AN ACT Relating to limiting bonding toll revenues on certain state highway facilities; amending RCW 47.56.830, 47.10.905, 47.10.906, 47.10.907, 47.56.880, 47.56.884, 47.56.895, and 47.56.897; repealing RCW 47.10.896, 47.10.897, 47.10.898, 47.10.899, 47.10.900, and 47.10.901; and declaring an emergency.

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

Sec. 1. RCW 47.56.830 and 2008 c 122 s 5 are each amended to read as follows:

Any proposal for the establishment of eligible toll facilities shall consider the following policy guidelines:

(1) Overall direction. Washington should use tolling to encourage effective use of the transportation system and provide a source of transportation funding.

(2) When to use tolling. Tolling should be used when it can be demonstrated to contribute a significant portion of the cost of a project that cannot be funded solely with existing sources or optimize the performance of the transportation system. Such tolling should, in all cases, be fairly and equitably applied in the context of the statewide transportation system and not have significant adverse impacts through the diversion of traffic to other routes that cannot otherwise be reasonably mitigated. Such tolling should also consider relevant social equity, environmental, and economic issues, and should be directed at making progress toward the state's greenhouse gas reduction goals.

(3) Use of toll revenue. All revenue from an eligible toll facility must be used only to improve, preserve, manage, or operate the eligible toll facility on or in which the revenue is collected. Additionally, toll revenue should provide for and encourage the inclusion of recycled and reclaimed construction materials. Further, toll revenue may be pledged for debt financing only when the revenue is generated from toll bridges and not when the revenue is generated from express toll lanes.

(4) Setting toll rates. Toll rates, which may include variable pricing, must be set to meet anticipated funding obligations. To the extent possible, the toll rates should be set to optimize system performance, recognizing necessary trade-offs to generate revenue.

(5) Duration of toll collection. Because transportation infrastructure projects have costs and benefits that extend well beyond those paid for by initial construction funding, tolls on future toll facilities may remain in place to fund additional capacity, capital rehabilitation, maintenance, management, and operations, and to optimize performance of the system.

Sec. 2. RCW 47.10.905 and 2019 c 421 s 8 are each amended to read as follows:

The toll facility bond retirement account is created in the state treasury for the purpose of payment of the principal of and interest and premium on bonds. Both principal of and interest on the bonds issued for the purposes of chapter 498, Laws of 2009((,))and chapter 377, Laws of 2011((, and chapter 421, Laws of 2019)) shall be payable from the toll facility bond retirement account. The state finance committee may provide that special subaccounts be created in the account to facilitate payment of the principal of and interest on the bonds. The state finance committee shall, on or before June 30th of each year, certify to the state treasurer the amount required for principal and interest on the bonds in accordance with the bond proceedings.

Sec. 3. RCW 47.10.906 and 2019 c 421 s 9 are each amended to read as follows:

The state finance committee may determine and include in any resolution authorizing the issuance of any bonds under chapter 498, Laws of 2009((,))and chapter 377, Laws of 2011, ((and chapter 421, Laws of 2019,)) such terms, provisions, covenants, and conditions as it may deem appropriate in order to assist with the marketing and sale of the bonds, confer rights upon the owners of bonds, and safeguard rights of the owners of bonds including, among other things:

(1) Provisions regarding the maintenance and operation of eligible toll facilities;

(2) The pledges, uses, and priorities of application of toll revenue;

(3) Provisions that bonds shall be payable from and secured solely by toll revenue as provided by RCW 47.10.886, or shall be payable from and secured by both toll revenue and by a pledge of excise taxes on motor vehicle and special fuels and the full faith and credit of the state as provided in RCW 47.10.879 and 47.10.883 through 47.10.885;

(4) ((Provisions that bonds shall be payable from and secured by both toll revenue and by a pledge of excise taxes on fuel and vehicle-related fees and the full faith and credit of the state as provided in RCW 47.10.896 and 47.10.899 through 47.10.901;

