title: RCW 39.106.080

text:
(1) Any intergovernmental entity formed under chapter 39.34 RCW or other applicable law may become a joint municipal utility services authority and be entitled to all the powers and privileges available under this chapter, if: (a) The public agencies that are parties to an existing interlocal agreement would otherwise be eligible to form an authority to provide the relevant utility services; (b) the public agencies that are parties to the existing interlocal agreement amend, restate, or replace that interlocal agreement so that it materially complies with the requirements of RCW 39.106.050; (c) the amended, restated, or replacement agreement is filed with the Washington state secretary of state consistent with RCW 39.106.030; and (d) the amended, restated, or replacement agreement expressly provides that all rights and obligations of the entity formerly existing under chapter 39.34 RCW or other applicable law shall thereafter be the obligations of the new authority created under this chapter. Upon compliance with those requirements, the new authority shall be a successor of the former intergovernmental entity for all purposes, and all rights and obligations of the former entity shall transfer to the new authority. Those obligations shall be treated as having been incurred, entered into, or issued by the new authority, and those obligations shall remain in full force and effect and shall continue to be enforceable in accordance with their terms.
(2) If an interlocal agreement under chapter 39.34 RCW or other applicable law relating to utility services includes among its original participants a city or county that does not itself provide or no longer provides utility services, that city or county may continue as a party to the amended, restated, or replacement agreement and shall be treated as a member for all purposes under this chapter.
[ 2011 c 258 s 8.]

catchline: Conversion of existing entities into authorities.


doc_type: statute

jurisdiction: wa

title: RCW 39.106.090

text:
The powers and authority conferred by this chapter shall be construed as in addition and supplemental to powers or authority conferred by any other law, and nothing contained in this chapter shall be construed as limiting any other powers or authority of any member or any other entity formed under chapter 39.34 RCW or other applicable law.
[ 2011 c 258 s 9.]

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Powers conferred by chapter are supplemental.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 39.108.005

text:
(1) Recognizing that uncoordinated and poorly planned growth poses a threat to the environment, sustainable economic development, and the health, safety, and high quality of life enjoyed by residents of this state, the legislature passed the growth management act, chapter 36.70A RCW. The planning goals adopted through the growth management act encourage development in urban areas where public facilities and services exist or can be provided efficiently, conservation of productive forest and agricultural lands, and a reduction of sprawl.
(2) Under RCW 36.70A.090 and 43.362.005 the legislature has encouraged:
(a) The use of innovative land use management techniques, including the transfer of development rights, to meet growth management goals; and
(b) The creation of a regional transfer of development rights marketplace in the central Puget Sound to assist in conserving agricultural and forestland, as well as other lands of state or regional priority.
(3) The legislature finds that:
(a) Local governments are in need of additional resources to provide public infrastructure to meet the needs of a growing population, and that public infrastructure is fundamental to community health, safety, and economic vitality. Investment in public infrastructure in growing urban areas supports growth management goals, encourages the redevelopment of underutilized or blighted urban areas, stimulates business activity and helps create jobs, lowers the cost of housing, promotes efficient land use, and improves residents' quality of life;
(b) Transferring development rights from agricultural and forestlands to urban areas where public facilities and services exist or can be provided efficiently and cost-effectively will ensure vibrant, economically viable communities. Directing growth to communities where people can live close to where they work or have access to transportation choices will also advance state goals regarding climate change by reducing vehicle miles traveled and by reducing fuel consumption and emissions that contribute to climate change. Directing growth to these communities will further help avoid the impacts of stormwater runoff to Puget Sound by avoiding impervious surfaces associated with development in watershed uplands;
(c) A transfer of development rights marketplace is particularly appropriate for conserving agricultural and forestland of long-term commercial significance. Transferring the development rights from these lands of statewide importance to cities will help achieve a specific goal of the growth management act by keeping them in farming and forestry, thereby helping ensure these remain viable industries in counties experiencing population growth. Transferring growth from agricultural and forestland of long-term commercial significance will also reduce costs to the counties that otherwise would be responsible for the provision of infrastructure and services for development on these lands, which are generally further from existing infrastructure and services; and
(d) The state and its residents benefit from investment in public infrastructure that is associated with urban growth facilitated by the transfer of development from agricultural and forestlands of long-term commercial significance. These activities advance multiple state growth management goals and benefit the state and local economies. It is in the public interest to enable local governments to finance such infrastructure investments and to incentivize development right transfers in the central Puget Sound through this chapter.
[ 2011 c 318 s 101.]
Notes:
Rules—2011 c 318: "The department of commerce may adopt any rules under chapter 34.05 RCW it considers necessary for the administration of this chapter." [ 2011 c 318 s 901.]

catchline: Findings.


title: RCW 39.108.010

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Assessed value" means the valuation of taxable real property as placed on the last completed assessment roll.
(2) "Eligible county" means any county that borders Puget Sound, that has a population of six hundred thousand or more, and that has an established program for transfer of development rights.
(3) "Employment" means total employment in a county or city, as applicable, estimated by the office of financial management.
(4) "Exchange rate" means an increment of development beyond what base zoning allows that is assigned to a development right by a sponsoring city for use in a receiving area.
(5) "Local infrastructure project area" means the geographic area identified by a sponsoring city under RCW 39.108.120.
(6) "Local infrastructure project financing" means the use of local property tax allocation revenue distributed to the sponsoring city to pay or finance public improvement costs within the local infrastructure project area in accordance with RCW 39.108.150.
(7) "Local property tax allocation revenue" means those tax revenues derived from the receipt of regular property taxes levied on the property tax allocation revenue value and used for local infrastructure project financing.
(8) "Participating taxing district" means a taxing district that:
(a) Has a local infrastructure project area wholly or partially within the taxing district's geographic boundaries; and
(b) Levies, or has levied on behalf of the taxing district, regular property taxes as defined in this section.
(9) "Population" means the population of a city or county, as applicable, estimated by the office of financial management.
(10) "Property tax allocation revenue base value" means the assessed value of real property located within a local infrastructure project area, less the property tax allocation revenue value.
(11)(a)(i) "Property tax allocation revenue value" means an amount equal to the sponsoring city ratio multiplied by seventy-five percent of any increase in the assessed value of real property in a local infrastructure project area resulting from:
(A) The placement of new construction, improvements to property, or both, on the assessment roll, where the new construction and improvements are initiated after the local infrastructure project area is created by the sponsoring city;
(B) The cost of new housing construction, conversion, and rehabilitation improvements, when the cost is treated as new construction for purposes of chapter 84.55 RCW as provided in RCW 84.14.020, and the new housing construction, conversion, and rehabilitation improvements are initiated after the local infrastructure project area is created by the sponsoring city;
(C) The cost of rehabilitation of historic property, when the cost is treated as new construction for purposes of chapter 84.55 RCW as provided in RCW 84.26.070, and the rehabilitation is initiated after the local infrastructure project area is created by the sponsoring city.
(ii) Increases in the assessed value of real property resulting from (a)(i)(A) through (C) of this subsection are included in the property tax allocation revenue value in the initial year. These same amounts are also included in the property tax allocation revenue value in subsequent years unless the property becomes exempt from property taxation.
(b) "Property tax allocation revenue value" includes an amount equal to the sponsoring city ratio multiplied by seventy-five percent of any increase in the assessed value of new construction consisting of an entire building in the years following the initial year, unless the building becomes exempt from property taxation.
(c) Except as provided in (b) of this subsection, "property tax allocation revenue value" does not include any increase in the assessed value of real property after the initial year.
(d) There is no property tax allocation revenue value if the assessed value of real property in a local infrastructure project area has not increased as a result of any of the reasons specified in (a)(i)(A) through (C) of this subsection.
(e) For purposes of this subsection, "initial year" means:
(i) For new construction and improvements to property added to the assessment roll, the year during which the new construction and improvements are initially placed on the assessment roll;
(ii) For the cost of new housing construction, conversion, and rehabilitation improvements, when the cost is treated as new construction for purposes of chapter 84.55 RCW, the year when the cost is treated as new construction for purposes of levying taxes for collection in the following year; and
(iii) For the cost of rehabilitation of historic property, when the cost is treated as new construction for purposes of chapter 84.55 RCW, the year when such cost is treated as new construction for purposes of levying taxes for collection in the following year.
(12)(a) "Public improvements" means:
(i) Infrastructure improvements within the local infrastructure project area that include:
(A) Street, road, bridge, and rail construction and maintenance;
(B) Water and sewer system construction and improvements;
(C) Sidewalks, streetlights, landscaping, and streetscaping;
(D) Parking, terminal, and dock facilities;
(E) Park and ride facilities of a transit authority and other facilities that support transportation efficient development;
(F) Park facilities, recreational areas, bicycle paths, and environmental remediation;
(G) Stormwater and drainage management systems;
(H) Electric, gas, fiber, and other utility infrastructures; and
(ii) Expenditures for facilities and improvements that support affordable housing;
(iii) Providing maintenance and security for common or public areas in the local infrastructure project area; or
(iv) Historic preservation activities authorized under RCW 35.21.395.
(b) Public improvements do not include the acquisition by a sponsoring city of transferable development rights.
(13) "Real property" has the same meaning as in RCW 84.04.090 and also includes any privately owned improvements located on publicly owned land that are subject to property taxation.
(14)(a) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (i) Regular property taxes levied by port districts or public utility districts specifically for the purpose of making required payments of principal and interest on general indebtedness; (ii) regular property taxes levied by the state for the support of common schools under RCW 84.52.065; and (iii) regular property taxes authorized by RCW 84.55.050 that are limited to a specific purpose.
(b) "Regular property taxes" do not include:
(i) Excess property tax levies that are exempt from the aggregate limits for junior and senior taxing districts as provided in RCW 84.52.043; and
(ii) Property taxes that are specifically excluded through an interlocal agreement between the sponsoring local government and a participating taxing district as set forth in RCW 39.104.060(3).
(15) "Receiving areas," for purposes of this chapter, are those designated lands within local infrastructure project areas in which transferable development rights from sending areas may be used.
(16) "Receiving city" means any incorporated city with population plus employment equal to twenty-two thousand five hundred or greater within an eligible county.
(17) "Receiving city allocated share" means the total number of transferable development rights from agricultural and forestland of long-term commercial significance and rural zoned lands designated under RCW 39.108.050 within the eligible counties allocated to a receiving city under RCW 39.108.070 (1) and (2).
(18) "Sending areas" means those lands within an eligible county that meet conservation criteria as described in RCW 39.108.030 and 39.108.050.
(19) "Sponsoring city" means a receiving city that accepts all or a portion of its receiving city allocated share, adopts a plan for development of infrastructure within one or more proposed local infrastructure project areas in accordance with RCW 39.108.080, and creates one or more local infrastructure project areas, as specified in RCW 39.108.070(4).
(20) "Sponsoring city allocated share" means the total number of transferable development rights a sponsoring city agrees to accept, under RCW 39.108.070(4), from agricultural and forestland of long-term commercial significance and rural zoned lands designated under RCW 39.108.050 within the eligible counties, plus the total number of transferable development rights transferred to the sponsoring city from another receiving city under RCW 39.108.070(5).
(21) "Sponsoring city ratio" means the ratio of the sponsoring city specified portion to the sponsoring city allocated share.
(22) "Sponsoring city specified portion" means the portion of a sponsoring city allocated share which may be used within one or more local infrastructure project areas, as set forth in the sponsoring city's plan for development of infrastructure under RCW 39.108.080.
(23) "Taxing district" means a city or county that levies or has levied on behalf of the taxing district, regular property taxes upon real property located within a local infrastructure project area.
(24) "Transfer of development rights" includes methods for protecting land from development by voluntarily removing the development rights from a sending area and transferring them to one or more receiving areas for the purpose of increasing development density or intensity.
(25) "Transferable development rights" means a right to develop one or more residential units in a sending area that can be sold and transferred.
[ 2011 c 318 s 201.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Definitions.


