Z-838                 _______________________________________________

                                                    HOUSE BILL NO. 908

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Representatives H. Sommers, B. Williams, Brekke, J. Williams, Brough, Sanders, Jacobsen and Silver

Read first time 2/13/87 and referred to Committee on State Government.

AN ACT Relating to capital construction and lease-development projects; and adding a new section to chapter 43.41 RCW.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 43.41 RCW to read as follows:

          (1) (a) For proposed capital construction and lease-development projects with an estimated cost of one million dollars or more for which both state construction and ownership and lease-development are reasonable alternatives, the office of financial management shall submit to the ways and means committees of the house of representatives and senate concurrent with the governor's budget request, an economic analysis and comparison of the two alternatives.

          (b) The economic analysis shall use the present value cost minimization technique by which projected future expenditures associated with each alternative are discounted to present-day values to enable total costs to be compared.  A discount rate approximating the projected interest rate for state bonds shall be used in the calculations.

          (c) When similar methodology can be used to compare other capital program alternatives such as remodeling versus replacing a facility or the leasing of an existing facility versus construction of a state-owned facility, the office of financial management shall develop and use, or  cause to be developed and used, this form of economic analysis.

          (2) The total costs of leasing real property for each department or agency shall be collected and transmitted to the ways and means committees of the house of representatives and senate by the office of financial management concurrent with the governor's budget request.  At a minimum this information shall include:

          (a) Costs for the previous biennium;

          (b) Projected total costs for the current biennium; and

          (c) A listing and explanation of those departments or agencies for which significant changes in leasing costs are anticipated in the ensuing biennium.