HOUSE BILL REPORT

ESB 6904

BYSenator Newhouse, Benitz, Warnke, Smitherman, Stratton, Wojahn, Bender, Sutherland, Vognild, Rasmussen, Talmadge, Fleming, Conner, Patrick, Murray, Madsen, Moore, McMullen, Hayner, Anderson and Cantu

Providing local government fiscal assistance.

AS PASSED HOUSE MARCH 9, 1990

BACKGROUND:

Current law prescribes that 17 percent of all motor vehicle excise tax (MVET) receipts deposited in the general fund from the basic 2 percent rate be distributed to incorporated cities and towns. Of this amount, 65 percent is distributed for the support of public safety and health programs. According to a Senate Committee on Ways and Means staff report, it is estimated that approximately $43.0 million of the $68.7 million 1989-91 MVET distribution to cities and towns will be spent for public safety programs.

Counties do not currently receive a share of state motor vehicle excise tax revenues for public safety programs. County officials have argued that county criminal justice expenditures have risen rapidly in recent years, and that additional revenues are necessary to insure the continued provision of criminal justice services.

SUMMARY:

The Local Justice Assistance Board is created within the Department of Community Development. The 17 board members serve for six years to coincide with termination of the board's activities. The board is directed to develop formula financing and grants-in-aid criteria for county and city criminal justice programs. An appropriation of $10 million is authorized for formula financing for counties. An appropriation of $5 million is appropriated for grants-in-aid and an additional one-time $5 million is appropriated for "emergency" criminal justice grants-in-aid.

An appropriation of $14.4 million is provided for local jail funding from the state building and construction account to the board.

Cities, towns, and counties are authorized to impose up to a 0.5 percent real estate excise tax and the local option sales tax at the same time.

Counties may impose a levy of $.03 per $1,000 of assessed value on all the property of the county for purposes of funding LEOFF I city and county medical and health costs.

Cities and towns may impose the maximum $3.60 levy, regardless of whether they possess pre-LEOFF firemen pension programs.

Cities and towns are required to inform the state actuary by November 1 of each even numbered year on the fiscal condition of specified firemen's pension systems. The state actuary is required to report to the Legislature by January 1 of each odd numbered year the fiscal condition of these specified pension systems. Moneys not used from the fire insurance premiums tax shall be returned to the state for redistribution to other cities with firemen pension obligations.

The sales tax equalization program for counties, cities, and towns is altered. Counties will receive a minimum floor of up to $375,000. Cities and towns will receive a distribution equal to 75 percent of the per capita average of all city sales tax revenues with minimum payments of $500 and maximum payments of $26,000 annually. The motor vehicle excise tax distribution to counties is increased from 2 percent to 3 percent. The cities and towns distribution from the motor vehicle excise tax is increased by 1/2 of 1 percent.

All counties are authorized to impose an employer tax measured by the number of employees in a business in the unincorporated area only. The rate of tax shall not exceed $5 per month per employee and each employer may only be taxed once where the employer is located in more than one county. Exemptions may be provided by ordinance, including but not limited to nonprofit organizations and governmental agencies.

Various county civil court fees and fees charged by court clerks for various services are increased. Where applicable, the current court fee division of revenue is maintained under the public safety and education account (68 percent of revenue is retained by counties and 32 percent is remitted to the state).

Cities, towns, and counties will receive monthly instead of bi- monthly distributions of sales tax revenues from the State Treasurer.

Specified unclaimed property may be retained by local governments however, such property must still be reported to the state.

The requirement that three or more unpaid parking violations may be reported to the Department of licensing is reduced to two. Notification requirements for local jurisdictions reporting unpaid parking fines to the Department of Licensing for motor vehicle license renewal purposes are reduced from 150 days to 90 days. The $10 surcharge imposed on unpaid parking fines is increased to $15.

The provisions of state reimbursement for new programs or increased levels of services required on the part of local governments are altered. New revenues or increased existing revenue sources approved after 1979 shall be considered as reimbursement for mandated costs. Reimbursement does not include changes for criminal justice sentencing or enforcement procedures before July 1, 1990 or changes to criminal justice activities that have historically been the responsibility of the taxing district. In addition, no further state reimbursement is necessary for new programs or increased levels of service through July 1, 1990.

VOTE ON FINAL PASSAGE:

Yeas 66; Nays 31 - 3/02

Voting Nay: Representatives Ballard, Beck, Bennett, Betrozoff, Bowman, Brooks, Brough, Brumsickle, Doty, Ferguson, Forner, Fuhrman, Hankins, Holland, Horn, Kirby, May, McLean, Miller, Moyer, Padden, Schoon, Silver, Smith, D. Sommers, Tate, Van Luven, Walker, Wolfe, Wood and Youngsman

VOTE ON FINAL PASSAGE:

Yeas 64; Nays 31; Excused 2 - 3/09

Excused: Representatives Baugher and Gallagher