(1) When a county is notified by the department of corrections or the department of social and health services of a potential distribution under section 2 or 6 of this act, the county shall provide timely notice to any potentially impacted cities in the county.

       (2) Each county that plans under this chapter and that receives notice under section 2 or 6 of this act regarding the inclusion of the county within the distribution of proposed siting of community or work release facilities shall if necessary take action to revise the countywide planning policies adopted under RCW 36.70A.210 to address the siting of such facilities. The county must include all cities in such review and must solicit the participation of the department of social and health services regarding policies applicable to community facilities and the department of corrections regarding policies applicable to work release facilities. The county and cities within the county shall develop policies that address the distribution of such facilities within the county and criteria for the siting of such facilities. The policies shall be consistent with the criteria under sections 2 and 6 of this act, as well as the reports and criteria adopted by rules under sections 2 and 6 of this act.

       (3) Each county and city identified in the countywide planning policies developed under subsection (2) of this section for projected siting within such county or city of community or work release facilities shall implement such policies through any necessary revisions to its comprehensive plan and development regulations. The provisions of the comprehensive plan and development regulations shall be consistent with the criteria under sections 2 and 6 of this act, as well as the reports and criteria adopted by rule under sections 2 and 6 of this act. Any amendments may be combined with the next scheduled adoption of revisions, but in any event not later than the date provided for comprehensive review and revision of plans pursuant to RCW 36.70A.130(1).

       (4) Nothing in this section precludes a local government from requiring that a special use permit or a conditional use permit be obtained to site a community facility or a work release facility. The local government shall establish timelines for processing any required permits that are no longer than those established for other comparable project permits under RCW 36.70B.080.

       NEW SECTION. Sec. 11. 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. 12. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.

       NEW SECTION. Sec. 13. If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2001, in the omnibus appropriations act, this act is null and void."

      Debate ensued.

      The President declared the question before the Senate to be the adoption of the striking amendment by Senators Costa, Hargrove and Long to Engrossed House Bill No. 2168.

      The motion by Senator Costa carried and the striking amendment was adopted.

MOTIONS

      On motion of Senator Costa, the following title amendment was adopted:

       On page 1, line 1 of the title, after "facilities;" strike the remainder of the title and insert "amending RCW 72.05.020, 72.05.400, 72.65.010, 72.65.220, and 36.70A.200; adding new sections to chapter 72.05 RCW; adding new sections to chapter 72.65 RCW; adding a new section to chapter 36.70A RCW; creating a new section; and declaring an emergency."

      On motion of Senator Costa, the rules were suspended, Engrossed House Bill No. 2168, as amended by the Senate, was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      The President declared the question before the Senate to be the roll call on the final passage of Engrossed House Bill No. 2168, as amended by the Senate.

ROLL CALL

      The Secretary called the roll on the final passage of Engrossed House Bill No. 2168, as amended by the Senate, and the bill passed the Senate by the following vote: Yeas, 47; Nays, 0; Absent, 0; Excused, 2.

     Voting yea: Senators Benton, Brown, Carlson, Constantine, Costa, Deccio, Eide, Fairley, Finkbeiner, Franklin, Fraser, Gardner, Hale, Haugen, Hewitt, Hochstatter, Honeyford, Horn, Jacobsen, Johnson, Kastama, Kline, Kohl-Welles, Long, McAuliffe, McCaslin, McDonald, Morton, Oke, Parlette, Patterson, Prentice, Rasmussen, Regala, Roach, Rossi, Sheahan, Sheldon, B., Sheldon, T., Shin, Snyder, Spanel, Stevens, Swecker, West, Winsley and Zarelli - 47.

     Excused: Senators Hargrove and Thibaudeau - 2.

      ENGROSSED HOUSE BILL NO. 2168, as amended by the Senate, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

      On motion of Senator Hewitt, Senators Parlette and Deccio were excused.

SECOND READING

      SUBSTITUTE HOUSE BILL NO. 1339, by House Committee on Finance (originally sponsored by Representatives Linville, Ericksen, Barlean and Van Luven) (by request of Department of Revenue)

Providing equity in the taxation of farmers.

