BILL REQ. #:  S-4115.1 

Read first time 01/27/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to taxation of heavy equipment; reenacting and amending RCW 43.84.092; adding a new section to chapter 84.36 RCW; adding a new chapter to Title 84 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 84.36 RCW to read as follows:
     (1) All heavy equipment, including attachments, owned by a heavy equipment rental business for the purpose of leasing or renting at retail is exempt from property taxes.
     (2) The definitions in section 2 of this act apply to this section.

NEW SECTION.  Sec. 2   (1) Beginning January 1, 2013, a county may impose a tax on persons leasing or renting heavy equipment at retail from a heavy equipment rental business. The rate of tax equals five dollars and twenty-five cents per invoice for the lease or rental of heavy equipment.
     (2) The tax authorized under this section is sourced to the county where the heavy equipment rental business from which the heavy equipment is leased or rented is located.
     (3) The heavy equipment rental business must collect the tax imposed under this section from the lessee and remit it in the manner prescribed by this chapter. The heavy equipment rental business must report taxes imposed under this section on a state tax return in the manner provided in section 3 of this act. However, a county may have the business report the tax authorized under this section directly to the county in lieu of the state administering the tax.
     (4) On an annual basis, a county imposing the tax under this section must distribute thirty-three and one-third percent of the proceeds derived under this chapter on a pro rata basis with cities and towns within the county based on population. However, a city or town is not eligible for any distribution under this subsection, and the county may retain such distribution, if the amount of the distribution would be less than one hundred dollars. The population determination for the county includes only the unincorporated areas.
     (5) The definitions in this subsection apply to this chapter unless the context clearly requires otherwise.
     (a) "Person" and "retail sale" have the same meanings as provided in chapter 82.04 RCW.
     (b) "Heavy equipment" means earthmoving, construction, or industrial equipment that is mobile, weighs at least five hundred pounds, and meets either of the following requirements:
     (i) The equipment is a self-propelled vehicle that is not designed to be driven on a highway; or
     (ii) The equipment is industrial lift equipment, industrial material handling equipment, industrial electrical generation equipment, or a similar piece of industrial equipment.
     (c) "Heavy equipment rental business" means a person primarily engaged in the short-term renting or leasing of heavy equipment.

NEW SECTION.  Sec. 3   (1) Counties opting to have the department administer and collect the county tax authorized under section 2 of this act must contract, no less than seventy-five days prior to the effective date of an ordinance or resolution imposing the tax authorized, for the administration and collection of the tax by the department. A county must provide the department with at least seventy-five days' notice prior to the imposition of the tax authorized under section 2 of this act and the department must make reasonable efforts to notify affected taxpayers before the tax is imposed. The department may deduct an amount, as provided by contract, not to exceed one percent of the taxes collected for administration and collection expenses incurred by the department. The remainder of any portion of any tax authorized by this chapter that is collected by the department must be deposited in the county heavy equipment tax account hereby created in the state treasury.
     (2) Monthly, the state treasurer must distribute moneys in the county heavy equipment tax account to counties imposing the tax authorized in section 2 of this act. Except as provided in RCW 43.08.190, all earnings of investments of balances in the county heavy equipment tax account must be credited to the county heavy equipment tax account and distributed monthly to the counties imposing the tax.

NEW SECTION.  Sec. 4   If the county opts to have the state administer the tax authorized in section 2 of this act, chapter 82.32 RCW applies to the tax authorized in section 2 of this act. The department or a county may adopt any administrative rules necessary for the effective administration of this chapter.

Sec. 5   RCW 43.84.092 and 2011 1st sp.s. c 16 s 6, 2011 1st sp.s. c 7 s 22, 2011 c 369 s 6, 2011 c 339 s 1, 2011 c 311 s 9, 2011 c 272 s 3, 2011 c 120 s 3, and 2011 c 83 s 7 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the budget stabilization account, the capital vessel replacement account, the capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the cleanup settlement account, the Columbia river basin water supply development account, the Columbia river basin taxable bond water supply development account, the Columbia river basin water supply revenue recovery account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the county heavy equipment tax account, the county sales and use tax equalization account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the Interstate 405 express toll lanes operations account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the hospital safety net assessment fund, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the marine resources stewardship trust account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multiagency permitting team account, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural mobility grant program account, the rural Washington loan fund, the site closure account, the skilled nursing facility safety net trust fund, the small city pavement and sidewalk account, the special category C account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the state patrol highway account, the state route number 520 civil penalties account, the state route number 520 corridor account, the state wildlife account, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state economic development commission account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts.
     (b) Any state agency that has independent authority over accounts or funds not statutorily required to be held in the state treasury that deposits funds into a fund or account in the state treasury pursuant to an agreement with the office of the state treasurer shall receive its proportionate share of earnings based upon each account's or fund's average daily balance for the period.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 6   Sections 2 through 4 of this act constitute a new chapter in Title 84 RCW.

NEW SECTION.  Sec. 7   Section 1 of this act applies to taxes levied for collection in 2013 and thereafter.