(1) Agencies authorized to provide high capacity transportation service, including transit agencies and regional transit authorities, and regional transportation investment districts acting with the agreement of an agency, are hereby granted dedicated funding sources for such systems. These dedicated funding sources, as set forth in RCW 81.104.150, 81.104.160, and 81.104.170, are authorized only for agencies located in (a) each county with a population of two hundred ten thousand or more and (b) each county with a population of from one hundred twenty-five thousand to less than two hundred ten thousand except for those counties that do not border a county with a population as described under (a) of this subsection. In any county with a population of one million or more or in any county having a population of four hundred thousand or more bordering a county with a population of one million or more, these funding sources may be imposed only by a regional transit authority or a regional transportation investment district. Regional transportation investment districts may, with the approval of the regional transit authority within its boundaries, impose the taxes authorized under this chapter, but only upon approval of the voters and to the extent that the maximum amount of taxes authorized under this chapter have not been imposed.

       (2) Agencies planning to construct and operate a high capacity transportation system should also seek other funds, including federal, state, local, and private sector assistance.

       (3) Funding sources should satisfy each of the following criteria to the greatest extent possible:

       (a) Acceptability;

       (b) Ease of administration;

       (c) Equity;

       (d) Implementation feasibility;

       (e) Revenue reliability; and

       (f) Revenue yield.

       (4) Agencies participating in regional high capacity transportation system development are authorized to levy and collect the following voter-approved local option funding sources:

       (a) Employer tax as provided in RCW 81.104.150, other than by regional transportation investment districts;

       (b) Special motor vehicle excise tax as provided in RCW 81.104.160; and

       (c) Sales and use tax as provided in RCW 81.104.170.

       Revenues from these taxes may be used only to support those purposes prescribed in subsection (10) of this section. Before the date of an election authorizing an agency to impose any of the taxes enumerated in this section and authorized in RCW 81.104.150, 81.104.160, and 81.104.170, the agency must comply with the process prescribed in RCW 81.104.100 (1) and (2) and 81.104.110. No construction on exclusive right of way may occur before the requirements of RCW 81.104.100(3) are met.

       (5) Authorization in subsection (4) of this section shall not adversely affect the funding authority of transit agencies not provided for in this chapter. Local option funds may be used to support implementation of interlocal agreements with respect to the establishment of regional high capacity transportation service. Except when a regional transit authority exists, local jurisdictions shall retain control over moneys generated within their boundaries, although funds may be commingled with those generated in other areas for planning, construction, and operation of high capacity transportation systems as set forth in the agreements.

       (6) Agencies planning to construct and operate high capacity transportation systems may contract with the state for collection and transference of voter-approved local option revenue.

       (7) Dedicated high capacity transportation funding sources authorized in RCW 81.104.150, 81.104.160, and 81.104.170 shall be subject to voter approval by a simple majority. A single ballot proposition may seek approval for one or more of the authorized taxing sources. The ballot title shall reference the document identified in subsection (8) of this section.

       (8) Agencies shall provide to the registered voters in the area a document describing the systems plan and the financing plan set forth in RCW 81.104.100. It shall also describe the relationship of the system to regional issues such as development density at station locations and activity centers, and the interrelationship of the system to adopted land use and transportation demand management goals within the region. This document shall be provided to the voters at least twenty days prior to the date of the election.

       (9) For any election in which voter approval is sought for a high capacity transportation system plan and financing plan pursuant to RCW 81.104.040, a local voter's pamphlet shall be produced as provided in chapter 29.81A RCW.

       (10) Agencies providing high capacity transportation service shall retain responsibility for revenue encumbrance, disbursement, and bonding. Funds may be used for any purpose relating to planning, construction, and operation of high capacity transportation systems and commuter rail systems, personal rapid transit, busways, bus sets, and entrained and linked buses.

III. CITY MVET FOR MONORAIL

       NEW SECTION. Sec. 301. A new section is added to chapter 81.104 RCW to read as follows:

       MVET FOR CITY MONORAIL. (1) The legislature finds that there is a need for large cities, with populations of five hundred thousand or more, at their option, to develop, construct, and operate intracity monorail systems within their boundaries to facilitate the movement of people and mitigate traffic congestion in highly urbanized areas.

