AN ACT Relating to capital improvements; adding new sections to chapter 82.08 RCW; and adding a new chapter to Title 39 RCW.

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

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Account" means the capital improvements account.

(2) "Board" means the capital improvements board.

(3) "City" means any incorporated city or town.

(4) "Special purpose district" means any water district, sewer district, or metropolitan municipal corporation that provides water or sewer disposal.

NEW SECTION. Sec. 2. (1) There is created the capital improvements board consisting of nineteen members. These shall be the director of the department of community development or the director's designee, the director of the department of ecology or the director's designee, the director of the interagency committee for outdoor recreation or the director's designee, the director of the department of commerce and economic development or the director's designee, the secretary of transportation or the secretary's designee, the secretary of social and health services or the secretary's designee, and, by appointment of the governor, eight representatives of local government and five representatives of the public at large. The director of the department of community development shall serve as chair of the board.

(2) The local government members of the board shall include three members who represent cities, three members who represent counties, and two members who represent special purpose districts. No city, county, or special purpose district may have more than one member on the board.

(3) The members of the board from the public at large shall include one member who represents contractors, one member who represents business, one member who represents labor, one member who represents homebuilders, and one member who represents environmentalists.

(4) Before appointing the local government members and the members from the public at large, the governor shall consider any recommendations submitted by the association of Washington cities, the Washington state association of counties, the Washington state association of water districts, the Washington state association of sewer districts, and any metropolitan municipal corporation in operation on the effective date of this act. Nominations shall be filed with the office of the governor within thirty days after the effective date of this act, or within thirty days after the creation of a vacancy on the board, as appropriate. Appointments shall be made by the governor for four-year terms, except in the case of appointments to fill vacancies which shall be for the remainder of the unexpired term.

NEW SECTION. Sec. 3. Members of the capital improvements board shall serve without compensation but shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 4. The department of community development shall furnish necessary staff services and facilities required by the board. The cost of such services, together with travel expenses in accordance with RCW 43.03.050 and 43.03.060 of the members and all other lawful expenses of the board that are attributable to the capital improvements program, shall be paid from the capital improvements account.

NEW SECTION. Sec. 5. (1) The capital improvements account is hereby established in the general fund. All moneys deposited in the account pursuant to section 12 of this act shall be expended for public works projects approved by the board and for those expenses of the board associated with the administration of the capital improvements program.

(2) The board shall consider the amount of state retail sales tax generated in each county in determining the amount of a grant or loan to a county, city, or special purpose district from the account.

(3) Moneys deposited in the account may be distributed without legislative appropriation.

NEW SECTION. Sec. 6. The board shall:

(1) Adopt rules in accordance with chapter 34.04 RCW necessary to implement this chapter relating to the distribution of grants and loans from the account to cities, counties, and special districts;

(2) Review the priorities and matching requirements established under sections 8 and 10 of this act for funding public works projects and recommend any needed changes to the legislature; and

(3) Report biennially on the first day of November of even-numbered years to the house and senate ways and means committees regarding the progress of cities, counties, and special purpose districts in providing necessary public works projects and the distribution of funds from the account.

NEW SECTION. Sec. 7. The board may allocate one-third of the moneys deposited in the account for loans to cities, counties, and special purpose districts. All loans under this chapter shall be made without interest and without any local matching requirements. Each public works project must meet the criteria established under section 10 of this act before a loan may be made under this section. The board shall determine the amount of each loan. Repayments of loans made under this section shall commence two years after their receipt and all loans must be fully repaid within fifteen years. Moneys received as repayments of loans shall be deposited in the account.

NEW SECTION. Sec. 8. (1) The board may allocate two-thirds of the moneys deposited in the account for grants to cities, counties, and special purpose districts. Each public works project must meet the matching requirements outlined in this section as well as the criteria established under section 10 of this act before a grant may be awarded under this section. The board shall determine the amount of each grant.

(2) The matching requirements for capital improvement grants shall be as follows:

(a) Seventy-five percent grant money and twenty-five percent local matching money for the following projects: Secondary treatment, installation of lateral lines in sole source aquifer areas, potable water, surface water drainage, streets, roads, and bridges; and

(b) Fifty percent grant money and fifty percent local matching money for the following projects: Pump stations, replacement of lateral lines, utility improvements, park improvements, and public buildings.

NEW SECTION. Sec. 9. Any city, county, or special purpose district that desires grant or loan funds from the account shall submit detailed plans for the project sought to be financed. The plans shall include the estimated cost, the estimated time of completion, and such other information as the board may require.

NEW SECTION. Sec. 10. (1) The board shall review public works projects according to the priority system established under this section. The services ranked in the first tier, or of the highest priority, must be adequately provided within a county before the board may allocate grant or loan money to any city, county, or special purpose district located within that county for a project in the next lower tier. All services within a tier must be adequately met within a county before a project in a lower tier may be funded.

(2) The following priorities shall apply to each city, county, and special purpose district, except class AA counties that have a metropolitan municipal corporation in operation on the effective date of this act:

(a) Tier 1: Secondary treatment and installation of lateral lines in sole source aquifer areas;

(b) Tier 2: Potable water, surface water drainage, streets, roads, and bridges;

(d) Tier 4: Park improvements and public buildings.

(3) The following priorities shall apply to class AA counties that have a metropolitan municipal corporation in operation on the effective date of this act:

(a) Tier 1: Secondary treatment and installation of lateral lines in sole source aquifer areas;

(b) Tier 2: Potable water, surface water drainage, streets, roads, bridges, pump stations, replacement of lateral lines, and utility improvements;

NEW SECTION. Sec. 11. In order to facilitate local planning and cooperation, any city, county, or special purpose district must first receive approval of a public works project from the local public works advisory committee before submitting it to the capital improvements board. Each committee shall consist of seven members. These shall be:

(1) Three members of the county legislative authority selected by the county;

(2) Three city officials selected by the representatives of the cities within the county; and

(3) One representative from either a sewer district or a water district selected by the representatives of those groups.

NEW SECTION. Sec. 12. A new section is added to chapter 82.08 RCW to read as follows:

On the first day of the months of January, April, July, and October of each year, the state treasurer shall transfer from the general fund a sum equal to three-tenths of one percent of all moneys collected from the state retail sales tax to the capital improvements account established in section 5 of this act.

NEW SECTION. Sec. 13. A new section is added to chapter 82.08 RCW to read as follows:

The director of the department of revenue shall advise the chair of the capital improvements board created under section 2 of this act of the total amount of state retail sales tax generated in each county during the preceding calendar quarter ending on the last day of March, June, September, and December.

NEW SECTION. Sec. 14. Sections 1 through 11 of this act shall constitute a new chapter in Title 39 RCW.