"Sec. 1   RCW 82.14.450 and 2007 c 380 s 1 are each amended to read as follows:
     (1) A county legislative authority may submit an authorizing proposition to the county voters at a primary or general election and, if the proposition is approved by a majority of persons voting, impose a sales and use tax in accordance with the terms of this chapter. The title of each ballot measure must clearly state the purposes for which the proposed sales and use tax will be used. Funds raised under this tax shall not supplant existing funds used for these purposes, except as follows: Up to one hundred percent may be used to supplant existing funding in calendar year 2010; up to eighty percent may be used to supplant existing funding in calendar year 2011; up to sixty percent may be used to supplant existing funding in calendar year 2012; up to forty percent may be used to supplant existing funding in calendar year 2013; and up to twenty percent may be used to supplant existing funding in calendar year 2014. For purposes of this subsection, existing funds means the actual operating expenditures for the calendar year in which the ballot measure is approved by voters. Actual operating expenditures excludes lost federal funds, lost or expired state grants or loans, extraordinary events not likely to reoccur, changes in contract provisions beyond the control of the county or city receiving the services, and major nonrecurring capital expenditures. The rate of tax under this section ((shall)) may not exceed three-tenths of one percent of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax.
     (2) The tax authorized in this section is in addition to any other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county.
     (3) The retail sale or use of motor vehicles, and the lease of motor vehicles for up to the first thirty-six months of the lease, are exempt from tax imposed under this section.
     (4) One-third of all money received under this section ((shall)) must be used solely for criminal justice purposes, fire protection purposes, or both. For the purposes of this subsection, "criminal justice purposes" ((means additional police protection, mitigation of congested court systems, or relief of overcrowded jails or other local correctional facilities)) has the same meaning as provided in RCW 82.14.340.
     (5) Money received under this section ((shall)) must be shared between the county and the cities as follows: Sixty percent ((shall)) must be retained by the county and forty percent ((shall)) must be distributed on a per capita basis to cities in the county.

Sec. 2   RCW 82.14.460 and 2008 c 157 s 2 are each amended to read as follows:
     (1) A county legislative authority may authorize, fix, and impose a sales and use tax in accordance with the terms of this chapter.
     (2) The tax authorized in this section shall be in addition to any other taxes authorized by law and shall be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax shall equal one-tenth of one percent of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax.
     (3) Moneys collected under this section shall be used solely for the purpose of providing for the operation or delivery of ((new or expanded)) chemical dependency or mental health treatment programs and services and for the operation or delivery of ((new or expanded)) therapeutic court programs and services. For the purposes of this section, "programs and services" includes, but is not limited to, treatment services, case management, and housing that are a component of a coordinated chemical dependency or mental health treatment program or service.
     (4) All moneys collected under this section must be used solely for the purpose of providing new or expanded programs and services as provided in this section, except a portion of moneys collected under this section ((shall not)) may be used to supplant existing funding for these purposes((, provided that)) in any county as follows: Up to fifty percent may be used to supplant existing funding in calendar year 2010; up to forty percent may be used to supplant existing funding in calendar year 2011; up to thirty percent may be used to supplant existing funding in calendar year 2012; up to twenty percent may be used to supplant existing funding in calendar year 2013; and up to ten percent may be used to supplant existing funding in calendar year 2014.
     (5) Nothing in this section ((shall)) may be interpreted to prohibit the use of moneys collected under this section for the replacement of lapsed federal funding previously provided for the operation or delivery of services and programs as provided in this section.