(5))) In consultation with the department of transportation and the tolling authority, financial covenants requiring that the eligible toll facilities must produce specified coverage ratios of toll revenue to debt service on bonds;

(((6)))(5) The purposes and conditions that must be satisfied prior to the issuance of any additional bonds that are to be payable from and secured by any toll revenue on an equal basis with previously issued and outstanding bonds payable from and secured by toll revenue;

(((7)))(6) Provisions that bonds for which any toll revenue are pledged, or for which a pledge of any toll revenue may be reserved, may be structured on a senior, parity, subordinate, or special lien basis in relation to any other bonds for which toll revenue is pledged, with respect to toll revenue only; and

(((8)))(7) Provisions regarding reserves, credit enhancement, liquidity facilities, and payment agreements with respect to bonds.

Notwithstanding the foregoing, covenants and conditions detailing the character of management, maintenance, and operation of eligible toll facilities, insurance for eligible toll facilities, financial management of toll revenue, and disposition of eligible toll facilities must first be approved by the department of transportation.

The owner of any bond may by mandamus or other appropriate proceeding require and compel performance of any duties imposed upon the tolling authority and the department of transportation and their respective officials, including any duties imposed upon or undertaken by them or by their respective officers, agents, and employees, in connection with the construction, maintenance, and operation of eligible toll facilities and in connection with the collection, deposit, investment, application, and disbursement of the proceeds of the bonds and toll revenue.

Sec. 4. RCW 47.10.907 and 2019 c 421 s 10 are each amended to read as follows:

(1) For the purposes of chapter 498, Laws of 2009((,))and chapter 377, Laws of 2011, ((and chapter 421, Laws of 2019,)) "toll revenue" means all toll receipts, all interest income derived from the investment of toll receipts, and any gifts, grants, or other funds received for the benefit of transportation facilities in the state, including eligible toll facilities. However, for the purpose of any pledge of toll revenue to the payment of particular bonds issued under chapter 498, Laws of 2009((,))and chapter 377, Laws of 2011, ((and chapter 421, Laws of 2019,)) "toll revenue" means and includes only such toll revenue or portion thereof that is pledged to the payment of those bonds in the resolution authorizing the issuance of such bonds. Toll revenue constitutes "fees and revenues derived from the ownership or operation of any undertaking, facility, or project" as that phrase is used in Article VIII, section 1(c)(1) of the state Constitution.

(2) For the purposes of chapter 498, Laws of 2009((,))and chapter 377, Laws of 2011, ((and chapter 421, Laws of 2019,)) "tolling authority" has the same meaning as in RCW 47.56.810.

Sec. 5. RCW 47.56.880 and 2019 c 421 s 11 are each amended to read as follows:

(1) The imposition of tolls for express toll lanes on Interstate 405 between Interstate 5 on the north end in the city of Lynnwood and Interstate 5 on the south end in the city of Tukwila, and for state route number 167 between Interstate 405 on the north end and state route number 512 on the south end is authorized. Interstate 405 and state route number 167 are designated an eligible toll facility, and toll revenue generated in the corridor must only be expended ((on the Interstate 405 and state route number 167 projects as identified in each corridor's master plan and)) as allowed under RCW 47.56.820.

(2) Tolls for the express toll lanes must be set as follows:

(a) The schedule of toll rates must be set by the tolling authority pursuant to RCW 47.56.850. Toll rates may vary in amount by time of day, level of traffic congestion within the highway facility, or other criteria, as the tolling authority deems appropriate.

(b) In those locations with two express toll lanes in each direction, the toll rate must be the same in both lanes.

(c) Toll charges may not be assessed on transit buses and vanpools.

(d) The department shall establish performance standards for travel time, speed, and reliability for the express toll lanes project. The department must automatically adjust the toll rate within the schedule established by the tolling authority, using dynamic tolling, to maintain the goal that average vehicle speeds in the lanes remain above ((forty-five))45 miles per hour at least ((ninety))90 percent of the time during peak hours.

