| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Community & Economic Development & Trade Committee | |
HB 3034
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: Encouraging private investment in port terminal facilities by providing tax incentives to local governments.
Sponsors: Representatives Linville, Bailey, Ericksen, Flannigan, Darneille, Seaquist, Pettigrew and Kelley.
Brief Summary of Bill |
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Hearing Date: 1/31/08
Staff: Meg Van Schoorl (786-7105).
Background:
Washington ports are municipal corporations that have specific powers granted under state law.
Ports are authorized to levy property taxes and typically use revenues generated to pay for capital
development such as marine terminals, industrial parks, infrastructure, and airport facilities.
Ports also may issue municipal bonds for use on capital construction projects, repaying the bonds
with property tax revenues. Ports may also issue revenue bonds which are guaranteed by the
revenues generated by a specific project. Ports buy, lease and sell personal and real property;
build and operate facilities such as docks, warehouses, elevators, fishing terminals; develop lands
for industrial and commercial purposes; enter into public works contracts; establish and operate
foreign trade zones. Ports pay sales taxes on their purchases and also pay a business and
occupation tax on services they provide to their customers. Businesses who lease port property
pay a leasehold tax.
Summary of Bill:
The purpose of this act is to develop the state's shipping and freight industry by encouraging
private investment in port terminal facilities.
A "qualified port terminal" is a facility for cargo related maritime activities constructed after the
effective date of the act and reasonably estimated to cost at least $150 million to construct.
State sales and use taxes on tangible personal property and labor and services used in the
construction of a qualified port terminal will be distributed to the county or city within which a
qualified port terminal is located. The tax revenues may only be used for public infrastructure
needs related to the qualified port terminal.
To receive distributions, the city or county must apply to the Department of Community, Trade
and Economic Development (DCTED) before port terminal construction begins. The application
must verify that the port terminal construction costs are estimated to exceed $150 million and
give an expected construction completion date. The Department must rule on the application
within 45 days.
The city or county must also submit an expenditure plan to the Department within 120 days of
submitting the application. The plan must be developed in consultation with governments,
public and private entities in close proximity to the proposed project. The Department must
report any deficiencies in the plan to the county or city within 90 days of submittal.
The Department of Revenue (DOR) must distribute funds at no cost to the city or county
receiving them by July 1 of the state fiscal year following the fiscal year when construction
began. The DOR may not distribute funds for construction occurring after the date of completion
noted in the application, but DOR can consult with DCTED and extend the date of completion
for good cause.
Appropriation: None.
Fiscal Note: Preliminary fiscal note available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.