Original Notice.

     Preproposal statement of inquiry was filed as WSR 04-02-044.

     Title of Rule: Political subdivision fees.

     Purpose: Establish the formula to calculate the fees paid by political subdivisions of the state to the Office of Minority and Women's Business Enterprises (OMWBE). This rule will not apply to nongovernmental parties.

     Statutory Authority for Adoption: RCW 39.19.220.

     Statute Being Implemented: RCW 39.19.220.

     Summary: The fee charged to each political subdivision for the period July 1, 2003 - June 30, 2005, and subsequent bienniums unless revised by rule shall be based on the annual average of expenditures for capital projects, supplies and other services for previous bienniums as reflected in the state auditor's on-line BARS report, when available; except for transit districts where the data shall be taken from the 2001 Summary of Public Transportation Systems in Washington State, and except for housing authorities, where the fee will be $1 per low-income unit. The maximum amount charged to any political subdivision shall not exceed $40,000 in a single biennium.

     Reasons Supporting Proposal: Input from the political subdivisions established that the current billing formula was too narrow in focus and discouraged utilization of minority and women business enterprises. The proposed formula also contains a cap on the fee a subdivision will be charged.

     Name of Agency Personnel Responsible for Drafting: Juan Huey-Ray, 406 South Water, P.O. Box 41160, Olympia, WA 98504-1160, (360) 951-4916; Implementation and Enforcement: Carolyn Crowson, 406 South Water, P.O. Box 41160, Olympia, WA 98504-1160, (360) 753-9679.

     Name of Proponent: Office of Minority and Women's Business Enterprises, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: Effective July 1993, the Washington state legislature authorized OMWBE to charge political subdivisions for a portion of the costs related to the certification of businesses. The current formula developed by the political subdivisions allocates the costs among them, using a different formula, based upon the structure of the political subdivision (e.g., city, educational service district, port authority). The political subdivisions determined the current formula was too narrow in focus and encouraged jurisdictions not to use certified firms because the greater the use, the greater the fee was due to OMWBE. The proposed formula would expand the types of expenditures used to determine the fee; e.g., expenditures for goods and services will be included. The proposed formula will more fairly allocate the overall charge to the more than 400 political subdivisions now participating.

     Proposal Changes the Following Existing Rules: The fee charged to each political subdivision for the period July 1, 2003 - June 30, 2005, and subsequent bienniums unless revised by rule shall be based on the annual average of expenditures for capital projects, supplies and other services for previous bienniums as reflected in the state auditor's on-line BARS report, when available; except for transit districts where the data shall be taken from the 2001 Summary of Public Transportation Systems in Washington State, and except for housing authorities, where the fee will be $1 per low-income unit. The maximum amount charged to any political subdivision shall not exceed $40,000 in a single biennium.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. There is no negative impact to small businesses by changing the formula by which the fee charged political subdivisions is calculated.

     RCW 34.05.328 does not apply to this rule adoption.

     Hearing Location: U.S. Small Business Administration, 1200 Sixth Avenue, 17th Floor, Executive Conference Room, Seattle, on April 28, 2004, at 10:00 a.m. - 12:00 p.m.; and at the Tacoma Housing Authority, 902 South "L" Street, Tacoma, on May 5, 2004, at 2:00 - 4:00 p.m.

     Assistance for Persons with Disabilities: Contact Cathy V. Canorro, (360) 704-1187 or ccanorro@omwbe.wa.gov by April 20, 2004.

     Submit Written Comments to: Cathy Canorro, Rules Coordinator, Office of Minority and Women's Business Enterprises, P.O. Box 41160, Olympia, WA 98504-1160, phone (360) 704-1187, fax (360) 586-7079, by May 7, 2004.

     Date of Intended Adoption: June 8, 2004.

