2237-S.E. AMC CONF H4564.1

2237-S.E AMC CONF H4564.1

ESHB 2237 - CONF REPT

By Conference Committee

ADOPTED 3/9/94

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. The legislature finds that the acquisition, construction, and management of state-owned and leased facilities has a profound and long-range effect upon the delivery and cost of state programs, and that there is an increasing need for better facility planning and management to improve the effectiveness and efficiency of state facilities.

Sec. 2. RCW 43.88.030 and 1991 c 358 s 1 and 1991 c 284 s 1 are each reenacted and amended to read as follows:

(1) The director of financial management shall provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management. The director shall provide agencies that are required under RCW 44.40.070 to develop comprehensive six-year program and financial plans with a complete set of instructions for submitting these program and financial plans at the same time that instructions for submitting other budget requests are provided. The budget document or documents shall consist of the governor's budget message which shall be explanatory of the budget and shall contain an outline of the proposed financial policies of the state for the ensuing fiscal period, as well as an outline of the proposed six-year financial policies where applicable, and shall describe in connection therewith the important features of the budget. The message shall set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy. Attached to the budget message shall be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor shall deem to be useful to the legislature. The budget document or documents shall set forth a proposal for expenditures in the ensuing fiscal period, or six-year period where applicable, based upon the estimated revenues as approved by the economic and revenue forecast council or upon the estimated revenues of the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast, including those revenues anticipated to support the six-year programs and financial plans under RCW 44.40.070. In estimating revenues to support financial plans under RCW 44.40.070, the office of financial management shall rely on information and advice from the interagency revenue task force. Revenues shall be estimated for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document, including the supplemental budgets submitted in the even-numbered years of a biennium. However, the estimated revenues for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads. All adjustments to the approved estimated revenues must be set forth in the budget document. The governor may additionally submit, as an appendix to each supplemental, biennial, or six-year agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.

Supplemental and biennial documents shall reflect a six-year expenditure plan consistent with estimated revenues from existing sources and at existing rates for those agencies required to submit six-year program and financial plans under RCW 44.40.070. Any additional revenue resulting from proposed changes to existing statutes shall be separately identified within the document as well as related expenditures for the six-year period.

The budget document or documents shall also contain:

(a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, those anticipated for the ensuing biennium, and those anticipated for the ensuing six-year period to support the six-year programs and financial plans required under RCW 44.40.070;

(b) The undesignated fund balance or deficit, by fund;

(c) Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;

(d) Such additional information dealing with revenues and expenditures as the governor shall deem pertinent and useful to the legislature;

(e) Tabulations showing expenditures classified by fund, function, activity and object;

(f) A delineation of each agency's activities, including those activities funded from nonbudgeted, nonappropriated sources, including funds maintained outside the state treasury; and

(g) Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.70 RCW, shown by agency and in total.

(2) The budget document or documents shall include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and shall also include all proposed operating or capital expenditures. The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves shall equal or exceed the total of proposed applicable expenditures. The budget document or documents shall further include:

(a) Interest, amortization and redemption charges on the state debt;

(b) Payments of all reliefs, judgments and claims;

(d) Expenditures incident to the operation for each agency;

(e) Revenues derived from agency operations;

(f) Expenditures and revenues shall be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium, as well as those required to support the six-year programs and financial plans required under RCW 44.40.070;

(g) A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;

(h) Common school expenditures on a fiscal-year basis;

(i) A showing, by agency, of the value and purpose of financing contracts for the lease/purchase or acquisition of personal or real property for the current and ensuing fiscal periods.

(3) A separate capital budget document or schedule shall be submitted that will contain the following:

(a) A ((~~capital plan consisting of proposed capital spending for at least four fiscal periods succeeding the next fiscal period~~)) statement setting forth a long-range facilities plan for the state that identifies and includes the highest priority needs within affordable spending levels;

(b) A capital program consisting of proposed capital projects for ((~~at least~~)) the next biennium and the two ((~~fiscal periods~~)) biennia succeeding the next ((~~fiscal period~~)) biennium consistent with the long-range facilities plan. Insomuch as is practical, and recognizing emergent needs, the capital program shall reflect the priorities, projects, and spending levels proposed in previously submitted capital budget documents in order to provide a reliable long-range planning tool for the legislature and state agencies;

(c) A capital plan consisting of proposed capital spending for at least four ((~~fiscal periods~~)) biennia succeeding the next ((~~fiscal period~~)) biennium;

