BILL REQ. #:  H-1918.1 

Read first time 02/22/2005.   Referred to Committee on Capital Budget.

     AN ACT Relating to bonds for outdoor recreation purposes such as parks and athletic fields; amending RCW 82.04.460 and 39.42.060; adding a new section to chapter 82.04 RCW; adding a new chapter to Title 43 RCW; adding a new chapter to Title 82 RCW; creating a new section; repealing 2003 c 126 s 1002 (uncodified); providing an effective date; and providing for submission of this act to a vote of the people.

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

NEW SECTION.  Sec. 1   The legislature finds that the diversity and splendor of Washington's parks system and local active recreational opportunities are important resources for the people of this state. Such outdoor opportunities contribute to the quality of life, are one of the reasons people choose to live in Washington state, and contribute to economic development. The state faces ever-increasing demands from use of our parks and recreation resources and the responsibility to protect natural and cultural resources while accommodating recreation needs. The legislature further finds that there has been a decline in suitable outdoor fields for community athletic activities that have resulted in overcrowding and deterioration of existing surfaces. Therefore, it is the policy of the state to maintain, develop, fund, and improve the state's parks system and local active recreation opportunities. The legislature recognizes that a dedicated revenue source is needed and intends to authorize, with approval by the people of the state, a bond measure to provide approximately fifty million dollars per year for ten years for these purposes.

NEW SECTION.  Sec. 2   For the purpose of providing funds for acquisition, preservation, and development of recreation areas and facilities by the state, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of five hundred million dollars, or as much thereof as may be required, to finance these projects and all costs incidental thereto. Bonds authorized in this section may be sold at such price as the state finance committee shall determine. No bonds authorized in this section may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.

NEW SECTION.  Sec. 3   The proceeds from the sale of bonds authorized under section 2 of this act shall be deposited in the parks and outdoor recreation enhancement account hereby created in the state treasury and shall be used exclusively for the purpose specified in this chapter and for payment of the expenses incurred in the issuance and sale of bonds.

NEW SECTION.  Sec. 4   (1) The proceeds from the sale of the bonds deposited in the parks and outdoor recreation enhancement account shall be divided into two shares as follows:
     (a) Fifty percent of such proceeds shall be allocated, subject to legislative appropriation, to the interagency committee for outdoor recreation for purposes of RCW 79A.25.800; and
     (b) Fifty percent of such proceeds shall be allocated to the state parks and recreation commission, subject to legislative appropriation, for improvement of existing state parks and the acquisition and preservation of historic sites and buildings. The commission may use or permit the use of any portion of such share as matching funds in any case where federal, local, or other funds are made available on a matching basis for improvements within the purposes of this chapter.
     (2) In the event that the bonds authorized by this chapter are sold in more than one series, the division into shares in subsection (1) of this section shall apply to the total proceeds of the bonds authorized by this chapter and not to the proceeds of each separate series.

NEW SECTION.  Sec. 5   (1) Bonds issued under section 2 of this act shall state that they are a general obligation of the state of Washington, pledge the full faith and credit of the state to the payment of principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.
     (2) The owner and holder of each of the bonds or the trustee for the owner and holder of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of funds as directed in this section.

NEW SECTION.  Sec. 6   The parks and outdoor recreation enhancement bond repayment account is hereby created in the state treasury.

NEW SECTION.  Sec. 7   (1) The nondebt-limit reimbursable bond retirement account shall be used for the payment of the principal of and interest on the bonds authorized in section 2 of this act.
     (2) The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing twelve months to meet the bond retirement and interest requirements on the bonds authorized in section 2 of this act.
     (3) On each date on which any interest or principal and interest payment is due on bonds issued for the purposes of section 2 of this act, the state treasurer shall transfer from the parks and outdoor recreation enhancement bond repayment account created in section 6 of this act for deposit into the nondebt-limit reimbursable bond retirement account the amount computed in subsection (2) of this section for bonds issued for the purposes of section 2 of this act.

NEW SECTION.  Sec. 8   For the purposes of this chapter, "admission charge" includes a charge made for season tickets or subscriptions, a cover charge, or a charge made for use of seats and tables, reserved or otherwise, and other similar accommodations; a charge made for food and refreshments in any place where any free entertainment, recreation, or amusement is provided; a charge made for rental or use of equipment or facilities for purpose of recreation or amusement, and where the rental of the equipment or facilities is necessary to the enjoyment of a privilege for which a general admission is charged, the combined charges shall be considered as the admission charge. "Admission charge" also includes any automobile parking charge where the amount of such charge is determined according to the number of passengers in any automobile.