March 9, 2004

Carolyn Crowson

Director

OTS-6984.1

AMENDATORY SECTION(Amending WSR 98-13-075, filed 6/15/98, effective 7/16/98)

WAC 326-02-034   Political subdivision fees.   (1) It is the intent of the state legislature that political subdivisions within the state of Washington contribute to the costs of the state's certification program for minority and women's business enterprises. For the purpose of this section, political subdivisions means any city, town, county, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation within the state of Washington that administers a policy or program, or funds from whatever source, which requires or encourages the use of certified minority, women, or disadvantaged business enterprises.

     (2) Effective July 1, 1993, the office shall allocate a portion of its biennial operational costs to political subdivisions. Each political subdivision shall pay a ((percentage)) proportionate share of this allocation based on the formula set forth in subsection (((3))) (4) of this section.

     (3)(a) The fee charged to each political subdivision for the period, July 1, ((1997)) 2003 - June 30, ((1999)) 2005, and subsequent bienniums unless revised by rule, ((will be calculated as follows:

     (a)(i) Cities with populations up to one thousand five hundred will not be charged.

     (ii) Cities with populations of one thousand five hundred to twenty-five thousand will be charged one hundred dollars each.

     (iii) Cities with populations of twenty-five thousand to fifty thousand will be charged two hundred dollars each.

     (iv) Cities with populations over fifty thousand will be charged based on the formula set forth in subsection (4) of this section.

     (b)(i) Counties with populations up to ten thousand will not be charged.

     (ii) Counties with populations of ten thousand to one hundred thousand will be charged one hundred dollars each.

     (iii) Counties with populations of one hundred thousand to five hundred thousand will be charged two hundred dollars each.

     (iv) Counties with populations over five hundred thousand will be charged based on the formula set forth in subsection (4) of this section.

     (c)(i) Ports with revenues up to two million dollars will not be charged.

     (ii) Ports with revenues of two million dollars to ten million dollars will be charged two hundred dollars each.

     (iii) Ports with revenues over ten million dollars will be charged based on the formula set forth in subsection (4) of this section.

     (d)(i) Educational service districts and public school districts with enrollments up to one thousand will not be charged.

     (ii) Educational service districts and public school districts with enrollments of one thousand to ten thousand will be charged one hundred dollars each.

     (iii) Educational service districts and public school districts with enrollments of ten thousand to twenty thousand will be charged two hundred dollars each.

     (iv) Educational service districts and public school districts with enrollments over twenty thousand will be charged based on the formula set forth in subsection (4) of this section.

     (e)(i) Transit authorities with capital expenditures less than one hundred thousand dollars will not be charged.

     (ii) Transit authorities with capital expenditures of one hundred thousand dollars to one million dollars will be charged one hundred dollars each.

     (iii) Transit authorities with capital expenditures of one million dollars to ten million dollars will be charged two hundred dollars each.

     (iv) Transit authorities with capital expenditures greater than ten million dollars will be charged based on the formula set forth in subsection (4) of this section.

     (f)(i) Housing authorities that own or manage less than three hundred total units will not be charged.

     (ii) Housing authorities that own or manage three hundred to nine hundred ninety-nine total units will be charged one hundred dollars each.

     (iii) Housing authorities that own or manage one thousand to four thousand nine hundred ninety-nine total units will be charged two hundred dollars each.

     (iv) Housing authorities that own or manage five thousand or more units will be charged based on the formula set forth in subsection (4) of this section.

     (4) Each political subdivision not subject to a fixed fee under subsection (3) of this section shall report to the office the total dollars committed to certified businesses in construction (including direct awards, subcontracts, and related suppliers) during the previous biennium or its fiscal years ending in the previous biennium.

     (a) The construction dollar commitment of each political subdivision will be divided by the sum of those commitments reported to calculate its proportionate share of the net allocation. The net allocation is the amount remaining after deduction of the amounts charged under subsection (3) of this section from the total allocated to all political subdivisions.