(d) A statement of the reason or purpose for a project;

(e) Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;

(f) A statement about the proposed site, size, and estimated life of the project, if applicable;

(g) Estimated total project cost;

(h) For major projects valued over five million dollars, estimated costs for the following project components: Acquisition, consultant services, construction, equipment, project management, and other costs included as part of the project. Project component costs shall be displayed in a standard format defined by the office of financial management to allow comparisons between projects;

(i) Estimated total project cost for each phase of the project as defined by the office of financial management;

((~~(i)~~)) (j) Estimated ensuing biennium costs;

((~~(j)~~)) (k) Estimated costs beyond the ensuing biennium;

((~~(k)~~)) (l) Estimated construction start and completion dates;

((~~(l)~~)) (m) Source and type of funds proposed;

((~~(m)~~)) (n) Estimated ongoing operating budget costs or savings resulting from the project, including staffing and maintenance costs;

(o) For any capital appropriation requested for a state agency for the acquisition of land or the capital improvement of land in which the primary purpose of the acquisition or improvement is recreation or wildlife habitat conservation, the capital budget document, or an omnibus list of recreation and habitat acquisitions provided with the governor's budget document, shall identify the projected costs of operation and maintenance for at least the two biennia succeeding the next biennium. Omnibus lists of habitat and recreation land acquisitions shall include individual project cost estimates for operation and maintenance as well as a total for all state projects included in the list. The document shall identify the source of funds from which the operation and maintenance costs are proposed to be funded;

(p) Such other information bearing upon capital projects as the governor deems to be useful;

((~~(n)~~)) (q) Standard terms, including a standard and uniform definition of maintenance for all capital projects;

((~~(o)~~)) (r) Such other information as the legislature may direct by law or concurrent resolution.

For purposes of this subsection (3), the term "capital project" shall be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative transportation committee, legislative evaluation and accountability program committee, and office of financial management.

(4) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel shall be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence. Prior legislative concurrence shall consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session or (b) a favorable majority vote on the proposal by members of the legislative evaluation and accountability program committee if the legislature is not in session.

Sec. 3. RCW 43.88A.020 and 1979 c 151 s 146 are each amended to read as follows:

The office of financial management shall, in cooperation with appropriate legislative committees and legislative staff, establish a procedure for the provision of fiscal notes on the expected impact of bills and resolutions which increase or decrease or tend to increase or decrease state government revenues or expenditures. Such fiscal notes shall indicate by fiscal year the impact for the remainder of the biennium in which the bill or resolution will first take effect as well as a cumulative forecast of the fiscal impact for the succeeding four fiscal years. Fiscal notes shall separately identify the fiscal impacts on the operating and capital budgets. Estimates of fiscal impacts shall be calculated using the procedures contained in the fiscal note instructions issued by the office of financial management.

In establishing the fiscal impact called for pursuant to this chapter, the office of financial management shall coordinate the development of fiscal notes with all state agencies affected.

Sec. 4. RCW 43.88.032 and 1989 c 311 s 1 are each amended to read as follows:

(1) Annual ongoing or routine maintenance costs shall be programmed in the operating budget rather than in the capital budget.

(2) All debt-financed pass-through money to local governments shall be programmed and separately identified in the ((~~capital~~)) budget document.

Sec. 5. RCW 43.88.110 and 1991 sp.s. c 32 s 27 and 1991 c 358 s 2 are each reenacted and amended to read as follows:

This section sets forth the expenditure programs and the allotment and reserve procedures to be followed by the executive branch for public funds.

(1) Allotments of an appropriation for any fiscal period shall conform to the terms, limits, or conditions of the appropriation.

(2) The director of financial management shall provide all agencies with a complete set of operating and capital instructions for preparing a statement of proposed expenditures at least thirty days before the beginning of a fiscal period. The set of instructions need not include specific appropriation amounts for the agency.

(3) Within forty-five days after the beginning of the fiscal period or within forty-five days after the governor signs the omnibus biennial appropriations act, whichever is later, all agencies shall submit to the governor a statement of proposed expenditures at such times and in such form as may be required by the governor.

(4) The office of financial management shall develop a method for monitoring capital appropriations and expenditures that will capture at least the following elements:

(a) Appropriations made for capital projects including transportation projects;

(b) Estimates of total project costs including past, current, ensuing, and future biennial costs;

(d) Comparisons of estimated construction start and completion dates with actual dates;

(e) Documentation of fund shifts between projects.

