BP BHEAD INT H [atlas:bill]

AN ACT Relating to credits against state taxes; amending RCW 84.36.381 and 84.36.383; reenacting and amending RCW 43.84.092; adding new sections to chapter 82.14 RCW; adding new sections to chapter 84.55 RCW; creating new sections; providing a contingent effective date; and providing an effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of a county may impose a sales and use tax in accordance with the terms of this chapter. The rate of this tax shall not exceed six and one-half 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) Taxes imposed under this section are in addition to 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. Taxes imposed under this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department under chapter 82.08 or 82.12 RCW. The department shall perform the collection of such taxes on behalf of the county at no cost to the county.

(3) Before a county may impose the tax under this section, the county must make an application to the transportation commission in a form and manner prescribed by the commission. The transportation commission shall identify and prioritize local transportation improvement projects eligible for funding from the tax authorized under this section. The commission shall approve applications from counties in which a local transportation improvement project identified by the transportation commission is located. The commission shall not approve an application if approval would cause the total amount of all approvals to exceed thirty million dollars for the 2001 fiscal year, and forty-six million two hundred fifty thousand dollars for each fiscal year 2002 through 2005.

(4) A tax imposed under this section shall expire when the revenue from the tax is equal to the amount approved by the transportation commission for each identified local transportation improvement project located in the county, but not later than July 1, 2005.

(5) All revenues collected on behalf of a county under this section shall be deposited in the local transportation improvement account hereby created in the custody of the state treasurer. Only the secretary of transportation or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but appropriations are not required for expenditures from the account. Moneys in the account may be used only to pay for local transportation improvement projects identified by the transportation commission. Money received from a county may be used only for an identified local transportation improvement project within that county.

NEW SECTION. Sec. 2. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of any county with a population less than five hundred thousand may impose an annual sales and use tax in accordance with the terms of this chapter. The rate of tax shall not exceed six and one-half 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. The tax shall take effect on or after July 1st of each year. The tax shall expire when the revenue from the tax for the county equals one thousand four hundred fifty-five dollars and four cents multiplied by the miles of shorelines in the county, but not later than June 30th of the following year. For the purposes of this section, "miles of shorelines in the county" means the number of miles of shorelines of the state, as defined in RCW 90.58.030, in the county as of January 1, 2000.

(2) Taxes imposed under this section are in addition to 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. Taxes imposed under this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department shall perform the collection of such taxes on behalf of the county at no cost to the county.

(3) A county must have an approved shoreline master program, as defined in RCW 90.58.030, before expending any moneys collected under this section. If a county does not have an approved shoreline master program before July 1, 2005, all moneys collected under this section for the county shall be deposited in the state general fund.

(4) Moneys collected under this section shall be used for:

(a) Fish habitat restoration projects; or

(b) Acquisition and preservation of riparian habitat, however any acquisitions must occur in the following manner:

(i) Riparian parcels located within a county-designated critical area under chapter 36.70A RCW or within a county's shoreline management jurisdiction under chapter 90.58 RCW, may be acquired in fee simple. A county may also acquire less than fee simple interests to be held in perpetuity, including conservation easements, and conservation futures as defined by RCW 84.34.220 in such areas; or

(ii) Less than fee simple interests to be held in perpetuity, including conservation easements, and conservation futures as defined by RCW 84.34.220, may be acquired in other riparian properties.

(5) In making acquisition decisions counties shall consult with a designated lead entity that has been established under RCW 75.46.060, and shall give priority to riparian properties that:

(a) Can be acquired in coordination with acquisitions made by the interagency committee for outdoor recreation according to chapter 43.99A RCW; or

(b) Have been designated by the United States national marine fisheries service or the United States fish and wildlife service as critical habitat for threatened or endangered species according to 16 U.S.C. Sec. 1533(a)(3).

(6) Once acquired, property or interests in property may be held and managed by the county, transferred to an appropriate state agency or local governmental entity, or transferred to a private nonprofit nature conservation corporation as defined by RCW 64.04.130.

(7) All taxes imposed under this section expire July 1, 2005.

NEW SECTION. Sec. 3. The legislature recognizes that existing transportation facilities in the central Puget Sound region are inadequate to address mobility needs of the area. The geography of the region, growth in demand for travel, and public resistance to new roadways combine to further necessitate the rapid development of alternative modes of travel.

