The AI workspace for legal professionals
- Legal research with access to more than 1 million sources
- Document automation
- Matter management
- Hosted in the EU and Switzerland
Try it free for 14 days (10 questions/day during trial)
The AI workspace for legal professionals
Try it free for 14 days (10 questions/day during trial)
title-39•Title 39 RCW — Public Contracts and Indebtedness
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Authorized local government" means a political subdivision of the state, school district, or special purpose district with public works authority.
(2) "Award" means the formal decision by the state or municipality notifying a responsible bidder with the lowest responsive bid of the state's or municipality's acceptance of the bid and intent to enter into a contract with the bidder.
(3) "Contract" means a contract in writing for the execution of public work for a fixed or determinable amount duly awarded after advertisement and competitive bid, or a contract awarded under the small works roster process in RCW 39.04.151 through 39.04.154.
(4) "Municipality" means every city, county, town, port district, district, or other public agency authorized by law to require the execution of public work, except drainage districts, diking districts, diking and drainage improvement districts, drainage improvement districts, diking improvement districts, consolidated diking and drainage improvement districts, consolidated drainage improvement districts, consolidated diking improvement districts, irrigation districts, or other districts authorized by law for the reclamation or development of waste or undeveloped lands.
(5) "Public work" means all work, construction, alteration, repair, or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein. All public works, including maintenance when performed by contract shall comply with chapter 39.12 RCW. "Public work" does not include work, construction, alteration, repair, or improvement performed under contracts entered into under RCW 36.102.060(4) or under development agreements entered into under RCW 36.102.060(7) or leases entered into under RCW 36.102.060(8).
(6) "Responsible bidder" means a contractor who meets the criteria in RCW 39.04.350.
(7) "Small business" means a business meeting certification criteria for size, ownership, control, and personal net worth adopted by the office of minority and women's business enterprises in accordance with RCW 39.19.030.
(8) "State" means the state of Washington and all departments, supervisors, commissioners, and agencies of the state.
(9) "State agency" means the department of enterprise services, the state parks and recreation commission, the department of natural resources, the department of fish and wildlife, the department of transportation, any institution of higher education as defined under RCW 28B.10.016, and any other state agency delegated authority by the department of enterprise services to engage in construction, building, renovation, remodeling, alteration, improvement, or repair activities.
[ 2023 c 395 s 2; 2008 c 130 s 16; 2007 c 133 s 1; 2000 c 138 s 102; 1997 c 220 s 402 (Referendum Bill No. 48, approved June 17, 1997); 1993 c 174 s 1; 1989 c 363 s 5; 1986 c 282 s 1; 1982 c 98 s 1; 1977 ex.s. c 177 s 1; 1923 c 183 s 1; RRS s 10322-1. ]
NOTES:
Findings—Intent—2023 c 395: "The legislature finds the need to increase equity and efficiencies in public works procurement. The legislature further finds that small, minority, women, and veteran-owned businesses are essential to a robust and high-functioning economy, which provides high quality living wage jobs throughout the state. The legislature further finds that public works contracting agencies need a streamlined and effective method for delivering small public works projects while protecting worker rights. Therefore, the legislature intends to provide a small business definition, best practices to be included in inclusion plans, and to update and revise the small and limited works roster process to increase administrative efficiency, to encourage greater participation and utilization by small, minority, women, and veteran-owned businesses, and continue to protect the rights of workers engaging in public works projects." [ 2023 c 395 s 1.]
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: "Sections 1 through 30, 32 through 34, 36, and 37 of this act take effect July 1, 2024." [ 2023 c 395 s 39.]
Purpose—2000 c 138: "The purpose of this act is to establish a common small works roster procedure that state agencies and local governments may use to award contracts for construction, building, renovation, remodeling, alteration, repair, or improvement of real property." [ 2000 c 138 s 1.]
Part headings not law—2000 c 138: "Part headings used in this act are not any part of the law." [ 2000 c 138 s 302.]
Referendum—Other legislation limited—Legislators' personal intent not indicated—Reimbursements for election—Voters' pamphlet, election requirements—1997 c 220: See RCW 36.102.800 through 36.102.803.
Municipalities—Energy audits and efficiency: RCW 43.19.691.
Notwithstanding the provisions of RCW 39.04.010, a state contracting authority is authorized to negotiate an adjustment to a bid price, based upon agreed changes to the contract plans and specifications, with a low responsive bidder under the following conditions:
(1) All bids for a state public works project involving buildings and any associated building utilities and appendants exceed the available funds, as certified by the appropriate fiscal officer;
(2) The apparent low responsive bid does not exceed the available funds by: (a) Five percent on projects valued under one million dollars; (b) the greater of fifty thousand dollars or two and one-half percent for projects valued between one million dollars and five million dollars; or (c) the greater of one hundred twenty-five thousand dollars or one percent for projects valued over five million dollars; and
(3) The negotiated adjustment will bring the bid price within the amount of available funds.
[ 1989 c 59 s 1. ]
Whenever the state or any municipality shall determine that any public work is necessary to be done, it shall cause plans, specifications, or both thereof and an estimate of the cost of such work to be made and filed in the office of the director, supervisor, commissioner, trustee, board, or agency having by law the authority to require such work to be done. The plans, specifications, and estimates of cost shall be approved by the director, supervisor, commissioner, trustee, board, or agency and the original draft or a certified copy filed in such office before further action is taken.
If the state or such municipality shall determine that it is necessary or advisable that such work shall be executed by any means or method other than by contract or by a small works roster process, and it shall appear by such estimate that the probable cost of executing such work will exceed the sum of twenty-five thousand dollars, then the state or such municipality shall at least fifteen days before beginning work cause such estimate, together with a description of the work, to be published at least once in a legal newspaper of general circulation published in or as near as possible to that part of the county in which such work is to be done. When any emergency shall require the immediate execution of such public work, upon a finding of the existence of such emergency by the authority having power to direct such public work to be done and duly entered of record, publication of description and estimate may be made within seven days after the commencement of the work.
[ 1994 c 243 s 1; 1993 c 379 s 111; 1986 c 282 s 2; 1982 c 98 s 4; 1975 1st ex.s. c 230 s 2; 1967 c 70 s 1; 1923 c 183 s 2; RRS s 10322-2. Formerly RCW 39.04.020 and 39.04.030. ]
NOTES:
Intent—Severability—Effective date—1993 c 379: See notes following RCW 28B.10.029.
Whenever plans and specifications shall have been filed the work to be done shall be executed in accordance with such plans and specifications unless supplemental plans and specifications of the alterations to be made therein shall be made and filed in the office where the original plans and specifications are filed.
In the event that the probable cost of executing such work in accordance with the supplemental plans and specifications shall be increased or decreased from the estimated cost as shown by the original estimate to an amount in excess of ten percent of such estimate, then a supplemental estimate shall be made of the increased or decreased cost of executing the work in accordance with the supplemental plans and specifications and filed in the office where the original estimate is filed.
[ 1923 c 183 s 3; RRS s 10322-3. ]
Original estimates shall show in detail the estimated cost of the work; the estimated quantities of each class of work; the estimated unit cost for each class; the estimated total cost for each class; the time limit, allowed for the completion of the work and the estimated dates of commencement and completion.
[ 1986 c 282 s 3; 1923 c 183 s 4; RRS s 10322-4. ]
Supplemental estimates shall show the estimated increase or decrease in the total quantities of each class, in the unit cost of each class, in the total cost for each class and in the total cost of the work as shown by the original estimate, together with any change in the time limit and in the estimated dates of commencing and completing the work.
[ 1923 c 183 s 5; RRS s 10322-5. ]
Whenever the state or any municipality shall execute any public work by any means or method other than by contract or small works roster, it shall cause to be kept and preserved a full, true and accurate account and record of the costs of executing such work in accordance with the budgeting, accounting, and reporting system provisions prescribed by law for the state agency or municipality.
[ 1986 c 282 s 4; 1923 c 183 s 6; RRS s 10322-6. ]
NOTES:
State auditor to prescribe standard form for costs of public works: RCW 43.09.205.
A true copy of such account or record, duly certified by the officer or officers having by law authority to direct such work to be done, to be a full, true, and accurate account of the costs of executing such work shall be filed in the office where the original plans and specifications are filed within sixty days after the completion of the work.
The engineer or other officer having charge of the execution of such work shall execute a certificate which shall be attached to and filed with such certified copy, certifying that such work was executed in accordance with the plans and specifications on file and the times of commencement and completion of such work. If the work is not in accordance with such plans and specifications he or she shall set forth the manner and extent of the variance therefrom.
[ 2011 c 336 s 802; 1923 c 183 s 7; RRS s 10322-7. ]
All plans, specifications, estimates, and copies of accounts or records and all certificates attached thereto shall, when filed, become public records and shall at all reasonable times be subject to public inspection.
Certified copies of any estimate, account or record shall be furnished by the officer having the custody thereof to any person on demand and the payment of the legal fees for making and certifying the same.
[ 1923 c 183 s 9; RRS s 10322-9. ]
(1) Within two business days of the bid opening on a public works project that is the subject of competitive bids, the municipality must provide, if requested by a bidder, copies of the bids the municipality received for the project. The municipality shall then allow at least two full business days after providing bidders with copies of all bids before executing a contract for the project. Intermediate Saturdays, Sundays, and legal holidays are not counted.
(2) When a municipality receives a written protest from a bidder for a public works project that is the subject of competitive bids, the municipality must not execute a contract for the project with anyone other than the protesting bidder without first providing at least two full business days' written notice of the municipality's intent to execute a contract for the project; provided that the protesting bidder submits notice in writing of its protest no later than:
(a) Two full business days following bid opening, if no bidder requested copies of the bids received for the project under subsection (1) of this section; or
(b) Two full business days following when the municipality provided copies of the bids to those bidders requesting bids under subsection (1) of this section. Intermediate Saturdays, Sundays, and legal holidays are not counted.
[ 2019 c 434 s 13; 2003 c 300 s 1. ]
NOTES:
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
A low bidder on a public works project who claims error and fails to enter into a contract is prohibited from bidding on the same project if a second or subsequent call for bids is made for the project.
[ 2003 c 300 s 2. ]
Any director, supervisor, officer or employee of the state and any commissioner, trustee, supervisor, officer or employee of any municipality who shall knowingly make any false entry in any account or record required by this chapter or who shall knowingly certify to any false statement in any certificate required by this chapter, shall be guilty of a misdemeanor.
[ 1923 c 183 s 10; RRS s 10322-10. ]
NOTES:
Falsifying accounts: RCW 42.20.070.
Misconduct of public officers: Chapter 42.20 RCW.
If the successful bidder must undertake additional work for public construction projects issued by the state of Washington, its authorities or agencies, or a political subdivision of the state due to the enactment of new environmental protection requirements or the amendment of existing environmental protection statutes, ordinances, or rules occurring after the submission of the successful bid, the awarding agency shall issue a change order setting forth the additional work that must be undertaken, which shall not invalidate the contract. The cost of such a change order to the awarding agency shall be determined in accordance with the provisions of the contract for change orders or, if no such provision is set forth in the contract, then the cost to the awarding agency shall be the contractor's costs for wages, labor costs other than wages, wage taxes, materials, equipment rentals, insurance, and subcontracts attributable to the additional activity plus a reasonable sum for overhead and profit. However, the additional costs to undertake work not specified in the contract documents shall not be approved unless written authorization is given the successful bidder prior to his or her undertaking such additional activity. In the event of a dispute between the awarding agency and the contractor, dispute resolution procedures may be commenced under the applicable terms of the construction contract, or, if the contract contains no such provision for dispute resolution, the then obtaining rules of the American arbitration association.
[ 2011 c 336 s 803; 1998 c 196 s 1; 1973 1st ex.s. c 62 s 1. ]
NOTES:
Severability—1973 1st ex.s. c 62: "If any provision or part of this 1973 act shall be judged to be invalid or unconstitutional, such adjudication shall not affect the validity of any provision or part of this 1973 act not adjudged invalid or unconstitutional." [ 1973 1st ex.s. c 62 s 4.]
Delay due to litigation, change orders, costs, arbitration, termination: RCW 60.28.080.
RCW 39.04.120 shall take effect in ninety days but shall not apply to any contract awarded pursuant to an invitation for bids issued on or before the date it takes effect, or to any persons or bonds in respect of any such contract.
[ 1973 1st ex.s. c 62 s 2. ]
NOTES:
Severability—1973 1st ex.s. c 62: See note following RCW 39.04.120.
(1) The state's preferences for the purchase and use of recycled content products shall be included as a factor in the design and development of state capital improvement projects.
(2) If a construction project receives state public funding, the product standards, as provided in RCW 43.19A.020, shall apply to the materials used in the project, whenever the administering agency and project owner determine that such products would be cost-effective and are readily available.
(3) This section does not apply to contracts entered into by a municipality.
[ 2002 c 299 s 2; 1996 c 198 s 5. ]
Material from demolition projects shall be recycled or reused whenever practicable.
[ 1996 c 198 s 6. ]
(1) A state agency or an authorized local government may utilize a statewide small works roster in accordance with subsection (2) of this section or create and maintain one or more small works rosters for different specialties, categories of anticipated work, or geographic areas served by contractors on the roster that have registered for inclusion on that particular roster.
(a) The small works roster shall consist of all responsible contractors who have requested to be on the list, and where required by law, are properly licensed or registered to perform such work in this state in accordance with RCW 39.04.350.
(b) A state agency or authorized local government establishing a small works roster must require contractors desiring to be placed on the roster to indicate if they meet the definition of women and minority-owned business as described in RCW 39.19.030(7)(b), veteran-owned business as defined in RCW 43.60A.010, or small business as defined in RCW 39.04.010, and to keep current records of any applicable licenses, certifications, registrations, bonding, insurance, or other appropriate matters on file with the appropriate agency as a condition of being placed on the roster and award of contract.
(c) At least once a year, the state agency or local government must publish in a newspaper of general circulation and provide the office of minority and women's business enterprises' directory of certified firms a notice of the existence of the roster and solicit contractors for the roster.
(d) Responsible contractors must be added to an appropriate roster at any time they submit a written request and the necessary records.
(e) The contractor must agree and be able to receive notifications and other communications via email.
(f) State agencies or authorized local governments using a small works roster may not break a project into units or construct a project by phases if done for the purposes of avoiding maximum dollar amounts set by chapter 395, Laws of 2023.
(2) The department of commerce though [through] the municipal research and services center shall develop a statewide small works roster in compliance with subsection (1) of this section by June 30, 2024. The municipal research and services center must develop criteria for the statewide roster with collaboration from affected state and local agencies. The statewide roster must have features to filter the roster by different specialties, categories of anticipated work, or geographic areas served by contractors. The roster must also indicate if the contractor is designated as a small business as defined in RCW 39.04.010.
(3) The department of commerce shall provide funding to the municipal research and services center as appropriated to maintain and publicize a small works roster and work with the municipal research and services center to notify state and local governments authorized to use small works rosters of the statewide roster authority and to provide guidance on how to use the authority. The guidance may take the form of a manual provided to local governments.
(4) A state agency establishing a small works roster shall adopt rules implementing this section. A local government establishing a small works roster shall adopt an ordinance or resolution implementing this section. Procedures included in rules adopted by the department of enterprise services in implementing this section must be included in any rules providing for a small works roster that is adopted by another state agency, if the authority for that state agency to engage in these activities has been delegated to it by the department of enterprise services under chapter 43.19 RCW. An interlocal contract or agreement between two or more state agencies or local governments establishing a small works roster to be used by the parties to the agreement or contract must clearly identify the lead entity that is responsible for implementing the provisions of this subsection.
[ 2023 c 395 s 14. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
(1)(a) This section provides uniform small works roster provisions to award contracts for construction, building, renovation, remodeling, alteration, repair, or improvement of real property that may be used by state agencies and by any local government that is expressly authorized to use these provisions. These provisions may be used in lieu of other procedures to award contracts for such work with an estimated cost, not including sales tax, of:
(i) $350,000 or less until December 31, 2026;
(ii) $530,000 or less from January 1, 2027, to June 30, 2027;
(iii) $560,000 or less from July 1, 2027, to June 30, 2028;
(iv) $590,000 or less from July 1, 2028, to June 30, 2029;
(v) $620,000 or less from July 1, 2029, to June 30, 2030; and
(vi) $650,000 or less beginning July 1, 2030.
(b) The small works roster process includes the direct contract provisions authorized under this section and any local government authorized to award contracts using the small works roster process under this section may award contracts using the direct contract provisions of this section. State agencies and authorized local governments using small works rosters must establish procedures for implementing chapter 395, Laws of 2023.
(2) State agencies and authorized local governments must document good faith efforts annually implementing subsections (6) and (7) of this section.
(3) Invitations for bids or direct contract negotiation must include, at a minimum, an estimate for the scope of work including the nature of the work to be performed as well as the materials and equipment to be furnished. Detailed plans and specifications need not be included.
(4) The department of enterprise services must develop and make available on its public-facing website templates for bid invitations, bidding, and contracting that may be used by state agencies, authorized local governments, and contractors.
(a)(i) For small works roster projects, state agencies and authorized local governments may contract by securing written or electronic quotations to assure that a competitive price is established and to award contracts to the responsible bidder with the lowest responsive bid.
(ii) A state agency or authorized local government contracting through a small works roster shall invite bids notifying all contractors on the applicable roster that have indicated interest in performing work in the applicable geographical area.
(b) For small public works projects with an estimated cost less than $150,000, not including sales tax, to increase the utilization of small businesses, state agencies and local governments are encouraged to and may direct contract with small businesses as defined in chapter 395, Laws of 2023, before direct contracting with other contractors on the appropriate small works roster without a competitive process as follows:
(i) If there are six or more contractors meeting the definition of small business on the applicable roster, the state agency or authorized local government must direct contract with one of those small businesses on the applicable roster that have indicated interest in performing work in the applicable geographical area. A state agency or authorized local government utilizing direct contracting pursuant to this subsection must rotate through the contractors on the appropriate small works roster and must, when qualified contractors are available from the roster who may perform the work or deliver the services within the budget described in the notice or request for proposals, utilize different contractors on different projects.
(ii) If there are five or less contractors meeting the definition of small business on the applicable roster, the state agency or authorized local government may direct contract with any contractor on the applicable roster.
(iii) The state agency or authorized local government must notify small, minority, women, or veteran-owned businesses on the applicable roster when direct contracting is utilized.
(iv) It is the intent of the legislature to increase utilization of small, minority, women, and veteran-owned businesses. Each state agency and authorized local government shall establish a small, minority, women, and veteran-owned business utilization plan. A state agency or authorized local government engaging in direct contracting may not favor certain contractors on the appropriate small works roster by repeatedly awarding contracts without documented attempts to direct contract with other contractors on the appropriate small works roster.
(v) If the state agency or authorized local government elects not to use the methods outlined in this subsection, it may not use direct contracting and must invite bids by electronically notifying all contractors on the applicable roster that have indicated interest in performing work in the applicable geographical area as described in this section.
(5) For small public works contracts under $5,000, there is no requirement for retainage or performance bonds. Small public works contracts valued at more than $5,000 shall be subject to performance bond requirements set forth in chapter 39.08 RCW and retainage requirements set forth in chapter 60.28 RCW, provided, however, that the awarding state agency or authorized local government may reduce or waive retainage requirements set forth in RCW 60.28.011(1)(a), thereby assuming the liability for the contractor's nonpayment of: (a) Laborers, mechanics, subcontractors, materialpersons, and suppliers; and (b) taxes, increases, and penalties pursuant to Titles 50, 51, and 82 RCW that may be due from the contractor for the project. Any such waiver will not affect the rights of the state agency or local government to recover against the contractor for any payments made on the contractor's behalf. For small public works contracts awarded through a bid solicitation, notice of any retainage reduction or waiver must be provided in bid solicitations.
(6) After an award is made, the bid quotations obtained shall be recorded, publicly available, and available by request.
(7) Annually, a state agency or authorized local government must publish a list of small works contracts awarded and contractors contacted for direct negotiation pursuant to RCW 39.04.200.
[ 2026 c 97 s 1; 2023 c 395 s 15. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Beginning in 2025 and every five years thereafter, the capital projects advisory review board must review construction cost escalation data for Washington state, readily available in industry publications, roster utilization, and other appropriate data and metrics, and make recommendations to the appropriate committees of the legislature on adjustments to the contracting thresholds described in RCW 39.04.152.
[ 2023 c 395 s 16. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
(1) All contracts entered into under this chapter by the state on or after September 1, 1983, are subject to the requirements established under chapter 39.19 RCW.
(2) All contracts entered into under this chapter by the state on or after January 1, 2024, are subject to the requirements established under RCW 49.60.530.
[ 2023 c 468 s 3; 1983 c 120 s 11. ]
NOTES:
Effective date—Applicability—Severability—Conflict with federal requirements—1983 c 120: See RCW 39.19.910, 39.19.920.
All procurement contracts entered into under this chapter on or after June 10, 2010, are subject to the requirements established under RCW 43.60A.200.
[ 2010 c 5 s 8. ]
NOTES:
Purpose—Construction—2010 c 5: See notes following RCW 43.60A.010.
This chapter shall not apply to performance-based contracts, as defined in *RCW 39.35A.020(3), that are negotiated under chapter 39.35A RCW.
[ 1985 c 169 s 5. ]
NOTES:
*Reviser's note: RCW 39.35A.020 was amended by 2001 c 214 s 18, changing subsection (3) to subsection (4). RCW 39.35A.020 was amended by 2022 c 128 s 2, changing subsection (4) to subsection (6).
This chapter does not apply to the selection of persons or entities to construct or develop water pollution control facilities or to provide water pollution control services under RCW 70A.140.040 or the selection of persons or entities to construct or develop solid waste handling facilities or to provide solid waste handling services under RCW 35.21.156 or under RCW 36.58.090.
[ 2021 c 65 s 26; 1989 c 399 s 11; 1986 c 244 s 13. ]
NOTES:
Explanatory statement—2021 c 65: See note following RCW 53.54.030.
On public works projects in which trench excavation will exceed a depth of four feet, any contract therefor shall require adequate safety systems for the trench excavation that meet the requirements of the Washington industrial safety and health act, chapter 49.17 RCW. This requirement shall be included in the cost estimates and bidding forms as a separate item. The costs of trench safety systems shall not be considered as incidental to any other contract item and any attempt to include the trench safety systems as an incidental cost is prohibited.
[ 1988 c 180 s 1. ]
(1) This section provides a uniform process to award contracts for the purchase of any materials, equipment, supplies, or services by those municipalities that are authorized to use this process in lieu of the requirements for formal sealed bidding. The state statutes governing a specific type of municipality shall establish the maximum dollar thresholds of the contracts that can be awarded under this process, and may include other matters concerning the awarding of contracts for purchases, for the municipality.
(2) At least twice per year, the municipality shall publish in a newspaper of general circulation within the jurisdiction a notice of the existence of vendor lists and solicit the names of vendors for the lists. Municipalities shall by resolution establish a procedure for securing telephone or written quotations, or both, from at least three different vendors whenever possible to assure that a competitive price is established and for awarding the contracts for the purchase of any materials, equipment, supplies, or services to the lowest responsible bidder as defined in chapter 39.26 RCW. Immediately after the award is made, the bid quotations obtained shall be recorded, open to public inspection, and shall be available by telephone inquiry. A contract awarded pursuant to this section need not be advertised.
[ 2015 c 79 s 4; 1993 c 198 s 2; 1991 c 363 s 110. ]
NOTES:
Purpose—Captions not law—1991 c 363: See notes following RCW 2.32.180.
Any local government using the uniform process established in RCW 39.04.190 to award contracts for purchases must post a list of the contracts awarded under that process at least once every two months. Any state agency or local government using the small works roster process established in RCW 39.04.151 through 39.04.154 to award contracts for construction, building, renovation, remodeling, alteration, repair, or improvement of real property must make available a list of the contracts awarded under that process at least once every year. The list shall contain the name of the contractor or vendor awarded the contract, the amount of the contract, a brief description of the type of work performed or items purchased under the contract, and the date it was awarded. The list shall also state the location where the bid quotations for these contracts are available for public inspection.
[ 2023 c 395 s 27; 2000 c 138 s 103; 1993 c 198 s 3; 1991 c 363 s 111. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Purpose—Part headings not law—2000 c 138: See notes following RCW 39.04.010.
Purpose—Captions not law—1991 c 363: See notes following RCW 2.32.180.
The legislature recognizes that fair and open competition is a basic tenet of public works procurement, that such competition reduces the appearance of and opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically, and that effective monitoring mechanisms are important means of curbing any improprieties and establishing public confidence in the process by which contractual services are procured. The legislature finds that there will continue to exist a need for additional correctional facilities due to the inadequate capacity of existing correctional facilities to accommodate the predicted growth of offender populations and that it is necessary to provide public works contract options for the effective construction and repair of additional department of corrections facilities.
[ 1994 c 80 s 1; 1991 c 130 s 1. ]
NOTES:
Severability—1994 c 80: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1994 c 80 s 4.]
Effective date—1994 c 80: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately [March 23, 1994]." [ 1994 c 80 s 5.]
Severability—1991 c 130: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1991 c 130 s 4.]
(1) In addition to currently authorized methods of public works contracting, and in lieu of the requirements of RCW 39.04.010 and 39.04.020 through 39.04.060, capital projects funded for over ten million dollars authorized by the legislature for the department of corrections to construct or repair facilities may be accomplished under contract using the general contractor/construction manager method described in this section. In addition, the general contractor/construction manager method may be used for up to two demonstration projects under ten million dollars for the department of corrections. Each demonstration project shall aggregate capital projects authorized by the legislature at a single site to total no less than three million dollars with the approval of the office of financial management. The department of enterprise services shall present its plan for the aggregation of projects under each demonstration project to the oversight advisory committee established under subsection (2) of this section prior to soliciting proposals for general contractor/construction manager services for the demonstration project.
(2) For the purposes of this section, "general contractor/construction manager" means a firm with which the department of enterprise services has selected and negotiated a maximum allowable construction cost to be guaranteed by the firm, after competitive selection through a formal advertisement, and competitive bids to provide services during the design phase that may include life-cycle cost design considerations, value engineering, scheduling, cost estimating, constructability, alternative construction options for cost savings, and sequencing of work, and to act as the construction manager and general contractor during the construction phase. The department of enterprise services shall establish an independent oversight advisory committee with representatives of interest groups with an interest in this subject area, the department of corrections, and the private sector, to review selection and contracting procedures and contracting documents. The oversight advisory committee shall discuss and review the progress of the demonstration projects. The general contractor/construction manager method is limited to projects authorized on or before July 1, 1997.
(3) Contracts for the services of a general contractor/construction manager awarded under the authority of this section shall be awarded through a competitive process requiring the public solicitation of proposals for general contractor/construction manager services. Minority and women enterprise total project goals shall be specified in the bid instructions to the general contractor/construction manager finalists. The director of enterprise services is authorized to include an incentive clause in any contract awarded under this section for savings of either time or cost or both from that originally negotiated. No incentives granted shall exceed five percent of the maximum allowable construction cost. The director of enterprise services or his or her designee shall establish a committee to evaluate the proposals considering such factors as: Ability of professional personnel; past performance in negotiated and complex projects; ability to meet time and budget requirements; location; recent, current, and projected workloads of the firm; and the concept of their proposal. After the committee has selected the most qualified finalists, these finalists shall submit sealed bids for the percent fee, which is the percentage amount to be earned by the general contractor/construction manager as overhead and profit, on the estimated maximum allowable construction cost and the fixed amount for the detailed specified general conditions work. The maximum allowable construction cost may be negotiated between the department of enterprise services and the selected firm after the scope of the project is adequately determined to establish a guaranteed contract cost for which the general contractor/construction manager will provide a performance and payment bond. The guaranteed contract cost includes the fixed amount for the detailed specified general conditions work, the negotiated maximum allowable construction cost, the percent fee on the negotiated maximum allowable construction cost, and sales tax. If the department of enterprise services is unable to negotiate a satisfactory maximum allowable construction cost with the firm selected that the department of enterprise services determines to be fair, reasonable, and within the available funds, negotiations with that firm shall be formally terminated and the department of enterprise services shall negotiate with the next low bidder and continue until an agreement is reached or the process is terminated. If the maximum allowable construction cost varies more than fifteen percent from the bid estimated maximum allowable construction cost due to requested and approved changes in the scope by the state, the percent fee shall be renegotiated. All subcontract work shall be competitively bid with public bid openings. Specific contract requirements for women and minority enterprise participation shall be specified in each subcontract bid package that exceeds ten percent of the department's estimated project cost. All subcontractors who bid work over two hundred thousand dollars shall post a bid bond and the awarded subcontractor shall provide a performance and payment bond for their contract amount if required by the general contractor/construction manager. A low bidder who claims error and fails to enter into a contract is prohibited from bidding on the same project if a second or subsequent call for bids is made for the project. Bidding on subcontract work by the general contractor/construction manager or its subsidiaries is prohibited. The general contractor/construction manager may negotiate with the low-responsive bidder only in accordance with RCW 39.04.015 or, if unsuccessful in such negotiations, rebid.
(4) If the project is completed for less than the agreed upon maximum allowable construction cost, any savings not otherwise negotiated as part of an incentive clause shall accrue to the state. If the project is completed for more than the agreed upon maximum allowable construction cost, excepting increases due to any contract change orders approved by the state, the additional cost shall be the responsibility of the general contractor/construction manager.
(5) The powers and authority conferred by this section shall be construed as in addition and supplemental to powers or authority conferred by any other law, and nothing contained in this section may be construed as limiting any other powers or authority of the department of enterprise services. However, all actions taken pursuant to the powers and authority granted to the director or the department of enterprise services under this section may only be taken with the concurrence of the department of corrections.
[ 2015 c 225 s 34; 1996 c 18 s 5; 1994 c 80 s 2; 1991 c 130 s 2. ]
NOTES:
Severability—Effective date—1994 c 80: See notes following RCW 39.04.210.
Severability—1991 c 130: See note following RCW 39.04.210.
Methods of public works contracting authorized by RCW 39.04.210 and 39.04.220 shall remain in full force and effect until completion of projects authorized on or before July 1, 1997.
[ 1994 c 80 s 3; 1991 c 130 s 3. ]
NOTES:
Severability—Effective date—1994 c 80: See notes following RCW 39.04.210.
Severability—1991 c 130: See note following RCW 39.04.210.
(1) The following public bodies of the state of Washington are authorized to procure public works contracts under this chapter for the purpose of completing anticipated types of work based on hourly rates or unit pricing for one or more categories of work or trades:
(a) Every county public transportation authority as defined under RCW 36.57.010;
(b) Every public transportation benefit area as defined under RCW 36.57A.010; and
(c) Every regional transit authority as defined under RCW 81.112.020.
(2) A public body may procure public works with a unit priced contract under this section for the purpose of completing anticipated types of work based on hourly rates or unit pricing for one or more categories of work or trades.
(3) Unit priced contracts must be executed for an initial contract term not to exceed one year, with the public body having the option of extending or renewing the unit priced contract for one additional year.
(4) Invitations for unit price bids must include, for purposes of the bid evaluation, estimated quantities of the anticipated types of work or trades, and specify how the public body will issue or release work assignments, work orders, or task authorizations pursuant to a unit priced contract for projects, tasks, or other work based on the hourly rates or unit prices bid by the contractor. Contracts must be awarded to the lowest responsible bidder as provided in RCW 39.04.010. Whenever possible, the public body must invite at least one proposal from a certified minority or woman contractor who otherwise qualifies under this section.
(5) Unit priced contractors shall pay prevailing wages for all work that would otherwise be subject to the requirements of chapter 39.12 RCW. Prevailing wages for all work performed pursuant to each work order must be the prevailing wage rates in effect at the beginning date for each contract year. Unit priced contracts must have prevailing wage rates updated annually. Intents and affidavits for prevailing wages paid must be submitted annually for all work completed within the previous twelve-month period of the unit priced contract.
(6) All public works procured with a unit priced contract under this section must comply with all other applicable bid requirements.
(7) For the purposes of this section, "unit priced contract" means a competitively bid contract in which public works are anticipated on a recurring basis to meet the business or operational needs of the public body, under which the contractor agrees to a fixed period indefinite quantity delivery of work, at a defined unit price for each category of work.
[ 2019 c 434 s 9. ]
NOTES:
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
(1) The provisions of RCW 4.84.250 through 4.84.280 shall apply to an action arising out of a public works contract in which the state or a municipality, or other public body that contracts for public works, is a party, except that: (a) The maximum dollar limitation in RCW 4.84.250 shall not apply; and (b) in applying RCW 4.84.280, the time period for serving offers of settlement on the adverse party shall be the period not less than thirty days and not more than one hundred twenty days after completion of the service and filing of the summons and complaint.
