AN ACT Relating to historic preservation; amending RCW 79.01.004 and 79.01.612; adding a new chapter to Title 27 RCW; adding a new section to chapter 43.82 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature finds and declares that the spirit and direction of Washington state are founded on the values, traditions, and accomplishments of past generations; and further, that the future of Washington's children will depend in part upon their ability to understand and appreciate the importance of their heritage. Landmark buildings are a source of pride and inspiration for the citizens of Washington and can serve as valuable working assets for Washington communities, yet these irreplaceable assets are easily lost or destroyed. The legislature finds that the 1989 Centennial Celebration of Washington Statehood is an especially appropriate occasion for committing to the preservation of buildings important in Washington's history.

It is the purpose of this chapter to establish a permanent fund, known as the endangered landmarks preservation fund, to be used by the department to purchase and hold for brief periods landmark buildings which might otherwise be lost or altered, and to resell those buildings, with the proceeds of sale deposited in the fund, at prices which preserve or increase the overall balance and assets of the fund, and to authorize the director to take all necessary actions consistent with applicable law to identify, acquire, stabilize, and resell such buildings while maintaining or increasing the value of the fund. The legislature recognizes that it may from time to time be necessary to dispose of properties acquired under this chapter at prices which do not fully recover associated costs.

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

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

(2) "Director" means the director of community development.

(3) "Fund" means the endangered landmarks preservation fund.

(4) "Landmark building" means a structure and the land on which it is located that is on a local, state, or national historic register, or that is eligible to be included on a local, state, or national historic register.

(5) "Property" means landmark buildings, including limited interests in such buildings, acquired and sold under this chapter.

(6) "Stabilization" means the minimum degree of rehabilitation necessary to protect a property from further deterioration.

NEW SECTION. Sec. 3. (1) Money appropriated for the purposes of this chapter shall be deposited in the endangered landmarks preservation fund hereby established in the state treasury. The department shall deposit in the fund any proceeds from the sale of property acquired with money from the fund or by gift or grant, and any other money designated by law for deposit therein. Interest accruing from money in the fund shall be retained by the fund. Money in the fund shall be used by the department for the purposes of this chapter. The department may use other funds available by law for such purposes to administer the fund. Proceeds from the sale of property acquired with money from the fund may be expended without appropriation to the extent that state-appropriated and matching funds were used in the original purchase of such property by the department. Any amounts representing profits on such sales shall be retained in the fund. Disbursements from the fund shall be on authorization of the director, or the director's designee.

(2) It is the intent of the legislature that the appropriation to the fund for the 1987-89 biennium shall act as a challenge to private and public donors. The treasurer shall not disburse from the fund any state-appropriated money until at least one hundred thousand dollars has been received from the sale of donated property or from other sources and deposited in the fund. The treasurer shall then disburse from money appropriated by the state for this purpose an equal amount and, thereafter, the treasurer shall disburse an amount equal to each cash donation received or to the proceeds of sale of each donated property until the total amount appropriated has been disbursed.

NEW SECTION. Sec. 4. The department may acquire, maintain, stabilize, resell, and hold title to and may acquire and resell, or exercise options to purchase or to acquire and resell, other limited ownership interests in endangered landmarks. It is the intent of the legislature that any property acquired shall be promptly offered for sale at fair market value.

NEW SECTION. Sec. 5. Criteria to be considered by the department in selecting among properties under section 4 of this act shall include:

(1) The importance of the property to the state and to the community within which it is located;

(2) The threat of demolition, of substantial alteration, or other factors that might result in the loss of the historic character of the property;

(3) The suitability of the property for re-use as a commercial, community, or residential property within local ordinances while retaining its historic character;

(4) A determination through the use of prudent and knowledgeable judgment, as well as current market and real estate valuation information, that the capital investment can be substantially recovered when the property is resold;

(5) The representation of diverse historic themes in different areas of the state and in different types of buildings;

(6) The accessibility of the property for public visitation or the visual prominence of the property as an historic landmark; and

(7) The ability of the state to obtain title to the property.

NEW SECTION. Sec. 6. If application of the criteria in section 5 of this act results in two or more properties being considered of equal value for the purposes of this chapter, the property which has the potential for providing the greatest return to the fund shall be purchased.

NEW SECTION. Sec. 7. If the director determines that the sale of a property purchased under this chapter would promote historic preservation or preserve the assets of the fund, the director may approve the sale.

