BP BHEAD INT H

AN ACT Relating to transportation systems and facilities; amending RCW 47.46.030 and 47.46.040; creating a new section; and declaring an emergency.

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

Sec. 1. RCW 47.46.030 and 1993 c 370 s 3 are each amended to read as follows:

(1) The secretary or a designee shall solicit proposals from, and negotiate and enter into agreements with, private entities to undertake as appropriate, together with the department and other public entities, all or a portion of the study, planning, design, construction, operation, and maintenance of transportation systems and facilities, using in whole or in part private sources of financing.

The public-private initiative program may develop up to six demonstration projects. Each proposal shall be weighed on its own merits, and each of the six agreements shall be negotiated individually, and as a stand-alone project. The commission shall approve each of the selected projects.

((~~Proposals and demonstration projects may be selected by the public and private sectors at their discretion.~~)) (2) No projects selected or agreements entered into under this chapter shall have force and effect until the department establishes a public involvement process to identify prospective projects that (a) are acceptable to the impacted communities; (b) meet a state transportation need; and (c) provide a significant state benefit.

(3) Those projects that meet the criteria in subsection (2) of this section shall be submitted for review by the Washington state transportation commission. The commission shall submit a list of eligible projects to the legislature for approval. Upon legislative approval of projects, the secretary is authorized to solicit proposals.

(4) All projects designed, constructed, and operated under this authority must comply with all applicable rules and statutes in existence at the time the agreement is executed, including but not limited to the following provisions: Chapter 39.12 RCW, this title, RCW 41.06.380, chapter 47.64 RCW, RCW 49.60.180, and 49 C.F.R. Part 21.

The secretary or a designee shall consult with legal, financial, and other experts within and outside state government in the negotiation and development of the agreements.

Sec. 2. RCW 47.46.040 and 1993 c 370 s 4 are each amended to read as follows:

Agreements shall provide for private ownership of the projects during the construction period. After completion and final acceptance of each project or discrete segment thereof, the agreement shall provide for state ownership of the transportation systems and facilities and lease to the private entity unless the state elects to provide for ownership of the facility by the private entity during the term of the agreement.

The state shall lease each of the demonstration projects, or applicable project segments, to the private entities for operating purposes for up to fifty years.

The department may exercise any power possessed by it to facilitate the development, construction, financing operation, and maintenance of transportation projects under this chapter. Agreements for maintenance services entered into under this section shall provide for full reimbursement for services rendered by the department or other state agencies. Agreements for police services under the agreement may be entered into with any qualified law enforcement agency, and shall provide for full reimbursement for services rendered by that agency. The department may provide services for which it is reimbursed, including but not limited to preliminary planning, environmental certification, and preliminary design of the demonstration projects.

The plans and specifications for each project constructed under this section shall comply with the department's standards for state projects. A facility constructed by and leased to a private entity is deemed to be a part of the state highway system for purposes of identification, maintenance, and enforcement of traffic laws and for the purposes of applicable sections of this title. Upon reversion of the facility to the state, the project must meet all applicable state standards. Agreements shall address responsibility for reconstruction or renovations that are required in order for a facility to meet all applicable state standards upon reversion of the facility to the state.

For the purpose of facilitating these projects and to assist the private entity in the financing, development, construction, and operation of the transportation systems and facilities, the agreements may include provisions for the department to exercise its authority, including the lease of facilities, rights of way, and airspace, exercise of the power of eminent domain, granting of development rights and opportunities, granting of necessary easements and rights of access, issuance of permits and other authorizations, protection from competition, remedies in the event of default of either of the parties, granting of contractual and real property rights, liability during construction and the term of the lease, authority to negotiate acquisition of rights of way in excess of appraised value, and any other provision deemed necessary by the secretary.

The agreements entered into under this section may include provisions authorizing the state to grant necessary easements and lease to a private entity existing rights of way or rights of way subsequently acquired with public or private financing. The agreements may also include provisions to lease to the entity airspace above or below the right of way associated or to be associated with the private entity's transportation facility. In consideration for the reversion rights in these privately constructed facilities, the department may negotiate a charge for the lease of airspace rights during the term of the agreement for a period not to exceed fifty years. If, after the expiration of this period, the department continues to lease these airspace rights to the private entity, it shall do so only at fair market value. The agreement may also provide the private entity the right of first refusal to undertake projects utilizing airspace owned by the state in the vicinity of the public-private project.

