BILL REQ. #:  S-1660.1 

READ FIRST TIME 02/21/11.   

     AN ACT Relating to authorizing the creation of cultural access authorities; amending RCW 84.52.010 and 36.96.010; adding a new section to chapter 82.14 RCW; adding a new section to chapter 84.52 RCW; adding a new chapter to Title 36 RCW; and creating a new section.

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

NEW SECTION.  Sec. 101   INTENT. (1) The legislature finds that:
     (a) 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.
     (b) 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.
     (c) 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.
     (d) Cultural institutions are an essential source of knowledge and inspiration for the citizens of the state.
     (2) The purpose of this chapter is to authorize the education and arts access program, under which education and arts cultural access authorities authorize funding for public school education and arts access programs and support 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 an education and arts cultural access authority under the education and arts access program.
     (4) "Authority board" means the board of directors of an authority.
     (5) "Community-based organization" means a cultural organization or a community preservation and development authority formed under chapter 43.167 RCW prior to January 1, 2011, 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, including the state arts commission established under chapter 43.46 RCW, 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 county 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 may create an authority by resolution of the county legislative authority.
     (b) Any contiguous group of counties may create an authority by entering into an interlocal agreement under chapter 39.34 RCW, approved by resolution of the county legislative authorities.
     (c) The interlocal agreement under which an authority is formed shall provide for reduction or expansion of an authority's service area over time as needed following any election to impose or extend either a voted sales and use tax or a voted property tax as provided in section 302 of this act. Such interlocal agreement must provide for revisions to the governance structure and the allocation of the proceeds of voter-approved taxes to coincide with any changes in the number of counties included within the service area of any authority in a manner consistent with this act.
     (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 with a population less than one million five hundred thousand must be governed by a five-member authority board consisting of five members appointed by the county legislative authority. An authority created by a single participating county with a population of more than one million five hundred thousand must be governed by a five-member authority board consisting of three members appointed by the legislative authority of the county; and one member appointed by the legislative authority of each of the two largest cities by population as of formation of the authority. The members of the authority board shall serve four-year terms. Of the initial members, one must be appointed for a one-year initial term, one must be appointed for a two-year initial term, one must be appointed for a three-year initial term, and the remainder must be appointed for four-year terms.
     (b) Except as provided in (c) of this subsection, an authority created by two or more participating counties under subsection (1)(b) of this section must be governed by an authority board as provided in the interlocal agreement creating the authority. The interlocal agreement must specify the number of members of the authority board, the total number of which must be an odd number. The board of an authority created by four or fewer participating counties may not have more than nine members, and not more than two of whom may be appointed by the legislative authority of any one participating county. The board of an authority created by more than four participating counties may not have more than eleven members. The interlocal agreement creating the authority must allocate responsibility for the appointment of the members of the authority board among the legislative authorities of the participating counties. If the total number of participating counties or the allocation of appointment responsibility provided in the interlocal agreement precludes each participating county from appointing at least one member of the initial board of the authority, the interlocal agreement may provide for rotation of responsibility for some board member appointments among the legislative authorities of the participating counties as board member vacancies occur. The members of the authority board shall serve four-year terms. The interlocal agreement creating the authority must divide the board into three classes of relatively equal size. Of the initial members of the board, one class of members must be appointed for a two-year initial term; one class of members must be appointed for a three-year initial term, and the remainder must be appointed for a four-year initial term.
     (c) An authority created by up to four participating counties with an aggregate population of more than two million five hundred thousand must be governed by a seven to nine-member authority board as follows: (i) With respect to a two-county authority formed under this subsection, two members 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; and 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 (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; and 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. 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 of the authority board shall serve four-year terms. The interlocal agreement creating the authority must divide the board into three classes of relatively equal size. Of the initial members of the board, one class of members must be appointed for a two-year initial term; one class of members must be appointed for a three-year initial term; and the remainder must be appointed for a four-year initial term.
     (d)(i) Authority board members may not be members of the legislative authorities of a participating county or of any city or town located in a participating county.
     (ii) In any 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.
     (iii) A vacancy on an authority board must be filled in the same manner as the original appointment was made, and the person appointed to fill a vacancy shall serve for the remainder of the unexpired term of the office for the position to which he or she was appointed.
     (iv) Any board member may be removed from office by action of at least two-thirds of the members of the legislative authority that made the appointment.
     (v) Authority board members may serve up to two full consecutive terms, in addition to serving one shorter initial term upon the formation of an authority or one shorter unexpired term filling a board vacancy.
     (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 must 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   SERVICE AREA REVISION FOLLOWING TAX IMPOSITION ELECTION. The service area of an authority formed under section 301 of this act shall be revised following any election on such authority's proposition to impose or extend either a voted sales and use tax under section 402 of this act or a voted property tax under section 403 of this act to be coextensive with the boundaries of only the participating county or counties in which a majority of the voters in any such participating county voting on the authority's proposition to impose or extend any such tax vote to approve the imposition or extension of such tax. Any county in which a majority of the voters voting on the authority's proposition vote to disapprove such proposition may not be included within the service area of an authority. A county with boundaries contiguous with the service area of an authority including one or more counties in which a majority of the voters have voted to approve the imposition or extension of such tax may be included within the service area of such authority after a majority of its voters vote to approve the imposition of such tax in that county.

