"NEW SECTION.  Sec. 1   (1) It is the intent of the legislature to provide diversified local revenue options that may be tailored to the needs of each jurisdiction. It is also the intent that local governments provide countywide transportation planning and coordinate with other municipalities, transit systems, transportation benefit districts, planning organizations, and other transportation agencies. It is critical that all transportation infrastructure is well planned, coordinated, and maintained at the local levels to provide a seamless transportation infrastructure to enable people and goods to move safely and efficiently throughout the state and to bolster and improve the state's economy.
     (2) The legislature finds that the purchasing power of funds to pay for local transportation needs continues to decline while costs have risen. Without additional funding, counties and cities will continue to struggle financially to preserve and maintain county roads, city streets, and bridges; pavement conditions will to continue to decline; and public transit systems will be forced to cut services at a time when demand for transit services is increasing.

Sec. 2   RCW 36.73.065 and 2007 c 329 s 1 are each amended to read as follows:
     (1) Except as provided in subsection (((4))) (5) of this section, taxes, fees, charges, and tolls may not be imposed by a district without approval of a majority of the voters in the district voting on a proposition at a general or special election. The proposition must include a specific description of the transportation improvement or improvements proposed by the district and the proposed taxes, fees, charges, and the range of tolls imposed by the district to raise revenue to fund the improvement or improvements.
     (2) Voter approval under this section ((shall)) must be accorded substantial weight regarding the validity of a transportation improvement as defined in RCW 36.73.015.
     (3) Except as provided in subsection (4) of this section, a district may not increase any taxes, fees, charges, or range of tolls imposed under this chapter once the taxes, fees, charges, or tolls take effect, unless authorized by the district voters pursuant to RCW 36.73.160.
     (4) A district, solely comprised of a city with a population of five hundred thousand or less, may impose a vehicle fee authorized in RCW 82.80.140 of up to forty dollars by a majority vote of the governing board of the district.
     (5)(a) A district that includes all the territory within the boundaries of the jurisdiction, or jurisdictions, establishing the district, but not including territory in which a fee is currently being collected under RCW 82.80.140, may impose by a majority vote of the governing board of the district the following fees and charges:
     (i) Up to twenty dollars of the vehicle fee authorized in RCW 82.80.140; ((or))
     (ii) A district, solely comprised of a city with a population of five hundred thousand or less, up to forty dollars of the vehicle fee authorized in RCW 82.80.140; or
     (iii) A fee or charge in accordance with RCW 36.73.120.
     (b) The vehicle fee authorized in (a) of this subsection may only be imposed for a passenger-only ferry transportation improvement if the vehicle fee is first approved by a majority of the voters within the jurisdiction of the district.
     (c)(i) A district solely comprised of a city or cities ((shall)) may not impose the fees or charges identified in (a) of this subsection within one hundred eighty days after July 22, 2007, unless the county in which the city or cities reside, by resolution, declares that it will not impose the fees or charges identified in (a) of this subsection within the one hundred eighty-day period; or
     (ii) A district solely comprised of a city or cities identified in RCW 36.73.020(6)(b) ((shall)) may not impose the fees or charges until after May 22, 2008, unless the county in which the city or cities reside, by resolution, declares that it will not impose the fees or charges identified in (a) of this subsection through May 22, 2008.
     (((5))) (6) If the interlocal agreement in RCW 82.80.140(2)(a) cannot be reached, a district that includes only the unincorporated territory of a county may impose by a majority vote of the governing body of the district up to twenty dollars of the vehicle fee authorized in RCW 82.80.140 or up to forty dollars for a district as authorized under subsection (4) of this section.

Sec. 3   RCW 36.73.040 and 2008 c 122 s 17 are each amended to read as follows:
     (1) A transportation benefit district is a quasi-municipal corporation, an independent taxing "authority" within the meaning of Article VII, section 1 of the state Constitution, and a "taxing district" within the meaning of Article VII, section 2 of the state Constitution.
