FINAL BILL REPORT

SHB 1817

                                  C 179 L 88

BYHouse Committee on Transportation (originally sponsored by Representatives Hine, Patrick, Walk, Cantwell, Ferguson, Allen, Holland, May, P. King and Todd)

Facilitating public and private funding of local transportation improvements.

House Committe on Transportation

Senate Committee on Transportation

SYNOPSIS AS ENACTED

BACKGROUND:

Prior to the enactment of Engrossed House Bill 396 in 1987, cities and counties were limited in their authority to address regional traffic needs in a comprehensive manner, particularly in areas of rapid economic growth. In addition, those agencies were also limited in their ability to require of developers in an area, financial assistance to fund offsite transportation improvements necessitated by their developments.  State law prohibited the imposition of development fees; however voluntary agreements to mitigate the effect of developments were, and still are, allowed.  The principal method local governments use to address off-site mitigation is the State Environmental Policy Act.  Local governments approve development applications only after provision is made for off-site impacts to be mitigated.

The Legislature in 1987 authorized cities and counties to establish transportation benefit districts (TBDs) to fund those capital improvements to city streets, county roads, and state highways, necessitated by economic development.  Districts are authorized to address road problems crossing local government jurisdictional boundaries.  Several funding sources were authorized for TBD projects including Local Improvement Districts (LIDs), property tax levies, general obligation bond authority, and the imposition of impact fees.

At the same time the TBD statute was being enacted, a task force of the King County Economic Development Council was drafting legislation to authorize cities and counties to implement programs for joint public and private funding of transportation improvements required because of development and growth.  The results of that effort have been incorporated into the "Local Transportation Act of 1988."

Certain local governments currently require "no protest" agreements from property owners to facilitate formation of LIDs or Road Improvement Districts (RIDs).  These agreements allow property owners to waive their right to protest the formation of the district.  There is no requirement that these agreements be recorded, nor is a time limit specified for the agreements.

Private parties that initiate the formation of LIDs and RIDs are at risk for the costs of preparing engineering plans, surveys, studies and other expenses.  Similarly, there is currently no provision for reimbursement by property owners in an LID or an RID to other property owners who agree to fund their share of a project.

A city or county may contract with real estate owners for improvement of streets that the owners elect to install as a prerequisite to development.  The contract may provide for the partial reimbursement by other property owners in an area who later develop benefitted property (latecomers).  Announcement to the affected property owners of area boundaries and preliminary assessments are required to be mailed by registered mail.

SUMMARY:

Cities, counties and transportation benefit districts are authorized to establish, by ordinance, transportation funding programs.  These programs may be within all or part of their respective jurisdictions, and are to fund, from public and private sources, transportation improvements necessitated by economic development and growth.  Each program must contain:  identification of geographic boundaries; a comprehensive, long-term transportation plan describing planned transportation improvements; establishment of a six-year public capital funding program; provision for transportation impact fees to be imposed on new developments; description of formula for determining impact fees and the process for collection; and administrative provisions including appeals of assessments and program amendment.

Impact fees may be assessed by local governemnts to fund off-site transportaiton projects needed to mitigate the impact of development.  Credit against impact assessments must be given for off-site land donations and offsite improvements to transportation facilities that are part of the transportation program.  Impact fees cannot be imposed when mitigation for the same off-site transportation impacts is imposed under any other government programs.

Local governments that adopt a transportation funding program are prohibited from using voluntary agreements with developers to fund off-site transportation improvements within the area addressed by the program.

Transportation benefit districts that impose impact fees on private development must do so in accordance with the provisions of this act.  Fees charged pursuant to this act are not subject to the prohibition against impact fees contained in RCW 82.02.020.

In the formation of LIDs and RIDs, "no protest" agreements must be recorded in order to be effective.  Cities or counties forming districts are authorized to reimburse property owners, from district funds, for pre- formation expenditures incurred in forming the district.  This includes preparation of engineering plans, surveys, studies, appraisals and other expenses.

A latecomer's financing mechanism is permitted that allows one or more property owners to pay the LID or RID assessments for owners of undeveloped or underdeveloped properties, with such payments to be reimbursed as those properties are developed.  Cities and counties are required, in setting LID and RID assessments for transportation improvements, to give credit to property owners for transportation impact fees imposed under their respective transportation programs, if any.

The requirement that preliminary boundary descriptions and preliminary assessments for private contracts for street construction projects be sent by registered mail is changed to certified mail.

VOTES ON FINAL PASSAGE:

      House 92   0

      Senate    47     1 (Senate amended)

      House             (House refused to concur)

Free Conference Committee

      Senate    46     2

      House 97   0

EFFECTIVE:June 9, 1988