       (2) For the sole purposes of developing, constructing, or operating an intracity monorail system within its boundaries, a city with a population of five hundred thousand or more may, with voter approval, impose a motor vehicle excise tax, at a rate approved by the voters, but not exceeding one percent of the value of every motor vehicle owned by a person residing within the city and on the state sales and use taxes paid under the rate in RCW 82.08.020(2) on retail car rentals within the city. No tax may be imposed on vehicles licensed under RCW 46.16.070 except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16.079, 46.16.085, or 46.16.090.

       Before the effective date of the resolution or ordinance imposing the tax, cities imposing a tax under this section shall contract the administration and collection to the state department of licensing and department of revenue, as appropriate, which shall deduct an amount, as provided by contract, for administration and collection expenses incurred by the department. All administrative provisions in chapters 82.03, 82.32, and 82.44 RCW, insofar as they apply to state motor vehicle excise taxes, also apply to taxes imposed under this section. All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW, insofar as they apply to state sales and use taxes, also apply to taxes imposed under this section.

IV. HIGHWAYS OF STATEWIDE SIGNIFICANCE

       Sec. 401. RCW 47.05.021 and 1998 c 245 s 95 and 1998 c 171 s 5 are each reenacted and amended to read as follows:

       LEGISLATURE MAY DESIGNATE HIGHWAYS OF STATEWIDE SIGNIFICANCE. (1) The transportation commission is hereby directed to conduct periodic analyses of the entire state highway system, report thereon to the chairs of the transportation committees of the senate and house of representatives, including one copy to the staff of each of the committees, biennially and based thereon, to subdivide, classify, and subclassify according to their function and importance all designated state highways and those added from time to time and periodically review and revise the classifications into the following three functional classes:

       (a) The "principal arterial system" shall consist of a connected network of rural arterial routes with appropriate extensions into and through urban areas, including all routes designated as part of the interstate system, which serve corridor movements having travel characteristics indicative of substantial statewide and interstate travel;

       (b) The "minor arterial system" shall, in conjunction with the principal arterial system, form a rural network of arterial routes linking cities and other activity centers which generate long distance travel, and, with appropriate extensions into and through urban areas, form an integrated network providing interstate and interregional service; and

       (c) The "collector system" shall consist of routes which primarily serve the more important intercounty, intracounty, and intraurban travel corridors, collect traffic from the system of local access roads and convey it to the arterial system, and on which, regardless of traffic volume, the predominant travel distances are shorter than on arterial routes.

       (2) In making the functional classification the transportation commission shall adopt and give consideration to criteria consistent with this section and federal regulations relating to the functional classification of highways, including but not limited to the following:

       (a) Urban population centers within and without the state stratified and ranked according to size;

       (b) Important traffic generating economic activities, including but not limited to recreation, agriculture, government, business, and industry;

       (c) Feasibility of the route, including availability of alternate routes within and without the state;

       (d) Directness of travel and distance between points of economic importance;

       (e) Length of trips;

       (f) Character and volume of traffic;

       (g) Preferential consideration for multiple service which shall include public transportation;

       (h) Reasonable spacing depending upon population density; and

       (i) System continuity.

       (3) The transportation commission or the legislature shall designate state highways of statewide significance under RCW 47.06.140((, and)). If the commission designates a state highway of statewide significance, it shall submit a list of such facilities for adoption by the ((1999)) legislature. This statewide system shall include at a minimum interstate highways and other statewide principal arterials that are needed to connect major communities across the state and support the state's economy.

       (4) The transportation commission shall designate a freight and goods transportation system. This statewide system shall include state highways, county roads, and city streets. The commission, in cooperation with cities and counties, shall review and make recommendations to the legislature regarding policies governing weight restrictions and road closures which affect the transportation of freight and goods.

       NEW SECTION. Sec. 402. A new section is added to chapter 47.05 RCW to read as follows:

       DESIGNATION OF STATE ROUTE NUMBER 509. The legislature designates that portion of state route number 509 that runs or will run from state route number 518 in the north to the intersection with interstate 5 in the south as a state highway of statewide significance.

