HOUSE BILL REPORT

HB 2889

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Substitute Bill

Requires that any city or town that operates its own water, sewer or wastewater, or stormwater utility, and imposes a tax or fee on the operation of that utility, must disclose the tax or fee to its customers on its billing statements, a public website, or through other written or electronic communication made on an annual basis or within 30 days of the effective date of any rate change.

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 7 members: Representatives Pollet, Chair; Duerr, Vice Chair; Kraft, Ranking Minority Member; Griffey, Assistant Ranking Minority Member; Appleton, Goehner and Senn.

Background:

Cities and towns may operate municipal utilities, including utilities providing water, sewage, and stormwater services.

Cities and towns may impose license or excise taxes on business activities, including the provision of services by utilities. These taxes may be imposed by a city or town on the operation of its own utility.

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Summary of Substitute Bill:

Any city or town that operates its own water, sewer or wastewater, or stormwater utility, and imposes a tax or fee on the gross revenue of the utility, must disclose the tax or fee to its utility customers. This disclosure can occur on a regular billing statement (either electronic or paper); on the city or town's website, if written notice is provided to customers or taxpayers that this information is available; or through an insert, mailer, or other communication provided to customers or taxpayers either annually or within 30 days of any subsequent tax rate change.

Substitute Bill Compared to Original Bill:

The substitute bill allows cities or towns additional disclosure options for billing statements: disclosure may be made on billing statements (electronically or paper copy); on the city or town's website if written notice is provided to customers that the information is available on the website; or through a billing insert, mailer, or by other electronic or written communication made either annually or within 30 days of any subsequent rate change.

Staff Summary of Public Testimony:

(In support) Currently, public disclosure requests may be required to determine the taxes imposed on and by utilities. This information should be available, and this bill will result in full disclosure of the tax rate on utilities.

(Opposed) None.

(Other) Government is committed to transparency, and this information should be accessible. This bill, however, has potentially significant impacts on jurisdictions that would have to redesign their billing statements in order to accommodate the new requirements. These jurisdictions should be able to use alternative ways to send out the information, such as in mailings or via a website. This would help jurisdictions where sending the information in a billing statement would not be feasible or would be cost prohibitive. Showing the tax rate imposed on the utility can be confusing for taxpayers, as the tax isn't imposed on them.

Persons Testifying: (In support) Representative Griffey, prime sponsor.

(Other) Candice Bock, Association of Washington Cities.