AN ACT Relating to public works financing; amending RCW 82.02.030, 82.16.020, and 82.20.010; adding a new chapter to Title 43 RCW; adding a new section to chapter 82.08 RCW; creating a new section; repealing RCW 43.63A.200, 43.79.450, and 43.79.452; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. LEGISLATIVE FINDINGS AND POLICY. The legislature finds that there exists in the state of Washington over four billion dollars worth of critical projects for the planning, acquisition, construction, repair, replacement, rehabilitation, or improvement of streets and roads, bridges, water systems, and storm and sanitary sewage systems. The December, 1983 Washington state public works report prepared by the planning and community affairs agency documented that local governments expect to be capable of financing over two billion dollars worth of the costs of those critical projects but will not be able to fund nearly half of the documented needs. It is the policy of the state of Washington to encourage self-reliance by local governments in meeting their public works needs and to assist in the financing of critical public works projects by making loans, financing guarantees, and technical assistance available to local governments for these projects.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.

(1) "Board" means the public works board created in section 3 of this act.

(2) "Department" means the department of community development.

(3) "Financing guarantees" means the pledge of money in the public works assistance account, or money to be received by the public works assistance account, to the repayment of all or a portion of the principal of or interest on obligations issued by local governments to finance public works projects.

(4) "Local governments" means cities, towns, counties, special purpose districts, and any other municipal corporations or quasi-municipal corporations in the state excluding school districts and port districts.

(5) "Public works project" means a project of a local government for the planning, acquisition, construction, repair, reconstruction, replacement, rehabilitation, or improvement of streets and roads, bridges, water systems, or storm and sanitary sewage systems.

(6) "Technical assistance" means training and other services provided to local governments to (a) help such local governments plan, apply, and qualify for loans and financing guarantees from the board and (b) help local governments improve their ability to plan for, finance, acquire, construct, repair, replace, rehabilitate, and maintain public facilities.

NEW SECTION. Sec. 3. PUBLIC WORKS BOARD CREATED. (1) The public works board is hereby created.

(2) The board shall be composed of thirteen members appointed by the governor for terms of four years, except that five members initially shall be appointed for terms of two years. The board shall include: (a) Three members, two of whom shall be elected officials and one shall be a public works manager, appointed from a list of at least six persons nominated by the association of Washington cities or its successor; (b) three members, two of whom shall be elected officials and one shall be a public works manager, appointed from a list of at least six persons nominated by the Washington state association of counties or its successor; (c) three members appointed from a list of at least six persons nominated jointly by the Washington state association of water districts and the Washington state association of sewer districts or their successors; and (d) four members appointed from the general public. In appointing the four general public members, the governor shall endeavor to balance the geographical composition of the board and to include members with special expertise in relevant fields such as public finance, architecture and civil engineering, and public works. The governor shall appoint one of the general public members of the board as chair. The term of the chair shall coincide with the term of the governor.

(3) Staff support to the board shall be provided by the department.

(4) Members of the board shall receive no compensation but shall be reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

(5) If a vacancy on the board occurs by death, resignation, or otherwise, the governor shall fill the vacant position for the unexpired term. Each vacancy in a position appointed from lists provided by the associations under subsection (2) of this section shall be filled from a list of at least three persons nominated by the relevant association or associations. Any members of the board, appointive or otherwise, may be removed by the governor for cause in accordance with RCW 43.06.070 and 43.06.080.

NEW SECTION. Sec. 4. GENERAL POWERS OF THE BOARD. The board may:

(1) Accept from any state or federal agency, loans or grants for the planning or financing of any public works project and enter into agreements with any such agency concerning the loans or grants;

(2) Provide technical assistance to local governments;

(3) Accept any gifts, grants, or loans of funds, property, or financial or other aid in any form from any other source on any terms and conditions which are not in conflict with this chapter;

(4) Adopt rules under chapter 34.04 RCW as necessary to carry out the purposes of this chapter;

(5) Do all acts and things necessary or convenient to carry out the powers expressly granted or implied under this chapter.

NEW SECTION. Sec. 5. PUBLIC WORKS FINANCING POWERS. In order to aid the financing of public works projects, the board may:

(1) Make low-interest or interest-free loans to local governments from the public works assistance account or other funds and accounts for the purpose of assisting local governments in financing public works projects. The board may require such terms and conditions and may charge such rates of interest on its loans as it deems necessary or convenient to carry out the purposes of this chapter. Money received from local governments in repayment of loans made under this section shall be paid into the public works assistance account for uses consistent with this chapter.

(2) Pledge money in the public works assistance account, or money to be received by the public works assistance account, to the repayment of all or a portion of the principal of or interest on obligations issued by local governments to finance public works projects. The board shall not pledge any amount greater than the sum of money in the public works assistance account plus money to be received from the payment of the debt service on loans made from that account, nor shall the board pledge the faith and credit or the taxing power of the state or any agency or subdivision thereof to the repayment of obligations issued by any local government.

(3) Create such subaccounts in the public works assistance account as the board deems necessary to carry out the purposes of this chapter.

(4) Provide a method for the allocation of loans and financing guarantees and the provision of technical assistance under this chapter.

All local public works projects aided in whole or in part under the provisions of this chapter shall be put out for competitive bids. The competitive bids called for shall be administered in the same manner as all other public works projects put out for competitive bidding by the local governmental entity aided under this chapter.