Sec. 3   RCW 84.55.050 and 2008 c 319 s 1 are each amended to read as follows:
     (1) Subject to any otherwise applicable statutory dollar rate limitations, regular property taxes may be levied by or for a taxing district in an amount exceeding the limitations provided for in this chapter if such levy is authorized by a proposition approved by a majority of the voters of the taxing district voting on the proposition at a general election held within the district or at a special election within the taxing district called by the district for the purpose of submitting such proposition to the voters. Any election held pursuant to this section shall be held not more than twelve months prior to the date on which the proposed levy is to be made, except as provided in subsection (2) of this section. The ballot of the proposition shall state the dollar rate proposed and shall clearly state the conditions, if any, which are applicable under subsection (4) of this section.
     (2)(a) Subject to statutory dollar limitations, a proposition placed before the voters under this section may authorize annual increases in levies for multiple consecutive years, up to six consecutive years, during which period each year's authorized maximum legal levy shall be used as the base upon which an increased levy limit for the succeeding year is computed, but the ballot proposition must state the dollar rate proposed only for the first year of the consecutive years and must state the limit factor, or a specified index to be used for determining a limit factor, such as the consumer price index, which need not be the same for all years, by which the regular tax levy for the district may be increased in each of the subsequent consecutive years. Elections for this purpose must be held at a primary or general election. The title of each ballot measure must state the limited purposes for which the proposed annual increases during the specified period of up to six consecutive years shall be used((, and funds raised under the levy shall not supplant existing funds used for these purposes)).
     (b)(i) Except as otherwise provided in this subsection (2)(b), funds raised by a levy under this subsection shall not supplant existing funds used for the limited purpose specified in the ballot title. For purposes of this subsection, existing funds means the actual operating expenditures for the calendar year in which the ballot measure is approved by voters. Actual operating expenditures excludes lost federal funds, lost or expired state grants or loans, extraordinary events not likely to reoccur, changes in contract provisions beyond the control of the taxing district receiving the services, and major nonrecurring capital expenditures.
     (ii) The supplanting limitations in (b)(i) of this subsection do not apply to levies approved by the voters in calendar years 2009, 2010, and 2011, in any county with a population of one million five hundred thousand or more. This subsection (2)(b)(ii) only applies to levies approved by the voters after the effective date of this act.
     (iii) The supplanting limitations in (b)(i) of this subsection do not apply to levies approved by the voters in calendar year 2009 and thereafter in any county with a population less than one million five hundred thousand. This subsection (2)(b)(iii) only applies to levies approved by the voters after the effective date of this act.
     (3) After a levy authorized pursuant to this section is made, the dollar amount of such levy may not be used for the purpose of computing the limitations for subsequent levies provided for in this chapter, unless the ballot proposition expressly states that the levy made under this section will be used for this purpose.
     (4) If expressly stated, a proposition placed before the voters under subsection (1) or (2) of this section may:
     (a) Use the dollar amount of a levy under subsection (1) of this section, or the dollar amount of the final levy under subsection (2) of this section, for the purpose of computing the limitations for subsequent levies provided for in this chapter;
     (b) Limit the period for which the increased levy is to be made under (a) of this subsection;
     (c) Limit the purpose for which the increased levy is to be made under (a) of this subsection, but if the limited purpose includes making redemption payments on bonds, the period for which the increased levies are made shall not exceed nine years;
     (d) Set the levy or levies at a rate less than the maximum rate allowed for the district; or
     (e) Include any combination of the conditions in this subsection.
     (5) Except as otherwise expressly stated in an approved ballot measure under this section, subsequent levies shall be computed as if:
     (a) The proposition under this section had not been approved; and
     (b) The taxing district had made levies at the maximum rates which would otherwise have been allowed under this chapter during the years levies were made under the proposition.

NEW SECTION.  Sec. 4   (1) A county may adopt an ordinance creating a rural public safety and infrastructure district in all of the unincorporated area of the county. The ordinance creating the district may only be adopted after a public hearing has been held on the creation of the district and the county legislative body makes a finding that it is in the public interest to create the district. The members of the county legislative body, acting in an ex officio capacity and independently, shall compose the governing body of a district.
     (2) A rural public safety and infrastructure district is a quasi-municipal corporation and an independent taxing "authority" within the meaning of Article VII, section 1 of the state Constitution.
     (3) A rural public safety and infrastructure district shall have the authority to contract under chapter 39.34 RCW with a county, city, town, or other municipality for the provision of services and capital projects within the district.
     (4) This section expires January 1, 2015.