This data may be incorporated into the existing accounting system or into a separate project management system, as deemed appropriate by the office of financial management.

(5) The office of financial management, prior to approving allotments for major capital construction projects valued over five million dollars, shall institute procedures for reviewing such projects at the predesign stage that will reduce long-term costs and increase facility efficiency. The procedures shall include, but not be limited to, the following elements:

(a) Evaluation of facility program requirements and consistency with long-range plans;

(b) Utilization of a system of cost, quality, and performance standards to compare major capital construction projects; and

(6) No expenditure may be incurred or obligation entered into for such major capital construction projects including, without exception, land acquisition, site development, predesign, design, construction, and equipment acquisition and installation, until the allotment of the funds to be expended has been approved by the office of financial management. This limitation does not prohibit the continuation of expenditures and obligations into the succeeding biennium for projects for which allotments have been approved in the immediate prior biennium.

(7) If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods. Except for the legislative and judicial branches and other agencies headed by elective officials, the governor shall review the statement of proposed operating expenditures for reasonableness and conformance with legislative intent. Once the governor approves the statements of proposed operating expenditures, further revisions shall be made only at the beginning of the second fiscal year and must be initiated by the governor. However, changes in appropriation level authorized by the legislature, changes required by across-the-board reductions mandated by the governor, changes caused by executive increases to spending authority, and changes caused by executive decreases to spending authority for failure to comply with the provisions of chapter 36.70A RCW may require additional revisions. Revisions shall not be made retroactively. Revisions caused by executive increases to spending authority shall not be made after June 30, 1987. However, the governor may assign to a reserve status any portion of an agency appropriation withheld as part of across-the-board reductions made by the governor and any portion of an agency appropriation conditioned on a contingent event by the appropriations act. The governor may remove these amounts from reserve status if the across-the-board reductions are subsequently modified or if the contingent event occurs. The director of financial management shall enter approved statements of proposed expenditures into the state budgeting, accounting, and reporting system within forty-five days after receipt of the proposed statements from the agencies. If an agency or the director of financial management is unable to meet these requirements, the director of financial management shall provide a timely explanation in writing to the legislative fiscal committees.

((~~(6)~~)) (8) It is expressly provided that all agencies shall be required to maintain accounting records and to report thereon in the manner prescribed in this chapter and under the regulations issued pursuant to this chapter. Within ninety days of the end of the fiscal year, all agencies shall submit to the director of financial management their final adjustments to close their books for the fiscal year. Prior to submitting fiscal data, written or oral, to committees of the legislature, it is the responsibility of the agency submitting the data to reconcile it with the budget and accounting data reported by the agency to the director of financial management.

((~~(7)~~)) (9) The director of financial management shall monitor agency operating expenditures against the approved statement of proposed expenditures and shall provide the legislature with quarterly explanations of major variances.

((~~(8)~~)) (10) The director of financial management may exempt certain public funds from the allotment controls established under this chapter if it is not practical or necessary to allot the funds. Allotment control exemptions expire at the end of the fiscal biennium for which they are granted. The director of financial management shall report any exemptions granted under this subsection to the legislative fiscal committees.

NEW SECTION. Sec. 6. A new section is added to chapter 43.88 RCW to read as follows:

(1) The capital appropriations act may authorize the governor, through the director of financial management, to transfer the appropriation authority for a capital project that is in excess of the amount required for the completion of the project to another capital project for which the appropriation is insufficient.

(a) No such transfer may be used to expand the capacity or change the intended use of the project beyond that intended by the legislature in making the appropriation.

(b) The transfer may be effected only between capital projects within a specific department, commission, agency, or institution of higher education.

(c) The transfer may be effected only if the project from which the transfer of funds is made is substantially complete and there are funds remaining, or bids have been let on the project from which the transfer of funds is made and it appears to a substantial certainty that the project can be completed within the biennium for less than the amount appropriated.

(2) For the purposes of this section, the legislature intends that each project be defined as proposed to the legislature in the governor's budget document, unless the legislative history demonstrates that the legislature intended to define the scope of a project in a different way.

(3) The office of financial management shall notify the legislative fiscal committees of the senate and the house of representatives at least thirty days before any transfer is effected under this section except emergency projects or any transfer under two hundred fifty thousand dollars, and shall prepare a report to such committees listing all completed transfers at the close of each fiscal year.

