1418-S.E AAS 04/09/01 S-2624.1

1418-S.E AAS 04/09/01 S2624.1

ESHB 1418 - S AMD 258

By Senator Brown

ADOPTED 04/09/01

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. Regular property taxes do not include excess property tax levies that are exempt from the aggregate limits for junior and senior taxing districts as provided in RCW 84.52.043.

(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-five 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-five 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-five 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-five 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 a legal newspaper of general circulation within the proposed increment area 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 of general circulation 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 in 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.

NEW SECTION. Sec. 11. A new section is added to chapter 27.12 RCW to read as follows:

In addition to other authority that a rural county library district or intercounty rural library district possesses, a rural county library district or an intercounty rural library district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a rural county library district or intercounty rural library district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 12. A new section is added to chapter 35.61 RCW to read as follows:

In addition to other authority that a metropolitan park district possesses, a metropolitan park district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a metropolitan park district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 13. A new section is added to chapter 36.32 RCW to read as follows:

In addition to other authority that a county possesses, a county may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a county to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 14. A new section is added to chapter 36.68 RCW to read as follows:

In addition to other authority that a park and recreation service area possesses, a park and recreation service area may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a park and recreation service area to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 15. A new section is added to chapter 36.69 RCW to read as follows:

In addition to other authority that a park and recreation district possesses, a park and recreation district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a park and recreation district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 16. A new section is added to chapter 36.75 RCW to read as follows:

In addition to other authority that a road district possesses, a road district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a road district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 17. A new section is added to chapter 52.12 RCW to read as follows:

In addition to other authority that a fire protection district possesses, a fire protection district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a fire protection district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 18. A new section is added to chapter 53.08 RCW to read as follows:

In addition to other authority that a port district possesses, a port district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a port district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 19. A new section is added to chapter 54.16 RCW to read as follows:

In addition to other authority that a public utility district possesses, a public utility district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a public utility district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 20. A new section is added to chapter 67.38 RCW to read as follows:

In addition to other authority that a cultural arts, stadium, and convention center district possesses, a cultural arts, stadium, and convention center district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a cultural arts, stadium, and convention center district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 21. A new section is added to chapter 68.52 RCW to read as follows:

In addition to other authority that a cemetery district possesses, a cemetery district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a cemetery district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 22. A new section is added to chapter 70.44 RCW to read as follows:

In addition to other authority that a public hospital district possesses, a public hospital district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a public hospital district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 23. A new section is added to chapter 86.15 RCW to read as follows:

In addition to other authority that a flood control zone district possesses, a flood control zone district may provide any public improvement as defined under section 2 of this act, but this additional authority is limited to participating in the financing of the public improvements as provided under section 5 of this act.

This section does not limit the authority of a flood control zone district to otherwise participate in the public improvements if that authority exists elsewhere.

NEW SECTION. Sec. 24. A new section is added to chapter 84.55 RCW to read as follows:

Limitations on regular property taxes that are provided in this chapter shall continue in a taxing district whether or not an increment area exists within the taxing district as provided under chapter 39.-- RCW (sections 1 through 10 and 29 of this act).

Sec. 25. RCW 36.33.220 and 1973 1st ex.s. c 195 s 142 are each amended to read as follows:

The legislative authority of any county may budget, in accordance with the provisions of chapter 36.40 RCW, and expend any portion of the county road property tax revenues for any service to be provided in the unincorporated area of the county notwithstanding any other provision of law, including chapter 36.82 RCW and RCW 84.52.050 and 84.52.043. County road property tax revenues that are diverted under chapter 39.-- RCW (sections 1 through 10 and 29 of this act) may be expended as provided under chapter 39.-- RCW (sections 1 through 10 and 29 of this act).

Sec. 26. RCW 36.79.140 and 1997 c 81 s 6 are each amended to read as follows:

At the time the board reviews the six-year program of each county each even-numbered year, it shall consider and shall approve for inclusion in its recommended budget, as required by RCW 36.79.130, the portion of the rural arterial construction program scheduled to be performed during the biennial period beginning the following July 1st. Subject to the appropriations actually approved by the legislature, the board shall as soon as feasible approve rural arterial trust account funds to be spent during the ensuing biennium for preliminary proposals in priority sequence as established pursuant to RCW 36.79.090. Only those counties that during the preceding twelve months have spent all revenues collected for road purposes only for such purposes, including traffic law enforcement, as are allowed to the state by Article II, section 40 of the state Constitution are eligible to receive funds from the rural arterial trust account((~~: PROVIDED HOWEVER~~)), except that: (1) Counties with a population of less than eight thousand are exempt from this eligibility restriction((~~: AND PROVIDED FURTHER, That~~)); (2) counties expending revenues collected for road purposes only on other governmental services after authorization from the voters of that county under RCW 84.55.050 are also exempt from this eligibility restriction; and (3) this restriction shall not apply to any moneys diverted from the road district levy under chapter 39.-- RCW (sections 1 through 10 and 29 of this act). The board shall authorize rural arterial trust account funds for the construction project portion of a project previously authorized for a preliminary proposal in the sequence in which the preliminary proposal has been completed and the construction project is to be placed under contract. At such time the board may reserve rural arterial trust account funds for expenditure in future years as may be necessary for completion of preliminary proposals and construction projects to be commenced in the ensuing biennium.