NEW SECTION.  Sec. 5   (1) A rural public safety and infrastructure district created under section 4 of this act may impose an excise tax on the privilege of engaging in business as a utility. The tax is equal to the gross income derived from providing service to consumers within the district multiplied by the rate provided in subsection (2) of this section. A district located in a county with a population of one million five hundred thousand or less may not impose an excise tax on the privilege of engaging in business as a gas utility.
     (2) A district may not impose a rate of tax that exceeds six percent, except a district located in a county with a population of one million five hundred thousand or less may not impose a rate that exceeds one percent on an electrical power utility.
     (3) A rural public safety and infrastructure district must use taxes collected under the authority of this section only for public safety, infrastructure, capital projects, and other services provided within the district.
     (4) A utility subject to tax under this section must add the tax to the rates or charges it makes for utility services and separately state the amount of tax on billings.
     (5) A rural public safety and infrastructure district may initially impose the tax authorized under this section only on the first day of a calendar quarter and no sooner than seventy-five days from the date the district adopts the ordinance or resolution imposing the tax.
     (6) A rural public safety and infrastructure district may provide exemptions for sales by utilities to business customers, such as manufacturing facilities, aircraft repair facilities, industrial parks, industrial facilities, farm businesses, and computer data centers. A district may not provide a general exemption for sales by utilities to residential customers unless business customers are also exempt.
     (7) A rural public safety and infrastructure district must allow a credit against the cable service utility tax for any franchise fee paid by the cable service utility to the county.
     (8) A rural public safety and infrastructure district must allow a credit against a tax imposed under the authority of this section for the amount of any similar utility tax imposed by a city or town on the same taxable event. The credit required by this subsection may not exceed the amount of tax otherwise due.
     (9) A rural public safety and infrastructure district located in a county with a population of one million five hundred thousand or more may not impose the tax authorized under this section after January 1, 2015.
     (10) The definitions in this subsection apply to this section.
     (a) "Cable service utility" means a person providing cable service as defined in the federal telecommunications act of 1996.
     (b) "Electrical power utility" has the same meaning as light and power business as defined in RCW 82.16.010.
     (c) "Gas utility" has the same meaning as gas distribution business as defined in RCW 82.16.010.
     (d) "Gross income" is defined as provided in RCW 82.16.010.
     (e) "Sewer utility" means a sewerage collection business as defined in RCW 82.16.020.
     (f) "Solid waste utility" means a solid waste collection business as defined in RCW 82.18.010.
     (g) "Telephone utility" means a person providing telecommunications service as defined in RCW 82.04.065.
     (h) "Water utility" means a water distribution business as defined in RCW 82.16.010.
     (i) "Utility" means an electrical power utility, gas utility, telephone utility, water utility, sewer utility, solid waste utility, or cable service utility. "Utility" also means a water-sewer district formed under Title 57 RCW.

Sec. 6   RCW 36.54.130 and 2007 c 223 s 6 are each amended to read as follows:
     (1) To carry out the purposes for which ferry districts are created, the governing body of a ferry district may levy each year an ad valorem tax on all taxable property located in the district not to exceed seventy-five cents per thousand dollars of assessed value, except a ferry district in a county with a population of one million five hundred thousand or more may not levy at a rate that exceeds seven and one-half cents per thousand dollars of assessed value. The levy must be sufficient for the provision of ferry services as shown to be required by the budget prepared by the governing body of the ferry district.
     (2) A tax imposed under this section may be used only for:
     (a) Providing ferry services, including the purchase, lease, or rental of ferry vessels and dock facilities;
     (b) The operation, maintenance, and improvement of ferry vessels and dock facilities;
     (c) Providing shuttle services between the ferry terminal and passenger parking facilities, and other landside improvements directly related to the provision of passenger-only ferry service; and
     (d) Related personnel costs.

