BILL REQ. #:  H-2022.1 

READ FIRST TIME 3/10/03.   

     AN ACT Relating to lease rates for marinas on state-owned aquatic lands that provide public moorage; amending RCW 79.90.480; and declaring an emergency.

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

Sec. 1   RCW 79.90.480 and 1998 c 185 s 2 are each amended to read as follows:
     Except as otherwise provided by this chapter, annual rent rates for the lease of state-owned aquatic lands for water-dependent uses shall be determined as follows:
     (1)(a) The assessed land value, exclusive of improvements, as determined by the county assessor, of the upland tax parcel used in conjunction with the leased area or, if there are no such uplands, of the nearest upland tax parcel used for water-dependent purposes divided by the parcel area equals the upland value.
     (b) The upland value times the area of leased aquatic lands times thirty percent equals the aquatic land value.
     (2) As of July 1, 1989, and each July 1st thereafter, the department shall determine the real capitalization rate to be applied to water-dependent aquatic land leases commencing or being adjusted under subsection (3)(a) of this section in that fiscal year. The real capitalization rate shall be the real rate of return, except that until June 30, 1989, the real capitalization rate shall be five percent and thereafter it shall not change by more than one percentage point in any one year or be more than seven percent or less than three percent.
     (3) The annual rent shall be:
     (a) Determined initially, and redetermined every four years or as otherwise provided in the lease, by multiplying the aquatic land value times the real capitalization rate; and
     (b) Adjusted by the inflation rate each year in which the rent is not determined under subsection (3)(a) of this section.
     (4) If the upland parcel used in conjunction with the leased area is not assessed or has an assessed value inconsistent with the purposes of the lease, the nearest comparable upland parcel used for similar purposes shall be substituted and the lease payment determined in the same manner as provided in this section.
     (5) For the purposes of this section, "upland tax parcel" is a tax parcel, some portion of which has upland characteristics. Filled tidelands or shorelands with upland characteristics which abut state-owned aquatic land shall be considered as uplands in determining aquatic land values.
     (6) The annual rent for filled state-owned aquatic lands that have the characteristics of uplands shall be determined in accordance with RCW 79.90.500 in those cases in which the state owns the fill and has a right to charge for the fill.
     (7) For leases for marina uses only, ((beginning on June 11, 1998)) as of January 1, 2004, the annual rental rates ((in effect on December 31, 1997, shall remain in effect until July 1, 1999, at which time the annual water-dependent rent)) shall be determined by the ((method in effect at that time. In order to be eligible for the rate to remain at this level, a marina lease must be in good standing, meaning that the lessee must be current with payment of rent, the lease not expired or in approved holdover status, and the lessee not in breach of other terms of the agreement)) marina rent formula developed by the department pursuant to subsection (8) of this section.
     (8)(a) On January 1, 2004, consistent with the provisions of this subsection (8), the lease rates for a marina are a percentage of the annual gross revenues generated by that marina. Lease rates must be recalculated annually based upon the marina's gross revenues from the previous year, as reported to the department consistent with this subsection (8).
     (b) By January 1, 2004, the department must develop a formula for calculating marina rents consistent with this subsection (8). The formula prepared and implemented by the department must at a minimum include the percentage of gross revenues that will serve as the basis for a marina's rent and a designation of revenue sources that will be considered for rent calculation purposes. In developing a percentage of gross revenues, the department must ensure, given the available information, that the rent formula is initially calculated to at least maintain state proceeds from marina rents as of July 1, 2003, and that if the department does not receive ninety percent of the income reporting forms required to be delivered under (d) of this subsection, the department may determine the initial percentage of revenue consistent with the goals of this section. In addition to the percent of marina income, the department shall determine the administrative costs of the department to calculate, audit, execute, and monitor marina leases. All administrative costs recovered by the department must be deposited into the resource management cost account created in RCW 79.64.020.
     (c) When developing a marina lease formula consistent with this subsection (8), the department shall ensure that the percentage of revenue established is applied to the income of the direct lessee, as well as to the income of any person or entity that subleases, or contracts to operate the marina, with the direct lessee, less the amount paid by the sublease to the direct lessee.
     (d) All marina operators under lease with the department must return to the department an income reporting form, provided by the department, and all state and federal tax information before July 1, 2003, and again annually on a date set by the department. On the income reporting form, the department may require a marina to disclose to the department any information about income from all marina related sources, excluding restaurants and bars. All income reports submitted to the department are subject to audit and revision by the department and the department may inspect all of the lessee's books, records, and documents relating to the operation of the leased aquatic lands at all reasonable times. If the lessee fails to submit the required income information, the department may conduct an audit at the lessee's expense or cancel the lease.
     (e) Initially, the marina rent formula developed by the department pursuant to (b) of this subsection will be applied to each marina on its 2004 anniversary date, and will be based on that marina's 2003 income information.
     (f) No marina lease may be for less than five hundred dollars, plus any administrative costs required to reimburse the department for the cost of establishing new marina leases.
     (9) For all new leases for ((marinas, or any)) other water-dependent uses, issued after December 31, 1997, the initial annual water-dependent rent shall be determined by the methods in subsections (1) through (6) of this section.

NEW SECTION.  Sec. 2   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.