HB 1435

HB 1435

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Modifying provisions relating to public facilities districts.

Sponsors: Representatives P. Sullivan, Upthegrove, Simpson, Schual-Berke and Pettigrew.

Background:

A public facilities district (PFD) may be created upon adoption of a resolution by a county, city or town's legislative authority in which the proposed district is located. A PFD is a municipal
corporation, and independent taxing authority within the meaning of Article VII, Section 1 of
the State Constitution, and a taxing district within the meaning of Article VII, Section 2 of the
State Constitution. A PFD is a body corporate and possesses all the usual powers of a
corporation for public purposes or specially conferred by statute.

A PFD is authorized to acquire, construct, own, remodel, maintain, equip, re-equip, repair, and
operate sports facilities, entertainment facilities, convention facilities or regional centers,
together with contiguous parking facilities. In addition to existing authorities, public facilities
districts formed after January 1, 2000, may acquire, construct, maintain, and operate recreation
facilities other than ski areas.

The districts formed prior to 2002 may impose a 0.033 percent sales tax that is deducted from
the state sales tax and is not an increase to taxpayers. A PFD also may levy a 0.2 percent sales
tax and a 2 percent lodging tax if approved by a majority of voters in the district.

A town or a city located in a county with a population of less than one million residents may create a PFD and may enter into agreement for the joint operation of the public facility.

Sales & Use Tax
Washington levies a sales tax on the selling price of tangible personal property and certain
services purchased at retail. This includes goods, construction including labor, repair of tangible
personal property, lodging for less than 30 days, and some personal and professional services,
such as landscape maintenance and physical fitness. The state retail sales tax is 6.5 percent.
The state sales tax is collected from purchasers by retail vendors at the time of sale using the tax
rate schedules provided by the Department of Revenue (DOR). Total transactions are reported in
the seller's combined excise tax return (CETR) and receipts are forwarded to the DOR on a
monthly or quarterly basis

For items used in Washington, but the acquisition of which was not subject to the Washington
retail sales tax, the Washington use tax is applied. This includes purchases made from out-of-state sellers, including catalog and Internet purchases, purchases from sellers who are not required to collect sales tax, items produced for use by the producer, and gifts and prizes. The tax is measured by the value of the item at the time of the first use within Washington, excluding any delivery charges. The state use tax rate is the same as the state retail sales tax 6.5 percent

Just as the State taxes the sale of tangible personal property and some services purchased at retail, cities and counties may levy a local sales and use tax. State law currently authorizes 17 different types of local sales and use taxes. There is: a basic 0.5 percent tax for cities and counties; an optional tax of up to 0.5 percent for cities and counties; three local taxes for the support of transportation programs; a tax of up to 1 percent to fund high capacity transportation; two taxes for funding criminal justice or public safety programs; taxes of 0.1 percent each for public facilities, juvenile correctional facilities, zoos and emergency communications facilities; two state-credited taxes to finance professional sports stadiums; and two state-credited taxes to
support rural counties and regional centers.

Summary of Bill:

A city with a population of between 80,000 and 115,000 residents, located in a county with a population of greater than one million residents, may create a PFD for the construction of a regional center. The city may impose a sales and use tax of .033 percent that will be credited against the state sales and use tax.

In addition, labor and services rendered in relation to the construction of the regional center as well as tangible personal property incorporated into the regional center are exempt from the state sales and use tax.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.

Washington State House of Representatives Office of Program Research	BILL ANALYSIS

Community & Economic Development & Trade Committee