Sec. 7. RCW 43.82.010 and 1990 c 47 s 1 are each amended to read as follows:

(1) The director of ((~~the department of~~)) general administration, on behalf of the agency involved, shall purchase, lease, lease purchase, rent, or otherwise acquire all real estate, improved or unimproved, as may be required by elected state officials, institutions, departments, commissions, boards, and other state agencies, or federal agencies where joint state and federal activities are undertaken and may grant easements and transfer, exchange, sell, lease, or sublease all or part of any surplus real estate for those state agencies which do not otherwise have the specific authority to dispose of real estate. This section does not transfer financial liability for the acquired property to the department of general administration.

(2) Except for real estate occupied by federal agencies, the director shall determine the location, size, and design of any real estate or improvements thereon acquired or held pursuant to subsection (1) of this section. Facilities acquired or held pursuant to this chapter, and any improvements thereon, shall conform to standards adopted by the director and approved by the office of financial management governing facility efficiency unless a specific exemption from such standards is provided by the director of general administration. The director of general administration shall report to the office of financial management annually on any exemptions granted pursuant to this subsection.

(3) The director of general administration may fix the terms and conditions of each lease entered into under this chapter, except that no lease shall extend greater than twenty years in duration. The director of general administration may enter into a long-term lease greater than five years in duration upon a determination by the director of the office of financial management that the long-term lease provides a more favorable rate than would otherwise be available, it appears to a substantial certainty that the facility is necessary for use by the state for the full length of the lease term, and the facility meets the standards adopted pursuant to subsection (2) of this section. The director of general administration may enter into a long-term lease greater than ten years in duration if an analysis shows that the life-cycle cost of leasing the facility is less than the life-cycle cost of purchasing or constructing a facility in lieu of leasing the facility.

(4) It is the policy of the state to encourage the collocation and consolidation of state services into single or adjacent facilities, whenever appropriate, to improve public service delivery, minimize duplication of facilities, increase efficiency of operations, and promote sound growth management planning.

(5) The director of general administration shall provide coordinated long-range planning services to identify and evaluate opportunities for collocating and consolidating state facilities. Upon the renewal of any lease, the inception of a new lease, or the purchase of a facility, the director of general administration shall determine whether an opportunity exists for collocating the agency or agencies in a single facility with other agencies located in the same geographic area. If a collocation opportunity exists, the director of general administration shall consult with the affected state agencies and the office of financial management to evaluate the impact collocation would have on the cost and delivery of agency programs, including whether program delivery would be enhanced due to the centralization of services. The director of general administration, in consultation with the office of financial management, shall develop procedures for implementing collocation and consolidation of state facilities.

(6) The director of general administration is authorized to purchase, lease, rent, or otherwise acquire improved or unimproved real estate as owner or lessee and to lease or sublet all or a part of such real estate to state or federal agencies. The director of general administration shall charge each using agency its proportionate rental which shall include an amount sufficient to pay all costs, including, but not limited to, those for utilities, janitorial and accounting services, and sufficient to provide for contingencies; which shall not exceed five percent of the average annual rental, to meet unforeseen expenses incident to management of the real estate.

((~~(4)~~)) (7) If the director of general administration determines that it is necessary or advisable to undertake any work, construction, alteration, repair, or improvement on any real estate acquired pursuant to subsection((s)) (1) or ((~~(3)~~)) (6) of this section, the director shall cause plans and specifications thereof and an estimate of the cost of such work to be made and filed in his or her office and the state agency benefiting thereby is hereby authorized to pay for such work out of any available funds: PROVIDED, That the cost of executing such work shall not exceed the sum of twenty-five thousand dollars. Work, construction, alteration, repair, or improvement in excess of twenty-five thousand dollars, other than that done by the owner of the property if other than the state, shall be performed in accordance with the public works law of this state.

((~~(5)~~)) (8) In order to obtain maximum utilization of space, the director of general administration shall make space utilization studies, and shall establish standards for use of space by state agencies. Such studies shall include the identification of opportunities for collocation and consolidation of state agency office and support facilities.

((~~(6)~~)) (9) The director of general administration may construct new buildings on, or improve existing facilities, and furnish and equip, all real estate under his or her management. Prior to the construction of new buildings or major improvements to existing facilities or acquisition of facilities using a lease purchase contract, the director of general administration shall conduct an evaluation of the facility design and budget using life-cycle cost analysis, value-engineering, and other techniques to maximize the long-term effectiveness and efficiency of the facility or improvement.

