Public safety facilities

AN ACT Relating to adding public safety facilities to the 1
allowable uses of revenues for local infrastructure financing 2
projects; amending RCW 39.89.020 and 39.114.010; and reenacting and 3
amending RCW 39.102.020 and 39.104.020. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 39.89.020 and 2022 c 38 s 1 are each amended to read 6
as follows: 7
The definitions in this section apply throughout this chapter 8
unless the context clearly requires otherwise. 9
(1) "Assessed value of real property" means the valuation of real 10
property as placed on the last completed assessment roll.11
(2) "Increment area" means the geographic area from which taxes 12
are to be appropriated to finance public improvements authorized 13
under this chapter. 14
(3) "Increment value" means 75 percent of any increase in the 15
true and fair value of real property in an increment area that is 16
placed on the tax rolls after the increment area is created.17
(4) "Local government" means any city, town, county, port 18
district, or any combination thereof. 19
(5) "Ordinance" means any appropriate method of taking 20
legislative action by a local government. 21
H-0650.1
HOUSE BILL 1786
State of Washington 69th Legislature 2025 Regular Session
By Representatives Volz, Griffey, Low, Eslick, Salahuddin, and Davis
Read first time 02/03/25. Referred to Committee on Finance.
p. 1 HB 1786
(6) "Permanently affordable housing" means housing, regardless of 1
ownership, for which there is a legally binding, recorded document in 2
effect that limits the price at which the owner may sell or restricts 3
the occupancy of the unit to a qualified, low-income household, for a 4
period of at least 40 years for a property used for shelter or rental 5
housing, or for a period of at least 25 years for a property to be 6
owned by a low-income household. These documents include, but are not 7
limited to, affordability covenants, deed restrictions, and community 8
land trust leases. Resale restrictions exercised by providers of 9
permanently affordable housing can include, but are not limited to:10
(a) Continuous ownership of land by a public entity or nonprofit 11
housing provider with a lease allowing ownership of the structure by 12
an income-eligible household; 13
(b) A nonpossessory interest or right in real property, such as a 14
deed restriction, restrictive covenant, resale restriction, or other 15
contractual agreement, that ensures affordability.16
(7) "Public improvement costs" means the costs of: (a) Design, 17
planning, acquisition, site preparation, construction, 18
reconstruction, rehabilitation, improvement, and installation of 19
public improvements; (b) purchasing, rehabilitating, retrofitting for 20
energy efficiency, and constructing housing for the purpose of 21
creating or preserving permanently affordable housing; (c) 22
relocating, maintaining, and operating property pending construction 23
of public improvements; (d) relocating utilities as a result of 24
public improvements; (e) financing public improvements, including 25
interest during construction, legal and other professional services, 26
taxes, insurance, principal and interest costs on general 27
indebtedness issued to finance public improvements, and any necessary 28
reserves for general indebtedness; (f) assessments incurred in 29
revaluing real property for the purpose of determining the tax 30
allocation base value that are in excess of costs incurred by the 31
assessor in accordance with the revaluation plan under chapter 84.41 32
RCW, and the costs of apportioning the taxes and complying with this 33
chapter and other applicable law; and (g) administrative expenses and 34
feasibility studies reasonably necessary and related to these costs, 35
including related costs that may have been incurred before adoption 36
of the ordinance authorizing the public improvements and the use of 37
community revitalization financing to fund the costs of the public 38
improvements. 39
(8) "Public improvements" means: 40
p. 2 HB 1786
(a) Infrastructure improvements within the increment area that 1
include: 2
(i) Street and road construction and maintenance;3
(ii) Water and sewer system construction and improvements;4
(iii) Sidewalks and streetlights; 5
(iv) Parking, terminal, and dock facilities; 6
(v) Park and ride facilities of a transit authority;7
(vi) Park facilities and recreational areas; 8
(vii) Stormwater and drainage management systems; ((and))9
(viii) Permanently affordable housing; and 10
(ix) Public safety facilities; and11
(b) Expenditures for any of the following purposes:12
(i) Providing environmental analysis, professional management, 13
planning, and promotion within the increment area, including the 14
management and promotion of retail trade activities in the increment 15
area; 16
(ii) Providing maintenance and security for common or public 17
areas in the increment area; or 18
(iii) Historic preservation activities authorized under RCW 19
35.21.395. 20
(9) "Public safety facilities" means any facilities, structures, 21
improvements, or equipment used to provide police, fire, emergency 22
medical, or other public safety services.23
(10) "Regular property taxes" means regular property taxes as 24
defined in RCW 84.04.140, except: (a) Regular property taxes levied 25
by port districts or public utility districts specifically for the 26
purpose of making required payments of principal and interest on 27
general indebtedness; and (b) regular property taxes levied by the 28
state for the support of the common schools under RCW 84.52.065. 29
Regular property taxes do not include excess property tax levies that 30
