BILL REQ. #:  H-0729.1 

Read first time 02/10/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to creating a county utility tax option; and adding a new chapter to Title 82 RCW.

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

NEW SECTION.  Sec. 1   The legislature recognizes counties have limited revenue options and their capacity has been further limited over the past decade. The legislature also recognizes the counties' reliance on the limited revenue authorities makes it difficult for counties to provide the necessary and required services to their residents. The legislature also recognizes that cities have diverse revenue options and the differences between cities and counties can be confusing for both residents and businesses within a county. The legislature also finds that a majority of citizens and businesses are already paying a utility tax. The legislature intends to provide counties with a utility tax option in order to help diversify revenue options in order to provide necessary and required services.

NEW SECTION.  Sec. 2   (1) Subject to the conditions and requirements of this section, a county may impose an excise tax on the privilege of engaging in business as a utility. The tax is equal to the gross income derived from providing service to consumers within the county multiplied by the rate provided in subsection (3) of this section. A county may submit a ballot proposition to the voters to seek voter approval to impose the utility tax under this section, but is not required to do so.
     (2) A county with a population of one million five hundred thousand persons or less may not impose an excise tax on the privilege of engaging in business as a gas utility.
     (3) A county may not impose a rate of tax that exceeds six percent, except a county with a population of one million five hundred thousand persons or less may not impose a rate that exceeds one percent on an electrical power utility.
     (4) A county must use taxes collected under the authority of this section only for public safety, infrastructure, capital projects, and other services.
     (5) A utility subject to tax under this section must add the tax to the rates or charges it makes for utility services and separately state the amount of tax on billings.
     (6) A county may initially impose the tax authorized under this section only on the first day of a calendar quarter and no sooner than seventy-five days from the date the county adopts the ordinance or resolution imposing the tax.
     (7) A county may provide exemptions for sales by utilities to business customers, such as manufacturing facilities, aircraft repair facilities, industrial parks, industrial facilities, farm businesses, and computer data centers. A county may not provide a general exemption for sales by utilities to residential customers unless business customers are also exempt.
     (8) A county must allow a credit against the cable service utility tax for any franchise fee paid by the cable service utility to the county.
     (9) A county must allow a credit against the tax imposed under the authority of this section for the amount of any similar utility tax imposed by a city or town on the same taxable event. The credit required by this subsection may not exceed the amount of tax otherwise due.

NEW SECTION.  Sec. 3   The following definitions apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Cable service utility" means a person providing cable service as defined in the federal telecommunications act of 1996.
     (2) "Electrical power utility" means a "light and power business" as defined in RCW 82.16.010.
     (3) "Gas utility" means a "gas distribution business" as defined in RCW 82.16.010.
     (4) "Gross income" has the same meaning as provided in RCW 82.16.010.
     (5) "Sewer utility" means a sewerage collection business as that term is used in chapter 82.16 RCW.
     (6) "Solid waste utility" means a "solid waste collection business" as defined in RCW 82.18.010.
     (7) "Telephone utility" means a person providing "telecommunications service" as defined in RCW 82.04.065.
     (8) "Water utility" means a "water distribution business" as defined in RCW 82.16.010.
     (9) "Utility" means an electrical power utility, gas utility, telephone utility, water utility, sewer utility, solid waste utility, or cable service utility. "Utility" also means a water-sewer district formed under Title 57 RCW.

NEW SECTION.  Sec. 4   Sections 1 through 3 of this act constitute a new chapter in Title 82 RCW.