title: RCW 39.108.030

text:
An eligible county must designate all agricultural and forestland of long-term commercial significance within its jurisdiction as sending areas for conservation under the eligible county's program for transfer of development rights. The development rights from all such agricultural and forestland of long-term commercial significance within the eligible counties must be available for transfer to receiving cities under this chapter.
[ 2011 c 318 s 301.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Designation of sending areas—Inclusion of agricultural and forestland of long-term commercial significance.


title: RCW 39.108.040

text:
(1) An eligible county must calculate the number of development rights from agricultural and forestland of long-term commercial significance that are eligible for transfer to receiving areas. An eligible county must determine transferable development rights for allocation purposes in this program by:
(a) Base zoning in effect as of January 1, 2011; or
(b) An allocation other than base zoning as reflected by an eligible county's transfer of development rights program or an interlocal agreement with a receiving city in effect as of January 1, 2011.
(2) The number of transferable development rights includes the development rights from agricultural and forestlands of long-term commercial significance that have been previously issued under the eligible county's program for transfer of development rights, but that have not as yet been utilized to increase density or intensity in a development as of January 1, 2011.
(3) The number of transferable development rights does not include development rights from agricultural and forestlands of long-term commercial significance that have previously been removed or extinguished, such as through an existing conservation easement or mitigation or habitat restoration plan, except when consistent with subsection (2) of this section.
[ 2011 c 318 s 302.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Development rights from agricultural and forestland of long-term commercial significance.


title: RCW 39.108.050

text:
(1) Subject to the requirements of this section, an eligible county may designate a portion of its rural zoned lands as sending areas for conservation under the eligible county's program for transfer of development rights available for transfer to receiving cities under this chapter.
(2) An eligible county may designate rural zoned lands as available for transfer to receiving cities under this chapter only if, and at such time as, fifty percent or more of the total acreage of land classified as agricultural and forestland of long-term commercial significance in the county, as of January 1, 2011, has been protected through either a permanent conservation easement, ownership in fee by the county for land protection or conservation purposes, or ownership in fee by a nongovernmental land conservation organization.
(3) To be designated as available for transfer to receiving cities under this chapter, rural zoned lands must either:
(a) Be identified by the county as top conservation priorities because they:
(i) Provide ecological effectiveness in achieving water resource inventory area goals;
(ii) Provide contiguous habitat protection, are adjacent to already protected habitat areas, or improve ecological function;
(iii) Are of sufficient size and location in the landscape to yield strategic growth management benefits;
(iv) Provide improved access for regional recreational opportunity;
(v) Prevent forest fragmentation or are appropriate for forest management;
(vi) Provide flood protection or reduce flood risk; or
(vii) Have other attributes that meet natural resource preservation program priorities; or
(b) Be identified by the state or in regional conservation plans as highly important to the water quality of Puget Sound.
(4) The portion of rural zoned lands in an eligible county designated as sending areas for conservation under the eligible county's program for transfer of development rights available for transfer to receiving cities under this chapter must not exceed one thousand five hundred development rights.
[ 2011 c 318 s 303.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Designation of sending areas—Inclusion of rural zoned lands under certain circumstances.


title: RCW 39.108.060

text:
On or before September 1, 2011, each eligible county must report to the Puget Sound regional council the total number of transferable development rights from agricultural and forestland of long-term commercial significance and designated rural zoned lands within the eligible county that may be available for allocation to receiving cities under this chapter, as determined under RCW 39.108.040 and 39.108.050.
[ 2011 c 318 s 304.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Determination of total number of transferable development rights for agricultural and forestland of long-term commercial significance and designated rural zoned lands.


title: RCW 39.108.070

text:
(1) The Puget Sound regional council must allocate among receiving cities the total number of development rights reported by eligible counties under RCW 39.108.060. Each receiving city allocated share must be determined by the Puget Sound regional council, in consultation with eligible counties and receiving cities, based on growth targets, determined by established growth management processes, and other relevant factors as determined by the Puget Sound regional council in conjunction with the counties and receiving cities.
(2) The Puget Sound regional council must report to each receiving city its receiving city allocated share on or before March 1, 2012.
(3) The Puget Sound regional council must report each receiving city allocated share to the department of commerce on or before March 1, 2012.
(4) A receiving city may become a sponsoring city by accepting all or a portion of its receiving city allocated share, adopting a plan in accordance with RCW 39.108.080, and creating one or more local infrastructure project areas to pay or finance costs of public improvements.
(5) A receiving city may, by interlocal agreement, transfer all or a portion of its receiving city allocated share to another sponsoring city. The transferred portion of the receiving city allocated share must be included in the other sponsoring city allocated share.
[ 2011 c 318 s 305.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Allocation among local governments of transferable development rights from agricultural and forestland of long-term commercial significance and designated rural zoned lands.


