FINAL BILL REPORT

HB 1205

PARTIAL VETO

                                  C 516 L 87

BYRepresentatives Grimm and P. King 

Providing for the distribution of funds from the water quality account using extended grant payments.

House Committe on Ways & Means/Appropriations

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The 1986 Legislature established the Water Quality Account to provide financial assistance to state and local governments for the planning, design, acquisition, construction and improvement of water pollution control facilities and related activities.

As a part of the 1986 legislation, the Office of Financial Management was directed to prepare a state financial assistance plan including recommendations regarding a revolving loan fund, criteria for equitable fund distribution based on current and future household sewage rates, an assessment of the future capital funding ability of local governmental entities and the feasibility of state and local debt service agreements.

The financial assistance plan was completed January 1, 1987.  One of the recommendations of the plan was to provide annual grants where a local agency arranges financing for a project and the state pays its share over an extended period of time.  The advantage of this method is the reduced requirements for state cash initially, thereby allowing more projects be undertaken in the near term.  This concept is a generalized version of a debt service agreement where the annual grant payment can be used by the local agency in their bond prospectus when selling bonds.  This does not mean there is a direct linkage between the state and the local entities bondholders.

SUMMARY:

The Department of Ecology is authorized to enter into contracts with local jurisdictions which provide for extended grant payments.  The payments must be in equal annual amounts not to exceed, on a net present value basis, 50 percent of the eligible cost of the project.

The duration of such extended grant payments is not more than 20 years.

Any moneys appropriated by the legislature from the water quality account must first be used to satisfy the conditions of the extended grant contracts.  Sole-source aquifers will receive assistance in the form of a 50 percent matching grant.

VOTES ON FINAL PASSAGE:

      House 97   0

      Senate    41     1(Senated amended)

      House 95   0(House concurred)

EFFECTIVE:July 26, 1987

Partial Veto Summary:  The subsection specifying that sole-source aquifers receive a 50 percent matching grant is vetoed.  (See VETO MESSAGE)