ORD 13-742ORDINANCE NO. 13-742
AN ORDINANCE of the City of Federal Way, Washington, imposing
a local sales and use tax to be Credited against the State Sales and Use
Tax for purposes of utilizing Local Infrastructure Financing under
Chapter 39.102 of the RCW; and providing for other matters
properly relating thereto.
WHEREAS, in 2006 the State Legislature authorized a Local Infrastructure Financing
Tool ("LIFT Tax") program as set forth in Chapter 39.102 of the RCW which authorizes the
imposition of local sales and use tax to be credited against the taxes otherwise due to the State
under Chapters 82.08 and 82.12 of the RCW, resulting in no net change in tax rate to the
taxpayer;
WHEREAS, on June 19, 2007 the City Council the adopted Ordinance No. 07-555
establishing a Revenue Development Area ("RDA") as required under RCW 39.102.060, for the
purpose of financing public improvements located within the RDA; and
WHEREAS, on September 13, 2007 Community Economic Revitalization Board (the
"Boaxd") approved the City's application granting a project award of up to $1 million annually in
State contribution of sales and use tax for up to 25 years; and
WHEREAS, on August 4, 2009 the City Council adopted Resolution No. 09-552
selecting 0.094% as the rate of sales and use tax to be imposed under RCW 82.14.475; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, DO ORDAIN AS FOLLOWS:
Section 1. Definitions. Capitalized terms not otherwise defined in this ordinance have the
meanings given in RCW 39.102.020, or as hereafter amended.
Section 2. Findin�s. The City Council of the City of Federal Way, Washington (the
"City"), hereby makes the following findings and determinations:
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2.1 Based on an analysis of the businesses in the RDA, the City has
determined that State Excise T� Allocation Revenues are $1,534,594 and the State
Property Tax Allocation Revenues for 2012 are estimated at $15,000.
2.2 The City Council iinds that the City has satisfied all prerequisites for
imposing the LIFT Taac and for receiving the State Contribution, including without
limitation, the conditions set forth in RCW 39.102.040 and RCW 82.14.475.
2.3 Prior to June 30, 2018, the City may incur indebtedness via general
obligation bonds, pursuant to RCW 39.102.150 to finance the Public Improvements.
Section 3. State-Shared Sales and Use Tax ("LIFT Tax") imposed as of July 1, 2013.
The sales and use tax authorized under RCW 82.14.475 is imposed as of July l, 2013 as follows:
3.1 Effective Date and Duration. The sales and use tax authorized by this
ordinance shall be imposed and become effective as of July 1, 2013. It shall expire when
all indebtedness issued under the authority of RCW 39.102.150 is retired and all other
contractual obligations relating to the financing of public improvements under RCW
39.102 are satisfied, but not later than July 1, 2038, which is twenty-five years after the
date the LIFT Tax is first imposed.
3.2 Rate. The tax rate shall initially be set at 0.094% 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 resol�tion of the City Council from time to time so that it is set at the
rate reasonably necessary to receive the state contribution over ten months, in accordance
with RCW 82.14.475(3)(b), but shall not exceed the rate of 0.094% established by
Resolution No. 09-552.
3.3 Use of LIFT Tax Receipts. Subject to RCW 39.102.195, receipts of the
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LIFT Tax may be applied either to provide for the payment of debt service on bonds
issued under RCW 39.102.150 by the City or to pay public improvement costs on a pay-
as-you-go basis, or both.
3.4 Other Statutory Rec�uirements.
1) In accordance with RCW 82.14.475(7):
a) The LIFT Ta�c authorized by this ordinance shall first be imposed on
July 1, 2013, which is the first day of the State fiscal year.
b) The cumulative amount of LIFT Tax distributions received by the City
in any fiscal year shall not exceed the amount of the State contribution.
c) The LIFT Tax shall cease to be distributed to the City for the
remainder of any State fiscal year in which either:
i. The amount of tax received by the City equals $1 Million, or
the amount of State Contribution as defined in RCW
��9.102.020(28).
ii. The amount of revenue from taxes imposed under this section
by ail sponsoring and cosponsoring local governments equals
the annual state contribution limit; or
iii. The amount of t� received by the sponsoring local
government equals the amount of project awarded granted in
the approval notice described in RCW 39.102.040;
d) Neither the Local Excise Tax Allocation Revenues nor the Local
Property Tax allocation revenues may constitute more than 80% of the
total local funds as described in RCW 39.102.020(28)(b). This
Ordinance No. 13-742 Page 3 of 6
requirement applies beginning January 1, 2018, which is 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.
2) The LIFT Tax shall be distributed again, should it cease to be distributed
for any reason provided in (c) of this subsection 3.4, at the beginning of
July lst, the next State fiscal year, subject to the restrictions in RCW
82.14.475.
3) Any revenue generated by the LIFT Tax in excess of the amounts
specified in (1)(c) of this subsection 3.4 shall belong to the State of
Washington.
4) In accordanee 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 State fiscal
year until such time as the City complies and the Department calculates
the state contribution amount for such State's fiscal year.
5) In accordance with RCW 82.14.475(16), the LIFT Tax shall cease to be
imposed if the City fails to issue indebtedness pursuant to RCW
39.102.150, or fails to commence construction on public improvements,
by June 30, 2018, which is the fifth fiscal year in which the LIFT Tax is
imposed.
Section 4. Severabilitv. Should any section, subsection, paragraph, sentence, clause, or
phrase of this chapter, or its application to any person or situation, be declared unconstitutional
or invalid for any reason, such decision shall not affect the validity of the remaining portions of
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this chapter or its application to any other person or situation. The City Council of the City of
Federal Way hereby declares that it would have adopted this chapter and each section,
subsection, sentence, clauses, phrase, or portion thereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 5. Corrections. The City Clerk and the codifiers of this ordinance are authorized
to make necessary corrections to this ordinance including, but not limited to, the correction of
scrivener/clerical errors, references, ordinance numbering, section/subsection numbers and any
references thereto.
Section 6. Ratification. Any act consistent with the authority and prior to the effective
date of this ordinance is hereby ratified and affirmed.
Section 7. Effective Date. This ordinance shall take effect and be in force thirty (30)
days from and after its passage and publication, as provided by law.
PASSED by the City Council of the City of Federal Way this 21st day of May, 2013.
CITY OF FEDERAL WAY
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ATTEST:
CITY CLERK, CARO MCNEI LY, CMC
Ordinance No. 13-742 Page S of 6
APPROVED AS TO FORM:
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CITY ATTORNEY, PATRICIA A. RICHARDSON
FILED WITH THE CITY CLERK: 04-30-2013
PASSED BY THE CITY COUNCIL: OS-21-2013
PUBLISHED: OS-24-2013
EFFECTIVE DATE: 06-23-2013
ORDINANCE NO.: 13-742
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