(2) The rights provided for under this section may not be waived by the parties to a public works contract that is entered into on or after June 11, 1992, and a provision in such a contract that provides for waiver of these rights is void as against public policy. However, this subsection shall not be construed as prohibiting the parties from mutually agreeing to a clause in a public works contract that requires submission of a dispute arising under the contract to arbitration.
[ 1999 c 107 s 1; 1992 c 171 s 1. ]
(1) When payment is received by a contractor or subcontractor for work performed on a public work, the contractor or subcontractor shall pay to any subcontractor not later than ten days after the receipt of the payment, amounts allowed the contractor on account of the work performed by the subcontractor, to the extent of each subcontractor's interest therein.
(2) In the event of a good faith dispute over all or any portion of the amount due on a payment from the state or a municipality to the prime contractor, or from the prime contractor or subcontractor to a subcontractor, then the state or the municipality, or the prime contractor or subcontractor, may withhold no more than one hundred fifty percent of the disputed amount. Those not a party to a dispute are entitled to full and prompt payment of their portion of a draw, progress payment, final payment, or released retainage.
(3) In addition to all other remedies, any person from whom funds have been withheld in violation of this section shall be entitled to receive from the person wrongfully withholding the funds, for every month and portion thereof that payment including retainage is not made, interest at the highest rate allowed under RCW 19.52.025. In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to costs of suit and reasonable attorneys' fees.
[ 1992 c 223 s 5. ]
NOTES:
Effective date—1992 c 223: See note following RCW 39.76.011.
Waiver of rights, construction—Application—1992 c 223: See RCW 39.04.900 and 39.04.901.
Any work, construction, alteration, repair, or improvement, other than ordinary maintenance, that the state or a municipality causes to be performed by a private party through a contract to rent, lease, or purchase at least fifty percent of the project by one or more state agencies or municipalities shall comply with chapter 39.12 RCW.
[ 1993 c 110 s 1. ]
NOTES:
Application—1993 c 110: "Section 1 of this act shall not apply to any project for which a call for competitive bids was made before July 25, 1993." [ 1993 c 110 s 2.]
(1) The legislature finds that the unique aspects of electronic data processing and telecommunications systems and the importance of these systems for effective administration warrant separate acquisition authority for electronic data processing and telecommunication systems. It is the intent of the legislature that municipalities utilize an acquisition method for electronic data processing and telecommunication systems that is both competitive and compatible with the needs of the municipalities.
(2) A municipality may acquire electronic data processing or telecommunication equipment, software, or services through competitive negotiation rather than through competitive bidding.
(3) "Competitive negotiation," for the purposes of this section, shall include, as a minimum, the following requirements:
(a) A request for proposal shall be prepared and submitted to an adequate number of qualified sources, as determined by the municipality in its discretion, to permit reasonable competition consistent with the requirements of the procurement. Notice of the request for the proposal must be published in a newspaper of general circulation in the municipality at least thirteen days before the last date upon which proposals will be received. The request for proposal shall identify significant evaluation factors, including price, and their relative importance.
(b) The municipality shall provide reasonable procedures for technical evaluation of the proposals received, identification of qualified sources, and selection for awarding the contract.
(c) The award shall be made to the qualified bidder whose proposal is most advantageous to the municipality with price and other factors considered. The municipality may reject any and all proposals for good cause and request new proposals.
[ 1996 c 257 s 1. ]
This section provides uniform exemptions to competitive bidding requirements utilized by municipalities when awarding contracts for public works and contracts for purchases. The statutes governing a specific type of municipality may also include other exemptions from competitive bidding requirements. The purpose of this section is to supplement and not to limit the current powers of any municipality to provide exemptions from competitive bidding requirements.
(1) Competitive bidding requirements may be waived by the governing body of the municipality for:
(a) Purchases that are clearly and legitimately limited to a single source of supply;
(b) Purchases involving special facilities or market conditions;
(c) Purchases in the event of an emergency;
(d) Purchases of insurance or bonds;
(e) Until January 1, 2045, purchases involving projects that are common facilities as described in RCW 54.44.020;
(f) Until January 1, 2045, purchases relating to energy generation, storage, transmission, or distribution facilities if the governing body determines that the expedited procurement action is for proprietary or specialized technologies with no comparable alternatives, is necessary to ensure compliance with electrical reliability standards, or prevent threats to grid reliability; and
(g) Public works in the event of an emergency.
(2)(a) The waiver of competitive bidding requirements under subsection (1) of this section may be by resolution or by the terms of written policies adopted by the municipality, at the option of the governing body of the municipality. If the governing body elects to waive competitive bidding requirements by the terms of written policies adopted by the municipality, immediately after the award of any contract, the contract and the factual basis for the exception must be recorded and open to public inspection.
If a resolution is adopted by a governing body to waive competitive bidding requirements under (b) of this subsection, the resolution must recite the factual basis for the exception. This subsection (2)(a) does not apply in the event of an emergency.
(b) If an emergency exists, the person or persons designated by the governing body of the municipality to act in the event of an emergency may declare an emergency situation exists, waive competitive bidding requirements, and award all necessary contracts on behalf of the municipality to address the emergency situation. If a contract is awarded without competitive bidding due to an emergency, a written finding of the existence of an emergency must be made by the governing body or its designee and duly entered of record no later than two weeks following the award of the contract.
(3) For purposes of this section "emergency" means unforeseen circumstances beyond the control of the municipality that either: (a) Present a real, immediate threat to the proper performance of essential functions; or (b) will likely result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken.
[ 2026 c 183 s 5; 1998 c 278 s 1. ]
NOTES:
Intent—Findings—2026 c 183: See note following RCW 54.04.070.
(1) A state agency or local government may award contracts of any value for the design, fabrication, and installation of building engineering systems by: (a) Using a competitive bidding process or request for proposals process where bidders are required to provide final specifications and a bid price for the design, fabrication, and installation of building engineering systems, with the final specifications being approved by an appropriate design, engineering, and/or public regulatory body; or (b) using a competitive bidding process where bidders are required to provide final specifications for the final design, fabrication, and installation of building engineering systems as part of a larger project with the final specifications for the building engineering systems portion of the project being approved by an appropriate design, engineering, and/or public regulatory body. The provisions of chapter 39.80 RCW do not apply to the design of building engineering systems that are included as part of a contract described under this section.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Building engineering systems" means those systems where contracts for the systems customarily have been awarded with a requirement that the contractor provide final approved specifications, including fire alarm systems, building sprinkler systems, pneumatic tube systems, extensions of heating, ventilation, or air conditioning control systems, chlorination and chemical feed systems, emergency generator systems, building signage systems, pile foundations, and curtain wall systems.
(b) "Local government" means any county, city, town, school district, or other special district, municipal corporation, or quasi-municipal corporation.
(c) "State agency" means the department of enterprise services, the state parks and recreation commission, the department of fish and wildlife, the department of natural resources, any institution of higher education as defined under RCW 28B.10.016, and any other state agency delegated authority by the department of enterprise services to engage in building, renovation, remodeling, alteration, improvement, or repair activities.
[ 2015 c 225 s 35; 2001 c 34 s 1. ]
A well-trained construction trades workforce is critical to the ability of the state of Washington to construct public works. Studies of the state's workforce highlight population trends that, without a concerted effort to offset them, will lead to an inadequate supply of skilled workers in the construction industry. State government regularly constructs public works. The efficient and economical construction of public works projects will be harmed if there is not an ample supply of trained construction workers. Apprenticeship training programs are particularly effective in providing training and experience to individuals seeking to enter or advance in the workforce. By providing for apprenticeship utilization on public works projects, state government can create opportunities for training and experience that will help assure that a trained workforce will be available, including returning veterans, in sufficient numbers in the future for the construction of public works. Furthermore, the state of Washington hereby establishes its intent to assist returning veterans through programs such as the "helmets to hardhats" program, which is administered by the center for military recruitment, assessment, and veterans employment. It is the state's intent to assist returning veterans with apprenticeship placement career opportunities, in order to expedite the transition from military service to the construction workforce.
[ 2006 c 321 s 1; 2005 c 3 s 1. ]
NOTES:
Effective date—2005 c 3: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [February 24, 2005]." [ 2005 c 3 s 5.]
The definitions in this section apply throughout this section and RCW 39.04.300 and 39.04.320 unless the context clearly requires otherwise.
(1) "Apprentice" means an apprentice enrolled in a state-approved apprenticeship training program.
(2) "Apprenticeship utilization plan" means a plan submitted by a prospective bidder specifically detailing verifiable efforts to meet the apprenticeship utilization requirements.
(3) "Apprentice utilization requirement" means the requirement that the appropriate percentage of labor hours be performed by apprentices.
(4) "Labor hours" means the total hours of workers receiving an hourly wage who are directly employed upon the public works project. "Labor hours" includes hours performed by workers employed by the contractor and all subcontractors working on the project. "Labor hours" does not include hours worked by foremen, superintendents, owners, and workers who are not subject to prevailing wage requirements.
(5) "School district" has the same meaning as in RCW 28A.315.025.
(6) "State-approved apprenticeship training program" means an apprenticeship training program approved by the Washington state apprenticeship council.
[ 2020 c 255 s 1; 2015 c 48 s 1; 2007 c 437 s 1; 2005 c 3 s 2. ]
NOTES:
Effective date—2005 c 3: See note following RCW 39.04.300.
(1)(a)(i) Except as provided in (b) through (d) of this subsection, from January 1, 2005, and thereafter, for all public works estimated to cost $1,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices.
(ii) As of July 1, 2024, for all public works contracts awarded by a municipality estimated to cost $2,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices. For contracts advertised for bid on or after July 1, 2026, for all public works contracts awarded by a municipality estimated to cost $1,500,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices. For contracts advertised for bid on or after July 1, 2028, for all public works contracts awarded by a municipality estimated to cost $1,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices.
(b) For contracts advertised for bid on or after July 1, 2020, for all public works by the department of transportation estimated to cost $2,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices.
(c) For contracts advertised for bid on or after January 1, 2010, for all public works by a school district estimated to cost $1,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices.
(d) For contracts advertised for bid on or after January 1, 2012, for all public works by a four-year institution of higher education estimated to cost $1,000,000 or more, all specifications must require that no less than 15 percent of the labor hours be performed by apprentices.
(2) Awarding entities may adjust the requirements of this section for a specific project for the following reasons:
(a) The demonstrated lack of availability of apprentices in specific geographic areas;
(b) A disproportionately high ratio of material costs to labor hours, which does not make feasible the required minimum levels of apprentice participation;
(c) Participating contractors have demonstrated a good faith effort to comply with the requirements of this section; or
(d) Other criteria the awarding entity deems appropriate, which are subject to review by the office of the governor or the municipality's legislative authority if the awarding entity is a municipality.
(3) The secretary of the department of transportation shall adjust the requirements of this section for a specific project for the following reasons:
(a) The demonstrated lack of availability of apprentices in specific geographic areas; or
(b) A disproportionately high ratio of material costs to labor hours, which does not make feasible the required minimum levels of apprentice participation.
(4)(a) This section applies to public works contracts awarded by the state, to public works contracts awarded by school districts, to public works contracts awarded by state four-year institutions of higher education, and to public works contracts awarded by a municipality. However, this section does not apply to contracts awarded by state agencies headed by a separately elected public official or housing authorities as defined in RCW 35.82.020.
(b) Within existing resources, awarding agencies and municipalities are responsible for monitoring apprenticeship utilization hours by contractor. There must be a specific line item in the contract specifying that apprenticeship utilization goals should be met, monetary incentives for meeting the goals, monetary penalties for not meeting the goals, and an expected cost value to be included in the bid associated with meeting the goals. The awarding agency and municipality must report the apprenticeship utilization by contractor and subcontractor to the supervisor of apprenticeship at the department of labor and industries by final project acceptance. The electronic reporting system that is being developed by the department of labor and industries may be used for either or both monitoring and reporting apprenticeship utilization hours.
(c) In lieu of the monetary penalty and incentive requirements specified in (b) of this subsection, the Washington state department of transportation may use its three strike system for ensuring compliance including the allowance for a good faith effort.
(5)(a) The department of labor and industries must provide information and technical assistance to affected agencies and municipalities, and collect the following data from affected agencies and municipalities for each project covered by this section:
(i) The name of each apprentice and apprentice registration number;
(ii) The name of each project;
(iii) The dollar value of each project;
(iv) The date of the contractor's notice to proceed;
(v) The number of apprentices and labor hours worked by them, categorized by trade or craft;
(vi) The number of journey level workers and labor hours worked by them, categorized by trade or craft; and
(vii) The number, type, and rationale for the exceptions granted under subsection (2) of this section.
(b) The department of labor and industries and the municipal research and services center shall provide training, information, and ongoing technical assistance to municipalities in order to comply with apprenticeship utilization requirements. Training must include, but not be limited to, department of labor and industries reporting requirements, contract administration including sample contract language, and best practices on how a municipality's governing authority must adopt apprenticeship guidelines, including procedures, rules, and instructions to ensure compliance relating to a contractor that seeks a good faith waiver of apprenticeship utilization requirements.
(c) The department of labor and industries shall provide information and technical assistance with apprenticeship utilization reporting. The department of enterprise services shall make available sample contract language and provide contract administration advice pertaining to apprenticeship requirements.
(6) The secretary of transportation shall establish an apprenticeship utilization advisory committee, which must include statewide geographic representation and consist of equal numbers of representatives of contractors and labor. The committee must include at least one member representing contractor businesses with less than 35 employees. The advisory committee shall meet regularly with the secretary of transportation to discuss implementation of this section by the department of transportation, including development of the process to be used to adjust the requirements of this section for a specific project.
(7) At the request of the senate labor, commerce, research and development committee, the house of representatives commerce and labor committee, or their successor committees, and the governor, the department of enterprise services and the department of labor and industries shall compile and summarize the agency and municipality data and provide a joint report to both committees. The report must include recommendations on modifications or improvements to the apprentice utilization program and information on skill shortages in each trade or craft.
(8) All contracts subject to this section must include specifications that a contractor or subcontractor may not be required to exceed the apprenticeship utilization requirements of this section.
(9) This section establishes the minimum apprenticeship utilization requirements on public works contracts awarded by a municipality. Any standards or requirements relating to apprenticeship utilization established by any applicable local law or ordinance that are more favorable to apprentices than the minimum requirements under this section are not affected by this section and those more favorable laws apply and may be enforced as provided by law.
[ 2023 c 342 s 1; 2018 c 244 s 1; 2015 3rd sp.s. c 40 s 1; 2015 c 225 s 36; 2009 c 197 s 1; 2007 c 437 s 2; 2006 c 321 s 2; 2005 c 3 s 3. ]
NOTES:
Effective date—2023 c 342 s 1: "Section 1 of this act takes effect July 1, 2024." [ 2023 c 342 s 3.]
Effective date—2018 c 244: "This act takes effect January 1, 2020." [ 2018 c 244 s 3.]
Effective date—2015 3rd sp.s. c 40: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [July 14, 2015]." [ 2015 3rd sp.s. c 40 s 3.]
Rules—Implementation—2009 c 197: "The Washington state apprenticeship and training council shall adopt rules necessary to implement sections 2 and 3 of this act. Rules shall address due process protections for all parties and shall strengthen the accountability for apprenticeship committees approved under chapter 49.04 RCW in enforcing the apprenticeship program standards adopted by the council." [ 2009 c 197 s 4.]
Effective date—2005 c 3: See note following RCW 39.04.300.
For purposes of determining compliance with chapter 39.35D RCW, the department of enterprise services shall credit the project for using wood products with a credible third party sustainable forest certification or from forests regulated under chapter 76.09 RCW, the Washington forest practices act.
[ 2015 c 225 s 37; 2005 c 12 s 11. ]
The Washington state apprenticeship and training council shall lead and coordinate an outreach effort to educate returning veterans about apprenticeship and career opportunities in the construction industry. The outreach effort shall include information about the "helmets to hardhats" program and other paths for making the transition from military service to the construction workforce. The outreach effort shall be developed and coordinated with apprenticeship programs, other state agencies involved in workforce training, and representatives of contractors and labor.
[ 2006 c 321 s 3. ]
(1) Before award of a public works contract, a bidder must meet the following responsibility criteria to be considered a responsible bidder and qualified to be awarded a public works project. The bidder must:
(a) At the time of bid submittal, have a certificate of registration in compliance with chapter 18.27 RCW, a plumbing contractor license in compliance with chapter 18.106 RCW, an elevator contractor license in compliance with chapter 70.87 RCW, or an electrical contractor license in compliance with chapter 19.28 RCW, as required under the provisions of those chapters;
(b) Have a current state unified business identifier number;
(c) If applicable, have industrial insurance coverage for the bidder's employees working in Washington as required in Title 51 RCW; an employment security department number as required in Title 50 RCW; and a state excise tax registration number as required in Title 82 RCW;
(d) Not be disqualified from bidding on any public works contract under RCW 39.06.010 or 39.12.065(3);
(e) If bidding on a public works project subject to the apprenticeship utilization requirements in RCW 39.04.320, not have been found out of compliance by the Washington state apprenticeship and training council for working apprentices out of ratio, without appropriate supervision, or outside their approved work processes as outlined in their standards of apprenticeship under chapter 49.04 RCW for the one-year period immediately preceding the date of the bid solicitation;
(f) Have received training on the requirements related to public works and prevailing wage under this chapter and chapter 39.12 RCW. The bidder must designate a person or persons to be trained on these requirements. The training must be provided by the department of labor and industries or by a training provider whose curriculum is approved by the department. The department, in consultation with the prevailing wage advisory committee, must determine the length of the training. Bidders that have completed three or more public works projects and have had a valid business license in Washington for three or more years are exempt from this subsection. The department of labor and industries must keep records of entities that have satisfied the training requirement or are exempt and make the records available on its website. Responsible parties may rely on the records made available by the department regarding satisfaction of the training requirement or exemption;
(g) Within the three-year period immediately preceding the date of the bid solicitation, not have been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW 49.48.082, any provision of chapter 49.46, 49.48, or 49.52 RCW; and
(h) At the time of bid submittal, not be subject to a revocation of a minor work permit under RCW 49.12.390(4).
(2) Before award of a public works contract, a bidder shall submit to the contracting agency a signed statement in accordance with chapter 5.50 RCW verifying under penalty of perjury that the bidder is in compliance with the responsible bidder criteria requirement of subsection (1)(g) and (h) of this section. A contracting agency may award a contract in reasonable reliance upon such a sworn statement.
(3)(a) In addition to the bidder responsibility criteria in subsection (1) of this section, for a project subject to apprentice utilization requirements under RCW 39.04.320, the bidder shall submit an apprentice utilization plan to the awarding agency before receiving the notice to proceed. A contracting agency may exempt a bidder from the requirements of this subsection if the bidder met or exceeded apprentice utilization requirements on the last public works project the bidder completed. Contracting agencies may rely on records made available by the department of labor and industries to determine whether a bidder is eligible for the exemption in this subsection.
(b) The department of labor and industries shall develop an apprentice utilization plan template and make the template available to awarding agencies and bidders. The plan template must include, at minimum: The projected start and end dates of the project; estimated total work hours; estimated apprentice hours by apprenticeable occupation; list of state registered apprenticeship programs to be contacted; and list of estimated apprenticeship training agents or sponsors on the project. The plan template must also include educational material on apprentice utilization requirements, including how to access apprentices and contact apprenticeship programs and where to find additional and relevant resources. The department may approve the use of a template developed by an awarding agency if it meets the minimum requirements of this subsection.
(c) The department of labor and industries shall publish completed apprentice utilization plans on its website.
(4) In addition to the bidder responsibility criteria in subsection (1) of this section, the state or municipality may adopt relevant supplemental criteria for determining bidder responsibility applicable to a particular project which the bidder must meet.
(a) Supplemental criteria for determining bidder responsibility, including the basis for evaluation and the deadline for appealing a determination that a bidder is not responsible, must be provided in the invitation to bid or bidding documents.
(b) In a timely manner before the bid submittal deadline, a potential bidder may request that the state or municipality modify the supplemental criteria. The state or municipality must evaluate the information submitted by the potential bidder and respond before the bid submittal deadline. If the evaluation results in a change of the criteria, the state or municipality must issue an addendum to the bidding documents identifying the new criteria.
(c) If the bidder fails to supply information requested concerning responsibility within the time and manner specified in the bid documents, the state or municipality may base its determination of responsibility upon any available information related to the supplemental criteria or may find the bidder not responsible.
(d) If the state or municipality determines a bidder to be not responsible, the state or municipality must provide, in writing, the reasons for the determination. The bidder may appeal the determination within the time period specified in the bidding documents by presenting additional information to the state or municipality. The state or municipality must consider the additional information before issuing its final determination. If the final determination affirms that the bidder is not responsible, the state or municipality may not execute a contract with any other bidder until two business days after the bidder determined to be not responsible has received the final determination.
(e) If the bidder has a history of receiving monetary penalties for not achieving the apprentice utilization requirements pursuant to RCW 39.04.320, or is habitual in utilizing the good faith effort exception process, the bidder must submit an apprenticeship utilization plan within ten business days immediately following the notice to proceed date.
(5) The capital projects advisory review board created in RCW 39.10.220 shall develop suggested guidelines to assist the state and municipalities in developing supplemental bidder responsibility criteria. The guidelines must be posted on the board's website.
[ 2025 c 173 s 1; 2025 c 63 s 1; 2023 c 88 s 1; 2020 c 255 s 2; 2019 c 232 s 15; 2018 c 243 s 1; 2017 c 258 s 2; 2010 c 276 s 2; 2009 c 197 s 2; 2007 c 133 s 2. ]
NOTES:
Reviser's note: This section was amended by 2025 c 63 s 1 and by 2025 c 173 s 1, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Effective date—2025 c 173: See note following RCW 49.30.060.
Effective date—2025 c 63 s 1: "Section 1 of this act takes effect July 1, 2026." [ 2025 c 63 s 3.]
Expiration date—2025 c 63 s 1: "Section 1 of this act expires July 1, 2027." [ 2025 c 63 s 4.]
Effective date—2018 c 243: "This act takes effect July 1, 2019." [ 2018 c 243 s 2.]
Findings—2017 c 258: "The legislature finds that government contracts should not be awarded to those who knowingly and intentionally violate state laws. The legislature also finds that businesses that follow the law and pay their workers appropriately are placed at a competitive disadvantage to those who reduce costs by willfully violating the minimum wage act and wage payment act. In order to create a level playing field for businesses and avoid taxpayer contracts going to those that willfully violate the law and illegally withhold money from workers, the state should amend the state responsible bidder criteria to consider whether a company has willfully violated the state's wage payment laws over the previous three years." [ 2017 c 258 s 1.]
Rules—Implementation—2009 c 197: See note following RCW 39.04.320.
PDFRCW 39.04.350
Bidder responsibility criteria—Verification of compliance—Sworn statement—Apprentice utilization plan—Supplemental criteria. (Effective July 1, 2027.)
(1) Before award of a public works contract, a bidder must meet the following responsibility criteria to be considered a responsible bidder and qualified to be awarded a public works project. The bidder must:
(a) At the time of bid submittal, have a certificate of registration in compliance with chapter 18.27 RCW, a plumbing contractor license in compliance with chapter 18.106 RCW, an elevator contractor license in compliance with chapter 70.87 RCW, or an electrical contractor license in compliance with chapter 19.28 RCW, as required under the provisions of those chapters;
(b) Have a current state unified business identifier number;
(c) If applicable, have industrial insurance coverage for the bidder's employees working in Washington as required in Title 51 RCW; an employment security department number as required in Title 50 RCW; and a state excise tax registration number as required in Title 82 RCW;
(d) Not be disqualified from bidding on any public works contract under RCW 39.06.010 or 39.12.065(3);
(e) If bidding on a public works project subject to the apprentice utilization requirements in RCW 39.04.320, not have been found out of compliance by the Washington state apprenticeship and training council for working apprentices out of ratio, without appropriate supervision, or outside their approved work processes as outlined in their standards of apprenticeship under chapter 49.04 RCW for the one-year period immediately preceding the date of the bid solicitation;
(f)(i) Have completed at least one public works project within the previous three years and have not received a citation for a violation of this chapter, chapter 39.12 RCW, or those provided in RCW 39.12.055 (1) through (3) during that same time period; or (ii) have at least one designated person who is a current employee or officer and who has received training on the requirements related to public works and prevailing wage under this chapter and chapter 39.12 RCW within the previous three years. The training must be provided by the department of labor and industries or by a training provider whose curriculum is approved by the department. The department, in consultation with the prevailing wage advisory committee, must determine the length of the training. The department of labor and industries must keep records of persons that have completed the training in the previous three years and make the records available on its website. Responsible parties may rely on the records made available by the department;
(g) Within the three-year period immediately preceding the date of the bid solicitation, not have been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW 49.48.082, any provision of chapter 49.46, 49.48, or 49.52 RCW; and
(h) At the time of bid submittal, not be subject to a revocation of a minor work permit under RCW 49.12.390(4).
(2)(a) The department of labor and industries shall publish on its website available information in order for contracting agencies to verify the status of a bidder's compliance with each of the criteria under subsection (1)(a) through (f) of this section.
(b) Before award of a public works contract, a bidder shall submit to the contracting agency a signed statement in accordance with chapter 5.50 RCW verifying under penalty of perjury that the bidder is in compliance with the responsible bidder criteria requirement of subsection (1)(g) and (h) of this section. A contracting agency may reasonably rely upon such a sworn statement. The contracting agency shall verify that the bidder meets the remaining criteria in subsection (1) of this section through publicly available information on the department of labor and industries' website.
(3)(a) In addition to the bidder responsibility criteria in subsection (1) of this section, for a project subject to apprentice utilization requirements under RCW 39.04.320, the bidder shall submit an apprentice utilization plan to the awarding agency before receiving the notice to proceed. A contracting agency may exempt a bidder from the requirements of this subsection if the bidder met or exceeded apprentice utilization requirements on the last public works project the bidder completed. Contracting agencies may rely on records made available by the department of labor and industries to determine whether a bidder is eligible for the exemption in this subsection.
(b) The department of labor and industries shall develop an apprentice utilization plan template and make the template available to awarding agencies and bidders. The plan template must include, at minimum: The projected start and end dates of the project; estimated total work hours; estimated apprentice hours by apprenticeable occupation; list of state registered apprenticeship programs to be contacted; and list of estimated apprenticeship training agents or sponsors on the project. The plan template must also include educational material on apprentice utilization requirements, including how to access apprentices and contact apprenticeship programs and where to find additional and relevant resources. The department may approve the use of a template developed by an awarding agency if it meets the minimum requirements of this subsection.
(c) The department of labor and industries shall publish completed apprentice utilization plans on its website.
(4) In addition to the bidder responsibility criteria in subsection (1) of this section, the state or municipality may adopt relevant supplemental criteria for determining bidder responsibility applicable to a particular project which the bidder must meet.
(a) Supplemental criteria for determining bidder responsibility, including the basis for evaluation and the deadline for appealing a determination that a bidder is not responsible, must be provided in the invitation to bid or bidding documents.
(b) In a timely manner before the bid submittal deadline, a potential bidder may request that the state or municipality modify the supplemental criteria. The state or municipality must evaluate the information submitted by the potential bidder and respond before the bid submittal deadline. If the evaluation results in a change of the criteria, the state or municipality must issue an addendum to the bidding documents identifying the new criteria.
(c) If the bidder fails to supply information requested concerning responsibility within the time and manner specified in the bid documents, the state or municipality may base its determination of responsibility upon any available information related to the supplemental criteria or may find the bidder not responsible.
(d) If the state or municipality determines a bidder to be not responsible, the state or municipality must provide, in writing, the reasons for the determination. The bidder may appeal the determination within the time period specified in the bidding documents by presenting additional information to the state or municipality. The state or municipality must consider the additional information before issuing its final determination. If the final determination affirms that the bidder is not responsible, the state or municipality may not execute a contract with any other bidder until two business days after the bidder determined to be not responsible has received the final determination.
(5) The capital projects advisory review board created in RCW 39.10.220 shall develop suggested guidelines to assist the state and municipalities in developing supplemental bidder responsibility criteria. The guidelines must be posted on the board's website.
[ 2025 c 173 s 1; 2025 c 63 s 2; 2023 c 88 s 1; 2020 c 255 s 2; 2019 c 232 s 15; 2018 c 243 s 1; 2017 c 258 s 2; 2010 c 276 s 2; 2009 c 197 s 2; 2007 c 133 s 2.]
Reviser's note: This section was amended by 2025 c 63 s 2 and by 2025 c 173 s 1, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Effective date—2025 c 173: See note following RCW 49.30.060.
Effective date—2025 c 63 s 2: "Section 2 of this act takes effect July 1, 2027." [ 2025 c 63 s 5.]
Effective date—2018 c 243: "This act takes effect July 1, 2019." [ 2018 c 243 s 2.]
Findings—2017 c 258: "The legislature finds that government contracts should not be awarded to those who knowingly and intentionally violate state laws. The legislature also finds that businesses that follow the law and pay their workers appropriately are placed at a competitive disadvantage to those who reduce costs by willfully violating the minimum wage act and wage payment act. In order to create a level playing field for businesses and avoid taxpayer contracts going to those that willfully violate the law and illegally withhold money from workers, the state should amend the state responsible bidder criteria to consider whether a company has willfully violated the state's wage payment laws over the previous three years." [ 2017 c 258 s 1.]
Rules—Implementation—2009 c 197: See note following RCW 39.04.320.
(1) No later than 30 days after satisfactory completion of any additional work or portion of any additional work by a contractor, subcontractor, or supplier on a public works project or private construction project, except private residential projects of 12 units or less, and receipt by the owner, state, or municipality of a request from the contractor for issuance of a change order to the contract, the owner, state, or municipality shall issue a change order to the contract for the full dollar amount of the work not in dispute to the contractor. Within 10 days of receipt of a change order from the owner, state, municipality, or upper-tier contractor, the contractor or subcontractor must issue change orders to lower-tier subcontractors impacted by the change. If the owner, state, or municipality does not issue such a change order within the 30 days, or the contractor or upper-tier subcontractor does not issue a change order to lower-tier subcontractors within 10 days after receipt of the approved change order, interest must accrue on the dollar amount of the additional work satisfactorily completed and not in dispute until a change order is issued. The owner, contractor, subcontractor, state, or municipality shall pay their proportionate share of the interest at a rate of one percent per month. For the purposes of this section, as it pertains to obligations of an owner, state, or municipality, additional work is work beyond the scope defined in the contract between the contractor and the owner, state, or municipality.
(2) No later than 30 days after satisfactory completion of any additional work or portion of any additional work authorized by the owner, state, or municipality and a request by a subcontractor or supplier, the contractor must request a change order from the owner, state, or municipality. A lower-tier subcontractor or supplier must request a change order from the upper-tier contractor 30 days after the completion of the additional work and a request from the lower-tier subcontractor. If a contractor or subcontractor has requested the change order from the owner, upper-tier contractor, state, or municipality within 30 days of the request from the subcontractor or supplier, the contractor or subcontractor is not liable for any interest on the unpaid dollar amount for any additional work satisfactorily completed and not in dispute if the owner, upper-tier contractor, state, or municipality has not issued the requested change order. This section does not provide any rights to a contractor, subcontractor, or supplier against a party with whom they are not a party to a written contract.
(3) An aggrieved party may bring a civil action for violations of this section in a court of competent jurisdiction for appropriate relief, including interest and reasonable attorneys' fees and costs.
[ 2024 c 199 s 1; 2009 c 193 s 1. ]
(1) For any public work estimated to cost over one million dollars, the contract must contain a provision requiring the submission of certain information about off-site, prefabricated, nonstandard, project specific items produced under the terms of the contract and produced outside Washington. The information must be submitted to the department of labor and industries under subsection (2) of this section. The information that must be provided is:
(a) The estimated cost of the public works project;
(b) The name of the awarding agency and the title of the public works project;
(c) The contract value of the off-site, prefabricated, nonstandard, project specific items produced outside Washington, including labor and materials; and
(d) The name, address, and federal employer identification number of the contractor that produced the off-site, prefabricated, nonstandard, project specific items.
(2)(a) The required information under this section must be submitted by the contractor or subcontractor as a part of the affidavit of wages paid form filed with the department of labor and industries under RCW 39.12.040. This information is only required to be submitted by the contractor or subcontractor who directly contracted for the off-site, prefabricated, nonstandard, project specific items produced outside Washington.
(b) The department of labor and industries shall include requests for the information about off-site, prefabricated, nonstandard, project specific items produced outside Washington on the affidavit of wages paid form required under RCW 39.12.040.
(c) The department of enterprise services shall develop standard contract language to meet the requirements of subsection (1) of this section and make the language available on its website.
(d) Failure to submit the information required in subsection (1) of this section as part of the affidavit of wages paid form does not constitute a violation of RCW 39.12.050.
(3) For the purposes of this section, "off-site, prefabricated, nonstandard, project specific items" means products or items that are: (a) Made primarily of architectural or structural precast concrete, fabricated steel, pipe and pipe systems, or sheet metal and sheet metal duct work; (b) produced specifically for the public work and not considered to be regularly available shelf items; (c) produced or manufactured by labor expended to assemble or modify standard items; and (d) produced at an off-site location.