The legislature has found and declared in RCW 47.06.140 that transportation facilities and services of high-capacity transportation systems are of state-wide significance. Pursuant to RCW 81.104.140, the legislature has also declared that agencies authorized to provide high-capacity transportation service, including regional transit authorities, should seek other funds in addition to dedicated funding sources, including federal, state, local, and private sector assistance.

The imposition of state taxes on the purchase of the goods, services, and activities necessary to construct a multicounty high-capacity transportation system reduces the revenues available to successfully implement such a system. The credit provided by section 4 of this act would facilitate the expansion of high-capacity transportation services by offsetting the taxes paid by regional transit authorities.

The legislature intends that the savings resulting from the credit provided in section 4 of this act will provide additional funds for the planning and construction of high-capacity transportation systems.

NEW SECTION. Sec. 4. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of a regional transit authority may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to 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 regional transit authority district. The rate shall not exceed 0.065 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 imposed under subsection (1) of this section shall be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department of revenue shall perform the collection of such taxes on behalf of the regional transit authority at no cost to the regional transit authority.

(3) Moneys collected under this section shall only be used for the purpose of planning and constructing a high-capacity transportation system.

(4) A tax imposed under this section shall expire when the revenue from the tax equals two hundred fourteen million dollars, but not later than January 1, 2007.

(5) As used in this section:

(a) "Regional transit authority" means an authority authorized under chapter 81.112 RCW; and

(b) "High-capacity transportation system" has the same meaning as provided in RCW 81.104.015.

Sec. 5. RCW 84.36.381 and 1998 c 333 s 1 are each amended to read as follows:

A person shall be exempt from any legal obligation to pay all or a portion of the amount of excess and regular real property taxes due and payable in the year following the year in which a claim is filed, and thereafter, in accordance with the following:

(1) The property taxes must have been imposed upon a residence which was occupied by the person claiming the exemption as a principal place of residence as of the time of filing((~~: PROVIDED, That~~)). Any person who sells, transfers, or is displaced from his or her residence may transfer his or her exemption status to a replacement residence, but no claimant shall receive an exemption on more than one residence in any year((~~: PROVIDED FURTHER, That~~)). Confinement of the person to a hospital, adult family home, boarding home, or nursing home shall not disqualify the claim of exemption if:

(a) The residence is temporarily unoccupied;

(b) The residence is occupied by a spouse and/or a person financially dependent on the claimant for support; or

(2) The person claiming the exemption must have owned, at the time of filing, in fee, as a life estate, or by contract purchase, the residence on which the property taxes have been imposed or if the person claiming the exemption lives in a cooperative housing association, corporation, or partnership, ((~~such~~)) the person must own a share therein representing the unit or portion of the structure in which ((~~he or she~~)) the person resides. For purposes of this subsection, a residence owned by a marital community or owned by cotenants shall be deemed to be owned by each spouse or cotenant, and any lease for life shall be deemed a life estate;

(3) The person claiming the exemption must be sixty-one years of age or older on December 31st of the year in which the exemption claim is filed, or must have been, at the time of filing, retired from regular gainful employment by reason of physical disability((~~: PROVIDED, That any~~)). A surviving spouse of ((a)) the person who was receiving an exemption at the time of the person's death shall qualify if the surviving spouse is fifty-seven years of age or older and otherwise meets the requirements of this section;

(4) The amount that the person shall be exempt from an obligation to pay shall be calculated on the basis of combined disposable income, as defined in RCW 84.36.383. If the person claiming the exemption was retired for two months or more of the assessment year, the combined disposable income of ((~~such~~)) the person shall be calculated by multiplying the average monthly combined disposable income of ((~~such~~)) the person during the months ((~~such~~)) the person was retired by twelve. If the income of the person claiming exemption is reduced for two or more months of the assessment year by reason of the death of the person's spouse, or when other substantial changes occur in disposable income that are likely to continue for an indefinite period of time, the combined disposable income of ((~~such~~)) the person shall be calculated by multiplying the average monthly combined disposable income of ((~~such~~)) the person after ((~~such~~)) the occurrences by twelve. If it is necessary to estimate income to comply with this subsection, the assessor may require confirming documentation of ((~~such~~)) the income prior to May 31st of the year following application;