are exempt from the aggregate limits for junior and senior taxing 31
districts as provided in RCW 84.52.043. 32
(((10))) (11) "Tax allocation base value" means the true and fair 33
value of real property located within an increment area for taxes 34
imposed in the year in which the increment area is created, plus 25 35
percent of any increase in the true and fair value of real property 36
located within an increment area that is placed on the assessment 37
rolls after the increment area is created. 38
p. 3 HB 1786
(((11))) (12) "Tax allocation revenues" means those tax revenues 1
derived from the imposition of regular property taxes on the 2
increment value and distributed to finance public improvements.3
(((12))) (13) "Taxing districts" means a governmental entity that 4
levies or has levied for it regular property taxes upon real property 5
located within a proposed or approved increment area.6
(((13))) (14) "Value of taxable property" means the value of the 7
taxable property as defined in RCW 39.36.015. 8
Sec. 2. RCW 39.102.020 and 2020 c 280 s 2 are each reenacted and 9
amended to read as follows: 10
The definitions in this section apply throughout this chapter 11
unless the context clearly requires otherwise. 12
(1) "Annual state contribution limit" means ((seven million five 13
hundred thousand dollars)) $7,500,000 statewide per fiscal year.14
(2) "Assessed value" means the valuation of taxable real property 15
as placed on the last completed assessment roll. 16
(3) "Board" means the community economic revitalization board 17
under chapter 43.160 RCW. 18
(4) "Dedicated" means pledged, set aside, allocated, received, 19
budgeted, or otherwise identified. 20
(5) "Demonstration project" means one of the following projects:21
(a) Bellingham waterfront redevelopment project;22
(b) Spokane river district project at Liberty Lake; and23
(c) Vancouver riverwest project. 24
(6) "Department" means the department of revenue.25
(7) "Fiscal year" means the ((twelve)) 12-month period beginning 26
July 1st and ending the following June 30th. 27
(8) "Local excise tax allocation revenue" means an amount of 28
local excise taxes equal to some or all of the sponsoring local 29
government's local excise tax increment, amounts of local excise 30
taxes equal to some or all of any participating local government's 31
excise tax increment as agreed upon in the written agreement under 32
RCW 39.102.080(1), or both, and dedicated to local infrastructure 33
financing. 34
(9) "Local excise tax increment" means an amount equal to the 35
estimated annual increase in local excise taxes in each calendar year 36
following the approval of the revenue development area by the board 37
from taxable activity within the revenue development area, as set 38
p. 4 HB 1786
forth in the application provided to the board under RCW 39.102.040, 1
and updated in accordance with RCW 39.102.140(1)(f).2
(10) "Local excise taxes" means local revenues derived from the 3
imposition of sales and use taxes authorized in RCW 82.14.030.4
(11) "Local government" means any city, town, county, port 5
district, and any federally recognized Indian tribe.6
(12) "Local infrastructure financing" means the use of revenues 7
received from local excise tax allocation revenues, local property 8
tax allocation revenues, other revenues from local public sources, 9
and revenues received from the local option sales and use tax 10
authorized in RCW 82.14.475, dedicated to pay either the principal 11
and interest on bonds authorized under RCW 39.102.150 or to pay 12
public improvement costs on a pay-as-you-go basis subject to RCW 13
39.102.195, or both. 14
(13) "Local property tax allocation revenue" means those tax 15
revenues derived from the receipt of regular property taxes levied on 16
the property tax allocation revenue value and used for local 17
infrastructure financing. 18
(14) "Low-income housing" means residential housing for low-19
income persons or families who lack the means which is necessary to 20
enable them, without financial assistance, to live in decent, safe, 21
and sanitary dwellings, without overcrowding. For the purposes of 22
this subsection, "low income" means income that does not exceed 23
((eighty)) 80 percent of the median family income for the standard 24
metropolitan statistical area in which the revenue development area 25
is located. 26
(15) "Ordinance" means any appropriate method of taking 27
legislative action by a local government. 28
(16) "Participating local government" means a local government 29
having a revenue development area within its geographic boundaries 30
that has entered into a written agreement with a sponsoring local 31
government as provided in RCW 39.102.080 to allow the use of all or 32
some of its local excise tax allocation revenues or other revenues 33
from local public sources dedicated for local infrastructure 34
financing. 35
(17) "Participating taxing district" means a local government 36
having a revenue development area within its geographic boundaries 37
that has entered into a written agreement with a sponsoring local 38
government as provided in RCW 39.102.080 to allow the use of some or 39
all of its local property tax allocation revenues or other revenues 40
p. 5 HB 1786
from local public sources dedicated for local infrastructure 1
financing. 2
(18) "Permanently affordable housing" means housing, regardless 3
of ownership, for which there is a legally binding, recorded document 4
in effect that limits the price at which the owner may sell or 5
restricts the occupancy of the unit to a qualified, low-income 6
household, for a period of at least ((forty)) 40 years for a property 7