(4) The department of labor and industries shall transmit information collected under this section to the capital projects advisory review board created in RCW 39.10.220 for review.
(5) This section applies to contracts entered into between September 1, 2010, and December 31, 2013.
(6) This section does not apply to department of transportation public works projects.
(7) This section does not apply to local transportation public works projects.
[ 2015 c 225 s 38; 2010 c 276 s 1. ]
(1) In any bidding process for public works in which a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage must be applied to the bid of that nonresident contractor.
(2) A nonresident contractor from a state that provides a percentage bid preference means a contractor that:
(a) Is from a state that provides a percentage bid preference to its resident contractors bidding on public works contracts; and
(b) At the time of bidding on a public works project, does not have a physical office located in Washington.
(3) The state of residence for a nonresident contractor is the state in which the contractor was incorporated or, if not a corporation, the state where the contractor's business entity was formed.
(4) This section does not apply to public works procured pursuant to RCW 39.04.280, RCW 39.04.151 through 39.04.154, or any other procurement exempt from competitive bidding.
[ 2023 c 395 s 28; 2015 c 225 s 39; 2011 c 345 s 1. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Conflict with federal requirements—2011 c 345: "If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state or local authority, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state or local authority." [ 2011 c 345 s 2.]
The repair or replacement of a city, town, or county bridge deemed structurally deficient, as defined in RCW 43.21C.470, may use the contracting process available under RCW 47.28.170.
[ 2015 c 144 s 3. ]
If a public works project includes landscaping, at least 25 percent of the planted area must be pollinator habitat to the extent practicable. For purposes of this section, "pollinator habitat" means an area of land that is or may be developed as habitat beneficial for the feeding, nesting, and reproduction of all pollinators, including honey bees. The department of agriculture, in consultation with the conservation commission and the department of fish and wildlife, must develop a list of native forage plants that are pollen-rich or nectar-rich and beneficial for all pollinators, including honey bees.
[ 2021 c 278 s 7. ]
NOTES:
Purpose—Intent—2021 c 278: See note following RCW 43.23.300.
(1)(a) For any building, bridge, ferry, or park being constructed or replaced after July 1, 2024, as a public works project, there must be installed in appropriate locations signs displaying the 988 national suicide prevention and mental health crisis hotline.
(b) The public body as defined in RCW 39.10.210 in control of a public works project in this subsection must decide where signs under this section would be physically feasible and appropriate. The following facilities are recommended to have such signs:
(i) Bridges where suicides by jumping have occurred or are likely to occur; and
(ii) Locations that provide services to people that have high incidence of suicide or mental health conditions that would benefit from knowing about the hotline.
(c) The signs must be designed to communicate that dialing 988 on a telephone will connect callers to behavioral health and suicide prevention services as provided in accordance with state and federal laws governing the 988 number.
(d) If a sign is located along a state highway or the interstate system, the department of transportation must approve the location prior to erecting the sign, but no permit is necessary.
(e) Signs created under this section may not conflict with provisions of the manual of uniform traffic control devices or existing state laws related to placement and design of signs.
(2) This section does not create a private right of action by, or a legal duty to, any party, and may not be used to impose liability on the public body if a sign has or has not been erected on its property. The state of Washington, including all of its agencies, subdivisions, employees, and agents, shall not be liable in tort for any violation of this section, notwithstanding any other provision of law.
(3) The public body may accept gifts or donations to pay for the creation, installation, or maintenance of signs under this section.
[ 2022 c 191 s 11. ]
NOTES:
Effective date—2022 c 191 s 11: "Section 11 of this act takes effect July 1, 2024." [ 2022 c 191 s 14.]
Findings—Intent—2022 c 191: See note following RCW 43.60A.260.
(1)(a) The capital projects advisory review board created in chapter 39.10 RCW shall review the extent to which prompt pay statutes meet the needs of small businesses, as defined in RCW 39.26.010, particularly women and minority-owned businesses as certified under chapter 39.19 RCW or as officially recognized as such by a local public entity. These statutes include RCW 39.04.250, 39.76.011, and 39.76.020.
(b) The capital projects advisory review board must present findings and any recommendations the board develops to the appropriate committees of the legislature on or before November 1, 2024.
(2) In carrying out the review and considering possible recommendations under subsection (1) of this section, the board shall engage with a broad range of stakeholders.
[ 2024 c 276 s 2. ]
NOTES:
Finding—Intent—Effective date—2024 c 276: See notes following RCW 39.04.440.
In considering possible recommendations under RCW 39.04.430(1)(b), at a minimum the capital projects advisory review board shall consider:
(1) Requiring the state and local entities to pay the prime contractor within 30 days for work satisfactorily completed or materials delivered by a subcontractor of any tier that is a small business certified with the office of minority and women's business enterprises under chapter 39.19 RCW, or is recognized as a women or minority-owned business enterprise in a state of Washington port, county, or municipal small business or women or minority-owned business enterprise program;
(2) Requiring that, within 10 days of receipt of payment, the prime contractor and each higher tier subcontractor must make payment to its subcontractor until the subcontractor that is a certified small business or recognized women or minority-owned business has received payment.
[ 2024 c 276 s 3. ]
NOTES:
Finding—Intent—2024 c 276: "(1) The legislature finds that prompt pay requirements address the acceptable amount of time that payments must be made to contractors and subcontractors, and under what circumstances exceptions can be made. Washington state has prompt pay statutes that apply to public works commissioned by the state or local public entities such as counties, cities, towns, port districts, school districts, and other public entities in the state. These statutes intend to promote efficient implementation of public works projects by, among other things, requiring timely payment to assist contractors and subcontractors in operating their businesses and meet working capital and cash flow needs, while enabling public entities to address such things as disagreements over amounts owed, unsatisfactory performance, and noncompliance with the terms of the contract.
(2) The legislature intends to review how well prompt pay provisions are working for small businesses, particularly women and minority-owned businesses, potential improvements that could be considered, and the potential impacts on the industry any recommendations might have." [ 2024 c 276 s 1.]
Effective date—2024 c 276: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 26, 2024]." [ 2024 c 276 s 4.]
(1) The rights provided in chapter 223, Laws of 1992 may not be waived by the parties and a contract provision that provides for waiver of the rights provided in chapter 223, Laws of 1992 is void as against public policy.
(2) Chapter 223, Laws of 1992 is to be liberally construed to provide security for all parties intended to be protected by its provisions.
[ 1992 c 223 s 6. ]
NOTES:
Effective date—1992 c 223: See note following RCW 39.76.011.
Application—1992 c 223: See RCW 39.04.901.
RCW 39.76.011, 60.28.011, 60.28.021, 60.28.051, 39.04.250, and 39.04.900 are applicable to all public works contracts entered into on or after September 1, 1992, relating to the construction of any work of improvement.
[ 2009 c 219 s 1; 1992 c 223 s 7. ]
NOTES:
Effective date—1992 c 223: See note following RCW 39.76.011.
No agency of the state or any of its political subdivisions may execute a contract:
(1) With any contractor who is not registered or licensed as may be required by the laws of this state other than contractors on highway projects who have been prequalified as required by RCW 47.28.070, with the department of transportation to perform highway construction, reconstruction, or maintenance; or
(2) For two years from the date that a violation is finally determined, with any person or entity who has been determined by the respective administering agency to have violated RCW 50.12.070(1)(b), 51.16.070(1)(b), or * 82.32.070(1)(b). During this two-year period, the person or entity may not be permitted to bid, or have a bid considered, on any public works contract.
[ 1997 c 54 s 1; 1984 c 7 s 43; 1967 c 70 s 3. ]
NOTES:
*Reviser's note: RCW 82.32.070 was amended by 1999 c 358 s 14, changing subsection (1)(b) to subsection (2).
Construction building permits—Cities, towns or counties prohibited from issuing without verification of registration: RCW 18.27.110.
A public works contractor must verify responsibility criteria for each first tier subcontractor, and a subcontractor of any tier that hires other subcontractors must verify responsibility criteria for each of its subcontractors. Verification shall include that each subcontractor, at the time of subcontract execution, meets the responsibility criteria listed in RCW 39.04.350(1) and possesses an electrical contractor license, if required by chapter 19.28 RCW, an elevator contractor license, if required by chapter 70.87 RCW, or a plumbing contractor license[,] if required by chapter 18.106 RCW. This verification requirement, as well as the responsibility criteria, must be included in every public works contract and subcontract of every tier.
[ 2023 c 88 s 2; 2007 c 133 s 3. ]
(1)(a) Whenever any board, council, commission, trustees, or body acting for the state or any county or municipality or any public body must contract with any person or corporation to do any work for the state, county, or municipality, or other public body, city, town, or district, such board, council, commission, trustees, or body must require the person or persons with whom such contract is made to make, execute, and deliver to such board, council, commission, trustees, or body a good and sufficient bond, with a surety company as surety, conditioned that such person or persons must:
(i) Faithfully perform all the provisions of such contract;
(ii) Pay all laborers, mechanics, and subcontractors and material suppliers, and all persons who supply such person or persons, or subcontractors, with provisions and supplies for the carrying on of such work; and
(iii) Pay the taxes, increases, and penalties incurred on the project under Titles 50, 51, and 82 RCW on: (A) Projects referred to in RCW 60.28.011(1)(b); and/or (B) projects for which the bond is conditioned on the payment of such taxes, increases, and penalties.
(b) The bond, in cases of cities and towns, must be filed with the clerk or comptroller thereof, and any person or persons performing such services or furnishing material to any subcontractor has the same right under the provisions of such bond as if such work, services, or material was furnished to the original contractor.
(2) The provisions of RCW 39.08.010 through 39.08.030 do not apply to any money loaned or advanced to any such contractor, subcontractor, or other person in the performance of any such work.
(3) On contracts of one hundred fifty thousand dollars or less, at the option of the contractor or the general contractor/construction manager as defined in RCW 39.10.210, the respective public entity may, in lieu of the bond, retain ten percent of the contract amount for a period of thirty days after date of final acceptance, or until receipt of all necessary releases from the department of revenue, the employment security department, and the department of labor and industries and settlement of any liens filed under chapter 60.28 RCW, whichever is later. The recovery of unpaid wages and benefits must be the first priority for any actions filed against retainage held by a state agency or authorized local government.
(4) For contracts of one hundred fifty thousand dollars or less, the public entity may accept a full payment and performance bond from an individual surety or sureties.
(5) The surety must agree to be bound by the laws of the state of Washington and subjected to the jurisdiction of the state of Washington.
[ 2017 c 75 s 1; 2013 c 113 s 2. Prior: 2007 c 218 s 88; 2007 c 210 s 3; 1989 c 145 s 1; 1982 c 98 s 5; 1975 1st ex.s. c 278 s 23; 1967 c 70 s 2; 1915 c 28 s 1; 1909 c 207 s 1; RRS s 1159; prior: 1897 c 44 s 1; 1888 p 15 s 1. ]
NOTES:
Intent—Finding—2007 c 218: See note following RCW 41.08.020.
Construction—Severability—1975 1st ex.s. c 278: See notes following RCW 11.08.160.
State highway construction and maintenance, bond and surety requirements: Chapter 47.28 RCW.
If any board of county commissioners of any county, or mayor and common council of any incorporated city or town, or tribunal transacting the business of any municipal corporation shall fail to take such bond as herein required, such county, incorporated city or town, or other municipal corporation, shall be liable to the persons mentioned in RCW 39.08.010, to the full extent and for the full amount of all such debts so contracted by such contractor.
[ 1909 c 207 s 2; RRS s 1160. Prior: 1888 p 15 s 2. Formerly RCW 39.08.070. ]
(1)(a) The bond mentioned in RCW 39.08.010 must be in an amount equal to the full contract price agreed to be paid for such work or improvement, except under subsection (2) of this section, and must be to the state of Washington, except as otherwise provided in RCW 39.08.100, and except in cases of cities, towns, public transportation benefit areas, passenger-only ferry service districts, and water-sewer districts, in which cases such municipalities may by general ordinance or resolution fix and determine the amount of such bond and to whom such bond runs. However, the same may not be for a less amount than 25 percent of the contract price of any such improvement for cities, towns, public transportation benefit areas, and passenger-only ferry service districts, and not less than the full contract price of any such improvement for water-sewer districts, and may designate that the same must be payable to such city, town, water-sewer district, public transportation benefit area, or passenger-only ferry service district, and not to the state of Washington, and all such persons mentioned in RCW 39.08.010 have a right of action in his, her, or their own name or names on such bond for work done by such laborers or mechanics, and for materials furnished or provisions and goods supplied and furnished in the prosecution of such work, or the making of such improvements, and the state has a right of action for the collection of taxes, increases, and penalties specified in RCW 39.08.010: PROVIDED, That, except for the state with respect to claims for taxes, increases, and penalties specified in RCW 39.08.010, such persons do not have any right of action on such bond for any sum whatever, unless within 30 days from and after the completion of the contract with an acceptance of the work by the affirmative action of the board, council, commission, trustees, officer, or body acting for the state, county or municipality, or other public body, city, town or district, the laborer, mechanic or subcontractor, or material supplier, or person claiming to have supplied materials, provisions or goods for the prosecution of such work, or the making of such improvement, must present to and file with such board, council, commission, trustees or body acting for the state, county or municipality, or other public body, city, town or district, a notice in writing in substance as follows:
| To (here insert the name of the state, county or municipality or other public body, city, town or district): | | | | --- | --- | --- | | Notice is hereby given that the undersigned (here insert the name of the laborer, mechanic or subcontractor, or material supplier, or person claiming to have furnished labor, materials or provisions for or upon such contract or work) has a claim in the sum of . . . . . . dollars (here insert the amount) against the bond taken from . . . . . . (here insert the name of the principal and surety or sureties upon such bond) for the work of . . . . . . (here insert a brief mention or description of the work concerning which said bond was taken). | | | | | (here to be signed) | . . . . |
(b) Such notice must be signed by the person or corporation making the claim or giving the notice, and the notice, after being presented and filed, is a public record open to inspection by any person, and in any suit or action brought against such surety or sureties by any such person or corporation to recover for any of the items specified in this section, the claimant is entitled to recover in addition to all other costs, attorneys' fees in such sum as the court adjudges reasonable. However, attorneys' fees are not allowed in any suit or action brought or instituted before the expiration of thirty days following the date of filing of the notice as provided in this section. However, any city may avail itself of the provisions of RCW 39.08.010, 39.08.015, and 39.08.030, notwithstanding any charter provisions in conflict with this section. Moreover, any city or town may impose any other or further conditions and obligations in such bond as may be deemed necessary for its proper protection in the fulfillment of the terms of the contract secured thereby, and not in conflict with this section. The 30-day notice requirement under this subsection does not apply to claims made by the state for taxes, increases, and penalties specified in RCW 39.08.010.
(2) Under the job order contracting procedure described in RCW 39.10.420, bonds will be in an amount not less than the dollar value of all open work orders. Under the design-build procedure described in RCW 39.10.330, bonds will be in an amount not less than the dollar value of the contracted amount of the construction portion of the contract. A performance and payment bond is not required for the portion of the design-build contract that includes design services, preconstruction services, and other services that are not public works construction included in the contract.
(3) Where retainage is not withheld pursuant to RCW 60.28.011(1)(b), upon final acceptance of the public works project, the state, county, municipality, or other public body must within thirty days notify the department of revenue, the employment security department, and the department of labor and industries of the completion of contracts over $35,000.
[ 2025 c 103 s 2; 2018 c 89 s 1. Prior: 2013 c 113 s 4; (2013 c 113 s 3 expired June 30, 2016); 2013 c 28 s 2; (2013 c 28 s 1 expired June 30, 2016); (2009 c 473 s 1 expired June 30, 2016); 2007 c 218 s 89; 2003 c 301 s 4; 1989 c 58 s 1; 1977 ex.s. c 166 s 4; 1915 c 28 s 2; 1909 c 207 s 3; RRS s 1161; prior: 1899 c 105 s 1; 1888 p 16 s 3. Formerly RCW 39.08.030 through 39.08.060. ]
NOTES:
Effective date—2018 c 89: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 15, 2018]." [ 2018 c 89 s 3.]
Effective date—2013 c 113 s 4: "Section 4 of this act takes effect June 30, 2016." [ 2013 c 113 s 10.]
Expiration date—2013 c 113 s 3: "Section 3 of this act expires June 30, 2016." [ 2013 c 113 s 9.]
Effective date—2013 c 28 s 2: "Section 2 of this act takes effect June 30, 2016." [ 2013 c 28 s 4.]
Expiration date—2013 c 28 s 1: "Section 1 of this act expires June 30, 2016." [ 2013 c 28 s 3.]
Expiration date—2009 c 473: "This act expires June 30, 2016." [ 2009 c 473 s 3.]
Intent—Finding—2007 c 218: See note following RCW 41.08.020.
Severability—1977 ex.s. c 166: "If any provision of this 1977 amendatory act, or its application to any person or circumstance is held invalid, the remainder of the act, or the application of the provision to the other persons or circumstances is not affected." [ 1977 ex.s. c 166 s 9.]
Every person, firm, or corporation furnishing materials, supplies, or provisions to be used in the construction, performance, carrying on, prosecution, or doing of any work for the state, or any county, city, town, district, municipality, or other public body, shall, not later than ten days after the date of the first delivery of such materials, supplies, or provisions to any subcontractor or agent of any person, firm, or corporation having a subcontract for the construction, performance, carrying on, prosecution, or doing of such work, deliver or mail to the contractor a notice in writing stating in substance and effect that such person, firm, or corporation has commenced to deliver materials, supplies, or provisions for use thereon, with the name of the subcontractor or agent ordering or to whom the same is furnished and that such contractor and his or her bond will be held for the payment of the same, and no suit or action shall be maintained in any court against the contractor or his or her bond to recover for such material, supplies, or provisions or any part thereof unless the provisions of this section have been complied with.
[ 2011 c 336 s 804; 1915 c 167 s 1; RRS s 1159-1. Formerly RCW 39.08.020. ]
On contracts for construction, maintenance, or repair of a marine vessel, the department of transportation, a public transportation benefit area, a passenger-only ferry service district, or any county may permit, subject to specified format and conditions, the substitution of one or more of the following alternate forms of security in lieu of all or part of the bond: Certified check, replacement bond, cashier's check, treasury bills, an irrevocable bank letter of credit, assignment of a savings account, or other liquid assets specifically approved by the secretary of transportation, county engineer, or equivalent for a public transportation benefit area or a passenger-only ferry service district, for their respective projects. The secretary of transportation, county engineer, or equivalent for a public transportation benefit area or a passenger-only ferry service district, respectively, shall predetermine and include in the special provisions of the bid package the amount of this alternative form of security or bond, or a combination of the two, on a case-by-case basis, in an amount adequate to protect one hundred percent of the state's or county's exposure to loss. Assets used as an alternative form of security shall not be used to secure the bond. By October 1, 1989, the department shall develop and adopt rules under chapter 34.05 RCW that establish the procedures for determining the state's exposure to loss on contracts for construction, maintenance, or repair of a marine vessel. Prior to awarding any contract limiting security to the county's, public transportation benefit area's, or passenger-only ferry service district's exposure to loss, the governing board of the county or agency shall develop and adopt an ordinance or resolution that establishes the procedure for determining the county's or agency's exposure to loss on contracts for construction, maintenance, or repair of a marine vessel.
[ 2018 c 89 s 2; 2005 c 101 s 1; 1989 c 58 s 2. ]
NOTES:
Effective date—2018 c 89: See note following RCW 39.08.030.
Effective date—2005 c 101: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [April 20, 2005]." [ 2005 c 101 s 2.]
The legislature finds that the traditional process of awarding public works contracts in lump sum to the lowest responsible bidder is a fair and objective method of selecting a contractor. However, under certain circumstances, alternative public works contracting procedures may best serve the public interest if such procedures are implemented in an open and fair process based on objective and equitable criteria. In addition, alternative public works contracting can provide increased access to contracting opportunities for small, minority, women, and veteran-owned businesses. The purpose of this chapter is to authorize the use of certain supplemental alternative public works contracting procedures, to prescribe appropriate requirements to ensure that such contracting procedures serve the public interest and advance contracting opportunities for small, minority, women, and veteran-owned businesses to the extent permitted by law, and to establish a process for evaluation of such contracting procedures. It is the intent of the legislature to establish that, unless otherwise specifically provided for in law, public bodies may use only those alternative public works contracting procedures specifically authorized in this chapter, subject to the requirements of this chapter. It is also the intent of the legislature that inclusion plans required by this chapter may include, with public body approval and to the extent permitted by law, features to improve access to opportunities, including outreach and mentorship, capital including, modified payment provisions, training, and other features intended to maximize the participation and success of small, minority, women, and veteran-owned businesses.
[ 2023 c 395 s 4; 2010 1st sp.s. c 21 s 2; 2007 c 494 s 1; 1994 c 132 s 1. Formerly RCW 39.10.010. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Intent—2010 1st sp.s. c 21: "The establishment of alternative public works contracting procedures authorized for use by public bodies has been a complex, controversial, and challenging undertaking, but it has been successful. The key to the successful adoption and consideration of these procedures has depended, in great part, on the review and oversight mechanisms put in place by the legislature in chapter 39.10 RCW, as well as the countless hours of dedicated work by numerous stakeholders over many years. It is the intent of the legislature to clarify that, unless otherwise specifically provided for in law, public bodies that want to use an alternative public works contracting procedure may use only those procedures specifically authorized in chapter 39.10 RCW." [ 2010 1st sp.s. c 21 s 1.]
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Alternative public works contracting procedure" means the design-build, general contractor/construction manager, and job order contracting procedures authorized in RCW 39.10.300, 39.10.340, and 39.10.420, respectively.
(2) "Board" means the capital projects advisory review board.
(3) "Budget contingencies" means contingencies established by a public body outside of the design-build or general contractor/construction manager contract for payment of project costs that are not the responsibility of the design-builder or general contractor/construction manager under the respective contract.
(4) "Certified public body" means a public body certified to use design-build or general contractor/construction manager contracting procedures, or both, under RCW 39.10.270.
(5) "Coefficient" means the job order contractor's competitively bid numerical factor applied to the public body's prices as published in the unit price book.
(6) "Committee," unless otherwise noted, means the project review committee.
(7) "Design-build procedure" means a contract between a public body and another party in which the party agrees to both design and build the facility, portion of the facility, or other item specified in the contract.
(8) "General contractor/construction manager" means a firm with which a public body has selected to provide services during the design phase and negotiated a maximum allowable construction cost to act as construction manager and general contractor during the construction phase.
(9) "Heavy civil construction project" means a civil engineering project, the predominant features of which are infrastructure improvements.
(10) "Job order contract" means a contract in which the contractor agrees to a fixed period, indefinite quantity delivery order contract which provides for the use of work orders for public works as defined in RCW 39.04.010.
(11) "Job order contractor" means a registered or licensed contractor awarded a job order contract.
(12) "Maximum allowable construction cost" means the maximum cost of the work to construct the project including a percentage for risk contingency, negotiated support services, and approved change orders.
(13) "Negotiated support services" means items a general contractor would normally manage or perform on a construction project including, but not limited to surveying, hoisting, safety enforcement, provision of toilet facilities, temporary heat, cleanup, and trash removal, and that are negotiated as part of the maximum allowable construction cost.
(14) "Percent fee" means the percentage amount to be earned by the general contractor/construction manager as overhead and profit.
(15) "Price-related factor" means an evaluation factor that impacts costs which may include, but is not limited to overhead and profit, lump sum or guaranteed maximum price for the entire or a portion of the project, operating costs, or other similar factors that may apply to the project.
(16) "Public body" means any general or special purpose government in the state of Washington, including but not limited to state agencies, institutions of higher education, counties, cities, towns, ports, school districts, and special purpose districts.
(17) "Public works project" means any work for a public body within the definition of "public work" in RCW 39.04.010.
(18) "Risk contingency" means a contingency for use as defined in the contract and established as part of the maximum allowable construction cost for unexpected cost of work items that have not otherwise been included or addressed in the maximum allowable construction cost.
(19) "Small business" means a small business as defined in RCW 39.04.010.
(20) "Total contract cost" means the fixed amount for the detailed specified general conditions work, the negotiated maximum allowable construction cost, and the percent fee on the negotiated maximum allowable construction cost.
(21) "Total project cost" means the cost of the project less financing and land acquisition costs.
(22) "Unit price book" means a book containing specific prices, based on generally accepted industry standards and information, where available, for various items of work to be performed by the job order contractor.
(23) "Work order" means an order issued for a definite scope of work to be performed pursuant to a job order contract.
[ 2023 c 395 s 5; 2021 c 230 s 1; 2019 c 212 s 1. Prior: 2014 c 42 s 1; 2013 c 222 s 1; prior: 2010 1st sp.s. c 36 s 6014; 2007 c 494 s 101; 2005 c 469 s 3; prior: 2003 c 352 s 1; 2003 c 301 s 2; 2003 c 300 s 3; 2001 c 328 s 1; 2000 c 209 s 1; 1997 c 376 s 1; 1994 c 132 s 2. Formerly RCW 39.10.020. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 10, 2021]." [ 2021 c 230 s 23.]
Effective date—2013 c 222: "Sections 1 through 23 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect June 30, 2013." [ 2013 c 222 s 26.]
Effective date—2010 1st sp.s. c 36: See note following RCW 43.155.050.
Effective date—2001 c 328: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2001." [ 2001 c 328 s 8.]
Effective date—1997 c 376: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1997." [ 1997 c 376 s 10.]
(1) The board is created in the department of enterprise services to provide an evaluation of public capital projects construction processes, including the impact of contracting methods on project outcomes, and to advise the legislature on policies related to public works delivery methods.
(2) Members of the board identified in (a) through (f) of this subsection must be knowledgeable or have experience in public works procurement and contracting, including state and federal laws, rules, and best practices concerning public contracting for small, minority, women, and veteran-owned businesses, and are appointed as follows:
(a) Two representatives from construction general contracting; one representative from the architectural profession; one representative from the engineering profession; two representatives from construction specialty subcontracting; two representatives from construction trades labor organizations; one representative from the office of minority and women's business enterprises; one representative from a higher education institution; one representative from the department of enterprise services; one individual representing Washington cities; two representatives from private industry; one individual from the private sector representing the interests of the small, minority, women, or veteran-owned businesses community; and one representative of a domestic insurer authorized to write surety bonds for contractors in Washington state, each appointed by the governor. The board must reflect the gender, racial, ethnic, and geographic diversity of the state, including the interests of persons with disabilities. If a vacancy occurs, the governor shall fill the vacancy for the unexpired term;
(b) One member representing counties, selected by the Washington state association of counties;
(c) One member representing public ports, selected by the Washington public ports association;
(d) One member representing public hospital districts, selected by the association of Washington public hospital districts;
(e) One member representing school districts, selected by the Washington state school directors' association;
(f) One member representing transit, selected by the Washington state transit association; and
(g) Two members of the house of representatives, one from each major caucus, appointed by the speaker of the house of representatives, and two members of the senate, one from each major caucus, appointed by the president of the senate. Legislative members are nonvoting.
(3) Members selected under subsection (2)(a) of this section shall serve for terms of four years, with the terms expiring on June 30th on the fourth year of the term.
(4) The board chair is selected from among the appointed members by the majority vote of the voting members.
(5) Legislative members of the board shall be reimbursed for travel expenses in accordance with RCW 44.04.120. Nonlegislative members of the board, project review committee members, and committee chairs shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.
(6) Vacancies are filled in the same manner as appointed. Members of the board may be removed for malfeasance or misfeasance in office, upon specific written charges by the governor, under chapter 34.05 RCW.
(7) The board shall meet as often as necessary.
(8) Board members are expected to consistently attend board meetings. The chair of the board may ask the governor to remove any member who misses more than two meetings in any calendar year without cause.
(9) The department of enterprise services shall provide staff support as may be required for the proper discharge of the function of the board.
(10) The board may establish committees as it desires and may invite nonmembers of the board to serve as committee members.
(11) The board shall provide opportunities for persons and entities not represented on the board to participate and provide insights on matters of interest to the board, particularly with respect to the experiences of small, minority, women, and veteran-owned businesses.
[ 2023 c 395 s 6; 2021 c 230 s 2; 2013 c 222 s 2; 2007 c 494 s 102; 2005 c 377 s 1. Formerly RCW 39.10.800. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
The board has the following powers and duties:
(1) Develop and recommend to the legislature policies to encourage competition and to further enhance the quality, efficiency, and accountability of and equitable participation by small, minority, women, or veteran-owned businesses in capital construction projects through the use of traditional and alternative delivery methods in Washington, and make recommendations regarding best practices, expansion, continuation, elimination, or modification of the alternative public works contracting methods, including specific recommendations for reducing barriers for and increasing participation by small, minority, women, or veteran-owned businesses;
(2) Evaluate the use of existing contracting procedures and the potential future use of other alternative contracting procedures including competitive negotiation contracts;
(3) Submit recommendations to the appropriate committees of the legislature evaluating alternative contracting procedures that are not authorized under this chapter;
(4) Appoint members of committees; and
(5) Direct the department of enterprise services to collect quantitative and qualitative data on alternative public works contracting procedures to support the board's work in meeting the purpose established in RCW 39.10.220(1).
[ 2023 c 395 s 7; 2021 c 230 s 3; 2013 c 222 s 3; 2010 1st sp.s. c 21 s 3; 2009 c 75 s 1; 2007 c 494 s 103; 2005 c 377 s 2. Formerly RCW 39.10.810. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
Intent—2010 1st sp.s. c 21: See note following RCW 39.10.200.
(1) The board shall establish a project review committee to review and approve public works projects using the design-build and general contractor/construction manager contracting procedures authorized in RCW 39.10.300 and 39.10.340 and to certify public bodies as provided in RCW 39.10.270.
(2) The board shall, by a majority vote of the board, appoint persons to the committee who are knowledgeable in the use of the design-build and general contractor/construction manager contracting procedures. Appointments must represent a balance of public and private sector representatives of the board listed in RCW 39.10.220, and must include at least one member representing the interests of small, minority, women, or veteran-owned businesses.
(a) Each member of the committee shall be appointed for a term of three years. However, for initial appointments, the board shall stagger the appointment of committee members so that the first members are appointed to serve terms of one, two, or three years from the date of appointment. Appointees may be reappointed to serve more than one term.
(b) The committee shall, by a majority vote, elect a chair and vice chair for the committee.
(c) The committee chair may select a person or persons on a temporary basis as a nonvoting member if project specific expertise is needed to assist in a review.
(3) The chair of the committee, in consultation with the vice chair, may appoint one or more panels of at least six committee members to carry out the duties of the committee. Each panel shall have balanced representation of the private and public sector representatives serving on the committee, and shall include a member representing the interests of small, minority, women, or veteran-owned businesses.
(4) Any member of the committee directly or indirectly affiliated with a submittal before the committee must recuse himself or herself from the committee consideration of that submittal.
(5) Any person who sits on the committee or panel is not precluded from subsequently bidding on or participating in projects that have been reviewed by the committee.
(6) The committee shall meet as often as necessary to ensure that certification and approvals are completed in a timely manner.
[ 2023 c 395 s 8; 2021 c 230 s 4; 2013 c 222 s 4; 2007 c 494 s 104. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
The committee shall:
(1) Certify, or renew certification for, public bodies to use design-build or general contractor/construction manager contracting procedures, or both;
(2) Review and approve the use of the design-build or general contractor/construction manager contracting procedures on a project by project basis for public bodies that are not certified under RCW 39.10.270;
(3) Review and approve the use of alternative subcontractor selection under RCW 39.10.385 on a project-by-project basis for public bodies that are not certified under RCW 39.10.270, which review and approval may be concurrent with project approval; and
(4) Review and approve not more than two design-build demonstration projects that include procurement of operations and maintenance services for a period longer than three years.
[ 2021 c 230 s 5; 2019 c 212 s 2; 2013 c 222 s 5; 2009 c 75 s 2; 2007 c 494 s 105. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) The committee shall hold regular public meetings to carry out its duties as described in RCW 39.10.250. Committee meetings are subject to chapter 42.30 RCW.
(2) The committee shall publish notice of its public meetings at least twenty days before the meeting in a legal newspaper circulated in the area where the public body seeking certification is located, or where each of the proposed projects under consideration will be constructed. All meeting notices must be posted on the committee's website.
(3) The meeting notice must identify the public body that is seeking certification or project approval, and where applicable, a description of projects to be considered at the meeting. The notice must indicate when, where, and how the public may present comments regarding the committee's certification of a public body or approval of a project. Information submitted by a public body to be reviewed at the meeting shall be available on the committee's website at the time the notice is published.
(4) The committee must allow for public comment on the appropriateness of certification of a public body or on the appropriateness of the use of the proposed contracting procedure and the qualifications of a public body to use the contracting procedure. The committee shall receive and record both written and oral comments at the public meeting.
