wa-law.org > bill > 2025-26 > SB 5804 > Substitute Bill
The legislature finds that habitat loss, both in quantity and quality, has been identified as one of the greatest risks to survival for salmon and steelhead populations. Hydropower dams and unpassable road culverts block large areas of former salmon habitat. Restoration of habitat is essential for the recovery of salmon and steelhead populations across the west coast and an obligation of the state under the federal injunction issued in United States v. Washington.
The federal court found that the state has a treaty-based duty to refrain from building or operating culverts under state-maintained roads that hinder salmon passage. The cost of reparations is estimated to exceed $5,000,000,000, which cannot be absorbed in current budgets.
The legislature acknowledges both a moral and legal obligation to address salmon habitat and therefore intends to invoke an exceptional remedy to create special tax revenue bonds funded by a tax on light and power utility businesses. The tax is dedicated to improving salmon and steelhead recovery and habitat restoration by addressing projects identified in response to the federal injunction. While the new tax is created to evidence the legislature's commitment to dedicate these funds for the duration of bond repayment, the tax is structured to ensure it will result in no additional obligation to the taxpayer.
There is levied and collected from every person a tax for the act or privilege of engaging within this state in any one or more of the businesses herein mentioned. The tax is equal to the gross income of the business, multiplied by the rate set out after the business, as follows:
Express, sewerage collection, and telegraph businesses: Three and six-tenths percent;
Light and power business: 1.741 percent;
Gas distribution business: Three and six-tenths percent;
Urban transportation business: Six-tenths of one percent;
Vessels under sixty-five feet in length, except tugboats, operating upon the waters within the state: Six-tenths of one percent;
Motor transportation, railroad, railroad car, and tugboat businesses, and all public service businesses other than ones mentioned above: One and eight-tenths of one percent;
Water distribution business: Four and seven-tenths percent;
Log transportation business: One and twenty-eight one- hundredths percent. The reduced rate established in this subsection (1)(h) is not subject to the ten-year expiration provision in RCW 82.32.805(1)(a).
An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section.
There is levied and collected from every person engaging within this state in any light and power business, a tax imposed at the rate of 2.01053 percent, multiplied by the gross income of the business.
The moneys collected from the tax pursuant to this section must be deposited in the federal injunction salmon habitat restoration account created in section 11 of this act and must be used exclusively for the purposes of mitigating the impact of fish passage barriers and improving salmon and steelhead recovery and habitat restoration as provided in section 11(2) of this act.
Taxes collected under this chapter must be held in trust until paid to the state. Except as otherwise provided in this subsection (1), taxes received by the state must be deposited in the general fund for general purpose expenditures. Any person collecting the tax who appropriates or converts the tax collected is guilty of a gross misdemeanor if the money required to be collected is not available for payment on the date payment is due. If a taxpayer fails to pay the tax imposed by this chapter to the person charged with collection of the tax and the person charged with collection fails to pay the tax to the department, the department may, in its discretion, proceed directly against the taxpayer for collection of the tax.
The tax is due from the taxpayer within twenty-five days from the date the taxpayer is billed by the person collecting the tax.
The tax is due from the person collecting the tax at the end of the tax period in which the tax is received from the taxpayer. If the taxpayer remits only a portion of the total amount billed for taxes, consideration, and related charges, the amount remitted must be applied first to payment of the solid waste collection tax and this tax has priority over all other claims to the amount remitted.
The amounts received for the tax imposed on each sale of real property under RCW 82.45.060 must be deposited as follows:
1.4 percent must be deposited into the city-county assistance account created in RCW 43.08.290;
84.6 percent must be deposited into the general fund; and
The remainder must be deposited into the education legacy trust account created in RCW 83.100.230.