V. FINANCE

       NEW SECTION. Sec. 501. REGIONAL TRANSPORTATION INVESTMENT DISTRICT ACCOUNT. The regional transportation investment district account is created in the custody of the state treasurer. The purpose of this account is to act as an account into which may be deposited state money, if any, that may be used in conjunction with district money to fund transportation projects. Additionally, the district may deposit funds into this account for disbursement, as appropriate, on transportation projects. Nothing in this section requires any state matching money. All money deposited in the regional transportation investment district account will be used for design, right of way acquisition, capital acquisition, and construction, or for the payment of debt service associated with these activities, for regionally funded projects developed under this chapter. Only the district may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW. An appropriation is not required for expenditures from this account.

       Sec. 502. RCW 47.56.075 and 1984 c 7 s 252 are each amended to read as follows:

       TOLL ROADS--REGIONAL TRANSPORTATION INVESTMENT DISTRICTS. The department shall approve for construction only such toll roads as the legislature specifically authorizes or such toll facilities as are specifically sponsored by a regional transportation investment district, city, town, or county.

       Sec. 503. RCW 43.84.092 and 2001 2nd sp.s. c 14 s 608, 2001 c 273 s 6, 2001 c 141 s 3, and 2001 c 80 s 5 are each reenacted and amended to read as follows:

       DEPOSIT OF SURPLUS BALANCE INVESTMENT EARNINGS--TREASURY INCOME ACCOUNT--ACCOUNTS AND FUNDS CREDITED. (EFFECTIVE MARCH 1, 2002.) (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 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 common school construction fund, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of retirement systems expense 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 education construction fund, the emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure account, 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 medical aid account, the mobile home park relocation fund, 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 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 health supplemental account, the Puyallup tribal settlement account, the regional transportation investment district account, the resource management cost account, the site closure 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 supplemental pension 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 infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 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. All earnings to be distributed under this subsection (4)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.

       (b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway account, the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, and the urban arterial trust account.

       (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. 504. A new section is added to chapter 82.14 RCW to read as follows:

       SALES AND USE TAX. (1) If approved by the majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may impose a sales and use tax of up to 0.5 percent of the selling price or value of the article used in the case of a use tax. The tax authorized by this section is in addition to the tax authorized by RCW 82.14.030 and must be 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 taxing district. Motor vehicles, as defined in RCW 46.04.320, are exempt from the sales and use tax imposed under this subsection.

       (2) A use tax may be imposed on the privilege of using a motor vehicle within a regional transportation investment district. The tax applies to those persons who reside within the regional transportation investment district. The rate of the tax may not exceed 0.5 percent of the value of the motor vehicle. The tax authorized by this subsection is in addition to the tax authorized under RCW 82.14.030 and must be imposed and collected at the time a taxable event under RCW 82.08.020(1) or 82.12.020 takes place. All revenue received under this subsection must be deposited in the local sales and use tax account and distributed to the regional transportation investment district according to RCW 82.14.050. The following provisions apply to the use tax in this subsection:

       (a) Where persons are taxable under chapter 82.08 RCW, the seller shall collect the use tax from the buyer using the collection provisions of RCW 82.08.050.

       (b) Where persons are taxable under chapter 82.12 RCW, the use tax must be collected using the provisions of RCW 82.12.045.

       (c) "Motor vehicle" has the meaning given in RCW 46.04.320.

       (d) "Person" has the meaning given in RCW 82.04.030.

       (e) The value of a motor vehicle must be determined under RCW 82.12.010.

       (f) Except as specifically stated in this subsection (2), chapters 82.12 and 82.32 RCW apply to the use tax. The use tax is a local tax imposed under the authority of chapter 82.14 RCW, and chapter 82.14 RCW applies fully to the use tax.

       NEW SECTION. Sec. 505. A new section is added to chapter 43.135 RCW to read as follows:

       SALES AND USE TAX CREDIT SHIFT. A transfer or credit from the general fund of sales and use tax paid on a transportation project being constructed by a regional transportation investment district does not require a corresponding lowering of the state expenditure limit to reflect this shift for purposes of RCW 43.135.035(4).

