Chapter 3.19
LOCAL OPTION SALES OR USE TAX

Sections:

3.19.010    Definitions.

3.19.020    Findings.

3.19.030    Effective date and duration.

3.19.040    Tax rate.

3.19.050    Use of LIFT tax receipts.

3.19.060    Additional statutory requirements.

3.19.070    Delivery of ordinance.

3.19.080    Ratification.

3.19.090    Severability.

3.19.010 Definitions.

Capitalized terms not otherwise defined in this chapter have the meanings given in RCW 39.102.020 and RCW 82.14.475, as amended from time to time. (Ord. 2132 § 1, 2013).

3.19.020 Findings.

The city council makes the following findings and determinations:

A.    The city previously passed Ordinance No. 1999 (2008) creating the Bothell Revenue Development Area (“RDA”) and received approval on November 25, 2008, from the Community Economic Revitalization Board (“CERB”) to use the Local Infrastructure Financing Tool (“LIFT”) under Chapter 39.102 RCW to finance certain Public Improvements within the RDA.

B.    RCW 82.14.475 authorizes the city to impose a local option sales and use tax within the city, which is to be credited against the state sales and use taxes imposed under RCW 82.08.020(1) and 82.12.020, resulting in no net change in tax rate to the taxpayer.

C.    The city has reported to the Department of Revenue (“DOR”) and to CERB that the state has benefited through the receipt of State Excise Tax Allocation Revenues and State Property Tax Allocation Revenues, in accordance with RCW 82.14.475(6)(a)(ii). A copy of that report is attached as Exhibit A to the ordinance codified in this chapter.

D.    By Resolution No. 1242, adopted on September 15, 2009, the city selected a maximum rate of tax under RCW 82.14.475, which rate is not to exceed 0.001616 (0.1616 percent).

E.    The city council finds that the city has satisfied all prerequisites to imposing the LIFT Tax and receiving the State Contribution, including, without limitation, the conditions set forth in RCW 39.102.040 and 82.14.475.

F.    Prior to July 1, 2014, the city intends to incur general indebtedness, and to issue bonds, pursuant to RCW 39.102.150, in a maximum principal amount of approximately $30,000,000 to finance the Public Improvements (the “LIFT Bonds”). The city intends to retire such indebtedness in whole or in part from the tax revenues received under RCW 82.14.475 and dedicates such revenues to that purpose.

G.    State-Shared Sales and Use Tax Imposed as of July 1, 2014. The sales and use tax authorized under RCW 82.14.475 is imposed as of July 1, 2014, as follows in the rest of this chapter. (Ord. 2132 § 2, 2013).

3.19.030 Effective date and duration.

The sales and use tax authorized by this chapter shall be imposed and become effective as of July 1, 2014. The tax imposed under this chapter expires the earlier of the date that the LIFT Bonds are retired or July 1, 2039, the date that is 25 years after the tax is first imposed. (Ord. 2132 § 3, 2013).

3.19.040 Tax rate.

The tax rate shall initially be set at 0.1616 percent of the selling price (in the case of a sales tax) or value of the article used (in the case of a use tax). The tax rate may be adjusted by ordinance of the city council from time to time so that it is set at the rate reasonably necessary to receive the state contribution over 10 months, in accordance with RCW 82.14.475(3)(b), but shall not exceed the rate established by Resolution No. 1242 of the city. (Ord. 2132 § 4, 2013).

3.19.050 Use of LIFT tax receipts.

In accordance with RCW 39.102.195, receipts of the LIFT Tax may be applied either to provide for the payment of debt service on the LIFT Bonds or to pay Public Improvement costs on a pay-as-you-go basis, or both. The city hereby dedicates such tax receipts to repayment of the LIFT Bonds. (Ord. 2132 § 5, 2013).

3.19.060 Additional statutory requirements.

A.    In accordance with RCW 82.14.475(7):

1.    The LIFT Tax authorized by this chapter shall first be imposed on July 1, 2014, which is the first day of a state fiscal year.

2.    The cumulative amount of LIFT Tax distributions received by the city in any state fiscal year shall not exceed the amount of the State Contribution to the city.

3.    The LIFT Tax shall cease to be distributed to the city for the remainder of any state fiscal year in which:

a.    The amount of tax received by the city equals the amount of the State Contribution; or

b.    The amount of revenue distributions to all Sponsoring and Cosponsoring Local Governments from taxes imposed under RCW 82.14.475 equals the Annual State Contribution Limit; or

c.    The amount of LIFT Tax distributions received by the city equals $1,000,000.

4.    With respect to calculation of the State Contribution under RCW 39.102.020(29)(b) and (c), neither Local Excise Tax Allocation Revenues nor the Local Property Tax Allocation Revenues may constitute more than 80 percent of the total local funds. This requirement applies beginning January 1st of the fifth calendar year after the calendar year in which the sponsoring local government begins allocating local excise tax allocation revenues under RCW 39.102.110.

B.    The LIFT tax shall be distributed again, should it cease to be distributed for any of the reasons provided in subsection (A)(3) of this section, at the beginning of the next state fiscal year, subject to the restrictions in RCW 82.14.475.

C.    Any revenue generated by the LIFT Tax in excess of the amounts specified in subsection (A)(3) of this section shall belong to the state of Washington.

D.    In accordance with RCW 82.14.475(11), if the city fails to comply with RCW 39.102.140, no tax will be distributed in the subsequent fiscal year until such time as the city complies with the reporting requirement and DOR calculates the State Contribution amount for such fiscal year. (Ord. 2132 § 6, 2013).

3.19.070 Delivery of ordinance.

The city clerk is directed to cause a certified copy of the ordinance codified in this chapter to be delivered to DOR, CERB and all other public officers or agencies required by law to receive a copy of the ordinance codified in this chapter. (Ord. 2132 § 7, 2013).

3.19.080 Ratification.

All actions heretofore taken in furtherance thereof and not inconsistent with the provisions of this chapter are hereby ratified and confirmed in all respects. (Ord. 2132 § 8, 2013).

3.19.090 Severability.

If any provision of this chapter shall be declared by any court of competent jurisdiction to be invalid, then such provision shall be null and void and shall be separable from the remaining provisions of this chapter and shall in no way affect the validity of the other provisions of this chapter, of any bonds issued in anticipation of receipt of distributions from LIFT Taxes or of the use of Local Infrastructure Financing Tool to finance the Public Improvements. (Ord. 2132 § 9, 2013).