H-210                _______________________________________________

                                                   HOUSE BILL NO. 1329

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Representatives Ferguson, Van Luven, Betrozoff, Horn, Miller, Heavey, Patrick, May and Morris

Read first time 1/20/89 and referred to Committees on Local Government/Revenue (3/1/89).

AN ACT Relating to taxation of commercial construction; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.     The legislature finds that commercial development stresses local infrastructure, requiring unanticipated and unsupported maintenance and construction of roads, streets, bridges, water systems, sewer systems, and storm drainage.  It is the intent of the legislature to provide revenue to cities, towns, and counties for  repair, maintenance, and  construction of roads, streets, bridges, water systems, sewer systems, and storm drainage by allotting a portion of the commercial construction sales and use tax revenue to these local governments.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.08 RCW to read as follows:

          (1)  Fifteen percent of the revenue collected from the retail sales tax on commercial construction shall be segregated and placed into an account to be known as the local infrastructure account, which is hereby created in the state treasury.  The moneys in the account shall be used solely for repair, maintenance, and construction of roads, streets, bridges, water systems, sewer systems, and storm drainage.  The local infrastructure account is divided into two subaccounts known as the county infrastructure subaccount and the city and town infrastructure subaccount.

          (2) The money in the local infrastructure account shall be allocated between the two subaccounts according to the following formula:

          (a) The city and town infrastructure subaccount shall be determined by dividing the total state-wide city and town population by total state population, and then taking this percentage from the local infrastructure account moneys.

          (b) The county infrastructure subaccount shall be determined by dividing the total state-wide county population by total state population, and then taking this percentage from the local infrastructure account moneys.

          (3) Allocation of money from the subaccounts to the individual cities, towns, and counties shall be determined by the department of revenue.   The department of revenue shall apportion the moneys according to the following formula:

          (a) Each city and town's population shall be divided by the total state-wide city and town population, and this percentage shall represent the city or town's share of the city and town infrastructure subaccount.

          (b) Each county's population shall be divided by the total state-wide county population, and this percentage shall represent the county's share of the county infrastructure subaccount.

          (4) The population figures that are used to determine distribution and allocation of the subaccounts shall be from the previous year and shall be provided by the office of financial management.

          (5) The state treasurer shall distribute bimonthly, as set forth in chapter 82.14 RCW, the moneys to the local governments as directed by the department of revenue.

NEW SECTION. Sec. 3.  A new section is added to chapter 82.12 RCW to read as follows:

          Fifteen percent of the revenue collected from the retail use tax on commercial construction shall be segregated and placed into the local infrastructure account created by section 2 of this act.

NEW SECTION. Sec. 4.     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 shall take effect July 1, 1989.  Segregation of money into the local infrastructure account shall begin with moneys collected on or after July 1, 1989.  The bimonthly distributions from the local infrastructure account shall begin the third quarter of 1989.