HB 2635 — Creating a military benefit zone program.

H-4261.1SUBSTITUTEH-3533.1HOUSE HOUSE BILL 2635State of Washington65th Legislature2018 Regular SessionBy House Community Development, Housing & Tribal Affairs (originally sponsored by Representatives Kilduff, Muri, Sawyer, Kirby, and Young)READYoungRead FIRSTfirst TIMEtime 01/29/18.AN01/11/18. ACT Relating to creating a military benefit zone program;

addingReferred ato newCommittee sectionon Community Development, Housing & Tribal Affairs.AN ACT Relating to chaptercreating 82.14a RCW;military benefit zone program;

and adding a new chapter to Title 39 RCW.BERCW; IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec. 1.  INTENT.

and adding a new chapter to Title 82 RCW.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec. 1.  INTENT.

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.(1) "Annual state contribution limit" means five million dollars statewide per fiscal year, plus the additional amounts approved for the pilot project in section 13 of this act.(2) "Approving agency" means the department of commerce.(3) "Bond" means a bond, note, or other evidence of indebtedness including, but not limited to, a lease-purchase agreement or an executory conditional sales contract.(4) "Department" means the department of revenue.(5) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.(6) "Local government" means any city, town, or county within two miles of the boundary of Joint Base Lewis-McChord.(7) "Local sales and use tax increment" means the estimated annual increase in local sales and use taxes as determined by the local government in the calendar years following the approval of the military benefit zone by the approving agency from taxable activity within the benefit zone.(8) "Local sales and use taxes" means local revenues derived from the imposition of sales and use taxes authorized in section 1411 of this act.(9) "Military benefit financing" means the use of revenues from local public sources, dedicated to pay the principal and interest on bonds authorized in section 97 of this act and public improvement costs within the benefit zone on a pay-as-you-go basis, and revenues received from the local option sales and use tax authorized under section 1411 of this act dedicated to pay the principal and interest on bonds authorized under section 97 of this act.(10) "Military benefit zone" means the geographic area adopted by a sponsoring military community and approved by the approving agency, from which local sales and use tax increments are estimated.(11) "Ordinance" means any appropriate method of taking legislative action by a local government.(12) "Participating local government" means a local government having a military benefit zone within its geographic boundaries that has taken action as provided in section 6 of this act to allow the use of all or some of its local sales and use tax increments or other revenues from local public sources dedicated for military benefit financing.(13) "Public improvements" means:(a) Infrastructure improvements within the benefit zone that include:(i) Street, road, bridge, and rail construction and maintenance;(ii) Water and sewer system construction and improvements;(iii) Sidewalks, streetlights, landscaping, and streetscaping;(iv) Parking, terminal, and dock facilities;(v) Park and ride facilities of a transit authority;(vi) Park facilities, recreational areas, and environmental remediation;(vii) Stormwater and drainage management systems;(viii) Electric, gas, fiber, and other utility infrastructures;

A sponsoring militarylocal communitygovernment that issues bonds under section 9 of this act to finance public improvements may pledge for the payment of such bonds all or part of any revenues derived from taxes imposed under section 14 of this act and held in connection with the public improvements.

and(b) Any other pilot project application submitted under this section by a local government.(3) Local government sponsors of pilot projects under this section must submit to the approving agency by no later than September 1, 2018, documentation that substantiates that the project has met the applicable conditions, limitations, and requirements provided in this chapter and chapter 39.--- RCW (the new chapter created in section 16 of this act).(4) Within ninety days of submitting the documentation required under subsection (3) of this section, the approving agency must approve a pilot project that has met the conditions, limitations, and requirements under this chapter.(5) Local government sponsors of pilot projects may elect to decline the project awards as designated in this section, and may elect instead to submit applications according to the process described in section 8 of this act.NEW SECTION.  Sec. 14.  ASECTION.  Sec. 14.  SALE new section is added to chapter 82.14 RCW to read as follows:SALE AND USE TAX AUTHORITY.

(1) Any localcity governmentor county that has been approved for a project award under section 8 of this act may impose a sales and use tax under the authority of this section in accordance with the terms of this chapter.

Except as provided in this section, the tax is in addition to other taxes authorized by law 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 jurisdiction of the localcity government.(2)or county.(2) The tax authorized under subsection (1) of this section is credited against the state taxes imposed under RCW 82.08.020(1) and 82.12.020 at the rate provided in RCW 82.08.020(1).

