AN ACT Relating to development of low-income housing near the state convention and trade center; amending RCW 67.40.030 and 67.40.040; amending section 1, chapter 8, Laws of 1987 1st ex. sess. as amended by section 9, chapter 1, Laws of 1988 1st ex. sess. (uncodified); amending section 9, chapter 8, Laws of 1987 1st ex. sess. as amended by section 10, chapter 1, Laws of 1988 1st ex. sess. (uncodified); and adding a new section to chapter 67.40 RCW.

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

Sec. 1. Section 3, chapter 34, Laws of 1982 as last amended by section 3, chapter 1, Laws of 1988 ex. sess. and RCW 67.40.030 are each amended to read as follows:

For the purpose of providing funds for the state convention and trade center, the state finance committee is authorized to issue, upon request of the corporation formed under RCW 67.40.020 and in one or more offerings, general obligation bonds of the state of Washington in the sum of one hundred sixty million, seven hundred sixty-five thousand dollars, or so much thereof as may be required, to finance this project and all costs incidental thereto, to capitalize all or a portion of interest during construction, to provide for expansion, renovation, exterior cleanup and repair of the Eagles building, conversion of various retail and other space to meeting rooms, and contingency costs of the center, purchase of the McKay Parcel as defined in the property and purchase agreement entered into by the corporation on June 12, 1986, development of low-income housing and to reimburse the general fund for expenditures in support of the project. The state finance committee may make such bond covenants as it deems necessary to carry out the purposes of this section and this chapter. No bonds authorized in this section may be offered for sale without prior legislative appropriation.

Sec. 2. Section 4, chapter 34, Laws of 1982 as last amended by section 4, chapter 1, Laws of 1988 ex. sess. and RCW 67.40.040 are each amended to read as follows:

(1) The proceeds from the sale of the bonds authorized in RCW 67.40.030, earnings from the investment of the proceeds, proceeds of the tax imposed under RCW 67.40.090, and all other moneys received by the state convention and trade center from any public or private source which are intended to fund the acquisition, design, construction, expansion, exterior cleanup and repair of the Eagles building, conversion of various retail and other space to meeting rooms, purchase of the land and building known as the McKay Parcel, development of low-income housing, or renovation of the center, shall be deposited in the state convention and trade center account hereby created in the state treasury and in such subaccounts as are deemed appropriate by the directors of the corporation.

(2) Seventy-five percent of the income from the investment of the corporation's funds deposited in the account, including interest earned thereon, before and after May 10, 1985, shall be credited against any future borrowings by the state convention and trade center corporation from the general fund for debt service or otherwise at the time such funds are needed after July 1, 1987.

(3) Moneys in the account, including unanticipated revenues under RCW 43.79.270, shall be used exclusively for the following purposes in the following priority:

(a) For reimbursement of the state general fund under RCW 67.40.060;

(b) After appropriation by statute:

(i) For payment of expenses incurred in the issuance and sale of the bonds issued under RCW 67.40.030;

(ii) For acquisition, design, and construction of the state convention and trade center; and

(iii) For reimbursement of any expenditures from the state general fund in support of the state convention and trade center; and

(4) The corporation shall identify with specificity those facilities of the state convention and trade center that are to be financed with proceeds of general obligation bonds, the interest on which is intended to be excluded from gross income for federal income tax purposes. The corporation shall not permit the extent or manner of private business use of those bond-financed facilities to be inconsistent with treatment of such bonds as governmental bonds under applicable provisions of the Internal Revenue Code of 1986, as amended.

Sec. 3. Section 1, chapter 8, Laws of 1987 1st ex. sess. as amended by section 9, chapter 1, Laws of 1988 1st ex. sess. (uncodified) is amended to read as follows:

(1) The director of financial management, in consultation with the chairpersons of the ways and means committees of the senate and house of representatives, may authorize temporary borrowing from the state treasury for the purpose of covering cash deficiencies in the state convention and trade center account resulting from project completion costs. Subject to the conditions and limitations provided in this section, lines of credit may be authorized at times and in amounts as the director of financial management determines are advisable to meet current and/or anticipated cash deficiencies. Each authorization shall distinctly specify the maximum amount of cash deficiency which may be incurred and the maximum time period during which the cash deficiency may continue. The total amount of borrowing outstanding at any time shall never exceed the lesser of:

(a) $58,275,000; or

(b) An amount, as determined by the director of financial management from time to time, which is necessary to provide for payment of project completion costs.

