BILL REQ. #:  S-2206.1 

READ FIRST TIME 03/02/05.   

     AN ACT Relating to financing local economic development projects; amending RCW 70.105D.020; adding a new section to chapter 82.29A RCW; and adding a new chapter to Title 43 RCW.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that, in many areas of the state, the lack of necessary infrastructure and vacant brownfields act as an impediment to economic growth.
     (2) The legislature further finds that public improvements to brownfields, carried out in accordance with local economic development plans, will encourage investment in job-producing private development and will expand the public tax base.
     (3) The legislature intends, through this act, to promote and facilitate the orderly development and economic stability of communities in the state. It is the purpose of this chapter to provide financial resources to assist local jurisdictions in the financing of public improvements which are needed to encourage private development where this development would not otherwise occur due to the presence of contaminated property and other environmental considerations.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Authority" means the Washington economic development finance authority created in chapter 43.163 RCW.
     (2) "Brownfield" means abandoned, idled, or underused property, including industrial and commercial facilities, owned by a local jurisdiction, where expansion or redevelopment is complicated by real or perceived contamination.
     (3) "Cleanup payments" means the payments made by lessees of former brownfield sites as required by section 3 of this act.
     (4) "Leasehold excise tax" means an excise tax imposed under chapter 82.29A RCW on the act or privilege of occupying or using publicly owned real or personal property.
     (5) "Local economic development project" means a project that:
     (a) Promotes economic development and job creation by the private sector; and
     (b) Includes cleanup of publicly owned contaminated brownfield sites, including adjacent rivers and lakes, that have been designated a priority for cleanup in a local economic development plan and by the department of ecology.
     (6) "Local economic development project costs" means costs associated with:
     (a) Environmental cleanup, including restoring brownfields and fish habitat;
     (b) Street and road construction and improvements;
     (c) Water and sewer system construction and improvements;
     (d) Land use planning and associated environmental analysis and project design;
     (e) Relocation, maintenance, and operation of property pending construction of the local economic development project;
     (f) Complying with the requirements of this act and other applicable law; and
     (g) Administrative expenditures reasonably necessary and related to these costs.
     (7) "Local jurisdiction" means a county, city, town, or port district.

NEW SECTION.  Sec. 3   (1) Local jurisdictions with local economic development projects approved by the department of community, trade, and economic development as provided under subsection (2) of this section may enter into an agreement with the Washington economic development finance authority regarding the issuance of bonds for the purpose of financing local economic development project costs. The agreement shall require that the local jurisdiction: (a) Collect from any lessee of property associated with a local economic development project a payment in an amount at least equal to all leasehold excise taxes that would be imposed on and collected with respect to property associated with the completed local economic development project but for the exemption granted by section 13 of this act; (b) pledge the cleanup payments collected to the payment of these bonds; and (c) stop collection of cleanup payments when the bond obligations have been satisfied and notify the lessee of the obligation to pay any leasehold excise taxes which may be due subsequently.
     (2) No local jurisdiction may enter an agreement with the Washington economic development finance authority under this act unless:
     (a) They have delivered a local economic development project plan to the department of community, trade, and economic development that includes a description of the contemplated property and the local economic development project; the estimated cost of the total project, including both public and private components; the estimated period during which the leasehold excise tax exemption in section 13 of this act is to be operative and cleanup payments from lessees are to be devoted to meeting bond obligations; the proposed use of bond funds financing the public portion of the project; and the estimated amounts to be derived from the cleanup payments during the period in which bonds for the project are being paid off and after such period;
     (b) The department of community, trade, and economic development has reviewed the plan and determined that: (i) There is a sufficient amount of revenue available to fund the project; and (ii) the project meets the definition of local economic development project under section 2 of this act.
     (3) Collection of cleanup payments must cease when the payments are no longer necessary or obligated to pay the costs associated with the local economic development project.