       Sec. 506. RCW 82.14.050 and 1999 c 165 s 14 are each amended to read as follows:

       CONTRACTS FOR COLLECTION OF SALES AND USE TAX. The counties, cities, and transportation authorities under RCW 82.14.045 ((and)), public facilities districts under chapters 36.100 and 35.57 RCW, and regional transportation investment districts shall contract, prior to the effective date of a resolution or ordinance imposing a sales and use tax, the administration and collection to the state department of revenue, which shall deduct a percentage amount, as provided by contract, not to exceed two 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 ((which)) that is collected by the department of revenue shall be deposited by the state department of revenue in the local sales and use tax account hereby created in the state treasury. Moneys in the local sales and use tax account may be spent only for distribution to counties, cities, transportation authorities, ((and)) public facilities districts, and regional transportation investment districts imposing a sales and use tax. All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW, as they now exist or may hereafter be amended, shall, insofar as they are applicable to state sales and use taxes, be applicable to taxes imposed pursuant to this chapter. Except as provided in RCW 43.08.190, all earnings of investments of balances in the local sales and use tax account shall be credited to the local sales and use tax account and distributed to the counties, cities, transportation authorities, ((and)) public facilities districts, and regional transportation investment districts monthly.

       NEW SECTION. Sec. 507. A new section is added to chapter 82.32 RCW to read as follows:

       CREDIT ON SALES TAX ON TOLL PROJECTS. (1) The tax imposed and collected under chapters 82.08 and 82.12 RCW, less any credits allowed under chapter 82.14 RCW, on initial construction for a project to be constructed under chapter 36.-- RCW (sections 101 through 117, 201, and 501 of this act), must be transferred to the project or identified as a credit on the project to defray costs or pay debt service on that project. In the case of a toll project, this transfer or credit must be used to lower the overall cost of the project and thereby the corresponding tolls.

       (2) This transaction is exempt from the requirements in RCW 43.135.035(4).

       (3) Government entities constructing projects under chapter 36.-- RCW (sections 101 through 117, 201, and 501 of this act) shall report to the department the amount of state sales or use tax covered under this section.

       NEW SECTION. Sec. 508. A new section is added to chapter 82.80 RCW to read as follows:

       LOCAL OPTION VEHICLE LICENSE FEE. (1) Upon approval of a majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may set and impose an annual local option vehicle license fee of a uniform amount of up to one hundred dollars per motor vehicle registered within the boundaries of the region on every motor vehicle, as defined in RCW 46.04.320. Vehicles registered under chapter 46.87 RCW and the International Registration Plan are exempt from the annual local option vehicle license fee set forth in this section. The department of licensing shall administer and collect this fee on behalf of regional transportation investment districts and remit this fee to the custody of the state treasurer for monthly distribution under RCW 82.80.080.

       (2) The local option vehicle license fee applies only when establishing or renewing a vehicle registration. This fee is effective with the registration expiration date as provided by the department of licensing.

       (3) A regional transportation investment district imposing the local option vehicle license fee or initiating an exemption process shall enter into a contract with the department of licensing. The contract must contain provisions that fully recover the costs to the department of licensing for collection and administration of the fee.

       (4) A regional transportation investment district imposing the local option fee shall delay the effective date of the local option vehicle license fee imposed by this section at least six months from the date of the final certification of the approval election to allow the department of licensing to implement the administration and collection of or exemption from the fee.

       NEW SECTION. Sec. 509. A new section is added to chapter 47.56 RCW to read as follows:

       AUTHORIZATION FOR DISTRICT TO IMPOSE TOLLS. Upon approval of a majority of the voters within its boundaries voting on the ballot proposition, and only for the purposes authorized in section 105(1)(g) of this act, a regional transportation investment district may impose vehicle tolls on state routes where improvements financed in whole or in part by a regional transportation investment district add additional lanes to a highway of statewide significance. The department shall administer the collection of vehicle tolls on designated facilities unless otherwise specified in law, and the state transportation commission, or its successor, shall be the tolling authority.

       Sec. 510. RCW 47.56.075 and 1984 c 7 s 252 are each amended to read as follows:

       DEPARTMENT OF TRANSPORTATION AUTHORIZATION FOR DISTRICT TOLL FACILITIES. The department shall approve for construction only such toll roads as the legislature specifically authorizes or such toll facilities as are specifically sponsored by a regional transportation investment district, city, town, or county.

