HOUSE BILL REPORT

HB 1347

BYRepresentatives Haugen, S. Wilson, Braddock, Belcher, Schmidt, J. Williams, Zellinsky and Spanel

Specifying the allocation of revenues from the lease of harbor areas in code cities on islands.

House Committe on Natural Resources

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (15)

      Signed by Representatives Sutherland, Chair; K. Wilson, Vice Chair; Basich, Beck, Belcher, Bumgarner, Butterfield, Dorn, Fuhrman, Hargrove, Haugen, Meyers, C. Smith, Spanel and S. Wilson.

House Staff:Pamela Madson (786-7310)

AS REPORTED BY COMMITTEE ON NATURAL RESOURCES FEBRUARY 4, 1988

BACKGROUND:

The Department of Natural Resources (DNR) manages most state-owned aquatic lands.  Aquatic lands include tidelands,  shorelands, harbor areas, and beds of navigable waters.

The policy established at the time of statehood recognized the importance of city waterfronts to the citizens of the state, and placed control of these waterfronts (beds of navigable waters and tidelands) in the hands of the state to be kept and used for the public benefit.  The state, under the state constitution, is prohibited from selling beds of navigable waters but may lease them.  The state may lease tidelands and sell them to other public agencies.

Revenue from state owned aquatic lands is distributed to the Aquatic Land Enhancement Fund, the Resource Management Cost Account (DNR) as a management fee, the Capitol Purchase and Development Account, and towns having harbor areas and tidelands within their boundaries (towns are defined as municipal corporations having at least 300 but not more than 1500 inhabitants at the time of organization).

Within port districts having management plans approved by DNR, the ports collect and retain 100 percent of lease revenues from water- dependent leases and 15 percent of revenues from nonwater-  dependent leases.  In order for a port district to receive lease revenue, the port must own the abutting uplands and must manage the lease activity.

In fiscal year 1987, revenue received by DNR from state-owned aquatic lands totalled $3,865,940.  Of that amount, $1,442,298 went to DNR for management; $969,940 went to the Aquatic Lands Enhancement Account; $1,454,607 went to the Capitol Purchase and Development Account; and $1,853 went to fourth class towns.

SUMMARY:

SUBSTITUTE BILL:  Code cities located on an island but not within a port district and having leased beds of navigable waters and tidelands within their boundaries on which the city operates a marina, shall receive revenue collected by the state from these leases.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Code cities located on an island but not within a port district and having leased beds of navigable waters and tidelands within their boundaries on which the city operates a marina, shall receive revenue collected by the state from these leases.

Fiscal Note:      Requested January 26, 1988.

House Committee ‑ Testified For:    Representative Haugen; and Roger Leonhardi, Harbormaster, Oak Harbor Marina.

House Committee - Testimony For:    The City of Oak Harbor is required to pay rent to the State of Washington on approximately 16.8 of the 24.9 acres on which its marine park and marina is located.  This rent amount is scheduled to increase from $18,000 to $60,000 in four years.  The City maintains a public boat ramp, picnic facilities, and restroom facilities that are supported by revenue from the marina.  The park and marina facilities are being expanded to include a breakwater facility that will provide for public access and use. The City is receiving $250,000 from IAC for this project.  If the city was a port district, all the money it generates would come back to it for water related uses rather than having to pay the money back to the state in the form of rent.  The City has not formed a port district and should not be forced to do so.  Since rent revenue goes back to the local governments in the form of grants from the Aquatic Lands Enhancement Fund, the money paid by the City could come back to the City in the form of a grant.  If that is the purpose, the city, as a general purpose government, should have the same authority over its lands as port districts and should be able to generate and retain lease revenue for waterfront enhancement.

House Committee - Testified Against:      Pat McElroy, Department of Natural Resources.

House Committee - Testimony Against:      No rent is charged for the area on which the marine park is located.  Rent is only charged for the area where private boat owners store their boats.  The indicated rent for Oak Harbor is $19,000 based on comparison to other upland property having a marina in front of it.  DNR is using property that is similar for assessment purposes (Anacortes area where a marina is located) and will not be increasing rent to $65,000.  No rent has been billed pending resolution of a dispute over the amount.  This bill is written to benefit one city and is not fair to other cities. Private marina lessees are also at a disadvantage when compared to port district marinas and code cities under this bill.  This change will reduce the amount of money available to the Aquatic Lands Enhancement Fund that is available to cities for use in water related enhancement projects.