      The bill was read the second time.

MOTION

      On motion of Senator Rasmussen, the rules were suspended, Substitute House Bill No. 1339 was advanced to third reading, the second reading considered the third and the bill was placed on final passage.

      The President declared the question before the Senate to be the roll call on the final passage of Substitute House Bill No. 1339.

ROLL CALL

      The Secretary called the roll on the final passage of Substitute House Bill No. 1339 and the bill passed the Senate by the following vote: Yeas, 46; Nays, 0; Absent, 0; Excused, 3.

     Voting yea: Senators Benton, Brown, Carlson, Constantine, Costa, Eide, Fairley, Finkbeiner, Franklin, Fraser, Gardner, Hale, Haugen, Hewitt, Hochstatter, Honeyford, Horn, Jacobsen, Johnson, Kastama, Kline, Kohl-Welles, Long, McAuliffe, McCaslin, McDonald, Morton, Oke, Patterson, Prentice, Rasmussen, Regala, Roach, Rossi, Sheahan, Sheldon, B., Sheldon, T., Shin, Snyder, Spanel, Stevens, Swecker, Thibaudeau, West, Winsley and Zarelli - 46.

     Excused: Senators Deccio, Hargrove and Parlette - 3.

      SUBSTITUTE HOUSE BILL NO. 1339, having received the constitutional majority, was declared passed. There being no objection, the title of the bill will stand as the title of the act.

MOTION

      On motion of Senator Gardner, Senators Eide and Haugen were excused.

SECOND READING

      ENGROSSED SUBSTITUTE HOUSE BILL NO. 1418, by House Committee on Finance (originally sponsored by Representatives Gombosky, McMorris, Mulliken, Pennington, Ahern, Wood, Ogden, Benson, Reardon, Linville, Haigh, Miloscia, Simpson, McIntire, Santos, Rockefeller and Kessler)

Promoting community revitalization.

      The bill was read the second time.

MOTION

      On motion of Senator Brown, the following Committee on Ways and Means striking amendment was not adopted:

       Strike everything after the enacting clause and insert the following:

       "NEW SECTION. Sec. 1. (1) It is declared to be the public policy of the state of Washington to promote and facilitate the orderly development and economic stability of its communities. Local governments need the ability to raise revenue to finance public improvements that are designed to encourage economic growth and development in geographic areas characterized by high levels of unemployment and stagnate employment and income growth. The construction of necessary public improvements in accordance with local economic development plans will encourage investment in job-producing private development and expand the public tax base.

       (2) It is the purpose of this chapter:

       (a) To encourage taxing districts to cooperate in the allocation of future tax revenues that are used to finance public improvements designed to encourage private development in selected areas, in particular in those local governments that are located adjacent to another state or international border;

       (b) To assist those local governments that have a competitive disadvantage in its ability to attract business, private investment, or commercial development due to its location near a state or international border; and

       (c) To prevent or arrest the decay of selected areas due to the inability of existing financial methods to provide needed public improvements, and to encourage private investment designed to promote and facilitate the orderly redevelopment of selected areas.

       NEW SECTION. Sec. 2. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

       (1) "Assessed value of real property" means the valuation of real property as placed on the last completed assessment roll.

       (2) "Local government" means any city, town, county, port district, or any combination thereof.

       (3) "Ordinance" means any appropriate method of taking legislative action by a local government.

       (4) "Public improvements" means:

       (a) Infrastructure improvements within the increment area that include:

       (i) Street and road construction and maintenance;

       (ii) Water and sewer system construction and improvements;

       (iii) Sidewalks and streetlights;

       (iv) Parking, terminal, and dock facilities;

       (v) Park and ride facilities of a transit authority;

       (vi) Park facilities and recreational areas; and

       (vii) Storm water and drainage management systems; and

       (b) Expenditures for any of the following purposes:

       (i) Providing environmental analysis, professional management, planning, and promotion within the increment area, including the management and promotion of retail trade activities in the increment area;

       (ii) Providing maintenance and security for common or public areas in the increment area; or

       (iii) Historic preservation activities authorized under RCW 35.21.395.