(2) Unless the due date under this subsection is extended by statute, all amounts borrowed under the authority of this section shall be repaid to the state treasury by June 30, 1991, together with interest at a rate determined by the state treasurer to be equivalent to the return on investments of the state treasury during the period the amounts are borrowed. Borrowing may be authorized from any excess balances in the state treasury, except the agricultural permanent fund, the Millersylvania park permanent fund, the state university permanent fund, the normal school permanent fund, the permanent common school fund, and the scientific permanent fund.

(3) As used in this section, "project completion" means:

(a) All remaining development, construction, and administrative costs related to completion of the convention center; and

(b) Costs of the McKay building demolition, Eagles building rehabilitation, development of low-income housing, and construction of rentable retail space and an operable parking garage.

(4) It is the intent of the legislature that project completion costs be paid ultimately from the following sources:

(a) $29,250,000 to be received by the corporation under an agreement and settlement with Industrial Indemnity Co.;

(b) $1,070,000 to be received by the corporation as a contribution from the city of Seattle;

(d) $4,765,000 for contingencies and project reserves from additional general obligation bonds to be repaid from the special excise tax under RCW 67.40.090;

(e) $13,000,000 for conversion of various retail and other space to meeting rooms, from additional general obligation bonds to be repaid from the special excise tax under RCW 67.40.090;

(f) $13,300,000 for expansion at the 900 level of the facility, from additional general obligation bonds to be repaid from the special excise tax under RCW 67.40.090;

(g) $10,400,000 for purchase of the land and building known as the McKay Parcel and for development of low-income housing, from additional general obligation bonds to be repaid from the special excise tax under RCW 67.40.090; and

(h) $300,000 for Eagles building exterior cleanup and repair, from additional general obligation bonds to be repaid from the special excise tax under RCW 67.40.090.

(5) The borrowing authority provided in this section is in addition to the authority to borrow from the general fund to meet the bond retirement and interest requirements set forth in RCW 67.40.060. To the extent the specific conditions and limitations provided in this section conflict with the general conditions and limitations provided for temporary cash deficiencies in RCW 43.88.260 (section 7, chapter 502, Laws of 1987), the specific conditions and limitations in this section shall govern.

Sec. 4. Section 9, chapter 8, Laws of 1987 1st ex. sess. as amended by section 10, chapter 1, Laws of 1988 1st ex. sess. (uncodified) is amended to read as follows:

There is appropriated to the state convention and trade center corporation from the state convention and trade center account, for the fiscal period beginning on the effective date of this section and ending June 30, ((~~1989~~)) 1991, the following amounts:

(1) $51,618,000 for development, construction, and administrative costs of completion;

(2) $4,765,000 for project reserves and contingency funds;

(3) $13,000,000 for conversion of various retail and other space to meeting rooms;

(4) $13,300,000 for expansion at the 900 level of the facility;

(5) $((~~10,400,000~~)) 8,950,000 for purchase of the land and building known as the McKay Parcel; ((~~and~~))

(6) $3,000,000 for development of low-income housing. Low-income housing as used in this section shall mean all of the rentable housing units heretofore or hereafter developed by or on behalf of the state convention and trade center located in the city of Seattle which (i) do not exceed an aggregate expenditure by the convention center of three million dollars; (ii) have been defined by the United States department of housing and urban development as affordable to tenants of low income; and (iii) have been found by the state convention and trade center corporation board of directors to be (A) owned and operated by a public or a nonprofit private organization dedicated to low-income housing and (B) reasonably related to effects, of the construction and operation of the convention center upon the availability of low-income housing in the city of Seattle; and

(7) $300,000 for Eagles building exterior cleanup and repair.

NEW SECTION. Sec. 5. Section 3 of this act is added to chapter 67.40 RCW.