6044-S

AN ACT Relating to transportation systems and facilities; amending RCW 47.46.010, 47.46.030, 47.46.040, and 47.46.050; adding a new section to chapter 47.46 RCW; and declaring an emergency.

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

Sec. 1. RCW 47.46.010 and 1993 c 370 s 1 are each amended to read as follows:

The legislature finds and declares:

It is essential for the economic, social, and environmental well-being of the state and the maintenance of a high quality of life that the people of the state have an efficient transportation system.

The ability of the state to provide an efficient transportation system will be enhanced by a public-private sector program providing for private entities to undertake all or a portion of the study, planning, design, development, financing, acquisition, installation, construction or improvement, operation, and maintenance of transportation systems and facility projects.

A public-private initiatives program will provide benefits to both the public and private sectors. Public-private initiatives provide a sound economic investment opportunity for the private sector. Such initiatives will provide the state with increased access to property development and project opportunities, financial and development expertise, and will supplement state transportation revenues, allowing the state to use its limited resources for other needed projects.

The public-private initiatives program, to the fullest extent possible, should encourage and promote business and employment opportunities for Washington state citizens.

The public-private initiatives program should be implemented in cooperation and consultation with affected local jurisdictions.

The secretary of transportation should be permitted and encouraged to test the feasibility of building privately funded transportation systems and facilities or segments thereof through the use of innovative agreements with the private sector. The secretary of transportation should be vested with the authority to solicit, evaluate, negotiate, and administer public-private agreements with the private sector relating to the planning, construction, upgrading, or reconstruction of transportation systems and facilities.

Agreements negotiated under a public-private initiatives program will not bestow on private entities an immediate right to construct and operate the proposed transportation facilities. Rather, agreements will grant to private entities the opportunity to design the proposed facilities, demonstrate public support for proposed facilities, and complete the planning processes required in order to obtain a future decision by the department of transportation and other state and local lead agencies on whether the facilities should be permitted and built.

Agreements negotiated under the public-private initiative's program should establish the conditions under which the private developer may secure the approval necessary to develop and operate the proposed transportation facilities; create a framework to attract the private capital necessary to finance their development; and ensure that the transportation facilities will be designed, constructed, and operated in accordance with applicable local, regional, state, and federal laws and the applicable standards and policies of the department of transportation.

The department of transportation should be encouraged to take advantage of new opportunities provided by federal legislation under section 1012 of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). That section establishes a new program authorizing federal participation in construction or improvement or improvement of publicly or privately owned toll roads, bridges, and tunnels, and allows states to leverage available federal funds as a means for attracting private sector capital.

Sec. 2. 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) If projects selected prior to September 1, 1994, are terminated by the public or private sectors, no other projects shall be selected as replacement projects until the department develops a public involvement process to identify prospective projects. The public involvement process shall, at a minimum, identify projects that: (a) Have the potential of achieving overall public support among users of such projects, residents of communities in the vicinity of such projects, and residents of communities impacted by such projects; (b) meet a state transportation need; and (c) provide a significant state benefit.

(3) The department shall develop a public involvement plan for identifying replacement projects by January 1, 1996, and shall submit such plan to the legislative transportation committee for review. Project selections made after September 1, 1994, shall be carried out utilizing the public involvement process developed by the department and reviewed by the legislative transportation committee. Projects that meet the criteria established 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 legislative transportation committee for its consideration. If within forty-five calendar days of such submission the legislative transportation committee has not adopted a resolution recommending that the secretary reject an eligible project, the secretary is authorized to solicit proposals for such eligible project.

(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.

(5) 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. 3. 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 for projects developed under ((~~the~~)) agreements 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.

The department shall not enter into an agreement with a private entity for a project selected prior to September 1, 1994, unless that agreement includes a process that provides for public involvement in decision making with respect to the development of such project.