((~~(7)~~)) (10) All conveyances and contracts to purchase, lease, rent, transfer, exchange, or sell real estate and to grant and accept easements shall be approved as to form by the attorney general, signed by the director of general administration or the director's designee, and recorded with the county auditor of the county in which the property is located.

((~~(8)~~)) (11) The director of general administration may delegate any or all of the functions specified in this section to any agency upon such terms and conditions as the director deems advisable.

((~~(9)~~)) (12) This section does not apply to the acquisition of real estate by:

(a) The state college and universities for research or experimental purposes;

(b) The state liquor control board for liquor stores and warehouses; and

(c) The department of natural resources, the department of ((~~fisheries, the department of~~)) fish and wildlife, the department of transportation, and the state parks and recreation commission for purposes other than the leasing of offices, warehouses, and real estate for similar purposes.

((~~(10)~~)) (13) Notwithstanding any provision in this chapter to the contrary, the department of general administration may negotiate ground leases for public lands on which property is to be acquired under a financing contract pursuant to chapter 39.94 RCW under terms approved by the state finance committee.

NEW SECTION. Sec. 8. (1) The legislature finds that current facility planning, budgeting, and management responsibilities are spread among a number of state agencies, and that there may be a need to consolidate these functions within a single entity with independent powers and fiduciary responsibility for state facilities as a whole to increase the consistency and quality of facility decisions.

(2) The office of financial management shall evaluate the need for and potential responsibilities of a central state facilities authority to coordinate and manage the design, acquisition, construction, and utilization of state facilities, including leased facilities. The evaluation shall include an examination of the current roles and responsibilities of state agencies including the department of general administration, the higher education coordinating board, the state board for community and technical colleges, and the office of financial management to identify critical areas for improvement and any overlapping areas of responsibility.

(3) The office of financial management shall consider the following potential responsibilities of a central facilities authority in its evaluation:

(a) Involvement in agency master planning and facility predesign activities to assist agencies in developing creative alternatives for meeting program needs;

(b) Development of facility performance and cost standards to assist in facility planning and budget evaluation;

(c) Critical evaluation of facility designs and budget requests through life-cycle cost analysis, value-engineering, and other tools to maximize the long-term effectiveness and efficiency of state facilities;

(d) Central management of and planning for the state's facility inventory, including both leased and state-owned facilities, to maximize agency collocation and consolidation opportunities and create identifiable state government and education centers;

(e) Administration and management of agency capital construction projects;

(f) Development of leasing standards and procedures, including a methodology for analyzing the costs and benefits of leasing versus owning facilities, and appropriate procurement of leased, lease-developed, or lease-purchased facilities;

(g) Development of facility operation and maintenance standards or guidelines;

(h) Administration and allocation of centrally pooled appropriations for projects affecting more than one agency or for which efficiency can be enhanced by central administration; and

(i) Other responsibilities as determined by the office of financial management.

(3) The evaluation shall consider increasing the responsibilities and powers of an existing agency or agencies, or establishing a new agency or agencies to accomplish the objectives of this section. The evaluation shall also estimate the costs and benefits of operating a central facility authority or authorities.

(4) The office of financial management shall convene a steering committee composed of representatives of affected state agencies and the private real estate industry to assist in collecting needed information and conducting the evaluation.

(5) The office of financial management shall report on the results of its evaluation to the appropriate standing committees of the legislature by January 10, 1995.

This section shall expire June 30, 1995.

NEW SECTION. Sec. 9. The office of financial management shall conduct a review of the state's bonding requirements under chapter 39.08 RCW, shall analyze alternative forms of security, and shall report its findings and analysis to the appropriate committees of the senate and the house of representatives no later that January 10, 1995. The alternative forms of security shall include, but not be limited to, a bond in an amount less than the full contract price, letter of credit, certified check, cash escrow, and assets of the contractor. The purpose of the review is to determine if alternative forms of security will provide essentially the same level of protection to the state at a lower cost to the contractor and the state.

This section shall expire June 30, 1995.

NEW SECTION. Sec. 10. (1) The state board of education shall study the potential for savings by constructing common schools from prototypical school construction designs. The findings and recommendations of the board shall be submitted to the senate committee on ways and means and the house of representatives capital budget committee by December 15, 1994.

