Governor signs Klicker bill to allow local governments to share certain tax revenue

Bipartisan legislation from Rep. Mark Klicker is set to become law after receiving the governor’s signature on Thursday.

House Bill 2428 will allow local governments to combine their resources by voluntarily entering into interlocal agreements to share a portion of general-purpose local government sales and use tax revenue.

“This is a good little bill on paper, but it will have a big impact in small cities and towns throughout Washington,” said Klicker, R-Walla Walla. “This legislation is important because it allows for local governments to share much-needed tax revenue. Walla Walla and College Place in my District are a perfect example. They work together on many projects and this bill will allow them to combine revenue for those projects.”

Under the bill, local governments or other public agencies will be able to enter an interlocal agreement by consenting to cooperatively conduct government activities or provide services. The agreement must include certain terms, such as the duration of the agreement, the precise organization of any entity created, the purpose of the agreement, how the undertaking will be financed, and how the agreement can be terminated.

In addition to the terms required to be included in any interlocal agreement, an agreement to share sales and use tax revenue must include the area or areas in which the agreement applies, if it is only applicable to revenue collected in certain areas. It must also include the amount or proportion of revenue to be shared and the mechanism for sharing it.

“This is an important change for many communities across the state, not just in rural areas,” added Klicker. “Currently, cities rely heavily on sales tax and neighboring cities and towns often have to compete for the same revenue. This bill removes that competition and allows for a joint pursuit of goals through voluntary interlocal agreements. This will help promote the combining of projects and the use of existing infrastructure and give a boost to smaller cities and towns throughout Washington.”

House Bill 2428 is schedule to take effect 90 days after adjournment of the 2024 legislative session.

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Washington State House Republican Communications
houserepublicans.wa.gov