NEW SECTION.  Sec. 9   (1) A state tax is hereby imposed on the admission to any place, measured by the amount of admission charge.
     (2) The rate of tax is as follows:
     (a) For the state fiscal biennium beginning July 1, 2005, one percent;
     (b) For the state fiscal biennium beginning July 1, 2007, three percent; and
     (c) Five percent, beginning July 1, 2009.
     (3) The person paying the admission charge shall pay the tax to the person receiving the admission charge.
     (4) Chapter 82.32 RCW applies to the taxes imposed in this chapter. The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the taxes imposed in this chapter.
     (5) The tax imposed under this section periodically shall be deposited into the parks and outdoor recreation enhancement bond repayment account created in section 6 of this act.

NEW SECTION.  Sec. 10   The tax imposed under this chapter is in addition to any other state or local tax imposed upon admission charges.

NEW SECTION.  Sec. 11   The legislature finds that professional sports teams doing business in Washington need an equitable way to apportion their gross receipts from service-related activities to Washington and that current methods do not provide a fair apportionment or reflection of the Washington activity. The legislature intends, through this act, to provide a method by which professional sports teams can properly apportion their gross receipts between the states in which they do business.

Sec. 12   RCW 82.04.460 and 2004 c 174 s 6 are each amended to read as follows:
     (1) Except as otherwise provided in this section, any person rendering services taxable under RCW 82.04.290 or 82.04.2908 and maintaining places of business both within and without this state which contribute to the rendition of such services shall, for the purpose of computing tax liability under RCW 82.04.290 or 82.04.2908, apportion to this state that portion of the person's gross income which is derived from services rendered within this state. Where such apportionment cannot be accurately made by separate accounting methods, the taxpayer shall apportion to this state that proportion of the taxpayer's total income which the cost of doing business within the state bears to the total cost of doing business both within and without the state.
     (2) ((Notwithstanding the provision of subsection (1) of this section,)) Persons doing business both within and without the state who receive gross income from service charges, as defined in RCW 63.14.010 (relating to amounts charged for granting the right or privilege to make deferred or installment payments) or who receive gross income from engaging in business as financial institutions within the scope of chapter 82.14A RCW (relating to city taxes on financial institutions) shall apportion or allocate gross income taxable under RCW 82.04.290 to this state pursuant to rules ((promulgated)) adopted by the department consistent with uniform rules for apportionment or allocation developed by the states.
     (3) The department shall by rule provide a method or methods of apportioning or allocating gross income derived from sales of telephone services taxed under this chapter, if the gross proceeds of sales subject to tax under this chapter do not fairly represent the extent of the taxpayer's income attributable to this state. The rules shall be, so far as feasible, consistent with the methods of apportionment contained in this section and shall require the consideration of those facts, circumstances, and apportionment factors as will result in an equitable and constitutionally permissible division of the services.
     (4) Persons doing business both within and without the state who engage in business as professional sports teams shall apportion their income to this state as provided in section 13 of this act. The tax collected based on the apportionment in section 13 of this act shall be deposited into the parks and outdoor recreation enhancement bond repayment account created in section 6 of this act.