used for shelter or rental housing, or for a period of at least 8
((twenty-five)) 25 years for a property to be owned by a low-income 9
household. These documents include, but are not limited to, 10
affordability covenants, deed restrictions, and community land trust 11
leases. Resale restrictions exercised by providers of permanently 12
affordable housing can include, but are not limited to:13
(a) Continuous ownership of land by a public entity or nonprofit 14
housing provider with a lease allowing ownership of the structure by 15
an income-eligible household; 16
(b) A nonpossessory interest or right in real property, such as a 17
deed restriction, restrictive covenant, resale restriction (([,])) , 18
or other contractual agreement, that ensures affordability.19
(19) "Property tax allocation revenue base value" means the 20
assessed value of real property located within a revenue development 21
area less the property tax allocation revenue value.22
(20)(a)(i) "Property tax allocation revenue value" means 23
((seventy-five)) 75 percent of any increase in the assessed value of 24
real property in a revenue development area resulting from:25
(A) The placement of new construction, improvements to property, 26
or both, on the assessment roll, where the new construction and 27
improvements are initiated after the revenue development area is 28
approved by the board; 29
(B) The cost of new housing construction, conversion, and 30
rehabilitation improvements, when such cost is treated as new 31
construction for purposes of chapter 84.55 RCW as provided in RCW 32
84.14.020, and the new housing construction, conversion, and 33
rehabilitation improvements are initiated after the revenue 34
development area is approved by the board; 35
(C) The cost of rehabilitation of historic property, when such 36
cost is treated as new construction for purposes of chapter 84.55 RCW 37
as provided in RCW 84.26.070, and the rehabilitation is initiated 38
after the revenue development area is approved by the board.39
p. 6 HB 1786
(ii) Increases in the assessed value of real property in a 1
revenue development area resulting from (a)(i)(A) through (C) of this 2
subsection are included in the property tax allocation revenue value 3
in the initial year. These same amounts are also included in the 4
property tax allocation revenue value in subsequent years unless the 5
property becomes exempt from property taxation. 6
(b) "Property tax allocation revenue value" includes ((seventy-7
five)) 75 percent of any increase in the assessed value of new 8
construction consisting of an entire building in the years following 9
the initial year, unless the building becomes exempt from property 10
taxation. 11
(c) Except as provided in (b) of this subsection, "property tax 12
allocation revenue value" does not include any increase in the 13
assessed value of real property after the initial year.14
(d) There is no property tax allocation revenue value if the 15
assessed value of real property in a revenue development area has not 16
increased as a result of any of the reasons specified in (a)(i)(A) 17
through (C) of this subsection. 18
(e) For purposes of this subsection, "initial year" means:19
(i) For new construction and improvements to property added to 20
the assessment roll, the year during which the new construction and 21
improvements are initially placed on the assessment roll;22
(ii) For the cost of new housing construction, conversion, and 23
rehabilitation improvements, when such cost is treated as new 24
construction for purposes of chapter 84.55 RCW, the year when such 25
cost is treated as new construction for purposes of levying taxes for 26
collection in the following year; and 27
(iii) For the cost of rehabilitation of historic property, when 28
such cost is treated as new construction for purposes of chapter 29
84.55 RCW, the year when such cost is treated as new construction for 30
purposes of levying taxes for collection in the following year.31
(21) "Public improvement costs" means the cost of: (a) Design, 32
planning, acquisition including land acquisition, site preparation 33
including land clearing, construction, reconstruction, 34
rehabilitation, improvement, and installation of public improvements; 35
(b) demolishing, relocating, maintaining, and operating property 36
pending construction of public improvements; (c) the local 37
government's portion of relocating utilities as a result of public 38
improvements; (d) financing public improvements, including interest 39
during construction, legal and other professional services, taxes, 40
p. 7 HB 1786
insurance, principal and interest costs on general indebtedness 1
issued to finance public improvements, and any necessary reserves for 2
general indebtedness; (e) assessments incurred in revaluing real 3
property for the purpose of determining the property tax allocation 4
revenue base value that are in excess of costs incurred by the 5
assessor in accordance with the revaluation plan under chapter 84.41 6
RCW, and the costs of apportioning the taxes and complying with this 7
chapter and other applicable law; (f) administrative expenses and 8
feasibility studies reasonably necessary and related to these costs; 9
and (g) any of the above-described costs that may have been incurred 10
before adoption of the ordinance authorizing the public improvements 11
and the use of local infrastructure financing to fund the costs of 12
the public improvements. 13
(22) "Public improvements" means: 14
(a) Infrastructure improvements within the revenue development 15
area that include: 16
(i) Street, bridge, and road construction and maintenance, 17
including highway interchange construction; 18