The department must perform the collection of such taxes on behalf of the localcity governmentor county at no cost to the localcity government.or county.

The taxes must be distributed to localcities governmentsand counties as provided in RCW 82.14.060.(3) The rate of tax imposed by a localcity governmentor county may not exceed the lesser of:(a) The rate provided in RCW 82.08.020(1), less:(i) The aggregate rates of all other local sales and use taxes imposed by any taxing authority on the same taxable events;(ii) The aggregate rates of all taxes under RCW 82.14.465 and 82.14.475 and this section that are authorized but have not yet been imposed on the same taxable events by a localcity governmentor county that has been approved to receive a state contribution by the department, the department of commerce, or the community economic revitalization board under chapter 39.104, 39.100, or 39.102 RCW;

and(b) The rate, as determined by the localcity governmentor county in consultation with the department, reasonably necessary to receive the project award under section 8 of this act over ten months.(4) The department, upon request, must assist a localcity governmentor county in establishing its tax rate in accordance with subsection (3) of this section.

and(iv) Bonds have been issued according to section 9 of this act.(b) The tax imposed under this section expires the earlier of the date that the bonds issued under the authority of section 9 of this act are retired or twenty-five years after the tax is first imposed.(6) An ordinance or resolution adopted by the legislative authority of the localcity governmentor county imposing a tax under this section must provide that:(a) The tax will first be imposed on the first day of a fiscal year;(b) The cumulative amount of tax received by the localcity government,or county, in any fiscal year, may not exceed the amount approved by the department under subsection (10) of this section;(c) The department must cease distributing the tax for the remainder of any fiscal year in which either:(i) The amount of tax received by the localcity governmentor county equals the amount of distributions approved by the department for the fiscal year under subsection (10) of this section;

and(e) The state is entitled to any revenue generated by the tax in excess of the amounts specified in (c) of this subsection.(7) If a localcity governmentor county receives approval for more than one military benefit zone within its jurisdiction, the localcity governmentor county may impose a sales and use tax under this section for each militaryrevitalization benefitarea.(8) zone.(8) The department must determine the amount of tax receipts distributed to each localcity governmentand county imposing a sales and use tax under the authority of this section and must advise a localcity governmentor county when tax distributions for the fiscal year equal the amount determined by the department in subsection (10) of this section.

Determinations by the department of the amount of tax distributions attributable to a localcity governmentor county are not appealable.

The department must remit any tax receipts in excess of the amounts specified in subsection (6)(c) of this section to the state treasurer who must deposit the money in the general fund.(9) If a localcity governmentor county fails to comply with RCW 82.32.765, no tax may be distributed in the subsequent fiscal year until such time as the localcity governmentor county complies and the department calculates the state contribution amount according to subsection (10) of this section for the fiscal year.(10)(a) For each fiscal year that a localcity governmentor county imposes the tax under the authority of this section, the department must approve the amount of taxes that may be distributed to the localcity government.or county.

or(iii) The total amount of revenues from local public sources dedicated or, in the case of carry forward revenues, deemed dedicated in the preceding calendar year, as reported in the required annual report under RCW 82.32.765.(b) A localcity governmentor county may not receive, in any fiscal year, more revenues from taxes imposed under the authority of this section than the amount approved annually by the department.(11) The amount of tax distributions received from taxes imposed under the authority of this section by all localcities governmentsand counties is limited annually to not more than the amount of annual state contribution limit.(12) The definitions in section 2 of this act apply to this section subject to subsection (13) of this section and unless the context clearly requires otherwise.(13) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.(a) "Local sales and use taxes" means sales and use taxes imposed by cities, counties, public facilities districts, and other local governments under the authority of this chapter, chapter 67.28 RCW, or any other chapter, and that are credited against the state sales and use taxes.(b) "State sales and use taxes" means the taxes imposed in RCW 82.08.020(1) and 82.12.020.NEW SECTION.  Sec. 15.  Moneys collected from the taxes imposed under section 14 of this act may be used only for the purpose of paying debt service on bonds issued under the authority in section 9 of this act.NEW SECTION.  Sec. 16.  Sections 1 through 12 of this act constitute a new chapter in Title 39 RCW.NEW SECTION.  Sec. 17.  Sections 13 andthrough 15 of this act constitute a new chapter in Title 3982 RCW.--- END ---