title: RCW 39.108.080

text:
(1) Before adopting an ordinance or resolution creating one or more local infrastructure project areas, a sponsoring city must adopt a plan for development of public infrastructure within one or more proposed local infrastructure project areas sufficient to utilize, on an aggregate basis, a sponsoring city specified portion that is equal to or greater than twenty percent of the sponsoring city allocated share.
(2) The plan must be developed in consultation with the department of transportation and the county where the local infrastructure project area to be created is located, be consistent with any transfer of development rights policies or development regulations adopted by the sponsoring city under RCW 39.108.090, specify the public improvements to be financed using local infrastructure project financing under RCW 39.108.120, estimate the number of any transferable development rights that will be used within the local infrastructure project area or areas and estimate the cost of the public improvements.
(3) A plan adopted under this section may be revised from time to time by the sponsoring city, in consultation with the county where the local infrastructure project area or areas are located, to increase the sponsoring city specified portion.
[ 2011 c 318 s 401.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Development plan for infrastructure.


title: RCW 39.108.090

text:
(1) Before adopting an ordinance or resolution creating one or more local infrastructure project areas, a sponsoring city must:
(a) Adopt transfer of development rights policies or implement development regulations as required by subsection (2) of this section; or
(b) Make a finding that the sponsoring city will:
(i) Receive its sponsoring city specified portion within one or more local infrastructure project areas; or
(ii) Purchase its sponsoring city specified portion should the sponsoring city not be able to receive its sponsoring city specified portion within one or more local infrastructure project areas such that purchased development rights can be held in reserve by the sponsoring city and used in future development.
(2) Any adoption of transfer of development rights policies or implementation of development regulations must:
(a) Comply with chapter 36.70A RCW;
(b) Designate a receiving area or areas;
(c) Adopt incentives consistent with subsection (4) of this section for developers purchasing transferable development rights;
(d) Establish an exchange rate consistent with subsection (5) of this section; and
(e) Require that the sale of a transferable development right from agricultural or forestland of long-term commercial significance or designated rural zoned lands under RCW 39.108.050 be evidenced by its permanent removal from the sending site, such as through a conservation easement on the sending site.
(3) Any adoption of transfer of development rights policies or implementation of development regulations must not be based upon a downzone within one or more receiving areas solely to create a market for the transferable development rights.
(4) Developer incentives should be designed to:
(a) Achieve the densities or intensities reasonably likely to result from absorption of the sponsoring city specified portion identified in the plan under RCW 39.108.080;
(b) Include streamlined permitting strategies such as by-right permitting; and
(c) Include streamlined environmental review strategies such as development and substantial environmental review of a subarea plan for a receiving area that benefits projects that use transferable development rights, with adoption as appropriate under RCW 43.21C.420 of optional elements of their comprehensive plan and optional development regulations that apply within the receiving area, adoption as appropriate of a categorical exemption for infill under RCW 43.21C.229 for a receiving area, and adoption as appropriate of a planned action under *RCW 43.21C.031 for the receiving area.
(5) Each sponsoring city may determine, at its option, what developer incentives to adopt within its jurisdiction.
(6) Exchange rates should be designed to:
(a) Create a marketplace in which transferable development rights are priced at a level at which sending site landowners are willing to sell and developers are willing to buy transferable development rights;
(b) Achieve the densities or intensities anticipated by the plan adopted under RCW 39.108.080;
(c) Provide for translation to commodities in addition to residential density, such as building height, commercial floor area, parking ratio, impervious surface, parkland and open space, setbacks, and floor area ratio; and
(d) Allow for appropriate exemptions from other land use or building requirements.
(7) A sponsoring city must designate all agricultural and forestland of long-term commercial significance and designated rural zoned lands under RCW 39.108.050 within the eligible counties as available sending areas.
(8) A sponsoring city, in accordance with its existing comprehensive planning and development regulation authority under chapter 36.70A RCW, and in accordance with RCW 36.70A.080, may elect to adopt an optional comprehensive plan element and optional development regulations that apply within one or more local infrastructure project areas under this chapter.
[ 2011 c 318 s 402.]
Notes:
*Reviser's note: The requirements for a planned action were moved by 2012 1st sp.s. c 1 from RCW 43.21C.031 to RCW 43.21C.440.
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Program for transfer of development rights into receiving areas—Requirements.


title: RCW 39.108.100

text:
Only development rights from agricultural and forestland of long-term commercial significance within the eligible counties as determined under RCW 39.108.040, and rural-zoned lands with the eligible counties designated under RCW 39.108.050, may be available for transfer to receiving cities in accordance with this chapter.
[ 2011 c 318 s 403.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Development rights available for transfer to receiving cities.


title: RCW 39.108.110

text:
The eligible counties, in collaboration with sponsoring cities, must provide a report to the department of commerce by March 1st of every other year. The report must contain the following information:
(1) The number of sponsoring cities that have adopted transfer of development rights policies and regulations incorporating transfer of development rights under this chapter, and have an interlocal agreement or have adopted the department of commerce transfer of development rights interlocal terms and conditions rule;
(2) The number of transfer of development rights transactions under this chapter using different types of transfer of development rights mechanisms;
(3) The number of acres under conservation easement under this chapter, broken out by agricultural land, forestland, and rural lands;
(4) The number of transferable development rights transferred from sending areas under this chapter;
(5) The number of transferable development rights transferred from a county into a sponsoring city under this chapter;
(6) Sponsoring city development under this chapter using transferable development rights, including:
(a) The number of total new residential units;
(b) The number of residential units created in receiving areas using transferable development rights transferred from sending areas;
(c) The amount of additional commercial floor area;
(d) The amount of additional building height;
(e) The number of required structured parking spaces reduced, if transferable development rights are specifically converted into reduced structured parking space requirements;
(f) The number of additional parking spaces allowed, if transferable development rights are specifically converted into additional receiving area parking spaces; and
(g) The amount of additional impervious surface allowed, if transferable development rights are specifically converted into receiving area impervious surfaces;
(7) The amount of the local property tax allocation revenues, if any, received in the preceding calendar year by the sponsoring city;
(8) A list of public improvements paid or financed with local infrastructure project financing;
(9) The names of any businesses locating within local infrastructure project areas as a result of the public improvements undertaken by the sponsoring local government and paid or financed in whole or in part with local infrastructure project financing;
(10) The total number of permanent jobs created in the local infrastructure project area as a result of the public improvements undertaken by the sponsoring local government and paid or financed in whole or in part with local infrastructure project financing;
(11) The average wages and benefits received by all employees of businesses locating within the local infrastructure project area as a result of the public improvements undertaken by the sponsoring local government and paid or financed in whole or in part with local infrastructure project financing; and
(12) The date when any indebtedness issued for local infrastructure project financing is expected to be retired.
[ 2011 c 318 s 501.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Quantitative and qualitative performance measures—Reporting.


title: RCW 39.108.120

text:
(1) Before adopting an ordinance or resolution creating one or more local infrastructure project areas, a sponsoring city must:
(a) Provide notice to the county assessor, county treasurer, and county within the proposed local infrastructure project area of the sponsoring city's intent to create one or more local infrastructure project areas. This notice must be provided at least one hundred eighty days in advance of the public hearing as required by (b) of this subsection;
(b) Hold a public hearing on the proposed formation of the local infrastructure project area.
(2) A sponsoring city may create one or more local infrastructure project areas by ordinance or resolution that:
(a) Describes the proposed public improvements, identified in the plan under RCW 39.108.080, to be financed in each local infrastructure project area;
(b) Describes the boundaries of each local infrastructure project area, subject to the limitations in RCW 39.108.130; and
(c) Provides the date when the use of local property tax allocation revenues will commence and a list of the participating taxing districts.
(3) The sponsoring city must deliver a certified copy of the adopted ordinance or resolution to the county assessor, county treasurer, and each other participating taxing district within which the local infrastructure project area is located.
[ 2011 c 318 s 601.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Creating a local infrastructure project area.


title: RCW 39.108.130

text:
The designation of any local infrastructure project area is subject to the following limitations:
(1) A local infrastructure project area is limited to contiguous tracts, lots, pieces, or parcels of land without the creation of islands of territory not included in the local infrastructure project area;
(2) The public improvements to be financed with local infrastructure project financing must be located in the local infrastructure project area and must, in the determination of the sponsoring city, further the intent of this chapter;
(3) Local infrastructure project areas created by a sponsoring city may not comprise an area containing more than twenty-five percent of the total assessed value of taxable property within the sponsoring city at the time the local infrastructure project areas are created;
(4) The boundaries of each local infrastructure project area may not overlap and may not be changed during the time period that local infrastructure project financing is used within the local infrastructure project area, as provided under this chapter; and
(5) All local infrastructure project areas created by the sponsoring city must comprise, in the aggregate, an area that the sponsoring city determines (a) is sufficient to use the sponsoring city specified portion, unless the sponsoring city satisfies its sponsoring city allocated share under RCW 39.108.090(1)(b)(ii), and (b) is no larger than reasonably necessary to use the sponsoring city specified portion in projected future developments.
[ 2011 c 318 s 602.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Limitations on local infrastructure project areas.