NEW SECTION.  Sec. 13   A new section is added to chapter 82.04 RCW to read as follows:
     (1) The apportionable income of a professional sports team engaged in business both within and without Washington shall be apportioned to Washington using an apportionment fraction composed of a property factor representing twenty-five percent of the fraction, a payroll factor representing twenty-five percent of the fraction, and a sales factor representing fifty percent of the fraction determined as provided in this section.
     (2)(a) The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax year and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax year. Cash on hand or in the bank, shares of stock, notes, bonds, accounts receivable, or other evidence of indebtedness, special privileges, franchises, goodwill, or property the income of which is not taxable or is separately allocated shall not be considered tangible property nor included in the apportionment.
     (b) Property used in the production of nonapportionable income or losses shall be excluded from the numerator and denominator of the property factor. Property used in the production of both apportionable and nonapportionable income or losses shall be partially excluded from the numerator and denominator of the property factor so as to exclude, as near as possible, the portion of such property producing the nonapportionable income or loss. Minor equipment, such as uniforms, and playing and practice equipment, need not be included in the factor.
     (c) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental. Net annual rental is the annual rental paid by the taxpayer less any annual rental received by the taxpayer from subrentals.
     (d) The average value of property shall be determined by averaging the values at the beginning and ending of the tax year but the department may require the averaging of monthly values during the tax year if reasonably required to reflect properly the average value of the taxpayer's property.
     (3)(a) The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax year by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax year. Compensation related to the operation, maintenance, protection, or supervision of property used in the production of both apportionable and nonapportionable income shall be partially excluded from the numerator and denominator of the payroll factor so as to exclude, as near as possible, the portion of pay related to the operation, maintenance, protection, and supervision of property used in the production of nonapportionable income.
     (b) Compensation, other than compensation for members of a professional sports team, is paid in this state if:
     (i) The individual's service is performed entirely within this state;
     (ii) The individual's service is performed within and without this state, but the service performed without this state is incidental to the individual's service within this state;
     (iii) A portion of the service is performed within this state and the base of operations of the individual is in this state;
     (iv) A portion of the service is performed within this state and, if there is no base of operations, the place from which the individual's service is directed or controlled is in this state;
     (v) A portion of the service is performed within this state and neither the base of operations of the individual nor the place from which the service is directed or controlled is in any state in which some part of the service is performed, but the individual's residence is in this state; or
     (vi) The individual is neither a resident of nor performs services in this state but is directed or controlled from an office in this state and returns to this state periodically for business purposes and the state in which the individual resides does not have jurisdiction to impose income or franchise taxes on the employer.
     (c) Compensation for members of a professional sports team shall be allocated to this state as follows: The Washington compensation of a member of a professional sports team includes that portion of such individual's total compensation for services rendered as a member of the team during the tax year which the number of duty days spent within Washington rendering services for the team in any manner during the tax year bears to the total number of duty days spent both within and without Washington during the tax year.
     (4)(a) The sales factor is a fraction, the numerator of which is the total gross income of the taxpayer in Washington during the tax year, and the denominator of which is the gross income everywhere during the tax year.
     (b) Gate receipts include all receipts from games played at the taxpayer's home facility plus any gate receipts received from games played away from the taxpayer's home facility. The numerator of the sales fraction for taxpayers whose home facility is in Washington includes all gate receipts from games played in its home facility. The numerator of the sales fraction for taxpayers whose home facility is outside Washington includes the percentage of gate receipts received from games played in Washington.
     (c) Radio and television receipts received by the taxpayer as its proportionate share from a league or association contract with the major communications networks are in Washington in proportion to the number of games played in Washington to total games played by the taxpayer covered by the contract during the season. Local television and radio receipts are sited to the state in which the games are played.
     (d) Concession income is assigned to this state if the concession is operated within the state. Other miscellaneous income taxable under RCW 82.04.290 is assigned to this state if the activity is conducted within this state.
     (e) Income from player contract transactions and other similar sources shall be excluded from the numerator and the denominator of the sales fraction.
     (5) The definitions in this subsection apply throughout this section.
     (a) "Apportionable income" means only those gross receipts taxable under RCW 82.04.290.
     (b) "Compensation for members of a professional sports team" means the total compensation received during the taxable year for services rendered:
     (i) From the beginning of the official preseason training period through the last game in which the team competes or is scheduled to compete during that taxable year; and
     (ii) During the taxable year on a date which does not fall within the period described in this subsection (5)(b). Such compensation shall include, but is not limited to, salaries, wages, bonuses, and any other type of compensation paid during the taxable year to a member of a professional sports team for services performed in that year. Such compensation shall not include strike benefits, severance pay, termination pay, contract or option year buy-out payments, expansion or relocation payments, or any other payments not related to services rendered to the team.
     (c) "Duty days" means all days during the taxable year from the beginning of the professional sports team's official preseason training period through the last game in which the team competes or is scheduled to compete. Duty days include game days, practice days, days spent at team meetings, promotional caravans, and preseason training camps, and days served with the team through all postseason games in which the team competes or is scheduled to compete. Duty days also include days on which a member of a professional sports team renders a service for a team on a date that does not fall within the period described in this subsection (5)(c), including but not limited to participation in instructional leagues on behalf of the team and promotional events. Rendering a service includes conducting training and rehabilitation activities, but only if conducted at the facilities of the team. Days for which a member of a professional sports team is not compensated and is not rendering services for the team in any manner, including days when such member of a professional sports team has been suspended without pay and prohibited from performing any services for the team shall not be treated as duty days. Travel days that do not involve either a game, practice, team meeting, promotional caravan, or other similar team event are not considered duty days spent in Washington.
     (d) "Member of a professional sports team" includes those employees who are active players, players on the disabled list, and any other persons required to travel and who do travel with and perform services on behalf of a professional sports team on a regular basis. This includes but is not limited to coaches, managers, and trainers.
     (e) "Professional sports team" includes, but is not limited to, any professional baseball, basketball, football, soccer, or hockey team.