NEW SECTION.  Sec. 303   START-UP FUNDING AND CONDITIONAL FORMATION. (1)(a) The county or counties creating an authority may 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. However, this subsection does not authorize the preparation and distribution of information to the general public for the purpose of influencing the outcome of an authority election.
     (b) 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.
     (2) The county or counties creating an authority must require repayment of start-up funding advanced to an authority from the proceeds of taxes authorized under sections 401 through 403 of this act and approved by voters after the taxes are first collected. The funds must be repaid to the participating county or counties with interest at the internal rate of return on the invested funds of each participating county.
     (3)(a) An authority must be dissolved three years after its formation unless it has secured voter approval of one of the taxes authorized herein. Upon dissolution of an authority after three years without securing voter approval of a 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.
     (b) 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.
     (c) 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. 304   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. 305   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. 306   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 as provided in sections 310 and 311 of this act 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. 307   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. 308   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. 309   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. 310   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. 311   STATE ARTS COMMISSION. An authority, other than 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, may contract with the state arts commission formed under chapter 43.46 RCW for consulting, management, or administrative services. A participating county may contract with the state arts commission to function for consulting, management, or administrative services, including functioning as its designated public agency.

NEW SECTION.  Sec. 312   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   AUTHORITY TO IMPOSE TAX. (1) An authority may impose sales and use taxes under section 402 of this act or regular property tax levies under section 403 of this act for the purposes authorized under section 601 of this act.
     (2) If an authority imposes sales and use taxes under section 402 of this act, the authority may not impose a regular property tax levy under section 403 of this act.
     (3) If an authority imposes a regular property tax levy under section 403 of this act, the authority may not impose sales and use taxes under section 402 of this act.

NEW SECTION.  Sec. 402   A new section is added to chapter 82.14 RCW to read as follows:
     VOTED SALES AND USE TAXES. (1) The authority board may impose a sales and use tax of up to 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, when specifically authorized to do so by a majority of the voters voting on a proposition submitted at a special election held after June 30, 2013. The ballot proposition may provide for the tax to apply for a period of up to seven years.
     (2) 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 authority.
     (3) The authority board may extend a tax imposed under this section for one or more additional periods of up to seven years, in each case when specifically authorized to extend the tax by a majority of the voters voting on a proposition submitted at a special election.
     (4) Moneys collected under this section may only be used for the purposes set forth in section 601 of this act.
     (5) The department must perform the collection of taxes under this section on behalf of an authority at no cost to the authority, and the state treasurer must distribute those taxes as available on a monthly basis to the authority or, upon the direction of the authority, to its treasurer or a fiscal agent, paying agent, or trustee for obligations issued or incurred by the authority.
     (6) The definitions in section 201 of this act apply to this section.