NEW SECTION. Sec. 6. PRIORITIES FOR LOANS AND PLEDGES. The board shall set up a system of priorities it will use in making loans and providing financial guarantees and technical assistance under this chapter. Top priority will be given to (1) projects of local governments that have developed and implemented a financial plan to assure the continued funding for the repair and maintenance of existing public works; (2) projects of local governments that are contributing substantial local funds, but distressed areas with high unemployment may have a lower contribution requirement; and (3) projects that involve existing public works as defined in section 2(5) of this act. Additional factors to be considered include:

(a) The level of need of state assistance to each local government receiving such assistance;

(b) Public works projects that serve a number of communities or are funded by two or more local governments to share the costs of the assisted public works projects;

(d) The occurrence of natural disasters that create the need for assistance for public works projects;

(e) The existence of federal and state projects that create the need for assistance for public works projects;

(f) The need in a community to attract new employers, expand existing employers, or otherwise and the need for economic development and recognition of such need by the department of commerce and economic development which results in a community economic revitalization board allocation; and

(g) Such other criteria as the board deems appropriate.

In issuing rules setting forth the method of weighing the criteria set forth in this section, and selecting public works projects for assistance, the board shall endeavor to provide clear and understandable rules that will indicate to local governments the likelihood of receiving assistance from the board on particular public works projects.

NEW SECTION. Sec. 7. PUBLIC WORKS ASSISTANCE ACCOUNT. The public works assistance account is hereby established in the general fund. 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 to give financial guarantees in accordance with this chapter.

NEW SECTION. Sec. 8. RECORDS, AUDITS, AND REPORTS. The board shall keep proper records of accounts and shall be subject to audit by the state auditor. Biennial reports on the activities of the board shall be made by the chair to the governor and the legislature.

NEW SECTION. Sec. 9. DEPOSIT OF MONEYS. The department of revenue shall deposit into the public works assistance account all moneys received on taxable activities occurring after the effective date of this act from the imposition on consumers under RCW 82.04.190(6) of the taxes under chapters 82.08 and 82.12 RCW on the sales or use of articles of tangible personal property which become or are to become an ingredient or component of new or existing buildings or other structures under, upon, or above real property of or for the United States, or any instrumentality thereof.

NEW SECTION. Sec. 10. A new section is added to chapter 82.08 RCW to read as follows:

The tax imposed under this chapter shall apply to local public works projects as defined in section 2 of this act any part of which are funded under chapter 43.__ RCW (sections 1 through 9 of this act) and the taxes collected on the public works projects shall be deposited in the public works assistance account created in section 7 of this act.

Sec. 11. Section 31, chapter 35, Laws of 1982 1st ex. sess. as last amended by section 6, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.02.030 are each amended to read as follows:

(1) The rate of the additional taxes under RCW 54.28.020(2), 54.28.025(2), 66.24.210(2), 66.24.290(2), 82.04.2901, 82.16.020(2), ((~~82.20.010(2),~~)) 82.26.020(2), 82.27.020(5), 82.29A.030(2), 82.44.020(5), and 82.45.060(2) shall be seven percent;

(2) The rate of the additional taxes under RCW 82.08.150(4) shall be fourteen percent;

(3) The rate of the additional taxes under RCW 82.24.020(2) shall be fifteen percent; and

(4) The rate of the additional taxes under RCW 48.14.020(3) shall be four percent.

Sec. 12. Section 82.16.020, chapter 15, Laws of 1961 as last amended by section 13, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.16.020 are each amended to read as follows:

(1) There is levied and there shall be 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 shall be equal to the gross income of the business, multiplied by the rate set out after the business, as follows:

(a) Railroad, express, railroad car, water distribution, garbage, light and power, and telegraph businesses: Three and six-tenths percent;

(b) Gas distribution business: Three and six-tenths percent;

(d) Vessels under sixty-five feet in length, except tugboats, operating upon the waters within the state: Six-tenths of one percent;

(e) Motor transportation and tugboat businesses, and all public service businesses other than ones mentioned above: One and eight-tenths of one percent;

(f) Sewerage collection businesses: Two and one-half percent.

(2) 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.

(3) Fifty-four percent of the moneys collected under subsection (1) of this section on water distribution and garbage businesses shall be deposited in the public works assistance account created in section 7 of this 1985 act.

(4) Sixty-three percent of the moneys collected under subsection (1) of this section on sewerage collection businesses shall be deposited in the public works assistance account created in section 7 of this 1985 act.

Sec. 13. Section 82.20.010, chapter 15, Laws of 1961 as last amended by section 14, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.20.010 are each amended to read as follows:

(1) There is levied and there shall be collected a tax upon conveyances as follows: On any deed, instrument, or writing (unless deposited in escrow before May 1, 1935), whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser, or any other person by his direction, when the consideration or value of the interest or property conveyed, exclusive of the value of any lien or encumbrance remaining thereon at the time of sale, exceeds one hundred dollars and does not exceed five hundred dollars or fractional part thereof, ((~~fifty cents~~)) one dollar; and for each additional five hundred dollars or fractional part thereof, ((~~fifty cents~~)) one dollar.

(2) ((~~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.~~)) Forty-six and one-half percent of the moneys collected under this section shall be deposited in the public works assistance account created in section 7 of this 1985 act.

(3) This section shall not apply to any instrument or writing, given to secure a debt, nor to any conveyance to the state.

NEW SECTION. Sec. 14. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 15. REPEALER. The following acts or parts of acts are each repealed:

(1) Section 1, chapter 244, Laws of 1984 and RCW 43.63A.200;

(2) Section 2, chapter 244, Laws of 1984 and RCW 43.79.450; and

(3) Section 3, chapter 244, Laws of 1984 and RCW 43.79.452.

NEW SECTION. Sec. 16. CAPTIONS. As used in this act, section captions constitute no part of the law.

NEW SECTION. Sec. 17. CODIFICATION. Sections 1 through 9 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 18. EFFECTIVE DATE. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect June 1, 1985.