NEW SECTION.  Sec. 14   The legislature may provide additional means for raising moneys for the payment of the principal and interest on the bonds authorized in section 2 of this act, and sections of this act shall not be deemed as the exclusive method for payment.

Sec. 15   RCW 39.42.060 and 2003 c 147 s 13 are each amended to read as follows:
     No bonds, notes, or other evidences of indebtedness for borrowed money shall be issued by the state which will cause the aggregate debt contracted by the state to exceed that amount for which payments of principal and interest in any fiscal year would require the state to expend more than seven percent of the arithmetic mean of its general state revenues, as defined in RCW 39.42.070, for the three immediately preceding fiscal years as certified by the treasurer in accordance with RCW 39.42.070. It shall be the duty of the state finance committee to compute annually the amount required to pay principal of and interest on outstanding debt. In making such computation, the state finance committee shall include all borrowed money represented by bonds, notes, or other evidences of indebtedness which are secured by the full faith and credit of the state or are required to be paid, directly or indirectly, from general state revenues and which are incurred by the state, any department, authority, public corporation or quasi public corporation of the state, any state university or college, or any other public agency created by the state but not by counties, cities, towns, school districts, or other municipal corporations, and shall include debt incurred pursuant to section 3 of Article VIII of the Washington state Constitution, but shall exclude the following:
     (1) Obligations for the payment of current expenses of state government;
     (2) Indebtedness incurred pursuant to RCW 39.42.080 or 39.42.090;
     (3) Principal of and interest on bond anticipation notes;
     (4) Any indebtedness which has been refunded;
     (5) Financing contracts entered into under chapter 39.94 RCW;
     (6) Indebtedness authorized or incurred before July 1, 1993, pursuant to statute which requires that the state treasury be reimbursed, in the amount of the principal of and the interest on such indebtedness, from money other than general state revenues or from the special excise tax imposed pursuant to chapter 67.40 RCW;
     (7) Indebtedness authorized and incurred after July 1, 1993, pursuant to statute that requires that the state treasury be reimbursed, in the amount of the principal of and the interest on such indebtedness, from (a) moneys outside the state treasury, except higher education operating fees, (b) higher education building fees, (c) indirect costs recovered from federal grants and contracts, and (d) fees and charges associated with hospitals operated or managed by institutions of higher education;
     (8) Any agreement, promissory note, or other instrument entered into by the state finance committee under RCW 39.42.030 in connection with its acquisition of bond insurance, letters of credit, or other credit support instruments for the purpose of guaranteeing the payment or enhancing the marketability, or both, of any state bonds, notes, or other evidence of indebtedness;
     (9) Indebtedness incurred for the purposes identified in RCW 43.99N.020;
     (10) Indebtedness incurred for the purposes of the school district bond guaranty established by chapter 39.98 RCW;
     (11) Indebtedness incurred for the purposes of replacing the waterproof membrane over the east plaza garage and revising related landscaping construction pursuant to RCW 43.99Q.070;
     (12) Indebtedness incurred for the purposes of the state legislative building rehabilitation, to the extent that principal and interest payments of such indebtedness are paid from the capitol building construction account pursuant to RCW 43.99Q.140(2)(b); and
     (13) Indebtedness incurred for the purposes of financing projects under RCW 47.10.867; and
     (14) Indebtedness incurred for the purposes of outdoor recreation facilities under chapter 43.-- RCW (sections 1 through 7 and 14 of this act).
     To the extent necessary because of the constitutional or statutory debt limitation, priorities with respect to the issuance or guaranteeing of bonds, notes, or other evidences of indebtedness by the state shall be determined by the state finance committee.

NEW SECTION.  Sec. 16   Sections 1 through 7 and 14 of this act constitute a new chapter in Title 43 RCW.

NEW SECTION.  Sec. 17   Sections 8 through 10 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION.  Sec. 18   2003 c 126 s 1002 (uncodified) is repealed.

NEW SECTION.  Sec. 19   Sections 8 through 13 of this act take effect January 1, 2006.

NEW SECTION.  Sec. 20   The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation.

NEW SECTION.  Sec. 21   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.