(e) The tolling authority shall periodically review the toll rates against traffic performance of all lanes to determine if the toll rates are effectively maintaining travel time, speed, and reliability on the highway facilities.

(((f)(i) Toll charges may not be assessed on carpools with two or more people in the vehicle on the portion of Interstate 405 between Bellevue and state route number 167 for at least the first year following the initial imposition of tolls on that portion of the express toll lanes, contingent upon the analysis described in (f)(ii) of this subsection.

(g) After the bonds issued pursuant to RCW 47.10.896(1)(a) are retired, the tolling authority must reduce the toll rates commensurate with this reduction in the amount of toll revenues required from the express toll lanes.))

(3) The department shall work with local jurisdictions to minimize and monitor impacts to local streets and, after consultation with local jurisdictions, recommend mitigation measures to the legislature in those locations where it is appropriate.

(4) The department shall monitor the express toll lanes and shall annually report to the transportation commission and the legislature on the impacts from the project on the following performance measures:

(a) Whether the express toll lanes maintain speeds of ((forty-five))45 miles per hour at least ((ninety))90 percent of the time during peak periods, and any alternate metric determined by the department in conjunction with the federal highway administration;

(b) Whether the average traffic speed changed in the general purpose lanes;

(c) Whether transit ridership changed;

(d) Whether the actual use of the express toll lanes is consistent with the projected use;

(e) Whether the express toll lanes generated sufficient revenue to pay for all express toll lane-related operating costs; and

(f) Whether travel times and volumes have increased or decreased on adjacent local streets and state highways.

(5) The department, in consultation with the transportation commission, shall consider making operational changes necessary to fix any unintended consequences of implementing the express toll lanes.

(6) A violation of the lane restrictions applicable to the express toll lanes established under this section is a traffic infraction.

Sec. 6. RCW 47.56.884 and 2019 c 421 s 12 are each amended to read as follows:

(1) The Interstate 405 and state route number 167 express toll lanes account is created in the motor vehicle fund.

(2) Deposits to the account must include:

(a) ((All proceeds of bonds authorized in RCW 47.10.896(1)(a) and loans for the Interstate 405 and state route number 167 projects, including capitalized interest;

(b))) All tolls and other revenues received from the operation of the Interstate 405 and state route number 167 express toll lanes facility, to be deposited at least monthly;

(((c)))(b) Any interest that may be earned from the deposit or investment of those revenues;

(((d)))(c) Notwithstanding RCW 47.12.063, proceeds from the sale of any surplus real property acquired for completing the Interstate 405 and state route number 167 express toll lanes facility; and

(((e)))(d) All damages liquidated or otherwise, collected under any contract involving Interstate 405 or state route number 167 projects.

(3) Moneys in the account may be spent only after appropriation, consistent with RCW 47.56.820.

(((4) The proceeds of the general obligation bonds authorized in RCW 47.10.896(1)(a) shall be used to make progress toward completion of the Interstate 405 and state route number 167 master plans. It is the intent of the legislature to first use the bond proceeds for the following projects:

(e) Up to twenty million dollars to design the Interstate 405/North 8th Street Direct Access Ramp project in the city of Renton. It is the intent of the legislature to provide construction funding for this project at a later date.))

Sec. 7. RCW 47.56.895 and 2019 c 421 s 13 are each amended to read as follows:

(1) The Puget Sound Gateway facility is designated an eligible toll facility, tolls are authorized to be imposed on the Puget Sound Gateway facility, and toll revenue generated must be expended only as allowed under RCW 47.56.820.

(2)(a) In setting toll rates for the Puget Sound Gateway facility, pursuant to RCW 47.56.850, the tolling authority shall set a variable schedule of toll rates to maintain travel time, speed, and reliability on the Puget Sound Gateway facility.

