BILL REQ. #:  H-3057.2 

Read first time 01/16/14.   Referred to Committee on Capital Budget.

     AN ACT Relating to state general obligation bonds for flood hazard reduction and storm water projects; adding a new chapter to Title 86 RCW; and adding a new chapter to Title 43 RCW.

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

NEW SECTION.  Sec. 101   FLOOD HAZARD REDUCTION BONDS AUTHORIZED. For the purpose of providing funds to finance flood control, prevention, protection, and mitigation projects in areas of Washington state that are at greatest risk and most vulnerable to flooding, and all costs incidental thereto, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of one billion ten million dollars, or as much thereof as may be required, to finance all or a part of the cost of these projects and all costs incidental thereto. Bonds authorized in this section may be sold at such price as the state finance committee shall determine. No bonds authorized in this section may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.

NEW SECTION.  Sec. 102   BOND ISSUANCE--INTENT. (1) It is the intent of the legislature that the proceeds of new bonds authorized in section 101 of this act will be appropriated in phases over five biennia, beginning with the 2015-2017 biennium, to the office of financial management to provide funding for flood control, prevention, protection, and mitigation projects in areas of Washington state that are at greatest risk and most vulnerable to flooding.
     (2) Subsection (1) of this section is not intended to limit the legislature's ability to appropriate bond proceeds if the full amount authorized in section 101 of this act has not been appropriated after five biennia. The authorization to issue bonds contained in this chapter does not expire until the full authorization has been appropriated and issued.

NEW SECTION.  Sec. 103   PROCEEDS. (1) The proceeds from the sale of the bonds authorized in section 101 of this act shall be deposited in the flood hazard reduction account created in section 109 of this act. Moneys in the account may be spent only after appropriation.
     (2) If the state finance committee deems it necessary to issue bonds authorized in section 101 of this act as taxable bonds in order to comply with federal internal revenue service rules and regulations pertaining to the use of nontaxable bond proceeds or in order to reduce the total financing costs for bonds issued, the proceeds of such taxable bonds shall be transferred to the state taxable building construction account in lieu of any deposit otherwise provided by this section. The state treasurer shall submit written notice to the director of the office of financial management if it is determined that any such transfer to the state taxable building construction account is necessary. Moneys in the account may be spent only after appropriation.
     (3) These proceeds shall be used exclusively for the purposes specified in section 101 of this act and for the payment of expenses incurred in the issuance and sale of the bonds, and shall be administered by the office of financial management, subject to legislative appropriation.

NEW SECTION.  Sec. 104   PAYMENT PROCEDURES, TERMS, AND COVENANTS. (1) The debt-limit general fund bond retirement account shall be used for the payment of the principal of and interest on the bonds authorized in section 101 of this act.
     (2) The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing twelve months to meet the bond retirement and interest requirements on the bonds authorized in section 101 of this act.
     (3) On each date on which any interest or principal and interest payment is due on bonds issued under section 101 of this act, the state treasurer shall withdraw from any general state revenues received in the state treasury and deposit in the debt-limit general fund bond retirement account an amount equal to the amount certified by the state finance committee to be due on the payment date.
     (4) Bonds issued under section 101 of this act shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.
     (5) The owner and holder of each of the bonds or the trustee for the owner and holder of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of funds as directed in this section.
     (6) The state finance committee is authorized to prescribe the form, terms, conditions, and covenants of the bonds provided for in section 101 of this act, the time or times of sale of all or any portion of them, and the conditions and manner of their sale and issuance.

NEW SECTION.  Sec. 105   ADDITIONAL METHODS OF PAYING DEBT SERVICE AUTHORIZED. The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 101 of this act, and this section shall not be deemed to provide an exclusive method for payment.

NEW SECTION.  Sec. 106   BONDS--LEGAL INVESTMENT FOR PUBLIC FUNDS. The bonds authorized by section 101 of this act shall constitute a legal investment for all state funds or for funds under state control and all funds of municipal corporations.

NEW SECTION.  Sec. 107   INTENDED USE OF BOND PROCEEDS--PILOT PROJECTS AUTHORIZED. The legislature intends to use three hundred million dollars of the proceeds from the sale of bonds issued under section 101 of this act for flood control, prevention, protection, and mitigation pilot projects in the Chehalis river basin including, but not limited to, an upstream water retention facility. Pilot projects funded must be reviewed and approved by both the Chehalis river basin flood authority and the Chehalis tribe prior to the allotment of funds by the office of financial management.

NEW SECTION.  Sec. 108   INTENDED USE OF BOND PROCEEDS--COMPETITIVE GRANT PROGRAM. (1) The legislature intends to use seven hundred million dollars of the proceeds from the sale of bonds issued under section 101 of this act for flood control, prevention, protection, and mitigation grants to be distributed on a competitive basis to the following eligible entities: Counties; cities; federally recognized Indian tribes; port districts; flood control zone districts; flood control districts; and diking and drainage districts.
     (2) Applicants must provide a twenty percent match from nonstate sources. The nonstate match may include cash on hand; the value of real property when acquired solely for the purpose of the project; the proceeds of a letter of credit or other binding loan commitment; a pledge commitment; and in-kind contributions. Applicants may receive credit for properly documented nonstate matching funds that were contributed no earlier than ten years prior to the grant solicitation round and that are related to the needs identified in the project application. The office of financial management may develop additional requirements related to documenting the value of the nonstate match.
     (3) The office of financial management, in consultation with the department of ecology, must evaluate, score, and rank applications based on the following criteria, in descending order of priority:
     (a) Projects that provide cost-effective hazard reduction to people, property, critical facilities, and transportation corridors in counties that have historically been and are projected to continue to be at greatest risk and most vulnerable to flooding, including:
     (i) Clark county;
     (ii) Cowlitz county;
     (iii) Grays Harbor county;
     (iv) King county;
     (v) Lewis county;
     (vi) Pierce county;
     (vii) Skagit county;
     (viii) Snohomish county;
     (ix) Thurston county;
     (x) Whatcom county; and
     (xi) Other counties as determined by the office of financial management;
     (b) Projects that have been examined through a collaborative planning and approval process that includes public comment, such as a comprehensive flood hazard management plan, a hazard mitigation plan, a comprehensive plan, a watershed plan, or other applicable plans;
     (c) Projects that minimize or eliminate future costs for maintenance, operation, or emergency response;
     (d) Projects that are ready to proceed with the scope of work, and whose sponsors have the capacity to complete the project successfully;
     (e) Projects that achieve multiple benefits, including, but not limited to, salmon recovery, water quality improvements, habitat restoration, and channel migration zone protection.
     (4) Proceeds from the sale of bonds issued under this chapter may not be used for the development of comprehensive flood hazard management plans, hazard mitigation plans, comprehensive plans, watershed plans, or other plans.

