[atlas:bill]

AN ACT Relating to public financing for construction and operation of facilities developed under the Public-Private Initiatives Program; amending RCW 47.56.040, 47.56.240, 47.56.245, 47.46.050, and 47.46.060; adding new sections to chapter 47.56 RCW; adding a new section to chapter 47.46 RCW; repealing RCW 47.56.271; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature intends to promote public trust in its laws, accountability in governance, and lowest cost financing for public infrastructure projects. The state supreme court has ruled unanimously that the exclusive authority to impose tolls on the existing Tacoma Narrows bridge rests with the state. The supreme court also ruled that state law requires that typical operations, maintenance, repair, and upkeep of that bridge be paid from statewide transportation revenues. The legislature intends to adhere to this statutory scheme for the imposition of tolls to the greatest extent possible, while still responding to the compelling public need for construction and operation of bridges across the Tacoma Narrows.

Furthermore, whereas the supreme court has ruled that the provisions of chapter 47.46 RCW are constitutional, the legislature intends to use all relevant provisions of the agreement developed under that chapter that were not otherwise invalidated by the supreme court, including but not limited to the selection of the design-build contractor for the Tacoma Narrows bridge toll project and the negotiated fixed price for all design, engineering, and construction.

NEW SECTION. Sec. 2. The state transportation commission, in its lawful capacity as the state's toll bridge authority, may impose tolls consistent with this chapter and, if necessary or desirable, chapter 47.58 RCW, for projects that have been selected and developed under chapter 47.46 RCW.

Sec. 3. RCW 47.56.040 and 1984 c 7 s 248 are each amended to read as follows:

The department is empowered, in accordance with the provisions of this chapter or under chapter 47.46 RCW, to provide for the establishment and construction of toll bridges upon any public highways of this state together with approaches thereto wherever it is considered necessary or advantageous and practicable for crossing any stream, body of water, gulch, navigable water, swamp, or other topographical formation whether that formation is within this state or constitutes a boundary between this state and an adjoining state or country. The necessity or advantage and practicability of any such toll bridge shall be determined by the department, and the feasibility of financing any toll bridge in the manner provided by this chapter shall be a primary consideration and determined according to the best judgment of the department. For the purpose of obtaining information for the consideration of the department upon the construction of any toll bridge or any other matters pertaining thereto, any cognizant officer or employee of the state shall, upon the request of the department, make reasonable examination, investigation, survey, or reconnaissance for the determination of material facts pertaining thereto and report this to the department. The cost of any such examination, investigation, survey, or reconnaissance shall be borne by the department or office conducting these activities from the funds provided for that department or office for its usual functions.

Sec. 4. RCW 47.56.240 and 1984 c 7 s 265 are each amended to read as follows:

The commission is hereby empowered to fix the rates of toll and other charges for all toll bridges built under the terms of this chapter or developed under chapter 47.46 RCW. Toll charges so fixed may be changed from time to time as conditions warrant. The commission, in establishing toll charges, shall give due consideration to the cost of operating and maintaining such toll bridge or toll bridges including the cost of insurance, and to the amount required annually to meet the redemption of bonds and interest payments on them. The tolls and charges shall be at all times fixed at rates to yield annual revenue equal to any required annual operating and maintenance expenses including insurance costs and all redemption payments and interest charges of the bonds issued for any particular toll bridge or toll bridges as the bonds become due. The bond redemption and interest payments constitute a first direct and exclusive charge and lien on all such tolls and other revenues and interest thereon. Sinking funds created therefrom received from the use and operation of the toll bridge or toll bridges, and such tolls and revenues together with the interest earned thereon shall constitute a trust fund for the security and payment of such bonds and shall not be used or pledged for any other purpose as long as any of these bonds are outstanding and unpaid.

Sec. 5. RCW 47.56.245 and 1984 c 7 s 267 are each amended to read as follows:

The ((~~department~~)) commission shall retain toll charges on all existing and future facilities until all costs of investigation, financing, acquisition of property, and construction advanced from the motor vehicle fund, and obligations incurred under RCW 47.56.250 and chapter 16, Laws of 1945 have been fully paid. With respect to every facility completed after March 19, 1953, costs of maintenance, management, and operation ((~~shall~~)) may be paid periodically out of the revenues of the facility in which such costs were incurred.

NEW SECTION. Sec. 6. Toll revenues generated from any facility developed under chapter 47.46 RCW after January 1, 2001, may be used for costs necessary or incident to operation of the toll facilities, including maintenance and preservation of the facilities.

NEW SECTION. Sec. 7. Pursuant to RCW 43.135.055, the legislature authorizes the transportation commission to increase bridge tolls in excess of the fiscal growth factor.

NEW SECTION. Sec. 8. The issuance, sale, and retirement of bonds authorized in RCW 47.10.843 through 47.10.848 (Referendum 49 bonds), is under the supervision and control of the state finance committee, which, upon request of the department of transportation shall provide for the issuance, sale, and retirement of coupon or registered bonds to be dated, issued, and sold from time to time in such amounts as the department of transportation determines to be necessary to meet the purposes specified in this chapter.

