FINAL BILL REPORT

SSB 5901

PARTIAL VETO

                                  C 8 L 87 E1

BYSenate Committee on Ways & Means (originally sponsored by Senator McDermott)

Revising the authority of the state convention and trade center.

Senate Committee on Ways & Means

House Committe on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The Washington State Convention and Trade Center was formed as a public nonprofit corporation under Chapter 24.03 RCW.  The State Finance Committee was given authority to sell general obligation bonds totalling $99 million in order to design and construct a state convention and trade center in Seattle.  The purpose of this legislation was to provide both direct and indirect civic and economic benefits to the people of the state.

SUMMARY:

An additional appropriation of $64,388,000 is provided for completion of the convention center, demolition of the McKay building, of the Eagles Building rehabilitation, and parking areas, and project contingencies.  The Director of the Office of Financial Management (OFM), in consultation with the chairs of House and Senate Ways and Means Committees, must approve convention center borrowing and capital expenses.

A representative of the management of the hotel/motel industry shall be appointed to the convention center board of directors and, thereafter, one member of the board shall always be from the hotel/motel industry.  The convention center corporation may enter into long term leases with the approval of the Director of OFM in consultation with the chairs of the Ways and Means Committees.

Bond proceeds, hotel/motel tax revenues, and all other funds used for construction must be deposited in the convention center account.  Money in this account may be used for bond retirement and, if appropriated, for capital expenses.  Operating revenues, and money from other sources, shall be deposited in the operating account, and must also be appropriated.  General fund money shall be transferred to this account to cover any operating appropriation not covered by operating revenue.  This borrowing shall be repaid with interest at the rate treasury investments earn.  The convention center corporation must use the money from the hotel/motel tax first, to make bond retirement payments and repay the general fund for money borrowed to make bond payments and, second, to complete construction.

The special hotel/motel tax (RCW 67.40.090), at 5 percent in Seattle and 2 percent in King County outside of Seattle, will expire when:  (1) the convention center bonds have been retired, and (2) all borrowing from the state for bond retirement and operating expenses prior to June 30, 1992 has been repaid together with interest at the rate treasury investments earn.  Additionally, on October 1, 1993, a surtax is added to the special hotel/motel tax.  The revenue from this surtax shall be used to cover the annual net operating loss of the convention center after July 1, 1992.  The surtax shall be the lesser of:  (1) 2 percent in the City of Seattle and .8 percent in King County outside of Seattle; (2) the amount necessary to cover the net operating deficit of the convention center in the prior fiscal year plus any surtax deficiencies in prior years less any surtax surpluses in prior years.  If the court enjoins collection of, or invalidates, the variable rate provisions of the surtax statute and the surtax would be imposed at the maximum rates of 2 percent in Seattle and .8 percent in King County outside of Seattle.

The Legislature will review the convention center finance and governance and will continue to finance capital costs of the center, retire debt issued for this purpose, and provide for existing obligations and duties of the convention center and management continuity.

A joint legislative committee on the convention and trade center is created to study, in consultation with the convention center board of directors and the hotel/motel industry, alternative methods for future finance and governance of the convention center.  Recommendation for changes in convention center structure, if any, shall provide that the new entity assume all obligations and duties of the current convention center corporation.  The committee must submit a report by December 15, 1987.  $100,000 is appropriated to the House to conduct, or contract for, this study.  Two members of both caucuses of both houses, including Ways and Means Committee chairs or designees, shall comprise the committee.

Special hotel/motel tax revenues cannot be used for building, buying, operating or maintaining facilities or land used by a professional sports franchise.

VOTES ON FINAL PASSAGE:

First Special Session

      Senate    28    14

      House 51  35 (House amended)

      Senate    25    11 (Senate concurred)

EFFECTIVE:June 12, 1987

Partial Veto Summary:  The section repealing the convention center's appropriation in the operating budget act (ESHB 1221) is vetoed, as is the appropriation itself.  As a result, the appropriation in section 12 of ESSB 5901 stands as enacted.  (See VETO MESSAGE)