NEW SECTION.  Sec. 7   A new section is added to chapter 84.52 RCW to read as follows:
     (1) A county with a population of one million five hundred thousand or more may impose an additional regular property tax levy in an amount not to exceed seven and one-half cents per thousand dollars of the assessed value of property in the county in accordance with the terms of this section.
     (2) Any tax imposed under this section shall be used as follows:
     (a) Thirteen and one-third percent for expanding transit capacity along state route number 520 by adding core and other supporting bus routes;
     (b) The remainder for transit-related expenditures.
     (3) The limitations in RCW 84.52.043 do not apply to the tax authorized in this section.
     (4) The limitation in RCW 84.55.010 does not apply to the first tax levy imposed under this section.

Sec. 8   RCW 84.52.043 and 2005 c 122 s 3 are each amended to read as follows:
     Within and subject to the limitations imposed by RCW 84.52.050 as amended, the regular ad valorem tax levies upon real and personal property by the taxing districts hereafter named shall be as follows:
     (1) Levies of the senior taxing districts shall be as follows: (a) The levy by the state shall not exceed three dollars and sixty cents per thousand dollars of assessed value adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue to be used exclusively for the support of the common schools; (b) the levy by any county shall not exceed one dollar and eighty cents per thousand dollars of assessed value; (c) the levy by any road district shall not exceed two dollars and twenty-five cents per thousand dollars of assessed value; and (d) the levy by any city or town shall not exceed three dollars and thirty-seven and one-half cents per thousand dollars of assessed value. However any county is hereby authorized to increase its levy from one dollar and eighty cents to a rate not to exceed two dollars and forty-seven and one-half cents per thousand dollars of assessed value for general county purposes if the total levies for both the county and any road district within the county do not exceed four dollars and five cents per thousand dollars of assessed value, and no other taxing district has its levy reduced as a result of the increased county levy.
     (2) The aggregate levies of junior taxing districts and senior taxing districts, other than the state, shall not exceed five dollars and ninety cents per thousand dollars of assessed valuation. The term "junior taxing districts" includes all taxing districts other than the state, counties, road districts, cities, towns, port districts, and public utility districts. The limitations provided in this subsection shall not apply to: (a) Levies at the rates provided by existing law by or for any port or public utility district; (b) excess property tax levies authorized in Article VII, section 2 of the state Constitution; (c) levies for acquiring conservation futures as authorized under RCW 84.34.230; (d) levies for emergency medical care or emergency medical services imposed under RCW 84.52.069; (e) levies to finance affordable housing for very low-income housing imposed under RCW 84.52.105; (f) the portions of levies by metropolitan park districts that are protected under RCW 84.52.120; (g) levies imposed by ferry districts under RCW 36.54.130; (h) levies for criminal justice purposes under RCW 84.52.135; ((and)) (i) the portions of levies by fire protection districts that are protected under RCW 84.52.125; and (j) levies by counties for transit-related purposes under section 7 of this act.