     (b) The percentage calculated for each reporting political subdivision will be applied to the total due from all political subdivisions required to report to determine their respective fees: Provided, That the fee charged under this subsection shall be no less than the highest flat fee charged to a political subdivision in subsection (3) of this section.

     (c) When a political subdivision fails to report as required by this section, the net allocation will be further reduced by an amount calculated as follows:

     (i) The number of political subdivisions reporting will be divided by the total number of political subdivisions required to report at that time.

     (ii) The resulting percentage will be used to calculate the portion of the net allocation due from the political subdivisions which is to be apportioned among those who reported. The balance of the net allocation will be charged equally among those who fail to report.

     (5) After the initial billing, which will include the total amount due for the biennium beginning July 1, 1997, the office will mail invoices on a quarterly basis one month before the start of each quarter for the outstanding balance at that time. Payments shall be due within thirty calendar days after receipt of the invoice.)) shall be based on the annual average of expenditures for capital projects, supplies and other services for fiscal years 1999-2001 as reflected in the state auditor's on-line BARS report, when available. Data on the annual average of capital expenditures by the transit districts during the relevant period will be taken from a report produced by the Washington state department of transportation entitled, 2001 Summary of Public Transportation Systems in Washington State. Data on the annual average of expenditures by school districts and educational service districts will be obtained from the office of the superintendent of public instruction. The basis for the fee to be charged to the Housing Authorities is the number of low-income units owned or managed during the last fiscal year as reported to the U.S. Department of Housing and Urban Development. The maximum amount charged to any political subdivision shall not exceed $40,000.00 in a single biennium.

     (b) For the biennium beginning July 1, 2005, data from the previous biennium will be used to calculate the fee charged to each political subdivision.

     (c) When insufficient data is available to calculate the average expenditures from the sources listed in (a) of this subsection, the office may either use other sources for the data or estimate the amount of relevant expenditures. In either event, the office shall allow the affected political subdivisions to offer alternative data on which to base its calculation. New political subdivisions will be charged based on the office's estimate of the annual average of relevant expenditures by the entity for the current biennium.

     (d) After paying the fee, the political subdivisions may challenge the office about the accuracy of the data used to calculate the fee under (b) of this subsection. Upon verification by the state auditor, the fee may be revised and refund issued or additional fee assessed.

     (e) Following the initial billing in each biennium, which will include the total amount due for the biennium beginning July 1, 2003, the office will mail invoices on a quarterly basis one month before the start of each quarter for the outstanding balance at that time. Payments shall be due within thirty calendar days after receipt of the invoice.

     (4)(a) The following formula will be used to calculate the fees:

     For the annual average of expenditures ranging from $1m - $50.99m, a sliding scale as follows: ($1m - $10m = $100; $11m - $20m = $150; $21m - $30m = $200; $31m - $40m = $250; $41m - $50m = $300). For $51m - $99.99m, the formula will be the annual average of expenditures multiplied by .0001. At $100m, a sliding scale resumes; beginning at $10k and increasing in increments of $5k for each additional $100m in the annual average of expenditures; e.g., $200m - $299m = $15k; $300m - $399m = $20,000; etc. Fees will not be charged to any political subdivision with an average annual expenditure totaling less than $1m during the period under review.

     (b) The fee to Housing Authorities will be $1 per low-income unit owned or managed during the last fiscal year.

     (5) The office shall develop a policy and procedure for collection of any invoice that is not paid within thirty calendar days. The office shall distribute the collection policy and procedure to all political subdivisions along with the initial and quarterly billings.

[Statutory Authority: RCW 39.19.030(17). 98-13-075, § 326-02-034, filed 6/15/98, effective 7/16/98. Statutory Authority: RCW 39.19.030(7). 97-17-045, § 326-02-034, filed 8/14/97, effective 9/15/97. Statutory Authority: RCW 39.19.220. 94-11-113, § 326-02-034, filed 5/18/94, effective 6/18/94.]

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