Municipal Finance

AWC Priority
Streamlined Sales Tax (SSB 5089/SHB 1072)

SSB 5089 was pulled to the Senate floor this week and passed out of the Senate on Friday, February 2. SHB 1072 passed out of the House Finance Committee on January 26.

All cities are encouraged to contact their House member to remind them of the importance of passing streamlined sales tax legislation with full mitigation. Like last year, the potential concerns on the bill are stronger in the House, and passage of the bill is not assured.

Cities should remind House members that passage of this legislation in 2007 is important to our businesses, cities, counties, and the economic competitiveness of the state. Tell them that a broad coalition of 19 associations supports this legislation. For a list of those organizations, see the factsheet at www.awcnet.org/streamlinedtax.

AWC Priority
Lodging Tax Revenues (HB 1342/SB 5647)

On Thursday, February 1, HB 1342 was heard by the House Committee on Community & Economic Development & Trade (see last week’s Legislative Bulletin for detailed bill information). Thank you to Bob Gregory, City Manager from Longview, and Doug Robinson, City Manager from Kelso, who both testified in support of the bill. While the hearing was generally positive, representatives of visitor and convention bureaus and the hotel/motel industry testified against the bill.

The companion bill, SB 5647, sponsored by Sen. Karen Fraser (D-Olympia), is scheduled for public hearing in the Senate Committee on Economic Development and Trade & Management on Friday, February 9 at 1:30 pm.

HB 1342 and SB 5647 still require cities to spend hotel/motel revenues on activities designed to "attract tourists." Please contact your legislators and ask them to support these bills.

AWC Priority
Lid Lifts and Sales Tax – Eliminating Non-Supplanting Language (HB 1369, SB 5498)

Two bills concerning voter-approved taxes (property lid lifts and sales) enhancing city flexibility are scheduled for public hearing the week of February 5.

SB 5498, sponsored by Sen. Debbie Regala (D-Tacoma), deletes the non-supplanting requirements of the three-tenths voter-approved sales tax. HB 1369 sponsored by Rep. Kelli Linville (D-Bellingham) and SB 5498 both remove non-supplanting language requirements on the voter-approved property tax lid lifts.

SB 5498 is scheduled for public hearing by the Senate Committee on Government Operations & Elections at 1:30 pm on Tuesday, February 6. HB 1369 is scheduled for public hearing by the House Committee on Finance on Friday, February 9, at 8 am.

These AWC priority bills are an important component of our fiscal flexibility theme. Please contact your legislators and seek their support of the bills.

AWC Priority
Multi-Family Ten Year Property Tax Exemption (HB 1737, SSB 5404, HB 1910)

Cities above 30,000 in population and the largest city in a GMA-planning county have the ability to provide a ten-year exemption from all property taxes for multi-family housing in an urban center. A number of cities have found this tool very helpful in meeting downtown density goals.

SSB 5404, which would lower the population threshold to 15,000 and require an affordability component, moved out of the Senate Consumer Protection & Housing Committee as a substitute bill on February 1. Changes were made to the affordability component.

HB 1910, identical to SSB5404, would also lower the population threshold to 15,000 and require an affordability component. It is scheduled for a hearing in the House Housing Committee at 1:30 pm on Monday, February 5.

AWC’s preferred bill, HB 1737, would simply lower the population threshold to 5,000 and allow a partial exemption to be used for rental properties, currently authorized for owner occupied units. This bill will also be heard by the House Housing Committee at 1:30 pm, Monday, February 5.

While AWC fully supports expansion of tools to increase affordable housing, we have concerns that certain modifications to this very valuable GMA tool will hinder cities’ ability to increase downtown density. We continue to review SSB 5404 and HB 1910.

Please contact Jim Justin, jimj@awcnet.org, if you have any comments or questions on these bills.

AWC Priority
Providing Dedicated Public Health Funding (HB 1825/SB 5729)

Companion bills concerning additional funding for public health jurisdictions have been scheduled for public hearing. HB 1825, sponsored by Rep. Shay Schual-Berke (D-Normandy Park), will be heard by the House Health Care & Wellness Committee on Wednesday, February 7, at 8 am. SB 5729, sponsored by Sen. Rosa Franklin (D-Tacoma), will be heard by the Senate Health & Long-Term Care Committee at the same date and time.

The bills would dedicate additional resources to all local health jurisdictions. Please see last week’s Bulletin for additional details. While the bills are still being perfected, AWC will support the general goal of additional public health funding.

Modifying Local REET Provisions (HB 1161)

Cities currently have the option of imposing a real estate excise tax (REET) at a rate of 0.25% to 0.5%. Cities can also impose an additional 0.5% REET in lieu of levying the second 0.5% optional sales tax. Currently only two cities impose the additional REET, Clarkston and Asotin.

HB 1161 would eliminate city authority to impose the additional 0.5% REET if the county in which they are located in levies the second 0.5% sales tax. This bill is scheduled for public hearing by the House Finance Committee on Friday, February 9, at 8 am.

Regulating House-Banked Social Card Games (SB 5558)

This legislation limits the number of licenses that may be issued for conducting house-banked social card games, grants local jurisdictions limited authority to determine the areas within which house-banked social card games may be conducted, and grandfathers existing city moratoriums that limit the number of card rooms.

The courts have been very clear over the last few years – cities may ban or allow gambling and nothing in between. A number of cities have moratoriums in place that would be voided by legal action if SB 5558 or similar legislation is not passed.

SB 5558 is scheduled to be heard by the Senate Labor, Commerce, and Research & Development Committee at 1:30 pm on Tuesday, February 6. AWC will support the bill but understands there will be refinements. Please contact Jim Justin, jimj@awcnet.org, if you have any interest in or comments on this bill.

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