[ 2013 c 222 s 6; 2007 c 494 s 106. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) A public body may apply for certification to use the design-build or general contractor/construction manager contracting procedure, or both. Once certified, a public body may use the contracting procedure for which it is certified on individual projects without seeking committee approval for a period of three years. A public body seeking certification must submit to the committee an application in a format and manner as prescribed by the committee. The application must include a description of the public body's qualifications, its capital plan during the certification period, and its intended use of alternative contracting procedures.
(2) A public body seeking certification for the design-build procedure must demonstrate successful management of at least one design-build project within the previous five years. A public body seeking certification for the general contractor/construction manager procedure must demonstrate successful management of at least one general contractor/construction manager project within the previous five years.
(3) To certify a public body, the committee shall determine that the public body:
(a) Has the necessary experience and qualifications to determine which projects are appropriate for using alternative contracting procedures;
(b) Has the necessary experience and qualifications to carry out the alternative contracting procedure including, but not limited to: (i) Project delivery knowledge and experience; (ii) personnel with appropriate construction experience; (iii) a management plan and rationale for its alternative public works projects; (iv) demonstrated success in managing public works projects; (v) the ability to properly manage its capital facilities plan including, but not limited to, appropriate project planning and budgeting experience; and (vi) the ability to meet requirements of this chapter; and
(c) Has resolved any audit findings on previous public works projects in a manner satisfactory to the committee.
(4) The committee shall make its determination at the public meeting during which an application for certification is reviewed. Public comments must be considered before a determination is made. Within 10 business days of the public meeting, the committee shall provide a written determination to the public body, and make its determination available to the public on the committee's website.
(5) The committee may revoke any public body's certification upon a finding, after a public hearing, that its use of design-build or general contractor/construction manager contracting procedures no longer serves the public interest.
(6) The committee may renew the certification of a public body for additional three-year periods. The public body must submit an application for recertification at least three months before the initial certification expires. The committee may accept late applications, if administratively feasible, to avoid expiration of certification on a case-by-case basis. The application shall include updated information on the public body's experience and current staffing with the procedure it is applying to renew, and any other information requested in advance by the committee. The committee must review the application for recertification at a meeting held before expiration of the applicant's initial certification period. A public body must reapply for certification under the process described in subsection (1) of this section once the period of recertification expires.
(7) Certified public bodies must submit project data information as required in RCW 39.10.320 and 39.10.350.
(8) The department of transportation is not subject to the certification requirements under this section to use the design-build procedure, progressive design-build procedure, or any general contractor/construction manager contracting procedure on individual projects.
[ 2025 c 231 s 1; 2019 c 212 s 3; 2017 c 211 s 1; 2013 c 222 s 7; 2009 c 75 s 3; 2007 c 494 s 107. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2025 c 231: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 12, 2025]." [ 2025 c 231 s 6.]
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) A public body not certified under RCW 39.10.270 must apply for approval from the committee to use the design-build or general contractor/construction manager contracting procedure on a project. A public body seeking approval must submit to the committee an application in a format and manner as prescribed by the committee. The application must include a description of the public body's qualifications, a description of the project, the public body's intended use of alternative contracting procedures, and, if applicable, a declaration that the public body has elected to procure the project as a heavy civil construction project.
(2) To approve a proposed project, the committee shall determine that:
(a) The alternative contracting procedure will provide a substantial fiscal benefit or the use of the traditional method of awarding contracts in lump sum to the low responsive bidder is not practical for meeting desired quality standards or delivery schedules;
(b) The proposed project meets the requirements for using the alternative contracting procedure as described in RCW 39.10.300 or 39.10.340;
(c) The public body has the necessary experience or qualified team to carry out the alternative contracting procedure including, but not limited to: (i) Project delivery knowledge and experience; (ii) sufficient personnel with construction experience to administer the contract; (iii) a written management plan that shows clear and logical lines of authority; (iv) the necessary and appropriate funding and time to properly manage the job and complete the project; (v) continuity of project management team, including personnel with experience managing projects of similar scope and size to the project being proposed; and (vi) necessary and appropriate construction budget;
(d) For design-build projects, public body personnel or consultants are knowledgeable in the design-build process and are able to oversee and administer the contract; and
(e) The public body has resolved any audit findings related to previous public works projects in a manner satisfactory to the committee.
(3) The committee shall, if practicable, make its determination at the public meeting during which a submittal is reviewed. Public comments must be considered before a determination is made.
(4) Within 10 business days after the public meeting, the committee shall provide a written determination to the public body, and make its determination available to the public on the committee's website. If the committee fails to make a written determination within 10 business days of the public meeting, the request of the public body to use the alternative contracting procedure on the requested project shall be deemed approved.
(5) Failure of the committee to meet within sixty calendar days of a public body's application to use an alternative contracting procedure on a project shall be deemed an approval of the application.
(6) Except as provided in RCW 47.20.785(2), the department of transportation is not subject to the project approval requirements under this section.
[ 2025 c 231 s 2; 2014 c 42 s 2; 2013 c 222 s 8; 2007 c 494 s 108. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2025 c 231: See note following RCW 39.10.270.
Effective date—2013 c 222: See note following RCW 39.10.210.
Final determinations by the committee may be appealed to the board within seven days by the public body or by an interested party. A written notice of an appeal must be provided to the committee and, as applicable, to the public body. The board shall resolve an appeal within forty-five days of receipt of the appeal and shall send a written determination of its decision to the party making the appeal and to the appropriate public body, as applicable. The public body shall comply with the determination of the board.
[ 2007 c 494 s 109. ]
NOTES:
Sunset Act application: See note following chapter digest.
(1) Subject to the requirements in RCW 39.10.250, 39.10.270, or 39.10.280, public bodies may utilize the design-build procedure, including progressive design-build, for public works projects in which the total project cost is over $2,000,000 and where:
(a) The construction activities are highly specialized and a design-build approach is critical in developing the construction methodology; or
(b) The projects selected provide opportunity for greater innovation or efficiencies between the designer and the builder; or
(c) Significant savings in project delivery time would be realized.
(2) Subject to the process in RCW 39.10.270 or 39.10.280, public bodies may use the design-build procedure, including progressive design-build, for parking garages and preengineered metal buildings, regardless of cost.
(3) The design-build procedure may be used for the construction or erection of portable facilities as defined in WAC 392-343-018, or not more than 10 prefabricated modular buildings per installation site, regardless of cost and is not subject to approval by the committee.
(4) Except for utility projects and approved demonstration projects, the design-build procedure may not be used to procure operations and maintenance services for a period longer than three years. State agency projects that propose to use the design-build-operate-maintain procedure shall submit cost estimates for the construction portion of the project consistent with the office of financial management's capital budget requirements. Operations and maintenance costs must be shown separately and must not be included as part of the capital budget request.
(5) Subject to the process in RCW 39.10.280, a public body may seek committee approval for a design-build demonstration project that includes procurement of operations and maintenance services for a period longer than three years.
(6) Washington State University may perform design-build demonstration projects with a total project cost under $2,000,000 to develop best practices in encouraging participation of small business entities and of minority, women, and veteran-owned businesses, and in managing capital projects under $2,000,000. Washington State University shall provide reports to the board every other year, starting with two years after May 10, 2021. Such reports shall include information on the type of projects performed, the initial and final project cost and schedule of the projects, participation of small business entities and of minority, women, and veteran-owned businesses, and the best practices derived from the projects. The report shall include outreach measures developed in concert with the office of minority and women's business enterprises.
[ 2021 c 230 s 6; 2019 c 212 s 4; 2013 c 222 s 9; 2009 c 75 s 4; 2007 c 494 s 201. Prior: 2003 c 352 s 2; 2003 c 300 s 4; 2002 c 46 s 1; 2001 c 328 s 2. Formerly RCW 39.10.051. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
Effective date—2002 c 46: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 14, 2002]." [ 2002 c 46 s 5.]
Effective date—2001 c 328: See note following RCW 39.10.210.
(1) A public body utilizing the design-build contracting procedure shall provide:
(a) Reasonable budget contingencies totaling not less than five percent of the anticipated contract value;
(b) Staff or consultants with expertise and prior experience in the management of comparable projects;
(c) Contract documents that include alternative dispute resolution procedures to be attempted prior to the initiation of litigation;
(d) Submission of project information, as required by the board;
(e) Contract documents that require the contractor, subcontractors, and designers to submit project information required by the board; and
(f) Contract documents that require the design builder to submit plans for inclusion of underutilized firms as subcontractors and suppliers including, but not limited to, the office of minority and women's business enterprises certified businesses, veteran certified businesses, and small businesses as allowed by law.
(2) A public body utilizing the design-build contracting procedure may provide incentive payments to contractors for early completion, cost savings, or other goals if such payments are identified in the request for proposals.
[ 2019 c 212 s 5; 2013 c 222 s 10; 2007 c 494 s 203; 1994 c 132 s 7. Formerly RCW 39.10.070. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) Contracts for design-build services shall be awarded through a competitive process using public solicitation of proposals for design-build services. At a minimum, the public body shall publish at least once in a legal newspaper of general circulation published in, or as near as possible to, that part of the county in which the public work will be done, a notice of its request for qualifications from proposers for design-build services, and the availability and location of the request for proposal documents. The public body is encouraged to post the design-build opportunity in additional areas, such as websites for business associations or the office of minority and women's business enterprises, to further publicize the opportunity for qualified design-build teams. The request for qualifications documents shall include:
(a) A description of the project including the estimated design-build contract value and the intended use of the project;
(b) The reasons for using the design-build procedure;
(c) A description of the qualifications to be required of the proposer;
(d) A description of the process the public body will use to evaluate qualifications and finalists' proposals, including evaluation factors and the relative weight of factors and any specific forms to be used by the proposers;
(i) Evaluation factors for qualifications shall include technical qualifications, such as specialized experience and technical competence of the firms and the key design and construction personnel; capacity to perform; the proposer's past performance in utilization of business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs, to the extent permitted by law; ability to provide a performance and payment bond for the project; and other appropriate factors. Cost or price-related factors are not permitted in the request for qualifications phase;
(ii) Evaluation factors for finalists' proposals shall include the management plan to meet time and budget requirements and one or more price-related factors. Evaluation factors must include a proposer's inclusion plan for business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs as subconsultants, subcontractors, and suppliers for the project, to the extent permitted by law. Evaluation factors may also include, but not be limited to, the technical approach or the design concept;
(e) Protest procedures including time limits for filing a protest, which in no event may limit the time to file a protest to fewer than four business days from the date the proposer was notified of the selection decision;
(f) The proposed contract;
(g) The honorarium to be paid to finalists submitting responsive proposals and who are not awarded a design-build contract;
(h) The schedule for the procurement process and the project; and
(i) Other information relevant to the project.
(2) The public body shall establish an evaluation committee to evaluate the responses to the request for qualifications based solely on the factors, weighting, and process identified in the request for qualifications and any addenda issued by the public body. Based on the evaluation committee's findings, the public body shall select not more than five responsive and responsible finalists to submit proposals. The public body may, in its sole discretion, reject all proposals and shall provide its reasons for rejection in writing to all proposers.
(3) The public body must notify all proposers of the finalists selected to move to the next phase of the selection process. The process may not proceed to the next phase until two business days after all proposers are notified of the committee's selection decision. At the request of a proposer not selected as a finalist, the public body must provide the requesting proposer with a scoring summary of the evaluation factors for its proposal. Proposers filing a protest on the selection of the finalists must file the protest in accordance with the published protest procedures. The selection process may not advance to the next phase of selection until two business days after the final protest decision is transmitted to the protestor.
(4) Upon selection of the finalists, the public body shall issue a request for proposals to the finalists. The request for proposal documents shall include:
(a) Any specific forms to be used by the finalists; and
(b) Submission of a summary of the finalist's accident prevention program and an overview of its implementation.
(5) The public body shall establish an evaluation committee to evaluate the proposals submitted by the finalists. The finalists' proposals shall be evaluated and scored based solely on the factors, weighting, and process identified in the request for qualifications, the request for proposals, and in any addenda published by the public body. Public bodies may request best and final proposals from finalists. The public body may initiate negotiations with the finalist submitting the highest scored proposal. If the public body is unable to execute a contract with the finalist submitting the highest scored proposal, negotiations with that finalist may be suspended or terminated and the public body may proceed to negotiate with the next highest scored finalist. Public bodies shall continue in accordance with this procedure until a contract agreement is reached or the selection process is terminated.
(6) The public body shall notify all finalists of the selection decision and make a selection summary of the final proposals available to all proposers within two business days of such notification. If the public body receives a timely written protest from a finalist firm, the public body may not execute a contract until two business days after the final protest decision is transmitted to the protestor. The protestor must submit its protest in accordance with the published protest procedures.
(7) The firm awarded the contract shall provide a performance and payment bond for the contracted amount before the start of construction and no later than 10 days upon request from the public body. A performance and payment bond is not required for the portion of the design-build contract that includes design services, preconstruction services, and other services that are not public works construction included in the contract.
(8) Any contract must require the firm awarded the contract to track and report to the public body and to the office of minority and women's business enterprises its utilization of the office of minority and women's business enterprises certified businesses and veteran certified businesses.
(9) The public body shall provide appropriate honorarium payments to finalists submitting responsive proposals that are not awarded a design-build contract. Honorarium payments shall be sufficient to generate meaningful competition among potential proposers on design-build projects. In determining the amount of the honorarium, the public body shall recognize the level of effort required to meet the selection criteria.
[ 2025 c 103 s 1; 2023 c 395 s 9; 2021 c 230 s 7; 2019 c 212 s 6; 2014 c 19 s 1; 2013 c 222 s 11; 2009 c 75 s 5; 2007 c 494 s 204. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
Subject to the process in RCW 39.10.270 or 39.10.280, public bodies may utilize the general contractor/construction manager procedure for public works projects where at least one of the following is met:
(1) Implementation of the project involves complex scheduling, phasing, or coordination;
(2) The project involves construction at an occupied facility which must continue to operate during construction;
(3) The involvement of the general contractor/construction manager during the design stage is critical to the success of the project;
(4) The project encompasses a complex or technical work environment;
(5) The project requires specialized work on a building that has historic significance; or
(6) The project is, and the public body elects to procure the project as, a heavy civil construction project. However, no provision of this chapter pertaining to a heavy civil construction project applies unless the public body expressly elects to procure the project as a heavy civil construction project.
[ 2014 c 42 s 3; 2013 c 222 s 12; 2007 c 494 s 301. Prior: 2003 c 352 s 3; 2003 c 300 s 5; 2002 c 46 s 2; 2001 c 328 s 3. Formerly RCW 39.10.061. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2013 c 222: See note following RCW 39.10.210.
Effective date—2002 c 46: See note following RCW 39.10.300.
Effective date—2001 c 328: See note following RCW 39.10.210.
(1) A public body using the general contractor/construction manager contracting procedure shall provide for:
(a) The preparation of appropriate, complete, and coordinated design documents;
(b) Confirmation that a constructability analysis of the design documents has been performed prior to solicitation of a subcontract bid package;
(c) Reasonable budget contingencies totaling not less than five percent of the anticipated contract value;
(d) To the extent appropriate, on-site architectural or engineering representatives during major construction or installation phases;
(e) Employment of staff or consultants with expertise and prior experience in the management of comparable projects, critical path method schedule review and analysis, and the administration, pricing, and negotiation of change orders;
(f) Contract documents that include alternative dispute resolution procedures to be attempted before the initiation of litigation;
(g) Contract documents that: (i) Obligate the public owner to, in writing, accept, dispute, or reject a request for equitable adjustment, change order request, or claim within a specified time period but no later than 30 calendar days after the receipt by the public body of related documentation; (ii) provide that, if the request is disputed or rejected, the public owner shall state in writing why part or all of the request is disputed or rejected; and (iii) provide that if the public owner does not respond in writing to a request for equitable adjustment, change order request, or claim within the specified time period, the contractor shall not be deemed to have waived any right to the claims process;
(h) Submission of project information, as required by the board; and
(i) Contract documents that require the contractor, subcontractors, and designers to submit project information required by the board.
(2) A public body using the general contractor/construction manager contracting procedure may include an incentive clause for early completion, cost savings, or other performance goals if such incentives are identified in the request for proposals. No incentives granted may exceed five percent of the maximum allowable construction cost. No incentives may be paid from any contingency fund established for coordination of the construction documents or coordination of the work.
(3) If the construction is completed for less than the maximum allowable construction cost, any savings not otherwise negotiated as part of an incentive clause shall accrue to the public body. If the construction is completed for more than the maximum allowable construction cost, the additional cost is the responsibility of the general contractor/construction manager.
(4) If the public body and the general contractor/construction manager agree, in writing, on a price for additional work, the public body must issue a change order within 30 days of the written agreement. If the public body does not issue a change order within the 30 days, interest shall accrue on the dollar amount of the additional work satisfactorily completed until a change order is issued. The public body shall pay this interest at a rate of one percent per month.
[ 2021 c 230 s 8; 2014 c 42 s 4; 2007 c 494 s 302. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
(1) Public bodies should select general contractor/construction managers at a time in the project when the general contractor/construction manager's participation provides value.
(2) Contracts for the services of a general contractor/ construction manager under this section shall be awarded through a competitive process requiring the public solicitation of proposals for general contractor/construction manager services. At a minimum, the public body shall publish at least once in a legal newspaper of general circulation published in, or as near as possible to, that part of the county in which the public work will be performed, a notice of its request for qualifications from proposers for general contractor/construction manager services, and the availability and location of the request for proposal documents. The public body is encouraged to post the general contractor/construction manager opportunity in additional areas, such as websites for business associations or the office of minority and women's business enterprises, to further publicize the opportunity for qualified general contractors/construction managers. The public solicitation of proposals shall include:
(a) A description of the project, including programmatic, performance, and technical requirements and specifications when available;
(b) The reasons for using the general contractor/construction manager procedure;
(c) A description of the qualifications to be required of the firm, including submission of the firm's accident prevention program;
(d) A description of the process the public body will use to evaluate qualifications and proposals, including evaluation factors, the relative weight of factors, and protest procedures including time limits for filing a protest, which in no event may limit the time to file a protest to fewer than four business days from the date the proposer was notified of the selection decision;
(e) The form of the contract, including any contract for preconstruction services, to be awarded;
(f) The estimated maximum allowable construction cost; and
(g) The bid instructions to be used by the general contractor/construction manager finalists.
(3) Evaluation factors for qualifications of the general contractor/construction manager shall include, but not be limited to:
(a) Experience and technical competence of key personnel;
(b) The proposer's past performance with negotiated or similarly complex projects;
(c) The proposer's capacity to perform the work;
(d) The scope of work the firm proposes to self-perform and its past performance of that scope of work;
(e) The proposer's approach to executing the project, including ability to meet the project time and budget requirements; and
(f) The proposer's past performance in utilization of business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs and the inclusion plan for business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs as subconsultants, subcontractors, and suppliers for the project, to the extent permitted by law.
(4) A public body shall establish a committee to evaluate the proposals. After the committee has selected the most qualified finalists, at the time specified by the public body, these finalists shall submit final proposals, which must include sealed bids for the percent fee on the estimated maximum allowable construction cost and which may include other price-related factors identified in the request for proposal. In no event shall a price-related factor include a request for overall project budget, estimate, or bid. The public body shall establish a time and place for the opening of sealed bids. At the time and place named, these bids must be publicly opened and read and the public body shall make all previous scoring available to the public. The public body shall select the firm submitting the highest scored final proposal using the evaluation factors and the relative weight of factors published in the public solicitation of proposals. A public body shall not evaluate or disqualify a proposal based on the terms of a collective bargaining agreement.
(5) The public body shall notify all finalists of the selection decision and make a selection summary of the final proposals available to all proposers within two business days of such notification. If the public body receives a timely written protest from a proposer, the public body may not execute a contract until two business days after the final protest decision is transmitted to the protestor. The protestor must submit its protest in accordance with the published protest procedures.
(6) Public bodies may contract with the selected firm to provide services during the design phase that may include life-cycle cost design considerations, value engineering, scheduling, cost estimating, constructability, alternative construction options for cost savings, and sequencing of work, and to act as the construction manager and general contractor during the construction phase.
[ 2023 c 395 s 10; 2021 c 230 s 9; 2014 c 42 s 5; 2013 c 222 s 13; 2009 c 75 s 6; 2007 c 494 s 303. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) The maximum allowable construction cost shall be used to establish a total contract cost for which the general contractor/construction manager shall provide a performance and payment bond. The maximum allowable construction cost shall be negotiated between the public body and the selected firm when the construction documents and specifications are at least ninety percent complete.
(2) Major bid packages may be bid in accordance with RCW 39.10.380 before agreement on the maximum allowable construction cost between the public body and the selected general contractor/construction manager. The general contractor/construction manager may issue an intent to award to the responsible bidder submitting the lowest responsive bid.
(3) The public body may, at its option, authorize the general contractor/construction manager to proceed with the bidding and award of bid packages and construction before receipt of complete project plans and specifications. Any contracts awarded under this subsection shall be incorporated in the negotiated maximum allowable construction cost.
(4) The total contract cost includes the fixed amount for the detailed specified general conditions work, the negotiated maximum allowable construction cost, the negotiated support services, and the percent fee on the negotiated maximum allowable construction cost. Unless portions or all are converted to lump sum, negotiated support services shall be treated as a contractual allowance, subject to reconciliation at the conclusion of work.
(5) If the public body is unable to negotiate a satisfactory maximum allowable construction cost with the firm selected that the public body determines to be fair, reasonable, and within the available funds, negotiations with that firm shall be formally terminated and the public body shall negotiate with the next highest scored firm and continue until an agreement is reached or the process is terminated.
(6) If the maximum allowable construction cost varies more than 15 percent from the bid estimated maximum allowable construction cost due to requested and approved changes in the scope by the public body, the percent fee shall be renegotiated.
[ 2021 c 230 s 10; 2014 c 42 s 6; 2007 c 494 s 304. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
(1) All subcontract work and equipment and material purchases shall be competitively bid with public bid openings and require the public solicitation of the bid documents. At a minimum, the general contractor/construction manager shall publish at least once in a legal newspaper of general circulation published in, or as near as possible to, that part of the county in which the subcontract work will be performed, a notice of its request for bid, and the availability and location of the bid documents. The general contractor/construction manager is encouraged to post the subcontract opportunity in additional areas beyond the legal newspaper as required by this subsection, such as websites for business associations, the office of minority and women's business enterprises, and other locations and mediums that will further publicize the opportunity for qualified subcontractors. Subcontract bid packages and equipment and materials purchases shall be awarded to the responsible bidder submitting the lowest responsive bid. In preparing subcontract bid packages, the general contractor/construction manager shall not be required to violate or waive terms of a collective bargaining agreement. Individual bid packages are to be prepared with trades separated in the manner consistent with industry practice to maximize participation and competition across all trades. Bundling of trades not normally combined into one bid package is not allowed without justification and specific approval by the public body. Bid packages must be prepared to reduce barriers for and increase participation by business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs.
(2) All subcontract bid packages in which bidder eligibility was not determined in advance shall include the specific objective criteria that will be used by the general contractor/construction manager and the public body to evaluate bidder responsibility. If the lowest bidder submitting a responsive bid is determined by the general contractor/construction manager and the public body not to be responsible, the general contractor/construction manager and the public body must provide written documentation to that bidder explaining their intent to reject the bidder as not responsible and afford the bidder the opportunity to establish that it is a responsible bidder. Responsibility shall be determined in accordance with criteria listed in the bid documents. Protests concerning bidder responsibility determination by the general contractor/construction manager and the public body shall be in accordance with subsection (4) of this section.
(3) All subcontractors who bid work over $300,000 shall post a bid bond. All subcontractors who are awarded a contract over $300,000 shall provide a performance and payment bond for the contract amount. All other subcontractors shall provide a performance and payment bond if required by the general contractor/construction manager.
(4) If the general contractor/construction manager receives a written protest from a subcontractor bidder or an equipment or material supplier, the general contractor/construction manager shall not execute a contract for the subcontract bid package or equipment or material purchase order with anyone other than the protesting bidder without first providing at least two full business days' written notice to all bidders of the intent to execute a contract for the subcontract bid package. The protesting bidder must submit written notice of its protest no later than two full business days following the bid opening. Intermediate Saturdays, Sundays, and legal holidays are not counted.
(5) A low bidder who claims error and fails to enter into a contract is prohibited from bidding on the same project if a second or subsequent call for bids is made for the project.
(6) The general contractor/construction manager may negotiate with the lowest responsible and responsive bidder to negotiate an adjustment to the lowest bid or proposal price to reduce cost based upon agreed changes to the contract plans and specifications under the following conditions:
(a) All responsive bids or proposal prices exceed the published bid package estimates; and
(b) The apparent low responsive bid or proposal does not exceed the published bid package estimates by more than 10 percent.
(7) If the negotiation is unsuccessful, the subcontract work or equipment or material purchases must be rebid.
(8) The general contractor/construction manager must provide a written explanation to the public body if all bids are rejected.
[ 2023 c 395 s 11; 2021 c 230 s 11; 2013 c 222 s 14; 2007 c 494 s 305. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
The selection process in this section may be used by public bodies certified under RCW 39.10.270. It may also be used by noncertified public bodies if this selection process has been approved for the project by the project review committee. As an alternative to the subcontractor selection process outlined in RCW 39.10.380, a general contractor/construction manager may, with the approval of the public body, select one or more subcontractors using the process outlined in this section. This alternative selection process may only be used when the anticipated value of the subcontract will exceed $3,000,000. When using the alternative selection process, the general contractor/construction manager should select the subcontractor early in the life of the public works project.
(1) In order to use this alternative selection process, the general contractor/construction manager and the public body must determine that it is in the best interest of the public. In making this determination the general contractor/construction manager and the public body must:
(a) Publish a notice of intent to use this alternative selection process in the same legal newspaper where the public solicitation of proposals is published. The general contractor/construction manager and public body are encouraged to post the notice in additional areas beyond the legal newspaper as required under this subsection, such as websites for business associations, the office of minority and women's business enterprises, and other locations and mediums that will further publicize the intent to use this alternative selection process. Notice must be published at least 14 calendar days before conducting a public hearing. The notice must include the date, time, and location of the hearing; a statement justifying the basis and need for the alternative selection process; and how interested parties may, prior to the hearing, obtain the following: (i) The evaluation criteria and applicable weight given to each criteria that will be used for evaluation, including clear definitions of what should be considered specified general conditions work and what should be considered the fee; and (ii) protest procedures including time limits for filing a protest, which may, in no event, limit the time to file a protest to fewer than four business days from the date the proposer was notified of the selection decision. The evaluation criteria, weights assigned to each criteria, and justification for using this selection process must be made available upon request at least seven calendar days before the public hearing;
(b) Conduct a hearing and provide an opportunity for any interested party to submit written and verbal comments regarding the justification for using this selection process, the evaluation criteria, weights for each criteria, and protest procedures;
(c) After the public hearing, consider the written and verbal comments received and determine if using this alternative selection process is in the best interests of the public; and
(d) Issue a written final determination to all interested parties. The final determination shall state the reasons the alternative selection process is determined to be in the best interests of the public and shall reasonably address the comments received regarding the criteria and weights for each criterion. Any modifications to the criteria, weights, and protest procedures based on comments received during the public hearing process must be included in the final determination. All protests of the decision to use the alternative selection process must be in writing and submitted to the public body within seven calendar days of the final determination. The public body shall not proceed with the selection process until after responding in writing to the protest.
(2) Contracts for the services of a subcontractor under this section must be awarded through a competitive process requiring a public solicitation of proposals. Notice of the public solicitation of proposals must be provided to the office of minority and women's business enterprises. The public solicitation of proposals must include:
(a) A description of the project, including programmatic, performance, and technical requirements and specifications when available, along with a description of the project's unique aspects, complexities, and challenges;
(b) The reasons for using the alternative selection process;
(c) A description of the minimum qualifications required of the firm;
(d) A description of the process used to evaluate qualifications and proposals, including evaluation factors and the relative weight of factors;
(e) Protest procedures;
(f) The form of the contract, including any contract for preconstruction services, to be awarded;
(g) The estimated maximum allowable subcontract cost; and
(h) The bid instructions to be used by the finalists.
(3) Evaluation factors for selection of the subcontractor must include, but not be limited to:
(a) Ability of the firm's professional personnel to deliver projects similar in size, scope, or complexity;
(b) The firm's past performance on projects similar in size, scope, or complexity;
(c) The firm's ability to meet time and budget requirements on projects similar in size, scope, or complexity;
(d) The scope of work the firm proposes to perform with its own forces and its ability to perform that work;
(e) The firm's plan for inclusion of business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs, to the extent permitted by law;
(f) The firm's proximity to the project location;
(g) The firm's approach to executing the project based on its delivery of other projects similar in size, scope, or complexity;
(h) The firm's approach to safety on the project;
(i) The firm's safety history;
(j) If interviews are part of the selection process, the solicitation shall describe how interviews will be scored or evaluated, and evaluations shall be included in the written selection summary; and
(k) If the firm is selected as one of the most qualified finalists, the firm's fee and cost proposal.
(4) The general contractor/construction manager shall establish a committee to evaluate the proposals. At least one representative from the public body shall serve on the committee. Final proposals, including sealed bids for the percent fee on the estimated maximum allowable subcontract cost, and the fixed amount for the subcontract general conditions work specified in the request for proposal, will be requested from the most qualified firms.
(5) The general contractor/construction manager must notify all proposers of the most qualified firms that will move to the next phase of the selection process. The process may not proceed to the next phase until two business days after all proposers are notified of the committee's selection decision. At the request of a proposer, the general contractor/construction manager must provide the requesting proposer with a scoring summary of the evaluation factors for its proposal. Proposers filing a protest on the selection of the most qualified finalists must file the protest with the public body in accordance with the published protest procedures. The selection process may not advance to the next phase of selection until two business days after the final protest decision issued by the public body is transmitted to the protestor.
(6) The general contractor/construction manager and the public body shall select the firm submitting the highest scored final proposal using the evaluation factors and the relative weight of factors identified in the solicitation of proposals. Scoring of the nonprice factors shall be added to the scoring of the fee and cost proposals to determine the highest scored firm. The scoring of the nonprice factors must be made available at the public opening of the fee and cost proposals. The general contractor/construction manager shall notify all proposers of the selection decision and make a selection summary of the final proposals, which shall be available to all proposers within two business days of such notification. The general contractor/construction manager may not evaluate or disqualify a proposal based on the terms of a collective bargaining agreement.
(7) If the public body receives a timely written protest from a "most qualified firm," the general contractor/construction manager may not execute a contract for the protested subcontract work until two business days after the final protest decision issued by the public body is transmitted to the protestor. The protestor must submit its protest in accordance with the published protest procedures.
(8) If the general contractor/construction manager is unable to negotiate a satisfactory maximum allowable subcontract cost with the firm selected deemed by public body and the general contractor/construction manager to be fair, reasonable, and within the available funds, negotiations with that firm must be formally terminated and the general contractor/construction manager may negotiate with the next highest scored firm until an agreement is reached or the process is terminated.
(9) With the approval of the public body, the general contractor/construction manager may contract with the selected firm to provide preconstruction services during the design phase that may include life-cycle cost design considerations, value engineering, scheduling, cost estimating, constructability, alternative construction options for cost savings, and sequencing of work; and to act as the subcontractor during the construction phase.
(10) The maximum allowable subcontract cost must be used to establish a total subcontract cost for purposes of a performance and payment bond. Total subcontract cost means the fixed amount for the detailed specified general conditions work, the negotiated maximum allowable subcontract cost, and the percent fee on the negotiated maximum allowable subcontract cost. Maximum allowable subcontract cost means the maximum cost to complete the work specified for the subcontract, including the estimated cost of work to be performed by the subcontractor's own forces, a percentage for risk contingency, negotiated support services, and approved change orders. The maximum allowable subcontract cost must be negotiated between the general contractor/construction manager and the selected firm when the construction documents and specifications are at least ninety percent complete. Final agreement on the maximum allowable subcontract cost is subject to the approval of the public body.
(11) If the work of the subcontractor is completed for less than the maximum allowable subcontract cost, any savings not otherwise negotiated as part of an incentive clause becomes part of the risk contingency included in the general contractor/construction manager's maximum allowable construction cost. If the work of the subcontractor is completed for more than the maximum allowable subcontract cost, the additional cost is the responsibility of that subcontractor. An independent audit, paid for by the public body, must be conducted to confirm the proper accrual of costs. The public body or general contractor/construction manager shall define the scope of the audit in the contract.
(12) A subcontractor selected under this section may perform work with its own forces. In the event it elects to subcontract some of its work, it must select a subcontractor utilizing the procedure outlined in RCW 39.10.380.
[ 2023 c 395 s 12; 2021 c 230 s 12; 2013 c 222 s 15; 2010 c 163 s 1. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) Except as provided in this section, bidding on subcontract work or for the supply of equipment or materials by the general contractor/construction manager or its subsidiaries is prohibited.