NEW SECTION.  Sec. 403   A new section is added to chapter 84.52 RCW to read as follows:
     VOTED PROPERTY TAX. (1) The authority board may impose annual regular property tax levies in the authority service area when specifically authorized to do so by a majority of the voters voting on a proposition submitted at a special election held after June 30, 2013. The ballot proposition must set forth the total dollar amount to be collected in the first year of the levy and may provide for a levy for a period of up to seven years. The total dollar amount to be set forth in the ballot proposition may not exceed an amount equal to: (a) The total number of taxable retail sales and taxable uses in the participating counties within the authority service area for the most recent calendar year as reported by the department of revenue; multiplied by (b) one-tenth of one percent.
     (2) The authority board may extend a tax imposed under subsection (1) of this section for one or more additional periods of up to seven years, in each case when specifically authorized to extend the tax by a majority of the voters voting on a proposition submitted at a special election. The ballot proposition must set forth the total dollar amount to be collected in the first year of the extended levy, which dollar amount may not exceed an amount equal to: (a) The total number of taxable retail sales and taxable uses in the participating counties within the authority service area for the most recent calendar year as reported by the department of revenue; multiplied by (b) one-tenth of one percent.
     (3) In the event an authority is levying property taxes that, in combination with property taxes levied by other taxing districts exceed the limitations in RCW 84.52.043 and 84.52.050, the authority's property tax levy must be reduced or eliminated consistent with RCW 84.52.010.
     (4) The limitation in RCW 84.55.010 does not apply to the first levy imposed under this section following the approval of the levy by the voters under subsection (1) of this section or to the first levy imposed under this section following the approval of an extension of the tax by the voters under subsection (2) of this section.
     (5) Moneys collected under this section may only be used for the purposes set forth in section 601 of this act.
     (6) The definitions in section 201 of this act apply to this section.

Sec. 404   RCW 84.52.010 and 2009 c 551 s 7 are each amended to read as follows:
     Except as is permitted under RCW 84.55.050, all taxes shall be levied or voted in specific amounts.
     The rate percent of all taxes for state and county purposes, and purposes of taxing districts coextensive with the county, shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the county, as shown by the completed tax rolls of the county, and the rate percent of all taxes levied for purposes of taxing districts within any county shall be determined, calculated and fixed by the county assessors of the respective counties, within the limitations provided by law, upon the assessed valuation of the property of the taxing districts respectively.
     When a county assessor finds that the aggregate rate of tax levy on any property, that is subject to the limitations set forth in RCW 84.52.043 or 84.52.050, exceeds the limitations provided in either of these sections, the assessor shall recompute and establish a consolidated levy in the following manner:
     (1) The full certified rates of tax levy for state, county, county road district, and city or town purposes shall be extended on the tax rolls in amounts not exceeding the limitations established by law; however any state levy shall take precedence over all other levies and shall not be reduced for any purpose other than that required by RCW 84.55.010. If, as a result of the levies imposed under RCW 36.54.130, 84.34.230, 84.52.069, 84.52.105, the portion of the levy by a metropolitan park district that was protected under RCW 84.52.120, 84.52.125, 84.52.135, and 84.52.140, the combined rate of regular property tax levies that are subject to the one percent limitation exceeds one percent of the true and fair value of any property, then these levies shall be reduced as follows:
     (a) The levy imposed by a county under RCW 84.52.140 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (b) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the portion of the levy by a fire protection district that is protected under RCW 84.52.125 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (c) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the levy imposed by a county under RCW 84.52.135 must be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or must be eliminated;
     (d) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the levy imposed by a ferry district under RCW 36.54.130 must be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or must be eliminated;
     (e) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, the portion of the levy by a metropolitan park district that is protected under RCW 84.52.120 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated;
     (f) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the levies imposed under RCW 84.34.230, 84.52.105, and any portion of the levy imposed under RCW 84.52.069 that is in excess of thirty cents per thousand dollars of assessed value, shall be reduced on a pro rata basis until the combined rate no longer exceeds one percent of the true and fair value of any property or shall be eliminated; and
     (g) If the combined rate of regular property tax levies that are subject to the one percent limitation still exceeds one percent of the true and fair value of any property, then the thirty cents per thousand dollars of assessed value of tax levy imposed under RCW 84.52.069 shall be reduced until the combined rate no longer exceeds one percent of the true and fair value of any property or eliminated.
     (2) The certified rates of tax levy subject to these limitations by all junior taxing districts imposing taxes on such property shall be reduced or eliminated as follows to bring the consolidated levy of taxes on such property within the provisions of these limitations:
     (a) First, the certified property tax levy rates of those junior taxing districts authorized under RCW 36.68.525, 36.69.145, 35.95A.100, ((and)) 67.38.130, and section 403 of this act shall be reduced on a pro rata basis or eliminated;
     (b) Second, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of flood control zone districts shall be reduced on a pro rata basis or eliminated;
     (c) Third, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates of all other junior taxing districts, other than fire protection districts, regional fire protection service authorities, library districts, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts, and the first fifty cent per thousand dollars of assessed valuation levies for public hospital districts, shall be reduced on a pro rata basis or eliminated;
     (d) Fourth, if the consolidated tax levy rate still exceeds these limitations, the first fifty cent per thousand dollars of assessed valuation levies for metropolitan park districts created on or after January 1, 2002, shall be reduced on a pro rata basis or eliminated;
     (e) Fifth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized to fire protection districts under RCW 52.16.140 and 52.16.160 and regional fire protection service authorities under RCW 52.26.140(1) (b) and (c) shall be reduced on a pro rata basis or eliminated; and
     (f) Sixth, if the consolidated tax levy rate still exceeds these limitations, the certified property tax levy rates authorized for fire protection districts under RCW 52.16.130, regional fire protection service authorities under RCW 52.26.140(1)(a), library districts, metropolitan park districts created before January 1, 2002, under their first fifty cent per thousand dollars of assessed valuation levy, and public hospital districts under their first fifty cent per thousand dollars of assessed valuation levy, shall be reduced on a pro rata basis or eliminated.

