BILL REQ. #:  H-0478.3 

Read first time 01/27/09.   Referred to Committee on Community & Economic Development & Trade.

     AN ACT Relating to authorizing the creation of cultural access authorities; amending RCW 36.96.010; adding a new chapter to Title 36 RCW; and creating new sections.

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

NEW SECTION.  Sec. 101   INTENT. The legislature finds that the cultural organizations of the state provide numerous public benefits. Providing support for the state's cultural organizations is in the public interest and will serve multiple public purposes including, among others, enhancing and extending the educational reach and offerings of cultural organizations; ensuring continued and expanded access to the facilities and programs of cultural organizations by economically and geographically underserved populations; and providing financial stability to the organizations to enable them to focus on core missions as well as to continue and extend the numerous public benefits they provide. Cultural organizations represent an essential component of the state's overall quality of life, contributing substantially to the state's attractiveness and competitiveness in the global economy. Cultural organizations are themselves a significant component of the state's economy. Through their numerous missions and offerings, they afford the state's citizens meaningful and life enriching educational and other experiences. Cultural institutions are an essential source of knowledge and inspiration for the citizens of the state. The purpose of this chapter is to authorize formation of cultural access authorities and to authorize funding for public school cultural access programs and the support of cultural organizations, subject to voter approval.

NEW SECTION.  Sec. 201   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Administrative costs" means all operating, administrative, and maintenance expenses of an authority, a designated public agency, or a designated entity.
     (2) "Attendance" means the total number of visits by persons in physical attendance during a year at cultural organization facilities located or cultural organization programs provided within an authority service area, including attendance for which admission was paid, discounted, or free, consistent with and verifiable under guidelines adopted by the appropriate authority.
     (3) "Authority" means a cultural access authority.
     (4) "Authority board" means the board of directors of an authority.
     (5) "Community-based organization" means a cultural organization that primarily functions, focuses its activities, and is supported or patronized within a local community and is not a regional organization, subject to further definition under guidelines adopted by the appropriate designated public agency.
     (6) "Cultural organization" means a nonprofit corporation incorporated under the laws of the state of Washington and recognized by the internal revenue service as described in section 501(c)(3) of the internal revenue code of 1986, as amended, with its principal location or locations and conducting a majority of its activities within the state, not including any agency of the state or any of its political subdivisions; any municipal corporation; any educational institution; any organization that raises funds for redistribution to cultural organizations; or any radio or television broadcasting network or station, cable communications system, internet-based communications venture or service, newspaper, or magazine. The primary purpose of the organization must be the advancement and preservation of science or technology, the visual or performing arts, zoology, botany, anthropology, or cultural or natural history and any organization shall directly provide programming or experiences available to the general public. Any organization with the primary purpose of advancing and preserving zoology such as zoos and aquariums must be or support a facility that is accredited by the association of zoos and aquariums or its functional successor. A state-related cultural organization may be a cultural organization.
     (7) "Designated entity" means the entity designated by the legislative authority of a participating county. The entity may be a public agency or a Washington nonprofit corporation that is not a cultural organization eligible for funding under this chapter.
     (8) "Designated public agency" means the agency designated by the legislative authority of a participating county within an authority service area.     
     (9) "Participating county" means a county that participated in the formation of an authority under this chapter.
     (10) "Regional organization" means a cultural organization that owns, operates, or supports cultural facilities or provides performances, exhibits, educational programs, experiences, or entertainment that widely benefit and are broadly attended by the public within the authority service area, subject to further definition under guidelines adopted by the appropriate authority. A regional organization may also generally be characterized under authority guidelines as a financially stable, substantial organization with full-time support and program staff, maintaining a broad-based membership within the authority service area, having year-round or enduring seasonal operations, being a substantial financial contributor to the development, operation, and maintenance of the organization's principal venue or venues, and providing substantial public benefits within the authority service area.
     (11) "Revenues" means revenues generated by a cultural organization, consistent with generally accepted accounting practices and any authority guidelines, excluding (a) revenues associated with capital projects other than major maintenance projects including, but not limited to, capital campaign expenses; (b) funds provided under this chapter; (c) revenue that would be considered unrelated business taxable income under the internal revenue code of 1986, as amended; and (d) with respect to a state-related cultural organization, state funding received by it or for the institution it supports. Revenues include transfers from an organization's endowment or reserves and may include the value of in-kind goods and services to the extent permitted under any authority guidelines.
     (12) "Service area" means the area in which an authority functions that is coterminous with the boundaries of one or two or more contiguous participating counties.
     (13) "State-related cultural organization" means an organization incorporated as a nonprofit corporation under the laws of the state of Washington and recognized by the internal revenue service as described in section 501(c)(3) of the internal revenue code of 1986, as amended, with a primary purpose and directly providing programming or experiences available to the general public consistent with the requirements for recognition as a cultural organization under this chapter operating in a facility owned and supported by the state, a state agency, or state educational institution.

