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3040
Contract Transactions
PUGET SOUND NAVAL SHIPYARD
ANNEXATION - TAXES AS PART
ADMIN SVCS
MOU
OF
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03/24/1985 1=
12/31/2004 1=
02/15/2005 1=
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$0.00
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Insurance
Type . Amount
Amount
Begin Date
End Date
Review Date
Insurance Total
Insurance Review Date
PERMANENT RECORD - FILE CLASSIFICATION CHANGED
PLN 22-1 ANNEXATION CASE FILES (lAANNEX/P)
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PUGET SOUND NAVAL SHIPYARD
TAXES AS PART OF ANNEXATION
ADMIN SVCS
MOU
Insurance
Type Amount
Amount
Begin Date
End Date
Review Date
Insurance Total
Insurance Review Date
Comments
REVIEW DATE FOR TRACKING PURPOSES ONLY
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03/24/1985 +
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06/15/2006 +
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$0.00 +
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MEMORANDUM OF UNDERSTANDING
CITY OF BREMERTON WITH
THE PUGET SOUND NAVAL SHIPYARD AND THE NAVAL SUPPLY CENTER, PUGET SOUND
WHEREAS, the United States Navy has expressed an intention to petition
the City of Bremerton for annexation of Puget Sound Naval Shipyard and the
Naval Supply Center, Puget Sound into the City of Bremerton; and
WHEREAS, the City of Bremerton has accepted and concurred in the Notice
of Intention to Annex as set forth by the United States Navy; and
WHEREAS, the duties and responsibilities of the parties upon said
annexation are controlled by the laws of the United States and through those
laws, certain of the laws of the State of Washington; and
WHEREAS, the parties agree that this annexation supersedes all other
purported annexations of Puget Sound Naval Shipyard and the Naval Supply
Center, Puget Sound into the City limits of the City of Bremerton.
WHEREAS, the parties have reached an understanding as to the applica-
tion of said laws upon the annexation of Puget Sound Naval Shipyard and the
Naval Supply Center, Puget Sound into the City limits of the City of Bremerton;
and
WHEREAS, it is the intention of the parties that this Memorandum of
Understanding is enforceable between the parties and sets forth the respective
obligations of the parties; however, this agreement is not to be construed as
placing any legally impermissible limitations on the Petition for Annexation
WITNESSETH
That for the mutual covenants and promises set forth herein the City of
Bremerton, a municipal corporation (hereinafter referred to as "City") and the
United States Navy .by and through the Puget Sound Naval Shipyard and the Naval
Supply Center, Puget Sound (hereinafter referred Go as "Navy"), agree as
follows:
.S~CTION 1: General Nature of Annexation - The parties agree that
the effect of the proposed annexation will be limited to the ability of the
City to assess business and occupation (hereinafter B & O) and utility taxation
as well as amusement, admissions and gambling taxes, as consistent with appli-
cable federal and state law. In the event that any or all of the above enu-
merated taxes are replaced or repealed by the State of Washington, the City
shall have the ability to assess any substantially equivalent taxation, if
provided for by State law.
SECTION 2: B & 0 Taxation - On the effective date of the annexation
of Puget Sound Naval Shipyard and the Naval Supply Center, Puget Sound into the
City of Bremerton, the City is intending to levy a B & 0 tax upon the gross
receipts of all vendors doing business with Puget Sound Naval Shipyard and the
Naval Supply Center, Puget Sound. It is agreed between the parties that the
2
issues of who can be taxed and the amount of taxation are essentially between
the vendor doing business with Puget Sound Naval Shipyard and the Naval Supply
Center, Puget Sound and the City. Navy has no responsibility for collection of
said tax or enforcement of City of Bremerton taxation ordinances. Responsi-
bility for the collection and payment of tax rests with the City and those
vendors doing business with the Puget Sound Naval Shipyard and the Naval Supply
Center, Puget Sound.
SECTION 3: Scope of B & 0 Tax - U. S. Navy understands that the
City may levy a B & 0 tax upon those persons and/or businesses engaged in
business with Puget Sound Naval Shipyard, the Naval Supply Center, Puget Sound,
and the United States Navy in accordance with local, state and federal laws.
In order to levy and collect this tax, the applicable statutes and decisions
require that there be a sufficient nexus or connection between the City and the
local federal activity to allow that activity to be taxed. It is the City's
understanding that this nexus or connection is established where there is some
sort of physical presence by the vendor or person doing business with Puget
Sound Naval Shipyard and the Naval Supply Center, Puget Sound within the City
of Bremerton.
SECTION 4: Utility Tax - In addition to a B & 0 tax on contracts
for the supplying of goods and services to Puget Sound Naval Shipyard and the
Naval Supply Center, Puget Sound, there is also proposed a non-discriminatory
"utility" tax which will be levied upon the providers of utility services to
Puget Sound Naval Shipyard and the Naval Supply Center, Puget Sound. These
providers include, but are not limited to, suppliers of electrical power and
services, suppliers of telephone equipment and services, suppliers of natural
gas, cable television, and any and all other energy products, and any and all
other vendors subject to Bremerton's Utility Tax. It is expressly agreed and
understood by the parties that federal law prohibits the levying of the uttllty
tax upon the Bonneville Power Adminfstration which wholesales electrical power
to Puget Sound Naval Shtpyard and the Naval Supply Center, Puget Sound.
SECTION 5; Amusement, Admissions, and Gambling Tax - The City can
assess the following taxes upon vendors and/or contractors doing business
within the Puget Sound Naval Shipyard and the Naval Supply Center, Puget Sound
as follows:
a. /~usement - Levied upon coin operated amusement devices.
b. Admissions - Levied upon establishments charging admissions.
c. Gambling - Levied upon various gambling activities.
SECTION 6: Tax to be Prospective - It is understood as to all above
enumerated taxes that the City will tax those vendors doing business with Puget
Sound Naval Shipyard and the Naval Supply Center, Puget Sound for transactions
which are completed,)ubsequent to the effective date of annexation. The City
will not attempt to collect taxes for transactions which have been completed
prior to effective annexation date. Work which is in progress will be appor-
tioned or pro-rated so that only that work performed subsequent to the effec-
tive date of annexation will be subject to tax.
SECTION 7: Availability of Records - It is understood and agreed
that the City will be requesting and the Navy will be providing, to the extent
and frequency as mutually agreed, those entry and exit logs maintained at all
of the gates to and from Puget Sound Naval Shipyard and the Naval Supply
Center, Puget Sound. These logs will document and set forth persons and
businesses entering and exiting Puget Sound Naval Shipyard and the Naval Supply
Center, Puget Sound. The Navy will indicate to the City what request forms are
necessary in order to obtain these documents on a periodic basis. Costs of
reproducing said documents shall be borne by the City. The City agrees that it
will not make burdensome or excessive requests upon the Navy of documents or in
any other way increase any administrative burden as a result of annexation of
Puget Sound Naval Shipyard and the Naval Supply Center, Puget Sound.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
this day of 19~.
CITY OF BREMERTON
~IIESI:
.N TED ST^TES N^VY
-~ 2Yr~ninand~n~ Officer
Naval Supply Center, Puget Sound
vlf338/1
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