Public facilities districts

AN ACT Relating to public facilities districts; and amending RCW 1
36.100.040. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 36.100.040 and 2018 c 245 s 2 are each amended to 4
read as follows: 5
(1) A public facilities district may impose an excise tax on the 6
sale of or charge made for the furnishing of lodging that is subject 7
to tax under chapter 82.08 RCW, except that no such tax may be levied 8
on any premises having fewer than ((forty)) 40 lodging units. Except 9
for any tax imposed under subsection (4) or (5) of this section, if a 10
public facilities district has not imposed such an excise tax prior 11
to December 31, 1995, the public facilities district may only impose 12
the excise tax if a ballot proposition authorizing the imposition of 13
the tax has been approved by a simple majority vote of voters of the 14
public facilities district voting on the proposition.15
(2) The rate of the tax may not exceed two percent and the 16
proceeds of the tax may only be used for the acquisition, design, 17
construction, remodeling, maintenance, equipping, reequipping, 18
repairing, and operation of its public facilities. This excise tax 19
may not be imposed until the district has approved the proposal to 20
acquire, design, and construct the public facilities.21
S-0070.1
SENATE BILL 5138
State of Washington 69th Legislature 2025 Regular Session
By Senators Saldaña, Dhingra, Hasegawa, and Nobles
Prefiled 01/06/25. Read first time 01/13/25. Referred to Committee
on Local Government.
p. 1 SB 5138
(3) Except for a public facilities district created within a 1
county with a population of one million five hundred thousand or more 2
for the purpose of acquiring, owning, and operating a convention and 3
trade center, a public facilities district may not impose the tax 4
authorized in this section if, after the tax authorized in this 5
section was imposed, the effective combined rate of state and local 6
excise taxes, including sales and use taxes and excise taxes on 7
lodging, imposed on the sale of or charge made for furnishing of 8
lodging in any jurisdiction in the public facilities district exceeds 9
eleven and one-half percent. 10
(4)(a) To replace the tax authorized by RCW 67.40.090, a public 11
facilities district created within a county with a population of one 12
million five hundred thousand or more for the purpose of acquiring, 13
owning, operating, renovating, and expanding a convention and trade 14
center may impose an excise tax on the sale of or charge made for the 15
furnishing of lodging (including but not limited to any short-term 16
rental) that is subject to tax under chapter 82.08 RCW, except that 17
no such tax may be levied on: 18
(i) Any premises: 19
(A) Having fewer than ((sixty)) 60 lodging units if the premises 20
is located in a town with a population less than three hundred; or21
(B) Classified as a hostel; 22
(ii) Any lodging that is concurrently subject to a tax on 23
engaging in the business of being a short-term rental operator 24
imposed by a city in which a convention and trade center is located; 25
or 26
(iii) Any lodging that is operated by a university health care 27
system exclusively for family members of patients.28
(b) The rate of the tax may not exceed seven percent within the 29
portion of the district that corresponds to the boundaries of the 30
largest city within the public facilities district and may not exceed 31
2.8 percent in the remainder of the district. The tax imposed under 32
this subsection (4) may not be collected prior to the transfer date 33
defined in RCW 36.100.230. 34
(5) To replace the tax authorized by RCW 67.40.130, a public 35
facilities district created within a county with a population of one 36
million five hundred thousand or more for the purpose of acquiring, 37
owning, operating, renovating, and expanding a convention and trade 38
center may impose an additional excise tax on the sale of or charge 39
made for the furnishing of lodging (including but not limited to any 40
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short-term rental) that is subject to tax under chapter 82.08 RCW, 1
except that no such tax may be levied on any premises: (a) Having 2
fewer than sixty lodging units if the premises is located in a town 3
with a population less than three hundred; or (b) classified as a 4
hostel. The rate of the additional excise tax may not exceed two 5
percent and may be imposed only within the portion of the district 6
that corresponds to the boundaries of the largest city within the 7
public facilities district and may not be imposed in the remainder of 8
the district. The tax imposed under this subsection (5) may not be 9
collected prior to the transfer date specified in RCW 36.100.230. The 10
tax imposed under this subsection (5) must be credited against the 11
amount of the tax otherwise due to the state from those same 12
taxpayers under chapter 82.08 RCW. The tax under this subsection (5) 13