NEW SECTION.  Sec. 501   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 601(2) of this act shall participate in good faith in the authority's public school education and arts access program required under section 502 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 education and arts access program.
     (2) 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 the organization for either retaining or recovering eligibility, as appropriate.
     (3) In evaluating requests for funding authorized under this chapter for projects of regional benefit under section 601 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.

NEW SECTION.  Sec. 502   PUBLIC SCHOOL EDUCATION AND ARTS ACCESS PROGRAM. (1) An authority established under this chapter shall develop and provide a public school education and arts access program within its service area, as provided in section 601 of this act.
     (2) As determined by the authority board and to the extent practicable consistent with available resources, the public school education and arts access program of an authority described in section 601(2) of this act 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 education and arts access program must include, without limitation:
     (i) Establishment and operation, within funding provided to support the public school education and arts 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.

NEW SECTION.  Sec. 601   ALLOCATION. (1) An authority, other than an authority described in subsection (2) of this section, must allocate the proceeds of taxes authorized under sections 402 and 403 of this act as follows:
     (a) Until any start-up funding provided to the authority under section 303 of this act has been fully repaid, the authority must annually reserve from total funds available funding sufficient to provide for repayment of such start-up funding;
     (b) Not more than five percent of total funds available annually may be reserved for authority administrative costs, including repaying its start-up funding provided under section 303 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;
     (c) The authority board must determine the percentage of total funds available annually to be reserved for a public school education and arts 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 education and arts access program required to be undertaken under section 502(2) of this act.
     (d) The authority board must 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), (b), and (c) of this subsection;
     (e) Remaining funds available annually, including all funds not initially reserved under (a), (b), (c), and (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 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 (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. 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;
     (f) 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;
     (g) 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.
     (2) 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 must allocate the proceeds of the taxes authorized under sections 402 and 403 of this act as follows:
     (a) Until any start-up funding provided to the authority under section 303 of this act has been fully repaid, the authority must annually reserve from total funds available annually funding sufficient to provide for repayment of such start-up funding;
     (b)(i) After allocating any funds as required in (a) of this subsection, up to one and one-fourth percent of total funds available annually may be used for authority administrative costs and up to two and three-fourths percent of total funds available annually may be used for other projects of regional benefit to be undertaken within the authority's service area;
     (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;
     (c) After allocating funds as required in (a) and (b) of this subsection, ten percent of remaining funds available annually must be used to fund a public school education and arts access program to be administered by the authority.
     (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 402 or 403 of this act expires. Thereafter, the authority board must, 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 such that:
     (A) 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 must 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;
     (B) 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 must 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; and
     (C) 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
     (iii) 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.

Sec. 701   RCW 36.96.010 and 1999 c 153 s 50 are each amended to read as follows:
     ((As used in)) The definitions in this section apply throughout 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, education and arts 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. 702   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 public records act requirements under chapter 42.56 RCW, the prohibition against 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. 703   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. 704   Sections 101 through 312, 401, 501, 502, 601, 702, and 703 of this act constitute a new chapter in Title 36 RCW.

NEW SECTION.  Sec. 705   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. 706   The provisions of this act shall be liberally construed to effect the policies and purposes of this act.