NEW SECTION.  Sec. 301   CREATION. (1)(a) Any county with a population of more than one hundred seventy-five thousand may create an authority by resolution of the county legislative authority.
     (b) Any contiguous group of up to four counties, including at least one county with a population of more than one hundred fifty thousand, may create an authority by entering into an interlocal agreement under chapter 39.34 RCW, approved by resolution of the county legislative authorities.
     (2) An authority service area must be coextensive with the boundaries of the participating county or counties that created the authority, including incorporated areas.
     (3)(a) An authority created by a single participating county must be governed by a five-member authority board consisting of four members appointed by the county legislative authority and one member appointed by the governor. In a participating county with an elected county executive, authority board members appointed by the county legislative authority must be nominated by the county executive subject to confirmation by the county legislative authority. The members appointed under this subsection may not be members of the legislative authority of the participating county or of any city or town located in a participating county. The members of the authority board shall serve four-year terms. Of the initial members, one must be appointed for a one-year term, one must be appointed for a two-year term, one must be appointed for a three-year term, and the remainder must be appointed for four-year terms.
     (b) An authority created by two or three participating counties under subsection (1)(b) of this section must be governed by a seven-member authority board consisting of six members appointed as specified in the interlocal agreement creating the authority and one member appointed by the governor. In a participating county with an elected county executive, authority board members appointed by the county legislative authority must be nominated by the county executive subject to confirmation by the county legislative authority. The members appointed under this subsection may not be members of the legislative authorities of the participating counties or of any city or town located in a participating county. The members of the authority board shall serve four-year terms. Of the initial members, two must be appointed for a one-year term, two must be appointed for a two-year term, two must be appointed for a three-year term, and one must be appointed for a four-year term, as set forth in the interlocal agreement creating the authority.
     (c) An authority created by up to four participating counties under subsection (1)(b) of this section with an aggregate population of more than two million five hundred thousand must be governed by a seven to eleven-member authority board as follows: (i) With respect to a two-county authority formed under this subsection, one member appointed by the legislative authority of each participating county; one member appointed by the legislative authority of each of the two largest cities by population as of formation of the authority in the larger participating county by population as of formation of the authority; one member appointed by the legislative authority of the largest city by population as of formation of the authority in the smaller participating county by population as of formation of the authority; and two members appointed by the governor; and (ii) with respect to a three or four-county authority formed under this subsection, one member appointed by the legislative authority of each participating county; one member appointed by the legislative authority of each of the two largest cities by population as of formation of the authority in the largest participating county by population as of formation of the authority; one member appointed by the legislative authority of the largest city by population as of formation of the authority in each of the other participating counties; and two members appointed by the governor. A county legislative authority appointing members under this subsection shall solicit recommendations from the county cultural commission, if any, and the county's designated public agency prior to final approval of any appointment or appointments. The members appointed under this subsection may not be members of the legislative authorities of the participating counties or of any city or town located in a participating county. In a participating county with an elected county executive, authority board members appointed by the county legislative authority must be nominated by the county executive subject to confirmation by the county legislative authority. The members of the authority board shall serve four-year terms. Of the initial members of the board of a two-county authority formed under this subsection, two must be appointed for a one-year term; two must be appointed for a two-year term; two must be appointed for a three-year term; and one member must be appointed for a four-year term as set forth in the interlocal agreement creating the authority. Of the initial members of the board of a three or four-county authority formed under this subsection, three must be appointed for a one-year term; three must be appointed for a two-year term; three must be appointed for a three-year term; and two members must be appointed for a four-year term as set forth in the interlocal agreement creating the authority.
     (4) An authority is a municipal corporation, a political subdivision, an independent taxing authority, and a taxing district.
     (5) An authority constitutes a body corporate and possesses all the usual powers of a corporation for public purposes as well as all other powers that may now or hereafter be specifically conferred by statute.
     (6) An authority board shall adopt ethics policies consistent with applicable law and generally recognized best practices for comparable entities addressing disclosure and management of potential conflicts of interest, among other matters. The policies must apply to authority board members, officers, and employees.