(1) The public works assistance account is hereby established in the state treasury. Money may be placed in the public works assistance account from the proceeds of bonds when authorized by the legislature or from any other lawful source. Money in the public works assistance account shall be used to make loans and grants and to give financial guarantees to local governments for public works projects. Moneys in the account may also be appropriated or transferred to the water pollution control revolving fund and the drinking water assistance account to provide for state match requirements under federal law. Moneys in the account may be transferred to the move ahead WA account to provide support of public works projects funded in the move ahead WA program. Not more than 20 percent of the biennial capital budget appropriation to the public works board from this account may be expended or obligated for preconstruction loans and grants, emergency loans and grants, or loans and grants for capital facility planning under this chapter. Not more than 10 percent of the biennial capital budget appropriation to the public works board from this account may be expended or obligated as grants for preconstruction, emergency, capital facility planning, and construction projects. During the 2017-2019 and 2019-2021 fiscal biennia, the legislature may appropriate moneys from the account for activities related to rural economic development, the growth management act, the aviation revitalization loan program, the community economic revitalization board broadband program, and the voluntary stewardship program. During the 2021-2023 and 2023-2025 and 2025-2027 fiscal biennia, the legislature may appropriate moneys from the account for activities related to the community aviation revitalization board. During the 2019-2021 fiscal biennia, the legislature may direct the state treasurer to make transfers of moneys in the public works assistance account to the education legacy trust account. During the 2019-2021 and 2021-2023 fiscal biennia, the legislature may direct the state treasurer to make transfers of moneys in the public works assistance account to the statewide broadband account. The legislature may appropriate moneys from the public works assistance account for activities related to the voluntary stewardship program, rural economic development, and the growth management act. During the 2021-2023 biennium, the legislature may appropriate moneys from the account for projects identified in section 1033, chapter 296, Laws of 2022. During the 2023-2025 fiscal biennium, the legislature may appropriate moneys from the public works assistance account for an evaluation of the costs of relocating public utilities related to fish barrier removal projects. During the 2023-2025 fiscal biennium, the legislature may appropriate moneys from the account for activities related to developing a data dashboard to map investments made by the public works board, the department of commerce, the department of health, the department of ecology, the department of transportation, the transportation improvement board, and by board partners to the system improvement team created in RCW 43.155.150.
The federal injunction salmon habitat bond retirement account is created in the state treasury. Moneys in the account must be used only for the payment of principal and interest on bonds authorized in section 8 of this act in accordance with the state finance committee's bond proceedings, and may be spent only after appropriation.
The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed to meet the bond retirement and interest requirements on the bonds authorized in section 8 of this act in accordance with the state finance committee's bond proceedings.
The state treasurer shall withdraw from the federal injunction salmon habitat restoration account created in section 11 of this act and deposit in the federal injunction salmon habitat bond retirement account created in this section such amounts, and at such times, as are required by the state finance committee's bond proceedings.
The state treasurer may establish separate subaccounts in the account to facilitate payment of the principal and interest on the bonds in accordance with the bond proceedings.
The state finance committee may issue special tax revenue bonds in amounts not to exceed the sum of $5,000,000,000, or as much thereof as may be necessary, payable from receipts from the federal injunction salmon habitat tax imposed in section 3 of this act and deposited into the federal injunction salmon habitat bond retirement account created in section 7 of this act to finance projects as described in section 11(2) of this act, and all costs incidental thereto. Proceeds from the sale of bonds must be deposited in the federal injunction salmon habitat restoration account created in section 11 of this act.
Bonds authorized in this section may be sold at such price as the state finance committee determines. Bonds authorized in this section may not be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.