Agreements under this section may include any contractual provision that is necessary to protect the project revenues required to repay the costs incurred to study, plan, design, finance, acquire, build, install, operate, enforce laws, and maintain toll highways, bridges, and tunnels and which will not unreasonably inhibit or prohibit the development of additional public transportation systems and facilities. Agreements under this section must secure and maintain liability insurance coverage in amounts appropriate to protect the project's viability and may address state indemnification of the private entity for design and construction liability where the state has approved relevant design and construction plans. Agreements under this section between the department and a private entity shall provide for public involvement in decision making with respect to the development of projects selected under this chapter. Public involvement shall include, but is not limited to, public participation in project planning, environmental assessment, traffic analysis and market analysis of tolls or user fee rates authorized under RCW 47.46.050, and right of way and access plans. Nothing in this chapter limits the right of the secretary and his or her agents to render such advice and to make such recommendations as they deem to be in the best interests of the state and the public.

NEW SECTION. Sec. 3. Subject to legislative appropriation, the department is authorized to reimburse a private entity for developer costs incurred after January 1, 1994, associated with projects selected in accordance with the terms of this chapter before September 1, 1994.

"Developer costs" means all reasonable costs and expenses incurred by the developer on and after January 4, 1994, and on or before the effective date of this act in connection with or relating to the state's public-private initiatives in transportation program established in chapter 47.46 RCW, including: (1) The application fee paid to the department of transportation; (2) out-of-pocket expenses, costs, and fees paid to consultants, attorneys, financial advisors, investment bankers, and others; (3) out-of-pocket expenses incurred by the developer for payment or reimbursement of travel, accommodation, and meal expenses of its personnel while away from their usual work assignments; (4) rent and office overhead of facilities specially leased to pursue opportunities of the program; (5) fully burdened salaries of personnel dedicated to the developer's activities relating to the program allocated on a pro rata basis for personnel dedicated less than full time; (6) parent-company allocated overhead actually charged to the developer by the developer's parent company, if any; (7) organizational expenses of the developer if the developer was formed exclusively for the purposes of pursuing opportunities of the program; and (8) interest on each of such amounts from the date incurred at the rate of twelve percent per annum. The following costs are not "developer costs": Political contributions as defined in the political reform act of 1974; write downs or amortization of goodwill; executive compensation and gifts and gratuities to the extent the same would not be deductible from the developer's adjusted gross income under the internal revenue code if the developer were a stand alone corporation; legal penalties or fines; goodwill as defined in Volume 48 of the code of federal regulations, federal acquisition regulations, C.F.R. 31.205-49; executive lobbying costs as defined in C.F.R. 31.205-50; costs of alcoholic beverages; asset devaluations resulting from business combinations; deferred research and development costs; costs related to legal and other proceedings, if the result is a conviction in a criminal proceeding or a finding of fraud in a civil or administrative proceeding; unallowable travel costs as defined in C.F.R. 31.205-46; unallowable training costs as defined in C.F.R. 31.205-44; unallowable trade, business, technical, and professional activity costs as defined in C.F.R. 31.205-43; fines and penalties, including late penalties on payment of taxes; losses on other contracts; legislative lobbying costs as defined and unallowable under C.F.R. 31.205-22; independent research and development costs except to the extent that such costs were incurred in connection with the program; excessive contributions or donations; compensation incidental to business acquisitions as defined in C.F.R. 31.205-6(I); unreasonable postretirement benefits other than pensions as defined in C.F.R. 31.205-6(o); employee rebate and purchase discount plans as defined in C.F.R. 31.205-6(n); employee stock ownership plan costs to the extent disallowed under C.F.R. 31.205-6(8); unallowable public relations and advertising costs as defined in C.F.R. 31.205-1(f)(3), (4)(i), (5), and (6); entertainment costs as defined in C.F.R. 31.205-14; and relocation costs associated with a permanent change of duty assignment of employees as defined in C.F.R. 31.205(c).

NEW SECTION. Sec. 4. 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 shall take effect immediately.