Sec. 9   RCW 84.52.010 and 2007 c 54 s 26 are each amended to read as follows:
     Except as is permitted under RCW 84.55.050, all taxes shall be levied or voted in specific amounts.
     The rate percent of all taxes for state and county purposes, and purposes of taxing districts coextensive with the county, shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the county, as shown by the completed tax rolls of the county, and the rate percent of all taxes levied for purposes of taxing districts within any county shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the taxing districts respectively.
     When a county assessor finds that the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.043 or 84.52.050, exceeds the limitations provided in either of these sections, the assessor shall recompute and establish a consolidated levy in the following manner:
     (1) The full certified rates of tax levy for state, county, county road district, and city or town purposes shall be extended on the tax rolls in amounts not exceeding the limitations established by law; however any state levy shall take precedence over all other levies and shall not be reduced for any purpose other than that required by RCW 84.55.010. If, as a result of the levies imposed under RCW 36.54.130, 84.34.230, 84.52.069, 84.52.105, the portion of the levy by a metropolitan park district that was protected under RCW 84.52.120, 84.52.125, ((and)) 84.52.135, and section 8 of this act, the combined rate of regular property tax levies that are subject to the one percent limitation exceeds one percent of the true and fair value of any property, then these levies shall be reduced as follows:
     (a) The levy imposed by a county under section 8 of this act shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (b) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the portion of the levy by a fire protection district that is protected under RCW 84.52.125 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (((b))) (c) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the levy imposed by a county under RCW 84.52.135 must be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or must be eliminated;
     (((c))) (d) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the levy imposed by a ferry district under RCW 36.54.130 must be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or must be eliminated;
     (((d))) (e) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the portion of the levy by a metropolitan park district that is protected under RCW 84.52.120 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (((e))) (f) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the levies imposed under RCW 84.34.230, 84.52.105, and any portion of the levy imposed under RCW 84.52.069 that is in excess of thirty cents per thousand dollars of assessed value, shall be reduced on a pro rata basis until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated; and
     (((f))) (g) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the thirty cents per thousand dollars of assessed value of tax levy imposed under RCW 84.52.069 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or eliminated.
     (2) The certified rates of tax levy subject to these limitations by all junior taxing districts imposing taxes on such property shall be reduced or eliminated as follows to bring the consolidated levy of taxes on such property within the provisions of these limitations:
     (a) First, the certified property tax levy rates of those junior taxing districts authorized under RCW 36.68.525, 36.69.145, 35.95A.100, and 67.38.130 shall be reduced on a pro rata basis or eliminated;
     (b) Second, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of flood control zone districts shall be reduced on a pro rata basis or eliminated;
     (c) Third, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of all other junior taxing districts, other than fire protection districts, regional fire protection service authorities, library districts, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts, and the first fifty cent per thousand dollars of assessed valuation levies for public hospital districts, shall be reduced on a pro rata basis or eliminated;
     (d) Fourth, if the consolidated tax levy rate still exceeds these limitations, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts created on or after January 1, 2002, shall be reduced on a pro rata basis or eliminated;
     (e) Fifth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.140 and 52.16.160 and regional fire protection service authorities under RCW 52.26.140(1) (b) and (c) shall be reduced on a pro rata basis or eliminated; and
     (f) Sixth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized for fire protection districts under RCW 52.16.130, regional fire protection service authorities under RCW 52.26.140(1)(a), library districts, metropolitan park districts created before January 1, 2002, under their first fifty cent per thousand dollars of assessed valuation levy, and public hospital districts under their first fifty cent per thousand dollars of assessed valuation levy, shall be reduced on a pro rata basis or eliminated.

Sec. 10   RCW 47.26.086 and 1994 c 179 s 11 are each amended to read as follows:
     (1) Transportation improvement account projects selected for funding programs after fiscal year 1995 are governed by the requirements of this section.
     (2) The board shall allocate funds from the account by June 30th of each year for the ensuing fiscal year to urban counties, cities with a population of five thousand and over, and to transportation benefit districts. Projects may include, but are not limited to, multi-agency projects and arterial improvement projects in fast-growing areas. The board shall endeavor to provide geographical diversity in selecting improvement projects to be funded from the account.
     (3) The intent of the program is to improve mobility of people and goods in Washington state by supporting economic development and environmentally responsive solutions to our statewide transportation system needs.
     (4) To be eligible to receive these funds, a project must be consistent with the Growth Management Act, the Clean Air Act including conformity, and the Commute Trip Reduction Law and consideration must have been given to the project's relationship, both actual and potential, with the statewide rail passenger program and rapid mass transit. Projects must be consistent with any adopted high capacity transportation plan, must consider existing or reasonably foreseeable congestion levels attributable to economic development or growth and all modes of transportation and safety, and must be partially funded by local government or private contributions, or a combination of such contributions. Priority consideration shall be given to those projects with the greatest percentage of local or private contribution, or both.
     (5) A city or town located within a county with a population of one million five hundred thousand or more may not qualify for new grants after December 31, 2014, until all potential annexation areas have been annexed. This subsection (5) only applies to potential annexation areas that are: (a) Recognized in the city or town's comprehensive plan or related document as such plan or related document exists on the effective date of this act; and (b) estimated to have a population in excess of four thousand. The 2014 date in this subsection is 2020 for any city or town located partially in a county with a population of one million five hundred thousand or more and partially in another county.
     (6) Within one year after board approval of an application for funding, the lead agency shall provide written certification to the board of the pledged local and private funding for the phase of the project approved. Funds allocated to an applicant that does not certify its funding within one year after approval may be reallocated by the board.