title: RCW 39.108.140

text:
Participating taxing districts must allow the use of all of their local property tax allocation revenues for local infrastructure project financing.
[ 2011 c 318 s 603.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Participating taxing districts.


title: RCW 39.108.150

text:
(1) Commencing in the second calendar year following the creation of a local infrastructure project area by a sponsoring city, the county treasurer must distribute receipts from regular taxes imposed on real property located in the local infrastructure project area as follows:
(a) Each participating taxing district and the sponsoring city must receive that portion of its regular property taxes produced by the rate of tax levied by or for the taxing district on the property tax allocation revenue base value for that local infrastructure project area in the taxing district; and
(b) The sponsoring city must receive an additional portion of the regular property taxes levied by it and by or for each participating taxing district upon the property tax allocation revenue value within the local infrastructure project area. However, if there is no property tax allocation revenue value, the sponsoring city may not receive any additional regular property taxes under this subsection (1)(b). The sponsoring city may agree to receive less than the full amount of the additional portion of regular property taxes under this subsection (1)(b) as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts must be allocated to the participating taxing districts that levied regular property taxes, or have regular property taxes levied for them, in the local infrastructure project area for collection that year in proportion to their regular tax levy rates for collection that year. The sponsoring city may request that the treasurer transfer this additional portion of the property taxes to its designated agent. The portion of the tax receipts distributed to the sponsoring local government or its agent under this subsection (1)(b) may only be expended to pay or finance public improvement costs within the local infrastructure project area.
(2) The county assessor must determine the property tax allocation revenue value and property tax allocation revenue base value. This section does not authorize revaluations of real property by the assessor for property taxation that are not made in accordance with the assessor's revaluation plan under chapter 84.41 RCW or under other authorized revaluation procedures.
(3)(a) The distribution of local property tax allocation revenue to the sponsoring city must cease on the date that is the earlier of:
(i) The date when local property tax allocation revenues are no longer used or obligated to pay the costs of the public improvements; or
(ii) The final termination date as determined under (b) of this subsection.
(b) The final termination date is determined as follows:
(i) Except as provided otherwise in this subsection (3)(b), if the sponsoring city certifies to the county treasurer that the local property tax threshold level 1 is met, the final termination date is ten years after the date of the first distribution of local property tax allocation revenues under subsection (1) of this section;
(ii) If the sponsoring city certifies to the county treasurer that the local property tax threshold level 2 is met at least six months prior to the final termination date under (b)(i) of this subsection (3), the final termination date is fifteen years after the date of the first distribution of local property tax allocation revenues under subsection (1) of this section;
(iii) If the sponsoring city certifies to the county treasurer that the local property tax threshold level 3 is met at least six months prior to the final termination date under (b)(ii) of this subsection (3), the final termination date is twenty years after the date of the first distribution of local property tax allocation revenues under subsection (1) of this section;
(iv) If the sponsoring city certifies to the county treasurer that the local property tax threshold level 4 is met at least six months prior to the final termination date under (b)(iii) of this subsection (3), the final termination date is twenty-five years after the date of the first distribution of local property tax allocation revenues under subsection (1) of this section.
(4) For purposes of this section:
(a) The "local property tax threshold level 1" is met when the sponsoring city has either:
(i) Issued building permits for development within the local infrastructure project area that, on an aggregate basis, uses at least twenty-five percent of the sponsoring city specified portion; or
(ii) Acquired transferable development rights equal to at least twenty-five percent of the sponsoring city specified portion for use in the local infrastructure project area or for extinguishment.
(b) The "local property tax threshold level 2" is met when the sponsoring city has either:
(i) Issued building permits for development within the local infrastructure project area that, on an aggregate basis, uses at least fifty percent of the sponsoring city specified portion; or
(ii) Acquired transferable development rights equal to at least fifty percent of the sponsoring city specified portion for use in the local infrastructure project area or for extinguishment.
(c) The "local property tax threshold level 3" is met when the sponsoring city has either:
(i) Issued building permits for development within the local infrastructure project area that, on an aggregate basis, uses at least seventy-five percent of the sponsoring city specified portion; or
(ii) Acquired transferable development rights equal to at least seventy-five percent of the sponsoring city specified portion for use in the local infrastructure project area or for extinguishment.
(d) The "local property tax threshold level 4" is met when the sponsoring city has either:
(i) Issued building permits for development within the local infrastructure project area that, on an aggregate basis, uses at least one hundred percent of the sponsoring city specified portion; or
(ii) Acquired transferable development rights equal to at least one hundred percent of the sponsoring city specified portion for use in the local infrastructure project area or for extinguishment.
(5) Any excess local property tax allocation revenues, and earnings on the revenues, remaining at the time the distribution of local property tax allocation revenue terminates must be returned to the county treasurer and distributed to the participating taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the local infrastructure project area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
(6) The allocation to local infrastructure project financing of that portion of the sponsoring city's and each participating taxing district's regular property taxes levied upon the property tax allocation revenue value within that local infrastructure project area is declared to be a public purpose of and benefit to the sponsoring city and each participating taxing district.
(7) The distribution of local property tax allocation revenues under this section may not affect or be deemed to affect the rate of taxes levied by or within any sponsoring local government and participating taxing district or the consistency of any such levies with the uniformity requirement of Article VII, section 1 of the state Constitution.
[ 2011 c 318 s 701.]
Notes:
Rules—2011 c 318: See note following RCW 39.108.005.

catchline: Allocation of property tax revenues.


title: RCW 39.110.005

text:
(1) The legislature finds that the issuance of taxable nonrecourse revenue bonds by the Washington economic development finance authority has provided a number of Washington firms with the financing necessary to grow and create jobs. The legislature further finds that municipal authority to issue taxable nonrecourse revenue bonds does not exist and that authorizing the local issuance of taxable bonds for economic development purposes will increase local capacity to strengthen businesses and create jobs.
(2) It is the purpose of this chapter to grant new authority for cities, counties, and port districts that created public corporations under chapter 39.84 RCW prior to 2012, in order to build on the expertise with tax-exempt nonrecourse revenue bond financing developed by these municipalities. Therefore, these municipalities are permitted to create local economic development finance authorities to act as a financial conduit that, without using state or local government funds or lending the credit of the state or local governments, can issue taxable and nontaxable nonrecourse revenue bonds, and participate in federal, state, and local economic development programs to help facilitate access to needed capital by Washington businesses. It is also a primary purpose of this chapter to encourage the development of local innovative approaches to the problem of unmet capital needs. This chapter must be construed liberally to carry out its purposes and objectives.
[ 2012 c 193 s 1.]

catchline: Findings—Purpose.