NEW SECTION.  Sec. 4   The local economic development project financing account shall be established by the authority. The proceeds of all cleanup payments collected with respect to property associated with a completed local economic development project shall be deposited into the local economic development project financing account. Only the Washington economic development finance authority may authorize expenditures from the account and no appropriation is required for expenditures. The money in the account must be used for the purposes of bond resolution or trust indenture under which the bonds are issued under this chapter and may not be used to replace or supplant existing funding. The deposit of cleanup payments required under this section shall cease when the authority specifies that all monetary obligations associated with bonds issued to pay a local economic development project's costs have been met.

NEW SECTION.  Sec. 5   In connection with any bonds issued by the authority under the terms of this act, the authority shall enter into agreements with participating local jurisdictions which shall provide for the deposit by each local jurisdiction of all cleanup payments collected on property associated with the completed local economic development project. Cleanup payments shall be disbursed bimonthly into the local economic development project account. Cleanup payments collected shall be sufficient, together with other revenues available to the authority, if any, to: (1) Pay the issuance and administrative fees set by the authority; (2) pay the local economic development project costs financed by the authority, to the extent that the payment of the costs has not otherwise been adequately provided for; (3) pay the principal of, premium, if any, and interest on outstanding bonds of the authority issued to finance the local economic development project costs as the same shall become due and payable; and (4) create and maintain reserves required or provided for in any bond resolution or trust indenture authorizing the issuance of such bonds of the authority. The authority's payments shall not be subject to supervision or regulation by any department, committee, board, body, bureau, or agency of the state other than the authority.

NEW SECTION.  Sec. 6   (1) The authority shall provide the assessor and treasurer of the county within which the local economic development project is located and the department of revenue of the parcel number or numbers and street address or addresses, if any, associated with all property that is part of a local economic development project.
     (2) The authority may, from time to time, issue its special obligation bonds in order to carry out the purposes of this chapter and to enable the authority to exercise any of the powers granted to it in this chapter. The bonds may be issued on either a taxable or federally tax-exempt basis. The bonds shall be issued pursuant to a bond resolution or trust indenture and shall be payable solely out of the local economic development project financing account created in section 4 of this act. The local economic development project financing account shall be funded in whole or in part from moneys paid by one or more local jurisdictions for whose benefit such bonds were issued and from any other sources authorized by law, including from the proceeds of bonds issued by the authority for the purpose of refunding any outstanding bonds of the authority.
     (3) The bonds may be secured by:
     (a) A first lien against any unexpended proceeds of the bonds;
     (b) A first lien against moneys in the local economic development project financing account created in section 4 of this act;
     (c) A first or subordinate lien against the cleanup payment receipts of the local jurisdiction or jurisdictions that are collected on property associated with the completed local economic development project or projects;
     (d) A first or subordinate security interest against any real or personal property, tangible or intangible, of the local jurisdiction or jurisdictions that is associated with the local economic development project;
     (e) Any other real or personal property of the local jurisdiction or jurisdictions, tangible or intangible;
     (f) Any combination of (a) through (e) of this subsection; or
     (g) Any other security the authority may deem appropriate or necessary.
     Any security interest created against the unexpended bond proceeds and against the local economic development project financing account shall be immediately valid and binding against the moneys and any securities in which the moneys may be invested without authority or trustee possession, and the security interest shall be prior to any party having any competing claim against the moneys or securities, without filing or recording under Article 9A of the Uniform Commercial Code or Title 62A RCW, and regardless of whether the party has notice of the security interest.
     (4) The bonds may be issued as serial bonds or as term bonds or any such combination. The bonds shall bear such date or dates; mature at such time or times; bear interest at such rate or rates, either fixed or variable; be payable at such time or times; be in such denominations; carry such registration privileges; be made transferable, exchangeable, and interchangeable; be payable in lawful money of the United States of America at such place or places; be subject to such terms of redemption; and be sold at public or private sale, in such manner, at such time, and at such price as the authority shall determine. The bonds shall be executed by the manual or facsimile signatures of the chairperson and the authority's duly elected secretary or its executive director, and by the trustee if the authority determines to use a trustee. At least one signature shall be manually subscribed.
