BILL REQ. #:  H-5134.2 

READ FIRST TIME 02/12/08.   

     AN ACT Relating to sales and use tax on transportation projects; amending RCW 47.46.060 and 82.14.0455; and adding a new section to chapter 82.32 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.32 RCW to read as follows:
     (1) The tax imposed and collected under chapters 82.08 and 82.12 RCW, less any credits allowed under chapter 82.14 RCW, on the initial construction of a transportation project in which fifty percent or more of the cost of the project or more than one billion dollars will be:
     (a) Recovered through tolls, must be transferred to the tolling account of the project; or
     (b) Provided by funding sources adopted pursuant to chapter 36.73 RCW, must be transferred to the entity providing the local funding for the transportation project.
     (2) The tax imposed and collected under chapters 82.08 and 82.12 RCW, less any credits allowed under chapter 82.14 RCW, on initial construction for a highway of statewide significance to be constructed under chapter 36.73 RCW in a county that borders another state and has a population of more than four hundred thousand, must be transferred to the highway project to defray the costs or pay debt service on that project, if more than one hundred million dollars will be provided for the highway of statewide significance by funding sources adopted pursuant to chapter 36.73 RCW.
     (3) Revenue transferred under subsection (1)(a) or (b) or (2) of this section must be used to lower the overall cost of the project.
     (4) A transfer under this section is exempt from the provisions of RCW 43.135.035(4).
     (5) For the purposes of this section, "transportation project" includes a series of related component projects. Related component projects for the state route number 520 bridge replacement and HOV lane construction project include the early construction of pontoons for the replacement bridge, the construction of the replacement bridge itself, and the construction of the corridor and various interchanges along state route number 520 between Interstate 5 and Interstate 405.
     (6) This section does not apply to the state route number 16 corridor improvements project.

Sec. 2   RCW 47.46.060 and 2002 c 114 s 18 are each amended to read as follows:
     (1) Any person, including the department of transportation and any private entity or entities, may apply for deferral of taxes on the site preparation for, the construction of, the acquisition of any related machinery and equipment which will become a part of, and the rental of equipment for use in the state route number 16 corridor improvements project under this chapter. Application shall be made to the department of revenue in a form and manner prescribed by the department of revenue. The application shall contain information regarding estimated or actual costs, time schedules for completion and operation, and other information required by the department of revenue. The department of revenue shall approve the application within sixty days if it meets the requirements of this section.
     (2) The department of revenue shall issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW on the project.
     (3) The department of transportation or a private entity granted a tax deferral under this section shall begin paying the deferred taxes in the fifth year after the date certified by the department of revenue as the date on which the project is operationally complete. The first payment is due on December 31st of the fifth calendar year after such certified date, with subsequent annual payments due on December 31st of the following nine years. Each payment shall equal ten percent of the deferred tax. The project is operationally complete under this section when the collection of tolls is commenced for the state route number 16 improvements covered by the deferral.
     (4) The department of revenue may authorize an accelerated repayment schedule upon request of the department of transportation or a private entity granted a deferral under this section.
     (5) Interest shall not be charged on any taxes deferred under this section for the period of deferral, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed for delinquent payments under this section. The debt for deferred taxes is not extinguished by insolvency or other failure of the private entity. Transfer of ownership does not terminate the deferral.
     (6) Applications and any other information received by the department of revenue under this section are not confidential and are subject to disclosure. Chapter 82.32 RCW applies to the administration of this section.
     (7) If a deferral has been granted under subsection (1) of this section, the taxes otherwise due under chapters 82.08 and 82.12 RCW on the site preparation for, the construction of, the acquisition of any related machinery and equipment that will become a part of, and the rental of equipment for use in the state route number 16 corridor improvements need not be repaid.

Sec. 3   RCW 82.14.0455 and 2006 c 311 s 16 are each amended to read as follows:
     (1) Subject to the provisions in RCW 36.73.065, a transportation benefit district under chapter 36.73 RCW may fix and impose a sales and use tax in accordance with the terms of this chapter. The tax authorized in this section is in addition to any 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 boundaries of the district. The rate of tax shall not exceed two-tenths of one 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 may not be imposed for a period exceeding ten years. This tax may be extended for a period not exceeding ten years with an affirmative vote of the voters voting at the election. If the transportation benefit district is located in a county that borders another state and has a population of more than four hundred thousand, and a portion of the sales tax is used to fund initial construction on a highway of statewide significance within the county, the sales tax may be imposed for more than ten years.
     (2) Money received from the tax imposed under this section must be spent in accordance with the requirements of chapter 36.73 RCW.