[atlas:bill]

AN ACT Relating to limiting taxes and fees; adding new sections to chapter 43.135 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. A new section is added to chapter 43.135 RCW to read as follows:

The legislature recognizes the following:

(1) Article I, section 29 of the Washington state Constitution provides that a frequent recurrence to fundamental principles is essential to the security of individual rights and the perpetuity of free government.

Article I, section 1 of the Washington state Constitution expresses the fundamental principle that all political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.

Article II, section 1 of the Washington state Constitution provides that the legislative authority of the state of Washington is vested in the legislature, but the people reserve to themselves the power to propose laws and to enact or reject the same at the polls independent of the legislature.

(2) The state Constitution, in contrast to the federal Constitution, does not operate as a grant of powers to government but rather as a limitation on the powers of government. The federal government has no powers other than those which are expressly delegated to it by the people or their representatives. The people and the state governments have all powers other than those which the people or their representatives have delegated pursuant to the federal Constitution or limited pursuant to the state Constitution.

The people and their representatives have the legislative power to act in any given field unless affirmatively restrained by the state Constitution, and their legislative power is absolute unless expressly limited in the state Constitution. The legislative power of the people and their representatives to condition the imposition of tax or fee increases upon popular approval is not affirmatively restrained or expressly limited by the state Constitution and the people and their representatives retain the right to make tax and fee increases conditional upon popular approval.

NEW SECTION. Sec. 2. A new section is added to chapter 43.135 RCW to read as follows:

(1) Except as otherwise provided in this act, any tax or fee increase shall be submitted to the voters of the taxing jurisdiction in which the tax or fee is to be imposed for their approval before it is imposed by a governmental entity.

(2) This section requires a popular vote on proposed tax and fee increases as a condition precedent that must be fulfilled before a tax or fee increase can be enacted and imposed. This section is not intended, and shall not be construed, to be a referendum under Article II, section 1 of the Washington state Constitution.

(3) In the event this section is determined by a court to be invalid and unenforceable for any reason, section 3 of this act shall apply.

NEW SECTION. Sec. 3. A new section is added to chapter 43.135 RCW to read as follows:

(1) Except as otherwise provided in this act, any tax or fee increase shall be submitted to the voters of the taxing jurisdiction in which the tax or fee is to be imposed for their advisory vote before it is imposed by a governmental entity.

(2) In the event section 2 of this act is determined by a court to be invalid and unenforceable for any reason, this section shall apply.

NEW SECTION. Sec. 4. A new section is added to chapter 43.135 RCW to read as follows:

(1) For the purposes of this act, "tax" means any charge imposed by a governmental entity on a person, property, or transaction for the general funding of government without any direct connection between the amount charged and the benefit received.

(2) For the purposes of this act, "fee" means any charge that is not a tax that is imposed by a governmental entity on a person, property, or transaction when the governmental entity is operating in a capacity other than a proprietary capacity.

(3) For the purposes of this act, "tax" or "fee" does not include any civil or criminal fine or other obligation imposed as a result of a violation of law or contract, or any tax or fee otherwise approved by a vote of the people.

(4) For the purposes of this act, "tax increase" or "fee increase" includes, but is not necessarily limited to, a new tax or fee, a monetary increase in an existing tax or fee, a tax or fee rate increase, an expansion in the legal definition of a tax base or fee formula, and an extension of an expiring tax or fee.

(5) For the purposes of this act, "governmental entity" includes, but is not necessarily limited to, the state itself and all its departments and agencies, any county, city, town, special district, and other political subdivision or governmental instrumentality of or within the state.

(6) This act does not apply to any specific emergency tax increase measure authorized by vote of two-thirds of a legislative body, otherwise authorized by law, that expires not later than twelve months from the effective date of the emergency act.

(7)(a) This act does not apply to any specific emergency fee increase measure authorized by vote of a legislative body or act of a nonlegislative body, otherwise authorized by law, that expires not later than thirty-six months from the effective date of the emergency act, is not adopted less than thirty-six months from the adoption of any previous specific emergency fee increase measure, and does not exceed the fee increase limit established in this subsection.

(b)(i) The fee increase limit for any fiscal year shall be the previous fiscal year's fee increased by a percentage rate that equals the fee growth factor.

(ii) "Fee growth factor" means the average of the percentage change in the implicit price deflator for the United States for each fiscal year as published by the federal bureau of labor statistics for each of the prior three fiscal years.

(8)(a) Any tax or fee increase adopted by a governmental entity from July 2, 1999, through the effective date of this act is null and void and of no effect unless the tax or fee increase was adopted in accordance with the requirements of subsections (1) through (7) of this section.

(b) Any tax or fee collected from a tax or fee increase not adopted in accordance with the requirements of subsections (1) through (7) of this section shall be refunded to the person or entity that paid the tax or fee.

(9) This act is not intended, and shall not be construed, to unlawfully impair any contract determined to exist by a court, including any revenues or funds derived from any tax or fee increase that are specifically dedicated or pledged to repay existing bonded indebtedness.

(10)(a) This act shall be operative for all intents and purposes unless preempted by federal law under Article VI of the United States Constitution.

(b) If any provision of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to a governmental entity, the conflicting part of this act remains operative regardless of the conflict.

(11) This act is intended to add to, and not replace, the requirements for tax increases set forth in RCW 43.135.035.

NEW SECTION. Sec. 5. The provisions of this act are to be liberally construed to effectuate the policies and purposes of this act.

NEW SECTION. Sec. 6. 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.