SENATE BILL REPORT

                  EHB 2873

              As Reported By Senate Committee On:

          State & Local Government, February 24, 2000

Title:  An act relating to increasing a city or town debt limit for purposes of financing capital facilities associated with economic development.

Brief Description:  Increasing local government debt limits to finance capital facilities.

Sponsors:  Representatives Parlette, Scott, Mulliken and Kessler.

Brief History:

Committee Activity:  State & Local Government:  2/21/2000, 2/24/2000 [DPA].

SENATE COMMITTEE ON STATE & LOCAL GOVERNMENT

Majority Report:  Do pass as amended.

  Signed by Senators Patterson, Chair; Gardner, Vice Chair; Hale, Haugen, Horn, Kline and McCaslin.

Staff:  Eugene Green (786-7405)

Background:  The amount that a city or town can borrow using general obligation debt and the purposes for which it can borrow are ruled by both statute and the state Constitution.  A city=s debt limits or debt capacity are subject to two sets of restrictions.  First, under the statutory and constitutional provisions, debt limits set the maximum amount of general obligation debt that a city can have outstanding at any one time.  Second, debt limits restrict how much of this capacity can be used for various purposes.  Statutorily, a city or town=s debt limit is as follows:  2 and 1/2 percent for providing general governing purposes (voted and nonvoted); 2 and 1/2 percent for provision of municipally-owned water, sewer, or electric facilities (voted); and 2 and 1/2 percent for providing open space and parks (voted).

Summary of Amended Bill:  The use of  the 2 and 1/2 percent voter approved indebtedness for cities and towns to provide open space and park facilities is expanded to include capital facilities associated with economic development.

Amended Bill Compared to Original Bill:  The striking amendment applies to all cities (as did SB 6748) rather than just the city of Leavenworth.  The emergency clause is deleted.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This bill is especially important to the city of Leavenworth.  It is trying to convert an old fruit warehouse into a conference/convention center.  The bill does not increase debt capacity.  There are concerns about limiting the authorization to just the city of Leavenworth.

Testimony Against:  None.

Testified:  PRO:  Representative Parlette, prime sponsor; Ron Rosenbloom, AWC.