     (2) A transportation benefit district constitutes a body corporate and possesses all the usual powers of a corporation for public purposes as well as all other powers that may now or hereafter be specifically conferred by statute, including, but not limited to, the authority to hire employees, staff, and services, to enter into contracts, to acquire, hold, and dispose of real and personal property, and to sue and be sued. Public works contract limits applicable to the jurisdiction that established the district apply to the district.
     (3) To carry out the purposes of this chapter, and subject to the provisions of RCW 36.73.065, a district is authorized to impose the following taxes, fees, charges, and tolls:
     (a) A sales and use tax in accordance with RCW 82.14.0455;
     (b) A vehicle fee in accordance with RCW 82.80.140;
     (c) A fee or charge in accordance with RCW 36.73.120. However, if a county or city within the district area is levying a fee or charge for a transportation improvement, the fee or charge ((shall)) must be credited against the amount of the fee or charge imposed by the district. Developments consisting of less than twenty residences are exempt from the fee or charge under RCW 36.73.120; ((and))
     (d) A motor vehicle excise tax in accordance with section 5 of this act; and
     (e) Vehicle tolls on state routes, city streets, or county roads, within the boundaries of the district, unless otherwise prohibited by law. However, consistent with RCW 47.56.820, the vehicle toll must first be authorized by the legislature if the toll is imposed on a state route. The department of transportation ((shall)) must administer the collection of vehicle tolls authorized on state routes, unless otherwise specified in law or by contract, and the state transportation commission, or its successor, may approve, set, and impose the tolls in amounts sufficient to implement the district's transportation improvement finance plan. The district ((shall)) must administer the collection of vehicle tolls authorized on city streets or county roads, and ((shall)) must set and impose the tolls in amounts sufficient to implement the district's transportation improvement plan. However, consistent with RCW 47.56.850, the vehicle toll, including any change in an existing toll rate, must first be reviewed and approved by the tolling authority designated in RCW 47.56.850 if the toll, or change in toll rate, would have a significant impact, as determined by the tolling authority, on the operation of any state facility.

Sec. 4   RCW 82.80.140 and 2010 c 161 s 917 are each amended to read as follows:
     (1) Subject to the provisions of RCW 36.73.065, a transportation benefit district under chapter 36.73 RCW may fix and impose an annual vehicle fee, not to exceed one hundred dollars per vehicle registered in the district, for each vehicle subject to vehicle license fees under RCW 46.17.350(1) (a), (c), (d), (e), (g), (h), (j), or (n) through (q) and for each vehicle subject to gross weight license fees under RCW 46.17.355 with a scale weight of six thousand pounds or less.
     (2)(a) A district that includes all the territory within the boundaries of the jurisdiction, or jurisdictions, establishing the district, but not including territory in which a fee is currently being collected under this section, may impose by a majority vote of the governing board of the district up to twenty dollars of the vehicle fee authorized in subsection (1) of this section. A district, solely comprised of a city with a population of five hundred thousand or less, may impose by a majority vote of the governing board of the district up to forty dollars of the vehicle fee authorized in subsection (1) of this section.
     (i) If the district is countywide, the revenues of the fee ((shall)) must be distributed to each city within the ((county)) district by interlocal agreement that must be effective prior to imposition of the fee. The interlocal agreement is effective when approved by the ((county)) district and sixty percent of the cities representing seventy-five percent of the population of the cities within the ((county)) district in which the countywide fee is collected.
     (ii) If the district is less than countywide, the revenues of the fee must be distributed to each city within the district by interlocal agreement that must be effective prior to imposition of the fee.
     (b) A district may not impose a fee under this subsection (2):
     (i) For a passenger-only ferry transportation improvement unless the vehicle fee is first approved by a majority of the voters within the jurisdiction of the district; or
     (ii) That, if combined with the fees previously imposed by another district within its boundaries under RCW 36.73.065(((4))) (5)(a)(i), exceeds twenty dollars or for a district, solely comprised of a city with a population of five hundred thousand or less, exceeds forty dollars.
