Brief Description: Providing an ongoing funding source for the community economic revitalization board's financial assistance programs.

Sponsors: Representatives Veloria, Eickmeyer, Linville, Chase, Hatfield, Fromhold, McCoy, Conway, Kessler, Cody, Jarrett, Murray, Kenney, Schual-Berke, Clibborn, Lovick, Upthegrove and McIntire; by request of Governor Locke.

Hearing Date: 1/16/03

Staff: Tracey Taylor (786-7196).

Background:

The Community Economic Revitalization Board (CERB) Program was created in 1982 to provide direct loans and grants to counties, cities, and special purpose districts for economic development-related infrastructure improvements. The CERB financing is available for public improvements that include the acquisition, construction, or repair of: domestic and industrial water, sewer and storm water infrastructure; bridge, railroad, electricity, telecommunication, and road improvements; buildings and structures; port facilities; and feasibility studies. The CERB financing must be necessary to either bring a new business into a community or expand or retain an existing business that is already located in the community.

The Public Works Trust Fund (PWTF) Program was created in 1985 to provide loans to counties, cities, and certain special purpose districts, which do not include school and port districts, to improve existing public infrastructure. The PWTF loans are available for the planning, acquisition, construction, repair, reconstruction, replacement, rehabilitation, or improvement of streets and roads, bridges, water systems, or storm and sanitary sewage systems, and solid waste facilities, including recycling facilities. In order to qualify for financial assistance under the PWTF, the county, city, and special purpose district must: (1) impose an excise tax on the sale of real estate of at least one-quarter of 1 percent; (2) have developed a long-term plan for financing public works needs; and (3) be using all local revenue sources that are reasonably available for funding public works.

In 1991, the Legislature authorized the use of a limited amount of PWTF monies to be used for new infrastructure improvements in timber-dependent communities. In 1995, the Legislature re-authorized the use of a limited amount of PWTF monies in timber-dependent communities and expanded its focus to include rural natural resource impact areas.

The state treasurer retains the interest earnings on all accounts, unless they are specifically exempted from this requirement or the account is allowed to retain a specified percentage of interest earnings. The repayments of loan principal and interest for both CERB and PWTF loans are placed into separate accounts in the state treasury (public facilities construction loan revolving account and the public works assistance account).

Last session, the Legislature authorized some of the interest earnings generated by the PWTF and the CERB program accounts to be used to fund public facilities through the CERB program. The state treasurer is required to transfer, on annual basis, interest earnings generated by the repayment of principal and interest of loans made to timber communities and rural natural resource impact areas under the PWTF program into the CERB program. This transfer cannot exceed $4.5 million per year and ends June 30, 2007. In addition beginning July 1, 2004, the CERB program is authorized to retain 100 percent of the interest earnings on loan principal and interest repayments used to finance public facilities.

Summary of Bill:

The state treasurer is required to transfer an amount equal to the interest earnings on all the moneys in the PWTF to the CERB program; thus, providing a permanent funding source for the program. The interest earnings transferred to CERB shall be the proportionate share of the treasury income account earnings based on the average daily balance in the PWTF.

Appropriation: None.

Fiscal Note: Requested on January 13, 2003.

Effective Date: The bill takes effect on July 1, 2005.