The board may, within the constraints of available rural arterial trust funds, consider additional projects for authorization upon a clear and conclusive showing by the submitting county that the proposed project is of an emergent nature and that its need was unable to be anticipated at the time the six-year program of the county was developed. The proposed projects shall be evaluated on the basis of the priority rating factors specified in RCW 36.79.080.

Sec. 27. RCW 36.82.040 and 1973 1st ex.s. c 195 s 41 are each amended to read as follows:

For the purpose of raising revenue for establishing, laying out, constructing, altering, repairing, improving, and maintaining county roads, bridges, and wharves necessary for vehicle ferriage and for other proper county purposes, the board shall annually at the time of making the levy for general purposes make a uniform tax levy throughout the county, or any road district thereof, of not to exceed two dollars and twenty-five cents per thousand dollars of assessed value of the last assessed valuation of the taxable property in the county, or road district thereof, unless other law of the state requires a lower maximum levy, in which event such lower maximum levy shall control. All funds accruing from such levy shall be credited to and deposited in the county road fund except that revenue diverted under RCW 36.33.220 shall be placed in a separate and identifiable account within the county current expense fund and except that revenue diverted under chapter 39.-- RCW (sections 1 through 10 and 29 of this act) shall be expended as provided under chapter 39.-- RCW (sections 1 through 10 and 29 of this act).

Sec. 28. RCW 46.68.124 and 1990 c 33 s 586 are each amended to read as follows:

(1) The equivalent population for each county shall be computed as the sum of the population residing in the county's unincorporated area plus twenty-five percent of the population residing in the county's incorporated area. Population figures required for the computations in this subsection shall be certified by the director of the office of financial management on or before July 1st of each odd-numbered year.

(2) The total annual road cost for each county shall be computed as the sum of one twenty-fifth of the total estimated county road replacement cost, plus the total estimated annual maintenance cost. Appropriate costs for bridges and ferries shall be included. The county road administration board shall be responsible for establishing a uniform system of roadway categories for both maintenance and construction and also for establishing a single statewide cost per mile rate for each roadway category. The total annual cost for each county will be based on the established statewide cost per mile and associated mileage for each category. The mileage to be used for these computations shall be as shown in the county road log as maintained by the county road administration board as of July 1, 1985, and each two years thereafter. Each county shall be responsible for submitting changes, corrections, and deletions as regards the county road log to the county road administration board. Such changes, corrections, and deletions shall be subject to verification and approval by the county road administration board prior to inclusion in the county road log.

(3) The money need factor for each county shall be the county's total annual road cost less the following four amounts:

(a) One-half the sum of the actual county road tax levied upon the valuation of all taxable property within the county road districts pursuant to RCW 36.82.040, including any amount of such tax diverted under chapter 39.-- RCW (sections 1 through 10 and 29 of this act), for the two calendar years next preceding the year of computation of the allocation amounts as certified by the department of revenue;

(b) One-half the sum of all funds received by the county road fund from the federal forest reserve fund pursuant to RCW 28A.520.010 and 28A.520.020 during the two calendar years next preceding the year of computation of the allocation amounts as certified by the state treasurer;

(c) One-half the sum of timber excise taxes received by the county road fund pursuant to chapter 84.33 RCW in the two calendar years next preceding the year of computation of the allocation amounts as certified by the state treasurer;

(d) One-half the sum of motor vehicle license fees and motor vehicle and special fuel taxes refunded to the county, pursuant to RCW 46.68.080 during the two calendar years next preceding the year of computation of the allocation amounts as certified by the state treasurer.

(4) The state treasurer and the department of revenue shall furnish to the county road administration board the information required by subsection (3) of this section on or before July 1st of each odd-numbered year.

(5) The county road administration board, shall compute and provide to the counties the allocation factors of the several counties on or before September 1st of each year based solely upon the sources of information herein before required: PROVIDED, That the allocation factor shall be held to a level not more than five percent above or five percent below the allocation factor in use during the previous calendar year. Upon computation of the actual allocation factors of the several counties, the county road administration board shall provide such factors to the state treasurer to be used in the computation of the counties' fuel tax allocation for the succeeding calendar year. The state treasurer shall adjust the fuel tax allocation of each county on January 1st of every year based solely upon the information provided by the county road administration board.

NEW SECTION. Sec. 29. Sections 1 through 10 of this act expire July 1, 2010.

NEW SECTION. Sec. 30. Sections 1 through 10 and 29 of this act constitute a new chapter in Title 39 RCW.

NEW SECTION. Sec. 31. 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."

ESHB 1418 - S AMD 258

By Senator Brown

ADOPTED 04/09/01

On page 1, line 1 of the title, after "financing;" strike the remainder of the title and insert "amending RCW 36.33.220, 36.79.140, 36.82.040, and 46.68.124; adding a new section to chapter 27.12 RCW; adding a new section to chapter 35.61 RCW; adding a new section to chapter 36.32 RCW; adding a new section to chapter 36.68 RCW; adding a new section to chapter 36.69 RCW; adding a new section to chapter 36.75 RCW; adding a new section to chapter 52.12 RCW; adding a new section to chapter 53.08 RCW; adding a new section to chapter 54.16 RCW; adding a new section to chapter 67.38 RCW; adding a new section to chapter 68.52 RCW; adding a new section to chapter 70.44 RCW; adding a new section to chapter 86.15 RCW; adding a new section to chapter 84.55 RCW; adding a new chapter to Title 39 RCW; and providing an expiration date."