title: RCW 39.110.010

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Authority" means a local economic development finance authority created under this chapter. An authority is a public body within the meaning of RCW 39.53.010.
(2) "Board of directors" means the board of directors of an authority.
(3) "Bonds" means any bonds, notes, debentures, interim certificates, conditional sales or lease financing agreements, lines of credit, forward purchase agreements, investment agreements, and other banking or financial arrangements, guaranties, or other obligations issued by or entered into by the authority. Such bonds may be issued on either a tax-exempt or taxable basis.
(4) "Borrower" means one or more public or private persons or entities acting as lessee, purchaser, mortgagor, or borrower who has obtained or is seeking to obtain financing either from an authority or from an eligible banking organization that has obtained or is seeking to obtain funds from the authority to finance a project. A borrower may include a party who transfers the right of use and occupancy to another party by lease, sublease, or otherwise, or a party who is seeking or has obtained a financial guaranty from the authority.
(5) "Economic development activities" means activities related to: Manufacturing, processing, the commercialization of research, production, assembly, tooling, warehousing, exporting products made in Washington or services provided by Washington firms, airports, docks and wharves, mass commuting facilities, high-speed intercity rail facilities, public broadcasting, pollution control, solid waste disposal, federally qualified hazardous waste facilities, energy generating, conservation, or transmission facilities, sports facilities, industrial parks, and activities conducted within a federally designated enterprise or empowerment zone or geographic area of similar nature.
(6) "Eligible banking organization" means any organization subject to regulation by the director of the department of financial institutions, any national bank, federal savings and loan association, and federal credit union located within this state.
(7) "Eligible person" means an individual, partnership, corporation, or joint venture carrying on business, or proposing to carry on business, within the state and seeking financial assistance under chapter 193, Laws of 2012.
(8) "Financial assistance" means the infusion of capital to persons for use in the development and exploitation of specific inventions and products.
(9) "Financing agreements" means, and includes without limitation, a contractual arrangement with an eligible person whereby an authority obtains rights from or in an invention or product or proceeds from an invention or product in exchange for the granting of financial and other assistance to the person.
(10) "Financing document" means an instrument executed by an authority and one or more persons or entities pertaining to the issuance of or security for bonds, or the application of the proceeds of bonds or other funds of, or payable to, the authority. A financing document may include, but need not be limited to, a lease, installment sale agreement, conditional sale agreement, mortgage, loan agreement, trust agreement or indenture, security agreement, letter or line of credit, reimbursement agreement, insurance policy, guaranty agreement, or currency or interest rate swap agreement. A financing document also may be an agreement between the authority and an eligible banking organization which has agreed to make a loan to a borrower.
(11) "Investment grade credit rating" means a rating of at least BBB- by Standard & Poor's, Baa3 by Moody's investors service, or BBB- by Fitch.
(12) "Municipality" means a city, town, county, or port district of this state.
(13) "Ordinance" means any appropriate method of taking official action or adopting a legislative decision by any municipality, whether known as a resolution, ordinance, or otherwise.
(14) "Plan" means the general plan of economic development finance objectives developed and adopted by the authority, and updated from time to time, as required under RCW 43.163.090.
(15) "Product" means a product, device, technique, or process that is or may be exploitable commercially. "Product" does not refer to pure research, but does apply to products, devices, techniques, or processes that have advanced beyond the theoretic stage and are readily capable of being, or have been, reduced to practice.
(16) "Project costs" means costs of:
(a) Acquisition, lease, construction, reconstruction, remodeling, refurbishing, rehabilitation, extension, and enlargement of land, rights to land, buildings, structures, docks, wharves, fixtures, machinery, equipment, excavations, paving, landscaping, utilities, approaches, roadways and parking, handling and storage areas, and similar ancillary facilities, and any other real or personal property included in an economic development activity;
(b) Architectural, engineering, consulting, accounting, and legal costs related directly to the development, financing, acquisition, lease, construction, reconstruction, remodeling, refurbishing, rehabilitation, extension, and enlargement of an activity included under subsection (5) of this section, including costs of studies assessing the feasibility of an economic development activity;
(c) Finance costs, including the costs of credit enhancement and discounts, if any, the costs of issuing revenue bonds, and costs incurred in carrying out any financing document;
(d) Start-up costs, working capital, capitalized research and development costs, capitalized interest during construction and during the eighteen months after estimated completion of construction, and capitalized debt service or repair and replacement or other appropriate reserves;
(e) The refunding of any outstanding obligations incurred for any of the costs outlined in this subsection; and
(f) Other costs incidental to any of the costs listed in this subsection.
[ 2012 c 193 s 2.]


title: RCW 39.110.020

text:
(1) A municipality that formed a public corporation under chapter 39.84 RCW prior to January 1, 2012, may, if that public corporation is still in existence, enact an ordinance creating an economic development finance authority for the purposes authorized in this chapter. The ordinance creating the authority must approve a charter for the authority containing such provisions as are authorized by and not in conflict with this chapter. Any charter issued under this chapter must contain in substance the limitations set forth in RCW 39.110.030. In any suit, action, or proceeding involving the validity or enforcement of or relating to any contract of the authority, the authority is conclusively presumed to be established and authorized to transact business and exercise its powers under this chapter upon proof of the adoption of the ordinance creating the authority by the governing body. A copy of the ordinance duly certified by the clerk of the governing body of the municipality is admissible in evidence in any suit, action, or proceeding.
(2) An authority created by a municipality pursuant to this chapter may be dissolved by the municipality if: (a) The authority has no property to administer, other than funds or property, if any, to be paid or transferred to the municipality by which it was established; and (b) all the authority's outstanding obligations have been satisfied. Such a dissolution must be accomplished by the governing body of the municipality adopting an ordinance providing for the dissolution.
(3) The creating municipality may, at its discretion and at any time, alter or change the structure, organizational programs, or activities of an authority, including termination of the authority if contracts entered into by the authority are not impaired. Any net earnings of an authority, beyond those necessary for retirement of indebtedness incurred by it, do not inure to the benefit of any person other than the creating municipality. Upon dissolution of an authority, title to all property owned by the authority vests in the municipality.
(4) The ordinance creating an authority must include provisions establishing a board of directors to govern the affairs of the authority, what constitutes a quorum of the board of directors, and how the authority must conduct its affairs.
(5) For a period of ten years after any financing through an authority, it is illegal for a director, officer, agent, or employee of an authority to have, directly or indirectly, any financial interest in any property to be included in or any contract for property, services, or materials to be furnished or used in connection with any economic development activity financed through the authority. Violation of any provision of this section is a gross misdemeanor.
(6) The finances of any authority are subject to examination by the state auditor's office pursuant to RCW 43.09.260.
[ 2012 c 193 s 3.]

catchline: Economic development finance authority—Creation—Dissolution—Requirements—Penalty.


title: RCW 39.110.030

text:
(1) No municipality may give or lend any money or property in aid of an authority. The municipality that creates an authority must annually review any financial statements of the authority and at all times must have access to the books and records of the authority. No authority may issue revenue obligations under this chapter except upon the approval of both the municipality under the auspices of which it was created and the county, city, or town within whose planning jurisdiction the economic development activity to be financed lies. Upon receiving approval from these jurisdictions, an authority must, before bonds may be issued, obtain one of the following:
(a) A letter of credit supporting the creditworthiness of the borrower from a bank with an investment grade credit rating;
(b) Confirmation that the borrower has arranged for private placement of the bonds with an institutional investor; or
(c) Confirmation that the borrower has an investment grade credit rating of their own.
(2) An authority established under the terms of this chapter constitutes an authority and an instrumentality (within the meaning of those terms in the regulations of the United States treasury and the rulings of the internal revenue service prescribed pursuant to 26 U.S.C. Sec. 103 of the federal internal revenue code of 1986, as amended) may act on behalf of the municipality under whose auspices it is created for the specific public purposes authorized by this chapter. The authority is not a municipal corporation within the meaning of the state Constitution and the laws of the state, or a political subdivision within the meaning of the state Constitution and the laws of the state, including without limitation, Article VIII, section 7 of the Washington state Constitution. A municipality may not delegate to an authority any of the municipality's attributes of sovereignty including, without limitation, the power to tax, the power of eminent domain, and the police power.
[ 2012 c 193 s 4.]

catchline: Lending to authority—Issuance of revenue obligations—Delegation of authority.


title: RCW 39.110.040

text:
(1) An authority established pursuant to this chapter may develop and conduct a program or programs to provide nonrecourse revenue bond financing for the project costs for economic development activities.
(2) An authority is authorized to participate fully in federal and other governmental economic development finance programs and to take such actions as are necessary and consistent with this chapter to secure the benefits of those programs and to meet their requirements.
(3) An authority may develop and conduct a program that will stimulate and encourage the development of new products within Washington state by the infusion of financial aid for invention and innovation in situations in which the financial aid would not otherwise be reasonably available from commercial sources. The authority is authorized to provide nonrecourse revenue bond financing for this program.
(a) For the purposes of this program, the authority has the following powers and duties:
(i) To enter into financing agreements with eligible persons doing business in Washington state, upon terms and on conditions consistent with the purposes of this chapter, for the advancement of financial and other assistance to the persons for the development of specific products, procedures, and techniques, to be developed and produced in this state, and to condition the agreements upon contractual assurances that the benefits of increasing or maintaining employment and tax revenues remain in this state and accrue to it;
(ii) Own, possess, and take license in patents, copyrights, and proprietary processes and negotiate and enter into contracts and establish charges for the use of the patents, copyrights, and proprietary processes when the patents and licenses for products result from assistance provided by the authority;
(iii) Negotiate royalty payments to the authority on patents and licenses for products arising as a result of assistance provided by the authority;
(iv) Negotiate and enter into other types of contracts with eligible persons that assure that public benefits will result from the provision of services by the authority; provided that the contracts are consistent with the state Constitution;
(v) Encourage and provide technical assistance to eligible persons in the process of developing new products;
(vi) Refer eligible persons to researchers or laboratories for the purpose of testing and evaluating new products, processes, or innovations; and
(vii) To the extent permitted under its contract with eligible persons, to consent to a termination, modification, forgiveness, or other change of a term of a contractual right, payment, royalty, contract, or agreement of any kind to which the authority is a party.
(b) Eligible persons seeking financial and other assistance under this program must forward an application, together with an application fee prescribed by rule, to the authority. An investigation and report concerning the advisability of approving an application for assistance must be completed by the staff of the authority. The investigation and report may include, but is not limited to, facts about the company under consideration as its history, wage standards, job opportunities, stability of employment, past and present financial condition and structure, pro forma income statements, present and future markets and prospects, integrity of management as well as the feasibility of the proposed product and invention to be granted financial assistance, including the state of development of the product as well as the likelihood of its commercial feasibility. After receipt and consideration of the report set out in this subsection and after other action as is deemed appropriate, the application must be approved or denied by the authority. The applicant must be promptly notified of action by the authority.
(4) An authority may receive no appropriation of state funds. The department of commerce and the Washington economic development finance authority may assist a local economic development finance authority in organizing itself and in designing programs.
(5) An authority may use any funds legally available to it for any purpose specifically authorized by this chapter, or for otherwise improving economic development by assisting businesses and farm enterprises that do not have access to capital at terms and rates comparable to large corporations due to the location of the business, the size of the business, the lack of financial expertise, or other appropriate reasons.
(6) An authority must coordinate its activities with those, including bond issuance activities, of the creating municipality and the public corporation created under chapter 39.84 RCW by the creating municipality.
[ 2012 c 193 s 5.]