The state finance committee may determine and include in any resolution authorizing the issuance of any bonds authorized by this chapter such terms, provisions, covenants, and conditions as it may deem appropriate in order to assist with the marketing and sale of the bonds, confer rights upon the owners of bonds, and safeguard rights of the owners of bonds, including, but not limited to:
Provisions that the bonds are payable solely from and secured solely by revenues from the tax imposed in section 3 of this act and received in the federal injunction salmon habitat bond retirement account created in section 7 of this act;
The conditions that must be satisfied before the issuance of any additional bonds that are to be payable from and secured by the federal injunction salmon habitat bond retirement account created in section 7 of this act on an equal basis with previously issued and outstanding bonds payable from the federal injunction salmon habitat bond retirement account created in section 7 of this act;
Provisions regarding reserves and credit enhancements, if any; and
Whether bonds may be issued as tax-exempt bonds or must be issued as taxable bonds under the applicable provisions of the federal internal revenue code. If the state treasurer deems it necessary to issue the bonds as taxable bonds in order to comply with federal internal revenue service regulations pertaining to the use of nontaxable bond proceeds, the proceeds of such taxable bonds must be deposited into the account. The state treasurer shall submit written notice to the director of financial management if the state treasurer determines that any such bonds should be issued as taxable bonds.
The authorization to issue bonds provided under section 8 of this act expires upon the full authorization having been issued and dispersed.
On an annual basis, and in compliance with RCW 43.01.036, the state treasurer may submit a report to the legislature that provides recommendations on the level of issuances over the dispersal period based on updated revenue forecasts, market factors, and fiscal needs. Bond issuance must be structured such that no debt service obligations remain past December 31, 2075.
Bonds authorized under this chapter are not a general obligation of the state and the full faith, credit, and taxing powers of the state are not pledged for their payment. Each bond issued under the authority of this chapter must distinctly state that payment or redemption of the bond and payment of the interest and any premium thereon is payable solely from and secured solely by a pledge of the revenues derived from the special tax imposed in section 3 of this act and received in the federal injunction salmon habitat restoration account created in section 11 of this act, and that such a bond is not a general obligation of the state. The legislature agrees to continue to impose this special tax at rates at least sufficient to pay and secure payment of debt service on the bonds and pledges to appropriate revenues derived from the tax to pay debt service on the bonds when due, in accordance with the state finance committee's bond proceedings. The state finance committee shall include this agreement and pledge to owners with any bonds issued under this chapter. The owner of any bond or the trustee of the owner of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of pledged funds as directed in this chapter.
The federal injunction salmon habitat restoration account is created in the state treasury. Proceeds from the sale of bonds authorized in section 8 of this act must be deposited in the account. Moneys in the account may be spent only after appropriations and only for projects as described in subsection (2) of this section and for the payment of expenses incurred in the issuance and sale of the bonds authorized by section 8 of this act.
Moneys collected from the special tax imposed in section 3 of this act and deposited in the federal injunction salmon habitat restoration account must first be used to pay and secure payment of principal and interest on bonds authorized in section 8 of this act in accordance with the state finance committee's bond proceedings and otherwise be used solely for fish habitat restoration and fish passage barrier removal projects identified in response to the federal court injunction issued under United States v. Washington. Funds may be used to address a combination of local and state habitat restoration projects if a mediation or settlement agreement identifies the projects as necessary to maximize impacts to salmon and steelhead population.
The state finance committee may issue special tax revenue bonds to refund outstanding bonds issued under this chapter, including the payment of any redemption premiums on the bonds and any interest accrued to or due to accrue to the first redemption date after delivery of the refunding bonds. The proceeds of the refunding bonds may, at the discretion of the committee, be applied to the purchases or payment at maturity of the bonds to be refunded, or the redemption of the outstanding bonds on the first redemption date after delivery of the refunding bonds and may, until so used, be placed in escrow to be applied to the purchase, retirement, or redemption. Refunding bonds issued under this section must be issued and secured in the manner provided by the state finance committee.
If the Washington state supreme court finds that principal and interest payable with respect to the bonds authorized in section 8 of this act must be included when computing the aggregate debt allowed to be contracted by the state pursuant to Article VIII, section 1 of the state Constitution, sections 7 through 10 and 12 of this act expire on the date of the Washington state supreme court's decision. The office of the state treasurer shall provide notice to the office of the code reviser of the Washington state supreme court's decision.
Sections 2 through 5 of this act take effect January 1, 2026.