H-1577.1

SUBSTITUTE HOUSE BILL 1113


State of Washington	65th Legislature	2017 Regular Session

By House Appropriations (originally sponsored by Representatives Hayes, Senn, Nealey, Appleton, Shea, Goodman, McCaslin, Wylie, Stokesbary, Peterson, Wilcox, Springer, Griffey, Ryu, Hargrove, Robinson, Vick, Ortiz-Self, Fey, Tharinger, Buys, Orwall, Harmsworth, Pike, Farrell, McBride, Stambaugh, Clibborn, Gregerson, Holy, Kloba, Stanford, Muri, Sells, McDonald, and Bergquist)

READ FIRST TIME 02/13/17.

AN ACT Relating to gradually increasing the local government share of excess liquor revenues until the percentage-based method for distributions is restored; amending RCW 66.08.190, 66.08.190, and 66.08.210; creating a new section; providing effective dates; providing an expiration date; and declaring an emergency.

NEW SECTION. Sec. 1. (1) The legislature finds that the state of Washington has been sharing liquor revenues with local governments for the past eight decades. The legislature further finds that alcohol consumption is a contributing factor in driving under the influence, fatal and injury collisions, certain criminal offenses, underage drinking, and misdemeanor offenses such as violations of open container laws; therefore, it is imperative that local governments receive an adequate share of liquor revenues to offset the cost these factors have on local communities. The legislature further finds that a preponderance of the law enforcement efforts to address offenses associated with excess alcohol consumption are at the local level.

(2) The legislature further finds that, in 2011, when voters approved Initiative Measure No. 1183 to privatize liquor sales, they did so with the expectation that funding for local public safety efforts related to alcohol would be increased. The legislature further finds that the passage of Engrossed Substitute House Bill No. 2823 in the 2012 2nd sp. sess. had the opposite effect, capping specific liquor revenue distributions to cities and counties and changing what had been a percentage-based distribution formula to a flat annual amount that does not grow with increased liquor sale revenues.

(3) The legislature further finds that in 2012 a bipartisan, eight-member joint task force on junior taxing districts, municipal corporations, and local government finance unanimously recommended to restore "the preinitiative formula for the distribution of excess liquor revenues that allows local governments to benefit from increases in future sales."

(4) Therefore, the legislature intends to honor the will of the voters and the 2012 task force by removing the statutory cap on excess liquor revenues and gradually returning the distributions to cities and counties to the percentage amounts before Initiative Measure No. 1183. The legislature intends to restore the previous funding percentages based on a phased-in approach, over several years. The legislature finds this is the most cost-effective way to increase excess liquor revenues for local governments, while mitigating the impact to the general fund by avoiding a large one-time expenditure, spreading the restoration of the previous distribution method over several years.

(1) Prior to making distributions described in subsection (2) of this section, amounts must be retained to support allotments under RCW 43.88.110 from any legislative appropriation for municipal research and services. The legislative appropriation for such services must be in the amount specified under RCW 66.24.065.

(2)(a) When excess funds are distributed during the months of June, September, December, and March of each year, all moneys subject to distribution must be disbursed to border areas, counties, cities, and towns as provided in RCW 66.24.065 plus the following additional amounts:

(c) Sixty percent of the amounts distributed under (b) of this subsection must be used for public safety, including fire protection, and criminal justice purposes. Criminal justice purposes has the same meaning as provided in RCW 82.14.340(4).

(1) Prior to making ((distributions)) the distribution to cities described in subsection (((2))) (3) of this section, ((amounts)) sufficient moneys must be retained to ((support)) fund the allotments under RCW 43.88.110 from any legislative appropriation for municipal research and services. The legislative appropriation for such services ((must be in the amount specified)) may not be less than the amount required under RCW 66.24.065.

(2) Prior to making distributions described in subsection (3) of this section, the quarterly portion of the ten million dollar amount specified in RCW 66.24.065 must be disbursed to local governments.

(3)(a) When excess funds are distributed during the months of June, September, December, and March of each year, all moneys subject to distribution must be disbursed ((to border areas, counties, cities, and towns as provided in RCW 66.24.065.

(b) The total annual distributions to local governments under this subsection (3) may not be less than the amount required under RCW 66.24.065, excluding the annual ten million dollar distribution in subsection (2) of this section.

(c) If the total amount distributed to local governments is greater than the distribution required under RCW 66.24.065, sixty percent of any amount disbursed to local governments under (a) of this subsection must be used for public safety, including fire protection, and criminal justice purposes. Criminal justice purposes has the same meaning as provided in RCW 82.14.340(4).

(1) With respect to the distribution of funds to the incorporated cities and towns ((under RCW 66.24.290(1)(c),)) the computations for distribution must be made by the state agency responsible for collecting the same as provided in subsection (2) of this section.

(2) The share coming to each eligible city or town must be determined by a division among the eligible cities and towns within the state ratably on the basis of population as last determined by the office of financial management. However, no city or town in which the sale of liquor is forbidden as the result of an election is entitled to any share in such distribution.

NEW SECTION. Sec. 5. (1) Except for section 3 of this act, this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2017.