     (c) If a district imposes or increases a fee under this subsection (2) that, if combined with the fees previously imposed by another district within its boundaries, exceeds twenty dollars or for a district, solely comprised of a city with a population of five hundred thousand or less, exceeds forty dollars, the district shall provide a credit for the previously imposed fees so that the combined vehicle fee does not exceed twenty dollars or, for a district solely comprised of a city with a population of five hundred thousand or less, forty dollars.
     (3) The department of licensing shall administer and collect the fee. The department shall deduct a percentage amount, as provided by contract, not to exceed one percent of the fees collected, for administration and collection expenses incurred by it. The department shall remit remaining proceeds to the custody of the state treasurer. The state treasurer shall distribute the proceeds to the district on a monthly basis.
     (4) No fee under this section may be collected until six months after approval under RCW 36.73.065.
     (5) The vehicle fee under this section applies only when renewing a vehicle registration, and is effective upon the registration renewal date as provided by the department of licensing.
     (6) The following vehicles are exempt from the fee under this section:
     (a) Campers, as defined in RCW 46.04.085;
     (b) Farm tractors or farm vehicles, as defined in RCW 46.04.180 and 46.04.181;
     (c) Mopeds, as defined in RCW 46.04.304;
     (d) Off-road and nonhighway vehicles, as defined in RCW 46.04.365;
     (e) Private use single-axle trailer, as defined in RCW 46.04.422;
     (f) Snowmobiles, as defined in RCW 46.04.546; and
     (g) Vehicles registered under chapter 46.87 RCW and the international registration plan.

NEW SECTION.  Sec. 5   A new section is added to chapter 82.80 RCW to read as follows:
     (1) Subject to the provisions of RCW 36.73.065, a transportation benefit district under chapter 36.73 RCW, created by a county with a population between four hundred thousand and one million five hundred thousand, where the majority of the district is comprised of incorporated area within the county, may impose a motor vehicle excise tax of up to one percent annually on the value of every motor vehicle owned by a resident of the district based on the valuation schedules in RCW 82.44.035.
     (2) The tax under this section may not be imposed on vehicles licensed under RCW 46.17.355, except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16A.425, 46.17.335, or 46.17.350(1)(c).
     (3) The department of licensing must administer and collect the tax. The department must deduct a percentage amount, as provided by contract, not to exceed one percent of the taxes collected, for administration and collection expenses incurred by the department. The department must remit the remaining proceeds to the custody of the state treasurer. The state treasurer must distribute the proceeds to the district on a monthly basis.
     (4) No tax imposed under this section may be collected until six months after approval under RCW 36.73.065.
     (5) The tax under this section applies only when renewing a vehicle registration, and is effective upon the registration renewal date as provided by the department of licensing.
     (6) The proceeds from a motor vehicle excise tax imposed under this section may only be used to support the operations, maintenance, and capital investments for public transportation.

NEW SECTION.  Sec. 6   A new section is added to chapter 82.80 RCW to read as follows:
     (1) A county with a population of one million five hundred thousand or more may impose, by approval of a majority of the registered voters of the county voting on the proposition at a general or special election, a motor vehicle excise tax of up to one percent annually on the value of every motor vehicle owned by a resident of the county based on the valuation schedules in RCW 82.44.035.
     (2) The tax under this section may not be imposed on vehicles licensed under RCW 46.17.355, except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16A.425, 46.17.335, or 46.17.350(1)(c).
     (3) Counties imposing a tax under this section shall contract, before the effective date of the resolution or ordinance imposing a motor vehicle excise tax, with the department of licensing. The department of licensing must administer and collect the tax. The department must deduct a percentage amount, as provided by contract, not to exceed one percent of the taxes collected, for administration and collection expenses incurred by the department. The department must remit the remaining proceeds to the custody of the state treasurer. The state treasurer must distribute the proceeds to the county on a monthly basis.
     (4) No tax imposed under this section may be collected until six months after approval.