(ii) Water and sewer system construction and improvements, 19
including wastewater reuse facilities; 20
(iii) Sidewalks, traffic controls, and streetlights;21
(iv) Parking, terminal, and dock facilities; 22
(v) Park and ride facilities of a transit authority;23
(vi) Park facilities and recreational areas, including trails; 24
((and))25
(vii) Stormwater and drainage management systems; and26
(viii) Public safety facilities;27
(b) Expenditures for facilities and improvements that support 28
affordable housing as defined in RCW 43.63A.510; and29
(c) Expenditures to purchase, rehabilitate, retrofit for energy 30
efficiency, and construct housing for the purpose of creating or 31
preserving permanently affordable housing. 32
(23) "Public safety facilities" means any facilities, structures, 33
improvements, or equipment used to provide police, fire, emergency 34
medical, or other public safety services.35
(24) "Real property" has the same meaning as in RCW 84.04.090 and 36
also includes any privately owned improvements located on publicly 37
owned land that are subject to property taxation. 38
(((24))) (25) "Regular property taxes" means regular property 39
taxes as defined in RCW 84.04.140, except: (a) Regular property taxes 40
p. 8 HB 1786
levied by public utility districts specifically for the purpose of 1
making required payments of principal and interest on general 2
indebtedness; (b) regular property taxes levied by the state for the 3
support of the common schools under RCW 84.52.065; and (c) regular 4
property taxes authorized by RCW 84.55.050 that are limited to a 5
specific purpose. "Regular property taxes" do not include excess 6
property tax levies that are exempt from the aggregate limits for 7
junior and senior taxing districts as provided in RCW 84.52.043.8
(((25))) (26) "Relocating a business" means the closing of a 9
business and the reopening of that business, or the opening of a new 10
business that engages in the same activities as the previous 11
business, in a different location within a one-year period, when an 12
individual or entity has an ownership interest in the business at the 13
time of closure and at the time of opening or reopening. "Relocating 14
a business" does not include the closing and reopening of a business 15
in a new location where the business has been acquired and is under 16
entirely new ownership at the new location, or the closing and 17
reopening of a business in a new location as a result of the exercise 18
of the power of eminent domain. 19
(((26))) (27) "Revenue development area" means the geographic 20
area adopted by a sponsoring local government and approved by the 21
board, from which local excise and property tax allocation revenues 22
are derived for local infrastructure financing. 23
(((27))) (28)(a) "Revenues from local public sources" means:24
(i) Amounts of local excise tax allocation revenues and local 25
property tax allocation revenues, dedicated by sponsoring local 26
governments, participating local governments, and participating 27
taxing districts, for local infrastructure financing; and28
(ii) Any other local revenues, except as provided in (b) of this 29
subsection, including revenues derived from federal and private 30
sources. 31
(b) Revenues from local public sources do not include any local 32
funds derived from state grants, state loans, or any other state 33
moneys including any local sales and use taxes credited against the 34
state sales and use taxes imposed under chapter 82.08 or 82.12 RCW.35
(((28))) (29) "Small business" has the same meaning as provided 36
in RCW 19.85.020. 37
(((29))) (30) "Sponsoring local government" means a city, town, 38
or county, and for the purpose of this chapter a federally recognized 39
Indian tribe or any combination thereof, that adopts a revenue 40
p. 9 HB 1786
development area and applies to the board to use local infrastructure 1
financing. 2
(((30))) (31) "State contribution" means the lesser of:3
(a) One million dollars; 4
(b) The total amount of local excise tax allocation revenues, 5
local property tax allocation revenues, and other revenues from local 6
public sources, that are dedicated by a sponsoring local government, 7
any participating local governments, and participating taxing 8
districts, in the preceding calendar year to the payment of principal 9
and interest on bonds issued under RCW 39.102.150 or to pay public 10
improvement costs on a pay-as-you-go basis subject to RCW 39.102.195, 11
or both. Revenues from local public sources dedicated in the 12
preceding calendar year that are in excess of the project award may 13
be carried forward and used in later years for the purpose of this 14
subsection (((30))) (31)(b); 15
(c) The amount of project award granted by the board in the 16
notice of approval to use local infrastructure financing under RCW 17
39.102.040; or 18
(d) The highest amount of state excise tax allocation revenues 19
and state property tax allocation revenues for any one calendar year 20
as determined by the sponsoring local government and reported to the 21
board and the department as required by RCW 39.102.140.22
(((31))) (32) "State excise tax allocation revenue" means an 23
amount equal to the annual increase in state excise taxes estimated 24
to be received by the state in each calendar year following the 25
approval of the revenue development area by the board, from taxable 26
activity within the revenue development area as set forth in the 27
application provided to the board under RCW 39.102.040 and 28
periodically updated and reported as required in RCW 29
39.102.140(1)(f). 30
(((32))) (33) "State excise taxes" means revenues derived from 31
