BILL REQ. #:  H-2484.1 

READ FIRST TIME 02/27/07.   

     AN ACT Relating to the use of local government real estate excise tax proceeds for the acquisition of equipment and software related to business applications; and amending RCW 82.46.010.

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

Sec. 1   RCW 82.46.010 and 1994 c 272 s 1 are each amended to read as follows:
     (1) The legislative authority of any county or city shall identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in subsection (2) of this section, and shall indicate that such tax is intended to be in addition to other funds that may be reasonably available for such capital projects.
     (2) The legislative authority of any county or any city may impose an excise tax on each sale of real property in the unincorporated areas of the county for the county tax and in the corporate limits of the city for the city tax at a rate not exceeding one-quarter of one percent of the selling price.
     (a) The revenues from this tax shall be used by any city or county with a population of five thousand or less and any city or county that does not plan under RCW 36.70A.040 for any capital purpose identified in a capital improvements plan and local capital improvements, including those listed in RCW 35.43.040. For purposes of this subsection (2), "capital projects" include equipment items that may contain and employ a software element necessary for initial installation and operation that may be included in the capital expenditure on a one-time basis during initial acquisition by a county or city in the regular course of business in connection with associated capital improvements. These expenditures must be capitalized with a lifetime of at least five years and must be tied directly to the dollar amount used solely for the economic development value of an existing or planned capital improvement. None of the tax proceeds may be used for daily operations or upgrading of the original capital investment.
     (b) After April 30, 1992, revenues generated from the tax imposed under this subsection in counties over five thousand population and cities over five thousand population that are required or choose to plan under RCW 36.70A.040 shall be used solely for financing capital projects specified in a capital facilities plan element of a comprehensive plan and housing relocation assistance under RCW 59.18.440 and 59.18.450. However, revenues (((a))) (i) pledged by such counties and cities to debt retirement prior to April 30, 1992, may continue to be used for that purpose until the original debt for which the revenues were pledged is retired, or (((b))) (ii) committed prior to April 30, 1992, by such counties or cities to a project may continue to be used for that purpose until the project is completed.
     (3) In lieu of imposing the tax authorized in RCW 82.14.030(2), the legislative authority of any county or any city may impose an additional excise tax on each sale of real property in the unincorporated areas of the county for the county tax and in the corporate limits of the city for the city tax at a rate not exceeding one-half of one percent of the selling price.
     (4) Taxes imposed under this section shall be collected from persons who are taxable by the state under chapter 82.45 RCW upon the occurrence of any taxable event within the unincorporated areas of the county or within the corporate limits of the city, as the case may be.
     (5) Taxes imposed under this section shall comply with all applicable rules, regulations, laws, and court decisions regarding real estate excise taxes as imposed by the state under chapter 82.45 RCW.
     (6) As used in this section, the following definitions apply:
     (a) "City" means any city or town; and
     (b) "Capital project" means those public works projects of a local government for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of streets; roads; highways; sidewalks; street and road lighting systems; traffic signals; bridges; domestic water systems; storm and sanitary sewer systems; parks; recreational facilities; law enforcement facilities; fire protection facilities; trails; libraries; administrative and/or judicial facilities; river and/or waterway flood control projects by those jurisdictions that, prior to June 11, 1992, have expended funds derived from the tax authorized by this section for such purposes; and, until December 31, 1995, housing projects for those jurisdictions that, prior to June 11, 1992, have expended or committed to expend funds derived from the tax authorized by this section or the tax authorized by RCW 82.46.035 for such purposes. "Capital project" includes equipment that may contain and employ software elements necessary for initial installation and operation that may be included in the capital budget expenditure on a one-time basis during the initial acquisition by a county or city in the regular course of business in connection with associated capital improvements. These capital expenditures must be capitalized with a lifetime of at least five years and must be tied directly to the dollar amount used solely for the economic development value of an existing or planned capital improvement. None of the tax proceeds may be used for daily operation, maintenance, or upgrading of the original capital investment.
     (7) All expenditures made by counties and cities for capital purposes, local capital improvements, and capital projects authorized under this section on or before the effective date of this act are declared to be valid.