       Sec. 511. RCW 81.100.010 and 1990 c 43 s 12 are each amended to read as follows:

       DISTRICT AUTHORITY TO IMPOSE HIGH-OCCUPANCY VEHICLE TAXES. The need for mobility, growing travel demand, and increasing traffic congestion in urban areas necessitate accelerated development and increased utilization of the high-occupancy vehicle system. RCW 81.100.030 and 81.100.060 provide taxing authority that counties or regional transportation investment districts can use in the near term to accelerate development and increase utilization of the high-occupancy vehicle system by supplementing available federal, state, and local funds.

       Sec. 512. RCW 81.100.030 and 1991 c 363 s 153 are each amended to read as follows:

       DISTRICT AUTHORITY TO IMPOSE HIGH-OCCUPANCY VEHICLE EMPLOYER TAX. (1) A county with a population of one million or more, or a county with a population of from two hundred ten thousand to less than one million that is adjoining a county with a population of one million or more, and having within its boundaries existing or planned high-occupancy vehicle lanes on the state highway system, or a regional transportation investment district for capital improvements, but only to the extent that the tax has not already been imposed by the county, may, with voter approval impose an excise tax of up to two dollars per employee per month on all employers or any class or classes of employers, public and private, including the state located in the agency's jurisdiction, measured by the number of full-time equivalent employees. In no event may the total taxes imposed under this section exceed two dollars per employee per month for any single employer. The county or investment district imposing the tax authorized in this section may provide for exemptions from the tax to such educational, cultural, health, charitable, or religious organizations as it deems appropriate.

       Counties or investment districts may contract with the state department of revenue or other appropriate entities for administration and collection of the tax. Such contract shall provide for deduction of an amount for administration and collection expenses.

       (2) The tax shall not apply to employment of a person when the employer has paid for at least half of the cost of a transit pass issued by a transit agency for that employee, valid for the period for which the tax would otherwise be owed.

       (3) A county or investment district shall adopt rules ((which)) that exempt from all or a portion of the tax any employer that has entered into an agreement with the county or investment district that is designed to reduce the proportion of employees who drive in single-occupant vehicles during peak commuting periods in proportion to the degree that the agreement is designed to meet the goals for the employer's location adopted under RCW 81.100.040.

       The agreement shall include a list of specific actions that the employer will undertake to be entitled to the exemption. Employers having an exemption from all or part of the tax through this subsection shall annually certify to the county or investment district that the employer is fulfilling the terms of the agreement. The exemption continues as long as the employer is in compliance with the agreement.

       If the tax authorized in RCW 81.100.060 is also imposed ((by the county)), the total proceeds from both tax sources each year shall not exceed the maximum amount which could be collected under RCW 81.100.060.

       Sec. 513. RCW 81.100.060 and 1998 c 321 s 34 are each amended to read as follows:

       DISTRICT AUTHORITY TO IMPOSE HIGH-OCCUPANCY VEHICLE MOTOR VEHICLE EXCISE TAX. A county with a population of one million or more and a county with a population of from two hundred ten thousand to less than one million that is adjoining a county with a population of one million or more, having within their boundaries existing or planned high-occupancy vehicle lanes on the state highway system, or a regional transportation investment district for capital improvements, but only to the extent that the surcharge has not already been imposed by the county, may, with voter approval, impose a local surcharge of not more than 13.64 percent on the state motor vehicle excise tax paid under RCW 82.44.020(1) on vehicles registered to a person residing within the county and on the state sales and use taxes paid under the rate in RCW 82.08.020(2) on retail car rentals within the county or investment district. A county may impose the surcharge only to the extent that it has not been imposed by the district. No surcharge may be imposed on vehicles licensed under RCW 46.16.070 except vehicles with an unladen weight of six thousand pounds or less, RCW 46.16.079, 46.16.085, or 46.16.090.

       Counties or investment districts imposing a tax under this section shall contract, before the effective date of the resolution or ordinance imposing a surcharge, administration and collection to the state department of licensing, and department of revenue, as appropriate, which shall deduct an amount, as provided by contract, for administration and collection expenses incurred by the department. All administrative provisions in chapters 82.03, 82.32, and 82.44 RCW shall, insofar as they are applicable to ((state)) motor vehicle excise taxes, be applicable to surcharges imposed under this section. All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW shall, insofar as they are applicable to state sales and use taxes, be applicable to surcharges imposed under this section.

