BILL REQ. #: H-4057.1
State of Washington | 63rd Legislature | 2014 Regular Session |
READ FIRST TIME 02/05/14.
AN ACT Relating to including costs associated with preparing for new annexations within city sales and use tax authority; and amending RCW 82.14.415.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.14.415 and 2011 c 353 s 10 are each amended to read
as follows:
(1) The legislative authority of any city that is located in a
county with a population greater than six hundred thousand that annexes
an area consistent with its comprehensive plan required by chapter
36.70A RCW may impose a sales and use tax in accordance with the terms
of this chapter. The tax is in addition to other taxes authorized by
law and is 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 city. The tax may only be imposed by a city if:
(a) The city has commenced annexation of an area having a
population of at least ten thousand people, or four thousand in the
case of a city described under subsection (3)(a)(i) of this section,
prior to January 1, ((2015)) 2017; and
(b) The city legislative authority determines by resolution or
ordinance that the projected cost to prepare for annexation and to
provide municipal services to the annexation area exceeds the projected
general revenue that the city would otherwise receive from the
annexation area on an annual basis.
(2) The tax authorized under this section is a credit against the
state tax under chapter 82.08 or 82.12 RCW. The department of revenue
must perform the collection of such taxes on behalf of the city at no
cost to the city and must remit the tax to the city as provided in RCW
82.14.060.
(3)(a) Except as provided in (b) of this subsection, the maximum
rate of tax any city may impose under this section is:
(i) 0.1 percent for each annexed area in which the population is
greater than ten thousand and less than twenty thousand. The ten
thousand population threshold in this subsection (3)(a)(i) is four
thousand for a city with a population between one hundred fifteen
thousand and one hundred forty thousand and located within a county
with a population over one million five hundred thousand; and
(ii) 0.2 percent for an annexed area in which the population is
greater than twenty thousand.
(b) Beginning July 1, 2011, the maximum rate of tax imposed under
this section is 0.85 percent for an annexed area in which the
population is greater than sixteen thousand if the annexed area was,
prior to November 1, 2008, officially designated as a potential
annexation area by more than one city, one of which has a population
greater than four hundred thousand.
(4)(a) Except as provided in (b) of this subsection, the maximum
cumulative rate of tax a city may impose under subsection (3)(a) of
this section is 0.2 percent for the total number of annexed areas the
city may annex.
(b) The maximum cumulative rate of tax a city may impose under
subsection (3)(a) of this section is 0.3 percent, beginning July 1,
2011, if the city commenced annexation of an area, prior to January 1,
2010, that would have otherwise allowed the city to increase the rate
of tax imposed under this section absent the rate limit imposed in (a)
of this subsection.
(c) The maximum cumulative rate of tax a city may impose under
subsection (3)(b) of this section is 0.85 percent for the single
annexed area the city may annex and the amount of tax distributed to a
city under subsection (3)(b) of this section may not exceed five
million dollars per fiscal year.
(5) The tax imposed by this section may only be imposed at the
beginning of a fiscal year and may continue for no more than ten years
from the date that each increment of the tax is first imposed. To
assist a city to prepare for annexation, the tax imposed under this
section may be imposed as follows: If the annexation is proceeding
under an election method authorized in chapter 35A.14 or 35.13 RCW, the
imposition may occur after the annexation election if a majority of
voters voting on the proposition has voted in favor of the annexation
and the annexing city has set an effective date of two or fewer years
following the election; or if the annexation is proceeding under a
direct petition or interlocal method authorized in chapter 35A.14 or
35.13 RCW, the imposition may occur after the city has set an effective
date for the annexation of two or fewer years after the date upon which
the resolution or ordinance establishing the effective date for the
annexation was adopted. Tax rate increases due to additional annexed
areas are effective on July 1st of the fiscal year following the fiscal
year in which the annexation occurred, provided that notice is given to
the department as set forth in subsection (9) of this section.
(6) All revenue collected under this section may be used solely to
prepare for annexation and to provide, maintain, and operate municipal
services for the annexation area.
(7) The revenues from the tax authorized in this section may not
exceed that which the city deems necessary to generate revenue equal to
the difference between the city's cost to prepare for annexation and to
provide, maintain, and operate municipal services for the annexation
area and the general revenues that the cities would otherwise expect to
receive from the annexation during a year. If the revenues from the
tax authorized in this section and the revenues from the annexation
area exceed the costs to the city to prepare for annexation and to
provide, maintain, and operate municipal services for the annexation
area during a given year, the city must notify the department and the
tax distributions authorized in this section must be suspended for the
remainder of the year.
(8) No tax may be imposed under this section before July 1, 2007.
Before imposing a tax under this section, the legislative authority of
a city must adopt an ordinance that includes the following:
(a) A certification that the amount needed to prepare for
annexation and to provide municipal services to the annexed area
reflects the city's true and actual costs;
(b) The rate of tax under this section that is imposed within the
city; and
(c) The threshold amount for the first fiscal year following the
annexation and passage of the ordinance.
(9) The tax must cease to be distributed to the city for the
remainder of the fiscal year once the threshold amount has been
reached. No later than March 1st of each year, the city must provide
the department with a certification of the city's true and actual costs
to prepare for annexation and to provide municipal services to the
annexed area, a new threshold amount for the next fiscal year, and
notice of any applicable tax rate changes. Distributions of tax under
this section must begin again on July 1st of the next fiscal year and
continue until the new threshold amount has been reached or June 30th,
whichever is sooner. Any revenue generated by the tax in excess of the
threshold amount belongs to the state of Washington. Any amount
resulting from the threshold amount less the total fiscal year
distributions, as of June 30th, may not be carried forward to the next
fiscal year.
(10) The tax must cease to be distributed to a city imposing the
tax under subsection (3)(b) of this section for the remainder of the
fiscal year, if the total distributions to the city imposing the tax
exceed five million dollars for the fiscal year.
(11) The resident population of the annexation area must be
determined in accordance with chapter 35.13 or 35A.14 RCW.
(12) The following definitions apply throughout this section unless
the context clearly requires otherwise:
(a) "Annexation area" means an area that is being or has been
annexed to a city under chapter 35.13 or 35A.14 RCW. "Annexation area"
includes all territory described in the city resolution.
(b) "Commenced annexation" means the initiation of annexation
proceedings has taken place under the direct petition method or the
election method under chapter 35.13 or 35A.14 RCW.
(c) "Department" means the department of revenue.
(d) "Municipal services" means those services customarily provided
to the public by city government.
(e) "Fiscal year" means the year beginning July 1st and ending the
following June 30th.
(f) "Potential annexation area" means one or more geographic areas
that a city has officially designated for potential future annexation,
as part of its comprehensive plan adoption process under the state
growth management act, chapter 36.70A RCW.
(g) "Threshold amount" means the maximum amount of tax
distributions as determined by the city in accordance with subsection
(7) of this section that the department must distribute to the city
generated from the tax imposed under this section in a fiscal year.