(2) This section expires June 30, 1995.

NEW SECTION. Sec. 11. A new section is added to chapter 28A.525 RCW to read as follows:

The state board of education, for purposes of determining eligibility for state assistance for new construction, shall adopt rules excluding from the inventory of available educational space those spaces that have been constructed for educational and community activities from grants received from other public or private entities.

Sec. 12. RCW 79.24.580 and 1993 sp.s. c 24 s 927 are each amended to read as follows:

After deduction for management costs as provided in RCW 79.64.040 and payments to towns under RCW 79.92.110(2), all moneys received by the state from the sale or lease of state-owned aquatic lands and from the sale of valuable material from state-owned aquatic lands shall be ((distributed as follows: (1) To the state building bond redemption fund such amounts necessary to retire bonds issued pursuant to RCW 79.24.630 through 79.24.647 prior to January 1, 1987, and for which tide and harbor area revenues have been pledged, and (2) all moneys not deposited for the purposes of subsection (1) of this section shall be)) deposited in the aquatic lands enhancement account which is hereby created in the state treasury. After appropriation, these funds shall be used solely for aquatic lands enhancement projects; for the purchase, improvement, or protection of aquatic lands for public purposes; for providing and improving access to such lands; and for volunteer cooperative fish and game projects. During the fiscal biennium ending June 30, 1995, the funds may be appropriated for shellfish management, enforcement, and enhancement and for developing and implementing plans for population monitoring and restoration of native wild salmon stock.

Sec. 13. RCW 43.82.110 and 1969 c 121 s 2 are each amended to read as follows:

All office or other space made available through the provisions of this chapter shall be leased by the director to such state or federal agencies, for such rental, and on such terms and conditions as he or she deems advisable: PROVIDED, HOWEVER, If space becomes surplus, the director is authorized to lease office or other space in any project to any person, corporation or body politic, for such period as the director shall determine said space is surplus, and upon such other terms and conditions as he or she may prescribe.

((There is hereby created within the treasury a special fund to be known as the "general administration bond redemption fund" in which all pledged rentals shall be deposited. In the event bonds are issued for more than one project, the rentals from each project will be maintained as separate accounts. The funds in this account or accounts shall be used to meet principal and interest payments when due on the bonds issued to finance the specific project for which each such account was created until all of such bonds and interest thereon have been paid.

The bonds shall include a covenant that the payment or redemption thereof and the interest thereon are secured by a first and direct charge and lien on the rentals deposited in the general administration bond redemption fund, as aforesaid, and received from the project for which the bonds were issued. Such rentals shall be pledged by the state for such purpose.))

Sec. 14. RCW 43.82.120 and 1965 c 8 s 43.82.120 are each amended to read as follows:

((~~There is hereby established within the state treasury a reserve fund to be known as the "general administration bond redemption guarantee fund."~~)) All ((~~unpledged~~)) rental income collected by the department of general administration from rental of state buildings shall be deposited in the ((~~general administration bond redemption guarantee fund until a total of two hundred thousand dollars is on deposit in said fund after which all unpledged rental income shall be deposited in the~~)) general administration management fund, the creation of which is hereby authorized. ((~~In the event the general administration bond redemption guarantee fund is diminished, it shall be replenished in the same manner.~~

If at any time there is insufficient money in the general administration bond redemption fund to make any payments of interest or principal due on any bonds payable from such fund, the state treasurer shall transfer from such general administration bond redemption guarantee fund to the general administration bond redemption fund an amount sufficient to meet such payments.))

NEW SECTION. Sec. 15. The legislature finds that there is inequitable distribution among state programs of capital costs associated with maintaining and rehabilitating state facilities. The legislature finds that there are insufficient available resources to support even minor capital improvements other than debt financing. The legislature further finds that little attention is focused on efficient facility management because in many cases capital costs are not factored into the ongoing process of allocating state resources. The purpose of sections 16 through 18 of this act is to create a mechanism to distribute capital costs among the agencies and programs occupying facilities owned and managed by the department of general administration in Thurston county that will foster increased accountability for facility decisions and more efficient use of the facilities.