(5)(a) A person who otherwise qualifies under this section and has a combined disposable income of thirty thousand dollars or less shall be exempt from all excess property taxes; and

(b)(i) A person who otherwise qualifies under this section and has a combined disposable income of twenty-four thousand dollars or less but greater than eighteen thousand dollars shall be exempt from all regular property taxes on the greater of forty thousand dollars or thirty-five percent of the valuation of ((~~his or her~~)) the residence, but not to exceed sixty thousand dollars of the valuation of ((~~his or her~~)) the residence; or

(ii) A person who otherwise qualifies under this section and has a combined disposable income of eighteen thousand dollars or less shall be exempt from all regular property taxes on the greater of fifty thousand dollars or sixty percent of the valuation of ((~~his or her~~)) the residence; and

(6) For a person who otherwise qualifies under this section and has a combined disposable income of thirty thousand dollars or less, the valuation of the residence shall be the assessed value of the residence on the later of January 1, 1995, or January 1st of the assessment year the person first qualifies under this section. If the person subsequently fails to qualify under this section only for one year because of high income, this same valuation shall be used upon requalification. If the person fails to qualify for more than one year in succession because of high income or fails to qualify for any other reason, the valuation upon requalification shall be the assessed value on January 1st of the assessment year in which the person requalifies. If the person transfers the exemption under this section to a different residence, the valuation of the different residence shall be the assessed value of the different residence on January 1st of the assessment year in which the person transfers the exemption.

In no event may the valuation under this subsection be greater than the true and fair value of the residence on January 1st of the assessment year.

This subsection does not apply to subsequent improvements to the property in the year in which the improvements are made. Subsequent improvements to the property shall be added to the value otherwise determined under this subsection at their true and fair value in the year in which they are made.

All taxpayers who qualify for exemption under this section shall be allowed a credit against the state levy equal to the tax imposed on the assessed value of the owner-occupied residential property for the state levy.

Sec. 6. RCW 84.36.383 and 1999 c 358 s 18 are each amended to read as follows:

As used in RCW 84.36.381 through 84.36.389, except where the context clearly indicates a different meaning:

(1) The term "residence" means a single family dwelling unit whether such unit be separate or part of a multiunit dwelling, including the land on which such dwelling stands not to exceed one acre. The term shall also include a share ownership in a cooperative housing association, corporation, or partnership if the person claiming exemption can establish that his or her share represents the specific unit or portion of such structure in which he or she resides. The term shall also include a single family dwelling situated upon lands the fee of which is vested in the United States or any instrumentality thereof including an Indian tribe or in the state of Washington, and notwithstanding the provisions of RCW 84.04.080 and 84.04.090, such a residence shall be deemed real property.

(2) The term "real property" shall also include a mobile home which has substantially lost its identity as a mobile unit by virtue of its being fixed in location upon land owned or leased by the owner of the mobile home and placed on a foundation (posts or blocks) with fixed pipe, connections with sewer, water, or other utilities. A mobile home located on land leased by the owner of the mobile home is subject, for tax billing, payment, and collection purposes, only to the personal property provisions of chapter 84.56 RCW and RCW 84.60.040.

(3) "Department" means the state department of revenue.

(4) "Combined disposable income" means the disposable income of the person claiming the exemption, plus the disposable income of his or her spouse, and the disposable income of each cotenant occupying the residence for the assessment year, less amounts paid by the person claiming the exemption or his or her spouse during the assessment year for:

(a) Drugs supplied by prescription of a medical practitioner authorized by the laws of this state or another jurisdiction to issue prescriptions; ((~~and~~))

(b) The treatment or care of either person received in the home or in a nursing home, adult family home, or boarding home; and

(c) Health care insurance of either person, including any deduction for medicare under Title XVIII of the social security act.

(5) "Disposable income" means adjusted gross income as defined in the federal internal revenue code, as amended prior to January 1, 1989, or such subsequent date as the director may provide by rule consistent with the purpose of this section, plus all of the following items to the extent they are not included in or have been deducted from adjusted gross income:

(a) Capital gains, other than gain excluded from income under section 121 of the federal internal revenue code to the extent it is reinvested in a new principal residence;

(b) Amounts deducted for loss;

(d) Pension and annuity receipts;

(e) Military pay and benefits other than attendant-care and medical-aid payments;

(f) Veterans benefits, other than (i) attendant-care and medical-aid payments or (ii) benefits for disabilities related to the performance of military duties received by veterans of the armed forces of the United States with service-connected disabilities of at least fifty percent;

(g) Federal social security act and railroad retirement benefits;

(h) Dividend receipts; and

(i) Interest received on state and municipal bonds.