NEW SECTION.  Sec. 302   START-UP FUNDING AND CONDITIONAL FORMATION. The county or counties creating an authority shall provide for the participating county or counties to advance to the authority up to one million dollars per year for up to three years for its administrative costs, including the cost of informing the public about the formation of the authority, how it is proposed to be funded, and the public benefits to be realized if it is successful. In the case of a multicounty authority, funds advanced must be provided pro rata by each participating county based on the relative size of the population of each county. Funds advanced to an authority must be repaid to each participating county, with interest at the internal rate of return on the invested funds of each county, from the proceeds of the sales and use tax approved by voters within two years after such tax is first collected. An authority must be dissolved three years after its formation unless it has secured voter approval of the sales and use tax authorized herein. Upon dissolution of an authority after three years without securing voter approval of the proposed tax, an authority may not again be formed under this chapter by the same county or combination of counties for three years following the dissolution of a predecessor. One or more of the counties participating in the formation of a dissolved authority may form another authority under this chapter without delay if the participant or combination of participants in the formation of another authority differs from the participant or combination of participants in the formation of the dissolved authority. Any expended funds of the participating county or counties advanced to an authority that is dissolved as provided under this section need not be repaid to the participating county or counties. Any remaining funds on hand upon dissolution must be returned to the participating counties.

NEW SECTION.  Sec. 303   NONSUPPLANTATION. In creating an authority under this chapter or appointing members of the board of the authority, any participating county or city appointing board members shall affirm that any funding such county or city usually and customarily provides to cultural organizations similar to funding that would be available to those organizations under this chapter may not be replaced or materially diminished as a result of funding becoming available under this chapter.

NEW SECTION.  Sec. 304   ADVISORY COUNCILS. Each authority established under this chapter may establish an advisory council, the membership of which must include citizen representatives of constituencies and organizations with interests relevant to the work of the authority including, but not limited to, leaders in the business, educational, and cultural communities. Advisory council members should be residents of the service area of the authority. Policies concerning the size and operation of any advisory council must be established by the authority that forms the council.

NEW SECTION.  Sec. 305   POWERS AND PURPOSES. In addition to accomplishing the cultural organization support activities specifically authorized under this chapter, an authority may:
     (1) Maintain an office or offices;
     (2) Sue and be sued in its own name, and plead and be impleaded;
     (3) Engage consultants, agents, attorneys, and advisers, contract with state and local governmental entities for services, and hire such employees, agents, and other personnel as the authority deems necessary, useful, or convenient to accomplish its purposes;
     (4) Establish procurement policies by resolution, including procedures for competitive procurement of services when required under its established policies;
     (5) Make and execute all manner of contracts, agreements, and documents with public and private parties as the authority deems necessary, useful, or convenient to accomplish its purposes;
     (6) Acquire and hold real or personal property, or any interest therein, in the name of the authority, and sell, assign, lease, encumber, mortgage, or otherwise dispose of the same in the manner as the authority deems necessary, useful, or convenient to accomplish its purposes. Any county legislative authority may transfer property, with or without consideration, to an authority created under this chapter;
     (7) Open and maintain accounts in qualified public depositaries and otherwise provide for the investment of any funds not required for immediate disbursement, and provide for the selection of investments;
     (8) Appear in its own behalf before boards, commissions, departments, or agencies of federal, state, or local government;
     (9) Procure insurance in amounts and from insurers as the authority deems desirable including, but not limited to, insurance against any loss or damage to its property or other assets, public liability insurance for injuries to persons or property, and liability insurance with limits an authority board deems reasonable for the purpose of protecting and holding personally harmless board members, officers, and employees of the authority against liability arising from their acts or omissions while performing or in good faith purporting to perform their official duties;
     (10) Apply for and accept grants, loans, advances, and contributions from any source of money, property, labor, or other things of value, to be held, used, and applied as the authority deems necessary, useful, or convenient to accomplish its purposes, without competing with cultural organizations as defined under this chapter or private organizations that raise funds for distribution to cultural organizations;
     (11) Make expenditures as are appropriate for paying the administrative costs and expenses of the authority in carrying out the provisions of this chapter;
     (12) Establish reserves and special funds, and controls on deposits to and disbursements from them, as the authority deems necessary, useful, or convenient to accomplish its purposes;
     (13) Prepare, publish, and distribute, with or without charge, studies, reports, bulletins, and other material as the authority deems necessary, useful, or convenient to accomplish its purposes;
     (14) Conduct meetings at which members participating through the use of any means of communication by which all members participating can hear each other during the meeting are deemed to be present in person at the meeting for all purposes;
     (15) Delegate any of its powers and duties if consistent with the purposes of this chapter;
     (16) Adopt rules and guidelines as may be necessary to implement this chapter; and
     (17) Exercise any other power the authority deems necessary, useful, or convenient to accomplish its purposes and exercise the powers expressly granted in this chapter.