catchline: Powers and duties of authority—Economic development activities.


title: RCW 39.110.045

text:
In addition to carrying out the economic development finance activities and programs specifically authorized in this chapter, an authority may:
(1) Maintain an office or offices;
(2) Sue and be sued in its own name, and plead and be impleaded;
(3) Engage consultants, agents, attorneys, and advisers, contract with federal, state, and local governmental entities for services, and hire such employees, agents, and other personnel as the authority deems necessary, useful, or convenient to accomplish its purposes;
(4) Make and execute all manner of contracts, agreements and instruments, and financing documents with public and private parties as the authority deems necessary, useful, or convenient to accomplish its purposes;
(5) Acquire and hold real or personal property, or any interest therein, in the name of the authority, and to sell, assign, lease, encumber, mortgage, or otherwise dispose of the same in such manner as the authority deems necessary, useful, or convenient to accomplish its purposes;
(6) Open and maintain accounts in qualified public depositaries and otherwise provide for the investment of any funds not required for immediate disbursement, and provide for the selection of investments;
(7) Appear in its own behalf before boards, commissions, departments, or agencies of federal, state, or local government;
(8) Procure such insurance in such amounts and from such insurers as the authority deems desirable including, but not limited to, insurance against any loss or damage to its property or other assets, public liability insurance for injuries to persons or property, and directors and officers liability insurance;
(9) Apply for and accept subventions, grants, loans, advances, and contributions from any source of money, property, labor, or other things of value, to be held, used, and applied as the authority deems necessary, useful, or convenient to accomplish its purposes;
(10) Establish guidelines for the participation by eligible banking organizations in programs conducted by the authority under this chapter;
(11) Act as an agent, by agreement, for federal, state, or local governmental entities to carry out the programs authorized in this chapter;
(12) Establish, revise, and collect such fees and charges as the authority deems necessary, useful, or convenient to accomplish its purposes;
(13) Make such expenditures as are appropriate for paying the administrative costs and expenses of the authority in carrying out the provisions of this chapter;
(14) Establish such reserves and special funds, and controls on deposits to and disbursements from them, as the authority deems necessary, useful, or convenient to accomplish its purposes;
(15) Prepare, publish, and distribute, with or without charge, such studies, reports, bulletins, and other material as the authority deems necessary, useful, or convenient to accomplish its purposes;
(16) Delegate any of its powers and duties if consistent with the purposes of this chapter;
(17) Adopt rules concerning its exercise of the powers authorized by this chapter; and
(18) Exercise any other power the authority deems necessary, useful, or convenient to accomplish its purposes and exercise the powers expressly granted in this chapter.
[ 2012 c 193 s 8.]

catchline: Powers of authority—Generally.


title: RCW 39.110.050

text:
(1) An authority established pursuant to this chapter must adopt general operating procedures for the authority. The authority must also adopt operating procedures for individual programs as they are developed for obtaining funds and for providing funds to borrowers. These operating procedures must be adopted by resolution prior to the authority operating the applicable programs.
(2) The operating procedures must include, but are not limited to:
(a) Appropriate standards for securing loans and other financing the authority provides to borrowers, such as guarantees or collateral; and
(b) Strict standards for providing financing to borrowers, such as:
(i) The borrower is a responsible party with a high probability of being able to repay the financing provided by the authority;
(ii) The financing is reasonably expected to benefit the creating municipality by enabling a borrower to increase or maintain jobs or capital in the municipality;
(iii) The borrowers with the greatest needs or that provide the most public benefit are given higher priority by the authority; and
(iv) The financing is consistent with any plan adopted by the authority under the provisions of RCW 39.110.060.
[ 2012 c 193 s 6.]

catchline: Operating procedures.


title: RCW 39.110.060

text:
(1) Any authority established pursuant to this chapter must adopt a general plan of economic development finance objectives to be implemented by the authority during the period of the plan. The authority may exercise the powers authorized under this chapter prior to the adoption of the initial plan. In developing the plan, the authority must consider and set objectives for:
(a) Employment generation associated with the authority's programs;
(b) The application of funds to economic sectors and economic development activity evidencing need for improved access to capital markets and funding resources;
(c) Eligibility criteria for participants in authority programs;
(d) The use of funds and resources available from or through federal, state, local, and private sources and programs;
(e) New programs which serve a targeted need for financing assistance within the purposes of this chapter; and
(f) Opportunities to improve capital access as evidenced by programs existent in other localities or as they are made possible by results of private capital market circumstances.
(2) Upon adoption of the general plan the authority must conduct its programs in observance of the objectives established in the plan. The authority may periodically update the plan as determined necessary by the authority.
[ 2012 c 193 s 7.]

catchline: Plan of economic development.


title: RCW 39.110.070

text:
Notwithstanding any other provision of this chapter, an authority may not:
(1) Give any municipal or state money or property or loan any municipal or state money or credit to or in aid of any individual, association, company, or corporation, or become directly or indirectly the owner of any stock in or bonds of any association, company, or corporation;
(2) Issue bills of credit or accept deposits of money for time or demand deposit, administer trusts, engage in any form or manner in, or in the conduct of, any private or commercial banking business, or act as a savings bank or savings and loan association other than as provided in this chapter;
(3) Be or constitute a bank or trust company within the jurisdiction or under the control of the director of financial institutions, the comptroller of the currency of the United States of America, or the treasury department thereof;
(4) Be or constitute a bank, broker, or dealer in securities within the meaning of, or subject to the provisions of, any securities, securities exchange, or securities dealers' law of the United States of America or the state;
(5) Engage in the financing of housing as provided for in chapter 43.180 RCW;
(6) Engage in the financing of health care facilities as provided for in chapter 70.37 RCW;
(7) Engage in financing higher education facilities as provided for in chapter 28B.07 RCW; or
(8) Exercise any of the powers authorized in this chapter or issue any revenue bonds with respect to any economic development activity unless the economic development activity is located wholly within the boundaries of the municipality under whose auspices the authority is created or unless the economic development activity comprises energy facilities or solid waste disposal facilities which provide energy for or dispose of solid waste from the municipality or the residents thereof.
[ 2012 c 193 s 9.]

catchline: Prohibited practices.