     (5) Any bond resolution, trust indenture, or agreement with a local jurisdiction relating to bonds issued by the authority or the financing or refinancing made available by this act may contain provisions, which may be made a part of the contract with the holders or owners of the bonds to be issued, pertaining to the following, among other matters:
     (a) The security interests granted by the local jurisdiction to secure repayment of any amounts financed and the performance by the local jurisdiction of its other obligations in the financing;
     (b) The security interests granted to the holders or owners of the bonds to secure repayment of the bonds;
     (c) Rentals, fees, and other amounts to be charged, and the sums to be raised in each year through such charges, and the use, investment, and disposition of the sums;
     (d) The segregation of reserves or sinking funds, and the regulation, investment, and disposition thereof;
     (e) Limitations on the purposes to which, or the investments in which, the proceeds of the sale of any issue of bonds may be applied;
     (f) Terms pertaining to the issuance of additional parity bonds;
     (g) Terms pertaining to the incurrence of parity debt;
     (h) The refunding of outstanding bonds;
     (i) Procedures, if any, by which the terms of any contract with bondholders may be amended or abrogated;
     (j) Acts or failures to act that constitute a default by the local jurisdiction or the authority in their respective obligations and the rights and remedies in the event of a default;
     (k) Terms governing performance by the trustee of its obligation; or
     (l) Such other additional covenants, agreements, and provisions as are deemed necessary, useful, or convenient by the authority for the security of the holders of the bonds.
     (6) Bonds may be issued by the authority to refund other outstanding authority bonds, at or before the maturity thereof, and to pay any redemption premium with respect thereto. Bonds issued for such refunding purposes may be combined with bonds issued for the financing or refinancing of new local economic development project costs. Pending the application of the proceeds of the refunding bonds to the redemption of the bonds to be redeemed, the authority may enter into an agreement or agreements with a corporate trustee under section 8 of this act with respect to the interim investment of the proceeds and the application of the proceeds and the earnings on the proceeds to the payment of the principal of and interest on, and the redemption of the bonds to be redeemed.
     (7) All bonds and any interest coupons appertaining to the bonds are negotiable instruments under Title 62A RCW.
     (8) Neither the members of the authority, nor its employees or agents, nor any person executing the bonds is liable personally on the bonds or subject to any personal liability or accountability by reason of the issuance of the bonds.
     (9) The authority may purchase its bonds with any of its funds available for the purchase. The authority may hold, pledge, cancel, or resell the bonds subject to and in accordance with agreements with bondholders.

NEW SECTION.  Sec. 7   Bonds issued under this chapter shall not be deemed to constitute obligations, either general or special, of the state, or a pledge of the faith and credit of the state, or a general obligation of the authority. The bonds shall be special obligations of the authority and shall be payable solely from the local economic development project financing account created in section 4 of this act. Except for any initial appropriations which may be made, the fund or funds shall be funded in whole or in part from moneys paid by one or more local jurisdictions for whose benefit such bonds were issued and from any other sources authorized by law, including from the proceeds of bonds issued by the authority for the purpose of refunding any outstanding bonds of the authority. The issuance of bonds under this chapter shall not obligate, directly, indirectly, or contingently, the state to levy any taxes or appropriate or expend any funds for the payment of the principal or the interest on the bonds.
     Neither the proceeds of bonds issued under this chapter nor any money used or to be used to pay the principal of or interest on the bonds shall constitute public money or property. All of such moneys shall be kept segregated and set apart from funds of the state and any political subdivision of the state and shall not be subject to appropriation or allotment by the state or subject to the provisions of chapter 43.88 RCW.