NEW SECTION.  Sec. 11   A new section is added to chapter 43.155 RCW to read as follows:
     A city or town located within a county with a population of one million five hundred thousand or more may not qualify for new loans or pledges after December 31, 2014, until all potential annexation areas have been annexed. This section only applies to potential annexation areas that are: (1) Recognized in the city's or town's comprehensive plan or related document as such plan or related document exists on the effective date of this act; and (2) estimated to have a population in excess of four thousand.

NEW SECTION.  Sec. 12   A new section is added to chapter 35.21 RCW to read as follows:
     (1) Subject to the requirements of this section, a city or town may impose a tax upon the gross income of a water-sewer district formed under Title 57 RCW.
     (2) A city or town imposing the tax authorized under this section may not impose a rate of tax that exceeds six percent. A city or town may impose the tax only upon the gross income of a water-sewer district derived from services provided within the city or town.
     (3) A city or town imposing the tax authorized under this section must allow a credit against the tax for any franchise fee paid by a water-sewer district to the city or town.

NEW SECTION.  Sec. 13   A new section is added to chapter 43.09 RCW to read as follows:
     (1) By January 1, 2011, the state auditor shall conduct a performance audit of any county with a population of one million five hundred thousand or more to specifically determine whether policy changes and programs the county has adopted since January 1, 2009, will effectively reduce overhead and other costs, improve services, and streamline operations. The performance audit must identify current deficiencies in recognized best practices in the provision of county goods and services and how the provision of these goods and services could be provided more efficiently and effectively. As part of the performance audit, the auditor shall also evaluate the amount of local and regional services provided by the county within and outside city limits and contrast this with other large counties in Washington and with counties of similar size in other states. The state auditor shall use money distributed to the auditor under RCW 82.08.020(5) to pay for the performance audit required under this section.
     (2) This section expires January 1, 2012.

NEW SECTION.  Sec. 14   The legislature reaffirms its intent that the statutes authorizing the local taxation of brokered natural gas and manufactured gas as provided by chapter 384, Laws of 1989 and RCW 82.12.010(5) result in the fair and equitable taxation of all natural and manufactured gas users, from large industrial consumers to small residential users, and it is the legislature's intent that the taxation of such gas by local jurisdictions be at the place of consumption.