title: RCW 39.110.080

text:
(1) An authority may issue its nonrecourse revenue bonds in order to obtain the funds to carry out the programs authorized in this chapter. The bonds must be special obligations of the authority, payable solely out of the special fund or funds established by the authority for their repayment.
(2) Any bonds issued under this chapter may be secured by a financing document between the authority and the purchasers or owners of such bonds or between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state.
(a) The financing document may pledge or assign, in whole or in part, the revenues and funds held or to be received by the authority, any present or future contract or other rights to receive the same, and the proceeds thereof.
(b) The financing document may contain such provisions for protecting and enforcing the rights, security, and remedies of bond owners as may be reasonable and proper including, without limiting the generality of the foregoing, provisions defining defaults and providing for remedies in the event of default which may include the acceleration of maturities, restrictions on the individual rights of action by bond owners, and covenants setting forth duties of and limitations on the authority in conduct of its programs and the management of its property.
(c) In addition to other security provided in this chapter or otherwise by law, bonds issued by the authority may be secured, in whole or in part, by financial guaranties, by insurance or by letters of credit issued to the authority or a trustee or any other person, by any bank, trust company, insurance or surety company, or other financial institution, within or without the state. The authority may pledge or assign, in whole or in part, the revenues and funds held or to be received by the authority, any present or future contract or other rights to receive the same, and the proceeds thereof, as security for such guaranties or insurance or for the reimbursement by the authority to any issuer of such letter of credit of any payments made under such letter of credit.
(3) Without limiting the powers of the authority contained in this chapter, in connection with each issue of its obligation bonds, the authority must create and establish one or more special funds including, but not limited to, debt service and sinking funds, reserve funds, project funds, and such other special funds as the authority deems necessary, useful, or convenient.
(4) Any security interest created against the unexpended bond proceeds and against the special funds created by the authority is immediately valid and binding against the money and any securities in which the money may be invested without authority or trustee possession. The security interest must be prior to any party having any competing claim against the moneys or securities, without filing or recording under Article 9A of the uniform commercial code, Title 62A RCW, and regardless of whether the party has notice of the security interest.
(5) The bonds may be issued as serial bonds, term bonds, or any other type of bond instrument consistent with the provisions of this chapter. The bonds must bear such date or dates; mature at such time or times; bear interest at such rate or rates, either fixed or variable; be payable at such time or times; be in such denominations; be in such form; bear such privileges of transferability, exchangeability, and interchangeability; be subject to such terms of redemption; and be sold at public or private sale, in such manner, at such time or times, and at such price or prices as the authority determines. The bonds must be executed by the manual or facsimile signatures of the authority's chair and either its secretary or executive director, and may be authenticated by the trustee (if the authority determines to use a trustee) or any registrar which may be designated for the bonds by the authority.
(6) Bonds may be issued by the authority to refund other outstanding authority bonds, at or prior to maturity of, and to pay any redemption premium on, the outstanding bonds. Bonds issued for refunding purposes may be combined with bonds issued for the financing or refinancing of new projects. Pending the application of the proceeds of the refunding bonds to the redemption of the bonds to be redeemed, the authority may enter into an agreement or agreements with a corporate trustee regarding the interim investment of the proceeds and the application of the proceeds and the earnings on the proceeds to the payment of the principal of and interest on, and the redemption of, the bonds to be redeemed.
(7) The bonds of the authority may be negotiable instruments under Title 62A RCW.
(8) Neither the board of directors of the authority, nor its employees or agents, nor any person executing the bonds is personally liable on the bonds or subject to any personal liability or accountability by reason of the issuance of the bonds.
(9) The authority may purchase its bonds with any of its funds available for the purchase. The authority may hold, pledge, cancel, or resell the bonds subject to and in accordance with agreements with bond owners.
(10) The state finance committee must be notified in advance of the issuance of bonds by the authority in order to promote the orderly offering of obligations in the financial markets.
[ 2012 c 193 s 10.]

catchline: Nonrecourse revenue bonds.


title: RCW 39.110.090

text:
(1) Bonds issued by an authority established under this chapter are not considered to constitute a debt of the state, of the municipality, or of any other municipal corporation, quasi-municipal corporation, subdivision, or agency of this state or to pledge any or all of the faith and credit of any of these entities. The revenue bonds are payable solely from both the revenues derived as a result of the economic development activities funded by the revenue bonds including, without limitation, amounts received under the terms of any financing document or by reason of any additional security furnished by beneficiaries of the economic development activity in connection with the financing thereof, and money and other property received from private sources. The issuance of bonds under this chapter do not obligate, directly, indirectly, or contingently, the state or any political subdivision of the state to levy any taxes or appropriate or expend any funds for the payment of the principal or the interest on the bonds. Each revenue bond must contain on its face, and any disclosure document prepared in conjunction with the offer and sale of bonds must include, statements to the effect that:
(a) Neither the state, the municipality, or any other municipal corporation, quasi-municipal corporation, subdivision, or agency of the state is obligated to pay the principal or the interest thereon;
(b) No tax funds or governmental revenue may be used to pay the principal or interest thereon; and
(c) Neither any or all of the faith and credit nor the taxing power of the state, the municipality, or any other municipal corporation, quasi-municipal corporation, subdivision, or agency thereof is pledged to the payment of the principal of or the interest on the revenue bond.
(2) Neither the proceeds of bonds issued under this chapter nor any money used or to be used to pay the principal of, premium, if any, or interest on the bonds constitute public money or property. All of such money must be kept segregated and set apart from funds of the state and any political subdivision of the state and are not subject to appropriation or allotment by the state or subject to the provisions of chapter 43.88 RCW.
(3) Contracts entered into by an authority must be entered into in the name of the authority and not in the name of the state or any political subdivision of the state. The obligations of the authority under such contracts are obligations only of the authority and are not, in any way, obligations of the municipality creating the authority or the state. An authority may incur only those financial obligations which will be paid from revenues received pursuant to financing documents, from fees or charges paid by beneficiaries of the economic development activities funded by the revenue bonds, or from the proceeds of revenue bonds.
[ 2012 c 193 s 11.]

catchline: Bonds—Payment source—Disclosures—Proceeds not public money—Contracting.


title: RCW 39.110.100

text:
(1)(a) An authority may enter into financing documents with borrowers regarding bonds issued by the authority that may provide for the payment by each borrower of amounts sufficient, together with other revenues available to the authority, if any, to:
(i) Pay the borrower's share of the fees established by the authority;
(ii) Pay the principal of, premium, if any, and interest on outstanding bonds of the authority issued in respect of such borrower as the same become due and payable; and
(iii) Create and maintain reserves required or provided for by the authority in connection with the issuance of such bonds.
(b) The payments are not subject to supervision or regulation by any department, committee, board, body, bureau, or agency of the state.
(2) All money received by or on behalf of the authority with respect to this issuance of its bonds must be trust funds to be held and applied solely as provided in this chapter. The authority, in lieu of receiving and applying the moneys itself, may enter into trust agreement or indenture with one or more banks or trust companies having the power and authority to conduct trust business in the state to:
(a) Perform all or any part of the obligations of the authority with respect to:
(i) Bonds issued by it;
(ii) The receipt, investment, and application of the proceeds of the bonds and money paid by a participant or available from other sources for the payment of the bonds;
(iii) The enforcement of the obligations of a borrower in connection with the financing or refinancing of any project; and
(iv) Other matters relating to the exercise of the authority's powers under this chapter;
(b) Receive, hold, preserve, and enforce any security interest or evidence of security interest granted by a participant for purposes of securing the payment of the bonds; and
(c) Act on behalf of the authority or the owners of bonds of the authority for purposes of assuring or enforcing the payment of the bonds, when due.
[ 2012 c 193 s 12.]

catchline: Financing documents with borrowers—Trust—Trust agreement.


title: RCW 39.110.110

text:
(1) Any owner of bonds issued under this chapter by any authority, and the trustee under any trust agreement or indenture, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect and enforce any of their respective rights, and may become the purchaser at any foreclosure sale if the person is the highest bidder, except to the extent the rights given are restricted by the authority in any bond resolution or trust agreement or indenture authorizing the issuance of the bonds.
(2) The bonds of an authority are securities in which all public officers and bodies of this state and all counties, cities, municipal corporations, and political subdivisions, all banks, eligible banking organizations, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, insurance companies and associations, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys, or other funds belonging to them or within their control. However, a municipality under the auspices of which an authority was created and the county, city, or town within whose planning jurisdiction the economic development activity to be financed lies, may not invest in bonds issued by the authority.
[ 2012 c 193 s 13.]

catchline: Protection and enforcement of rights of bond owners and trustees—Bonds as securities.


title: RCW 39.110.120

text:
This chapter provides a complete, additional, and alternative method for accomplishing the purposes of this chapter and must be regarded as supplemental and additional to powers conferred by other laws. The issuance of bonds and refunding bonds under this chapter need not comply with the requirements of any other law applicable to the issuance of bonds.
[ 2012 c 193 s 14.]

catchline: Chapter supplemental and additional.


title: RCW 39.110.900

text:
Insofar as the provisions of this chapter are inconsistent with the provisions of any general or special law, or parts thereof, the provisions of this chapter are controlling.
[ 2012 c 193 s 15.]

catchline: Construction.


