SENATE BILL REPORT

SB 6443

BYSenators Owen, McDonald and Conner

Clarifying the 1989 appropriation for dredging Grays Harbor.

Senate Committee on Ways & Means

Senate Hearing Date(s):January 17, 1990; January 18, 1990

Majority Report:  That Substitute Senate Bill No. 6443 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bauer, Bluechel, Cantu, Gaspard, Johnson, Moore, Newhouse, Niemi, Saling, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Mary Poole (786-7613)

                  January 23, 1990

AS REPORTED BY COMMITTEE ON WAYS & MEANS, JANUARY 18, 1990

BACKGROUND:

The Port of Grays Harbor is a deep-water coastal port.  The harbor includes approximately 24 miles of channel from the outer bar and three terminals with deep draft berths.  ITT and Weyerhaeuser occupy two of the terminals; the third is used by the Port.  The current depth of the harbor is 30 feet.

A 1982 feasibility study conducted by the Army Corps of Engineers recommended widening and deepening the existing channel to up to 45 feet to enable deep-draft water transportation into Grays Harbor. The Grays Harbor Navigation Improvement Project expanded its goals to include modification of an existing bridge, and expansion of two turning basins.  The project was authorized by the Federal Water Resource Development Act of 1986, and a 65 percent federal match was committed to the project at that time.  The total cost of the project is $70 million; of that amount, local and state sources are required to contribute $23 million.  Local sources have committed to raising all but $10 million of the state and local share through bonds, levies, and other means.

An appropriation of $10 million was made in the 1989 capital budget to the Department of Community Development (DCD) for the state's portion of the Grays Harbor dredging project.  Expenditure of the state portion "is contingent on" $40 million from the Army Corps and $10 million from local sources.  Since the project will take three years to complete, however, the federal portion will be divided into three FY appropriations.  Because of this, DCD has been reluctant to meet the first federal appropriation of $13 million with any part of the state's share until the entire federal contribution has been received.

SUMMARY:

The 1989 capital budget is amended to make the state's appropriation "contingent on the authorization of" the $40 million from the Army Corps.  Up to one half of the local government contribution may be comprised of in-kind property and other contributions.  State dollars for the project shall be released at a rate not to exceed one state dollar for every four federal dollars.  Expenditures remain contingent on agreements between the Port and the Army Corps, pursuant to federal law.

EFFECT OF PROPOSED SUBSTITUTE:

The substitute bill clarifies the nature of the in-kind contributions from local sources.  Local sources are specifically authorized to include the value of property, easements, and rent adjustments towards up to $3.5 million of their portion of the first year cost of the project.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Effective Date:The bill includes an emergency clause and takes effect immediately.