     (5) The tax under this section applies only when renewing a vehicle registration, and is effective upon the registration renewal date as provided by the department of licensing.
     (6) Counties imposing a tax under this section must use the funds in a manner consistent with RCW 35.58.2795, 36.70A.070, and 36.70.330, and chapters 36.73 and 47.80 RCW.
     (7)(a) The legislative authority of each county shall convene a meeting with representatives of each city and town located within the county for the purpose of establishing a collaborative process that will provide a framework for the adoption of a ballot measure pursuant to chapter 29A.36 RCW.
     (b) The legislative authority of each county that includes a public transit system under chapter 36.57A RCW, 36.56, 35.95A, or 36.57 RCW, or RCW 35.58.2721 or 36.57.100, shall convene a meeting with representatives of the respective transit system for the purpose of establishing a collaborative process that will provide a framework for the adoption of a ballot measure pursuant to chapter 29A.36 RCW.
     (8) Any county that has implemented a congestion reduction charge under RCW 82.80.055 must sunset the congestion reduction charge prior to the implementation date of the county motor vehicle excise tax imposed in accordance with this section.
     (9) The proceeds from a motor vehicle excise tax imposed under this section may only be used to support the operations, maintenance, and capital investments for public transportation.
     (10)(a) A county that is eligible to impose a tax under this section may, as a public authority, allow the purchase of air rights and associated property interests above transit facilities that include parking facilities and ferry terminals and provide, at no or reduced costs, for nonprofit organizations or public housing authorities to provide, for purchase or lease, affordable workforce housing. For purposes of this subsection, "affordable workforce housing" means housing for a single person, family, or unrelated persons living together whose income is between thirty percent and eighty percent of the median income, adjusted for household size, for the county in which the housing is located. Any commercial use located in these facilities must pay a commercial market rate when purchasing or leasing in one of these facilities. The Washington state ferries shall not exercise the authorization under this authority until after June 30, 2013.
     (b) In furtherance of the public health and welfare and public transportation purposes, a county with a population of one million five hundred thousand or more, a metropolitan municipal corporation, a regional transit authority, and the Washington state ferries may sell, transfer, exchange, lease, or otherwise dispose of the air rights and associated property interests in any parcel of real property owned by such entities, and used and improved by those entities for public transportation facilities, for the development of and use of the air rights and associated property interests for affordable workforce housing so long as any such sale, transfer, exchange, lease, or other disposition of the air rights and associated property interests for affordable housing is compatible with the public transportation use of the underlying property or facility. The Washington state ferries shall not exercise the authorization under this authority until after June 30, 2013.
     (c) Any sale, transfer, exchange, lease, or other disposition of air rights and associated property interests made under the authority of this section is exempt from any statutory or other requirement to obtain fair market value, and a sale, transfer, exchange, lease, or other disposition of air rights and associated property interests at less than fair market value made under this section is not invalid, provided that such sale, transfer, exchange, lease, or other disposition of air rights and associated property interests is discounted below fair market value not more than any proportional reduction in value resulting from the requirement for affordable housing.
     (d) Any sale, transfer, exchange, lease, or other disposition of air rights and associated property interests to a private entity made under the authority of this section must include a restrictive covenant requiring that any subsequent transfer of the air rights and associated property interests be prohibited unless the property continues to be used for affordable housing purposes for the duration of the term of the restrictive covenant.
     (e) Any sale, transfer, exchange, lease, or other disposition of air rights and associated property interests for affordable housing purposes is considered a legitimate public transportation purpose.

Sec. 7   RCW 82.80.010 and 2003 c 350 s 1 are each amended to read as follows:
     (1) For purposes of this section:
     (a) "Distributor" means every person who imports, refines, manufactures, produces, or compounds motor vehicle fuel and special fuel as defined in RCW 82.36.010 and 82.38.020, respectively, and sells or distributes the fuel into a county;
     (b) "Person" has the same meaning as in RCW 82.04.030.
