Z‑0445.4 _____________________________________________
HOUSE BILL 1518
_____________________________________________
State of Washington 57th Legislature 2001 Regular Session
By Representatives Fromhold, Van Luven, Veloria, Conway and Dunn; by request of Governor Locke
Read first time 01/29/2001. Referred to Committee on Trade & Economic Development.
_1 AN ACT Relating to using state sales and use tax revenues
_2 generated within a benefited jurisdiction as a funding source for
_3 community development infrastructure improvements not to exceed
_4 one million dollars of funding per fiscal year; amending RCW
_5 43.135.080; adding new sections to chapter 82.14 RCW; adding a new
_6 section to chapter 82.32 RCW; and creating new sections.
_7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
_8 NEW SECTION. Sec. 1. The legislature finds that:
_9 It is in the best interest of the state of Washington to
10 promote private investment in many areas for the purpose of
11 stimulating economic vitality and promoting economic stability. In
12 many urban areas, urban decay, abandoned buildings, and
13 environmental contamination pose a barrier to redevelopment.
14 Public investment is needed to reclaim brownfields, update
15 infrastructure, and improve the condition of public areas. In the
16 absence of public investment, urban redevelopment projects often
17 cannot pay a return sufficient to attract private investment. These
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_1 urban areas need private investment to create employment
_2 opportunities and to generally improve the economic stability of
_3 many neighborhoods.
_4 In other areas, the public infrastructure necessary to attract
_5 new business or to facilitate the growth and expansion of existing
_6 industry is inadequate. Industry expects that basic infrastructure
_7 such as sewer, roads, power, natural gas, and telecommunications
_8 services will be available at potential industrial and commercial
_9 sites. Private investment is necessary to diversify and strengthen
10 many economies throughout the state; however the private sector is
11 unlikely to invest in areas in which public infrastructure is
12 lacking.
13 In 1999, the state of Washington local government
14 infrastructure study identified a gap in infrastructure financing
15 well over three billion dollars. The legislature finds that with
16 existing local resources, counties, cities, or Indian tribes
17 cannot finance needed public infrastructure projects. The
18 legislature further finds that a partnership between the state,
19 and counties, cities, or Indian tribes, and private industry can
20 make strategic investments in public infrastructure that will
21 stimulate the private investment needed to spur economic
22 development and create jobs.
23 NEW SECTION. Sec. 2. A new section is added to chapter 82.14
24 RCW to read as follows:
25 (1) A county, city, or Indian tribe that obtains approval under
26 section 3 of this act shall receive a monthly distribution from
27 the infrastructure improvement account, hereby created in the
28 state treasury, subject to the limitations in this section and
29 section 3 of this act. The distribution shall be equal to the
30 proceeds from the state share of the sales tax and use tax upon
31 taxable events under chapters 82.08 and 82.12 RCW, within the
32 boundaries of the county or city, or within Indian country of the
33 tribe, subject to the funding limitations in this section. The
34 proceeds shall be from the state share of the sales and use tax
35 from within the specific county, city, or Indian country of the
36 tribe, and shall be deposited as directed in section 5 of this
37 act. No more than five hundred thousand dollars are available for
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_1 any one project in any fiscal year, and no one city, county, or
_2 tribe may receive more than one million dollars in any fiscal
_3 year.
_4 (2) The funding provided in this section shall expire when the
_5 debt obligation for the infrastructure improvement project, as
_6 approved under section 3 of this act, is repaid, but in no event
_7 may the funding be received for more than twenty years after the
_8 first distribution under this section.
_9 (3) The proceeds received under this section shall be used for
10 the purpose of payments on the infrastructure improvement project
11 debt obligations to cover infrastructure improvements and related
12 infrastructure expenses. This revenue is the state's share of the
13 debt obligation repayment, and it may not exceed thirty percent of
14 the total public sector project budget. At least seventy percent of
15 the funding must come from other public or private sources.
16 (4) The definitions in this subsection apply to this section
17 and sections 3 and 5 of this act.
18 (a) "Indian country" has the meaning given in RCW 82.24.010.
19 (b) "Indian tribe" means an Indian nation, tribe, band,
20 community, or other entity recognized as a federally recognized
21 Indian tribe by the United States department of the interior.
22 (c) "Infrastructure improvements" means the construction,
23 renovation, or expansion of publicly owned infrastructure
24 improvements such as dock facilities, park and recreation
25 facilities and areas, parking facilities, public transit
26 facilities, sewer systems, sidewalks, lighting, and pedestrian
27 improvements and amenities, telecommunications systems, water
28 systems, and wastewater systems, including demolition and clean-up
29 activities related to the improvements.
30 (d) "Private partner" does not include any government or any
31 government enterprise, corporation, or other similar entity.
32 (e) "Related infrastructure expenses" includes expenditures for
33 activities such as design, planning, environmental analysis, land
34 and materials acquisition, and site preparation, as well as
35 expenditures for the financing of the infrastructure improvement,
36 such as legal fees, insurance fees, financing fees, principal and
37 interest costs on general indebtedness including reserves, and
38 administrative costs.