may be imposed only for the purpose of paying or securing the payment 14
of the principal of and interest on obligations issued or incurred by 15
the public facilities district and paying annual payment amounts to 16
the state under subsection (6)(a) of this section. The authority to 17
impose the additional excise tax under this subsection (5) expires on 18
the date that is the earlier of (i) July 1, 2029, or (ii) the date on 19
which all obligations issued or incurred by the public facilities 20
district to implement any redemption, prepayment, or legal defeasance 21
of outstanding obligations under RCW 36.100.230(3)(a) are no longer 22
outstanding. 23
(6)(a) Commencing with the first full fiscal year of the state 24
after the transfer date defined in RCW 36.100.230 and for so long as 25
a public facilities district imposes a tax under subsection (5) of 26
this section, the public facilities district must transfer to the 27
state of Washington on June 30th of each state fiscal year an annual 28
payment amount. 29
(b) For the purposes of this subsection (6), "annual payment 30
amount" means an amount equal to revenues received by the public 31
facilities district in the fiscal year from the additional excise tax 32
imposed under subsection (5) of this section plus an interest charge 33
calculated on one-half the annual payment amount times an interest 34
rate equal to the average annual rate of return for the prior 35
calendar year in the Washington state local government investment 36
pool created in chapter 43.250 RCW. 37
(c)(i) If the public facilities district in any fiscal year is 38
required to apply additional lodging excise tax revenues to the 39
payment of principal and interest on obligations it issues or incurs, 40
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and the public facilities district is unable to pay all or any 1
portion of the annual payment amount to the state, the deficiency is 2
deemed to be a loan from the state to the public facilities district 3
for the purpose of assisting the district in paying such principal 4
and interest and must be repaid by the public facilities district to 5
the state after providing for the payment of the principal of and 6
interest on obligations issued or incurred by the public facilities 7
district, all on terms established by an agreement between the state 8
treasurer and the public facilities district executed prior to the 9
transfer date. Any agreement between the state treasurer and the 10
public facilities district must specify the term for the repayment of 11
the deficiency in the annual payment amount with an interest rate 12
equal to the twenty bond general obligation bond buyer index plus one 13
percentage point. 14
(ii) Outstanding obligations to repay any loans deemed to have 15
been made to the public facilities district as provided in any such 16
agreements between the state treasurer and the public facilities 17
district survive the expiration of the additional excise tax under 18
subsection (5) of this section. 19
(iii) For the purposes of this subsection (6)(c), "additional 20
lodging excise tax revenues" mean the tax revenues received by the 21
public facilities district under subsection (5) of this section.22
(7) A public facilities district is authorized to pledge any of 23
its revenues, including without limitation revenues from the taxes 24
authorized in this section, to pay or secure the payment of 25
obligations issued or incurred by the public facilities district, 26
subject to the terms established by the board of directors of the 27
public facilities district. So long as a pledge of the taxes 28
authorized under this section is in effect, the legislature may not 29
withdraw or modify the authority to levy and collect the taxes at the 30
rates permitted under this section and may not increase the annual 31
payment amount to be transferred to the state under subsection (6) of 32
this section. 33
(8) The department of revenue must perform the collection of such 34
taxes on behalf of the public facilities district at no cost to the 35
district, and the state treasurer must distribute those taxes as 36
available on a monthly basis to the district or, upon the direction 37
of the district, to a fiscal agent, paying agent, or trustee for 38
obligations issued or incurred by the district. 39
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(9) Except as expressly provided in this chapter, all of the 1
provisions contained in RCW 82.08.050 and 82.08.060 and chapter 82.32 2
RCW have full force and application with respect to taxes imposed 3
under the provisions of this section. 4
(10) In determining the effective combined rate of tax for 5
purposes of the limit in subsection (3) of this section, the tax rate 6
under RCW 82.14.530 is not included. 7
(11) The taxes imposed in this section do not apply to sales of 8
temporary medical housing exempt under RCW 82.08.997.9