state retail sales and use taxes under RCW 82.08.020(1) and 82.12.020 32
at the rate provided in RCW 82.08.020(1), less the amount of tax 33
distributions from all local retail sales and use taxes, other than 34
the local sales and use taxes authorized by RCW 82.14.475 for the 35
applicable revenue development area, imposed on the same taxable 36
events that are credited against the state retail sales and use taxes 37
under chapters 82.08 and 82.12 RCW. 38
(((33))) (34) "State property tax allocation revenue" means an 39
amount equal to the estimated tax revenues derived from the 40
p. 10 HB 1786
imposition of property taxes levied by the state for the support of 1
common schools under RCW 84.52.065 on the property tax allocation 2
revenue value, as set forth in the application submitted to the board 3
under RCW 39.102.040 and updated annually in the report required 4
under RCW 39.102.140(1)(f). 5
(((34))) (35) "Taxing district" means a government entity that 6
levies or has levied for it regular property taxes upon real property 7
located within a proposed or approved revenue development area.8
Sec. 3. RCW 39.104.020 and 2020 c 280 s 3 are each reenacted and 9
amended to read as follows: 10
The definitions in this section apply throughout this chapter 11
unless the context clearly requires otherwise. 12
(1) "Annual state contribution limit" means ((two million five 13
hundred thousand dollars)) $2,500,000 statewide per fiscal year, plus 14
the additional amounts approved for demonstration projects in RCW 15
82.14.505. 16
(2) "Approving agency" means the department of revenue for 17
project awards approved before June 9, 2016, and the department of 18
commerce for project awards approved after June 9, 2016.19
(3) "Assessed value" means the valuation of taxable real property 20
as placed on the last completed assessment roll. 21
(4) "Bond" means a bond, a note or other evidence of 22
indebtedness, including but not limited to a lease-purchase agreement 23
or an executory conditional sales contract. 24
(5) "Department" means the department of revenue.25
(6) "Fiscal year" means the ((twelve)) 12-month period beginning 26
July 1st and ending the following June 30th. 27
(7) "Local government" means any city, town, county, and port 28
district. 29
(8) "Local property tax allocation revenue" means those tax 30
revenues derived from the receipt of regular property taxes levied on 31
the property tax allocation revenue value and used for local 32
revitalization financing. 33
(9) "Local revitalization financing" means the use of revenues 34
from local public sources, dedicated to pay the principal and 35
interest on bonds authorized under RCW 39.104.110 and public 36
improvement costs within the revitalization area on a pay-as-you-go 37
basis, and revenues received from the local option sales and use tax 38
p. 11 HB 1786
authorized in RCW 82.14.510, dedicated to pay the principal and 1
interest on bonds authorized under RCW 39.104.110. 2
(10) "Local sales and use tax increment" means the estimated 3
annual increase in local sales and use taxes as determined by the 4
local government in the calendar years following the approval of the 5
revitalization area by the department from taxable activity within 6
the revitalization area. 7
(11) "Local sales and use taxes" means local revenues derived 8
from the imposition of sales and use taxes authorized in RCW 9
82.14.030. 10
(12) "Ordinance" means any appropriate method of taking 11
legislative action by a local government. 12
(13) "Participating local government" means a local government 13
having a revitalization area within its geographic boundaries that 14
has taken action as provided in RCW 39.104.070(1) to allow the use of 15
all or some of its local sales and use tax increment or other 16
revenues from local public sources dedicated for local revitalization 17
financing. 18
(14) "Participating taxing district" means a taxing district 19
that: 20
(a) Has a revitalization area wholly or partially within its 21
geographic boundaries; 22
(b) Levies or has levied for it regular property taxes as defined 23
in this section; and 24
(c) Has not taken action as provided in RCW 39.104.060(2).25
(15) "Permanently affordable housing" means housing, regardless 26
of ownership, for which there is a legally binding, recorded document 27
in effect that limits the price at which the owner may sell or 28
restricts the occupancy of the unit to a qualified, low-income 29
household, for a period of at least ((forty)) 40 years for a property 30
used for shelter or rental housing, or for a period of at least 31
((twenty-five)) 25 years for a property to be owned by a low-income 32
household. These documents include, but are not limited to, 33
affordability covenants, deed restrictions, and community land trust 34
leases. Resale restrictions exercised by providers of permanently 35
affordable housing can include, but are not limited to:36
(a) Continuous ownership of land by a public entity or nonprofit 37
housing provider with a lease allowing ownership of the structure by 38
an income-eligible household; 39
p. 12 HB 1786
(b) A nonpossessory interest or right in real property, such as a 1
deed restriction, restrictive covenant, resale restriction (([,])), or 2
other contractual agreement, that ensures affordability.3
(16) "Property tax allocation revenue base value" means the 4
assessed value of real property located within a revitalization area, 5
less the property tax allocation revenue value. 6
(17)(a)(i) "Property tax allocation revenue value" means 7
((seventy-five)) 75 percent of any increase in the assessed value of 8