NEW SECTION.  Sec. 109   CREATION OF THE FLOOD HAZARD REDUCTION ACCOUNT. The flood hazard reduction account is created in the state treasury. Proceeds from the bonds issued under section 103 of this act shall be deposited in the account. The account shall be used for purposes of section 101 of this act. Moneys in the account may be spent only after appropriation.

NEW SECTION.  Sec. 201   STORM WATER BONDS AUTHORIZED. For the purpose of providing funds to finance an ongoing, statewide competitive program of grants to cities and counties for storm water projects that protect and improve water quality and improve watershed functionality, and all costs incidental thereto, the state finance committee is authorized to issue general obligation bonds of the state of Washington in the sum of five hundred five million dollars, or as much thereof as may be required, to finance all or a part of the cost of these projects and all costs incidental thereto. Bonds authorized in this section may be sold at such price as the state finance committee shall determine. No bonds authorized in this section may be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.

NEW SECTION.  Sec. 202   BOND ISSUANCE--INTENT. (1) It is the intent of the legislature that the proceeds of new bonds authorized in section 201 of this act will be appropriated in phases over five biennia, beginning with the 2015-2017 biennium, to the department of ecology to provide funding to cities and counties for competitive storm water grants.
     (2) Subsection (1) of this section is not intended to limit the legislature's ability to appropriate bond proceeds if the full amount authorized in this chapter has not been appropriated after five biennia. The authorization to issue bonds contained in this chapter does not expire until the full authorization has been appropriated and issued.

NEW SECTION.  Sec. 203   PROCEEDS. (1) The proceeds from the sale of the bonds authorized in section 201 of this act shall be deposited in the storm water financial assistance account created in section 207 of this act. Moneys in the account may be spent only after appropriation.
     (2) If the state finance committee deems it necessary to issue bonds authorized in section 201 of this act as taxable bonds in order to comply with federal internal revenue service rules and regulations pertaining to the use of nontaxable bond proceeds or in order to reduce the total financing costs for bonds issued, the proceeds of such taxable bonds shall be transferred to the state taxable building construction account in lieu of any deposit otherwise provided by this section. The state treasurer shall submit written notice to the director of the office of financial management if it is determined that any such transfer to the state taxable building construction account is necessary. Moneys in the account may be spent only after appropriation.
     (3) These proceeds shall be used exclusively for the purposes specified in section 201 of this act and for the payment of expenses incurred in the issuance and sale of the bonds, and shall be administered by the department of ecology, subject to legislative appropriation.

NEW SECTION.  Sec. 204   PAYMENT PROCEDURES, TERMS, AND COVENANTS. (1) The debt-limit general fund bond retirement account shall be used for the payment of the principal of and interest on the bonds authorized in section 201 of this act.
     (2) The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount needed in the ensuing twelve months to meet the bond retirement and interest requirements on the bonds authorized in section 201 of this act.
     (3) On each date on which any interest or principal and interest payment is due on bonds issued under section 201 of this act, the state treasurer shall withdraw from any general state revenues received in the state treasury and deposit in the debt-limit general fund bond retirement account an amount equal to the amount certified by the state finance committee to be due on the payment date.
     (4) Bonds issued under section 201 of this act shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due.
     (5) The owner and holder of each of the bonds or the trustee for the owner and holder of any of the bonds may by mandamus or other appropriate proceeding require the transfer and payment of funds as directed in this section.
     (6) The state finance committee is authorized to prescribe the form, terms, conditions, and covenants of the bonds provided for in section 201 of this act, the time or times of sale of all or any portion of them, and the conditions and manner of their sale and issuance.

NEW SECTION.  Sec. 205   ADDITIONAL METHODS OF PAYING DEBT SERVICE AUTHORIZED. The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 201 of this act, and this section shall not be deemed to provide an exclusive method for payment.

NEW SECTION.  Sec. 206   BONDS--LEGAL INVESTMENT FOR PUBLIC FUNDS. The bonds authorized by section 201 of this act shall constitute a legal investment for all state funds or for funds under state control and all funds of municipal corporations.

NEW SECTION.  Sec. 207   CREATION OF THE STORM WATER FINANCIAL ASSISTANCE ACCOUNT. The storm water financial assistance account is created in the state treasury. Proceeds from the bonds issued under section 203 of this act shall be deposited in the account. The account shall be used for purposes of section 201 of this act. Moneys in the account may be spent only after appropriation.

NEW SECTION.  Sec. 301   SEVERABILITY. 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. 302   Sections 101 through 109 of this act constitute a new chapter in Title 86 RCW.

NEW SECTION.  Sec. 303   Sections 201 through 207 of this act constitute a new chapter in Title 43 RCW.