities of the district on a per capita basis. Any duties

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_1 to be performed by a county official pursuant to RCW 53.48.030

_2 through 53.48.120 will be performed by the relevant official of

_3 the county in which the petition for dissolution is filed.

_4 NEW SECTION. Sec. 6. A new section is added to chapter 36.100

_5 RCW to read as follows:

_6 A public facilities district established in accordance with

_7 this chapter will be dissolved and its affairs liquidated by

_8 either of the following methods:

_9 (1) When directed by a majority of persons in the district

10 voting on the question. An election placing the question before the

11 voters may be called in the following manner:

12 (a) By resolution of the public facilities district governing

13 authority;

14 (b) By resolution of the county legislative body or bodies with

15 the concurrence by resolution of the city council of a component

16 city; or

17 (c) By petition calling for an election signed by at least ten

18 percent of the qualified voters residing within the public

19 facilities district filed with the auditor of the county where the

20 largest portion of the district is located. The auditor will

21 examine and certify the sufficiency of the signatures, however,

22 the signatures must have been collected within a ninety-day period

23 as designated by the petition sponsors.

24 With dissolution of the public facilities district, any

25 outstanding obligations and bonded indebtedness of the district

26 will be satisfied or allocated by mutual agreement to the county

27 or counties and component cities of the district.

28 (2) By submission of a petition signed by at least two-thirds

29 of the legislative bodies who have representatives on the public

30 facilities district governing body for an order of dissolution to

31 the superior court of a county of the district. All of the

32 signatures must have been collected within one hundred twenty days

33 of the date of submission to the court. The procedures for

34 dissolution provided in RCW 53.48.030 through 53.48.120 apply,

35 except that the balance of any assets, after payment of all costs

36 and expenses, will be divided among the county or counties and

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_1 component cities of the district on a per capita basis. Any duties

_2 to be performed by a county official pursuant to RCW 53.48.030

_3 through 53.48.120 will be performed by the relevant official of

_4 the county in which the petition for dissolution is filed.

_5 NEW SECTION. Sec. 7. A new section is added to chapter 36.100

_6 RCW to read as follows:

_7 (1) A public facilities district may apply for deferral of

_8 taxes on site preparation, construction of buildings or other

_9 structures, and acquisition of related machinery and equipment,

10 for a regional center. Application shall be made to the department

11 of revenue in a form and manner prescribed by the department of

12 revenue. The application shall contain information regarding the

13 location of the regional center, estimated or actual costs, time

14 schedules for completion and operation, and other information

15 required by the department of revenue. The department of revenue

16 shall approve the application within sixty days if it meets the

17 requirements of this section.

18 (2) The department of revenue shall issue a sales and use tax

19 deferral certificate for state and local sales and use taxes due

20 under chapters 82.08, 82.12, and 82.14 RCW on the public

21 facility. The use of the certificate shall be governed by rules

22 established by the department of revenue.

23 (3) The public facilities district shall begin paying the

24 deferred taxes in the fifth year after the date certified by the

25 department of revenue as the date on which the regional center is

26 operationally complete. The first payment is due on December 31st

27 of the fifth calendar year after such certified date, with

28 subsequent annual payments due on December 31st of the following

29 nine years. Each payment shall equal ten percent of the deferred

30 tax.

31 (4) The department of revenue may authorize an accelerated

32 repayment schedule upon request of the public facilities district.

33 (5) Interest shall not be charged on any taxes deferred under

34 this section for the period of deferral, although all other

35 penalties and interest applicable to delinquent excise taxes may

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_1 be assessed and imposed for delinquent payments under this

_2 section. The debt for deferred taxes is not extinguished by

_3 insolvency or other failure of the public facilities district.

_4 (6) Applications and any other information received by the

_5 department of revenue under this section are not confidential and

_6 are subject to disclosure. Chapter 82.32 RCW applies to the

_7 administration of this section.

_9 NEW SECTION. Sec. 8. A new section is added to chapter 35.57

10 RCW to read as follows:

11 (1) A public facilities district may apply for deferral of

12 taxes on site preparation, construction of buildings or other

13 structures, and acquisition of related machinery and equipment,

14 for a regional center. Application shall be made to the department

15 of revenue in a form and manner prescribed by the department of

16 revenue. The application shall contain information regarding the

17 location of the regional center, estimated or actual costs, time

18 schedules for completion and operation, and other information

19 required by the department of revenue. The department of revenue

20 shall approve the application within sixty days if it meets the

21 requirements of this section.

22 (2) The department of revenue shall issue a sales and use tax

23 deferral certificate for state and local sales and use taxes due

24 under chapters 82.08, 82.12, and 82.14 RCW on the public

25 facility. The use of the certificate shall be governed by rules

26 established by the department of revenue.

27 (3) The public facilities district shall begin paying the

28 deferred taxes in the fifth year after the date certified by the

29 department of revenue as the date on which the regional center is

30 operationally complete. The first payment is due on December 31st

31 of the fifth calendar year after such certified date, with

32 subsequent annual payments due on December 31st of the following

33 nine years. Each payment shall equal ten percent of the deferred

34 tax.

35 (4) The department of revenue may authorize an accelerated

36 repayment schedule upon request of the public facilities district.

37 (5) Interest shall not be charged on any taxes deferred under

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_1 this section for the period of deferral, although all other

_2 penalties and interest applicable to delinquent excise taxes may

_3 be assessed and imposed for delinquent payments under this

_4 section. The debt for deferred taxes is not extinguished by

_5 insolvency or other failure of the public facilities district.

_6 (6) Applications and any other information received by the

_7 department of revenue under this section are not confidential and

_8 are subject to disclosure. Chapter 82.32 RCW applies to the

_9 administration of this section.

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