NEW SECTION.  Sec. 8   All moneys received by or on behalf of the authority under this chapter, whether as proceeds from the sale of bonds or from participants or from other sources, shall be deemed to be trust funds to be held and applied solely as provided in this chapter. The authority, in lieu of receiving and applying the moneys itself, may enter into an agreement or trust indenture with one or more banks or trust companies having the power and authority to conduct trust business in the state to:
     (1) Perform all of any part of the obligations of the authority with respect to: (a) Bonds issued by it; (b) the receipt, investment, and application of the proceeds of the bonds and moneys paid by a local jurisdiction or available from other sources for the payment of the bonds; (c) the enforcement of the obligations of a local jurisdiction in connection with the financing or refinancing of any project; and (d) other matters relating to the exercise of the authority's powers under this chapter;
     (2) Receive, hold, preserve, and enforce any security interest or evidence of security interest granted by a local jurisdiction for purposes of securing the payment of the bonds; and
     (3) Act on behalf of the authority or the holders or owners of bonds of the authority for purposes of assuring or enforcing the payment of the bonds, when due.

NEW SECTION.  Sec. 9   This chapter supplements and neither restricts nor limits any powers that the state or any local jurisdiction might otherwise have under any laws of this state.

NEW SECTION.  Sec. 10   This chapter provides a complete, additional, and alternative method for accomplishing the purposes of this chapter and shall be regarded as supplemental and additional to powers conferred by other laws. The issuance of bonds and refunding bonds under this chapter need not comply with the requirements of any other law applicable to the issuance of bonds.

NEW SECTION.  Sec. 11   This chapter, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect its purposes. Insofar as the provisions of this chapter are inconsistent with the provisions of any general or special law, or parts thereof, the provisions of this chapter shall be controlling.

Sec. 12   RCW 70.105D.020 and 1998 c 6 s 1 are each amended to read as follows:
     (1) "Agreed order" means an order issued by the department under this chapter with which the potentially liable person receiving the order agrees to comply. An agreed order may be used to require or approve any cleanup or other remedial actions but it is not a settlement under RCW 70.105D.040(4) and shall not contain a covenant not to sue, or provide protection from claims for contribution, or provide eligibility for public funding of remedial actions under RCW 70.105D.070(2)(d)(xi).
     (2) "Department" means the department of ecology.
     (3) "Director" means the director of ecology or the director's designee.
     (4) "Facility" means (a) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, vessel, or aircraft, or (b) any site or area where a hazardous substance, other than a consumer product in consumer use, has been deposited, stored, disposed of, or placed, or otherwise come to be located.
     (5) "Federal cleanup law" means the federal comprehensive environmental response, compensation, and liability act of 1980, 42 U.S.C. Sec. 9601 et seq., as amended by Public Law 99-499.
     (6) "Foreclosure and its equivalents" means purchase at a foreclosure sale, acquisition, or assignment of title in lieu of foreclosure, termination of a lease, or other repossession, acquisition of a right to title or possession, an agreement in satisfaction of the obligation, or any other comparable formal or informal manner, whether pursuant to law or under warranties, covenants, conditions, representations, or promises from the borrower, by which the holder acquires title to or possession of a facility securing a loan or other obligation.
     (7) "Hazardous substance" means:
     (a) Any dangerous or extremely hazardous waste as defined in RCW 70.105.010 (5) and (6), or any dangerous or extremely dangerous waste designated by rule pursuant to chapter 70.105 RCW;
     (b) Any hazardous substance as defined in RCW 70.105.010(14) or any hazardous substance as defined by rule pursuant to chapter 70.105 RCW;
     (c) Any substance that, on March 1, 1989, is a hazardous substance under section 101(14) of the federal cleanup law, 42 U.S.C. Sec. 9601(14);
     (d) Petroleum or petroleum products; and
     (e) Any substance or category of substances, including solid waste decomposition products, determined by the director by rule to present a threat to human health or the environment if released into the environment.
     The term hazardous substance does not include any of the following when contained in an underground storage tank from which there is not a release: Crude oil or any fraction thereof or petroleum, if the tank is in compliance with all applicable federal, state, and local law.