Sec. 16. RCW 43.01.090 and 1991 sp.s. c 31 s 10 are each amended to read as follows:

The director of general administration may assess a charge or rent against each state board, commission, agency, office, department, activity, or other occupant or user for payment of a proportionate share of costs for occupancy of buildings, structures, or facilities including but not limited to all costs of acquiring, constructing, operating, and maintaining such buildings, structures, or facilities and the repair, remodeling, or furnishing thereof and for the rendering of any service or the furnishing or providing of any supplies, equipment, or materials.

The director of general administration may recover the full costs including appropriate overhead charges of the foregoing by periodic billings as determined by the director including but not limited to transfers upon accounts and advancements into the general administration facilities and services revolving fund. Charges related to the rendering of real estate services under RCW 43.82.010 and to the operation of nonassigned public spaces in Thurston county shall be allocated separately from other charges assessed under this section. Rates shall be established by the director of general administration after consultation with the director of financial management. The director of general administration may allot, provide, or furnish any of such facilities, structures, services, equipment, supplies, or materials to any other public service type occupant or user at such rates or charges as are equitable and reasonably reflect the actual costs of the services provided: PROVIDED, HOWEVER, That the legislature, its duly constituted committees, interim committees and other committees shall be exempted from the provisions of this section.

Upon receipt of such bill, each entity, occupant, or user shall cause a warrant or check in the amount thereof to be drawn in favor of the department of general administration which shall be deposited in the state treasury to the credit of the general administration facilities and services revolving fund established in RCW 43.19.500 unless the director of financial management has authorized another method for payment of costs.

Beginning July 1, 1995, the director of general administration shall assess a capital projects surcharge upon each agency or other user occupying a facility owned and managed by the department of general administration in Thurston county. The capital projects surcharge does not apply to agencies or users that agree to pay all future repairs, improvements, and renovations to the buildings they occupy and a proportional share, as determined by the office of financial management, of all other campus repairs, installations, improvements, and renovations that provide a benefit to the buildings they occupy or that have an agreement with the department of general administration that contains a charge for a similar purpose, including but not limited to section 19 of this act, in an amount greater than the capital projects surcharge. The director, after consultation with the director of financial management, shall adopt differential capital project surcharge rates to reflect the differences in facility type and quality. The initial payment structure for this surcharge shall be one dollar per square foot per year. The surcharge shall increase over time to an amount that when combined with the facilities and service charge equals the market rate for similar types of lease space in the area or equals five dollars per square foot per year, whichever is less. The capital projects surcharge shall be in addition to other charges assessed under this section. Proceeds from the capital projects surcharge shall be deposited into the Thurston county capital facilities account created in section 18 of this act.

Sec. 17. RCW 43.19.500 and 1982 c 41 s 2 are each amended to read as follows:

There is hereby created a fund within the state treasury designated as the "department of general administration facilities and services revolving fund". Such revolving fund shall be used by the department of general administration for the payment of certain costs, expenses, and charges, as ((~~hereinafter~~)) specified in this section, incurred by it in the operation and administration of the department in the rendering of services, the furnishing or supplying of equipment, supplies and materials, and for providing or allocating facilities, including the operation, maintenance, rehabilitation, or furnishings thereof to other agencies, offices, departments, activities, and other entities enumerated in RCW 43.01.090 and including the rendering of services in acquiring real estate under RCW 43.82.010 and the operation and maintenance of nonassigned public spaces in Thurston county. The department shall treat the rendering of services in acquiring real estate and the operation and maintenance of nonassigned public spaces as ((a)) separate operating ((~~entity~~)) entities within the fund for financial accounting and control.

The schedule of services, facilities, equipment, supplies, materials, maintenance, rehabilitation, furnishings, operations, and administration to be so financed and recovered shall be determined jointly by the director of general administration and the director of financial management, in equitable amounts which, together with any other income or appropriation, will provide the department of general administration with funds to meet its anticipated expenditures during any allotment period.

The director of general administration may ((~~promulgate~~)) adopt rules ((~~and regulations~~)) governing the provisions of RCW 43.01.090 and this section and the relationships and procedures between the department of general administration and such other entities.

NEW SECTION. Sec. 18. A new section is added to chapter 43.19 RCW to read as follows:

The Thurston county capital facilities account is created in the state treasury. The account is subject to the appropriation and allotment procedures under chapter 43.88 RCW. Moneys in the account may be expended for capital projects in facilities owned and managed by the department of general administration in Thurston county.