title: RCW 39.112.010

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Assessed value" means the valuation of taxable real property as placed on the last completed assessment roll.
(2) "Bond" means a bond, note, or other evidence of indebtedness, including but not limited to a lease-purchase agreement or an executory conditional sales contract.
(3) "City" means a city with a population greater than sixty thousand that is located east of the Cascade mountains and abutted by the Columbia river to the south and that is the sponsor of a state land improvement financing area.
(4) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.
(5) "Ordinance" means any appropriate method of taking legislative action by a local government.
(6) "Property tax revenue" means tax revenue derived from the receipt of all regular property taxes levied on the state land improvement financing area and used for state land improvement financing.
(7) "Public improvement costs" means the costs of:
(a) Design, planning, acquisition, including land acquisition, site preparation, including land clearing, construction, reconstruction, rehabilitation, improvement, and installation of public improvements;
(b) Demolishing, relocating, maintaining, and operating property pending construction of public improvements;
(c) Relocating utilities as a result of public improvements;
(d) Financing public improvements, including interest during construction, legal and other professional services, taxes, insurance, principal and interest costs on general indebtedness issued to finance public improvements, and any necessary reserves for general indebtedness; and
(e) Administrative expenses and feasibility studies reasonably necessary and related to these costs, including related costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of state land improvement financing to fund the costs of the public improvements.
(8) "Public improvements" means:
(a) Infrastructure improvements within the state land improvement financing area including:
(i) Street, road, bridge, and rail construction and maintenance;
(ii) Water and sewer system construction and improvements;
(iii) Sidewalks, streetlights, landscaping, and streetscaping;
(iv) Parking facilities;
(v) Park facilities, recreational areas, and environmental remediation;
(vi) Stormwater and drainage management systems;
(vii) Electric, gas, fiber, and other utility infrastructures; and
(b) Expenditures for any of the following purposes:
(i) Providing environmental analysis, professional management, planning, and promotion within the state land improvement financing area;
(ii) Providing maintenance and security for common or public areas in the state land improvement financing area; and
(iii) Historic preservation activities authorized under RCW 35.21.395.
(9) "Real property" has the same meaning as in RCW 84.04.090 and also includes any privately owned improvements located on publicly owned land that are subject to property taxation.
(10) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except regular property taxes levied by the state for the support of the common schools under RCW 84.52.065. "Regular property taxes" do not include excess property tax levies that are exempt from the aggregate limits for junior and senior taxing districts as provided in RCW 84.52.043.
(11) "State land improvement financing" means the use of regular property tax revenue dedicated to pay the public improvement costs within the state land improvement financing area.
(12) "State land improvement financing area" means the geographic area adopted by a city and from which property tax revenues are derived for state land improvement financing, and which meets the following conditions:
(a) The state of Washington is the current owner of the land, and the land is being sold for private development; or
(b) The state of Washington was the most recent owner of the land, prior to it being sold for private development.
(13) "Taxing district" means a government entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved state land improvement financing area.
(14) "Value of taxable property" means the value of the taxable property as defined in RCW 39.36.015.
[ 2016 c 192 s 1.]

catchline: Definitions.


title: RCW 39.112.020

text:
A city may finance public improvements using state land improvement financing subject to the following conditions:
(1) The city has adopted an ordinance designating a state land improvement financing area within its boundaries and specified the public improvements proposed to be financed in whole or in part with the use of state land improvement financing.
(2) The public improvements proposed to be financed in whole or in part using state land improvement financing are expected to encourage private development within the state land improvement financing area and to increase the fair market value of real property within the state land improvement financing area.
(3) Private development that is anticipated to occur within the state land improvement financing area, as a result of the public improvements, will be consistent with the countywide planning policy adopted by the county under RCW 36.70A.210 and the city's comprehensive plan and development regulations adopted under chapter 36.70A RCW.
[ 2016 c 192 s 2.]

catchline: Conditions for using state land improvement financing.


title: RCW 39.112.030

text:
Before adopting an ordinance creating the state land improvement financing area, a city must:
(1) Provide written notice of a public hearing to each taxing jurisdiction that levies regular property taxes in the state land improvement financing area, publish notice of the public hearing in a legal newspaper of general circulation within the proposed state land improvement financing area at least ten days before the public hearing, and post the notice in at least six conspicuous public places located in the proposed state land improvement financing area. Notices must describe the contemplated public improvements, estimate the costs of the public improvements, describe the portion of the costs of the public improvements to be borne by state land improvement financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed state land improvement financing area, and estimate the period during which state land improvement financing is contemplated to be used. The public hearing may be held by either the governing body of the city, or a committee of the governing body that includes at least a majority of the whole governing body;
(2) Hold a public hearing on the proposed financing of the public improvement in whole or in part with state land improvement financing; and
(3) Adopt an ordinance establishing the state land improvement financing area that describes the public improvements, describes the boundaries of the state land improvement financing area, estimates the cost of the public improvements and the portion of these costs to be financed by state land improvement financing, estimates the time during which regular property taxes are to be apportioned, provides the date when the apportionment of the regular property taxes will commence, and finds that the conditions of RCW 39.112.020 are met.
[ 2016 c 192 s 3.]

catchline: Procedures for creating a state land improvement financing area.


title: RCW 39.112.040

text:
The city must:
(1) Publish notice in a legal newspaper of general circulation within the state land improvement financing area that describes the public improvement, describes the boundaries of the state land improvement financing area, and identifies the location and times where the ordinance and other public information concerning the public improvement may be inspected; and
(2) Deliver a certified copy of the ordinance to the county treasurer, the county assessor, and the governing body of each taxing district within which the state land improvement financing area is located.
[ 2016 c 192 s 4.]

catchline: Public notice—Notice to officials.


title: RCW 39.112.050

text:
A state land improvement financing area is subject to the following limitations:
(1) A state land improvement financing area is limited to contiguous tracts, lots, pieces, or parcels of land without the creation of islands of property not included in the state land improvement financing area.
(2) The public improvements financed through bonds issued under RCW 39.112.070 and public improvements made on a pay-as-you-go basis must be located in the state land improvement financing area.
(3) A state land improvement financing area cannot comprise an area containing more than twenty-five percent of the total assessed value of the taxable real property within the boundaries of the city at the time the state land improvement financing area is created.
(4) The boundaries of the state land improvement financing area may not be changed for the time period that receipts from regular property taxes are used to pay bonds issued under RCW 39.112.070 and public improvement costs within the state land improvement financing area on a pay-as-you-go basis, as provided under this chapter.
[ 2016 c 192 s 5.]

catchline: Limitations on state land improvement financing areas.


title: RCW 39.112.060

text:
(1) Commencing in the calendar year following the passage of the ordinance, the county treasurer must distribute receipts from regular taxes imposed on real property located in the state land improvement financing area to the city.
(2) The city may agree to receive less than the full amount of the regular property taxes under subsection (1) of this section as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts must be allocated to the taxing districts that levied regular property taxes, or have regular property taxes levied for them, in the state land improvement financing area for collection that year in proportion to their regular tax levy rates for collection that year.
(3) The city may request that the treasurer transfer the property taxes to its designated agent. The tax receipts distributed to the city or its agent under this section may only be expended to finance public improvement costs associated with the public improvements financed in whole or in part by state land improvement financing.
(4) This section does not authorize revaluations of real property by the assessor for property taxation that are not made in accordance with the assessor's revaluation plan under chapter 84.41 RCW or under other authorized revaluation procedures.
(5) The distribution of regular property tax revenue to the city must cease when regular property taxes are no longer obligated to pay the costs of the public improvements. Any excess regular property tax revenues, and earnings on the revenues, remaining at the time the distribution of regular property tax revenue terminates, must be returned to the county treasurer and distributed to the participating taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the state land improvement financing area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
[ 2016 c 192 s 6.]

catchline: Apportionment of revenues.


title: RCW 39.112.070

text:
(1) A city creating a state land improvement financing area and authorizing the use of state land improvement financing may incur general indebtedness, including issuing general obligation bonds, to finance the public improvements and retire the indebtedness in whole or in part from state land improvement financing it receives, subject to the following requirements:
(a) The ordinance adopted by the city creating the state land improvement financing area and authorizing the use of state land improvement financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and
(b) The city includes this statement of intent in all notices required by RCW 39.112.040.
(2) The general indebtedness incurred under subsection (1) of this section may be payable from other tax revenues, the full faith and credit of the city, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the city for payment of costs of the public improvements or associated debt service on the general indebtedness.
(3) In addition to the requirements in subsection (1) of this section, a city creating a state land improvement financing area and authorizing the use of state land improvement financing may require any nonpublic participants to provide adequate security to protect the public investment in the public improvement within the state land improvement financing area.
[ 2016 c 192 s 7.]

catchline: General indebtedness—Requirements.


title: RCW 39.112.080

text:
A city that issues bonds issued under RCW 39.112.070 to finance public improvements may pledge for the payment of such bonds all or part of any regular property tax revenues derived from the public improvements.
[ 2016 c 192 s 8.]

catchline: Use of tax revenue for bond repayment.


title: RCW 39.112.090

text:
The bonds issued by a city under RCW 39.112.070 to finance public improvements do not constitute an obligation of the state of Washington, either general or special.
[ 2016 c 192 s 9.]

catchline: Limitation on bonds issued.