NEW SECTION.  Sec. 306   EXPENSE REIMBURSEMENT PROCEDURES. The authority board shall adopt a resolution that may be amended from time to time governing methods and amounts of reimbursement payable to board members, officers, and employees for travel and other business expenses incurred on behalf of the authority. The resolution must, among other things, establish procedures for approving expenses, the form of travel and expense vouchers, and requirements governing the use of credit cards issued in the name of the authority. Board members, officers, and employees may be advanced sufficient sums to cover their anticipated expenses in accordance with rules adopted by the state auditor.

NEW SECTION.  Sec. 307   PER DIEM COMPENSATION. Each member of the authority board may receive compensation of fifty dollars per day for attending meetings or conferences on behalf of the authority, not to exceed three thousand dollars per year. A board member may waive all or a portion of his or her compensation under this section during his or her term of office, by a written waiver filed with the authority. The compensation provided in this section is in addition to reimbursement for expenses paid to board members by the authority.

NEW SECTION.  Sec. 308   DEFENSE AND INDEMNITY. Whenever an action, claim, or proceeding is instituted against a person who is or was a board member, officer, or employee of an authority arising out of the performance of duties for or employment with the authority, the authority may grant a request by the person that the attorney of the authority's choosing be authorized to defend the claim, suit, or proceeding, and the costs of defense, attorneys' fees, and obligation for payments arising from the action may be paid from the authority's funds. Costs of defense, judgment, or settlement against the person may not be paid in a case where the court has found that the person was not acting in good faith within the scope of employment with or duties for the authority. No board member or officer of the authority may be personally liable for acts done or omitted in good faith while performing duties as a board member or officer on behalf of the authority.

NEW SECTION.  Sec. 309   EMPLOYEES, SALARIES, AND BENEFITS. An authority may create and fill positions; fix reasonable wages and salaries; pay costs involved in hiring employees; and establish reasonable benefits for employees, including holiday pay, vacations or vacation pay, retirement benefits, and medical, life, accident, or health disability insurance, as approved by the board. Authority board members, at their own expense, may be included under any authority policy for medical, life, accident, or health disability insurance. Insurance for employees and board members may not be considered compensation. Coverage for the board under any authority policy is not to exceed that provided authority employees. An authority is a political subdivision for purposes of participation in the state public employees' retirement system under RCW 41.40.062 and for other purposes.

NEW SECTION.  Sec. 310   TREASURER. At the request of the authority, the treasurer of any participating county may serve as the ex officio treasurer of the authority.

NEW SECTION.  Sec. 401   VOTED SALES TAX. The authority board may submit an authorizing proposition to the voters of the authority and, if the proposition is approved by a majority of persons voting, fix and impose a sales and use tax in accordance with the terms of this section. The tax authorized in this section is in addition to any other taxes authorized by law and must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the service area. The rate of tax shall not exceed one-tenth of one percent of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax. The tax imposed in this section expires seven years after the date the tax is first collected, but may be reauthorized for one or more additional seven-year terms, in each case if the authority board submits an authorizing proposition to the voters of the authority and the proposition is approved by a majority of persons voting. Moneys collected under this section shall only be used for the purposes set forth in sections 501 and 502 of this act.