NEW SECTION. Sec. 19. It is hereby declared to be the policy of the state of Washington that each agency or other occupant of newly constructed or substantially renovated facilities owned and operated by the department of general administration in Thurston county shall proportionally share the debt service costs associated with the original construction or substantial renovation of the facility. Beginning July 1, 1995, each state agency or other occupant of a facility constructed or substantially renovated after July 1, 1992, and owned and operated by the department of general administration in Thurston county, shall be assessed a charge to pay the principal and interest payments on any bonds or other financial contract issued to finance the construction or renovation or an equivalent charge for similar projects financed by cash sources. In recognition that full payment of debt service costs may be higher than market rates for similar types of facilities or higher than existing agreements for similar charges entered into prior to the effective date of this section, the initial charge may be less than the full cost of principal and interest payments. The charge shall be assessed to all occupants of the facility on a proportional basis based on the amount of occupied space or any unique construction requirements. The office of financial management, in consultation with the department of general administration, shall develop procedures to implement this section and report to the legislative fiscal committees, by October 1994, their recommendations for implementing this section. The office of financial management shall separately identify in the budget document all payments and the documentation for determining the payments required by this section for each agency and fund source during the current and the two past and future fiscal biennia. The charge authorized in this section is subject to annual audit by the state auditor.

NEW SECTION. Sec. 20. The following acts or parts of acts are each repealed:

(1) RCW 43.82.040 and 1965 c 8 s 43.82.040;

(2) RCW 43.82.050 and 1965 c 8 s 43.82.050;

(3) RCW 43.82.060 and 1965 c 8 s 43.82.060;

(4) RCW 43.82.070 and 1965 c 8 s 43.82.070;

(5) RCW 43.82.080 and 1965 c 8 s 43.82.080; and

(6) RCW 43.82.090 and 1979 ex.s. c 67 s 4 & 1965 c 8 s 43.82.090.

NEW SECTION. Sec. 21. The following acts or parts of acts are each repealed:

(1) RCW 79.24.630 and 1970 ex.s. c 14 s 1;

(2) RCW 79.24.632 and 1969 ex.s. c 273 s 4 & 1967 ex.s. c 105 s 5;

(3) RCW 79.24.634 and 1969 ex.s. c 273 s 5 & 1967 ex.s. c 105 s 6;

(4) RCW 79.24.636 and 1969 ex.s. c 273 s 6 & 1967 ex.s. c 105 s 7;

(5) RCW 79.24.638 and 1982 2nd ex.s. c 8 s 5, 1969 ex.s. c 273 s 7, & 1967 ex.s. c 105 s 8;

(6) RCW 79.24.640 and 1969 ex.s. c 273 s 8 & 1967 ex.s. c 105 s 9;

(7) RCW 79.24.642 and 1969 ex.s. c 273 s 9 & 1967 ex.s. c 105 s 10;

(8) RCW 79.24.6421 and 1969 ex.s. c 273 s 1;

(9) RCW 79.24.6422 and 1969 ex.s. c 273 s 2;

(10) RCW 79.24.644 and 1967 ex.s. c 105 s 11;

(11) RCW 79.24.645 and 1969 ex.s. c 273 s 10;

(12) RCW 79.24.646 and 1967 ex.s. c 105 s 12; and

(13) RCW 79.24.647 and 1969 ex.s. c 273 s 13.

NEW SECTION. Sec. 22. (1) For the purposes of RCW 43.82.010, "the department of fish and wildlife" means "the department of fisheries and the department of wildlife" until July 1, 1994.

(2) This section expires July 1, 1994.

NEW SECTION. Sec. 23. Sections 8 and 9 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately."

ESHB 2237 - CONF REPT

By Conference Committee

On page 1, line 1 of the title, after "facilities;" strike the remainder of the title and insert "amending RCW 43.88A.020, 43.88.032, 43.82.010, 79.24.580, 43.82.110, and 43.82.120; reenacting and amending RCW 43.88.030, 43.88.110, 43.01.090, and 43.19.500; adding a new section to chapter 43.88 RCW; adding a new section to chapter 28A.525 RCW; adding a new section to chapter 43.19 RCW; creating new sections; repealing RCW 43.82.040, 43.82.050, 43.82.060, 43.82.070, 43.82.080, 43.82.090, 79.24.630, 79.24.632, 79.24.634, 79.24.636, 79.24.638, 79.24.640, 79.24.642, 79.24.6421, 79.24.6422, 79.24.644, 79.24.645, 79.24.646, and 79.24.647; and declaring an emergency."