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_1 NEW SECTION. Sec. 3. A new section is added to chapter 82.14
_2 RCW to read as follows:
_3 (1) The department of community, trade, and economic
_4 development shall review and approve or deny applications from
_5 counties, cities, or Indian tribes for infrastructure improvement
_6 projects, consistent with the criteria in this section. Counties,
_7 cities, and tribes may develop proposals with other government
_8 entities such as port districts, special purpose districts,
_9 municipal corporations, and public development authorities, but
10 the county, city, or tribe remains the only entity eligible under
11 this section and section 2 of this act. Applications shall be in a
12 form and manner as required by the department of community, trade,
13 and economic development. Funding is available on a first-come
14 basis, with priority based on the date and time an application is
15 received. In the event that a subsequent application is received
16 from a taxing jurisdiction that has overlapping jurisdiction with
17 a jurisdiction with a priority application, the subsequent
18 application shall be approved only if there are sufficient
19 revenues expected to be generated to cover the state's share of
20 the project. All qualifying projects shall be funded until the
21 fiscal funding cap is met. At the point the fiscal funding cap is
22 reached, no proposals may be evaluated until the following fiscal
23 year. Applications denied due to the program funding cap being met
24 must be resubmitted the following fiscal year in order to be
25 reconsidered. The department of community, trade, and economic
26 development shall provide a response to a proposal within sixty
27 days of receipt.
28 (a) During each fiscal year, the department of community,
29 trade, and economic development may approve no more than one
30 million dollars in new projects for each fiscal year.
31 (b) A county, city, or Indian tribe may have no more than two
32 ongoing infrastructure improvement projects at any one time and
33 may not be approved for more than one project in any one year.
34 (c) The funds received under section 3 of this act may not
35 exceed five hundred thousand dollars for any one project per year.
36 (2) A county, city, or Indian tribe may finance infrastructure
37 improvements and related infrastructure expenses in part by using
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_1 tax revenue dedicated under section 5 of this act, subject to
_2 providing the department of community, trade, and economic
_3 development with documentation regarding the following conditions
_4 and requirements:
_5 (a) The county, city, or Indian tribe must certify to the
_6 department that an analysis has been made of the value to the
_7 state of the private portion of the project, and that over a
_8 thirty-year term the projected state revenue, such as sales and
_9 use tax and business and occupation tax, from all state taxes
10 directly associated with the private portion of the project will
11 at least equal the dollar value of the state's funding of the
12 project;
13 (b) The county, city, or Indian tribe must identify the source
14 of funds through which it will fund its share of the
15 infrastructure improvement project;
16 (c) The county, city, or Indian tribe must have received an
17 agreement in writing from a private entity committing to a
18 privately funded private project that will directly benefit from
19 the infrastructure improvements and must provide a copy of such
20 agreement to the department; and
21 (d) A project proposed by a county or city must be consistent
22 with the comprehensive plan and development regulations it has
23 adopted in conformance with chapter 36.70A RCW.
24 (3) The department of community, trade, and economic
25 development may give an approval conditioned on the county, city,
26 or Indian tribe satisfying the conditions and requirements in this
27 section, but in no circumstances may funds be received under
28 section 2 of this act before the conditions in subsection (2) of
29 this section are satisfied, at which point final approval may be
30 given. Upon final approval under this section, the department of
31 community, trade, and economic development shall notify the
32 applicant and the department of revenue.
33 (4) No projects may be approved under this section after June
34 30, 2006.
35 Sec. 4. RCW 43.135.080 and 1998 c 321 s 14 are each amended to
36 read as follows:
37 (1) Initiative Measure No. 601 (chapter 43.135 RCW, as amended
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_1 by chapter 321, Laws of 1998 and the amendatory changes enacted by
_2 section 6, chapter 2, Laws of 1994) is hereby reenacted and
_3 reaffirmed. The legislature also adopts chapter 321, Laws of 1998
_4 to continue the general fund revenue and expenditure limitations
_5 contained in this chapter 43.135 RCW after this one-time transfer
_6 of funds.
_7 (2) RCW 43.135.035(4) does not apply to sections 5 through 13,
_8 chapter 321, Laws of 1998.
_9 (3) RCW 43.135.035(4) does not apply to sections 2 and 3 of
10 this act.
11 NEW SECTION. Sec. 5. A new section is added to chapter 82.32
12 RCW to read as follows:
13 The department shall deposit into the infrastructure
14 improvement account, created in section 2 of this act, all
15 proceeds from the state share of the sales tax and use tax upon
16 taxable events, for those counties, cities, or Indian tribes that
17 have been approved under section 3 of this act. The proceeds shall
18 be from the state share of the sales and use tax from within the
19 specific county, city, or Indian country of the tribe. Pursuant to
20 section 2 of this act, no more than five hundred thousand dollars
21 shall be for any one project in any fiscal year, and any one
22 jurisdiction may receive not more than one million dollars in any
23 fiscal year. If the department has received notice of final
24 approval from the department of community, trade, and economic
25 development under section 3(3) of this act and the sale of bonds
26 or other debt instruments is complete, the department shall notify
27 the state treasurer regarding the monthly distributions under
28 section 2(1) of this act.
29 NEW SECTION. Sec. 6. The state incurs no obligation or
30 liability regarding an infrastructure improvement project under
31 section 3 of this act, other than the funding provided through the
32 sales and use tax under section 2 of this act.
33 NEW SECTION. Sec. 7. If any provision of this act or its
34 application to any person or circumstance is held invalid, the
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_1 remainder of the act or the application of the provision to other
_2 persons or circumstances is not affected.
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