     (2) Subject to the conditions of this section((,)): (a) Any county may levy, by approval of its legislative body and a majority of the registered voters of the county voting on the proposition at a general or special election, additional excise taxes equal to ((ten percent of the statewide motor vehicle fuel tax rate under RCW 82.36.025)) one cent, two cents, or three cents on each gallon of motor vehicle fuel as defined in RCW 82.36.010 and on each gallon of special fuel as defined in RCW 82.38.020 sold within the boundaries of the county; and (b) any city with a population of over five hundred thousand may levy, by approval of its legislative body and a majority of the registered voters of the city voting on the proposition at a general or special election, additional excise taxes equal to one cent on each gallon of motor vehicle fuel as defined in RCW 82.36.010 and on each gallon of special fuel as defined in RCW 82.38.020 sold within the boundaries of the city. Vehicles paying an annual license fee under RCW 82.38.075 are exempt from the county fuel excise tax. An election held under this section must be held not more than twelve months before the date on which the proposed tax is to be levied. The ballot setting forth the proposition ((shall)) must state the tax rate that is proposed. The county's authority to levy additional excise taxes under this section includes the incorporated and unincorporated areas of the county to the extent that the tax has not been imposed by the city. The additional excise taxes are subject to the same exceptions and rights of refund as applicable to other motor vehicle fuel and special fuel excise taxes levied under chapters 82.36 and 82.38 RCW. The proposed tax ((shall)) may not be levied less than one month from the date the election results are certified by the county election officer. The commencement date for the levy of any tax under this section ((shall be)) is the first day of January, April, July, or October.
     (3) The local option motor vehicle fuel tax on each gallon of motor vehicle fuel and on each gallon of special fuel is imposed upon the distributor of the fuel.
     (4) A taxable event for the purposes of this section occurs upon the first distribution of the fuel within the boundaries of a county or city to a retail outlet, bulk fuel user, or ultimate user of the fuel.
     (5) All administrative provisions in chapters 82.01, 82.03, and 82.32 RCW, insofar as they are applicable, apply to local option fuel taxes imposed under this section.
     (6) Before the effective date of the imposition of the fuel taxes under this section, a county ((shall)) or city must contract with the department of revenue for the administration and collection of the taxes. The contract must provide that a percentage amount, not to exceed one percent of the taxes imposed under this section, will be deposited into the local tax administration account created in the custody of the state treasurer. The department of revenue may spend money from this account, upon appropriation, for the administration of the local taxes imposed under this section.
     (7) The state treasurer ((shall)) must distribute monthly to the levying county and cities contained therein the proceeds of the additional excise taxes collected under this section, after the deductions for payments and expenditures as provided in RCW 46.68.090(1) (a) and (b) and under the conditions and limitations provided in RCW 82.80.080.
     (8) The proceeds of the additional excise taxes levied under this section ((shall)) must be used strictly for transportation purposes in accordance with RCW 82.80.070.
     (9) A county or city may not levy the tax under this section if they are levying the additional fuel tax in RCW 82.80.110 or if they are a member of a regional transportation investment district levying the additional fuel tax in RCW 82.80.120.

Sec. 8   RCW 36.73.015 and 2010 c 251 s 2 and 2010 c 105 s 1 are each reenacted and amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "City" means a city or town.
     (2) "District" means a transportation benefit district created under this chapter.
     (3) "Supplemental transportation improvement" or "supplemental improvement" means any project, work, or undertaking to provide public transportation service, in addition to a district's existing or planned voter-approved transportation improvements, proposed by a participating city member of the district under RCW 36.73.180.
     (4) "Transportation improvement" means a project contained in the transportation plan of the state, a regional transportation planning organization, city, county, or eligible jurisdiction as identified in RCW 36.73.020(2). A project may include, but is not limited to, investment in new or existing highways of statewide significance, principal arterials of regional significance, high capacity transportation, public transportation, and other transportation projects and programs of local, regional, or statewide significance including transportation demand management. Projects may also include the operation, preservation, and maintenance of these facilities or programs."