NEW SECTION. Sec. 8. In offering properties for sale under this chapter, the department shall select buyers by applying the following criteria:

(1) The extent to which the buyer agrees to maintain, and to cause future owners to maintain, the historic character of the property;

(2) The extent to which the proposed uses of the property conform to local ordinances and published plans;

(3) The estimated ability of the buyer to achieve the proposed use of the property; and

(4) Other public benefits of the proposed use, including accessibility to the public, interpretive or other facilities, and related development of other properties.

NEW SECTION. Sec. 9. In no case may the director accept an offer for purchase of property under this chapter when:

(1) The offer does not provide for payment in cash to the state of the full purchase price prior to possession of the property; or

(2) Another offer more consistent with the purposes of this chapter has been made and received under the announced terms of sale.

NEW SECTION. Sec. 10. The director may sell any property acquired through the fund without regard to the criteria of section 8 of this act if he or she finds after public offer for sale and a public hearing that no buyer can be found who will agree to the requirements of section 8 of this act at a price that will substantially preserve the assets of the fund.

NEW SECTION. Sec. 11. Nothing in this chapter gives the department any right of condemnation or eminent domain.

NEW SECTION. Sec. 12. The director shall adopt such rules as are necessary to implement this chapter.

NEW SECTION. Sec. 13. A new section is added to chapter 43.82 RCW to read as follows:

This chapter shall not apply to property acquired under sections 1 through 12 of this act.

Sec. 14. Section 1, chapter 255, Laws of 1927 and RCW 79.01.004 are each amended to read as follows:

Public lands of the state of Washington are lands belonging to or held in trust by the state, which are not devoted to or reserved for a particular use by law, and include state lands, tidelands, shorelands and harbor areas as hereinafter defined, and the beds of navigable waters belonging to the state. "Public lands" do not include property acquired by the state under sections 1 through 12 of this 1987 act.

Whenever used in this chapter the term "state lands" shall mean and include:

School lands, that is, lands held in trust for the support of the common schools;

University lands, that is, lands held in trust for university purposes;

Agricultural college lands, that is, lands held in trust for the use and support of agricultural colleges;

Scientific school lands, that is, lands held in trust for the establishment and maintenance of a scientific school;

Normal school lands, that is, lands held in trust for state normal schools;

Capitol building lands, that is, lands held in trust for the purpose of erecting public buildings at the state capital for legislative, executive and judicial purposes;

Institutional lands, that is, lands held in trust for state charitable, educational, penal and reformatory institutions; and

All public lands of the state, except tidelands, shorelands, harbor areas and the beds of navigable waters.

Sec. 15. Section 154, chapter 255, Laws of 1927 as amended by section 13, chapter 222, Laws of 1984 and RCW 79.01.612 are each amended to read as follows:

The department of natural resources shall manage and control all lands acquired by the state by escheat or under chapter 79.66 RCW and all lands acquired by the state by deed of sale or gift or by devise, except such lands which are conveyed or devised to the state to be used for a particular purpose, and property acquired by the state under sections 1 through 12 of this 1987 act. The department shall lease the lands in the same manner as school lands. When the department determines to sell the lands, they shall be initially offered for sale at public auction as provided in this chapter. If the lands are not sold at public auction, the department may, with approval of the board of natural resources, market the lands through persons licensed under chapter 18.85 RCW or through other commercially feasible means at a price not lower than the land's appraised value and pay necessary marketing costs from the sale proceeds. Necessary marketing costs includes reasonable costs associated with advertising the property and paying commissions. The proceeds of the lease or sale of all such lands shall be deposited into the appropriate fund in the state treasury in the manner prescribed by law: PROVIDED, That if the grantor in any such deed or the testator in case of a devise specifies that the proceeds of the sale or lease of such lands be devoted to a particular purpose such proceeds shall be so applied. The department may employ agents to rent any escheated, deeded, or devised lands, or lands acquired under chapter 79.66 RCW, for such rental and time and in such manner as the department directs, but the property shall not be rented by such agent for a longer period than one year and no tenant is entitled to compensation for any improvement which he makes on such property. The agent shall cause repairs to be made to the property as the department directs, and shall deduct the cost thereof, together with such compensation and commission as the department authorizes, from the rentals of such property and the remainder which is collected shall be transmitted monthly to the department of natural resources.

NEW SECTION. Sec. 16. 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. 17. Sections 1 through 12 of this act shall constitute a new chapter in Title 27 RCW.