     (8) "Independent remedial actions" means remedial actions conducted without department oversight or approval, and not under an order, agreed order, or consent decree.
     (9) "Holder" means a person who holds indicia of ownership primarily to protect a security interest. A holder includes the initial holder such as the loan originator, any subsequent holder such as a successor-in-interest or subsequent purchaser of the security interest on the secondary market, a guarantor of an obligation, surety, or any other person who holds indicia of ownership primarily to protect a security interest, or a receiver, court-appointed trustee, or other person who acts on behalf or for the benefit of a holder. A holder can be a public or privately owned financial institution, receiver, conservator, loan guarantor, or other similar persons that loan money or guarantee repayment of a loan. Holders typically are banks or savings and loan institutions but may also include others such as insurance companies, pension funds, or private individuals that engage in loaning of money or credit.
     (10) "Indicia of ownership" means evidence of a security interest, evidence of an interest in a security interest, or evidence of an interest in a facility securing a loan or other obligation, including any legal or equitable title to a facility acquired incident to foreclosure and its equivalents. Evidence of such interests includes, mortgages, deeds of trust, sellers interest in a real estate contract, liens, surety bonds, and guarantees of obligations, title held pursuant to a lease financing transaction in which the lessor does not select initially the leased facility, or legal or equitable title obtained pursuant to foreclosure and their equivalents. Evidence of such interests also includes assignments, pledges, or other rights to or other forms of encumbrance against the facility that are held primarily to protect a security interest.
     (11) "Operating a facility primarily to protect a security interest" occurs when all of the following are met: (a) Operating the facility where the borrower has defaulted on the loan or otherwise breached the security agreement; (b) operating the facility to preserve the value of the facility as an ongoing business; (c) the operation is being done in anticipation of a sale, transfer, or assignment of the facility; and (d) the operation is being done primarily to protect a security interest. Operating a facility for longer than one year prior to foreclosure or its equivalents shall be presumed to be operating the facility for other than to protect a security interest.
     (12) "Owner or operator" means:
     (a) Any person with any ownership interest in the facility or who exercises any control over the facility; or
     (b) In the case of an abandoned facility, any person who had owned, or operated, or exercised control over the facility any time before its abandonment;
     The term does not include:
     (i) An agency of the state or unit of local government which acquired ownership or control through a drug forfeiture action under RCW 69.50.505; involuntarily through bankruptcy, tax delinquency, or abandonment((,)); or ((circumstances in which the government involuntarily acquires title)) through acquisition of title to carry out a local economic development project approved under the provisions of section 3(2) of this act. This exclusion does not apply to an agency of the state or unit of local government which has caused or contributed to the release or threatened release of a hazardous substance from the facility;
     (ii) A person who, without participating in the management of a facility, holds indicia of ownership primarily to protect the person's security interest in the facility. Holders after foreclosure and its equivalent and holders who engage in any of the activities identified in subsection (13)(e) through (g) of this section shall not lose this exemption provided the holder complies with all of the following:
     (A) The holder properly maintains the environmental compliance measures already in place at the facility;
     (B) The holder complies with the reporting requirements in the rules adopted under this chapter;
     (C) The holder complies with any order issued to the holder by the department to abate an imminent or substantial endangerment;
     (D) The holder allows the department or potentially liable persons under an order, agreed order, or settlement agreement under this chapter access to the facility to conduct remedial actions and does not impede the conduct of such remedial actions;
     (E) Any remedial actions conducted by the holder are in compliance with any preexisting requirements identified by the department, or, if the department has not identified such requirements for the facility, the remedial actions are conducted consistent with the rules adopted under this chapter; and
     (F) The holder does not exacerbate an existing release. The exemption in this subsection (12)(b)(ii) does not apply to holders who cause or contribute to a new release or threatened release or who are otherwise liable under RCW 70.105D.040(1) (b), (c), (d), and (e); provided, however, that a holder shall not lose this exemption if it establishes that any such new release has been remediated according to the requirements of this chapter and that any hazardous substances remaining at the facility after remediation of the new release are divisible from such new release;
