_______________________________________________

                                          ENGROSSED SENATE BILL NO. 5990

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Senators Johnson, Moore and McCaslin

Read first time 2/21/89 and referred to Committee on  Governmental Operations.

AN ACT Relating to limiting the authority of cities to impose license fees or taxes on the resale of network telephone services; and amending RCW 35.21.714, 35.21.715, 35A.82.060, and 35A.82.065.

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

        Sec. 1.  Section 10, chapter 144, Laws of 1981 as last amended by section 1, chapter 70, Laws of 1986 and RCW 35.21.714 are each amended to read as follows:

          Any city which imposes a license fee or tax upon the business activity of engaging in the telephone business, as defined in RCW 82.04.065, which is measured by gross receipts or gross income may impose the fee or tax, if it desires, on one hundred percent of the total gross revenue derived from intrastate toll telephone services subject to the fee or tax:  PROVIDED, That the city shall not impose the fee or tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services, or charges for network telephone service that is purchased for the purpose of resale.

        Sec. 2.  Section 2, chapter 70, Laws of 1986 and RCW 35.21.715 are each amended to read as follows:

          Notwithstanding RCW 35.21.714 or 35A.82.060, any city or town which imposes a tax upon business activities measured by gross receipts or gross income from sales, may impose such tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll services, or charges for network telephone service that is purchased for the purpose of resale.  Such tax shall be levied at the same rate as is applicable to other competitive telephone service as defined in RCW 82.04.065.

        Sec. 3.  Section 11, chapter 144, Laws of 1981 as last amended by section 4, chapter 70, Laws of 1986 and RCW 35A.82.060 are each amended to read as follows:

          Any code city which imposes a license fee or tax upon the business activity of engaging in the telephone business, as defined in RCW 82.04.065, which is measured by gross receipts or gross income may impose the fee or tax, if it desires, on one hundred percent of the total gross revenue derived from intrastate toll telephone services subject to the fee or tax:  PROVIDED, That the city shall not impose the fee or tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services, or charges for network telephone service that is purchased for the purpose of resale.

        Sec. 4.  Section 5, chapter 70, Laws of 1986 and RCW 35A.82.065 are each amended to read as follows:

          Notwithstanding RCW 35.21.714 or 35A.82.060, any city or town which imposes a tax upon business activities measured by gross receipts or gross income from sales, may impose such tax  on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll services, or charges for network telephone service that is purchased for the purpose of resale.  Such tax shall be levied at the same rate as is applicable to other competitive telephone service as defined in RCW 82.04.065.

NEW SECTION. Sec. 5.     If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.