BILL REQ. #:  H-3818.1 

Read first time 01/16/2004.   Referred to Committee on Transportation.

     AN ACT Relating to a private-public partnership program; and adding a new chapter to Title 47.46 RCW.

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

NEW SECTION.  Sec. 1   LEGISLATIVE INTENT. The legislature finds that creating partnerships between private and public sector organizations can most effectively use available resources for the benefit of the citizens of the state. The legislature intends to encourage and promote these ventures by creating a program that allows private entities to finance and construct improvements to the state's highway infrastructure that are financed and constructed with the resources and best attributes of the public and private sectors.

NEW SECTION.  Sec. 2   ESTABLISHING P4 PROGRAM WITHIN THE DOT. The public-private partnership program (P4) is established within the department of transportation. The department shall solicit proposals for improvements to the state highway system from private entities, or from public entities that have entered into an agreement with a private entity that will provide more than fifty percent of financing for the project.
     Cities, counties, and public port districts are eligible to form partnerships with private entities to sponsor a project for development and construction under this chapter.

NEW SECTION.  Sec. 3   PROJECT DEFINITION. New improvements to the existing state transportation system, as well as reconstruction of existing highway facilities, are eligible to be proposed by public or private sponsors. Improvements must meet applicable standards of design and operability of the state highway system or have deviations that can be approved by the department before construction of the project. Improvements include but are not limited to new or improved access interchanges, facilities such as park and ride lots, highway safety rest areas, and any other new or modified improvement to the state highway system.

NEW SECTION.  Sec. 4   CREATION OF P4 INFRASTRUCTURE ACCOUNT. The public-private partners (P4) infrastructure account is established in the state treasury. Revenues collected from state sales taxes on transportation projects constructed under this chapter must be deposited into the account. Money may be placed in the account from the proceeds of bonds or from any other lawful source. Money in the account may be used to provide, in whole or in part, financial guarantees and payments as part of a negotiated development agreement for state highway construction projects authorized in section 8 of this act.

NEW SECTION.  Sec. 5   ELIGIBILITY FOR FUNDING UNDER RURAL ECONOMIC DEVELOPMENT FUND. Projects developed under this chapter qualify for investment in rural counties from the rural economic development fund.

NEW SECTION.  Sec. 6   RESPONSIBILITIES OF PRIVATE SPONSORS. All projects constructed under this chapter must conform with the ASHTO highway design standards in effect at the time of commencing project construction. Private sponsors of projects constructed under this chapter must pay for all project construction and permitting costs. Compensation to the private sector for their participation in this program will be under section 8 of this act.

NEW SECTION.  Sec. 7   PROJECT PRIORITIZATION AND SELECTION. (1) Projects funded under this chapter may not exceed fifty million dollars.
     (2) The department shall develop criteria for prioritizing projects submitted for funding under this chapter. The selection criteria for projects are:
     (a) Economic development potential; and
     (b) Amount of private investment as a percentage of total project cost.
     (3) After reaching a tentative negotiated agreement with a project sponsor, the department shall forward the proposed project and negotiated agreement to the legislative transportation committee for review, comment, and final approval.

NEW SECTION.  Sec. 8   NEGOTIATED AGREEMENTS. The department shall review and evaluate proposals from private sponsors, or public sponsors that have majority financial participation from private sector partners. The department shall negotiate the terms and compensation for projects constructed and delivered. The total amount of compensation to be agreed upon must be comprised of a mix of funds from the P4 infrastructure account in section 4 of this act and tax credits and incentives provided in section 9 of this act. The department shall make every effort to maximize compensation from tax incentives and credits, and minimize direct payments from the P4 infrastructure account. Payments to project sponsors must be completed within twenty-five years of the date the project is certified as complete and control returned to the state.

NEW SECTION.  Sec. 9   TAX INCENTIVES SUBJECT TO NEGOTIATED AGREEMENTS. In negotiating agreements under this chapter, the department shall propose compensating private sector participants with a combination of funds from the P4 infrastructure account and from tax incentives. Tax incentives eligible for compensation include:
     (1) Proceeds from tax increment financing, based upon new development associated with the project;
     (2) Property tax deferrals for new development associated with the project;
     (3) Property tax exemptions for new development associated with the project;
     (4) Sales tax deferrals for new development associated with the project; and
     (5) Sales tax exemptions for new development associated with the project.

NEW SECTION.  Sec. 10   Projects developed under this chapter are not considered public works projects under Title 39 RCW. Projects authorized for development under this chapter are subject to the expedited permitting process as authorized under chapter 47.06C RCW.

NEW SECTION.  Sec. 11   RESPONSIBILITIES AFTER PROJECT COMPLETION. Project sponsors may not own the finished transportation facility after construction is certified as complete. Private sector sponsors may not impose tolls or other charges for use of the facility. The department shall assume all maintenance and operation of the facility upon project completion.

NEW SECTION.  Sec. 12   Captions used in this act are not part of the law.

NEW SECTION.  Sec. 13   Sections 1 through 12 of this act are each added to chapter 47.46 RCW.