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. 4. A new section is added to chapter 47.46 RCW to read as follows:

(1) In carrying out the public involvement process required in RCW 47.46.040, the private entity shall proactively seek public participation through a process appropriate to the characteristics of such project, or in the case of a project developed in phases or segments, such phase or segment, that assesses overall public support among: Users of such project, phase, or segment; residents of communities in the vicinity of such project, phase, or segment; and residents of communities impacted by such project, phase, or segment. Such public involvement process shall provide opportunities for users and residents to comment upon key issues regarding such project, phase, or segment, including, but not limited to: (a) Alternative sizes and scopes; (b) design; (c) environmental assessment; (d) right of way and access plans; (e) traffic impacts; (f) tolling or user fee strategies and tolling or user fee ranges; (g) project cost; (h) construction impacts; (i) facility operation; and (j) any other salient characteristics.

(2) In seeking public participation, the private entity shall cause to be conducted on one or more occasions, a comprehensive inventory of public positions of users and residents of communities in the vicinity of or impacted by such project, phase, or segment. Such inventory of public positions shall be conducted by an independent accountant or other independent professional jointly selected and supervised by the private entity and the department of transportation in consultation with the legislative transportation committee. The independent accountant or other independent professional must have a proven history and expertise in assessing public opinion and shall not have a direct or indirect interest in such project. The results of the inventory of public positions shall be made available for public review and comment.

(3) The department shall provide the legislative transportation committee with progress reports on the status of the public involvement process and the inventory of public positions. The results of the inventory of public positions, including public comment on such inventory of public positions, shall be forwarded to the legislative transportation committee for its review. Within forty-five calendar days of submission of such information for a project, phase, or segment, the legislative transportation committee shall conduct a public hearing regarding the results of the inventory of public positions on the project, phase, or segment. Taking into account the information submitted, the legislative transportation committee shall adopt a resolution making a recommendation to the secretary regarding the disposition of the agreement for such project, phase, or segment. Any action by the secretary in response to the recommendation of the legislative transportation committee shall be taken within thirty calendar days of receipt of such recommendation and shall be carried out in accordance with the terms and conditions established in the agreement for such project, phase, or segment.

Sec. 5. RCW 47.46.050 and 1993 c 370 s 5 are each amended to read as follows:

The department may enter into agreements using federal, state, and local financing in connection with the projects, including without limitation, grants, loans, and other measures authorized by section 1012 of ISTEA, and to do such things as necessary and desirable to maximize the funding and financing, including the formation of a revolving loan fund to implement this section.

Agreements entered into under this section shall authorize the private entity to lease the facilities within a designated area or areas from the state and to impose user fees or tolls within the designated area to allow a reasonable rate of return on investment, as established through a negotiated agreement between the state and the private entity. The negotiated agreement shall determine a maximum rate of return on investment, based on project characteristics. If the negotiated rate of return on investment is not affected, the private entity may establish and modify toll rates and user fees.

Agreements may establish "incentive" rates of return beyond the negotiated maximum rate of return on investment. The incentive rates of return shall be designed to provide financial benefits to the affected public jurisdictions and the private entity, given the attainment of various safety, performance, or transportation demand management goals. The incentive rates of return shall be negotiated in the agreement.

Agreements shall require that over the term of the ownership or lease the user fees or toll revenues be applied to payment of the private entity's capital outlay costs for the project, including interest expense, the costs associated with operations, toll collection, maintenance and administration of the facility, reimbursement to the state for the costs of project review and oversight, technical and law enforcement services, establishment of a fund to assure the adequacy of maintenance expenditures, and a reasonable return on investment to the private entity. The ((~~use of any excess toll revenues or user fees may be negotiated between the parties~~)) agreements must require that tolls and user fees be used only for the construction, operation, maintenance, and administration of the project, or where a project is developed in phases or segments, for such phase or segment.

After expiration of the lease of a facility to a private entity, the secretary may continue to charge user fees or tolls for the use of the facility, with these revenues to be used for operations and maintenance of the facility, or to be paid to the local transportation planning agency, or any combination of such uses.

NEW SECTION. Sec. 6. 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.