       If the tax authorized in RCW 81.100.030 is also imposed ((by the county)), the total proceeds from tax sources imposed under this section and RCW 81.100.030 each year shall not exceed the maximum amount which could be collected under this section.

       Sec. 514. RCW 82.80.030 and 1990 c 42 s 208 are each amended to read as follows:

       DISTRICT AUTHORITY TO IMPOSE PARKING TAX. (1) Subject to the conditions of this section, the legislative authority of a county ((or)), city, or district may fix and impose a parking tax on all persons engaged in a commercial parking business within its respective jurisdiction. The jurisdiction of a county, for purposes of this section, includes only the unincorporated area of the county. The jurisdiction of a city, or district includes only the area within its ((incorporated)) boundaries.

       (2) In lieu of the tax in subsection (1) of this section, a city ((or)), a county in its unincorporated area, or a district may fix and impose a tax for the act or privilege of parking a motor vehicle in a facility operated by a commercial parking business.

       The city ((or)), county, or district may provide that:

       (a) The tax is paid by the operator or owner of the motor vehicle;

       (b) The tax applies to all parking for which a fee is paid, whether paid or leased, including parking supplied with a lease of nonresidential space;

       (c) The tax is collected by the operator of the facility and remitted to the city ((or)), county, or district;

       (d) The tax is a fee per vehicle or is measured by the parking charge;

       (e) The tax rate varies with zoning or location of the facility, the duration of the parking, the time of entry or exit, the type or use of the vehicle, or other reasonable factors; and

       (f) Tax exempt carpools, vehicles with handicapped decals, or government vehicles are exempt from the tax.

       (3) "Commercial parking business" as used in this section, means the ownership, lease, operation, or management of a commercial parking lot in which fees are charged. "Commercial parking lot" means a covered or uncovered area with stalls for the purpose of parking motor vehicles.

       (4) The rate of the tax under subsection (1) of this section may be based either upon gross proceeds or the number of vehicle stalls available for commercial parking use. The rates charged must be uniform for the same class or type of commercial parking business.

       (5) The county ((or)), city, or district levying the tax provided for in subsection (1) or (2) of this section may provide for its payment on a monthly, quarterly, or annual basis. Each local government may develop by ordinance or resolution rules for administering the tax, including provisions for reporting by commercial parking businesses, collection, and enforcement.

       (6) The proceeds of the commercial parking tax fixed and imposed by a city or county under subsection (1) or (2) of this section shall be used strictly for transportation purposes in accordance with RCW 82.80.070. The proceeds of the parking tax imposed by a district must be used as provided in chapter 36.-- RCW (sections 101 through 117, 201, and 501 of this act).

       Sec. 515. RCW 82.80.070 and 1991 c 141 s 4 are each amended to read as follows:

       REQUIRES THAT LOCAL OPTION TAXES IMPOSED BY DISTRICT BE USED FOR DISTRICT PROJECTS. (1) The proceeds collected pursuant to the exercise of the local option authority of RCW 82.80.010, 82.80.020, 82.80.030, and 82.80.050 (hereafter called "local option transportation revenues") shall be used for transportation purposes only, including but not limited to the following: The operation and preservation of roads, streets, and other transportation improvements; new construction, reconstruction, and expansion of city streets, county roads, and state highways and other transportation improvements; development and implementation of public transportation and high-capacity transit improvements and programs; and planning, design, and acquisition of right of way and sites for such transportation purposes. The proceeds collected from excise taxes on the sale, distribution, or use of motor vehicle fuel and special fuel under RCW 82.80.010 shall be used exclusively for "highway purposes" as that term is construed in Article II, section 40 of the state Constitution.

       (2) The local option transportation revenues shall be expended for transportation uses consistent with the adopted transportation and land use plans of the jurisdiction expending the funds and consistent with any applicable and adopted regional transportation plan for metropolitan planning areas.

       (3) Each local government with a population greater than eight thousand that levies or expends local option transportation funds, is also required to develop and adopt a specific transportation program that contains the following elements:

       (a) The program shall identify the geographic boundaries of the entire area or areas within which local option transportation revenues will be levied and expended.

       (b) The program shall be based on an adopted transportation plan for the geographic areas covered and shall identify the proposed operation and construction of transportation improvements and services in the designated plan area intended to be funded in whole or in part by local option transportation revenues and shall identify the annual costs applicable to the program.