real property in a revitalization area resulting from:9
(A) The placement of new construction, improvements to property, 10
or both, on the assessment roll, where the new construction and 11
improvements are initiated after the revitalization area is approved;12
(B) The cost of new housing construction, conversion, and 13
rehabilitation improvements, when the cost is treated as new 14
construction for purposes of chapter 84.55 RCW as provided in RCW 15
84.14.020, and the new housing construction, conversion, and 16
rehabilitation improvements are initiated after the revitalization 17
area is approved; 18
(C) The cost of rehabilitation of historic property, when the 19
cost is treated as new construction for purposes of chapter 84.55 RCW 20
as provided in RCW 84.26.070, and the rehabilitation is initiated 21
after the revitalization area is approved. 22
(ii) Increases in the assessed value of real property in a 23
revitalization area resulting from (a)(i)(A) through (C) of this 24
subsection are included in the property tax allocation revenue value 25
in the initial year. These same amounts are also included in the 26
property tax allocation revenue value in subsequent years unless the 27
property becomes exempt from property taxation. 28
(b) "Property tax allocation revenue value" includes ((seventy-29
five)) 75 percent of any increase in the assessed value of new 30
construction consisting of an entire building in the years following 31
the initial year, unless the building becomes exempt from property 32
taxation. 33
(c) Except as provided in (b) of this subsection, "property tax 34
allocation revenue value" does not include any increase in the 35
assessed value of real property after the initial year.36
(d) There is no property tax allocation revenue value if the 37
assessed value of real property in a revitalization area has not 38
increased as a result of any of the reasons specified in (a)(i)(A) 39
through (C) of this subsection. 40
p. 13 HB 1786
(e) For purposes of this subsection, "initial year" means:1
(i) For new construction and improvements to property added to 2
the assessment roll, the year during which the new construction and 3
improvements are initially placed on the assessment roll;4
(ii) For the cost of new housing construction, conversion, and 5
rehabilitation improvements, when the cost is treated as new 6
construction for purposes of chapter 84.55 RCW, the year when the 7
cost is treated as new construction for purposes of levying taxes for 8
collection in the following year; and 9
(iii) For the cost of rehabilitation of historic property, when 10
the cost is treated as new construction for purposes of chapter 84.55 11
RCW, the year when such cost is treated as new construction for 12
purposes of levying taxes for collection in the following year.13
(18) "Public improvement costs" means the costs of:14
(a) Design, planning, acquisition, including land acquisition, 15
site preparation including land clearing, construction, 16
reconstruction, rehabilitation, improvement, and installation of 17
public improvements; 18
(b) Demolishing, relocating, maintaining, and operating property 19
pending construction of public improvements; 20
(c) Relocating utilities as a result of public improvements;21
(d) Financing public improvements, including interest during 22
construction, legal and other professional services, taxes, 23
insurance, principal and interest costs on general indebtedness 24
issued to finance public improvements, and any necessary reserves for 25
general indebtedness; and 26
(e) Administrative expenses and feasibility studies reasonably 27
necessary and related to these costs, including related costs that 28
may have been incurred before adoption of the ordinance authorizing 29
the public improvements and the use of local revitalization financing 30
to fund the costs of the public improvements. 31
(19) "Public improvements" means: 32
(a) Infrastructure improvements within the revitalization area 33
that include: 34
(i) Street, road, bridge, and rail construction and maintenance;35
(ii) Water and sewer system construction and improvements;36
(iii) Sidewalks, streetlights, landscaping, and streetscaping;37
(iv) Parking, terminal, and dock facilities; 38
(v) Park and ride facilities of a transit authority;39
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(vi) Park facilities, recreational areas, and environmental 1
remediation; 2
(vii) Stormwater and drainage management systems;3
(viii) Electric, gas, fiber, and other utility infrastructures; 4
and5
(ix) Public safety facilities;6
(b) Expenditures for any of the following purposes:7
(i) Providing environmental analysis, professional management, 8
planning, and promotion within the revitalization area, including the 9
management and promotion of retail trade activities in the 10
revitalization area; 11
(ii) Providing maintenance and security for common or public 12
areas in the revitalization area; or 13
(iii) Historic preservation activities authorized under RCW 14
35.21.395; and 15
(c) Expenditures to purchase, rehabilitate, retrofit for energy 16
efficiency, and construct housing for the purpose of creating or 17
preserving permanently affordable housing. 18
(20) "Public safety facilities" means any facilities, structures, 19
improvements, or equipment used to provide police, fire, emergency 20
medical, or other public safety services.21
(21) "Real property" has the same meaning as in RCW 84.04.090 and 22
also includes any privately owned improvements located on publicly 23
owned land that are subject to property taxation. 24
(((21))) (22)(a) "Regular property taxes" means regular property 25