NEW SECTION.  Sec. 501   ALLOCATION. (1) An authority with a service area population of more than one million five hundred thousand established as provided in section 301(1)(a) of this act or an authority with an aggregate service area population of more than two million five hundred thousand established as provided in section 301(1)(b) of this act shall allocate funds available under section 401 of this act as follows:
     (a) Until any start-up funding provided to the authority under section 302 of this act has been fully repaid within two years after the sales and use tax authorized under section 401 of this act is first collected, the authority shall reserve from total funds available annually funding sufficient to provide for repayment of such start-up funding;
     (b) After allocating any funds necessary for repayment of start-up funding as provided in (a) of this subsection, up to one and one-fourth percent of total funds available annually may be used for authority administrative costs;
     (c)(i) After allocating funds for repayment of start-up funding as provided under (a) of this subsection and for authority administrative expenses as provided in (b) of this subsection, ten percent of remaining funds available annually must be used to fund a public school cultural access program to be administered by the authority and, to the extent funds are available after funding the public school cultural access program, such other projects of regional benefit to be undertaken within the authority's service area. As determined by the authority board and to the extent practicable consistent with available resources, the public school cultural access program must include the following attributes:
     (A) Provide benefits designed to increase public school student access to the programming offered and facilities operated by regional and community-based organizations receiving funding under this chapter;
     (B) Offer benefits to every public school in the authority's service area while scaling the range of benefits available to and the frequency of opportunities to participate by any particular school to coincide with the relative percentage of students attending the school who participate in the national free or reduced-price school meals program; and
     (C) Benefits provided under the public school cultural access program must include, without limitation:
     (I) Establishment and operation, within funding provided to support the public school cultural access program under this subsection, of a centralized service available to regional and community-based organizations receiving funding under this chapter and public schools in the authority's service area to coordinate opportunities for public school student access to the programs and activities offered by the organizations both at the facilities and venues operated by the organizations and through programs and experiences provided by the organizations at schools and elsewhere;
     (II) Providing directly or otherwise funding and arranging for transportation for public school students to attend and participate in the programs and activities offered by such organizations;
     (III) In consultation with regional and community-based organizations, preparing and maintaining a readily accessible and current guide cataloging access opportunities and facilitating scheduling;
     (IV) Coordinating closely with regional and community-based organizations to maximize student utilization of available opportunities in a cost-efficient manner including possible scheduling on a single day opportunities for different grade levels at any one school and participation in multiple programs or activities in the same general area for which authority-funded transportation is provided;
     (V) Supporting the development of tools, materials, and media by cultural organizations to ensure that school access programs and activities correlate with school curricula and extend the reach of access programs and activities for classroom use with or without direct on-site participation, to the extent practicable;
     (VI) Building meaningful partnerships with public schools and cultural organizations in order to maximize participation in school access programs and activities and ensure their relevance and effectiveness;
     (VII) Preparing an annual public school access plan for authority board review and adoption prior to implementation; and
     (VIII) Compiling an annual report documenting the reach and evaluating the effectiveness of authority-funded public school access efforts, including recommendations to the authority board for improvements.
     (ii) The authority board shall establish eligibility guidelines, criteria for the award of funding to support projects of regional benefit, including identification and evaluation of the public benefits to be derived from the projects, and a competitive allocation process to be undertaken at least annually. The projects may include, without limitation, regional cultural public information and promotional activities; support for new cultural organizations; and support for specific projects or organizations working to expand access to cultural activities by underserved populations. Regional organizations receiving funding under this chapter are not eligible applicants for funding under this section. However, regional organizations may participate in broad-based, collaborative projects funded under this section and may partner with a community-based organization in a project for which the community-based organization is the applicant for funding and plays the lead role in the project;
     (d) Seventy-five percent of total remaining funds available annually excluding funds initially reserved under (a), (b), and (c) of this subsection must be reserved for distribution by the authority board to each regional organization that the authority board determines, on an annual basis, to have met the following guidelines:
     (i) For at least the preceding three years, the organization has been continuously in good standing as a nonprofit corporation under the laws of the state of Washington;
     (ii) Has its principal location or locations and conducts the majority of its activities within the authority service area primarily for the benefit of authority residents;
     (iii) Has not declared bankruptcy or suspended or substantially curtailed operations for a period longer than six months during the preceding three years;
     (iv) Has provided to the authority audited annual financial statements for at least its two most recent fiscal years;
     (v) Over the three preceding years, has minimum average annual revenues of at least one million two hundred fifty thousand dollars. The authority board shall annually and cumulatively adjust the minimum revenues by the annual percentage change in the consumer price index for the prior year for the Seattle-Tacoma-Bellevue, Washington metropolitan statistical area for all urban consumer, all goods, as published by the United States department of labor, bureau of labor statistics. The minimum revenues requirement, adjusted for inflation as provided in this section, remains effective through the date on which the initial tax authorized by the voters under section 401 of this act expires. Thereafter, the authority board shall, at the beginning of each subsequent period of funding as approved by the voters, establish initial minimum average annual revenues of not less than the amount of the minimum revenues required during the final year of the immediately preceding period of funding;
     (vi) For purposes of determining the eligibility of a cultural organization to receive funding or the relative magnitude of the funding it receives on the basis of its revenues, any determination with respect to a qualifying state-related cultural organization must exclude any state funding received by the organization or for the institution it supports; and
     (vii) Any additional guidelines, consistent with section 201 of this act and this section, as it deems necessary or appropriate for determining the eligibility of prospective regional organizations to receive funding under this section and for establishing the amount of funding any organization may receive;
     (e) Funds available under (d) of this subsection must be distributed among eligible regional organizations based on an annual ranking of eligible organizations by the combined size of their average annual revenues and their average annual attendance, both over the three preceding years. However, an organization's attendance must have twice the weight of the organization's revenues in determining its relative ranking. Available funds must be distributed proportionally among eligible organizations, consistent with the ranking, such that the organization with the largest combined revenues and weighted attendance would receive the most funding and the organization with the smallest combined revenues and weighted attendance would receive the least funding. However, no organization may receive funds in excess of fifteen percent of its average annual revenues over the three preceding years. Any funds available under (d) of this subsection not distributed to regional organizations as a result of application of the formula provided under this subsection (1)(e) must be allocated by the authority board for distribution under (g) of this subsection;
     (f) Funds distributed to regional organizations under (d) of this subsection must be used to support cultural and educational activities, programs and initiatives, public benefits and communications, and basic operations. No funds distributed to regional organizations under (d) of this subsection may be used for capital expenditures or acquisitions including, but not limited to, the acquisition of or the construction of improvements to real property;
     (g) Remaining funds available annually, including funds not initially reserved under (a) through (d) of this subsection as well as funds not distributed by the authority from the reserved funds must be distributed by the authority board to public agencies designated by the legislative authorities of the participating counties, subject to the following guidelines:
     (i) With respect to an authority created by four contiguous counties with an aggregate service area population of more than three million, the agency designated by the legislative authority of the largest of the participating counties by size of population shall receive fifty percent of funds available under this subsection (1)(g); the agencies designated by the legislative authorities of the next two largest of the participating counties by size of population must each receive twenty percent of funds available under this subsection (1)(g); and the agency designated by the legislative authority of the smallest of the participating counties by size of population must receive the remaining ten percent of funds available;
     (ii) With respect to an authority created by fewer than four contiguous counties with an aggregate service area population of more than two million five hundred thousand, funds must be distributed by the authority board to public agencies designated by the legislative authorities of the participating counties under a formula to be determined by the authority board. In determining its formula for the distribution of remaining funds among the designated public agencies, the authority board shall consider factors such as the relative size of the populations and the economies of the participating counties; the number of regional organizations receiving funds under (d) of this subsection in each participating county; and the extent to which citizens or groups of citizens within each county may be underserved by cultural organizations;
     (iii) The distribution formula for an authority comprised of three contiguous counties including one county with a population in excess of one million five hundred thousand, another county with a population in excess of six hundred thousand, and one with a population of less than three hundred thousand shall provide that the agency designated by the legislative authority of the largest county by population receives not less than sixty percent of funds available; the next largest county by population receives not less than twenty-five percent of funds available; and the smallest county by population receives not less than twelve percent of funds available;
     (iv) The distribution formula for an authority comprised of three continuous counties including one county with a population in excess of one million five hundred thousand and two other counties each with a population in excess of six hundred thousand shall provide that the agency designated by the legislative authority of the largest county by population receives not less than fifty-five percent of funds available and each of the other two counties receive not less than twenty percent of funds available;
     (v) The distribution formula for an authority comprised of two contiguous counties including one county with a population in excess of one million five hundred thousand and one county with a population in excess of six hundred thousand shall provide that the agency designated by the legislative authority of the larger county by population receives not less than seventy-five percent of the funds available; and
     (vi) The distribution formula for an authority comprised of two contiguous counties including one county with a population in excess of one million five hundred thousand and one county with a population of less than three hundred thousand shall provide that the agency designated by the legislative authority of the larger county by population receives not less than eighty-five percent of funds available;
     (h) Funds distributed by the designated public agencies under (g) of this subsection must be applied as follows:
     (i) Not more than eight percent of such funds must be used for administrative costs of the public agency designated by a participating county; and
     (ii) The balance must be used to fund community-based organizations. Designated public agencies shall adopt:
     (A) Guidelines, consistent with the requirements of this chapter, it deems necessary or appropriate for determining the eligibility of community-based organizations to receive funding under this chapter and for establishing the amount of funding any organization may receive;
     (B) Criteria for the award of funds to eligible community-based organizations, including the public benefits to be derived from projects submitted for funding; and
     (C) Procedures for conducting, at least annually, a competitive process for the award of available funding;
     (i) Funds distributed to community-based organizations may be used to support cultural and educational activities, programs, and initiatives; public benefits and communications; and basic operations. Funds may also be used for (i) capital expenditures or acquisitions including, but not limited to, the acquisition of or construction of improvements to real property; and (ii) technology, equipment, and supplies reasonably related to or necessary for a project otherwise eligible for funding under this chapter. Authority guidelines may also determine the circumstances under which funds may be used to fund start-up expenses of new community-based organizations.
     (2) An authority, other than an authority described in subsection (1) of this section, shall allocate available funding as follows:
     (a) Not more than five percent of total funds available annually may be reserved for authority administrative costs, including its start-up funding provided under section 302 of this act and to support projects of regional benefit to be undertaken within the authority's service area, as determined by the authority board. Not more than two and one half percent of total funds available annually may be used for authority administrative costs. The authority board shall establish eligibility guidelines, criteria for the award of funding to support projects of regional benefit, including identification and evaluation of the public benefits to be derived from the projects, and a competitive allocation process to be undertaken at least annually. The projects may include, without limitation, regional cultural public information and promotional activities, support for new cultural organizations, and support for specific projects or organizations working to expand access to cultural activities by underserved populations. Regional organizations receiving funding under this chapter are not eligible applicants for funding under this section. However, regional organizations may participate in broad-based, collaborative projects funded under this section and may partner with a community-based organization in a project for which the community-based organization is the applicant for funding and plays the lead role in the project;
     (b) The authority board shall determine the percentage of total funds available annually to be reserved for a public school cultural access program established and managed by the authority to increase access to cultural activities and programming for public school students resident in the authority's service area. The activities and programming need not be located or provided within the authority's service area. In developing its program, the authority may consider the attributes prescribed for a public school cultural access program required to be undertaken under subsection (1)(c) of this section.
     (c) The authority board shall determine the percentage of total funds available annually to be reserved for distribution by the authority board to regional organizations under a formula to be determined by the authority board. The authority board may adopt guidelines, consistent with the requirements of this chapter, it deems necessary or appropriate for determining the eligibility of regional organizations to receive funding under this chapter. Total funds reserved for distribution to regional organizations may not exceed seventy-five percent of total funds available annually excluding funds initially reserved under (a) and (b) of this subsection;
     (d) Remaining funds available annually, including all funds not initially reserved under (a), (b), or (c) of this subsection as well as funds not distributed by the authority from the reserved funds must be distributed by the authority board to an entity in each participating county designated by the legislative authorities of the participating counties under a formula to be determined by the authority board. In determining its formula for the distribution of remaining funds among the designated entities, the authority board shall consider factors such as the relative size of the economies of the participating counties, the number of regional organizations receiving funds under (c) of this subsection in each participating county, and the extent to which citizens or groups of citizens within each county may be underserved by cultural organizations. The authority shall determine the amount of funding to be allocated to support designated agency administrative costs. Funds distributed to the designated entity under this section must be awarded to community-based cultural organizations. Subject to the approval of the authority, designated entities shall adopt:
     (i) Guidelines, consistent with the requirements of this chapter, it deems necessary or appropriate for determining the eligibility of community-based organizations to receive funding under this chapter;
     (ii) Criteria for the award of funds to eligible community-based organizations, including the public benefits to be derived from projects submitted for funding; and
     (iii) Procedures for conducting, at least annually, a competitive process for the award of available funding.
     (e) Funds distributed to community-based organizations may be used to support cultural and educational activities, programs, and initiatives; public benefits and communications; and basic operations. Funds may also be used for (i) capital expenditures or acquisitions including, but not limited to, the acquisition of or construction of improvements to real property; and (ii) technology, equipment, and supplies reasonably related to or necessary for a project otherwise eligible for funding under this chapter. Authority guidelines may also determine the circumstances under which funds may be used to fund start-up expenses of new community-based organizations;
     (f) If the authority board or designated agency determine the eligibility of a cultural organization to receive funding or the relative magnitude of the funding it receives on the basis of its budget, revenues, or expenses, any determination with respect to a qualifying state-related cultural organization must exclude any state funding received by the organization or for the institution it supports.