       (5) "Public improvement costs" means the costs of: (a) Design, planning, acquisition, site preparation, construction, reconstruction, rehabilitation, improvement, and installation of public improvements; (b) relocating, maintaining, and operating property pending construction of public improvements; (c) relocating utilities as a result of public improvements; (d) financing public improvements, including interest during construction, legal and other professional services, taxes, insurance, principal and interest costs on general indebtedness issued to finance public improvements, and any necessary reserves for general indebtedness; (e) assessments incurred in revaluing real property for the purpose of determining the tax allocation base value that are in excess of costs incurred by the assessor in accordance with the revaluation plan under chapter 84.41 RCW, and the costs of apportioning the taxes and complying with this chapter and other applicable law; and (f) administrative expenses and feasibility studies reasonably necessary and related to these costs, including related costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of community revitalization financing to fund the costs of the public improvements.

       (6) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) Regular property taxes levied by port districts or public utility districts specifically for the purpose of making required payments of principal and interest on general indebtedness; and (b) regular property taxes levied by the state for the support of the common schools under RCW 84.52.065.

       (7) "Tax allocation base value" means the true and fair value of real property located within an increment area for taxes imposed in the year in which the increment area is created, plus twenty-five percent of any increase in the true and fair value of real property located within an increment area that is placed on the assessment rolls after the increment area is created.

       (8) "Tax allocation revenues" means those tax revenues derived from the imposition of regular property taxes on the increment value and distributed to finance public improvements.

       (9) "Increment area" means the geographic area from which taxes are to be appropriated to finance public improvements authorized under this chapter.

       (10) "Increment value" means seventy-five percent of any increase in the true and fair value of real property in an increment area that is placed on the tax rolls after the increment area is created.

       (11) "Taxing districts" means a governmental entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved increment area.

       (12) "Value of taxable property" means the value of the taxable property as defined in RCW 39.36.015.

       NEW SECTION. Sec. 3. A local government may finance public improvements using community revitalization financing subject to the following conditions:

       (1) The local government adopts an ordinance designating an increment area within its boundaries and specifying the public improvements proposed to be financed in whole or in part with the use of community revitalization financing;

       (2) The public improvements proposed to be financed in whole or in part using community revitalization financing are expected to encourage private development within the increment area and to increase the fair market value of real property within the increment area;

       (3) Private development that is anticipated to occur within the increment area, as a result of the public improvements, will be consistent with the countywide planning policy adopted by the county under RCW 36.70A.210 and the local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;

       (4) Taxing districts, in the aggregate, that levy at least seventy percent of the regular property tax within which the increment area is located approves the community revitalization financing of the project under section 5(1) of this act; and

       (5) In an increment area that includes any portion of a fire protection district as defined in Title 52 RCW, the fire protection district must approve their participation in the community revitalization financing of the project under this act. Approval by the fire protection district shall be considered as part of the required participation by taxing districts under subsection (4) of this section.

       NEW SECTION. Sec. 4. Public improvements that are financed with community revitalization financing may be undertaken and coordinated with other programs or efforts undertaken by the local government and other taxing districts and may be funded in part from revenue sources other than community revitalization financing.

       NEW SECTION. Sec. 5. Before adopting an ordinance creating the increment area, a local government must:

       (1) Obtain written agreement for the use of community revitalization financing to finance all or a portion of the costs of the designated public improvements from taxing districts that, in the aggregate, levy at least seventy percent of the regular property tax on property within the increment area. A signed, written agreement from taxing districts that in the aggregate levy at least seventy percent of the regular property tax within the increment area, constitutes concurrence by all taxing districts in the increment area in the public improvement and participation in the public improvement to the extent of providing limited funding under community revitalization financing authorized under this chapter. The agreement must be authorized by the governing body of taxing districts that in the aggregate levy at least seventy percent of the regular property tax on property within the increment area;