taxes as defined in RCW 84.04.140, except: (i) Regular property taxes 26
levied by public utility districts specifically for the purpose of 27
making required payments of principal and interest on general 28
indebtedness; (ii) regular property taxes levied by the state for the 29
support of common schools under RCW 84.52.065; and (iii) regular 30
property taxes authorized by RCW 84.55.050 that are limited to a 31
specific purpose. 32
(b) "Regular property taxes" do not include: 33
(i) Excess property tax levies that are exempt from the aggregate 34
limits for junior and senior taxing districts as provided in RCW 35
84.52.043; and 36
(ii) Property taxes that are specifically excluded through an 37
interlocal agreement between the sponsoring local government and a 38
participating taxing district as set forth in RCW 39.104.060(3).39
(((22))) (23)(a) "Revenues from local public sources" means:40
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(i) The local sales and use tax amounts received as a result of 1
interlocal agreement, local sales and use tax amounts from sponsoring 2
local governments based on its local sales and use tax increment, and 3
local property tax allocation revenues, which are dedicated by a 4
sponsoring local government, participating local governments, and 5
participating taxing districts, for payment of bonds under RCW 6
39.104.110 or public improvement costs within the revitalization area 7
on a pay-as-you-go basis; and 8
(ii) Any other local revenues, except as provided in (b) of this 9
subsection, including revenues derived from federal and private 10
sources and amounts received by taxing districts as set forth by an 11
interlocal agreement as described in RCW 39.104.060(4), which are 12
dedicated for the payment of bonds under RCW 39.104.110 or public 13
improvement costs within the revitalization area on a pay-as-you-go 14
basis. 15
(b) Revenues from local public sources do not include any local 16
funds derived from state grants, state loans, or any other state 17
moneys including any local sales and use taxes credited against the 18
state sales and use taxes imposed under chapter 82.08 or 82.12 RCW.19
(((23))) (24) "Revitalization area" means the geographic area 20
adopted by a sponsoring local government and approved by the 21
approving agency, from which local sales and use tax increments are 22
estimated and property tax allocation revenues are derived for local 23
revitalization financing. 24
(((24))) (25) "Sponsoring local government" means a city, town, 25
county, or any combination thereof, that adopts a revitalization 26
area. 27
(((25))) (26) "State contribution" means the lesser of:28
(a) Five hundred thousand dollars; 29
(b) The project award amount approved by the approving agency as 30
provided in RCW 39.104.100 or 82.14.505; or 31
(c) The total amount of revenues from local public sources 32
dedicated in the preceding calendar year to the payment of principal 33
and interest on bonds issued under RCW 39.104.110 and public 34
improvement costs within the revitalization area on a pay-as-you-go 35
basis. Revenues from local public sources dedicated in the preceding 36
calendar year that are in excess of the project award may be carried 37
forward and used in later years for the purpose of this subsection 38
(((25))) (26)(c). 39
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(((26))) (27) "State property tax increment" means the estimated 1
amount of annual tax revenues estimated to be received by the state 2
from the imposition of property taxes levied by the state for the 3
support of common schools under RCW 84.52.065 on the property tax 4
allocation revenue value, as determined by the sponsoring local 5
government in an application under RCW 39.104.100 and updated 6
periodically as required in RCW 82.32.765. 7
(((27))) (28) "State sales and use tax increment" means the 8
estimated amount of annual increase in state sales and use taxes to 9
be received by the state from taxable activity within the 10
revitalization area in the years following the approval of the 11
revitalization area as determined by the sponsoring local government 12
in an application under RCW 39.104.100 and updated periodically as 13
required in RCW 82.32.765. 14
(((28))) (29) "State sales and use taxes" means state retail 15
sales and use taxes under RCW 82.08.020(1) and 82.12.020 at the rate 16
provided in RCW 82.08.020(1), less the amount of tax distributions 17
from all local retail sales and use taxes, other than the local sales 18
and use taxes authorized by RCW 82.14.510 for the applicable 19
revitalization area, imposed on the same taxable events that are 20
credited against the state retail sales and use taxes under RCW 21
82.08.020(1) and 82.12.020. 22
(((29))) (30) "Taxing district" means a government entity that 23
levies or has levied for it regular property taxes upon real property 24
located within a proposed or approved revitalization area.25
Sec. 4. RCW 39.114.010 and 2024 c 236 s 1 are each amended to 26
read as follows: 27
The definitions in this section apply throughout this chapter 28
unless the context clearly requires otherwise. 29
(1) "Assessed value of real property" means the valuation of 30
taxable real property as placed on the last completed assessment roll 31
prepared pursuant to Title 84 RCW. 32
(2) "Increment area" means the geographic area within which 33
regular property tax revenues are to be apportioned to pay public 34
improvement costs, as authorized under this chapter.35
(3) "Increment value" means 100 percent of any increase in the 36
true and fair value of real property in an increment area that is 37
