BILL REQ. #:  S-4728.2 

READ FIRST TIME 02/09/10.   

     AN ACT Relating to local excise tax authorities for counties and cities; amending RCW 82.14.450, 82.14.340, 9.46.113, 82.46.010, and 82.46.035; amending 2009 c 551 s 12 (uncodified); providing an effective date; and providing expiration dates.

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

Sec. 1   RCW 82.14.450 and 2009 c 551 s 1 are each amended to read as follows:
     (1) A county legislative authority may submit an authorizing proposition to the county voters at a primary or general election and, if the proposition is approved by a majority of persons voting, impose a sales and use tax in accordance with the terms of this chapter. The title of each ballot measure must clearly state the purposes for which the proposed sales and use tax will be used. ((Funds raised under this tax shall not supplant existing funds used for these purposes, except as follows: Up to one hundred percent may be used to supplant existing funding in calendar year 2010; up to eighty percent may be used to supplant existing funding in calendar year 2011; up to sixty percent may be used to supplant existing funding in calendar year 2012; up to forty percent may be used to supplant existing funding in calendar year 2013; and up to twenty percent may be used to supplant existing funding in calendar year 2014. For purposes of this subsection, existing funds means the actual operating expenditures for the calendar year in which the ballot measure is approved by voters. Actual operating expenditures excludes lost federal funds, lost or expired state grants or loans, extraordinary events not likely to reoccur, changes in contract provisions beyond the control of the county or city receiving the services, and major nonrecurring capital expenditures.)) The rate of tax under this section may not exceed three-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.
     (2) The tax authorized in this section is in addition to any other taxes authorized by law and must 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.
     (3) The retail sale or use of motor vehicles, and the lease of motor vehicles for up to the first thirty-six months of the lease, are exempt from tax imposed under this section.
     (4) One-third of all money received under this section must be used solely for criminal justice purposes, fire protection purposes, or both. For the purposes of this subsection, "criminal justice purposes" has the same meaning as provided in RCW 82.14.340.
     (5) Money received under this section must be shared between the county and the cities as follows: Sixty percent must be retained by the county and forty percent must be distributed on a per capita basis to cities in the county.

Sec. 2   RCW 82.14.340 and 1995 c 309 s 1 are each amended to read as follows:
     (1) The legislative authority of any county may fix and impose a sales and use tax in accordance with the terms of this chapter, provided that such sales and use tax is subject to repeal by referendum, using the procedures provided in RCW 82.14.036. The referendum procedure provided in RCW 82.14.036 is the exclusive method for subjecting any county sales and use tax ordinance or resolution to a referendum vote.
     (2) The tax authorized in this section ((shall be)) is in addition to any other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state pursuant to chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within such county. The rate of tax ((shall)) equals one-tenth 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).
     (3) When distributing moneys collected under this section, the state treasurer ((shall)) must distribute ten percent of the moneys to the county in which the tax was collected. The remainder of the moneys collected under this section ((shall)) must be distributed to the county and the cities within the county ratably based on population as last determined by the office of financial management. In making the distribution based on population, the county ((shall)) must receive that proportion that the unincorporated population of the county bears to the total population of the county and each city shall receive that proportion that the city incorporated population bears to the total county population.
     (4) Moneys received from any tax imposed under this section ((shall)) must be expended exclusively for criminal justice purposes ((and shall not be used to replace or supplant existing funding)). Criminal justice purposes are defined as activities that substantially assist the criminal justice system, which may include circumstances where ancillary benefit to the civil justice system occurs, and which includes domestic violence services such as those provided by domestic violence programs, community advocates, and legal advocates, as defined in RCW 70.123.020. ((Existing funding for purposes of this subsection is defined as calendar year 1989 actual operating expenditures for criminal justice purposes. Calendar year 1989 actual operating expenditures for criminal justice purposes exclude the following: Expenditures for extraordinary events not likely to reoccur, changes in contract provisions for criminal justice services, beyond the control of the local jurisdiction receiving the services, and major nonrecurring capital expenditures.))
     (5) In the expenditure of funds for criminal justice purposes as provided in this section, cities and counties, or any combination thereof, are expressly authorized to participate in agreements, pursuant to chapter 39.34 RCW, to jointly expend funds for criminal justice purposes of mutual benefit. Such criminal justice purposes of mutual benefit include, but are not limited to, the construction, improvement, and expansion of jails, court facilities, and juvenile justice facilities.

Sec. 3   RCW 9.46.113 and 1975 1st ex.s. c 166 s 11 are each amended to read as follows:
     Any county, city, or town ((which)) that collects a tax on gambling activities authorized pursuant to RCW 9.46.110 ((shall)) must use the revenue from such tax primarily for the purpose of ((enforcement of the provisions of this chapter by the county, city or town law enforcement agency)) public safety.

Sec. 4   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)) must identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in this section, and ((shall)) must indicate that such tax is intended to be in addition to other funds that may be reasonably available for such capital projects.
     (2)(a) 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. The revenues from this tax ((shall)) must 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. Revenues from the tax authorized in this subsection (2)(a) may also be used for maintenance and operation of capital projects.
     (b)(i) 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)) must be used solely for financing and maintenance and operation of 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.
     (ii) However, revenues (((a))) (A) 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))) (B) 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)) must 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)) must 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)) The definitions in this section((,)) apply throughout this section unless the context clearly requires otherwise.
     (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, or maintenance and operation 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; and 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.