(2) The general contractor/construction manager, or its subsidiaries, may bid on subcontract work or for the supply of equipment or materials if:
(a) The work within the subcontract bid package or equipment or materials is customarily performed or supplied by the general contractor/construction manager;
(b) The bid opening is managed by the public body and is in compliance with RCW 39.10.380; and
(c) Notification of the general contractor/construction manager's intention to bid is included in the public solicitation of bids for the bid package or for the equipment or materials.
(3) In no event may the general contractor/construction manager or its subsidiaries assign warranty responsibility or the terms of its contract or purchase order with vendors for equipment or material purchases to subcontract bid package bidders or subcontractors who have been awarded a contract. The value of subcontract work performed and equipment and materials supplied by the general contractor/construction manager may not exceed 30 percent of the negotiated maximum allowable construction cost, unless procured as a heavy civil construction project under this chapter. Negotiated support services performed by the general contractor/construction manager shall not be considered subcontract work for purposes of this subsection.
[ 2021 c 230 s 13; 2014 c 42 s 7; 2013 c 222 s 16; 2007 c 494 s 306. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) If determination of subcontractor eligibility prior to seeking bids is in the best interest of the project and critical to the successful completion of a subcontract bid package, the general contractor/construction manager and the public body may determine subcontractor eligibility to bid. The general contractor/construction manager and the public body must:
(a) Conduct a hearing and provide an opportunity for any interested party to submit written and verbal comments regarding the justification for conducting bidder eligibility, the evaluation criteria, and weights for each criteria and subcriteria;
(b) Publish a notice of intent to evaluate and determine bidder eligibility in a legal newspaper published in or as near as possible to that part of the county where the public work will be constructed at least 14 calendar days before conducting a public hearing. The general contractor/construction manager and public body are encouraged to post the notice in additional areas beyond the legal newspaper as required under this subsection, such as websites for business associations, the office of minority and women's business enterprises, and other locations and mediums that will further publicize the intent to use subcontractor eligibility prior to seeking bids;
(c) Ensure the public hearing notice includes the date, time, and location of the hearing, a statement justifying the basis and need for performing eligibility analysis before bid opening, and how interested parties may, at least five days before the hearing, obtain the specific eligibility criteria and applicable weights given to each criteria and subcriteria that will be used during evaluation;
(d) After the public hearing, consider written and verbal comments received and determine if establishing bidder eligibility in advance of seeking bids is in the best interests of the project and critical to the successful completion of a subcontract bid package; and
(e) Issue a written final determination to all interested parties. All protests of the decision to establish bidder eligibility before issuing a subcontractor bid package must be filed with the superior court within seven calendar days of the final determination. Any modifications to the eligibility criteria and weights shall be based on comments received during the public hearing process and shall be included in the final determination.
(2) Determinations of bidder eligibility shall be in accordance with the evaluation criteria and weights for each criteria established in the final determination and shall be provided to interested persons upon request. Any potential bidder determined not to meet eligibility criteria must be afforded one opportunity to establish its eligibility. Protests concerning bidder eligibility determinations shall be in accordance with subsection (1) of this section.
[ 2021 c 230 s 14; 2013 c 222 s 17; 2007 c 494 s 307. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
Subcontract agreements used by the general contractor/construction manager shall not:
(1) Delegate, restrict, or assign the general contractor/construction manager's implied duty not to hinder or delay the subcontractor. Nothing in this subsection (1) prohibits the general contractor/construction manager from requiring subcontractors not to hinder or delay the work of the general contractor/construction manager or other subcontractors and to hold subcontractors responsible for such damages;
(2) Delegate, restrict, or assign the general contractor/construction manager's authority to resolve subcontractor conflicts. The general contractor/construction manager may delegate or assign coordination of specific elements of the work, including: (a) The coordination of shop drawings among subcontractors; (b) the coordination among subcontractors in ceiling spaces and mechanical rooms; and (c) the coordination of a subcontractor's lower tier subcontractors. Nothing in this subsection prohibits the general contractor/construction manager from imposing a duty on its subcontractors to cooperate with the general contractor/construction manager and other subcontractors in the coordination of the work;
(3) Restrict the subcontractor's right to damages for changes to the construction schedule or work to the extent that the delay or disruption is caused by the general contractor/construction manager or entities acting for it. The general contractor/construction manager may require the subcontractor to provide notice that rescheduling or resequencing will result in delays or additional costs;
(4) Require the subcontractor to bear the cost of trade damage repair except to the extent the subcontractor is responsible for the damage. Nothing in this subsection (4) precludes the general contractor/construction manager from requiring the subcontractor to take reasonable steps to protect the subcontractor's work from trade damage; or
(5) Require the subcontractor to execute progress payment applications that waive claims for additional time or compensation or bond or retainage rights as a condition of receipt of progress payment, except to the extent the subcontractor has received or will receive payment. Nothing in this section precludes the general contractor/construction manager from requiring the subcontractor to provide notice of claims for additional time or compensation as a condition precedent to right of recovery or to execute a full and final release, including a waiver of bond and retainage rights, as a condition of final payment.
[ 2007 c 494 s 308. ]
NOTES:
Sunset Act application: See note following chapter digest.
(1) All public bodies of the state of Washington are authorized to award job order contracts and use the job order contracting procedure.
(2)(a) The department of enterprise services may issue job order contract work orders for Washington state parks department projects and public hospital districts.
(b) The department of enterprise services, the University of Washington, and Washington State University may issue job order contract work orders for the state regional universities and The Evergreen State College.
(3) Public bodies may use a job order contract for public works projects when a determination is made that the use of job order contracts will benefit the public by providing an effective means of reducing the total lead-time and cost for the construction of public works projects for repair and renovation required at public facilities through the use of unit price books and work orders by eliminating time-consuming, costly aspects of the traditional public works process, which require separate contracting actions for each small project.
[ 2019 c 212 s 7; 2017 c 136 s 1; 2016 c 52 s 1. Prior: 2013 c 222 s 18; 2013 c 186 s 1; 2012 c 102 s 1; 2009 c 75 s 7; 2007 c 494 s 401; 2003 c 301 s 1. Formerly RCW 39.10.130. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) Job order contracts shall be awarded through a competitive process using public requests for proposals.
(2) The public body shall prioritize efforts to solicit proposals from certified minority or certified woman-owned contractors to the extent permitted by the Washington state civil rights act, RCW 49.60.400.
(3) The public body shall publish, at least once in a statewide publication and legal newspaper of general circulation published in every county in which the public works project is anticipated, a request for proposals for job order contracts and the availability and location of the request for proposal documents. The public body is encouraged to post the request for proposals for job order contracts and the availability and location of the request for proposal documents in other areas, such as websites for business associations, the office of minority and women's business enterprises, and other locations and mediums that will further publicize the opportunities. The public body shall ensure that the request for proposal documents at a minimum includes:
(a) A detailed description of the scope of the job order contract including performance, technical requirements and specifications, functional and operational elements, minimum and maximum work order amounts, duration of the contract, and options to extend the job order contract;
(b) The reasons for using job order contracts;
(c) A description of the qualifications required of the proposer;
(d) The identity of the specific unit price book to be used and a description of which elements shall be included in the coefficient as necessary to establish a firm fixed price on work orders to be awarded under the job order contract;
(e) The minimum contracted amount committed to the selected job order contractor;
(f) A description of the process the public body will use to evaluate qualifications and proposals, including evaluation factors and the relative weight of factors. The public body shall ensure that evaluation factors include, but are not limited to, the coefficient and the ability of the proposer to perform the job order contract. In evaluating the ability of the proposer to perform the job order contract, the public body may consider: The ability of the professional personnel who will work on the job order contract; past performance on similar contracts; ability to meet time and budget requirements; past performance on approved subcontractor inclusion plans; ability to provide a performance and payment bond for the job order contract; recent, current, and projected workloads of the proposer; location; and the concept of the proposal;
(g) The form of the contract to be awarded;
(h) The method for pricing renewals of or extensions to the job order contract;
(i) A notice that the proposals are subject to RCW 39.10.470; and
(j) Other relevant information.
(4) A public body shall establish a committee, including a member with knowledge and experience in state and federal laws, rules, and best practices concerning public contracting for minority, women, and veteran-owned businesses and small businesses, to evaluate the proposals. After the committee has selected the most qualified finalists, the finalists shall submit a sealed bid including, but not limited to, coefficient(s). Such bids may be in the form of coefficient adjustments to the listed unit price book. The public body shall award the contract to the firm submitting the highest scored final proposal using the evaluation factors and the relative weight of factors published in the public request for proposals and will notify the board of the award of the contract.
(5) The public body shall provide a protest period of at least ten business days following the day of the announcement of the apparent successful proposal to allow a protester to file a detailed statement of the grounds of the protest. The public body shall promptly make a determination on the merits of the protest and provide to all proposers a written decision of denial or acceptance of the protest. The public body shall not execute the contract until two business days following the public body's decision on the protest.
(6) The requirements of RCW 39.30.060 do not apply to requests for proposals for job order contracts.
[ 2021 c 230 s 15; 2019 c 212 s 8; 2007 c 494 s 402. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
(1) The maximum total dollar amount that may be awarded under a job order contract is $4,000,000 per year for a maximum of three years. Any unused capacity from the previous year may be carried over for one year and added to the immediate following year's limit. The maximum annual volume including unused capacity shall not exceed the limit of two years. The maximum total dollar amount that may be awarded under a job order contract for the department of enterprise services, counties with a population of more than 1,000,000, and cities with a population of more than 400,000 is $6,000,000 per year for a maximum of three years. The maximum total dollar amounts are exclusive of Washington state sales and use tax.
(2) Job order contracts may be executed for an initial contract term of not to exceed two years, with the option of extending or renewing the job order contract for one year. All extensions or renewals must be priced as provided in the request for proposals. The extension or renewal must be mutually agreed to by the public body and the job order contractor.
(3) A public body may have no more than three job order contracts in effect at any one time, with the exception of the department of enterprise services, which may have six job order contracts in effect at any one time.
(4) At least 90 percent of work contained in a job order contract must be subcontracted to entities other than the job order contractor. The job order contractor must distribute contracts as equitably as possible among qualified and available subcontractors including certified minority and woman-owned subcontractors to the extent permitted by law as demonstrated on the subcontractor and supplier project submission, and shall limit subcontractor bonding requirements to the greatest extent possible.
(5) The job order contractor shall publish notification of intent to perform public works projects at the beginning of each contract year in a statewide publication and in a legal newspaper of general circulation in every county in which the public works projects are anticipated. The job order contractor is encouraged to post the notification of intent to perform public works projects in other areas, such as websites for business associations, the office of minority and women's business enterprises, and other locations and mediums that will further publicize subcontractor opportunities.
(6) Job order contractors shall pay prevailing wages for all work that would otherwise be subject to the requirements of chapter 39.12 RCW. Prevailing wages for all work performed pursuant to each work order must be the rates in effect at the time the individual work order is issued.
(7) If, in the initial contract term, the public body, at no fault of the job order contractor, fails to issue the minimum amount of work orders stated in the public request for proposals, the public body shall pay the contractor an amount equal to the difference between the minimum work order amount and the actual total of the work orders issued multiplied by an appropriate percentage for overhead and profit contained in the contract award coefficient for services as specified in the request for proposals. This is the contractor's sole remedy.
(8) All job order contracts awarded under this section must be signed before July 1, 2031; however the job order contract may be extended or renewed as provided for in this section.
[ 2021 c 230 s 16; 2019 c 212 s 9; 2015 c 173 s 1; 2013 c 222 s 19; 2007 c 494 s 403. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
(1) The maximum dollar amount for a work order is five hundred thousand dollars, excluding Washington state sales and use tax.
(2) All work orders issued for the same project shall be treated as a single work order for purposes of the dollar limit on work orders.
(3) No more than twenty percent of the dollar value of a work order may consist of items of work not contained in the unit price book.
(4) Any new stand-alone permanent structure constructed under a work order shall not exceed three thousand gross square feet.
(5) A public body may issue no work orders under a job order contract until it has approved, in consultation with the office of minority and women's business enterprises or the equivalent local agency, a plan prepared by the job order contractor that equitably spreads certified women and minority business enterprise subcontracting opportunities, to the extent permitted by the Washington state civil rights act, RCW 49.60.400, among the various subcontract disciplines.
(6) For purposes of chapters 39.08, 39.12, 39.76, and 60.28 RCW, each work order issued shall be treated as a separate contract. The alternate filing provisions of RCW 39.12.040(2) apply to each work order that otherwise meets the eligibility requirements of RCW 39.12.040(2).
(7) The job order contract shall not be used for the procurement of architectural or engineering services not associated with specific work orders. Architectural and engineering services shall be procured in accordance with RCW 39.80.040.
(8) Any work order over three hundred fifty thousand dollars, excluding Washington state sales and use tax, and including over six hundred single trade hours shall utilize a state registered apprenticeship program for that single trade in accordance with RCW 39.04.320. Awarding entities may adjust this requirement for a specific work order for the following reasons:
(a) The demonstrated lack of availability of apprentices in specific geographic areas;
(b) A disproportionately high ratio of material costs to labor hours, which does not make feasible the required minimum levels of apprentice participation;
(c) Participating contractors have demonstrated a good faith effort to comply with the requirements of RCW 39.04.300 and 39.04.310; or
(d) Other criteria the awarding entity deems appropriate.
[ 2019 c 212 s 10; 2012 c 102 s 2; 2007 c 494 s 404. ]
NOTES:
Sunset Act application: See note following chapter digest.
Each public body shall maintain and make available the following information for each job order contract:
(1) A list of work orders issued;
(2) The cost of each work order;
(3) A list of subcontractors hired under each work order, including whether those subcontractors were certified small, minority, women, or veteran-owned businesses; and
(4) A copy of the intent to pay prevailing wage and the affidavit of wages paid for each work order subcontract.
[ 2021 c 230 s 17; 2012 c 102 s 3; 2007 c 494 s 405. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
(1) Except as provided in subsections (2) and (3) of this section, all proceedings, records, contracts, and other public records relating to alternative public works transactions under this chapter shall be open to the inspection of any interested person, firm, or corporation in accordance with chapter 42.56 RCW.
(2) Trade secrets, as defined in RCW 19.108.010, or other proprietary information submitted by a bidder, offeror, or contractor in connection with an alternative public works transaction under this chapter shall not be subject to chapter 42.56 RCW if the bidder, offeror, or contractor specifically states in writing the reasons why protection is necessary, and identifies the data or materials to be protected.
(3) All documents related to a procurement under RCW 39.10.330 are exempt from disclosure until the notification of the highest scoring finalist is made in accordance with RCW 39.10.330(6) or the selection process is terminated, except as expressly required under RCW 39.10.330(3).
[ 2019 c 212 s 11; 2014 c 19 s 2; 2005 c 274 s 275; 1994 c 132 s 10. Formerly RCW 39.10.100. ]
NOTES:
Sunset Act application: See note following chapter digest.
This chapter shall not be construed to affect or modify the existing statutory, regulatory, or charter powers of public bodies except to the extent that a procedure authorized by this chapter is adopted by a public body for a particular public works project. In that event, the normal contracting or procurement limits or requirements of a public body as imposed by statute, ordinance, resolution, or regulation shall be deemed waived or amended only to the extent necessary to accommodate such procedures for a particular public works project.
[ 1994 c 132 s 9. Formerly RCW 39.10.090. ]
NOTES:
Sunset Act application: See note following chapter digest.
The alternative public works contracting procedures authorized under this chapter are limited to public works contracts signed before July 1, 2031. Methods of public works contracting authorized under this chapter shall remain in full force and effect until completion of contracts signed before July 1, 2031.
[ 2021 c 230 s 18; 2013 c 222 s 20; 2007 c 494 s 501; 2001 c 328 s 5. Prior: 1997 c 376 s 7; 1997 c 220 s 404 (Referendum Bill No. 48, approved June 17, 1997); 1995 3rd sp.s. c 1 s 305; 1994 c 132 s 12. Formerly RCW 39.10.120. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2021 c 230: See note following RCW 39.10.210.
Effective date—2013 c 222: See note following RCW 39.10.210.
Effective date—2001 c 328: See note following RCW 39.10.210.
Effective date—1997 c 376: See note following RCW 39.10.210.
Referendum—Other legislation limited—Legislators' personal intent not indicated—Reimbursements for election—Voters' pamphlet, election requirements—1997 c 220: See RCW 36.102.800 through 36.102.803.
Part headings not law—Effective date—1995 3rd sp.s. c 1: See notes following RCW 82.14.0485.
Captions as used in this act do not constitute any part of law.
[ 1994 c 132 s 13. ]
NOTES:
Sunset Act application: See note following chapter digest.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
[ 1994 c 132 s 14. ]
NOTES:
Sunset Act application: See note following chapter digest.
Part headings and captions used in chapter 494, Laws of 2007 are not any part of the law.
[ 2007 c 494 s 510. ]
NOTES:
Sunset Act application: See note following chapter digest.
This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2007, except for section 104 of this act, which takes effect immediately [May 15, 2007], and section 508 of this act, which takes effect June 30, 2007.
[ 2007 c 494 s 512. ]
NOTES:
Sunset Act application: See note following chapter digest.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
[ 2007 c 494 s 513. ]
NOTES:
Sunset Act application: See note following chapter digest.
In addition to the general contractor/construction manager requirements established in this chapter, public bodies utilizing the general contractor/construction manager method for a heavy civil construction project must also comply with the following requirements:
(1) The heavy civil construction general contractor/construction manager contract solicitation must:
(a) Provide the reasons for using the general contractor/construction manager procedure, including a clear statement that the public body is electing to procure the project as a heavy civil construction project;
(b) Indicate the minimum percentage of the cost of the work to construct the project that will constitute the negotiated self-perform portion of the project;
(c) Indicate whether the public body will allow the price to be paid for the negotiated self-perform portion of the project to be deemed a cost of the work to which the general contractor/construction manager's percent fee applies; and
(d) Require proposals to indicate the proposer's fee for the negotiated self-perform portion of the project;
(2) As part of the negotiation of the maximum allowable construction cost established in RCW 39.10.370(1), the general contractor/construction manager shall submit a proposed construction management and contracting plan, which must include, at a minimum:
(a) The scope of work and cost estimates for each bid package;
(b) A proposed price and scope of work for the negotiated self-perform portion of the project;
(c) The bases used by the general contractor/construction manager to develop all cost estimates, including the negotiated self-perform portion of the project; and
(d) The general contractor/construction manager's updated inclusion plan for business entities certified with the office of minority and women's business enterprises, including small businesses and business entities certified with the department of veterans affairs, and any other underutilized businesses as the public body may designate in the public solicitation of proposals, as subcontractors and suppliers for the project;
(3) The public body and general contractor/construction manager may negotiate the scopes of work to be procured by bid and the price and scope of work for the negotiated self-perform portion of the project, if any;
(4) The negotiated self-perform portion of the project must not exceed 50 percent of the cost of the work to construct the project;
(5) Notwithstanding any contrary provision of this chapter, for a project that a public body has elected to procure as a heavy civil construction project under this chapter, at least 30 percent of the cost of the work to construct the project included in the negotiated maximum allowable construction cost must be procured through competitive sealed bidding in which bidding by the general contractor/construction manager or its subsidiaries is prohibited;
(6) Subject to the limitation of subsection (5) of this section, the public body may additionally negotiate with the general contractor/construction manager to determine on which scopes of work the general contractor/construction manager will be permitted to bid, if any;
(7) The public body and general contractor/construction manager shall negotiate, to the public body's satisfaction, a fair and reasonable inclusion plan;
(8) If the public body is unable to negotiate to its reasonable satisfaction a component of this section, negotiations with the firm must be terminated and the public body shall negotiate with the next highest scored firm and continue until an agreement is reached or the process is terminated; and
(9) For a project procured as a heavy civil construction project, an independent audit, paid for by the public body, must be conducted to confirm the proper accrual of costs as outlined in the contract. The public body shall define the scope of the audit in the contract.
[ 2023 c 395 s 13; 2021 c 230 s 19. ]
NOTES:
Sunset Act application: See note following chapter digest.
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Effective date—2021 c 230: See note following RCW 39.10.210.
(1) The "prevailing rate of wage" is the rate of hourly wage, usual benefits, and overtime paid in the locality, as hereinafter defined, to the majority of workers, laborers, or mechanics, in the same trade or occupation. In the event that there is not a majority in the same trade or occupation paid at the same rate, then the average rate of hourly wage and overtime paid to such laborers, workers, or mechanics in the same trade or occupation is the prevailing rate. If the wage paid by any contractor or subcontractor to laborers, workers, or mechanics on any public work is based on some period of time other than an hour, the hourly wage is mathematically determined by the number of hours worked in such period of time.
(2) The "locality" is the largest city in the county wherein the physical work is being performed.
(3) The "usual benefits" includes the amount of:
(a) The rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and
(b) The rate of costs to the contractor or subcontractor, which may be reasonably anticipated in providing benefits to workers, laborers, and mechanics pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to the workers, laborers, and mechanics affected, for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of such benefits.
(4) An "interested party" includes a contractor, subcontractor, an employee of a contractor or subcontractor, an organization whose members' wages, benefits, and conditions of employment are affected by this chapter, a joint labor-management cooperation committee established pursuant to the federal labor management cooperation act of 1978, a Taft-Hartley trust, and the director of labor and industries or the director's designee.
(5) An "inadvertent filing or reporting error" is a mistake and is made notwithstanding the use of due care by the contractor, subcontractor, or employer. An inadvertent filing or reporting error includes a contractor who, in good faith, relies on a written determination provided by the department of labor and industries and pays its workers, laborers, and mechanics accordingly, but is later found to have not paid the proper prevailing wage rate.
(6) "Unpaid prevailing wages" or "unpaid wages" means the employer fails to pay all of the prevailing rate of wages owed for any workweek by the regularly established payday for the period in which the workweek ends. Every employer must pay all wages, other than usual benefits, owing to its employees not less than once a month. Every employer must pay all usual benefits owing to its employees by the regularly established deadline for those benefits.
(7) "Rate of contribution" means the effective annual rate of usual benefit contributions for all hours, public and private, worked during the year by an employee (commonly referred to as "annualization" of benefits). The only exemption to the annualization requirements is for defined contribution pension plans that have immediate participation and vesting.
(8) "Contractor" means any prime contractor, subcontractor, or other employer as defined by rules adopted by the department of labor and industries. "Contractor" includes an entity, however organized, with substantially identical operations, corporate, or management structure to an entity that has been found in violation under RCW 39.12.050, 39.12.055, or 39.12.065, or any associated rules. The nonexclusive factors used to determine substantial identity include an assessment of whether there is: Substantial continuity of the same business operation; use of the same machinery, equipment, or both tangible and intangible real or personal property; similarity of jobs and types of working conditions; continuity of supervisors; and similarity of product or services. An entity with operational, corporate, and management structures distinct from an entity that has been found in violation under RCW 39.12.050, 39.12.055, or 39.12.065, or any associated rules, shall not be deemed a substantially identical entity.
[ 2025 c 99 s 2; (2025 c 99 s 1 expired January 1, 2026); 2024 c 7 s 2; 2019 c 242 s 2; 1989 c 12 s 6; 1985 c 15 s 1; 1965 ex.s. c 133 s 1; 1945 c 63 s 3; Rem. Supp. 1945 s 10322-22. ]
NOTES:
Effective date—2025 c 99 s 2: "Section 2 of this act takes effect January 1, 2026." [ 2025 c 99 s 5.]
Expiration date—2025 c 99 s 1: "Section 1 of this act expires January 1, 2026." [ 2025 c 99 s 4.]
Effective date—2024 c 7: "This act takes effect January 1, 2026." [ 2024 c 7 s 4.]
Findings—2024 c 7: See note following RCW 39.12.130.
Findings—2019 c 242: "The legislature finds:
(1) That from the shift in the 1980s from criminal to civil penalties for prevailing wage violations that the law needs some enhancements to effectively provide the department of labor and industries with the ability to utilize its civil remedies to both discourage and penalize repeat and willful violations of the law.
(2) Revisions to chapter 39.12 RCW are long overdue and are necessary to appropriately address filing and reporting procedures and penalties, which are necessary to strengthen enforcement of and deterrence from repeat and/or willful violations of the chapter." [ 2019 c 242 s 1.]
Effective date—2019 c 242: "This act takes effect January 1, 2020." [ 2019 c 242 s 6.]
Severability—1985 c 15: See note following RCW 39.12.065.
(1) All determinations of the prevailing rate of wage shall be made by the industrial statistician of the department of labor and industries.
(2) The time period for recovery of any wages owed to a worker affected by the determination is tolled until the prevailing wage determination is final.
(3)(a) Except as provided in RCW 39.12.017, and notwithstanding RCW 39.12.010(1), the industrial statistician shall establish the prevailing rate of wage by adopting the hourly wage, usual benefits, and overtime paid for the geographic jurisdiction established in collective bargaining agreements for those trades and occupations that have collective bargaining agreements. For trades and occupations with more than one collective bargaining agreement in the county, the higher rate will prevail.
(b) For trades and occupations in which there are no collective bargaining agreements in the county, the industrial statistician shall establish the prevailing rate of wage as defined in RCW 39.12.010 by conducting wage and hour surveys. In instances when there are no applicable collective bargaining agreements and conducting wage and hour surveys is not feasible, the industrial statistician may employ other appropriate methods to establish the prevailing rate of wage.
[ 2019 c 29 s 2. Prior: 2018 c 248 s 1; 2018 c 242 s 1; 1965 ex.s. c 133 s 2. ]
NOTES:
Intent—2019 c 29: "The legislature intends that the methodology for establishing the prevailing rates of wages under this act applies only to affordable housing, homeless and domestic violence shelters, and low-income weatherization and home rehabilitation programs." [ 2019 c 29 s 1.]
Effective date—2019 c 29: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [April 17, 2019]." [ 2019 c 29 s 5.]
Publication of wage rates—Effective date—2019 c 29: See note following RCW 39.12.017.
(1) For residential construction, the industrial statistician shall establish the prevailing rate of wage by conducting wage and hour surveys. If the industrial statistician determines that information received from a survey is insufficient to determine the prevailing rate of wage for a trade under this subsection, the industrial statistician shall employ other appropriate methods to establish the prevailing rate of wage.
(a) The industrial statistician shall conduct the initial surveys required by this subsection (1) as soon as feasible after April 17, 2019. These surveys shall cover fiscal year 2018.
(b) The industrial statistician shall conduct a wage and hour survey following the initial survey or otherwise reestablish a prevailing rate of wage for each trade covered by this section at least every five years, and after the initial survey may stagger the surveys for workload purposes.
(2)(a) Until the industrial statistician has established a prevailing wage rate under subsection (1)(a) of this section and except as provided in (b) of this subsection, the industrial statistician shall establish the wage rate by:
(i) Identifying the residential prevailing wage rate in effect on August 30, 2018, for that trade (rate A);
(ii) Determining the year most recent to 2018, but not earlier than 2007, in which the wage rate for that trade was adjusted (year A);
(iii) Determining the percentage change in the annual average hourly wages reported for construction workers in Washington state, as calculated by the United States bureau of labor statistics' state and area employment, hours, and earnings estimates, from year A to 2019;
(iv) Adding the percentage change from (a)(iii) of this subsection to one hundred percent (percentage A); and
(v) Multiplying rate A by percentage A.
(b) If the residential construction wage rate in effect for a trade on August 31, 2018, is the same as the wage rate in effect on August 30, 2018, the industrial statistician must adopt the wage rate in effect for the trade on August 31, 2018, until a wage rate is established under subsection (1)(a) of this section.
(3) For purposes of this section:
(a) "Residential construction" means construction, alteration, repair, improvement, or maintenance of single-family dwellings, duplexes, apartments, condominiums, and other residential structures not to exceed four stories in height, including the basement, in the following categories:
(i) Affordable housing, including permanent supportive housing and transitional housing, which may include common spaces, community rooms, recreational spaces, a management office, or offices for the purposes of service delivery;
(ii) Weatherization and home rehabilitation programs for low-income households; and
(iii) Homeless shelters and domestic violence shelters.
(b) "Residential construction" does not include the utilities construction, such as water and sewer lines, or work on streets, or work on other structures unrelated to the housing.
[ 2019 c 29 s 3. ]
NOTES:
Publication of wage rates—Effective date—2019 c 29: "The industrial statistician must establish and publish wage rates under RCW 39.12.017(2) within thirty days after April 17, 2019. The wage rates take effect thirty days after publication." [ 2019 c 29 s 4.]
Effective date—Intent—2019 c 29: See notes following RCW 39.12.015.
The hourly wages to be paid to laborers, workers, or mechanics, upon all public works and under all public building service maintenance contracts of the state or any county, municipality or political subdivision created by its laws, shall be not less than the prevailing rate of wage for an hour's work in the same trade or occupation in the locality within the state where such labor is performed. For a contract in excess of ten thousand dollars, a contractor required to pay the prevailing rate of wage shall post in a location readily visible to workers at the jobsite: PROVIDED, That on road construction, sewer line, pipeline, transmission line, street, or alley improvement projects for which no field office is needed or established, a contractor may post the prevailing rate of wage statement at the contractor's local office, gravel crushing, concrete, or asphalt batch plant as long as the contractor provides a copy of the wage statement to any employee on request:
(1) A copy of a statement of intent to pay prevailing wages approved by the industrial statistician of the department of labor and industries under RCW 39.12.040; and
(2) The address and telephone number of the industrial statistician of the department of labor and industries where a complaint or inquiry concerning prevailing wages may be made.
This chapter shall not apply to workers or other persons regularly employed by the state, or any county, municipality, or political subdivision created by its laws.
[ 2007 c 169 s 1; 1989 c 12 s 7; 1982 c 130 s 1; 1981 c 46 s 1; 1967 ex.s. c 14 s 1; 1945 c 63 s 1; Rem. Supp. 1945 s 10322-20. ]
Apprentice workers employed upon public works projects for whom an apprenticeship agreement has been registered and approved with the state apprenticeship council pursuant to chapter 49.04 RCW, must be paid at least the prevailing hourly rate for an apprentice of that trade. Any worker for whom an apprenticeship agreement has not been registered and approved by the state apprenticeship council shall be considered to be a fully qualified journey level worker, and, therefore, shall be paid at the prevailing hourly rate for journey level workers.
[ 1989 c 12 s 8; 1963 c 93 s 1. ]
(1) In establishing the prevailing rate of wage under RCW 39.12.010, 39.12.015, and 39.12.020, all data collected by the department of labor and industries may be used only in the county for which the work was performed.
(2) The department of labor and industries must provide registered contractors with the option of completing a wage survey electronically.
[ 2015 3rd sp.s. c 40 s 2; 2003 c 363 s 206. ]
NOTES:
Effective date—2015 3rd sp.s. c 40: See note following RCW 39.04.320.
Findings—Intent—2003 c 363 ss 201-206: See note following RCW 49.04.141.
Part headings not law—Severability—2003 c 363: See notes following RCW 47.28.241.
(1) The specifications for every contract for the construction, reconstruction, maintenance or repair of any public work to which the state or any county, municipality, or political subdivision created by its laws is a party, shall contain a provision stating the hourly minimum rate of wage, not less than the prevailing rate of wage, which may be paid to laborers, workers, or mechanics in each trade or occupation required for such public work employed in the performance of the contract either by the contractor, subcontractor or other person doing or contracting to do the whole or any part of the work contemplated by the contract, and the contract shall contain a stipulation that such laborers, workers, or mechanics shall be paid not less than such specified hourly minimum rate of wage. If the awarding agency determines that the work contracted for meets the definition of residential construction, the contract must include that information.
(2) If the hourly minimum rate of wage stated in the contract specifies residential construction rates and it is later determined that the work performed is commercial and subject to commercial construction rates, the state, county, municipality, or political subdivision that entered into the contract must pay the difference between the residential rate stated and the actual commercial rate to the contractor, subcontractor, or other person doing or contracting to do the whole or any part of the work under the contract.
[ 2009 c 62 s 1; 1989 c 12 s 9; 1945 c 63 s 2; Rem. Supp. 1945 s 10322-21. ]
(1)(a) Except as provided in subsection (2) of this section, before payment is made by or on behalf of the state, or any county, municipality, or political subdivision created by its laws, of any sum or sums due on account of a public works contract, it is the duty of the officer or person charged with the custody and disbursement of public funds to require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer a "Statement of Intent to Pay Prevailing Wages". For a contract in excess of ten thousand dollars, the statement of intent to pay prevailing wages must include:
(i) The contractor's registration certificate number; and
(ii) The prevailing rate of wage for each classification of workers entitled to prevailing wages under RCW 39.12.020 and the estimated number of workers in each classification.