placed on the tax rolls after the increment area takes effect. The 38
increment value shall not be less than zero. 39
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(4) "Local government" means any city, town, county, port 1
district, or any combination thereof. 2
(5) "Ordinance" means any appropriate method of taking 3
legislative action by a local government, including a resolution 4
adopted by a port district organized under Title 53 RCW.5
(6) "Public improvement costs" means the costs of:6
(a) Design, planning, acquisition, required permitting, required 7
environmental studies and mitigation, seismic studies or surveys, 8
archaeological studies or surveys, land surveying, site acquisition, 9
including appurtenant rights and site preparation, construction, 10
reconstruction, rehabilitation, improvement, expansion, and 11
installation of public improvements, and other directly related 12
costs; 13
(b) Relocating, maintaining, and operating property pending 14
construction of public improvements; 15
(c) Relocating utilities as a result of public improvements;16
(d) Financing public improvements, including capitalized interest 17
for up to six months following completion of construction, legal and 18
other professional services, taxes, insurance, principal and interest 19
costs on general indebtedness issued to finance public improvements, 20
and any necessary debt service reserves; 21
(e) Expenses incurred in revaluing real property for the purpose 22
of determining the tax allocation base value by a county assessor 23
under chapter 84.41 RCW and expenses incurred by a county treasurer 24
under chapter 84.56 RCW in apportioning the taxes and complying with 25
this chapter and other applicable law. For purposes of this 26
subsection (6)(e), "expenses incurred" means actual staff and 27
software costs directly related to the implementation and ongoing 28
administration of increment areas under this chapter;29
(f) Administrative expenses and feasibility studies reasonably 30
necessary and related to these costs, including related costs that 31
may have been incurred before adoption of the ordinance authorizing 32
the public improvements and the use of tax increment financing to 33
fund the costs of the public improvements; and 34
(g) Funding for mitigation to impacted taxing districts as 35
allowed in RCW 39.114.020. 36
(7) "Public improvements" means: 37
(a) Infrastructure improvements owned by a state or local 38
government within or outside of and serving the increment area and 39
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real property owned or acquired by a local government within the 1
increment area including: 2
(i) Street and road construction; 3
(ii) Water and sewer system construction, expansion, and 4
improvements; 5
(iii) Sidewalks and other nonmotorized transportation 6
improvements and streetlights; 7
(iv) Parking, terminal, and dock facilities; 8
(v) Park and ride facilities or other transit facilities;9
(vi) Park and community facilities and recreational areas;10
(vii) Stormwater and drainage management systems;11
(viii) Electric, broadband, or rail service; 12
(ix) Mitigation of brownfields; ((or))13
(x) Public safety facilities; and14
(b) Expenditures for any of the following purposes:15
(i) Purchasing, rehabilitating, retrofitting for energy 16
efficiency, and constructing housing for the purpose of creating or 17
preserving long-term affordable housing; 18
(ii) Purchasing, rehabilitating, retrofitting for energy 19
efficiency, and constructing child care facilities serving children 20
and youth that are low-income, homeless, or in foster care;21
(iii) Providing maintenance and security for the public 22
improvements; 23
(iv) Historic preservation activities authorized under RCW 24
35.21.395; or 25
(v) Relocation and construction of a government-owned facility, 26
with written permission from the agency owning the facility and the 27
office of financial management. 28
(8) "Public safety facilities" means any facilities, structures, 29
improvements, or equipment used to provide police, fire, emergency 30
medical, or other public safety services.31
(9) "Real property" means: 32
(a) Real property as defined in RCW 84.04.090; and33
(b) Privately owned or used improvements located on publicly 34
owned land that are subject to property taxation or leasehold excise 35
tax. 36
(((9))) (10) "Regular property taxes" means regular property 37
taxes as defined in RCW 84.04.140, except: (a) Regular property taxes 38
levied by port districts or public utility districts to the extent 39
necessary for the payments of principal and interest on general 40
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obligation debt; and (b) regular property taxes levied by the state 1
for the support of the common schools under RCW 84.52.065. Regular 2
property taxes do not include excess property tax levies that are 3
exempt from the aggregate limits for junior and senior taxing 4
districts as provided in RCW 84.52.043. "Regular property taxes" does 5
not include excess property taxes levied by local school districts.6
(((10))) (11) "Tax allocation base value" means the assessed 7
value of real property located within an increment area for taxes 8
imposed in the year in which the increment area takes effect.9
(((11))) (12) "Tax allocation revenues" means those revenues 10
derived from the imposition of regular property taxes on the 11
increment value. 12
(((12))) (13) "Taxing district" means a governmental entity that 13
levies or has levied for it regular property taxes upon real property 14
located within a proposed or approved increment area.15
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