Sec. 15   RCW 82.12.010 and 2006 c 301 s 3 are each amended to read as follows:
     For the purposes of this chapter:
     (1) "Purchase price" means the same as sales price as defined in RCW 82.08.010((.));
     (2)(a) "Value of the article used" shall be the purchase price for the article of tangible personal property, the use of which is taxable under this chapter. The term also includes, in addition to the purchase price, the amount of any tariff or duty paid with respect to the importation of the article used. In case the article used is acquired by lease or by gift or is extracted, produced, or manufactured by the person using the same or is sold under conditions wherein the purchase price does not represent the true value thereof, the value of the article used shall be determined as nearly as possible according to the retail selling price at place of use of similar products of like quality and character under such rules as the department may prescribe.
     (b) In case the articles used are acquired by bailment, the value of the use of the articles so used shall be in an amount representing a reasonable rental for the use of the articles so bailed, determined as nearly as possible according to the value of such use at the places of use of similar products of like quality and character under such rules as the department of revenue may prescribe. In case any such articles of tangible personal property are used in respect to the construction, repairing, decorating, or improving of, and which become or are to become an ingredient or component of, new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any such articles therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, then the value of the use of such articles so used shall be determined according to the retail selling price of such articles, or in the absence of such a selling price, as nearly as possible according to the retail selling price at place of use of similar products of like quality and character or, in the absence of either of these selling price measures, such value may be determined upon a cost basis, in any event under such rules as the department of revenue may prescribe.
     (c) In the case of articles owned by a user engaged in business outside the state which are brought into the state for no more than one hundred eighty days in any period of three hundred sixty-five consecutive days and which are temporarily used for business purposes by the person in this state, the value of the article used shall be an amount representing a reasonable rental for the use of the articles, unless the person has paid tax under this chapter or chapter 82.08 RCW upon the full value of the article used, as defined in (a) of this subsection.
     (d) In the case of articles manufactured or produced by the user and used in the manufacture or production of products sold or to be sold to the department of defense of the United States, the value of the articles used shall be determined according to the value of the ingredients of such articles.
     (e) In the case of an article manufactured or produced for purposes of serving as a prototype for the development of a new or improved product, the value of the article used shall be determined by: (i) The retail selling price of such new or improved product when first offered for sale; or (ii) the value of materials incorporated into the prototype in cases in which the new or improved product is not offered for sale.
     (f) In the case of an article purchased with a direct pay permit under RCW 82.32.087, the value of the article used shall be determined by the purchase price of such article if, but for the use of the direct pay permit, the transaction would have been subject to sales tax;
     (3) "Value of the service used" means the purchase price for the service, the use of which is taxable under this chapter. If the service is received by gift or under conditions wherein the purchase price does not represent the true value thereof, the value of the service used shall be determined as nearly as possible according to the retail selling price at place of use of similar services of like quality and character under rules the department may prescribe;
     (4) "Value of the extended warranty used" means the purchase price for the extended warranty, the use of which is taxable under this chapter. If the extended warranty is received by gift or under conditions wherein the purchase price does not represent the true value of the extended warranty, the value of the extended warranty used shall be determined as nearly as possible according to the retail selling price at place of use of similar extended warranties of like quality and character under rules the department may prescribe;
     (5) "Use," "used," "using," or "put to use" shall have their ordinary meaning, and shall mean:
     (a) With respect to tangible personal property, except for natural gas and manufactured gas, the first act within this state by which the taxpayer takes or assumes dominion or control over the article of tangible personal property (as a consumer), and include installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption within this state;
     (b) With respect to a service defined in RCW 82.04.050(2)(a), the first act within this state after the service has been performed by which the taxpayer takes or assumes dominion or control over the article of tangible personal property upon which the service was performed (as a consumer), and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state; ((and))
     (c) With respect to an extended warranty, the first act within this state after the extended warranty has been acquired by which the taxpayer takes or assumes dominion or control over the article of tangible personal property to which the extended warranty applies, and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state; and
     (d) With respect to natural gas or manufactured gas, the use of which is taxable under RCW 82.12.022, including gas that is also taxable under the authority of RCW 82.14.230, the first act within this state by which the taxpayer consumes the gas by burning the gas or storing the gas in the taxpayer's own facilities for later consumption by the taxpayer;
     (6) "Taxpayer" and "purchaser" include all persons included within the meaning of the word "buyer" and the word "consumer" as defined in chapters 82.04 and 82.08 RCW;
     (7)(a)(i) Except as provided in (a)(ii) of this subsection (7), "retailer" means every seller as defined in RCW 82.08.010 and every person engaged in the business of selling tangible personal property at retail and every person required to collect from purchasers the tax imposed under this chapter.
     (ii) "Retailer" does not include a professional employer organization when a covered employee coemployed with the client under the terms of a professional employer agreement engages in activities that constitute a sale of tangible personal property, extended warranty, or a sale of any service defined as a retail sale in RCW 82.04.050 (2)(a) or (3)(a) that is subject to the tax imposed by this chapter. In such cases, the client, and not the professional employer organization, is deemed to be the retailer and is responsible for collecting and remitting the tax imposed by this chapter.
     (b) For the purposes of (a) of this subsection, the terms "client," "covered employee," "professional employer agreement," and "professional employer organization" have the same meanings as in RCW 82.04.540;
     (8) "Extended warranty" has the same meaning as in RCW 82.04.050(7);
     (9) The meaning ascribed to words and phrases in chapters 82.04 and 82.08 RCW, insofar as applicable, shall have full force and effect with respect to taxes imposed under the provisions of this chapter. "Consumer," in addition to the meaning ascribed to it in chapters 82.04 and 82.08 RCW insofar as applicable, shall also mean any person who distributes or displays, or causes to be distributed or displayed, any article of tangible personal property, except newspapers, the primary purpose of which is to promote the sale of products or services. With respect to property distributed to persons within this state by a consumer as defined in this subsection (9), the use of the property shall be deemed to be by such consumer.

