HOUSE BILL REPORT

HB 1014

BYRepresentative Haugen

Allowing certain public corporations to use local improvement district financing.

House Committe on Local Government

Majority Report:  Do pass.  (13)

      Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Beck, Bumgarner, Ferguson, Hine, Madsen, Nealey, Nelson, Nutley, Rayburn, L. Smith and Zellinsky.

House Staff:Steve Lundin (786-7127)

AS PASSED HOUSE MARCH 13, 1987

BACKGROUND:

Cities, towns, and counties are authorized to create public corporations to carry out federal programs, improve governmental efficiencies, or improve the living conditions in urban areas. Under this grant of authority, Seattle has created several public corporations, including a public corporation to operate the Pike Place Market.

Cities and towns are authorized to finance a wide variety of public improvements with local improvement districts (LID's) if they are of a special benefit to the nearby property.  The determination of whether an improvement confers special benefits to nearby property is a judicial test.  Our state supreme court has held that a library can not be financed with a LID because the benefits of a library are general and not special.  The court in that decision cited other authorities indicating that the following may not be financed with a LID: war memorials, public auditoriums, a court house, and public school buildings.

Legislation was enacted in 1985 allowing local governments that can create LID's to jointly perform LID's, have one local government create a LID to finance another local government's public improvements, or have a local government construct or acquire a public improvement for another local government.

SUMMARY:

A finding is made that public improvements owned and operated by public corporations, that confer special benefits on property, should be able to be financed by local improvement districts (LID's).  An implication is made that museum, cultural, or arts facilities confer special benefit to property.

Cities and towns are authorized to use LID's to finance facilities of any value for public corporations.  Cities and towns are authorized to construct facilities for public corporations, that are financed by LID's, using their own work forces if the lowest bid for the work that was received exceeds the preliminary cost estimate for the project by ten or more percent.  The legal, financial and other expenses incurred by a public corporation that relate to a public improvement may be included as part of special assessment.

Public corporations are authorized to create joint LID's with local governments, have another local government create an LID for its projects, and allow another local government construct its improvements.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Gerry Johnson, Museum Development Authority of Seattle.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The proposed Seattle Art Museum in downtown will be owned by a public corporation created by Seattle.  This bill will allow a portion of the costs of the museum to be financed with a LID.  Property owners in the area requested this.  It is proposed that $2 to $3 million, out of a total cost of $75 - $80 million, will be generated by a LID.  A test case will be necessary to determine if an art museum confers special benefit, instead of general benefit, to adjacent properties.

House Committee - Testimony Against:      LID's are controversial They are difficult to explain to property owners.