     (iii) A fiduciary in his, her, or its personal or individual capacity. This exemption does not preclude a claim against the assets of the estate or trust administered by the fiduciary or against a nonemployee agent or independent contractor retained by a fiduciary. This exemption also does not apply to the extent that a person is liable under this chapter independently of the person's ownership as a fiduciary or for actions taken in a fiduciary capacity which cause or contribute to a new release or exacerbate an existing release of hazardous substances. This exemption applies provided that, to the extent of the fiduciary's powers granted by law or by the applicable governing instrument granting fiduciary powers, the fiduciary complies with all of the following:
     (A) The fiduciary properly maintains the environmental compliance measures already in place at the facility;
     (B) The fiduciary complies with the reporting requirements in the rules adopted under this chapter;
     (C) The fiduciary complies with any order issued to the fiduciary by the department to abate an imminent or substantial endangerment;
     (D) The fiduciary allows the department or potentially liable persons under an order, agreed order, or settlement agreement under this chapter access to the facility to conduct remedial actions and does not impede the conduct of such remedial actions;
     (E) Any remedial actions conducted by the fiduciary are in compliance with any preexisting requirements identified by the department, or, if the department has not identified such requirements for the facility, the remedial actions are conducted consistent with the rules adopted under this chapter; and
     (F) The fiduciary does not exacerbate an existing release.
     The exemption in this subsection (12)(b)(iii) does not apply to fiduciaries who cause or contribute to a new release or threatened release or who are otherwise liable under RCW 70.105D.040(1) (b), (c), (d), and (e); provided however, that a fiduciary shall not lose this exemption if it establishes that any such new release has been remediated according to the requirements of this chapter and that any hazardous substances remaining at the facility after remediation of the new release are divisible from such new release. The exemption in this subsection (12)(b)(iii) also does not apply where the fiduciary's powers to comply with this subsection (12)(b)(iii) are limited by a governing instrument created with the objective purpose of avoiding liability under this chapter or of avoiding compliance with this chapter; or
     (iv) Any person who has any ownership interest in, operates, or exercises control over real property where a hazardous substance has come to be located solely as a result of migration of the hazardous substance to the real property through the ground water from a source off the property, if:
     (A) The person can demonstrate that the hazardous substance has not been used, placed, managed, or otherwise handled on the property in a manner likely to cause or contribute to a release of the hazardous substance that has migrated onto the property;
     (B) The person has not caused or contributed to the release of the hazardous substance;
     (C) The person does not engage in activities that damage or interfere with the operation of remedial actions installed on the person's property or engage in activities that result in exposure of humans or the environment to the contaminated ground water that has migrated onto the property;
     (D) If requested, the person allows the department, potentially liable persons who are subject to an order, agreed order, or consent decree, and the authorized employees, agents, or contractors of each, access to the property to conduct remedial actions required by the department. The person may attempt to negotiate an access agreement before allowing access; and
     (E) Legal withdrawal of ground water does not disqualify a person from the exemption in this subsection (12)(b)(iv).
     (13) "Participation in management" means exercising decision-making control over the borrower's operation of the facility, environmental compliance, or assuming or manifesting responsibility for the overall management of the enterprise encompassing the day-to-day decision making of the enterprise.
     The term does not include any of the following: (a) A holder with the mere capacity or ability to influence, or the unexercised right to control facility operations; (b) a holder who conducts or requires a borrower to conduct an environmental audit or an environmental site assessment at the facility for which indicia of ownership is held; (c) a holder who requires a borrower to come into compliance with any applicable laws or regulations at the facility for which indicia of ownership is held; (d) a holder who requires a borrower to conduct remedial actions including setting minimum requirements, but does not otherwise control or manage the borrower's remedial actions or the scope of the borrower's remedial actions except to prepare a facility for sale, transfer, or assignment; (e) a holder who engages in workout or policing activities primarily to protect the holder's security interest in the facility; (f) a holder who prepares a facility for sale, transfer, or assignment or requires a borrower to prepare a facility for sale, transfer, or assignment; (g) a holder who operates a facility primarily to protect a security interest, or requires a borrower to continue to operate, a facility primarily to protect a security interest; and (h) a prospective holder who, as a condition of becoming a holder, requires an owner or operator to conduct an environmental audit, conduct an environmental site assessment, come into compliance with any applicable laws or regulations, or conduct remedial actions prior to holding a security interest is not participating in the management of the facility.
