Z‑0639.1   _____________________________________________

 

SENATE BILL 5636

 

           _____________________________________________

 

State of Washington      57th Legislature     2001 Regular Session

 

By Senators T. Sheldon, Franklin and Rasmussen; by request of Governor Locke

 

Read first time 01/29/2001.  Referred to Committee on Economic Development & Telecommunications.

_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     

_2      NEW SECTION.  Sec. 3.  A new section is added to chapter 82.14

_3  RCW to read as follows:

_4      (1) The department of community, trade, and economic

_5  development shall review and approve or deny applications from

_6  counties, cities, or Indian tribes for infrastructure improvement

_7  projects, consistent with the criteria in this section.  Counties,

_8  cities, and tribes may develop proposals with other government

_9  entities such as port districts, special purpose districts,

10  municipal corporations, and public development authorities, but

11  the county, city, or tribe remains the only entity eligible under

12  this section and section 2 of this act.  Applications shall be in a

13  form and manner as required by the department of community, trade,

14  and economic development.  Funding is available on a first-come

15  basis, with priority based on the date and time an application is

16  received.  In the event that a subsequent application is received

17  from a taxing jurisdiction that has overlapping jurisdiction with

18  a jurisdiction with a priority application, the subsequent

19  application shall be approved only if there are sufficient

20  revenues expected to be generated to cover the state's share of

21  the project.  All qualifying projects shall be funded until the

22  fiscal funding cap is met.  At the point the fiscal funding cap is

23  reached, no proposals may be evaluated until the following fiscal

24  year.  Applications denied due to the program funding cap being met

25  must be resubmitted the following fiscal year in order to be

26  reconsidered.  The department of community, trade, and economic

27  development shall provide a response to a proposal within sixty

28  days of receipt.

29      (a) During each fiscal year, the department of community,

30  trade, and economic development may approve no more than one

31  million dollars in new projects for each fiscal year.

32      (b) A county, city, or Indian tribe may have no more than two

33  ongoing infrastructure improvement projects at any one time and

34  may not be approved for more than one project in any one year.

35      (c) The funds received under section 3 of this act may not

36  exceed five hundred thousand dollars for any one project per year.

37      (2) A county, city, or Indian tribe may finance infrastructure

38  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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