       (2) Hold a public hearing on the proposed financing of the public improvement in whole or in part with community revitalization financing. Notice of the public hearing must be published in the official local government newspaper at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed increment area. Notices must describe the contemplated public improvements, estimate the costs of the public improvements, describe the portion of the costs of the public improvements to be borne by community revitalization financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed increment area, and estimate the period during which community revitalization financing is contemplated to be used. The public hearing may be held by either the governing body of the local government, or a committee of the governing body that includes at least a majority of the whole governing body; and

       (3) Adopt an ordinance establishing the increment area that describes the public improvements, describes the boundaries of the increment area, estimates the cost of the public improvements and the portion of these costs to be financed by community revitalization financing, estimates the time during which regular property taxes are to be apportioned, provides the date when the apportionment of the regular property taxes will commence, and finds that the conditions of section 3 of this act are met.

       NEW SECTION. Sec. 6. The local government shall:

       (1) Publish notice in a legal newspaper circulated within the increment area that describes the public improvement, describes the boundaries of the increment area, and identifies the location and times where the ordinance and other public information concerning the public improvement may be inspected; and

       (2) Deliver a certified copy of the ordinance to the county treasurer, the county assessor, and the governing body of each taxing district within which the increment area is located.

       NEW SECTION. Sec. 7. (1) Commencing on the later of either the date established in the ordinance creating the increment area, or the first day of the calendar year following the passage of the ordinance, the county treasurer shall distribute receipts from regular taxes imposed on real property located in the increment area as follows:

       (a) Each taxing district shall receive that portion of its regular property taxes produced by the rate of tax levied by or for the taxing district on the tax allocation base value for that community revitalization financing project in the taxing district, or upon the total assessed value of real property in the taxing district, whichever is smaller; and

       (b) The local government that created the increment area shall receive an additional portion of the regular property taxes levied by or for each taxing district upon the increment value within the increment area. However, the local government that created the increment area may agree to receive less than the full amount of this portion as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts shall be allocated to the taxing districts that imposed regular property taxes, or have regular property taxes imposed for them, in the increment area for collection that year in proportion to their regular tax levy rates for collection that year. The local government may request that the treasurer transfer this additional portion of the property taxes to its designated agent. The portion of the tax receipts distributed to the local government or its agent under this subsection (1)(b) may only be expended to finance public improvement costs associated with the public improvements financed in whole or in part by community revitalization financing.

       (2) The county assessor shall allocate twenty-five percent of any increased real property value occurring in the increment area to the tax allocation base value and seventy-five percent to the increment value. This section does not authorize revaluations of real property by the assessor for property taxation that are not made in accordance with the assessor's revaluation plan under chapter 84.41 RCW or under other authorized revaluation procedures.

       (3) The apportionment of increases in assessed valuation in an increment area, and the associated distribution to the local government of receipts from regular property taxes that are imposed on the increment value, must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any excess tax allocation revenues and earnings on the tax allocation revenues remaining at the time the apportionment of tax receipts terminates must be returned to the county treasurer and distributed to the taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the increment area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.

       NEW SECTION. Sec. 8. (1) A local government designating an increment area and authorizing the use of community revitalization financing may incur general indebtedness, and issue general obligation bonds, to finance the public improvements and retire the indebtedness in whole or in part from tax allocation revenues it receives, subject to the following requirements:

       (a) The ordinance adopted by the local government creating the increment area and authorizing the use of community revitalization financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and

       (b) The local government includes this statement of the intent in all notices required by section 5 of this act.

       (2) The general indebtedness incurred under subsection (1) of this section may be payable from other tax revenues, the full faith and credit of the local government, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the local government for payment of costs of the public improvements or associated debt service on the general indebtedness.

       (3) In addition to the requirements in subsection (1) of this section, a local government designating an increment area and authorizing the use of community revitalization financing may require the nonpublic participant to provide adequate security to protect the public investment in the public improvement within the increment area.

       NEW SECTION. Sec. 9. A direct or collateral attack on a public improvement, public improvement ordinance, or increment area purported to be authorized or created in conformance with applicable legal requirements, including this chapter, may not be commenced more than thirty days after publication of notice as required by section 6 of this act.

       NEW SECTION. Sec. 10. This chapter supplements and neither restricts nor limits any powers which the state or any local government might otherwise have under any laws of this state.