(b) Each statement of intent to pay prevailing wages must be approved by the industrial statistician of the department of labor and industries before it is submitted to the disbursing officer. Unless otherwise authorized by the department of labor and industries, each voucher claim submitted by a contractor for payment on a project estimate must state that the prevailing wages have been paid in accordance with the prefiled statement or statements of intent to pay prevailing wages on file with the public agency. Following the final acceptance of a public works project, it is the duty of the officer charged with the disbursement of public funds, to require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer an affidavit of wages paid before the funds retained according to the provisions of RCW 60.28.011 are released to the contractor. On a public works project where no retainage is withheld, the affidavit of wages paid must be submitted to the state, county, municipality, or other public body charged with the duty of disbursing or authorizing disbursement of public funds prior to final acceptance of the public works project. If a subcontractor performing work on a public works project fails to submit an affidavit of wages paid form, the contractor or subcontractor with whom the subcontractor had a contractual relationship for the project may file the forms on behalf of the nonresponsive subcontractor. Affidavit forms may only be filed on behalf of a nonresponsive subcontractor who has ceased operations or failed to file as required by this section. The contractor filing the affidavit must accept responsibility for payment of prevailing wages unpaid by the subcontractor on the project pursuant to RCW 39.12.020 and 39.12.065. Intentionally filing a false affidavit on behalf of a subcontractor subjects the filer to the same penalties as are provided in RCW 39.12.050. Each affidavit of wages paid must be certified by the industrial statistician of the department of labor and industries before it is submitted to the disbursing officer.
(2) As an alternate to the procedures provided for in subsection (1) of this section, for public works projects of $5,000 or less as allowed under RCW 39.04.152 is followed:
(a) An awarding agency may authorize the contractor or subcontractor to submit the statement of intent to pay prevailing wages directly to the officer or person charged with the custody or disbursement of public funds in the awarding agency without approval by the industrial statistician of the department of labor and industries. The awarding agency must retain such statement of intent to pay prevailing wages for a period of not less than three years.
(b) Upon final acceptance of the public works project, the awarding agency must require the contractor or subcontractor to submit an affidavit of wages paid. Upon receipt of the affidavit of wages paid, the awarding agency may pay the contractor or subcontractor in full, including funds that would otherwise be retained according to the provisions of RCW 60.28.011. Within thirty days of receipt of the affidavit of wages paid, the awarding agency must submit the affidavit of wages paid to the industrial statistician of the department of labor and industries for approval.
(c) A statement of intent to pay prevailing wages and an affidavit of wages paid must be on forms approved by the department of labor and industries.
(d) In the event of a wage claim and a finding for the claimant by the department of labor and industries where the awarding agency has used the alternative process provided for in this subsection (2), the awarding agency must pay the wages due directly to the claimant. If the contractor or subcontractor did not pay the wages stated in the affidavit of wages paid, the awarding agency may take action at law to seek reimbursement from the contractor or subcontractor of wages paid to the claimant, and may prohibit the contractor or subcontractor from bidding on any public works contract of the awarding agency for up to one year.
(e) Nothing in this section may be interpreted to allow an awarding agency to subdivide any public works project of more than $5,000 for the purpose of circumventing the procedures required by subsection (1) of this section.
[ 2023 c 395 s 29; 2019 c 434 s 6; 2013 c 113 s 5; 2012 c 129 s 1; 2009 c 219 s 2; 2007 c 210 s 4; 1991 c 15 s 1; 1982 c 130 s 2; 1981 c 46 s 2; 1975-'76 2nd ex.s. c 49 s 1; 1965 ex.s. c 133 s 3; 1945 c 63 s 4; Rem. Supp. 1945 s 10322-23. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
If any agency of the state, or any county, municipality, or political subdivision created by its laws shall knowingly fail to comply with the provisions of RCW 39.12.040 as now or hereafter amended, such agency of the state, or county, municipality, or political subdivision created by its laws, shall be liable to all workers, laborers, or mechanics to the full extent and for the full amount of wages due, pursuant to the prevailing wage requirements of RCW 39.12.020.
[ 1993 c 404 s 3; 1989 c 12 s 11; 1975-'76 2nd ex.s. c 49 s 2. ]
NOTES:
Effective date—1993 c 404: See note following RCW 39.12.070.
(1) Any contractor or subcontractor who files a false statement or fails to file any statement or record required to be filed or fails to post a document required to be posted under this chapter and the rules adopted under this chapter, shall, after a determination to that effect has been issued by the director after hearing under chapter 34.05 RCW, forfeit as a civil penalty the sum of $500 for each false filing or failure to file or post, and shall not be permitted to bid, or have a bid considered, on any public works contract until the penalty has been paid in full to the director. The civil penalty under this subsection does not apply to a violation determined by the director to be an inadvertent filing or reporting error. The burden of proving, by a preponderance of the evidence, that an error is inadvertent rests with the contractor or subcontractor charged with the error. Civil penalties shall be deposited in the public works administration account.
To the extent that a contractor or subcontractor has not paid wages at the rate due pursuant to RCW 39.12.020, and a finding to that effect has been made as provided by this subsection, such unpaid wages constitute a lien against the bonds and retainage as provided in RCW 18.27.040, 18.106.410, 19.28.041, 39.08.010, and 60.28.011.
(2) If a contractor or subcontractor is found to have violated the provisions of subsection (1) of this section for a second time within a five year period, the contractor or subcontractor is subject to the sanctions prescribed in subsection (1) of this section and shall not be allowed to bid on any public works contract for one year. The one year period runs from the date of notice by the director of the determination of noncompliance. When an appeal is taken from the director's determination, the one year period commences from the date the notice of violation becomes final.
The director shall issue his or her findings that a contractor or subcontractor has violated the provisions of this subsection after a hearing held subject to the provisions of chapter 34.05 RCW, unless a notice of violation is not timely appealed. A notice of violation not timely appealed is final and binding, and not subject to further appeal.
[ 2023 c 88 s 3; 2019 c 242 s 3; 2009 c 219 s 3; 2001 c 219 s 1; 1985 c 15 s 3; 1977 ex.s. c 71 s 1; 1973 c 120 s 1; 1945 c 63 s 5; Rem. Supp. 1945 s 10322-24. ]
NOTES:
Effective date—Findings—2019 c 242: See notes following RCW 39.12.010.
Severability—1985 c 15: See note following RCW 39.12.065.
Except as otherwise provided in RCW 49.105.040, a contractor shall not be allowed to bid on any public works contract for one year from the date of a final determination that the contractor has committed any combination of two of the following violations or infractions within a five-year period:
(1) Violated RCW 51.48.020(1) or 51.48.103;
(2) Committed an infraction or violation under chapter 18.27, 18.106, 19.28, or 70.87 RCW for performing work as an unregistered or unlicensed contractor; or
(3) Determined to be out of compliance by the Washington state apprenticeship and training council for working apprentices out of ratio, without appropriate supervision, or outside their approved work processes as outlined in their standards of apprenticeship under chapter 49.04 RCW.
[ 2023 c 145 s 6; 2023 c 88 s 4; 2009 c 197 s 3; 2008 c 120 s 3. ]
NOTES:
Reviser's note: This section was amended by 2023 c 88 s 4 and by 2023 c 145 s 6, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Rules—Implementation—2009 c 197: See note following RCW 39.04.320.
Conflict with federal requirements—Severability—2008 c 120: See notes following RCW 18.27.030.
Such contract shall contain a further provision that in case any dispute arises as to what are the prevailing rates of wages for work of a similar nature and such dispute cannot be adjusted by the parties in interest, including labor and management representatives, the matter shall be referred for arbitration to the director of the department of labor and industries of the state and his or her decision therein shall be final and conclusive and binding on all parties involved in the dispute.
[ 1989 c 12 s 10; 1965 ex.s. c 133 s 4; 1945 c 63 s 6; Rem. Supp. 1945 s 10322-25. ]
NOTES:
Arbitration of disputes: Chapter 49.08 RCW.
Uniform arbitration act: Chapter 7.04A RCW.
(1) Upon complaint by an interested party, the director of labor and industries shall cause an investigation to be made to determine whether there has been compliance with this chapter and the rules adopted hereunder, and if the investigation indicates that a violation may have occurred, the department of labor and industries may issue a notice of violation for unpaid wages, penalties, and interest on all wages owed at one percent per month. A hearing shall be held following a timely appeal of the notice of violation in accordance with chapter 34.05 RCW. The director shall issue a written determination including his or her findings after the hearing unless a notice of violation is not timely appealed. A notice of violation not timely appealed is final and binding, and not subject to further appeal. A judicial appeal from the director's determination may be taken in accordance with chapter 34.05 RCW, with the prevailing party entitled to recover reasonable costs and attorneys' fees.
A complaint concerning nonpayment of the prevailing rate of wage shall be filed with the department of labor and industries no later than 60 days from the acceptance date of the public works project. The department may not charge a contractor or subcontractor with a violation of this section when responding to a complaint filed after the 60-day limit. The failure to timely file such a complaint does not prohibit the department from investigating the matter and recovering unpaid wages for the worker(s) within two years from the acceptance of the public works contract. The department may not investigate or recover unpaid wages if the complaint is filed after two years from the acceptance of a public works contract. The failure to timely file such a complaint also does not prohibit a claimant from pursuing a private right of action against a contractor or subcontractor for unpaid prevailing wages. The remedy provided by this section is not exclusive and is concurrent with any other remedy provided by law.
(2) To the extent that a contractor or subcontractor has not paid the prevailing rate of wage under a determination issued as provided in subsection (1) of this section, the director shall notify the agency awarding the public works contract of the amount of the violation found, and the awarding agency shall withhold, or in the case of a bond, the director shall proceed against the bond in accordance with the applicable statute to recover, such amount from the following sources in the following order of priority until the total of such amount is withheld:
(a) The retainage or bond in lieu of retainage as provided in RCW 60.28.011;
(b) If the claimant was employed by the contractor or subcontractor on the public works project, the bond filed by the contractor or subcontractor with the department of labor and industries as provided in RCW 18.27.040, 18.106.410, and 19.28.041;
(c) A surety bond, or at the contractor's or subcontractor's option an escrow account, running to the director in the amount of the violation found; and
(d) That portion of the progress payments which is properly allocable to the contractor or subcontractor who is found to be in violation of this chapter. Under no circumstances shall any portion of the progress payments be withheld that are properly allocable to a contractor, subcontractor, or supplier, that is not found to be in violation of this chapter.
The amount withheld shall be released to the director to distribute in accordance with the director's determination.
(3) A contractor or subcontractor that is found, in accordance with subsection (1) of this section, to have violated the requirement to pay the prevailing rate of wage is subject to a civil penalty of not less than $5,000 or an amount equal to 50 percent of the total prevailing wage violation found on the contract, whichever is greater, interest on all wages owed at one percent per month, and is not permitted to bid, or have a bid considered, on any public works contract until such civil penalty has been paid in full to the director. If a contractor or subcontractor is found to have participated in a violation of the requirement to pay the prevailing rate of wage for a second time within a five-year period, the contractor or subcontractor is subject to the sanctions prescribed in this subsection and as an additional sanction is not allowed to bid on any public works contract for two years. Civil penalties shall be deposited in the public works administration account. If a previous or subsequent violation of a requirement to pay a prevailing rate of wage under federal or other state law is found against the contractor or subcontractor within five years from a violation under this section, the contractor or subcontractor shall not be allowed to bid on any public works contract for two years. The two-year period runs from the date of notice by the director of the determination of noncompliance. When an appeal is taken from the director's determination, the two-year period commences from the date the notice of violation becomes final. A contractor or subcontractor is not barred from bidding on any public works contract if the contractor or subcontractor relied upon written information from the department to pay a prevailing rate of wage that is later determined to be in violation of this chapter. The civil penalty and sanctions under this subsection do not apply to a violation determined by the director to be an inadvertent filing or reporting error. The burden of proving, by a preponderance of the evidence, that an error is inadvertent rests with the contractor or subcontractor charged with the error. To the extent that a contractor or subcontractor has not paid the prevailing wage rate under a determination issued as provided in subsection (1) of this section, the unpaid wages constitute a lien against the bonds and retainage as provided herein and in RCW 18.27.040, 18.106.410, 19.28.041, 39.08.010, and 60.28.011.
(4) The director may waive or reduce a penalty or additional sanction under this section including, but not limited to, when the director determines the contractor or subcontractor paid all wages and interest or there was an inadvertent filing or reporting error. The director may not waive or reduce interest. The department of labor and industries shall submit a report of the waivers made under this section, including a justification for any waiver made, upon request of an interested party.
(5) If, after the department of labor and industries initiates an investigation and before a notice of violation of unpaid wages, the contractor or subcontractor pays the unpaid wages identified in the investigation, interest on all wages owed at one percent per month, and penalties in the amount of $1,000 or 20 percent of the total prevailing wage violation determined by the department of labor and industries, whichever is greater, then the violation is considered resolved without further penalty under subsection (3) of this section.
(6) A contractor or subcontractor may only utilize the process outlined in subsection (5) of this section if the department of labor and industries has not issued a notice of violation that resulted in final judgment under this section against that contractor or subcontractor in the last five-year period. If a contractor or subcontractor utilizes the process outlined in subsection (5) of this section for a second time within a five-year period, the contractor or subcontractor is subject to the sanctions prescribed in subsection (3) of this section and may not be allowed to bid on any public works contract for two years.
[ 2023 c 88 s 5; 2019 c 242 s 4; 2009 c 219 s 4; 2001 c 219 s 2; 1994 c 88 s 1; 1985 c 15 s 2. ]
NOTES:
Effective date—Findings—2019 c 242: See notes following RCW 39.12.010.
Severability—1985 c 15: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1985 c 15 s 4.]
(1) The department of labor and industries may charge fees to awarding agencies on public works for the approval of statements of intent to pay prevailing wages and the certification of affidavits of wages paid. The department may also charge fees to persons or organizations requesting the arbitration of disputes under RCW 39.12.060. The amount of the fees shall be established by rules adopted by the department under the procedures in the administrative procedure act, chapter 34.05 RCW. Except as provided in subsection (3) of this section, the fees shall apply to all approvals, certifications, and arbitration requests made after the effective date of the rules. All fees shall be deposited in the public works administration account. The department may refuse to arbitrate for contractors, subcontractors, persons, or organizations which have not paid the proper fees. The department may, if necessary, request the attorney general to take legal action to collect delinquent fees.
(2) The department shall set the fees permitted by this section at a level that generates revenue that is as near as practicable to the amount of the appropriation to administer this chapter, including, but not limited to, the performance of adequate wage surveys, and to investigate and enforce all alleged violations of this chapter, including, but not limited to, incorrect statements of intent to pay prevailing wage, incorrect certificates of affidavits of wages paid, and wage claims, as provided for in this chapter and chapters 49.48 and 49.52 RCW. However, the fees charged for the approval of statements of intent to pay prevailing wages and the certification of affidavits of wages paid shall be forty dollars or less, as determined by the director of labor and industries in accordance with this subsection. For the 2019-2021 biennium, the fees shall not be more than twenty dollars.
(3) If, at the time an individual or entity files an affidavit of wages paid, the individual or entity is exempt from the requirement to pay the prevailing rate of wage under RCW 39.12.020, the department of labor and industries may not charge a fee to certify the affidavit of wages paid.
[ 2019 c 193 s 1; 2014 c 148 s 1; 2008 c 285 s 2; 2006 c 230 s 1; 1993 c 404 s 1; 1982 1st ex.s. c 38 s 1. ]
NOTES:
Effective date—2008 c 285 s 2: "Section 2 of this act takes effect July 1, 2008." [ 2008 c 285 s 3.]
Intent—Captions not law—2008 c 285: See notes following RCW 43.22.434.
Effective date—2006 c 230: "This act takes effect July 1, 2007." [ 2006 c 230 s 3.]
Effective date—1993 c 404: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1993." [ 1993 c 404 s 4.]
The public works administration account is created in the state treasury. The department of labor and industries shall deposit in the account all moneys received from fees or civil penalties collected under RCW 39.12.050, 39.12.065, and 39.12.070. Appropriations from the account may be made only for the purposes of administration of this chapter, including, but not limited to, the performance of adequate wage surveys, and for the investigation and enforcement of all alleged violations of this chapter as provided for in this chapter and chapters 49.48 and 49.52 RCW. During the 2017-2019 fiscal biennium the legislature may direct the state treasurer to make transfers of moneys in the public works administration account to the state general fund. It is the intent of the legislature to use the moneys transferred in the 2017-2019 biennium to support apprenticeship programs. During the 2025-2027 fiscal biennium, the legislature may direct the state treasurer to make transfers of moneys in the public works administration account to the general fund such amounts as reflect the excess fund balance of the account.
[ 2025 c 424 s 933; 2018 c 299 s 923; 2006 c 230 s 2; 2001 c 219 s 3; 1993 c 404 s 2. ]
NOTES:
Effective date—2025 c 424: See note following RCW 9.46.100.
Effective date—2018 c 299: See note following RCW 43.41.433.
Effective date—2006 c 230: See note following RCW 39.12.070.
Effective date—1993 c 404: See note following RCW 39.12.070.
For the purposes of this chapter, an individual employed on a public works project is not considered to be a laborer, worker, or mechanic when:
(1) The individual has been and is free from control or direction over the performance of the service, both under the contract of service and in fact;
(2) The service is either outside the usual course of business for the contractor or contractors for whom the individual performs services, or the service is performed outside all of the places of business of the enterprise for which the individual performs services, or the individual is responsible, both under the contract and in fact, for the costs of the principal place of business from which the service is performed;
(3) The individual is customarily engaged in an independently established trade, occupation, profession, or business, of the same nature as that involved in the contract of service, or the individual has a principal place of business for the business the individual is conducting that is eligible for a business deduction for federal income tax purposes other than that furnished by the employer for which the business has contracted to furnish services;
(4) On the effective date of the contract of service, the individual is responsible for filing at the next applicable filing period, both under the contract of service and in fact, a schedule of expenses with the internal revenue service for the type of business the individual is conducting;
(5) On the effective date of the contract of service, or within a reasonable period after the effective date of the contract of service, the individual has an active and valid certificate of registration with the department of revenue, and an active and valid account with any other state agencies as required by the particular case, for the business the individual is conducting for the payment of all state taxes normally paid by employers and businesses and has registered for and received a unified business identifier number from the state of Washington;
(6) On the effective date of the contract of service, the individual is maintaining a separate set of books or records that reflect all items of income and expenses of the business which the individual is conducting; and
(7) On the effective date of the contract of service, if the nature of the work performed requires registration under chapter 18.27 RCW or licensure under chapter 18.106, 19.28, or 70.87 RCW, the individual has the contractor registration and contractor licenses required by the laws of this state including chapters 18.27, 18.106, 19.28, and 70.87 RCW.
[ 2023 c 88 s 6; 2009 c 63 s 1. ]
(1) If a contractor or subcontractor engages three or more independent contractors, as described in RCW 39.12.100, to perform the same type of covered finishing work at the same time on a public works project, the department of labor and industries, upon a referral for investigation, must investigate to determine whether the individuals performing the work have been misclassified as independent contractors.
(2) A referral for investigation under this section may be made by:
(a) The state, county, municipality, or political subdivision awarding the public works contract;
(b) Any contractor or subcontractor on the public works project;
(c) Any labor organization that represents individuals performing covered finishing work on the public works project; or
(d) Any individual performing covered finishing work on the project.
(3) If the department of labor and industries finds, following an investigation under this section, that any individual performing covered finishing work has been misclassified as an independent contractor, the contractor or subcontractor that engaged the individual is subject to all applicable requirements, liabilities, and penalties under this chapter. Following this finding, the department of labor and industries shall make the appropriate referrals under Titles 50 and 51 RCW.
(4) For purposes of this section, "covered finishing work" means work in drywall, flooring, tiling, painting, and glazier and glasswork.
[ 2026 c 105 s 1. ]
Any employer, contractor, or subcontractor who fails to provide requested records, or fails to allow adequate inspection of records in an investigation by the department of labor and industries under this chapter within sixty calendar days of service of the department's request may not use the records in any proceeding under this chapter to challenge the correctness of any determination by the department that wages are owed, that a record or statement is false, or that the employer, contractor, or subcontractor has failed to file a record or statement.
[ 2011 c 92 s 1. ]
(1) Each contractor, subcontractor, or employer shall keep accurate payroll records for three years from the date of acceptance of the public works project by the contract awarding agency, showing the employee's full name, address, social security number, trade or occupation, classification, straight and overtime rates, hourly rate of usual benefits, and hours worked each day and week, including any employee authorizations executed pursuant to RCW 49.28.065, and the actual gross wages, itemized deductions, withholdings, and net wages paid, for each laborer, worker, and mechanic employed by the contractor for work performed on a public works project.
(2) A contractor, subcontractor, or employer shall file a copy of its certified payroll records using the department of labor and industries' online system at least once per month. If the department of labor and industries' online system is not used, a contractor, subcontractor, or employer shall file a copy of its certified payroll records directly with the department of labor and industries in a format approved by the department of labor and industries at least once per month.
(3) The department of labor and industries shall provide, upon request, a copy of an employer's certified payroll records to an interested party. A joint labor-management cooperation committee may only use the information provided under this subsection for purposes of filing complaints under RCW 39.12.065 and may not use the information for any other purpose, including union organizing or commercial activity.
(4) A contractor, subcontractor, or employer's noncompliance with this section constitutes a violation of RCW 39.12.050.
[ 2025 c 99 s 3; 2019 c 242 s 5. ]
NOTES:
Effective date—Findings—2019 c 242: See notes following RCW 39.12.010.
(1) For the purposes of enforcing this chapter, if a contractor has substantially identical operations, corporate, or management structure to another entity that has been debarred or otherwise sanctioned under RCW 39.12.050, 39.12.055, 39.12.065, or any associated rule, then the contractor is subject to the same debarment or sanction as that other entity. These sanctions include: Penalties issued under this chapter; findings of violations that the department of labor and industries count toward a bar on bidding on public works; and debarment, prohibiting bidding on public works. The department of labor and industries may enforce this section under the enforcement provisions of this chapter and associated rules.
(2) The director may issue a notice of violation under this section to a contractor described in subsection (1) of this section to extend the sanctions of a debarred or sanctioned entity imposed through a final and binding order or agreement to the contractor. A hearing must be held following a timely appeal of the notice of violation in accordance with chapter 34.05 RCW. The director shall issue a written determination including his or her findings after the hearing unless a notice of violation is not timely appealed. A notice of violation not timely appealed is final and binding, and is not subject to further appeal.
[ 2024 c 7 s 3. ]
NOTES:
Findings—2024 c 7: "The legislature finds that government contracts should not be awarded to those that knowingly and intentionally violate Washington state's prevailing wage laws. The legislature also finds that businesses that follow the law and pay workers appropriately are placed at a competitive disadvantage to those that reduce costs by failing to pay prevailing wages or failing to file or falsely file with the Washington state department of labor and industries or sanctioned under RCW 39.12.055. In order to create a consistent, fair playing field for businesses and avoid taxpayer contracts going to those that repeatedly violate the law and illegally withhold money from workers, the state should amend the state prevailing wage laws to extend those businesses' sanctions to their substantially identical companies. These sanctions include penalties issued under chapter 39.12 RCW; findings of violations that the department of labor and industries count toward a bar on bidding on public works; and debarment, prohibiting bidding on public works." [ 2024 c 7 s 1.]
Effective date—2024 c 7: See note following RCW 39.12.010.
The legislature finds that minority and women-owned businesses are significantly underrepresented and have been denied equitable competitive opportunities in contracting. It is the intent of this chapter to mitigate societal discrimination and other factors in participating in public works and in providing goods and services and to delineate a policy that an increased level of participation by minority and women-owned and controlled businesses is desirable at all levels of state government. The purpose and intent of this chapter are to provide the maximum practicable opportunity for increased participation by minority and women-owned and controlled businesses in participating in public works and the process by which goods and services are procured by state agencies and educational institutions from the private sector.
[ 1987 c 328 s 1; 1983 c 120 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Advisory committee" means the advisory committee on minority and women's business enterprises.
(2) "Broker" means a person that provides a bona fide service, such as professional, technical, consultant, brokerage, or managerial services and assistance in the procurement of essential personnel, facilities, equipment, materials, or supplies required for performance of a contract.
(3) "Contractor" means an individual or entity granted state certification and awarded either a direct contract with an agency or an indirect contract as a subcontractor to perform a service or provide goods.
(4) "Debar" means to prohibit a contractor, individual, or other entity from submitting a bid, having a bid considered, or entering into a state contract during a specified period of time as set forth in a debarment order.
(5) "Director" means the director of the office of minority and women's business enterprises.
(6) "Educational institutions" means the state universities, the regional universities, The Evergreen State College, and the community colleges.
(7) "Goals" means annual overall agency goals, expressed as a percentage of dollar volume, for participation by minority and women-owned and controlled businesses and shall not be construed as a minimum goal for any particular contract or for any particular geographical area. It is the intent of this chapter that such overall agency goals shall be achievable and shall be met on a contract-by-contract or class-of-contract basis.
(8) "Goods and/or services" includes professional services and all other goods and services.
(9) "Office" means the office of minority and women's business enterprises.
(10) "Person" includes one or more individuals, partnerships, associations, organizations, corporations, cooperatives, legal representatives, trustees and receivers, or any group of persons.
(11) "Procurement" means the purchase, lease, or rental of any goods or services.
(12) "Public works" means all work, construction, highway and ferry construction, alteration, repair, or improvement other than ordinary maintenance, which a state agency or educational institution is authorized or required by law to undertake.
(13) "State agency" includes the state of Washington and all agencies, departments, offices, divisions, boards, commissions, and correctional and other types of institutions.
[ 2021 c 160 s 1; 2019 c 434 s 2; 1996 c 69 s 4; 1987 c 328 s 2; 1983 c 120 s 2. ]
NOTES:
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
Intent—1996 c 69: See note following RCW 39.19.030.
There is hereby created the office of minority and women's business enterprises. The governor shall appoint a director for the office, subject to confirmation by the senate. The director may employ a deputy director and a confidential secretary, both of which shall be exempt under chapter 41.06 RCW, and such staff as are necessary to carry out the purposes of this chapter.
The office shall consult with the minority and women's business enterprises advisory committee to:
(1) Develop, plan, and implement programs to provide an opportunity for participation by qualified minority and women-owned and controlled businesses in public works and the process by which goods and services are procured by state agencies and educational institutions from the private sector;
(2) Develop a comprehensive plan insuring that qualified minority and women-owned and controlled businesses are provided an opportunity to participate in public contracts for public works and goods and services;
(3) Identify barriers to equal participation by qualified minority and women-owned and controlled businesses in all state agency and educational institution contracts;
(4) Establish annual overall goals for participation by qualified minority and women-owned and controlled businesses for each state agency and educational institution to be administered on a contract-by-contract basis or on a class-of-contracts basis;
(5) Develop and maintain a central minority and women's business enterprise certification list for all state agencies and educational institutions. No business is entitled to certification under this chapter unless it meets the definition of small business concern as established by the office. All applications for certification under this chapter shall be sworn under oath;
(6) Develop, implement, and operate a system of monitoring compliance with this chapter;
(7) Adopt rules under chapter 34.05 RCW, the Administrative Procedure Act, governing: (a) Establishment of agency goals; (b) development and maintenance of a central minority and women's business enterprise certification program and a public works small business certification program, including a definition of "small business concern" which shall be consistent with the small business requirements defined under section 3 of the Small Business Act, 15 U.S.C. Sec. 632, and its implementing regulations as guidance; (c) procedures for monitoring and enforcing compliance with goals, regulations, contract provisions, and this chapter; (d) utilization of standard clauses by state agencies and educational institutions, as specified in RCW 39.19.050; and (e) determination of an agency's or educational institution's goal attainment consistent with the limitations of RCW 39.19.075;
(8) Submit an annual report to the governor and the legislature outlining the progress in implementing this chapter;
(9) Investigate complaints of violations of this chapter with the assistance of the involved agency or educational institution; and
(10) Cooperate and act jointly or by division of labor with the United States or other states, and with political subdivisions of the state of Washington and their respective minority, socially and economically disadvantaged and women business enterprise programs to carry out the purposes of this chapter. However, the power which may be exercised by the office under this subsection permits investigation and imposition of sanctions only if the investigation relates to a possible violation of chapter 39.19 RCW, and not to violation of local ordinances, rules, regulations, however denominated, adopted by political subdivisions of the state.
[ 2023 c 395 s 3; 1996 c 69 s 5; 1989 c 175 s 85; 1987 c 328 s 3; 1983 c 120 s 3. ]
NOTES:
Effective date—2023 c 395 ss 1-30, 32-34, 36, and 37: See note following RCW 39.04.010.
Findings—Intent—2023 c 395: See note following RCW 39.04.010.
Intent—1996 c 69: "It is the intent of the legislature to ensure that the counting of the dollar value of an agency's or educational institution's expenditures to certified minority and women's business enterprises meaningfully reflects the actual financial participation of the certified businesses." [ 1996 c 69 s 3.]
Effective date—1989 c 175: See note following RCW 34.05.010.
The director may establish ad hoc advisory committees, as necessary, to assist in the development of policies to carry out the purposes of this chapter.
[ 1995 c 269 s 1302. ]
NOTES:
Effective date—Part headings not law—Severability—1995 c 269: See notes following RCW 18.16.050.
The rules adopted under RCW 39.19.030 shall include requirements for standard clauses in requests for proposals, advertisements, bids, or calls for bids, necessary to carry out the purposes of this chapter, which shall include notice of the statutory penalties under RCW 39.19.080 and 39.19.090 for noncompliance.
[ 1983 c 120 s 5. ]
(1) Each state agency and educational institution shall comply with the annual goals established for that agency or institution under this chapter for public works and procuring goods or services. This chapter applies to all public works and procurement by state agencies and educational institutions, including all contracts and other procurement under chapters 28B.10, 39.04, 39.26, 43.19, and 47.28 RCW.
(2) Each state agency shall adopt a plan, developed in consultation with the director and the advisory committee, to ensure that minority and women-owned businesses are afforded the maximum practicable opportunity to directly and meaningfully participate in the execution of public contracts for public works and goods and services. The plan shall include specific measures the agency will undertake to increase the participation of certified minority and women-owned businesses.
(3) Of all state agencies and educational institutions, the office must annually identify those: (a) In the lowest quintile of utilization of minority and women-owned contractors as a percentage of all contracts issued by the agency; (b) in the lowest quintile of the dollar value awarded to minority and women-owned contractors as a percentage of the dollar value of all contracts issued by the agency; and (c) that are performing significantly below their established goals, as determined by the office. The office must meet with each identified agency to review its plan and identify available tools and actions for increasing participation.
(4) The office shall annually notify the governor, the state auditor, and the joint legislative audit and review committee of all agencies and educational institutions not in compliance with this chapter.
[ 2021 c 160 s 2; 2019 c 434 s 3; 1996 c 288 s 28; 1993 c 512 s 9; 1983 c 120 s 6. ]
NOTES:
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
Compliance with chapter 39.19 RCW: RCW 28B.10.023, 39.04.160, 39.26.245, 47.28.030, 47.28.050, 47.28.090.
It is the intent of this chapter that the goals established under this chapter for participation by minority and women-owned and controlled businesses be achievable. If necessary to accomplish this intent, contracts may be awarded to the next lowest responsible bidder in turn, or all bids may be rejected and new bids obtained, if the lowest responsible bidder does not meet the goals established for a particular contract under this chapter. The dollar value of the total contract used for the calculation of the specific contract goal may be increased or decreased to reflect executed change orders. An apparent low-bidder must be in compliance with the contract provisions required under this chapter as a condition precedent to the granting of a notice of award by any state agency or educational institution.
[ 1994 c 15 s 1; 1987 c 328 s 4; 1983 c 120 s 7. ]
For purposes of measuring an agency's or educational institution's goal attainment, any regulations adopted under RCW 39.19.030(7)(e) must provide that if a certified minority and women's business enterprise is a broker of goods or materials required under a contract, the contracting agency or educational institution may count only the dollar value of the fee or commission charged and not the value of goods or materials provided. The contracting agency or educational institution may, at its discretion, fix the dollar value of the fee or commission charged at either the actual dollar value of the fee or commission charged or at a standard percentage of the total value of the brokered goods, which percentage must reflect the fees or commissions generally paid to brokers for providing such services.
[ 1996 c 69 s 6. ]
NOTES:
Intent—1996 c 69: See note following RCW 39.19.030.
A person, firm, corporation, business, union, or other organization shall not:
(1) Prevent or interfere with a contractor's or subcontractor's compliance with this chapter, or any rule adopted under this chapter;
(2) Submit false or fraudulent information to the state concerning compliance with this chapter or any such rule;
(3) Fraudulently obtain, retain, attempt to obtain or retain, or aid another in fraudulently obtaining or retaining or attempting to obtain or retain certification as a minority or women's business enterprise for the purpose of this chapter;
(4) Knowingly make a false statement, whether by affidavit, verified statement, report, or other representation, to a state official or employee for the purpose of influencing the certification or denial of certification of any entity as a minority or women's business enterprise;
(5) Knowingly obstruct, impede, or attempt to obstruct or impede any state official or employee who is investigating the qualification of a business entity that has requested certification as a minority or women's business enterprise;
(6) Fraudulently obtain, attempt to obtain, or aid another person in fraudulently obtaining or attempting to obtain public moneys to which the person is not entitled under this chapter; or
(7) Knowingly make false statements that any entity is or is not certified as a minority or women's business enterprise for purposes of obtaining a contract governed by this chapter.