       (c) The program shall indicate how the local transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions.

       (d) The program shall include at least a six-year funding plan, updated annually, identifying the specific public and private sources and amounts of revenue necessary to fund the program. The program shall include a proposed schedule for construction of projects and expenditure of revenues. The funding plan shall consider the additional local tax revenue estimated to be generated by new development within the plan area if all or a portion of the additional revenue is proposed to be earmarked as future appropriations for transportation improvements in the program.

       (4) Local governments with a population greater than eight thousand exercising the authority for local option transportation funds shall periodically review and update their transportation program to ensure that it is consistent with applicable local and regional transportation and land use plans and within the means of estimated public and private revenue available.

       (5) In the case of expenditure for new or expanded transportation facilities, improvements, and services, priorities in the use of local option transportation revenues shall be identified in the transportation program and expenditures shall be made based upon the following criteria, which are stated in descending order of weight to be attributed:

       (a) First, the project serves a multijurisdictional function;

       (b) Second, it is necessitated by existing or reasonably foreseeable congestion;

       (c) Third, it has the greatest person-carrying capacity;

       (d) Fourth, it is partially funded by other government funds, such as from the state transportation improvement board, or by private sector contributions, such as those from the local transportation act, chapter 39.92 RCW; and

       (e) Fifth, it meets such other criteria as the local government determines is appropriate.

       (6) It is the intent of the legislature that as a condition of levying, receiving, and expending local option transportation revenues, no local government agency use the revenues to replace, divert, or loan any revenues currently being used for transportation purposes to nontransportation purposes. The association of Washington cities and the Washington state association of counties, in consultation with the legislative transportation committee, shall study the issue of nondiversion and make recommendations to the legislative transportation committee for language implementing the intent of this section by December 1, 1990.

       (7) Local governments are encouraged to enter into interlocal agreements to jointly develop and adopt with other local governments the transportation programs required by this section for the purpose of accomplishing regional transportation planning and development.

       (8) Local governments may use all or a part of the local option transportation revenues for the amortization of local government general obligation and revenue bonds issued for transportation purposes consistent with the requirements of this section.

       (9) Subsections (1) through (8) of this section do not apply to a regional transportation investment district imposing a tax or fee under the local option authority of this chapter. Proceeds collected under the exercise of local option authority under this chapter by a district must be used in accordance with chapter 36.-- RCW (sections 101 through 117, 201, and 501 of this act). Proceeds collected under RCW 82.80.010 by a district must be used exclusively for "highway purposes," as that term is construed under Article II, section 40 of the Washington state Constitution.

       Sec. 516. RCW 82.80.080 and 1998 c 281 s 2 are each amended to read as follows:

       LOCAL OPTION TAX REVENUE DISTRIBUTION. (1) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and 82.80.020, levied by counties to the levying counties, and cities contained in those counties, based on the relative per capita population. County population for purposes of this section is equal to one and one-half of the unincorporated population of the county. In calculating the distributions, the state treasurer shall use the population estimates prepared by the state office of financial management and shall further calculate the distribution based on information supplied by the departments of licensing and revenue, as appropriate.

       (2) The state treasurer shall distribute revenues, less authorized deductions, generated by the local option taxes authorized in RCW 82.80.010 and 82.80.020 levied by qualifying cities and towns to the levying cities and towns.

       (3) The state treasurer shall distribute to the district revenues, less authorized deductions, generated by the local option taxes under RCW 82.80.010 or fees under section 508 of this act levied by a district.

       NEW SECTION. Sec. 517. A new section is added to chapter 82.80 RCW to read as follows:

       DISTRICT DEFINED FOR LOCAL TAXES. For the purposes of this chapter, "district" means a regional transportation investment district created under chapter 36.-- RCW (sections 101 through 117, 201, and 501 of this act).

VI. OTHER PROVISIONS

       NEW SECTION. Sec. 601. CAPTIONS AND SUBHEADINGS. Captions and subheadings used in this act are not part of the law.

       NEW SECTION. Sec. 602. TERMINATION OF DISTRICTS. Regional transportation investment districts and their powers and duties are terminated on June 30, 2006. However, nothing in this section may be construed as impairing a district created before June 30, 2006, from continuing to collect approved revenues and make payment on projects or debt incurred.