     (14) "Person" means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, state government agency, unit of local government, federal government agency, or Indian tribe.
     (15) "Policing activities" means actions the holder takes to insure that the borrower complies with the terms of the loan or security interest or actions the holder takes or requires the borrower to take to maintain the value of the security. Policing activities include: Requiring the borrower to conduct remedial actions at the facility during the term of the security interest; requiring the borrower to comply or come into compliance with applicable federal, state, and local environmental and other laws, regulations, and permits during the term of the security interest; securing or exercising authority to monitor or inspect the facility including on-site inspections, or to monitor or inspect the borrower's business or financial condition during the term of the security interest; or taking other actions necessary to adequately police the loan or security interest such as requiring a borrower to comply with any warranties, covenants, conditions, representations, or promises from the borrower.
     (16) "Potentially liable person" means any person whom the department finds, based on credible evidence, to be liable under RCW 70.105D.040. The department shall give notice to any such person and allow an opportunity for comment before making the finding, unless an emergency requires otherwise.
     (17) "Prepare a facility for sale, transfer, or assignment" means to secure access to the facility; perform routine maintenance on the facility; remove inventory, equipment, or structures; properly maintain environmental compliance measures already in place at the facility; conduct remedial actions to clean up releases at the facility; or to perform other similar activities intended to preserve the value of the facility where the borrower has defaulted on the loan or otherwise breached the security agreement or after foreclosure and its equivalents and in anticipation of a pending sale, transfer, or assignment, primarily to protect the holder's security interest in the facility. A holder can prepare a facility for sale, transfer, or assignment for up to one year prior to foreclosure and its equivalents and still stay within the security interest exemption in subsection (12)(b)(ii) of this section.
     (18) "Primarily to protect a security interest" means the indicia of ownership is held primarily for the purpose of securing payment or performance of an obligation. The term does not include indicia of ownership held primarily for investment purposes nor indicia of ownership held primarily for purposes other than as protection for a security interest. A holder may have other, secondary reasons, for maintaining indicia of ownership, but the primary reason must be for protection of a security interest. Holding indicia of ownership after foreclosure or its equivalents for longer than five years shall be considered to be holding the indicia of ownership for purposes other than primarily to protect a security interest. For facilities that have been acquired through foreclosure or its equivalents prior to July 23, 1995, this five-year period shall begin as of July 23, 1995.
     (19) "Public notice" means, at a minimum, adequate notice mailed to all persons who have made timely request of the department and to persons residing in the potentially affected vicinity of the proposed action; mailed to appropriate news media; published in the newspaper of largest circulation in the city or county of the proposed action; and opportunity for interested persons to comment.
     (20) "Release" means any intentional or unintentional entry of any hazardous substance into the environment, including but not limited to the abandonment or disposal of containers of hazardous substances.
     (21) "Remedy" or "remedial action" means any action or expenditure consistent with the purposes of this chapter to identify, eliminate, or minimize any threat or potential threat posed by hazardous substances to human health or the environment including any investigative and monitoring activities with respect to any release or threatened release of a hazardous substance and any health assessments or health effects studies conducted in order to determine the risk or potential risk to human health.