[ 2021 c 160 s 3; 1987 c 328 s 5; 1983 c 120 s 8. ]
(1)(a) Except as provided in (b) of this subsection, if a person, firm, corporation, or business does not comply with any provision of this chapter or with a contract requirement established under this chapter, the state may impose one or more of the following penalties: Withholding payment, decertifying the contractor, debarring the contractor, suspending or terminating the contract, or subjecting the contractor to civil penalties of up to 10 percent of the amount of the contract or up to $5,000 for each violation.
(b) If a person, firm, corporation, or business commits any of the activities prohibited in RCW 39.19.080, the state must impose one or more of the following penalties: Withholding payment, decertifying the contractor, debarring the contractor for a period between one and three years, terminating the contract, or subjecting the contractor to civil penalties of between two and 10 percent of the amount of the contract or between $1 and $5,000 for each violation.
(c) In addition to any other penalties imposed, willful repeated violations, exceeding a single violation, must disqualify the contractor from further participation in state contracts for a period of three years. A willful violation includes a conscious or deliberate false statement, misrepresentation, omission, or concealment of a material fact, with the specific intent of obtaining, continuing, or increasing benefits under this chapter.
(2) An apparent low-bidder must be in compliance with the contract provisions required under this chapter as a condition precedent to the granting of a notice of award by any state agency or educational institution.
(3) The office shall follow administrative procedures under chapter 34.05 RCW in determining a violation and imposing penalties under this chapter. The office shall adopt by rule criteria for the imposition of penalties under this section. The rule may incorporate the debarment process authorized for the department of enterprise services in RCW 39.26.200.
(4)(a) An audit and review unit is established within the office for the purpose of detecting and investigating fraud and violations of this chapter. The office must employ qualified personnel for the unit.
(b) For the purpose of any investigation or proceeding under this chapter, the director or the director's designee may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records that the director or the director's designee deems relevant or material to the inquiry.
(c) Subpoenas issued under this section may be enforced under RCW 34.05.588.
(d) The audit and review unit must annually:
(i) Conduct a site review of a minimum of three percent of persons, firms, corporations, or businesses awarded a contract under this chapter;
(ii) Submit a response for all complaints for investigation made by an external agency to the agency submitting the complaint;
(iii) Develop and implement a process for prioritizing and conducting thorough investigations of persons, firms, corporations, or businesses identified by an external complaint and determined to be the highest priority for the agency; and
(iv) Develop and implement a process for prioritizing and conducting thorough investigations of persons, firms, corporations, or businesses internally identified and determined to be the highest priority for the agency.
(5) The procedures and sanctions in this section are not exclusive; nothing in this section prevents the state agency or educational institution administering the contracts from pursuing such procedures or sanctions as are otherwise provided by statute, rule, or contract provision.
[ 2021 c 160 s 4; 1987 c 328 s 6; 1983 c 120 s 9. ]
The office shall be the sole authority to perform certification of minority business enterprises, socially and economically disadvantaged business enterprises, and women's business enterprises throughout the state of Washington. Certification by the state office will allow these firms to participate in programs for these enterprises administered by the state of Washington, any city, town, county, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation within the state of Washington.
This statewide certification process will prevent duplication of effort, achieve efficiency, and permit local jurisdictions to further develop, implement, and/or enhance comprehensive systems of monitoring and compliance for contracts issued by their agencies.
[ 1987 c 328 s 7. ]
Implementation of statewide certification shall be effective January 1, 1988, following consultation by the office with appropriate state and local officials who currently administer similar certification programs. Any business having been certified under any of the programs identified pursuant to *RCW 39.19.130 as a minority and women's business enterprise shall be deemed certified by the office as of January 1, 1988.
[ 1987 c 328 s 9. ]
NOTES:
*Reviser's note: RCW 39.19.130 expired June 30, 1991.
(1) Any city, county, town, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation having reason to believe that a particular minority and women's business enterprise should not have been certified under RCW 39.19.140 may petition the office for reconsideration. The basis for the petition may be one or more of the following:
(a) The office's rules or regulations were improperly applied; or
(b) Material facts relating to the minority and women's business enterprise's certification application to the office are untrue.
(2) The petitioner shall carry the burden of persuasion. The affected minority or women's business enterprise shall receive notice of the petition and an opportunity to respond.
(3) After reviewing the information presented in support of and in opposition to the petition, the office shall issue a written decision, granting or denying the petition. If the office grants the petition, it may revoke, suspend, or refuse to renew the certification or impose sanctions under this chapter as appropriate.
(4) The office's decision on a petition is administratively final and the rights of appeal set out in the office regulations shall apply. A certification shall remain in effect while a petition is pending.
[ 1987 c 328 s 10. ]
Any city, town, county, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation within the state of Washington utilizing the certification by the office retains the responsibility for monitoring compliance with the programs under its jurisdiction. The office shall not be responsible for enforcement of local ordinances, rules, or regulations, however titled.
[ 1987 c 328 s 11. ]
(1) State agencies shall not require a performance bond for any public works project that does not exceed twenty-five thousand dollars awarded to a prequalified and certified minority or woman-owned business that has been prequalified as provided under subsection (2) of this section.
(2) A limited prequalification questionnaire shall be required assuring:
(a) That the bidder has adequate financial resources or the ability to secure such resources;
(b) That the bidder can meet the performance schedule;
(c) That the bidder is experienced in the type of work to be performed; and
(d) That all equipment to be used is adequate and functioning and that all equipment operators are qualified to operate such equipment.
[ 1993 c 512 s 10. ]
The minority and women's business enterprises account is created in the custody of the state treasurer. All receipts from RCW 39.19.210, 39.19.220, and 39.19.230 and civil penalties imposed under RCW 39.19.090 shall be deposited in the account. Expenditures from the account may be used only for the purposes defraying all or part of the costs of the office in administering this chapter. Only the director or the director's designee may authorize expenditures from the account. Moneys in the account may be spent only after appropriation.
[ 2021 c 160 s 6; 1993 c 195 s 1. ]
NOTES:
Effective date of 1993 c 195—1993 sp.s. c 24: "Chapter 195, Laws of 1993 is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1993." [ 1993 sp.s. c 24 s 930.]
The office may charge a reasonable fee or other appropriate charge, to be set by rule adopted by the office under chapter 34.05 RCW, to a business using the services of the office.
[ 1993 c 195 s 2. ]
NOTES:
Effective date of 1993 c 195—1993 sp.s. c 24: See note following RCW 39.19.200.
The office may charge to a political subdivision in this state a reasonable fee or other appropriate charge, to be set by rule adopted by the office under chapter 34.05 RCW, prorated on the relative benefit to the political subdivision, for the certification under this chapter of a business.
[ 1993 c 195 s 3. ]
NOTES:
Effective date of 1993 c 195—1993 sp.s. c 24: See note following RCW 39.19.200.
The office may charge to a state agency and educational institutions, as both are defined in RCW 39.19.020, a reasonable fee or other appropriate charge, to be set by rule adopted by the office under chapter 34.05 RCW, based upon the state agency's or educational institution's expenditure level of funds subject to the office.
[ 1993 c 195 s 4. ]
NOTES:
Effective date of 1993 c 195—1993 sp.s. c 24: See note following RCW 39.19.200.
(1) The office shall, in consultation with the state treasurer and the department of commerce, compile information on minority and women's business enterprises that have received financial assistance through a qualified public depositary under the provisions of RCW 43.86A.060. The information shall include, but is not limited to:
(a) Name of the qualified public depositary;
(b) Geographic location of the minority or women's business enterprise;
(c) Name of the minority or women's business enterprise;
(d) Date of last certification by the office and certification number;
(e) Type of business;
(f) Amount and term of the loan to the minority or women's business enterprise; and
(g) Other information the office deems necessary for the implementation of this section.
(2) The office shall notify the state treasurer of minority or women's business enterprises that are no longer certified under the provisions of this chapter. The written notification shall contain information regarding the reason for the decertification and information on financing provided to the minority or women's business enterprise under RCW 43.86A.060.
(3) The office shall, in consultation with the state treasurer and the department of commerce, monitor the performance of loans made to minority and women-owned business enterprises under RCW 43.86A.060.
[ 2023 c 470 s 2025; 2005 c 302 s 5; 2002 c 305 s 2. ]
NOTES:
Explanatory statement—2023 c 470: See note following RCW 10.99.030.
Intent—2005 c 302: See note following RCW 43.86A.030.
(1) For the purpose of annual reporting on progress required by this chapter, each state agency and educational institution shall submit data to the office and the office of minority and women's business enterprises on the participation by qualified minority and women-owned and controlled businesses in the agency's or institution's contracts and other related information requested by the director. The director of the office of minority and women's business enterprises shall determine the content and format of the data and the reporting schedule, which must be at least annually.
(2) The office must develop and maintain a list of contact people at each state agency and educational institution who are able to present to hearings of the appropriate committees of the legislature its progress in carrying out the purposes of chapter 39.19 RCW.
(3) The office must submit a report aggregating the data received from each state agency and educational institution, and the information identified and actions taken under RCW 39.19.060(3) and 39.19.090(4), to the legislature and the governor.
[ 2021 c 160 s 7; 2019 c 434 s 4; 2009 c 348 s 2. ]
NOTES:
Finding—Intent—2019 c 434: See note following RCW 35.23.352.
(1) The director or director's designee may apply for and obtain a superior court order approving and authorizing a subpoena in advance of its issuance. The application may be made in the county where the subpoenaed person resides or is found, or the county where the subpoenaed documents, records, or evidence are located, or in Thurston county. The application must:
(a) State that an order is sought under this section;
(b) Adequately specify the documents, records, evidence, or testimony; and
(c) Include a declaration made under oath that an investigation is being conducted for a lawfully authorized purpose related to an investigation within the office's authority and that the subpoenaed documents, records, evidence, or testimony are reasonably related to an investigation within the office's authority.
(2) When an application under this section is made to the satisfaction of the court, the court must issue an order approving the subpoena. An order under this subsection constitutes authority of law for the agency to subpoena the documents, records, evidence, or testimony.
(3) The director or director's designee may seek approval and a court may issue an order under this section without prior notice to any person, including the person to whom the subpoena is directed and the person who is the subject of an investigation. An application for court approval is subject to the fee and process set forth in RCW 36.18.012(3).
[ 2021 c 160 s 5. ]
The office shall develop a program to foster the development of women, minority-owned, and veteran-owned licensed driver training schools in the state, including through instruction on topics relevant to owning and operating a licensed driver training school, and shall report to the transportation committees of the legislature by October 1, 2024, with an update on program implementation and administration.
[ 2023 c 445 s 6. ]
(1) This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1983.
(2) Contracts entered into before September 1, 1983, are not subject to this act.
[ 1983 c 120 s 21. ]
(1) If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
(2) If any part of this chapter is found to be in conflict with federal requirements which are a prescribed condition to the allocation of federal funds to the state the conflicting part of this chapter is hereby declared to be inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and such finding or determination shall not affect the operation of the remainder of this chapter in its application to the agencies concerned. The rules under this chapter shall meet federal requirements which are a necessary condition to the receipt of federal funds by the state.
[ 1983 c 120 s 18. ]
It is the intent of the legislature to encourage municipalities to purchase products and/or services manufactured or provided by sheltered workshops and programs of the department of social and health services which operate facilities serving persons with disabilities and disadvantaged individuals.
[ 2020 c 274 s 19; 1975 c 20 s 1. ]
As used in RCW 39.23.005 and 39.23.020 the term "sheltered workshops" shall have the meaning ascribed to it by RCW 82.04.385 and "programs of the department of social and health services" shall mean the group training homes and day training centers defined in *RCW 72.33.800 and "municipality" shall have the meaning ascribed to it by RCW 39.04.010.
[ 1975 c 20 s 2. ]
NOTES:
*Reviser's note: RCW 72.33.800 was repealed by 1988 c 176 s 1007. See Title 71A RCW.
Municipalities are hereby authorized to purchase products and/or services manufactured or provided by sheltered workshops and programs of the department of social and health services. Such purchases shall be at the fair market price of such products and services as determined by a municipality. To determine the fair market price a municipality shall use the last comparable bid on the products and/or services or in the alternative the last price paid for the products and/or services. The increased cost of labor, materials, and other documented costs since the last comparable bid or the last price paid are additional cost factors which shall be considered in determining fair market price. Upon the establishment of the fair market price as provided for in this section a municipality is hereby empowered to negotiate directly with sheltered workshops or officials in charge of the programs of the department of social and health services for the purchase of the products or services.
[ 1977 ex.s. c 10 s 1; 1975 c 20 s 3. ]
A governmental unit shall, to the maximum extent economically feasible, purchase paper products which meet the specifications established by the department of enterprise services under RCW 39.26.255.
[ 2015 c 225 s 40; 1982 c 61 s 3. ]
(1) All purchases made by a public agency are subject to the requirements established under RCW 19.06.020.
(2) For the purposes of this section, "public agency" means those agencies subject to RCW 19.06.020.
(3) This section is not intended to create an entitlement to an individual or class of individuals.
[ 2016 c 40 s 2. ]
NOTES:
Construction—2016 c 40: See note following RCW 39.26.285.
It is the intent of this chapter to promote open competition and transparency for all contracts for goods and services entered into by state agencies, unless specifically exempted under this chapter. It is further the intent of this chapter to centralize within one agency the authority and responsibility for the development and oversight of policies related to state procurement and contracting. To ensure the highest ethical standards, proper accounting for contract expenditures, and for ease of public review, it is further the intent to centralize the location of information about state procurements and contracts. It is also the intent of the legislature to provide state agency contract data to the public in a searchable manner.
In addition, the legislature intends that the state develop procurement policies, procedures, and materials that encourage and facilitate state agency purchase of goods and services from Washington small businesses.
[ 2012 c 224 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Agency" means any state office or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, commissions, institutions of higher education as defined in RCW 28B.10.016, and correctional and other types of institutions. "Agency" does not include a comprehensive cancer center participating in a collaborative arrangement as defined in RCW 28B.10.930 that is operated in conformance with RCW 28B.10.930.
(2) "Bid" means an offer, proposal, or quote for goods or services in response to a solicitation issued for such goods or services by the department or an agency of Washington state government.
(3) "Bidder" means an individual or entity who submits a bid, quotation, or proposal in response to a solicitation issued for such goods or services by the department or an agency of Washington state government.
(4) "Client services" means services provided directly to agency clients including, but not limited to, medical and dental services, employment and training programs, residential care, and subsidized housing.
(5) "Community rehabilitation program of the department of social and health services" means any entity that:
(a) Is registered as a nonprofit corporation with the secretary of state; and
(b) Is recognized by the department of social and health services, division of vocational rehabilitation as eligible to do business as a community rehabilitation program.
(6) "Competitive solicitation" means a documented formal process providing an equal and open opportunity to bidders and culminating in a selection based on predetermined criteria.
(7) "Contractor" means an individual or entity awarded a contract with an agency to perform a service or provide goods.
(8) "Debar" means to prohibit a contractor, individual, or other entity from submitting a bid, having a bid considered, or entering into a state contract during a specified period of time as set forth in a debarment order.
(9) "Department" means the department of enterprise services.
(10) "Director" means the director of the department of enterprise services.
(11) "Estimated useful life" of an item means the estimated time from the date of acquisition to the date of replacement or disposal, determined in any reasonable manner.
(12) "Goods" means products, materials, supplies, or equipment provided by a contractor.
(13) "In-state business" means a business that has its principal office located in Washington.
(14) "Life-cycle cost" means the total cost of an item to the state over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life.
(15) "Master contracts" means a contract for specific goods or services, or both, that is solicited and established by the department in accordance with procurement laws and rules on behalf of and for general use by agencies as specified by the department.
(16) "Microbusiness" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that: (a) Is owned and operated independently from all other businesses; and (b) has a gross revenue of less than $1,000,000 annually as reported on its federal tax return or on its return filed with the department of revenue.
(17) "Minibusiness" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that: (a) Is owned and operated independently from all other businesses; and (b) has a gross revenue of less than $3,000,000, but $1,000,000 or more annually as reported on its federal tax return or on its return filed with the department of revenue.
(18) "Polychlorinated biphenyls" means any polychlorinated biphenyl congeners and homologs.
(19) "Practical quantification limit" means the lowest concentration that can be reliably measured within specified limits of precision, accuracy, representativeness, completeness, and comparability during routine laboratory operating conditions.
(20) "Purchase" means the acquisition of goods or services, including the leasing or renting of goods.
(21) "Services" means labor, work, analysis, or similar activities provided by a contractor to accomplish a specific scope of work.
(22) "Small business" means an in-state business, including a sole proprietorship, corporation, partnership, or other legal entity, that:
(a) Certifies, under penalty of perjury, that it is owned and operated independently from all other businesses and has either:
(i) Fifty or fewer employees; or
(ii) A gross revenue of less than $7,000,000 annually as reported on its federal income tax return or its return filed with the department of revenue over the previous three consecutive years; or
(b) Is certified with the office of women and minority business enterprises under chapter 39.19 RCW.
(23) "Sole source" means a contractor providing goods or services of such a unique nature or sole availability that the contractor is clearly and justifiably the only practicable source to provide the goods or services.
(24) "Washington grown" has the definition in RCW 15.64.060.
[ 2024 c 140 s 1; 2022 c 71 s 12; 2015 c 79 s 5. Prior: 2014 c 135 s 2; prior: 2012 c 224 s 2. ]
NOTES:
Findings—Intent—2022 c 71: See note following RCW 28B.10.930.
Findings—2014 c 135: See note following RCW 39.26.280.
(1)(a) A state officer or employee of an agency who seeks to acquire goods or services or who participates in those contractual matters is subject to the requirements in RCW 42.52.150.
(b) A contractor who contracts with an agency to perform services related to the acquisition of goods and services for or on behalf of the state is subject to the requirements in RCW 42.52.150.
(2) No person or entity who seeks or may seek a contract with a state agency may give, loan, transfer, or deliver to any person something of economic value for which receipt of such item would cause a state officer or employee to be in a violation of RCW 42.52.040, 42.52.110, 42.52.120, * 42.52.140, or 42.52.150.
[ 2012 c 224 s 3. ]
NOTES:
***** Reviser's note: RCW 42.52.140 was repealed by 2025 c 377 s 29.
(1) Records related to state procurements are public records subject to disclosure to the extent provided in chapter 42.56 RCW except as provided in subsection (2) of this section.
(2) Bid submissions and bid evaluations are exempt from disclosure until the agency announces the apparent successful bidder.
[ 2012 c 224 s 4. ]
Agencies that are authorized or directed to establish a board, commission, council, committee, or other similar group made up of volunteers to advise the activities and management of the agency are prohibited from entering into contracts with any or all volunteer members as a means to reimburse or otherwise pay members of such board, commission, council, committee, or other similar group for the work performed as part of the entity, except where payment is specifically authorized by statute.
[ 2012 c 224 s 5. ]
(1) In addition to the powers and duties provided in chapter 43.19 RCW, the department shall make available goods and services to support state agencies, and may enter into agreements with any other local or federal governmental agency or entity or a public benefit nonprofit organization, in compliance with RCW 39.34.055, and any tribes located in the state, to furnish such products and services as deemed appropriate by both parties.
(2) The department shall ensure full cost recovery from state agencies, other local or federal governmental agency or entity, public benefit nonprofit organizations, or any tribes located in the state, for activities performed pursuant to subsection (1) of this section. Cost recovery must ensure that the department is reimbursed its full cost for providing the goods and services furnished as determined by the department. Cost recovery may be collected through the state agency, other governmental entity, nonprofit organization, or through the contractor.
(3) All governmental entities of this state may enter into agreements under this section with the department, unless otherwise prohibited.
[ 2012 c 224 s 6. ]
(1) On behalf of the state, the department may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of any goods or services with one or more states, state agencies, local governments, local government agencies, federal agencies, or tribes located in the state, in accordance with an agreement entered into between the participants. The cooperative purchasing may include, but is not limited to, joint or multiparty contracts between the entities, and master contracts or convenience contracts that are made available to other public agencies.
(2) All cooperative purchasing conducted under this chapter must be through contracts awarded through a competitive solicitation process.
[ 2012 c 224 s 7. ]
A convenience contract is a contract for specific goods or services, or both, that is solicited and established in accordance with procurement laws and rules for use by a specified group of agencies. A convenience contract is not available for general use and must be approved by the department. Convenience contracts are not intended to replace or supersede master contracts as defined in this chapter.
[ 2024 c 140 s 2; 2015 c 79 s 6; 2012 c 224 s 8. ]
(1) The director is responsible for the development and oversight of policy for the procurement of goods and services by all state agencies under this chapter. When establishing policies, standards, and procedures, the director shall account for differentiation in procurement practices and needs among state agencies and strive to establish policies, standards, and procedures that promote greater efficiency in procurement.
(2) The director is authorized to adopt rules, policies, and guidelines governing the procurement, contracting, and contract management of any and all goods and services procured by state agencies under this chapter.
(3) The director or designee is the sole authority to enter into master contracts on behalf of the state.
[ 2012 c 224 s 9. ]
The director shall:
(1) Establish overall state policies, standards, and procedures regarding the procurement of goods and services by all state agencies;
(2) Develop policies and standards for the use of credit cards or similar methods to make purchases;
(3) Establish procurement processes for information technology goods and services, using technology standards and policies established by Washington technology solutions under chapter 43.105 RCW;
(4) Enter into contracts or delegate the authority to enter into contracts on behalf of the state to facilitate the purchase, lease, rent, or otherwise acquire all goods and services and equipment needed for the support, maintenance, and use of all state agencies, except as provided in RCW 39.26.100;
(5) Have authority to delegate to agencies authorization to purchase goods and services. The authorization must specify restrictions as to dollar amount or to specific types of goods and services, based on a risk assessment process developed by the department. Acceptance of the purchasing authorization by an agency does not relieve the agency from conformance with this chapter or from policies established by the director. Also, the director may not delegate to a state agency the authorization to purchase goods and services if the agency is not in substantial compliance with overall procurement policies as established by the director;
(6) Develop procurement policies and procedures, such as unbundled contracting and subcontracting, that encourage and facilitate the purchase of goods and services from Washington small businesses, microbusinesses, and minibusinesses, and minority and women-owned businesses to the maximum extent practicable and consistent with international trade agreement commitments;
(7) Develop and implement an enterprise system for electronic procurement;
(8) Provide for a commodity classification system and provide for the adoption of goods and services commodity standards;
(9) Establish overall state policy for compliance by all agencies regarding:
(a) Food procurement procedures and materials that encourage and facilitate the purchase of Washington grown food by state agencies and institutions to the maximum extent practicable and consistent with international trade agreement commitments; and
(b) Policies requiring all food contracts to include a plan to maximize to the extent practicable and consistent with international trade agreement commitments the availability of Washington grown food purchased through the contract;
(10) Develop guidelines and criteria for the purchase of vehicles, high gas mileage vehicles, and alternate vehicle fuels and systems, equipment, and materials, that reduce overall energy-related costs and energy use by the state, including investigations into all opportunities to aggregate the purchasing of clean technologies by state and local governments, and including the requirement that new passenger vehicles purchased by the state meet the minimum standards for passenger automobile fuel economy established by the United States secretary of transportation pursuant to the energy policy and conservation act (15 U.S.C. Sec. 2002); and
(11) Develop and enact rules to implement the provisions of this chapter.
[ 2024 c 54 s 28; 2012 c 224 s 10. ]
(1) The provisions of this chapter do not apply in any manner to the operation of the state legislature except as requested by the legislature.
(2) The provisions of this chapter do not apply to the contracting for services, equipment, and activities that are necessary to establish, operate, or manage the state data center, including architecture, design, engineering, installation, and operation of the facility, that are approved by the technology services board or the acquisition of proprietary software, equipment, and information technology services necessary for or part of the provision of services offered by Washington technology solutions.
(3) Primary authority for the purchase of specialized equipment, and instructional and research material, for their own use rests with the institutions of higher education as defined in RCW 28B.10.016.
(4) Universities operating hospitals with approval from the director, as the agent for state hospitals as defined in RCW 72.23.010, and for health care programs provided in state correctional institutions as defined in RCW 72.65.010(3) and veterans' institutions as defined in RCW 72.36.010 and 72.36.070, may make purchases for hospital operation by participating in contracts for materials, supplies, and equipment entered into by nonprofit cooperative hospital group purchasing organizations if documented to be more cost-effective.
(5) Primary authority for the purchase of materials, supplies, and equipment, for resale to other than public agencies, rests with the state agency concerned.
(6) The authority for the purchase of insurance and bonds rests with the risk manager under RCW 43.19.769, except for institutions of higher education that choose to exercise independent purchasing authority under RCW 28B.10.029.
(7) The provisions of this chapter do not apply to information technology purchases by state agencies, other than institutions of higher education and agencies of the judicial branch, if (a) the purchase is less than one hundred thousand dollars, (b) the initial purchase is approved by the chief information officer of the state, and (c) the agency director and the chief information officer of the state jointly prepare a public document providing a detailed justification for the expenditure.
(8) The authority to purchase interpreter services on behalf of applicants and recipients of public assistance who are sensory-impaired rests with the department of social and health services and the health care authority.
[ 2024 c 54 s 29; 2019 c 152 s 2; 2018 c 253 s 4; 2013 2nd sp.s. c 33 s 2; 2012 c 224 s 11. ]
NOTES:
Finding—Intent—2019 c 152: "The legislature finds that recent legislation to alter the procurement of spoken language interpreter services and to allow spoken language interpreters to elect collective bargaining representation also removed the authority of department of social and health services to procure interpreter services on behalf of applicants and recipients of public assistance who are sensory-impaired. The legislature intends to reinstate that authority." [ 2019 c 152 s 1.]
Effective date—2019 c 152: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [April 26, 2019]." [ 2019 c 152 s 3.]
Intent—Conflict with federal requirements—2018 c 253: See notes following RCW 74.04.025.
The department of corrections shall be exempt from the following provisions of this chapter in respect to goods or services purchased or sold pursuant to the operation of correctional industries: RCW * 43.19.180, * 43.19.190, * 43.19.1901, * 43.19.1905, * 43.19.1906, * 43.19.1908, * 43.19.1911, * 43.19.1913, * 43.19.1915, 43.19.1917, 43.19.1919, 43.19.1921, and * 43.19.200.
[ 2011 1st sp.s. c 43 s 220; 1989 c 185 s 2; 1981 c 136 s 14. Formerly RCW 43.19.1932. ]
NOTES:
*Reviser's note: RCW 43.19.180, 43.19.190, 43.19.1901, 43.19.1905, 43.19.1906, 43.19.1908, 43.19.1911, 43.19.1913, 43.19.1915, and 43.19.200 were repealed by 2012 c 224 s 29, effective January 1, 2013.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Effective date—1981 c 136: See RCW 72.09.900.
(1) The department must provide expertise and training on best practices for state procurement.
(2) The department must establish either training or certification programs, or both, to ensure consistency in procurement practices for employees authorized to perform procurement functions under the provisions of this chapter. When establishing training or certification programs, the department may approve existing training or certification programs at state agencies. When establishing programs or approving existing programs, the department shall work with agencies with existing training programs to ensure coordination and minimize additional costs associated with training requirements.
(3) Beginning July 1, 2013, state agencies must require agency employees responsible for developing, executing, or managing procurements or contracts, or both, to complete department-approved training or certification programs, or both. Beginning July 1, 2015, no agency employee may execute or manage contracts unless the employee has met the training or certification requirements or both as set by the department. Any request for exception to this requirement must be submitted to the director for approval before the employee or group of employees executes or manages contracts.
[ 2012 c 224 s 12. ]
(1) Insofar as practicable, all purchases of or contracts for goods and services must be based on a competitive solicitation process. This process may include electronic or web-based solicitations, bids, and signatures. This requirement also applies to procurement of goods and services executed by agencies under delegated authority granted in accordance with RCW 39.26.090 or under RCW 28B.10.029.
(2) Subsection (1) of this section applies to contract amendments that substantially change the scope of work of the original contract or substantially increase the value of the original contract.
[ 2012 c 224 s 13. ]
All contracts must be entered into pursuant to competitive solicitation, except for:
(1) Emergency contracts;
(2) Sole source contracts that comply with the provisions of RCW 39.26.140;
(3) Direct buy purchases, as designated by the director. The director shall establish policies to define criteria for direct buy purchases. These criteria may be adjusted to accommodate special market conditions and to promote market diversity for the benefit of the citizens of the state of Washington;
(4) Purchases involving special facilities, services, or market conditions, in which instances of direct negotiation is in the best interest of the state;
(5) Purchases from master contracts established by the department or an agency authorized by the department;
(6) Client services contracts;
(7) Other specific contracts or classes or groups of contracts exempted from the competitive solicitation process when the director determines that a competitive solicitation process is not appropriate or cost-effective;
(8) Off-contract purchases of Washington grown food when such food is not available from Washington sources through an existing contract. However, Washington grown food purchased under this subsection must be of an equivalent or better quality than similar food available through the contract and must be able to be paid from the agency's existing budget. This requirement also applies to purchases and contracts for purchases executed by state agencies, including institutions of higher education as defined in RCW 28B.10.016, under delegated authority granted in accordance with this chapter or under RCW 28B.10.029;
(9) Contracts awarded to companies that furnish a service where the tariff is established by the utilities and transportation commission or other public entity;
(10) Intergovernmental agreements awarded to any governmental entity, whether federal, state, or local and any department, division, or subdivision thereof;
(11) Contracts for services that are necessary to the conduct of collaborative research if the use of a specific contractor is mandated by the funding source as a condition of granting funds;
(12) Contracts for architectural and engineering services as defined in RCW 39.80.020, which shall be entered into under chapter 39.80 RCW;
(13) Contracts for the employment of expert witnesses for the purposes of litigation;
(14) Contracts for bank supervision authorized under RCW 30A.38.040;
(15) Contracts for the purchase of opioid overdose reversal medication authorized under RCW 70.14.170; and
(16) Contracts for investigators awarded by the office of independent investigations as authorized under RCW 43.102.050.
[ 2021 c 318 s 313; 2021 c 273 s 9; 2012 c 224 s 14. ]
NOTES:
Reviser's note: This section was amended by 2021 c 273 s 9 and by 2021 c 318 s 313, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Finding—Intent—2021 c 318: See note following RCW 43.102.020.
Rules—2021 c 273 ss 7-12: See note following RCW 70.14.170.
Findings—Intent—2021 c 273: See note following RCW 70.41.480.
(1) An agency may make emergency purchases as defined in subsection (4) of this section. When an emergency purchase is made, the agency head shall submit written notification of the purchase within 10 business days of the purchase to the director. This notification must contain a description of the purchase, a description of the emergency and the circumstances leading up to the emergency, and an explanation of why the circumstances required an emergency purchase.
(2) Emergency contracts must be submitted to the department and made available for public inspection within 10 business days following the commencement of work or execution of the contract, whichever occurs first.
(3) The department may authorize exceptions to this section due to exigent circumstances.
(4) As used in this section, "emergency" means a set of unforeseen circumstances beyond the control of the agency that either:
(a) Present a real, immediate, and extreme threat to the proper performance of essential functions; or
(b) May reasonably be expected to result in material loss or damage to property, bodily injury, or loss of life, if immediate action is not taken.
[ 2024 c 140 s 3; 2012 c 224 s 15. ]
(1) Agencies must submit sole source contracts to the department and make the contracts available for public inspection not fewer than 15 working days before the proposed starting date of the contract. Agencies must provide documented justification for sole source contracts to the department when the contract is submitted, and must include evidence that the agency posted the contract opportunity at a minimum on the state's enterprise vendor registration and bid notification system.
(2) The department must approve sole source contracts before any such contract becomes binding and before any services may be performed or goods provided under the contract. These requirements shall also apply to all sole source contracts except as otherwise exempted by the director.
(3) The director may provide an agency an exemption from the requirements of this section for a contract or contracts. Requests for exemptions must be submitted to the director in writing.
(4) Contracts awarded by institutions of higher education from nonstate funds are exempt from the requirements of this section.
[ 2024 c 140 s 4; 2012 c 224 s 16. ]
(1) Agencies must provide public notice for all competitive solicitations. Agencies must post all contract opportunities on the state's enterprise vendor registration and bid notification system. In addition, agencies may notify contractors and potential bidders by sending notices by mail, electronic transmission, newspaper advertisements, or other means as may be appropriate.