NEW SECTION. Sec. 9. Money arising from the sale of bonds under RCW 47.10.843 through 47.10.848 for the purposes authorized under section 1 of this act must be deposited in the state treasury to the credit of the Tacoma Narrows toll bridge account created in section 10 of this act. Those funds are available only for the purposes enumerated in this chapter, for payment of the expense incurred in the issuance and sale of any such bonds, and to repay the motor vehicle fund for any sums advanced to pay the cost of surveys, location, design, right-of-way, and all other things necessary for the construction of the bridge and its approaches.

NEW SECTION. Sec. 10. A special account to be known as the Tacoma Narrows toll bridge account is created in the motor vehicle fund in the state treasury. Any capitalized interest from the proceeds of the bonds authorized under RCW 47.10.843, and at least monthly all of the tolls and other revenues received from the operation of the toll bridge and from any interest that may be earned from the deposit or investment of these revenues after the payment of costs of operation, maintenance, management, and necessary repairs of the facility must be deposited into this account.

NEW SECTION. Sec. 11. All tolls or other revenues received from the operation of the Tacoma Narrows toll bridge constructed with the proceeds of bonds issued and sold under RCW 47.10.843 through 47.10.848 must be paid by the department to the state treasurer, who shall deposit them as demand deposits in a depositary or depositaries authorized by law to receive deposits of state funds, to the credit of the Tacoma Narrows toll bridge account.

NEW SECTION. Sec. 12. Tolls must remain on the facility for a length of time necessary to repay the motor vehicle fund for any amounts expended on the design, development, construction, maintenance, repair, or operation of the Tacoma Narrows toll bridge project. Funds specifically appropriated as a state financial contribution to the project do not require repayment.

NEW SECTION. Sec. 13. A new section is added to chapter 47.46 RCW to read as follows:

RCW 47.46.010 authorizes private entities to undertake either all or a portion of the study, planning, design, development, financing, acquisition, installation, construction or improvement, operation, and maintenance of transportation projects developed under the public-private initiative program. RCW 47.46.040(4) authorizes the state to exercise any power it possesses to facilitate the development of the project, including any powers related to financing and operation. While still upholding the constitutionality of this chapter, the state supreme court unanimously held that the contractual method proposed for a private entity to impose tolls on the existing Tacoma Narrows bridge, as well as proposed uses of the toll revenues, violate state law. Therefore, the legislature intends to rely upon existing state laws to provide a public toll authority and public financing, while allowing the remainder of the project proposed under this chapter to proceed.

Sec. 14. RCW 47.46.050 and 1995 2nd sp.s. c 19 s 4 are each amended to read as follows:

(1) 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.

(2) Agreements entered into under this section ((~~shall~~)) may 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.

(3) 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.

(4) Agreements ((~~shall~~)) may require that over the term of the ownership or lease the user fees or toll revenues be applied only to payment of the ((~~private entity's~~)) capital outlay costs for the project, including project development costs, interest expense, the costs associated with design, construction, operations, toll collection, maintenance and administration of the project, reimbursement to the state for all costs associated with an election as required under RCW 47.46.030, 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. A negotiated agreement shall not extend the term of the ownership or lease beyond the period of time required for payment of the private entity's capital outlay costs for the project under this subsection.

Sec. 15. RCW 47.46.060 and 1998 c 179 s 4 are each amended to read as follows:

(1) Either the department of transportation or a private entity that is party to an agreement under this chapter may apply for deferral of taxes on the site preparation for, the construction of, the acquisition of any related machinery and equipment which will become a part of, and the rental of equipment for use in the state route number 16 corridor improvements project under this chapter. Application shall be made to the department of revenue in a form and manner prescribed by the department of revenue. The application shall contain information regarding estimated or actual costs, time schedules for completion and operation, and other information required by the department of revenue. The department of revenue shall approve the application within sixty days if it meets the requirements of this section.

(2) The department of revenue shall issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW on the project. The use of the certificate shall be governed by rules established by the department of revenue.

(3) The department of transportation or a private entity granted a tax deferral under this section shall begin paying the deferred taxes in the fifth year after the date certified by the department of revenue as the date on which the project is operationally complete. The first payment is due on December 31st of the fifth calendar year after such certified date, with subsequent annual payments due on December 31st of the following nine years. Each payment shall equal ten percent of the deferred tax.

(4) The department of revenue or the department of transportation may authorize an accelerated repayment schedule upon request of a private entity granted a deferral under this section.

(5) Interest shall not be charged on any taxes deferred under this section for the period of deferral, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed for delinquent payments under this section. The debt for deferred taxes is not extinguished by insolvency or other failure of the private entity.

(6) Applications and any other information received by the department of revenue under this section are not confidential and are subject to disclosure. Chapter 82.32 RCW applies to the administration of this section.

NEW SECTION. Sec. 16. RCW 47.56.271 (Tacoma Narrows bridge--Toll free facility) and 1983 c 3 s 130 & 1965 c 50 s 1 are each repealed.

NEW SECTION. Sec. 17. Sections 1, 2, and 6 through 12 of this act are added to chapter 47.56 RCW.

NEW SECTION. Sec. 18. 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 takes effect immediately.