Infrastructure, Transportation, & Economic Development

There were very few bills that survived the 5 p.m. March 7 cut-off to consider opposite house bills. The list was further reduced during the last six days of session. Of note:

Supplemental Capital Budget (ESHB 2765)

The capital budget passed on the 60th day as a conference committee bill. The capital budget included $150M in additional bonds to pay for Chehalis River Basin flood mitigation projects ($50M) and $100M for school construction and skills centers. In this very tight budget year, the Legislature also funded $18.5M for additional local and community projects. Two provisos that are reflective of the interim Public Infrastructure Programs and Funding Structures Task Force recommendations remained in the budget:

Section 1004 appropriates up to $10M from the Public Works Assistance Account to create a pilot program by providing grants to local governments to "demonstrate options for the most efficient use of the states investment in local infrastructure by funding more projects at an accelerated rate."  The $10M is from pre-construction funds within the Public Works Assistance Account and does not affect current projects identified in the public works loan list. The proviso directs the pilot project to use projects that were identified in the 2008 Public Works Board legislative report (i.e. one’s that missed the cut on the current PWB list), but then adds in 2 categories to target areas that are economically distressed, and jurisdictions with unused debt capacity.

Section 1022, "Infrastructure Investment Systems," will require the Office of Financial Management - in consultation with the Legislature, loan and grant recipients, and other stakeholders - to develop an infrastructure implementation plan. Affected agencies are the Department of Community, Trade, and Economic Development, the Department of Ecology, the Department of Health, the Transportation Improvement Board, and the Office of the State Treasurer. The Infrastructure Implementation Plan is due December 1, 2008.

Transportation Budget (ESHB 2878)

The $7.5 billion transportation budget was also introduced as a conference committee budget and had little floor discussion in either chamber. As noted in previous Bulletins, this budget will allow the Legislature to "go home" without major dislocations to projects that are underway or that are scheduled to be underway. Over the last year, federal and state fuel tax revenues have fallen by 4% while project costs have increased approximately $300M over the same period. Absent additional funding or a dramatic decrease in construction costs, this will probably be the last year the transportation budget can be balanced and maintain the project lists identified in the 2003 and 2005 revenue proposals.

Authorizing Public Works Board Projects (HB 2437)

The Governor signed this bill into law on Friday, March 7. Several cities were at the bill signing and then proceeded to the Public Works Board (PWB) office to sign contracts and get their projects underway. A notable amendment to the legislation is that it directs the PWB to charge a uniform rate of ½ percent interest on all loans identified in HB 2437. As recommended by the Board, 52 project loans totaling $278 million are authorized for the 2008 loan cycle. All of the appropriation available for construction loans in the 2007-09 biennium is being used for the 2008 loan list. Cities represent 32 projects totaling $182 million. Please see http://www.pwb.wa.gov for more detailed project information.

Regarding State Economic Development Programs (2SSB 6855)

This bill passed the legislature on the 59th day of session. Originally SSB 5762, it streamlines Community Economic Revilization Board (CERB) functions and provides an urban element to CERB, subject to new funding. Please note that rural communities are held harmless in this legislation. Most of the provisions in this new law do not take effect until July 1, 2009 in order for CERB and its customers to adapt to this legislation. E2SHB 3125, creating the building communities fund program (BCF), has also been amended into the bill. The bill allows capital and technical assistance grants to be provided to nonprofit organizations for distressed communities.

Distressed communities are defined as:

• a county that has an unemployment rate that is 20 percent above the statewide average for the immediately previous three years;
• an area within a county that the DCTED determines to be a low-income community, using as guidance designations under the Community Development Financial Institutions Fund's New Markets Tax Credit Program; or
• a school district in which at least 50 percent of local elementary students receive free and reduced-price meals.

The BCF Program grants may be used for acquiring, constructing, or rehabilitating facilities used to deliver nonresidential community services, including social service centers or multipurpose community centers, including those that serve a distinct or ethnic population. These facilities must be located in a distressed community or serve a substantial number of low-income or disadvantaged persons. The Department of Community Trade and Economic Development is required to annually submit to the Governor and the Legislature an unranked list of qualified projects.

Imposition of Tolls (E2SHB 1773)

This legislation establishes the statewide framework for imposing tolls. The bill has been transmitted to the Governor.

Financing the 520 Bridge Replacement Project (ESHB 3096)

The "520 Bridge Bill" passed the Legislature and is on its way to the Governor. The 520 Bridge Bill establishes an SR 520 finance plan. The SR 520 finance plan must include certain assumptions, including savings from early construction of certain on-site project elements, early construction of a single string of pontoons, and preconstruction tolling. An SR 520 tolling implementation committee (Committee) is formed, consisting of three members, one each from the Puget Sound Regional Council, the Department, and the State Transportation Commission.

The Committee must evaluate various issues relating to the SR 520 bridge replacement project, including traffic diversion to other state and local roads, tolling technology, partnership opportunities, and also must survey citizens about the project. The committee must confer with mayors and city councils from cities located along the SR 520, SR 522 & Interstate 90 corridors. A report is due from the Committee to the Governor and Legislature by January 2009. The Department may seek approval from the Legislature to begin tolling on the existing SR 520 bridge and its replacement only after the Committee has submitted its report.

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