       NEW SECTION. Sec. 603. CODIFICATION. Sections 101 through 117, 201, and 501 of this act constitute a new chapter in Title 36 RCW.

       NEW SECTION. Sec. 604.        SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

       NEW SECTION. Sec. 605. NULL AND VOID. This act is null and void if a transportation revenue act containing new or additional revenue does not become law by December 31, 2002."

MOTION

      Senator Johnson moved that the following amendment by Senators Johnson, Zarelli, Eide and Keiser to the striking amendment be adopted:

       On page 25, strike all of sub (1) to Sec. 509 (lines 12 - 23) and insert the following:

       "LOCAL OPTION VEHICLE LICENSE FEE. (1) Upon approval of a majority of the voters within its boundaries voting on the ballot proposition, a regional transportation investment district may set and impose an annual local option vehicle license fee, or a schedule of fees based upon the age of the vehicle, of up to one hundred dollars per motor vehicle registered within the boundaries of the region on every motor vehicle, as defined in RCW 46.04.320. Vehicles registered under chapter 46.87 RCW and the International Registration Plan are exempt from the annual local option vehicle license fee set forth in this section. The department of licensing shall administer and collect this fee on behalf of regional transportation investment districts and remit this fee to the custody of the state treasurer for monthly distribution under RCW 82.80.080."

      Debate ensued.

      The President declared the question before the Senate to be the adoption of the amendment by Senators Johnson, Zarelli, Eide and Keiser to the striking amendment by Senators McDonald, Horn, Kastama, McDonald, Rasmussen, Benton and Haugen to Second Substitute Senate Bill No. 6140.

      The motion by Senator Johnson carried and the amendment to the striking amendment was adopted.

      The President declared the question before the Senate to be the adoption of the striking amendment, as amended, to Second Substitute Senate Bill No. 6140.

      The motion by Senator McDonald carried and the striking amendment, as amended, was adopted.

MOTION

      On motion of Senator McDonald, the following title amendment was adopted;

       On line 2 of the title, after "districts;" strike the remainder of the title and insert "amending RCW 81.104.140, 47.56.075, 82.14.050, 47.56.075, 81.100.010, 81.100.030, 81.100.060, 82.80.030, 82.80.070, and 82.80.080; reenacting and amending RCW 47.05.021 and 43.84.092; adding a new section to chapter 81.104 RCW; adding a new section to chapter 47.05 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 43.135 RCW; adding a new section to chapter 82.32 RCW; adding new sections to chapter 82.80 RCW; adding a new section to chapter 47.56 RCW; adding a new chapter to Title 36 RCW; and creating new sections."

MOTION

      On motion of Senator McDonald, the rules were suspended, Engrossed Second Substitute Senate Bill No. 6140 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      Debate ensued.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed Second Substitute Senate Bill No. 6140.

MOTION

      On motion of Senator Eide, Senator Hargrove was excused.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed Second Substitute Senate Bill No. 6140 and the bill passed the Senate by the following vote: Yeas, 31; Nays, 14; Absent, 0; Excused, 4.

     Voting yea: Senators Benton, Carlson, Costa, Eide, Fairley, Gardner, Hale, Haugen, Hewitt, Hochstatter, Horn, Johnson, Kastama, Keiser, Long, McAuliffe, McCaslin, McDonald, Morton, Parlette, Poulsen, Prentice, Rasmussen, Sheahan, Shin, Snyder, Spanel, Swecker, West, Winsley and Zarelli - 31.

     Voting nay: Senators Brown, Franklin, Fraser, Honeyford, Jacobsen, Kline, Kohl-Welles, Oke, Regala, Roach, Sheldon, B., Sheldon, T., Stevens and Thibaudeau - 14.

     Excused: Senators Deccio, Finkbeiner, Hargrove and Rossi - 4.

      ENGROSSED SECOND SUBSTITUTE SENATE BILL NO. 6140, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

      At 12:10 p.m., on motion of Senator Betti Sheldon, the Senate adjourned until 12:00 noon, Monday, January 28, 2002.

BRAD OWEN, President of the Senate

TONY M. COOK, Secretary of the Senate