SENATE BILL REPORT

ESHB 1817

BYHouse Committee on Transportation (originally sponsored by Representatives Hine, Patrick, Walk, Cantwell, Ferguson, Allen, Holland, May, P. King and Todd)

Facilitating public and private funding of local transportation improvements.

House Committe on Transportation

Senate Committee on Transportation

Senate Hearing Date(s):February 23, 1988; February 25, 1988

Majority Report:  Do pass as amended.

      Signed by Senators Patterson, Chairman; Nelson, Vice Chairman; von Reichbauer, Vice Chairman; Barr, Conner, DeJarnatt, Garrett, Hansen, Kiskaddon, Metcalf, Owen.

Senate Staff:Gene Baxstrom (786-7303)

                  February 26, 1988

AS REPORTED BY COMMITTEE ON TRANSPORTATION, FEBRUARY 25, 1988

BACKGROUND:

Prior to the enactment of Engrossed House Bill 396 in 1987, cities and counties were limited in their authority to address regional traffic needs in a comprehensive manner, particularly in areas of rapid economic growth. In addition, those agencies were also limited in their ability to require of developers in an area, financial assistance to fund offsite transportation improvements necessitated by their developments.  State law prohibited the imposition of development fees; however voluntary agreements to mitigate the effect of developments were, and still are allowed.  The principal method local governments use to address off-site mitigation is the State Environmental Policy Act.  Local governments approve development applications only after provision is made for off-site impacts to be mitigated.

The Legislature in 1987 authorized cities and counties to establish transportation benefit districts (TBDs) to fund those capital improvements to city streets, county roads, and state highways, necessitated by economic development.  Districts are authorized to address road problems crossing local government jurisdictional boundaries.  Several funding sources were authorized for TBD projects including LIDs, property tax levies, general obligation bond authority, and the imposition of impact fees.

At the same time the TBD statute was being enacted, a task force of the King County Economic Development Council was drafting legislation to authorize cities and counties to implement programs for joint public and private funding of transportation improvements required because of development and growth.  The results of that effort have been incorporated into the "Local Transportation Act of 1988".

Certain local governments currently require "no protest" agreements from property owners to facilitate formation of LIDs or RIDs (Road Improvement Districts).  These agreements allow property owners to waive their right to protest the formation of the district.  There is no requirement that these agreements be recorded, nor is a time limit specified for the agreements.

Private parties which initiate the formation of LIDs and RIDs are at risk for the costs of preparing engineering plans, surveys, studies and other expenses.  Similarly, there is currently no provision for reimbursement by property owners in an LID or an RID to other property owners who agree to fund their share of a project.

SUMMARY:

Cities, counties and transportation benefit districts are authorized to establish, by ordinance, transportation funding programs.  These programs may be within all or part of their respective jurisdictions, and are to fund, from public and private sources, improvements necessitated by economic development and growth.  Each program must contain:  1) identification of geographic boundaries; 2) a comprehensive, long-term transportation plan describing planned transportation improvements; 3) establishment of a six-year public capital funding program; 4) provision for transportation impact fees on new developments; 5) description of formula for determining impact fees and the process for collection; and 6) administrative provisions including appeals of assessments and program amendment.  Impact fees cannot be imposed when mitigation for the same off-site transportation impacts are imposed under any other government programs.

Local governments which adopt a transportation funding program are prohibited from using voluntary agreements with developers to fund off-site transportation improvements within the area addressed by the program.

Transportation benefit districts which assess impact fees on private development must do so in accordance with the provisions of this Act.  Fees charged pursuant to this Act are not subject to the prohibition against impact fees contained in RCW 82.02.020.

In the formation of LIDs and RIDs, "no protest" agreements must be recorded in order to be effective and may not exceed 10 years.  Cities or counties forming districts are authorized to reimburse property owners, from district funds, for pre- formation expenditures incurred in forming the district, including preparation of engineering plans, surveys, studies, appraisals and other expenses.

A latecomer's financing mechanism is permitted which allows one or more property owners to pay the LID or RID assessments for owners of undeveloped or underdeveloped properties, with such payments to be reimbursed as those properties are developed.  Cities and counties are required, in setting LID and RID assessments for transportation improvements, to give credit to property owners for transportation impact fees imposed under their respective transportation programs, if any.

SUMMARY OF PROPOSED SENATE AMENDMENT:

The intent section is clarified with regard to this act supplementing existing local government powers, except where expressly provided otherwise.  Definitions for transportation impact fee and fair market value are added, and the definition of off-site transportation improvements is clarified.

Numerous technical changes are made to LID and RID sections to improve terminology and to make it internally consistent.  Punctuation changes are added.

The requirement that preliminary boundary descriptions and preliminary assessments for private contracts for street construction projects be sent by registered mail is changed to certified mail.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Senate Committee - Testified: Representative Hine, original sponsor (for); Phyllis Lamphere, Seattle-King County Economic Development Council (for); John Keegan, Davis, Wright law firm (for); Paul Barden, King County Councilman (for); Doreen Marchione, Mayor of Redmond (for); Don Chance, Seattle-King County Masterbuilders (for); Roy Moore, V.P. Winmar Co. (for); Stan Finkelstein, Association of Washington Cities (for); Mary Macumber, City of Auburn (for); Ron Lewis, Seattle Engineering Department