(12) The definitions in this subsection apply throughout this 10
section unless the context clearly requires otherwise.11
(a)(i) "Hostel" means a structure or facility where a majority of 12
the rooms for sleeping accommodations are hostel dormitories 13
containing a minimum of four standard beds designed for single-person 14
occupancy within the facility. Hostel accommodations are supervised 15
and must include at least one common area and at least one common 16
kitchen for guest use. 17
(ii) For the purpose of this subsection (12)(a), "hostel 18
dormitory" means a single room, containing four or more standard beds 19
designed for single-person occupancy, used exclusively as nonprivate 20
communal sleeping quarters, generally for unrelated persons, where 21
such persons independently acquire the right to occupy individual 22
beds, with the operator supervising and determining which bed each 23
person will occupy. 24
(b) "Short-term rental" means a lodging use, that is not a hotel 25
or motel, in which a dwelling unit, or portion thereof, that is 26
offered or provided to a guest or guests by a short-term rental 27
operator for a fee for fewer than thirty consecutive nights. The term 28
"short-term rental" does not include: 29
(i) A dwelling unit, or portion thereof, that is used by the same 30
person for thirty or more consecutive nights; and 31
(ii) A dwelling unit, or portion thereof, that is operated by an 32
organization or government entity that is registered as a charitable 33
organization with the secretary of state, state of Washington, and/or 34
is classified by the federal internal revenue service as a public 35
charity or a private foundation, and provides temporary housing to 36
individuals who are being treated for trauma, injury, or disease 37
and/or their family members. 38
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(13) Taxes authorized under subsections (4) and (5) of this 1
section are deemed to have been imposed on December 1, 2000, for the 2
purposes of RCW 82.14.410. 3
(14)(a) Beginning on the date that the condition in (b) of this 4
subsection is satisfied, a public facilities district created within 5
a county with a population of one million five hundred thousand or 6
more for the purpose of acquiring, owning, operating, renovating, and 7
expanding a convention and trade center must make quarterly payments 8
from tax revenue collected by a public facilities district as a 9
result of the tax imposed in chapter 245, Laws of 2018 to a city in 10
which the convention and trade center is located that has authorized 11
on or before December 31, 2017, a tax on engaging in the business of 12
being a short-term rental operator. Such payments must be made no 13
more than thirty days after the last day of each fiscal quarter and 14
must equal the portion of the revenues received by the public 15
facilities district during such fiscal quarter from the lodging taxes 16
authorized under subsection (4) of this section that are determined 17
by the department of revenue to be derived from the short-term rental 18
activity within such city. 19
(b) The public facilities district is not required to make any 20
payments under this subsection (14) unless the city has repealed any 21
ordinance authorizing a tax on engaging in the business of being a 22
short-term rental operator. 23
(c) The public facilities district is not required to make any 24
payments to a city under this subsection (14), if the city, after 25
satisfying the condition in (b) of this subsection imposes any tax 26
specifically on the act of engaging in the business of being a short-27
term rental operator. 28
(d) The proceeds of any payments made by a public facilities 29
district to a city under this subsection (14) must be used by the 30
city to support community-initiated equitable development and 31
affordable housing programs, as determined by the city in its sole 32
discretion. 33
(15) ((Fifty)) 50 percent of any tax revenue collected by a 34
public facilities district as a result of the tax imposed in chapter 35
245, Laws of 2018 must be distributed by the public facilities 36
district to the county in which the convention and trade center is 37
located. However, if a city has satisfied the condition in subsection 38
(14)(b) of this section, payments made under this subsection to the 39
county in which the convention and trade center is located must be 40
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calculated after deducting any payments made to a city under 1
subsection (14) of this section from the total tax revenue received 2
by the public facilities district as a result of the enactment of 3
chapter 245, Laws of 2018. The proceeds of such payments to a county 4
under this subsection (15) must be used by the county to support 5
community-initiated equitable development and affordable housing 6
programs, as determined by the county, in its sole discretion.7
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