NEW SECTION.  Sec. 502   PUBLIC BENEFITS. (1) An authority established under this chapter shall provide or continue to provide funding authorized under this chapter only to cultural organizations that provide discernible public benefits. Each authority established under this chapter shall identify a range of public benefits that cultural organizations within its service area may provide or continue to provide in satisfaction of this requirement for eligibility to receive funding authorized under this chapter. The public benefits include, without limitation, reasonable opportunities for access to facilities, programs, and services on a reduced or no admission fee basis, particularly for diverse and underserved populations and communities; providing, through technological and other means, services or programs in locations other than an organization's own facilities; providing educational programs and experiences both at an organization's own facilities and in schools and other venues; broadening cultural programs, performances, and exhibitions for the enlightenment and entertainment of the public; supporting collaborative relationships with other cultural organizations in order to extend the reach and impact of the collaborating organizations for the benefit of the public; and, in the case of community-based organizations, organizational capacity-building projects or activities that an organization can demonstrate, to the reasonable satisfaction of the county-designated public agency, will enhance the ability of the organization to provide or continue to provide meaningful public benefits not otherwise achievable. In addition to providing or continuing to provide public benefits identified by the appropriate authorities under this section, regional organizations receiving funding under section 501(1) of this act shall participate in good faith in the authority's public school cultural access program required under section 501(1) of this act. The regional organizations shall provide or continue to provide public benefits under this section in addition to participating in the public school cultural access program.
     (2) In evaluating requests for funding authorized under this chapter for projects of regional benefit under section 501(1) of this act or this subsection, the authority board shall consider the public benefits to be derived from proposed projects. At the conclusion of a project of regional benefit, the recipient of funding authorized under this chapter is required to report to the authority on the public benefits realized. Each regional organization receiving funds authorized under this chapter pursuant to an authority allocation formula shall annually, prior to year end, preview for the authority public benefits the organization's plans to provide or continue to provide in the following year and report on public benefits it provided or continued to provide during the current year. In evaluating requests for funding authorized under this chapter, a county-designated public agency responsible for the distribution of the funds shall consider the public benefits applicant community-based organizations represent will be derived from proposed projects. At the conclusion of a project approved for funding, the sponsoring community-based organization is required to report to the county-designated public agency on the public benefits realized.
     (3) Each authority established under this chapter shall adopt guidelines establishing a baseline standard of continuous performance with respect to the provision of public benefits required under this chapter and for evaluating the continuing eligibility of any regional or community-based organization to receive funds under this chapter based on the continuous performance of the organization in the provision of the public benefits. The guidelines must include (a) procedures for notifying any organization at risk of losing its continuing eligibility to receive funds under this chapter for failure to achieve the authority's baseline standard of performance with respect to the continuous provision of public benefits and (b) measures or procedures available to such an organization for either retaining or recovering eligibility, as appropriate.