(b) The tolling authority may adjust toll rates to reflect inflation as measured by the consumer price index or as necessary for those costs that are eligible under RCW 47.56.820 and to meet the obligations of the tolling authority under RCW 47.56.850.

(((c) After the bonds issued pursuant to RCW 47.10.896(1)(b) are retired, the tolling authority must reduce the toll rates commensurate with this reduction in the amount of toll revenues required from the express toll lanes.))

(3) For the purposes of this section and RCW 47.56.897, "Puget Sound Gateway facility" means the state route number 167 roadway between north Meridian Avenue in Puyallup and Interstate 5 in Fife, the state route number 509 spur between Interstate 5 in Fife and state route number 509 in Tacoma, and the state route number 509 roadway between south 188th Street and Interstate 5 in SeaTac.

(4) Prior to setting the schedule of toll rates on the portion of state route number 509 between South 188th Street and Interstate 5 in SeaTac, the department, in collaboration with the transportation commission, must analyze and present to the transportation commission at least one schedule of toll rates that exempts, discounts, or provides other toll relief for low-income drivers during all hours of operation on state route number 509 between South 188th Street and Interstate 5 in SeaTac. In analyzing the schedule of toll rates, the department shall consider implementing an exemption, discount, or other toll relief policy for drivers that reside in close proximity to the corridor.

Sec. 8. RCW 47.56.897 and 2019 c 421 s 14 are each amended to read as follows:

(1) A special account to be known as the Puget Sound Gateway facility account is created in the motor vehicle fund.

(2) Deposits to the account must include:

(a) ((All proceeds of bonds authorized in RCW 47.10.896(1)(b) and loans for the Puget Sound Gateway project, including capitalized interest;

(b))) All tolls and other revenues received from the operation of the Puget Sound Gateway facility, to be deposited at least monthly;

(((c)))(b) Any interest that may be earned from the deposit or investment of those revenues;

(((d)))(c) Notwithstanding RCW 47.12.063, proceeds from the sale of any surplus real property acquired for completing the Puget Sound Gateway project, including existing state route number 509 right-of-way in SeaTac and Des Moines; and

(((e)))(d) All damages liquidated or otherwise, collected under any contract involving the Puget Sound Gateway project.

(3) Moneys in the account may be spent only after appropriation, consistent with RCW 47.56.820.

(4) ((The proceeds of the general obligation bonds authorized in RCW 47.10.896(1)(b) shall be used to make progress toward completion of the Puget Sound Gateway facility. It is the intent of the legislature to use the bond proceeds to advance the Puget Sound Gateway facility in order to maximize net mobility benefits for both freight and the traveling public. It is the intent of the legislature for tolling to begin on stage one of the project as soon as practicable in order to leverage toll funds, use bond proceeds to advance one hundred twenty-nine million dollars of connecting Washington state appropriations by two biennia to the 2023-2025 biennium, and advance local and federal contributions. This will allow the department of transportation to deliver and open to the public stage two of the project in fiscal year 2028, three years earlier than originally planned, and to realize twenty million dollars in cost savings in connecting Washington state appropriations.

(6))) It is further the intent of the legislature to clarify how the tolling of state route number 167 and state route number 509 will be implemented by requiring the transportation commission and the department of transportation to consider naming the sections of each facility where all of the lanes are tolled as the state route number 167 express way and the state route number 509 express way respectively.

(1) RCW 47.10.896 (Bond issue authorized) and 2019 c 421 s 2;

(2) RCW 47.10.897 (Administration and amount of sale) and 2019 c 421 s 3;

(3) RCW 47.10.898 (Proceeds—Deposit and use) and 2019 c 421 s 4;

(4) RCW 47.10.899 (Statement of general obligation—Pledge of toll revenue and excise taxes and vehicle-related fees) and 2019 c 421 s 5;

(5) RCW 47.10.900 (Repayment procedure) and 2019 c 421 s 6; and

(6) RCW 47.10.901 (Equal charge against fuel excise taxes and vehicle-related fees) and 2019 c 421 s 7.

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