Sec. 5   RCW 82.46.035 and 2009 c 211 s 1 are each amended to read as follows:
     (1) The legislative authority of any county or city ((shall)) must identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in this section, and ((shall)) must 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 that plans under RCW 36.70A.040(1) 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-quarter of one percent of the selling price. Any county choosing to plan under RCW 36.70A.040(2) and any city within such a county may only adopt an ordinance imposing the excise tax authorized by this section if the ordinance is first authorized by a proposition approved by a majority of the voters of the taxing district voting on the proposition at a general election held within the district or at a special election within the taxing district called by the district for the purpose of submitting such proposition to the voters.
     (3)(a) Revenues generated from the tax imposed under subsection (2) of this section ((shall)) must be used by such counties and cities solely for financing capital projects specified in a capital facilities plan element of a comprehensive plan. Revenues generated from the tax authorized in this section may also be used for maintenance and operation of capital projects.
     (b) However, revenues (((a))) (i) pledged by such counties and cities to debt retirement prior to March 1, 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 March 1, 1992, by such counties or cities to a project may continue to be used for that purpose until the project is completed.
     (4) Revenues generated by the tax imposed by this section ((shall)) must be deposited in a separate account.
     (5) ((As used)) The definitions in this section((:)) apply throughout this section unless the context clearly requires otherwise.
     (a) "City" means any city or town;
     (b) "Capital project" means those public works projects of a local government for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, ((or)) improvement, or maintenance and operation of: Streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, municipally owned heavy rail short line railroads, domestic water systems, storm and sanitary sewer systems, parks, recreational facilities, law enforcement facilities, fire protection facilities, trails, libraries, administrative and/or judicial facilities, and river and/or waterway flood control facilities; and ((planning, construction, reconstruction, repair, rehabilitation, or improvement of parks; and))
     (c) "Short line railroads" means class III railroads as defined by the United States surface transportation board.
     (6) When the governor files a notice of noncompliance under RCW 36.70A.340 with the secretary of state and the appropriate county or city, the county or city's authority to impose the additional excise tax under this section ((shall)) must be temporarily rescinded until the governor files a subsequent notice rescinding the notice of noncompliance.
     (7) A city or county may use revenue generated under subsection (2) of this section for municipally owned heavy short line railroads only if the revenue was collected prior to December 31, 2008, and may not use more than twenty-five percent of the total revenue generated under subsection (2) of this section for municipally owned heavy short line railroads.

Sec. 6   RCW 82.46.035 and 1992 c 221 s 3 and 1991 sp.s. c 32 s 33 are each reenacted and amended to read as follows:
     (1) The legislative authority of any county or city ((shall)) must identify in the adopted budget the capital projects funded in whole or in part from the proceeds of the tax authorized in this section, and ((shall)) must 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 that plans under RCW 36.70A.040(1) 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-quarter of one percent of the selling price. Any county choosing to plan under RCW 36.70A.040(2) and any city within such a county may only adopt an ordinance imposing the excise tax authorized by this section if the ordinance is first authorized by a proposition approved by a majority of the voters of the taxing district voting on the proposition at a general election held within the district or at a special election within the taxing district called by the district for the purpose of submitting such proposition to the voters.
     (3)(a) Revenues generated from the tax imposed under subsection (2) of this section ((shall)) must be used by such counties and cities solely for financing capital projects specified in a capital facilities plan element of a comprehensive plan. Revenues generated from the tax authorized in this section may also be used for maintenance and operation of capital projects.
     (b) However, revenues (((a))) (i) pledged by such counties and cities to debt retirement prior to March 1, 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 March 1, 1992, by such counties or cities to a project may continue to be used for that purpose until the project is completed.
     (4) Revenues generated by the tax imposed by this section ((shall)) must be deposited in a separate account.
     (5) ((As used)) The definitions in this section((,)) apply throughout this section unless the context clearly requires otherwise.
     (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, ((and planning, construction, reconstruction, repair, rehabilitation, or improvement of parks)) recreational facilities, law enforcement facilities, fire protection facilities, trails, libraries, administrative and/or judicial facilities, and river and/or waterway flood control facilities.
     (6) When the governor files a notice of noncompliance under RCW 36.70A.340 with the secretary of state and the appropriate county or city, the county or city's authority to impose the additional excise tax under this section ((shall)) must be temporarily rescinded until the governor files a subsequent notice rescinding the notice of noncompliance.

Sec. 7   2009 c 551 s 12 (uncodified) is amended to read as follows:
     Section((s 1 and)) 2 of this act expires January 1, ((2015)) 2014.

NEW SECTION.  Sec. 8   Section 6 of this act takes effect June 30, 2012.

NEW SECTION.  Sec. 9   Section 5 of this act expires June 30, 2012.

NEW SECTION.  Sec. 10   Sections 3, 4, and 6 of this act expire January 1, 2014.