Sec. 16   RCW 82.46.035 and 1992 c 221 s 3 and 1991 sp.s c 32 s 33 are each reenacted and amended to read as follows:
     (1) The legislative authority of any county or city shall identify in the adopted budget the capital projects and park maintenance and operation expenditures, or both, 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)).
     (2) The legislative authority of any county or any city that plans under RCW 36.70A.040(1) 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-quarter of one percent of the selling price. Any county choosing to plan under RCW 36.70A.040(2) and any city within such a county may only adopt an ordinance imposing the excise tax authorized by this section if the ordinance is first authorized by a proposition approved by a majority of the voters of the taxing district voting on the proposition at a general election held within the district or at a special election within the taxing district called by the district for the purpose of submitting such proposition to the voters.
     (3)(a) Revenues generated from the tax imposed under subsection (2) of this section shall be used by such counties and cities ((solely)) for financing capital projects specified in a capital facilities plan element of a comprehensive plan, and, until January 1, 2014, at the option of the city or county, park maintenance and operation expenditures. Only cities with a population less than fifty thousand and counties with a population less than two hundred fifty thousand may use revenues for park maintenance and operation expenditures. However, revenues (((a))) (i) pledged by such counties and cities to debt retirement prior to March 1, 1992, may continue to be used for that purpose until the original debt for which the revenues were pledged is retired, or (((b))) (ii) committed prior to March 1, 1992, by such counties or cities to a project may continue to be used for that purpose until the project is completed.
     (b) Counties, cities, and towns using revenues generated by the tax imposed under this section for park maintenance and operation expenditures may not use these revenues for the acquisition of capital projects specified in a capital facilities plan element of a comprehensive plan. This subsection (3)(b) does not apply to capital projects that are necessary for the health and safety of residents within the county, city, or town imposing the tax.
     (4) Revenues generated by the tax imposed by this section shall be deposited in a separate account.
     (5) As used in this section, "city" means any city or town and "capital project" means, except as provided by subsection (3) of this section, 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((, and planning, construction, reconstruction, repair, rehabilitation, or improvement of parks)) parks, recreational facilities, law enforcement facilities, fire protection facilities, trails, libraries, administrative and/or judicial facilities, and river and water flood control facilities. "Capital projects" after December 31, 2013, include expenditures for the planning, construction, reconstruction, repair, rehabilitation, or improvement of parks. "Capital projects" after December 31, 2013, do not include expenditures for the planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of recreational facilities, law enforcement facilities, fire protection facilities, trails, libraries, administrative facilities, judicial facilities, and river and water flood control facilities.
     (6) When the governor files a notice of noncompliance under RCW 36.70A.340 with the secretary of state and the appropriate county or city, the county or city's authority to impose the additional excise tax under this section shall be temporarily rescinded until the governor files a subsequent notice rescinding the notice of noncompliance.

NEW SECTION.  Sec. 17   By December 1, 2013, the Washington state association of counties and the association of Washington cities shall provide a report to the legislature on the following:
     (1) The number of cities and counties using tax revenue under RCW 82.46.035 for park maintenance and operation expenditures;
     (2) The amount of tax revenue under RCW 82.46.035 dedicated by cities and counties for park maintenance and operation expenditures; and
     (3) The tax collections and population growth for calendar years 2009, 2010, 2011, and 2012 for cities and counties using tax revenue under RCW 82.46.035 for park maintenance and operation expenditures.

NEW SECTION.  Sec. 18   Sections 4 and 5 of this act constitute a new chapter in Title 36 RCW.

NEW SECTION.  Sec. 19   Sections 1 and 2 of this act expire January 1, 2015."