SENATE BILL REPORT

HB 1205

BYRepresentatives Grimm and P. King 

Providing for the distribution of funds from the water quality account for water pollution control facilities.

House Committe on Ways & Means/Appropriations

Senate Committee on Ways & Means

Senate Hearing Date(s):March 31, 1987

Majority Report:  Do pass as amended.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bluechel, Craswell, Deccio, Fleming, Kreidler, Lee, McDonald, Talmadge, Vognild, Williams, Zimmerman.

Senate Staff:Charles Langen (786-7715)

                  April 2, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 31, 1987

BACKGROUND:

The 1986 Legislature established the Water Quality Account to provide financial assistance to state and to local governments for the planning, design, acquisition, construction, and improvement of water pollution control facilities and related activities.

As a part of the 1986 legislation, the Office of Financial Management was directed to prepare a state financial assistance plan including recommendations regarding a revolving loan, criteria for equitable fund distribution based on current and future household sewage rates, an assessment of the future capital funding ability of local governmental entities,and state and local debt service agreements.

One of the recommendations of the financial assistance plan was for annual grants with a local agency financing the project expenditures and the state paying its share over an extended period of time.  The advantage of this method is the reduced requirement for initial state money.  This concept is a generalized version of a debt service agreement where the annual grant payment can be used by the local agency in their bond prospectus when selling bonds.  This does not mean there is a direct link between the state and the local entities' bondholders.

SUMMARY:

HB 1205 authorizes the Department of Ecology to enter into contracts with local jurisdictions which provide for extended grants payments.  The payments shall be in equal annual amounts not to exceed 50 percent of the eligible cost of the project.

The duration of such extended grant payments is not more than twice the length of time for the date of the grant award and the compliance deadline.

Any moneys appropriated by the Legislature from the water quality account shall first be used to satisfy the conditions of the extended grant contracts.

SUMMARY OF PROPOSED SENATE AMENDMENT:

Extended grants may be paid on a deferred basis only.  The total of the grant paid, on a net present value basis, shall not exceed 50 percent of the eligible cost of the project.  The duration of the extended grant shall not exceed 20 years.

Fiscal Note:      none requested

Senate Committee - Testified: Ann Daley, Office of the Governor; Ed Thorpe, Coalition for Clean Water; Ron Posthuma, Metro