BILL REQ. #:  H-4482.1 

Read first time 01/30/2006.   Referred to Committee on Local Government.

     AN ACT Relating to the use of real estate excise taxes to offset costs of annexation; amending RCW 82.46.010; adding a new section to chapter 82.46 RCW; creating a new section; and providing a contingent effective date.

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

NEW SECTION.  Sec. 1   The legislature finds that it is in the interests of the people of the state of Washington to facilitate the annexation of unincorporated areas that lie within designated urban growth areas. This act is intended to permit cities to apply real estate excise tax revenues that would otherwise be restricted to capital purposes to offset the costs associated with such annexations. This authority is intended to work in conjunction with the establishment of an annexation capital facilities district under House Bill No. . . . . (2006).

NEW SECTION.  Sec. 2   A new section is added to chapter 82.46 RCW to read as follows:
     The legislative authority of any city for which an annexation capital facilities district has been established under chapter 35.-- RCW (H-4485/06), may apply all or a portion of the revenues received from the tax imposed under RCW 82.46.010 to the costs of annexation identified in an annexation cost study completed under RCW 82.46.010(1). The total amount of revenues applied to annexation costs shall not exceed the amount dedicated to capital purposes by the annexation facilities district under chapter 35.-- RCW (H-4485/06).

Sec. 3   RCW 82.46.010 and 1994 c 272 s 1 are each amended to read as follows:
     (1) The legislative authority of any county ((or city)) shall identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in this section, and shall indicate that such tax is intended to be in addition to other funds that may be reasonably available for such capital projects. The legislative authority of any city shall: (a) Identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in this section, and indicate that the tax is intended to be in addition to other funds that may be reasonably available for these capital projects; or (b) if acting under chapter 35.-- RCW (H-4485/06), undertake a comprehensive study of the costs associated with the proposed annexation and indicate by resolution or ordinance that the tax is intended to be in addition to other funds that may be reasonably available for these costs.
     If the legislative authority of a city determines to dedicate a portion of the tax authorized under this section to capital projects and a portion to annexation costs, it shall identify the capital portion as described in (a) of this subsection and shall identify the annexation funding as described in (b) of this subsection.
     (2) The legislative authority of any county or any city may impose an excise tax on each sale of real property in the unincorporated areas of the county for the county tax and in the corporate limits of the city for the city tax at a rate not exceeding one-quarter of one percent of the selling price. The revenues from this tax shall be used by any city or county with a population of five thousand or less and any city or county that does not plan under RCW 36.70A.040 for any capital purpose identified in a capital improvements plan and local capital improvements, including those listed in RCW 35.43.040.
     After April 30, 1992, revenues generated from the tax imposed under this subsection in counties over five thousand population and cities over five thousand population that are required or choose to plan under RCW 36.70A.040 shall be used solely for financing capital projects specified in a capital facilities plan element of a comprehensive plan and housing relocation assistance under RCW 59.18.440 and 59.18.450. However, revenues (a) pledged by such counties and cities to debt retirement prior to April 30, 1992, may continue to be used for that purpose until the original debt for which the revenues were pledged is retired, or (b) committed prior to April 30, 1992, by such counties or cities to a project may continue to be used for that purpose until the project is completed.
     (3) In lieu of imposing the tax authorized in RCW 82.14.030(2), the legislative authority of any county or any city may impose an additional excise tax on each sale of real property in the unincorporated areas of the county for the county tax and in the corporate limits of the city for the city tax at a rate not exceeding one-half of one percent of the selling price.
     (4) Taxes imposed under this section shall be collected from persons who are taxable by the state under chapter 82.45 RCW upon the occurrence of any taxable event within the unincorporated areas of the county or within the corporate limits of the city, as the case may be.
     (5) Taxes imposed under this section shall comply with all applicable rules, regulations, laws, and court decisions regarding real estate excise taxes as imposed by the state under chapter 82.45 RCW.
     (6) As used in this section, "city" means any city or town and "capital project" means those public works projects of a local government for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of streets; roads; highways; sidewalks; street and road lighting systems; traffic signals; bridges; domestic water systems; storm and sanitary sewer systems; parks; recreational facilities; law enforcement facilities; fire protection facilities; trails; libraries; administrative and/or judicial facilities; river and/or waterway flood control projects by those jurisdictions that, prior to June 11, 1992, have expended funds derived from the tax authorized by this section for such purposes; and, until December 31, 1995, housing projects for those jurisdictions that, prior to June 11, 1992, have expended or committed to expend funds derived from the tax authorized by this section or the tax authorized by RCW 82.46.035 for such purposes.

NEW SECTION.  Sec. 4   This act takes effect July 1, 2006, only if chapter . . . (House Bill No. . . . . (H-4485/06)), Laws of 2006 is signed by the governor. If chapter . . . (House Bill No. . . . . (H-4485/06)), Laws of 2006 is not signed by the governor by July 1, 2006, this act is null and void.

NEW SECTION.  Sec. 5   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.