READ FIRST TIME 03/07/05.   

     AN ACT Relating to mitigation or mitigation fees imposed by the department of transportation; amending RCW 82.02.100; reenacting and amending RCW 43.79A.040; adding new sections to chapter 43.21C RCW; and adding new sections to chapter 47.04 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 43.21C RCW to read as follows:
     (1) The department of transportation may impose mitigation fees, or require mitigation, from development activity that creates additional significant demand and need for transportation improvements to highways of statewide significance or related facilities or state highways in urban growth areas as defined in RCW 36.70A.030, as determined by the department. This authority may be exercised only under this chapter.
     (2) The mitigation or mitigation fee(s):
     (a) Must be determined within the time frame and in conjunction with the process established under this chapter;
     (b) May be imposed only for state transportation improvements that are reasonably related to the development activity;
     (c) May not exceed a proportionate share of the costs of state transportation improvements that are reasonably related to the development activity;
     (d) Must be used for state transportation improvements that will reasonably benefit the development activity;
     (e) Must be spent in all cases within six years of collection, or the unspent funds must be refunded; and
     (f) Must be transparent and the method and details of how the mitigation or mitigation fee was derived must be included in the assessment.
     (3)(a) Subject to (b) of this subsection, the determination of the mitigation, or the collection of mitigation fees, must be included in the local entity's mitigation assessment.
     (b) If there is no local mitigation assessment, or if the department of transportation chooses to assess its mitigation separately, then the department of transportation may submit the mitigation or mitigation fee, or both, separately from the local jurisdiction, consistent with the mitigation process established under this chapter. However, the development activity may not be charged twice for any particular mitigation required.
     (c) Regardless of whether the mitigation or mitigation fee is assessed under (a) or (b) of this subsection (3), local jurisdictions may fund the department of transportation mitigation fee through alternative revenue sources.
     (4) The department shall adopt rules under chapter 34.05 RCW regarding:
     (a) The criteria applicable to a determination under subsection (1) of this section as to whether development activity creates additional significant demand and need for transportation improvements to highways of statewide significance or related facilities or state highways in urban growth areas as defined in RCW 36.70A.030;
     (b) A formula or method for calculating the amount of mitigation or mitigation fees, or both, to be imposed on the development activity, considering (i) the type of development activity subject to the fees and (ii) the proportionate share of the costs of state transportation improvements that are reasonably related to the development activity;
     (c) Provisions outlining the types of nonfee-based mitigation that are allowed, establishing standards for such mitigation and outlining oversight procedures for such mitigation;
     (d) The administration and collection of the fees;
     (e) The provision that a development activity may not be charged twice for any particular mitigation required;
     (f) The allowance of an adjustment to the standard mitigation fee at the time the fee is imposed to consider unusual circumstances in specific cases to ensure that mitigation fees are imposed fairly;
     (g) An administrative appeals process for the appeal of a mitigation fee that is in compliance with RCW 43.21C.075; and
     (h) Procedures for refunding funds not spent within six years.
     (5) The following development activities are exempt from this section:
     (a) Residential development meeting the criteria of "affordable housing" as defined in RCW 43.63A.510; or
     (b) Development that generates less than twenty-five "peak hour trips" on a highway of statewide significance or on its related facilities or state highways in urban growth areas as defined in RCW 36.70A.030. However, development activity subject to this exemption may choose, at the developer's option, to subject the development activity to the provisions of this section.
     (6) Infrastructure improvement projects currently funded by federal, state, or local revenue shall not be included as part of a mitigation, or mitigation fee, assessed on development activity.
     (7) Mitigation fees imposed under this section must be deposited into the transportation mitigation fee account, hereby created in the custody of the state treasurer. Expenditures from the account must be used only for the purpose or purposes for which the mitigation fees were imposed, and according to subsection (2) of this section. Only the secretary of transportation or the secretary's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 2   A new section is added to chapter 43.21C RCW to read as follows:
     (1) Within two working days of receipt of notification or application for a development project that is either (a) subject to a State Environmental Policy Act review under this chapter or (b) that is adjacent to a highway of statewide significance or a state highway in an urban growth area as defined in RCW 36.70A.030, the local governmental entity receiving the application or notification shall notify the department of transportation of the proposed project. Before preparing the environmental impact statement or issuing a threshold determination, the lead agency shall consult with the department of transportation. Any significant adverse impacts identified by the department of transportation must be included in the environmental impact statement or the threshold determination. The department of transportation must notify the lead agency of any such impacts in a timely manner to allow the responsible official to comply with RCW 43.21C.033.

Sec. 3   RCW 82.02.100 and 1992 c 219 s 2 are each amended to read as follows:
     A person required to pay a fee pursuant to RCW 43.21C.060 or section 1 of this act for system improvements shall not be required to pay an impact fee under RCW 82.02.050 through 82.02.090 for those same system improvements.

NEW SECTION.  Sec. 4   A new section is added to chapter 47.04 RCW to read as follows:
     The department of transportation may impose mitigation or mitigation fees, or both, according to sections 1 and 2 of this act.

Sec. 5   RCW 43.79A.040 and 2004 c 246 s 8 and 2004 c 58 s 10 are each reenacted and amended to read as follows:
     (1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury.
     (2) All income received from investment of the treasurer's trust fund shall be set aside in an account in the treasury trust fund to be known as the investment income account.
     (3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4)(a) Monthly, the state treasurer shall distribute the earnings credited to the investment income account to the state general fund except under (b) and (c) of this subsection.
     (b) The following accounts and funds shall receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The Washington promise scholarship account, the college savings program account, the Washington advanced college tuition payment program account, the agricultural local fund, the American Indian scholarship endowment fund, the students with dependents grant account, the basic health plan self-insurance reserve account, the contract harvesting revolving account, the Washington state combined fund drive account, the Washington international exchange scholarship endowment fund, the developmental disabilities endowment trust fund, the energy account, the fair fund, the fruit and vegetable inspection account, the future teachers conditional scholarship account, the game farm alternative account, the grain inspection revolving fund, the juvenile accountability incentive account, the law enforcement officers' and fire fighters' plan 2 expense fund, the local tourism promotion account, the produce railcar pool account, the rural rehabilitation account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the sulfur dioxide abatement account, the children's trust fund, the Washington horse racing commission Washington bred owners' bonus fund account, the Washington horse racing commission class C purse fund account, ((and)) the Washington horse racing commission operating account (earnings from the Washington horse racing commission operating account must be credited to the Washington horse racing commission class C purse fund account), and the transportation mitigation fee account. However, the earnings to be distributed shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (c) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advanced right of way revolving fund, the advanced environmental mitigation revolving account, the city and county advance right-of-way revolving fund, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.
     (5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 6   A new section is added to chapter 47.04 RCW to read as follows:
     The department of transportation may impose and collect latecomer fees on behalf of another entity for infrastructure improvement projects initially funded partially or entirely by private sources. However, there must be an agreement in place between the department of transportation and the entity before the imposition and collection of any such fees, that specifies (1) the collection process; (2) the maximum amount that may be collected; and (3) the period of time during which the collection may occur.