Sec. 601   RCW 36.96.010 and 1999 c 153 s 50 are each amended to read as follows:
     As used in this chapter, unless the context requires otherwise:
     (1) "Special purpose district" means every municipal and quasi-municipal corporation other than counties, cities, and towns. Such special purpose districts shall include, but are not limited to, water-sewer districts, fire protection districts, port districts, public utility districts, county park and recreation service areas, flood control zone districts, diking districts, drainage improvement districts, cultural access authorities, and solid waste collection districts, but shall not include industrial development districts created by port districts, and shall not include local improvement districts, utility local improvement districts, and road improvement districts;
     (2) "Governing authority" means the commission, council, or other body which directs the affairs of a special purpose district;
     (3) "Inactive" means that a special purpose district, other than a public utility district, is characterized by either of the following criteria:
     (a) Has not carried out any of the special purposes or functions for which it was formed within the preceding consecutive five-year period; or
     (b) No election has been held for the purpose of electing a member of the governing body within the preceding consecutive seven-year period or, in those instances where members of the governing body are appointed and not elected, where no member of the governing body has been appointed within the preceding seven-year period.
     A public utility district is inactive when it is characterized by both criteria (a) and (b) of this subsection.

NEW SECTION.  Sec. 602   APPLICABILITY OF PUBLIC LAWS. The authority, its officers, and the board of directors, created under this chapter, are subject to the general laws regulating local governments and local governmental officials including, but not limited to, the requirement to be audited by the state auditor and various accounting requirements under chapter 43.09 RCW, the open public record requirements under chapter 42.17 RCW, the prohibition on using its facilities for campaign purposes under RCW 42.17.130, the open public meetings law under chapter 42.30 RCW, the code of ethics for municipal officers under chapter 42.23 RCW, and the local government whistleblower law under chapter 42.41 RCW.

NEW SECTION.  Sec. 603   No direct or collateral attack on any authority purported to be authorized or created in conformance with this chapter may be commenced more than thirty days after creation.

NEW SECTION.  Sec. 604   Part headings and captions used in this act are not any part of the law.

NEW SECTION.  Sec. 605   Sections 101 through 502, 602, and 603 of this act constitute a new chapter in Title 36 RCW.

NEW SECTION.  Sec. 606   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. 607   The provisions of this act shall be liberally construed to effect the policies and purposes of this act.