     (22) "Security interest" means an interest in a facility created or established for the purpose of securing a loan or other obligation. Security interests include deeds of trusts, sellers interest in a real estate contract, liens, legal, or equitable title to a facility acquired incident to foreclosure and its equivalents, and title pursuant to lease financing transactions. Security interests may also arise from transactions such as sale and leasebacks, conditional sales, installment sales, trust receipt transactions, certain assignments, factoring agreements, accounts receivable financing arrangements, easements, and consignments, if the transaction creates or establishes an interest in a facility for the purpose of securing a loan or other obligation.
     (23) "Industrial properties" means properties that are or have been characterized by, or are to be committed to, traditional industrial uses such as processing or manufacturing of materials, marine terminal and transportation areas and facilities, fabrication, assembly, treatment, or distribution of manufactured products, or storage of bulk materials, that are either:
     (a) Zoned for industrial use by a city or county conducting land use planning under chapter 36.70A RCW; or
     (b) For counties not planning under chapter 36.70A RCW and the cities within them, zoned for industrial use and adjacent to properties currently used or designated for industrial purposes.
     (24) "Workout activities" means those actions by which a holder, at any time prior to foreclosure and its equivalents, seeks to prevent, cure, or mitigate a default by the borrower or obligor; or to preserve, or prevent the diminution of, the value of the security. Workout activities include: Restructuring or renegotiating the terms of the security interest; requiring payment of additional rent or interest; exercising forbearance; requiring or exercising rights pursuant to an assignment of accounts or other amounts owed to an obligor; requiring or exercising rights pursuant to an escrow agreement pertaining to amounts owed to an obligor; providing specific or general financial or other advice, suggestions, counseling, or guidance; and exercising any right or remedy the holder is entitled to by law or under any warranties, covenants, conditions, representations, or promises from the borrower.
     (25)(a) "Fiduciary" means a person acting for the benefit of another party as a bona fide trustee; executor; administrator; custodian; guardian of estates or guardian ad litem; receiver; conservator; committee of estates of incapacitated persons; trustee in bankruptcy; trustee, under an indenture agreement, trust agreement, lease, or similar financing agreement, for debt securities, certificates of interest or certificates of participation in debt securities, or other forms of indebtedness as to which the trustee is not, in the capacity of trustee, the lender. Except as provided in subsection (12)(b)(iii) of this section, the liability of a fiduciary under this chapter shall not exceed the assets held in the fiduciary capacity.
     (b) "Fiduciary" does not mean:
     (i) A person acting as a fiduciary with respect to a trust or other fiduciary estate that was organized for the primary purpose of, or is engaged in, actively carrying on a trade or business for profit, unless the trust or other fiduciary estate was created as part of, or to facilitate, one or more estate plans or because of the incapacity of a natural person;
     (ii) A person who acquires ownership or control of a facility with the objective purpose of avoiding liability of the person or any other person. It is prima facie evidence that the fiduciary acquired ownership or control of the facility to avoid liability if the facility is the only substantial asset in the fiduciary estate at the time the facility became subject to the fiduciary estate;
     (iii) A person who acts in a capacity other than that of a fiduciary or in a beneficiary capacity and in that capacity directly or indirectly benefits from a trust or fiduciary relationship;
     (iv) A person who is a beneficiary and fiduciary with respect to the same fiduciary estate, and who while acting as a fiduciary receives benefits that exceed customary or reasonable compensation, and incidental benefits permitted under applicable law;
     (v) A person who is a fiduciary and receives benefits that substantially exceed customary or reasonable compensation, and incidental benefits permitted under applicable law; or
     (vi) A person who acts in the capacity of trustee of state or federal lands or resources.
     (26) "Fiduciary capacity" means the capacity of a person holding title to a facility, or otherwise having control of an interest in the facility pursuant to the exercise of the responsibilities of the person as a fiduciary.

NEW SECTION.  Sec. 13   A new section is added to chapter 82.29A RCW to read as follows:
     All leasehold interests in completed local economic development projects financed under this act are exempt from tax under this chapter for the period of time lessees are making cleanup payments as required by this act.

NEW SECTION.  Sec. 14   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 15   Sections 1 through 11 of this act constitute a new chapter in Title 43 RCW.