HOUSE BILL REPORT

HB 1817

BYRepresentatives 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

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (26)

      Signed by Representatives Walk, Chair; Baugher, Vice Chair; Betrozoff, Cantwell, Cooper, Day, Doty, Fisher, Fox, Gallagher, Hankins, Haugen, Heavey, Jacobsen, Jones, Meyers, Prince, Schmidt, Smith, D. Sommers, Sutherland, Todd, Vekich, K. Wilson, S. Wilson and Zellinsky.

House Staff:Gene Baxstrom (786-7303)

AS REPORTED BY COMMITTEE ON TRANSPORTATION FEBRUARY 4, 1988

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 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 RIDs (Road Improvement Districts).  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 which 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.

SUMMARY:

SUBSTITUTE BILL:  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, improvements necessitated by economic development and growth.  Each program must contain:  1) identification of geographic boundaries; 2) a comprehensive, long-term transportation plan describing planned transportation improvements; 3) establishment of a six-year public capital funding program; 4) provision for transportation impact fees on new developments; 5) description of formula for determining impact fees and the process for collection; and 6) administrative provisions.  Impact fees cannot be imposed when mitigation for the same off-site transportation impacts are imposed under any other government programs.

Local governments which adopt a transportation funding program are prohibited from using voluntary agreements with developers to fund off-site transportation improvements which are funded by fees imposed under the program. Fees charged pursuant to this Act are not subject to the prohibition against impact fees contained in RCW 82.02.020.

Transportation benefit districts which assess impact fees on private development must do so in accordance with the provisions of this Act.

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, including preparation of engineering plans, surveys, studies, appraisals and other expenses.

A latecomer's financing mechanism is permitted which 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.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Transportation improvements addressed in the program are no longer limited by the term "local".  Except when fees for improvements are paid pursuant to a transportation funding program, local governments are no longer prohibited from using voluntary agreements to collect fees to mitigate off-site impacts, by virtue of adopting the transportation funding program.  Statutory language setting criteria for the imposition of impact fees by transportation benefit districts is retained.  Numerous clarifying and technical changes are incorporated.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    John Keegan and Phyllis Lamphere, Seattle/King County Economic Development Council (EDC); Doreen Marchione, Mayor of Redmond and EDC; Ted Knapp, Union Pacific Realty and EDC; Greg Nickols, King County Council.

House Committee - Testified Against:      Larry Warren, City of Renton; Don Wickstrom, City of Kent.

House Committee - Testimony For:    Local governments and the private sector are provided increased opportunity for addressing the funding of transportation projects necessitated by economic development and growth.  Private sector participation and obligations are better defined in mitigating the impacts of development.  The double charge on a developer for transportation impacts is precluded.

House Committee - Testimony Against:      The process for small units of government which opt to use the program is burdensome.  The program places more obligations on the local government than on the developer.