(6) "Cotenant" means a person who resides with the person claiming the exemption and who has an ownership interest in the residence.

(7) "Adult family home" means a home licensed under chapter 70.128 RCW.

(8) "Boarding home" means a facility licensed under chapter 18.20 RCW.

(9) "Hospital" means a facility licensed under chapter 70.41 RCW.

(10) "Nursing home" means a facility licensed under chapter 18.51 RCW.

NEW SECTION. Sec. 7. A new section is added to chapter 84.55 RCW to read as follows:

The levy for a taxing district in any year shall be reduced as necessary to prevent increased exemptions resulting from the 2000 amendments to RCW 84.36.381 in section 5 of this act and to RCW 84.36.383 in section 6 of this act from resulting in a higher tax rate than would have occurred without this amendment.

NEW SECTION. Sec. 8. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of a county may impose an annual sales and use tax in accordance with the terms of this chapter. The rate of tax shall not exceed six and one-half 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. The tax shall take effect on or after January 1st of each year. The tax shall expire when the revenue from the tax is equal to the total amount of revenue reductions for the year for all taxing districts in the county, other than the state, resulting from the 2000 amendments to RCW 84.36.381 in section 5 of this act and to RCW 84.36.383 in section 6 of this act, but not later than the end of the calendar year.

(3) All revenues collected under this section shall be distributed to taxing districts in the county, other than the state, in proportion to the revenue reductions for the year resulting from the 2000 amendments to RCW 84.36.381 in section 5 of this act and to RCW 84.36.383 in section 6 of this act.

NEW SECTION. Sec. 9. A new section is added to chapter 84.55 RCW to read as follows:

The levy for a taxing district in any year shall be reduced as necessary to prevent limited values under RCW 84.40.0305 from resulting in a higher tax rate than would apply if properties were valued without reference to that section.

NEW SECTION. Sec. 10. A new section is added to chapter 82.14 RCW to read as follows:

(1) The legislative authority of a county may impose an annual sales and use tax in accordance with the terms of this chapter. The rate of tax shall not exceed six and one-half 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. The tax shall take effect on or after January 1st of each year. The tax shall expire when the revenue from the tax is equal to the total amount of revenue reductions for the year for all taxing districts in the county, other than the state, resulting from limited values under RCW 84.40.0305, but not later than the end of the calendar year.

Sec. 11. RCW 43.84.092 and 1999 c 380 s 9, 1999 c 309 s 929, 1999 c 268 s 5, and 1999 c 94 s 4 are each reenacted and amended to read as follows:

(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.

(2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.

(3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.

(4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:

(a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense account, the drinking water assistance account, the Eastern Washington University capital projects account, the education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the local transportation improvement account, the medical aid account, the mobile home park relocation fund, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system plan 2 account, the Puyallup tribal settlement account, the resource management cost account, the site closure account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the supplemental pension account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal ((~~account~~)) fund, the volunteer fire fighters' ((~~relief and pension~~)) and reserve officers' administrative ((~~account~~)) fund, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

(b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.

(5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION. Sec. 12. The rates of taxes imposed in a county under sections 1, 2, 4, 8, and 10 of this act shall be ratably reduced as necessary so that the total rate of the taxes imposed in a county under RCW 82.14.0485, 82.14.0494, 82.14.370, 82.14.390, sections 1, 2, 4, 8, and 10 of this act do not exceed six and one-half percent at any time.

NEW SECTION. Sec. 13. Section 11 of this act takes effect September 1, 2000.

NEW SECTION. Sec. 14. Sections 9 and 10 of this act take effect January 1, 2002, if the proposed amendment to Article VII of the state Constitution allowing property valuation increases to be spread over time (House Joint Resolution No. . . .) is validly submitted to and is approved and ratified by the voters at a general election held in November 2000. If the proposed amendment is not approved and ratified, these sections are void in their entirety.

NEW SECTION. Sec. 15. Sections 5 and 6 of this act apply to taxes levied for collection in 2001 and thereafter.