(2) Agencies should try to anticipate changes in a requirement before the bid submittal date and to provide reasonable notice to all prospective bidders of any resulting modification or cancellation. If, in the opinion of the agency, it is not possible to provide reasonable notice, the submittal date for receipt of bids may be postponed and all bidders notified.
[ 2012 c 224 s 17. ]
(1)(a) After bids that are submitted in response to a competitive solicitation process are reviewed by the awarding agency, the awarding agency may:
(i) Reject all bids and rebid or cancel the competitive solicitation;
(ii) Request best and final offers from responsive and responsible bidders; or
(iii) Award the purchase or contract to the lowest responsive and responsible bidder.
(b) The agency may award one or more contracts from a competitive solicitation.
(2) In determining whether the bidder is a responsible bidder, the agency must consider the following elements:
(a) The ability, capacity, and skill of the bidder to perform the contract or provide the service required;
(b) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;
(c) Whether the bidder can perform the contract within the time specified;
(d) The quality of performance of previous contracts or services;
(e) The previous and existing compliance by the bidder with laws relating to the contract or services;
(f) Whether, within the three-year period immediately preceding the date of the bid solicitation, the bidder has been determined by a final and binding citation and notice of assessment issued by the department of labor and industries or through a civil judgment entered by a court of limited or general jurisdiction to have willfully violated, as defined in RCW 49.48.082, any provision of chapter 49.46, 49.48, or 49.52 RCW; and
(g) Such other information as may be secured having a bearing on the decision to award the contract.
(3) In determining the lowest responsive and responsible bidder, an agency may consider best value criteria, including but not limited to:
(a) Whether the bid satisfies the needs of the state as specified in the solicitation documents;
(b) Whether the bid encourages diverse contractor participation;
(c) Whether the bid provides competitive pricing, economies, and efficiencies;
(d) Whether the bid considers human health and environmental impacts;
(e) Whether the bid appropriately weighs cost and noncost considerations; and
(f) Life-cycle cost.
(4) The solicitation document must clearly set forth the requirements and criteria that the agency will apply in evaluating bid submissions. Before award of a contract, a bidder shall submit to the contracting agency a signed statement in accordance with chapter 5.50 RCW verifying under penalty of perjury that the bidder is in compliance with the responsible bidder criteria requirement of subsection (2)(f) of this section. A contracting agency may award a contract in reasonable reliance upon such a sworn statement.
(5) The awarding agency may at its discretion reject the bid of any contractor who has failed to perform satisfactorily on a previous contract with the state.
(6) After reviewing all bid submissions, an agency may enter into negotiations with the lowest responsive and responsible bidder in order to determine if the bid may be improved. An agency may not use this negotiation opportunity to permit a bidder to change a nonresponsive bid into a responsive bid.
(7) The procuring agency must enter into the state's enterprise vendor registration and bid notification system the name of each bidder and an indication as to the successful bidder.
[ 2019 c 232 s 16; 2017 c 258 s 3; 2012 c 224 s 18. ]
NOTES:
Findings—2017 c 258: See note following RCW 39.04.350.
(1) All agencies that have original or delegated procurement authority for goods or services must have a clear and transparent complaint process. The complaint process must provide for the complaint to be submitted and response provided before the deadline for bid submissions.
(2) All agencies that have original or delegated procurement authority for goods or services must have a clear and transparent protest process. The protest process must include a protest period after the apparent successful bidder is announced but before the contract is signed.
(3) The director may grant authority for an agency to sign a contract before the protest process is completed due to exigent circumstances.
[ 2012 c 224 s 19. ]
(1) The department must adopt uniform policies and procedures for the effective and efficient management of contracts by all state agencies. The policies and procedures must, at a minimum, include:
(a) Precontract procedures for selecting potential contractors based on their qualifications and ability to perform, including procedures to ensure compliance with chapter 39.19 RCW, and providing for participation of minority and women-owned businesses;
(b) Model complaint and protest procedures;
(c) Alternative dispute resolution processes;
(d) Incorporation of performance measures and measurable benchmarks in contracts;
(e) Model contract terms to ensure contract performance and compliance with state and federal standards, including terms to facilitate recovery of the costs of employee staff time that must be expended to bring a contract into substantial compliance, and terms required under RCW 41.06.142;
(f) Executing contracts using electronic signatures;
(g) Criteria for contract amendments;
(h) Postcontract procedures;
(i) Procedures and criteria for terminating contracts for cause or otherwise, including procedures and criteria for terminating performance-based contracts that are not achieving performance standards;
(j) A requirement that agencies, departments, and institutions of higher education monitor performance-based contracts, including contracts awarded pursuant to RCW 41.06.142, to ensure that all aspects of the contract are being properly performed and that performance standards are being achieved; and
(k) Any other subject related to effective and efficient contract management.
(2) An agency may not enter into a contract under which the contractor could charge additional costs to the agency, the department, the joint legislative audit and review committee, or the state auditor for access to data generated under the contract. A contractor under such a contract must provide access to data generated under the contract to the contracting agency, the joint legislative audit and review committee, and the state auditor.
(3) To the extent practicable, agencies should enter into performance-based contracts. Performance-based contracts identify expected deliverables and performance measures or outcomes. Performance-based contracts also use appropriate techniques, which may include but are not limited to, either consequences or incentives or both to ensure that agreed upon value to the state is received. Payment for goods and services under performance-based contracts should be contingent on the contractor achieving performance outcomes.
(4) An agency and contractor may execute a contract using electronic signatures.
(5) As used in subsection (2) of this section, "data" includes all information that supports the findings, conclusions, and recommendations of the contractor's reports, including computer models and the methodology for those models.
[ 2020 c 269 s 4; 2012 c 224 s 20. ]
NOTES:
Intent—Finding—Application—2020 c 269: See notes following RCW 41.06.142.
When any bid has been accepted, the agency may require of the successful bidder a bond payable to the state in such amount with such surety or sureties as determined by the agency, conditioned that he or she will fully, faithfully, and accurately perform the terms of the contract into which he or she has entered. Bidders who regularly do business with the state shall be permitted to file with the agency an annual performance bond in an amount established by the agency and such annual bond shall be acceptable as surety in lieu of furnishing individual bonds. The agency may also require bidders to provide bid bonds conditioned that if a bidder is awarded the contract the bidder will enter into and execute the contract, protest bonds, or other bonds the agency deems necessary. Agencies must adhere to the policies developed by the department regarding the use of protest bonds. All bonds must be filed with the agency on a form acceptable to the agency. Any surety issuing a bond must meet the qualification requirements established by the agency.
[ 2012 c 224 s 21. ]
(1)(a) The director shall provide notice to the contractor of the director's intent to either fine or debar with the specific reason for either the fine or debarment. The department must establish the debarment and fining processes by rule.
(b) After reasonable notice to the contractor and reasonable opportunity for that contractor to be heard, the director has the authority to debar a contractor for cause from consideration for award of contracts. The debarment must be for a period of not more than three years.
(2) The director may either fine or debar a contractor based on a finding of one or more of the following causes:
(a) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of such contract or subcontract;
(b) Conviction or a final determination in a civil action under state or federal statutes of fraud, embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, violation of the federal false claims act, 31 U.S.C. Sec. 3729 et seq., or the state medicaid fraud false claims act, chapter 74.66 RCW, or any other offense indicating a lack of business integrity or business honesty that currently, seriously, and directly affects responsibility as a state contractor;
(c) Conviction under state or federal antitrust statutes arising out of the submission of bids or proposals;
(d) Two or more violations within the previous five years of the national labor relations act as determined by the national labor relations board or court of competent jurisdiction;
(e) Violation of contract provisions, as set forth in this subsection, of a character that is regarded by the director to be so serious as to justify debarment action:
(i) Deliberate failure without good cause to perform in accordance with the specifications or within the time limit provided in the contract; or
(ii) A recent record of failure to perform or of unsatisfactory performance in accordance with the terms of one or more contracts, however the failure to perform or unsatisfactory performance caused by acts beyond the control of the contractor may not be considered to be a basis for debarment;
(f) Violation of ethical standards set forth in RCW 39.26.020;
(g) Any other cause the director determines to be so serious and compelling as to affect responsibility as a state contractor, including debarment by another governmental entity for any cause listed in regulations; and
(h) The failure to comply with a provision in a state master contract or other agreement with a state agency that requires equality among its workers by ensuring similarly employed individuals are compensated as equals.
(3) The director must issue a written decision to debar. The decision must:
(a) State the reasons for the action taken; and
(b) Inform the debarred contractor of the contractor's rights to judicial or administrative review.
[ 2024 c 140 s 5; 2020 c 269 s 3; 2017 3rd sp.s. c 1 s 996; 2015 c 44 s 1; 2013 2nd sp.s. c 34 s 1; 2012 c 224 s 22. ]
NOTES:
Intent—Finding—Application—2020 c 269: See notes following RCW 41.06.142.
Effective date—2017 3rd sp.s. c 1: See note following RCW 43.41.455.
(1) Agencies must annually submit to the department a list of all contracts that the agency has entered into or renewed. "Contracts," for the purposes of this section, does not include purchase orders. The department must maintain a publicly available list of all contracts entered into by agencies during each fiscal year, except that contracts for the employment of expert witnesses for the purposes of litigation shall not be made publicly available to the extent that information is exempt from disclosure under state law. Except as otherwise exempt, the data must identify the contracting agency, the contractor, the purpose of the contract, effective dates and periods of performance, the cost of the contract and funding source, any substantive modifications to the contract, and whether the contract was competitively procured or awarded on a sole source basis.
(2) The department may conduct audits of its master contracts and convenience contracts to ensure that the contractor is in compliance with the contract terms and conditions, including but not limited to providing only the goods and services specified in the contract at the contract price.
[ 2012 c 224 s 23. ]
The state auditor and the attorney general must annually by November 30th of each year, provide a collaborative report of contract audit and investigative findings, enforcement actions, and the status of agency resolution to the governor and the policy and fiscal committees of the legislature.
[ 2012 c 224 s 24. ]
The state agencies and departments are hereby authorized to purchase products and/or services manufactured or provided by community rehabilitation programs of the department of social and health services.
Such purchases shall be at the fair market price of such products and services as determined by the department of enterprise services. To determine the fair market price the department shall use the last comparable bid on the products and/or services or in the alternative the last price paid for the products and/or services. The increased cost of labor, materials, and other documented costs since the last comparable bid or the last price paid are additional cost factors which shall be considered in determining fair market price. Upon the establishment of the fair market price as provided for in this section the department is hereby empowered to negotiate directly for the purchase of products or services with officials in charge of the community rehabilitation programs of the department of social and health services.
[ 2011 1st sp.s. c 43 s 226; 2005 c 204 s 2; 2003 c 136 s 3; 1977 ex.s. c 10 s 2; 1974 ex.s. c 40 s 3. Formerly RCW 43.19.530. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
(1) State agencies that are purchasing wireless devices or services must make such purchases through the state master contract, unless the state agency provides to Washington technology solutions evidence that the state agency is securing its wireless devices or services from another source for a lower cost than through participation in the state master contract.
(2) For the purposes of this section, "state agency" means any office, department, board, commission, or other unit of state government, but does not include a unit of state government headed by a statewide elected official, an institution of higher education as defined in RCW 28B.10.016, the student achievement council, the state board for community and technical colleges, or agencies of the legislative or judicial branches of state government.
[ 2024 c 54 s 30; 2012 c 229 s 584; 2011 1st sp.s. c 43 s 734; 2010 c 282 s 2. Formerly RCW 43.19.797, 43.105.410. ]
NOTES:
Effective date—2012 c 229 ss 101, 117, 401, 402, 501 through 594, 601 through 609, 701 through 708, 801 through 821, 902, and 904: See note following RCW 28B.77.005.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
All procurement contracts entered into under this chapter on or after June 10, 2010, are subject to the requirements established under RCW 43.60A.200.
[ 2010 c 5 s 9. Formerly RCW 39.29.052. ]
NOTES:
Purpose—Construction—2010 c 5: See notes following RCW 43.60A.010.
(1) All contracts entered into and purchases made, including leasing or renting, under this chapter on or after September 1, 1983, are subject to the requirements established under chapter 39.19 RCW.
(2) All procurement contracts entered into under this chapter on or after June 10, 2010, are subject to the requirements established under RCW 43.60A.200.
(3) All contracts with the state for goods or services entered into under this chapter on or after January 1, 2024, are subject to the requirements established under RCW 49.60.530.
[ 2023 c 468 s 2; 2010 c 5 s 6; 1983 c 120 s 13. Formerly RCW 43.19.536. ]
NOTES:
Purpose—Construction—2010 c 5: See notes following RCW 43.60A.010.
Effective date—Applicability—Severability—Conflict with federal requirements—1983 c 120: See RCW 39.19.910, 39.19.920.
Any person, firm, or organization which makes any bid to provide any goods or any services to any state agency shall be granted a preference over other bidders if (1) the goods or services have been or will be produced or provided in whole or in part by an inmate work program of the department of corrections and (2) an amount equal to at least fifteen percent of the total bid amount has been paid or will be paid by the person, firm, or organization to inmates as wages. The preference provided under this section shall be equal to ten percent of the total bid amount.
[ 1981 c 136 s 15. Formerly RCW 43.19.535. ]
NOTES:
Effective date—1981 c 136: See RCW 72.09.900.
(1) State agencies, the legislature, and departments shall purchase for their use all goods and services required by the legislature, agencies, or departments that are produced or provided in whole or in part from class II inmate work programs operated by the department of corrections through state contract. These goods and services shall not be purchased from any other source unless, upon application by the department or agency: (a) The department finds that the articles or products do not meet the reasonable requirements of the agency or department, (b) are not of equal or better quality, or (c) the price of the product or service is higher than that produced by the private sector. However, the criteria contained in (a), (b), and (c) of this subsection for purchasing goods and services from sources other than correctional industries do not apply to goods and services produced by correctional industries that primarily replace goods manufactured or services obtained from outside the state. The department of corrections and department shall adopt administrative rules that implement this section.
(2) Effective July 1, 2012, this section does not apply to the purchase of uniforms for correctional officers employed with the Washington state department of corrections.
[ 2015 c 79 s 7; 2012 c 220 s 1. Prior: 2011 1st sp.s. c 43 s 227; 2011 c 367 s 707; 2009 c 470 s 717; 1993 sp.s. c 20 s 1; 1986 c 94 s 2. Formerly RCW 43.19.534. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Effective date—2011 c 367: See note following RCW 46.68.060.
Effective date—2009 c 470: See note following RCW 46.68.170.
(1) The director shall develop specifications and adopt rules for the purchase of products which will provide for preferential purchase of products containing recycled material by:
(a) The use of a weighting factor determined by the amount of recycled material in a product, where appropriate and known in advance to potential bidders, to determine the lowest responsible bidder. The actual dollars bid shall be the contracted amount. If the department determines, according to criteria established by rule that the use of this weighting factor does not encourage the use of more recycled material, the department shall consider and award bids without regard to the weighting factor. In making this determination, the department shall consider but not be limited to such factors as adequate competition, economics or environmental constraints, quality, and availability.
(b) Requiring a written statement of the percentage range of recycled content from the bidder providing products containing recycled material. The range may be stated in five percent increments.
(2) The director shall develop a directory of businesses that have a master contract with the department that supply products containing significant quantities of recycled materials. This directory may be combined with and made accessible through the database of recycled content products to be developed under RCW 43.19A.060.
(3) The director shall encourage all parties using the state purchasing office to purchase products containing recycled materials.
(4) The rules, specifications, and bid evaluation shall be consistent with recycled content standards adopted under RCW 43.19A.020.
[ 2015 c 79 s 8; 2011 1st sp.s. c 43 s 228; 1991 c 297 s 5; 1988 c 175 s 2; 1987 c 505 s 26; 1982 c 61 s 2. Formerly RCW 43.19.538. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Effective date—1988 c 175: "This act shall take effect July 1, 1988." [ 1988 c 175 s 4.]
Recycled product procurement: Chapter 43.19A RCW.
The legislature finds that in-state preference clauses used by other states in procuring goods and services have a discriminatory effect against Washington vendors with resulting harm to this state's revenues and the welfare of this state's citizens. Chapter 183, Laws of 1983 is intended to promote fairness in state government procurement by requiring that, when appropriate, Washington exercise reciprocity with those states having in-state preferences, and it shall be liberally construed to that effect.
[ 1983 c 183 s 1. Formerly RCW 43.19.700. ]
(1) The department shall establish purchasing and procurement policies that establish a preference for electronic products that meet environmental performance standards relating to the reduction or elimination of hazardous materials.
(2) The department shall ensure that their surplus electronic products, other than those sold individually to private citizens, are managed only by registered transporters and by processors meeting the requirements of RCW 70A.500.250.
(3) The department shall ensure that their surplus electronic products are directed to legal secondary materials markets by requiring a chain of custody record that documents to whom the products were initially delivered through to the end use manufacturer.
[ 2021 c 65 s 27; 2011 1st sp.s. c 43 s 229; 2006 c 183 s 36. Formerly RCW 43.19.539. ]
NOTES:
Explanatory statement—2021 c 65: See note following RCW 53.54.030.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Construction—Effective date—2006 c 183: See RCW 70A.500.900 and 70A.500.901.
(1) Beginning January 1, 2027, a seller of any combination of gasoline, diesel, biodiesel, or propane fuel is only eligible to receive a contract awarded by the state, any state agency, or any municipality, if the seller:
(a) Is registered with the department of ecology as a covered or opt-in entity under chapter 70A.65 RCW; or
(b) Can provide documentation, including but not limited to invoices, demonstrating that the fuel being sold was purchased from a covered or opt-in entity registered with the department under chapter 70A.65 RCW and the emissions from the fuel are covered emissions for the covered or opt-in entity.
(2) For purposes of this section, "municipality" means every city, county, town, special purpose district, political subdivision, or instrumentality of the state.
[ 2026 c 251 s 6. ]
NOTES:
Intent—Findings—2026 c 251: See note following RCW 70A.65.080.
The director shall compile a list of the statutes and regulations, relating to state purchasing, of each state, which statutes and regulations the director believes grant a preference to vendors located within the state or goods manufactured within the state. At least once every twelve months the director shall update the list.
[ 2011 1st sp.s. c 43 s 240; 1983 c 183 s 2. Formerly RCW 43.19.702. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
The director shall adopt and apply rules designed to provide for some reciprocity in bidding between Washington and those states having statutes or regulations on the list under RCW 39.26.270. The director shall have broad discretionary power in developing these rules and the rules shall provide for reciprocity only to the extent and in those instances where the director considers it appropriate. For the purpose of determining the lowest responsible bidder pursuant to RCW 39.26.160, such rules shall (1) require the director to impose a reciprocity increase on bids when appropriate under the rules and (2) establish methods for determining the amount of the increase. In no instance shall such increase, if any, be paid to a vendor whose bid is accepted.
[ 2015 c 79 s 9; 2011 1st sp.s. c 43 s 241; 1983 c 183 s 3. Formerly RCW 43.19.704. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
(1) The department shall establish purchasing and procurement policies that provide a preference for products and products in packaging that does not contain polychlorinated biphenyls.
(2) No agency may knowingly purchase products or products in packaging containing polychlorinated biphenyls above the practical quantification limit except when it is not cost-effective or technically feasible to do so.
(3) Nothing in this section requires the department or any other state agency to breach an existing contract or dispose of stock that has been ordered or is in the possession of the department or other state agency as of June 12, 2014.
[ 2014 c 135 s 3. ]
NOTES:
Findings—2014 c 135: "Polychlorinated biphenyls, commonly known as PCBs, are a family of human-made organic chemicals that were used in many industrial and commercial products such as insulating fluids for electric transformers and capacitors, hydraulic fluids, plasticizers, paint additives, lubricants, inks, caulk, and carbonless copy paper. PCBs were used because of their fire resistance, chemical stability, and electrical insulating properties. PCBs are also found in products as an unintentional by-product of manufacturing processes. PCBs are ubiquitous in the environment because of their stability, extensive previous use, by-production in manufacturing, inadvertent release, and the inability to control and eliminate them through current waste management practices. PCBs are persistent, bioaccumulative, and toxic, and they cycle between the air, soil, and water. PCBs have been shown to cause cancer and affect the human immune, reproductive, nervous, and endocrine systems. The United States toxic substances control act prohibited the commercial production of PCBs in 1979. However, the United States environmental protection agency rules implementing the ban provides exemptions for certain products containing PCBs at concentrations of fifty parts per million or less as a result of manufacturing processes and therefore the continued manufacture, processing, distribution, and use of products containing PCBs remains permitted." [ 2014 c 135 s 1.]
(1) All contracts entered into and purchases made under this chapter are subject to the requirements established under RCW 19.06.020.
(2) This section is not intended to create an entitlement to an individual or class of individuals.
[ 2016 c 40 s 1. ]
NOTES:
Construction—2016 c 40: "Nothing in this act requires the department of enterprise services or any other public agency to breach an existing contract or dispose of stock that has been ordered or is in the possession of the department or other agency as of June 9, 2016." [ 2016 c 40 s 3.]
(1) This chapter does not require the department to test every product procured. However, the department may accept from businesses, manufacturers, organizations, and individuals results obtained from an accredited laboratory or testing facility documenting product or product packaging polychlorinated biphenyl levels.
(2) The department may request suppliers of products to provide testing data from an accredited laboratory or testing facility documenting product or product packaging polychlorinated biphenyl levels.
[ 2014 c 135 s 4. ]
NOTES:
Findings—2014 c 135: See note following RCW 39.26.280.
(1) The department of social and health services, the department of children, youth, and families, and the health care authority are each authorized to purchase interpreter services on behalf of limited English-speaking applicants and recipients of public assistance.
(2) The department of labor and industries is authorized to purchase interpreter services for medical and vocational providers authorized to provide services to limited English-speaking injured workers or crime victims.
(3) No later than September 1, 2020, the department of social and health services, the department of children, youth, and families, the health care authority, and the department of labor and industries must purchase in-person spoken language interpreter services directly from language access providers as defined in RCW 74.04.025, or through limited contracts with scheduling and coordinating delivery organizations, or both. Each state agency must have at least one contract with an entity that provides interpreter services through telephonic and video remote technologies. Nothing in this section precludes the department of labor and industries from purchasing in-person spoken language interpreter services directly from language access providers or from directly reimbursing language access providers.
(4) Notwithstanding subsection (3) of this section, the department of labor and industries may pay a language access provider directly for the costs of interpreter services when the services are necessary for use by a medical provider for emergency or urgent care, or where the medical provider determines that advanced notice is not feasible.
(5) Upon the expiration of any contract in effect on June 7, 2018, but no later than September 1, 2020, the department must develop and implement a model that all state agencies must use to procure spoken language interpreter services by purchasing directly from language access providers or through contracts with scheduling and coordinating entities, or both. The department must have at least one contract with an entity that provides interpreter services through telephonic and video remote technologies. If the department determines it is more cost-effective or efficient, it may jointly purchase these services with the department of social and health services, the department of children, youth, and families, the health care authority, and the department of labor and industries as provided in subsection (3) of this section. The department of social and health services, the department of children, youth, and families, the health care authority, and the department of labor and industries have the authority to procure interpreters through the department if the demand for spoken language interpreters cannot be met through their respective contracts.
(6) All interpreter services procured under this section must be provided by language access providers who are certified or authorized by the state, or nationally certified by the certification commission for health care interpreters or the national board for certification of medical interpreters. When a nationally certified, state-certified, or authorized language access provider is not available, a state agency is authorized to contract with a spoken language interpreter with other certifications or qualifications deemed to meet agency needs. Nothing in this subsection precludes providing interpretive services through state employees or employees of medical or vocational providers.
(7) Nothing in this section is intended to address how state agencies procure interpreters for sensory-impaired persons.
(8) For purposes of this section, "state agency" means any state office or activity of the executive branch of state government, including state agencies, departments, offices, divisions, boards, commissions, and correctional and other types of institutions, but excludes institutions of higher education as defined in RCW 28B.10.016, the school for the blind, and the Washington center for deaf and hard of hearing youth.
[ 2019 c 266 s 24; 2018 c 253 s 3. ]
NOTES:
Intent—Conflict with federal requirements—2018 c 253: See notes following RCW 74.04.025.
(1) The department shall establish purchasing and procurement policies that provide a preference for products that:
(a) Are not restricted under RCW 70A.60.060;
(b) Do not contain hydrofluorocarbons or contain hydrofluorocarbons with a comparatively low global warming potential;
(c) Are not designed to function only in conjunction with hydrofluorocarbons characterized by a comparatively high global warming potential; and
(d) Were not manufactured using hydrofluorocarbons or were manufactured using hydrofluorocarbons with a low global warming potential.
(2) No agency may knowingly purchase products that are not accorded a preference in the purchasing and procurement policies established by the department pursuant to subsection (1) of this section, unless there is no cost-effective and technologically feasible option that is accorded a preference.
(3) The department shall establish a purchasing and procurement policy that provides a preference, in serving existing equipment, for a reclaimed refrigerant that meets the minimum quality requirement established in federal regulations adopted under 42 U.S.C. Sec. 7671(g).
(4)(a) Nothing in subsection (1) of this section requires the department or any other state agency to breach an existing contract or dispose of stock that has been ordered or is in the possession of the department or other state agency as of July 28, 2019.
(b) Nothing in subsection (3) of this section requires the department or any other state agency to breach an existing contract or dispose of stock that has been ordered or is in the possession of the department or other state agency as of July 28, 2021.
(5) By December 1, 2020, and each December 1st of even-numbered years thereafter, the department must submit a status report to the appropriate committees of the house of representatives and senate regarding the implementation and compliance of the department and state agencies with this section.
[ 2021 c 315 s 19; 2021 c 65 s 28; 2019 c 284 s 9. ]
NOTES:
Reviser's note: This section was amended by 2021 c 65 s 28 and by 2021 c 315 s 19, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Explanatory statement—2021 c 65: See note following RCW 53.54.030.
Finding—Intent—2019 c 284: See notes following RCW 70A.60.060.
An agency, department, or institution of higher education that intends to contract out, or does contract out, for services that, on or after July 1, 2005, have been customarily and historically performed by employees in the classified service defined in RCW 41.06.020 must follow procedures and meet criteria established under RCW 41.06.142.
[ 2020 c 269 s 5. ]
NOTES:
Intent—Finding—Application—2020 c 269: See notes following RCW 41.06.142.
(1) Beginning July 1, 2024, all state agencies may only purchase plastic trash bags manufactured by producers that comply with the minimum recycled content requirements established in RCW 70A.245.020.
(2) By July 1, 2024, the department of ecology shall provide to the department a list of the plastic trash bag producer brands that comply with the minimum recycled content requirements established in RCW 70A.245.020, in order for state agencies to purchase compliant products, updated annually.
[ 2021 c 313 s 8. ]
NOTES:
Finding—Intent—2021 c 313: See note following RCW 70A.245.010.
(1) Before an agency shares with a contractor category 3 or higher data, as defined in policy established in accordance with RCW 43.105.054, a written data-sharing agreement must be in place. Such agreements shall conform to the policies for data sharing specified by the office of cybersecurity under the authority of RCW 43.105.054.
(2) Nothing in this section shall be construed as limiting audit authorities under chapter 43.09 RCW.
[ 2021 c 291 s 5. ]
This act takes effect January 1, 2013.
[ 2012 c 224 s 31. ]
The following terms wherever used or referred to in RCW 39.28.010 through 39.28.030 shall have the following meaning unless a different meaning appears from the context.
(1) The term "municipality" shall mean the state, a county, city, town, district or other municipal corporation or political subdivision;
(2) The term "governing body" shall mean the body, a board charged with the governing of the municipality;
(3) The term "law" shall mean any act or statute, general, special or local, of this state, including, without being limited to, the charter of any municipality;
(4) The term "bonds" shall mean bonds, interim receipts, certificates, or other obligations of a municipality issued or to be issued by its governing body for the purpose of financing or aiding in the financing of any work, undertaking or project for which a loan or grant, or both, has heretofore been made or may hereafter be made by any federal agency;
(5) The term "Recovery Act" shall mean any acts of the congress of the United States of America to reduce and relieve unemployment or to provide for the construction of public works;
(6) The term "federal agency" shall include the United States of America, the president of the United States of America, and any agency or instrumentality of the United States of America, which has heretofore been or hereafter may be designated, created or authorized to make loans or grants;
(7) The term "public works project" shall mean any work, project, or undertaking which any municipality, is authorized or required by law to undertake or any lawful purpose for which any municipality is authorized or required by law to make an appropriation;
(8) The term "contract" or "agreement" between a federal agency and a municipality shall include contracts and agreements in the customary form and shall also be deemed to include an allotment of funds, resolution, unilateral promise, or commitment by a federal agency by which it shall undertake to make a loan or grant, or both, upon the performance of specified conditions or compliance with rules and regulations theretofore or thereafter promulgated, prescribed or published by a federal agency. In the case of such an allotment of funds, resolution, unilateral promise, or commitment by a federal agency, the terms, conditions and restrictions therein set forth and the rules and regulations theretofore or thereafter promulgated, prescribed or published shall, for the purpose of RCW 39.28.010 through 39.28.030, be deemed to constitute covenants of such a contract which shall be performed by the municipality, if the municipality accepts any money from such federal agency.
[ 1971 c 76 s 4; 1937 c 107 s 2; RRS s 10322A-8. Prior: 1935 c 107 s 2; RRS s 10322A-2. ]
NOTES:
Short title: "This act may be cited as 'The Municipal Emergency Procedure Act (Revision of 1937)'." [ 1937 c 107 s 1; RRS s 10322A-7. Prior: 1935 c 107 s 1; RRS s 10322A-1.]
Severability—1937 c 107: "If any provision of this act, or the application thereof to any person, body, or circumstances shall be held invalid, the remainder of the act and the application of each provision to persons, bodies, or circumstances other than those as to which it shall have been held invalid shall not be affected thereby." [ 1937 c 107 s 5; RRS s 10322A-11. Prior: 1935 c 107 s 5; RRS s 10322A-5.]
Every municipality shall have power and is hereby authorized:
(1) To accept from any federal agency grants for or in aid of the construction of any public works project;
(2) To make contracts and execute instruments containing such terms, provisions, and conditions as in the discretion of the governing body of the municipality may be necessary, proper or advisable for the purpose of obtaining grants or loans, or both, from any federal agency pursuant to or by virtue of the Recovery Act; to make all other contracts and execute all other instruments necessary, proper or advisable in or for the furtherance of any public works project and to carry out and perform the terms and conditions of all such contracts or instruments;
(3) To subscribe to and comply with the Recovery Act and any rules and regulations made by any federal agency with regard to any grants or loans, or both, from any federal agency;
(4) To perform any acts authorized under RCW 39.28.010 through 39.28.030 through or by means of its own officers, agents and employees, or by contracts with corporations, firms or individuals;
(5) To award any contract for the construction of any public works project or part thereof upon any day at least fifteen days after one publication of a notice requesting bids upon such contract in a newspaper of general circulation in the municipality: PROVIDED, That in any case where publication of notice may be made in a shorter period of time under the provisions of existing statute or charter, such statute or charter shall govern;
(6) To sell bonds at private sale to any federal agency without any public advertisement;
(7) To issue interim receipts, certificates or other temporary obligations, in such form and containing such terms, conditions and provisions as the governing body of the municipality issuing the same may determine, pending the preparation or execution of definite bonds for the purpose of financing the construction of a public works project;
(8) To issue bonds bearing the signatures of officers in office on the date of signing such bonds, notwithstanding that before delivery thereof any or all the persons whose signatures appear thereon shall have ceased to be the officers of the municipality issuing the same;
(9) To include in the cost of a public works project which may be financed by the issuance of bonds: (a) Engineering, inspection, accounting, fiscal and legal expenses; (b) the cost of issuance of the bonds, including engraving, printing, advertising, and other similar expenses; (c) any interest costs during the period of construction of such public works project and for six months thereafter on money borrowed or estimated to be borrowed;
(10) To stipulate in any contract for the construction of any public works project or part thereof the maximum hours that any laborer, worker, or mechanic should be permitted or required to work in any one calendar day or calendar week or calendar month, and the minimum wages to be paid to laborers, workers, or mechanics in connection with any public works project: PROVIDED, That no such stipulation shall provide for hours in excess of or for wages less than may now or hereafter be required by any other law;
(11) To exercise any power conferred by RCW 39.28.010 through 39.28.030 for the purpose of obtaining grants or loans, or both, from any federal agency pursuant to or by virtue of the Recovery Act, independently or in conjunction with any other power or powers conferred by RCW 39.28.010 through 39.28.030 or heretofore or hereafter conferred by any other law;
(12) To do all acts and things necessary or convenient to carry out the powers expressly given in RCW 39.28.010 through 39.28.030.
[ 1989 c 12 s 12; 1937 c 107 s 3; RRS s 10322A-9. Prior: 1935 c 107 s 3; RRS s 10322A-3. ]
NOTES:
Short title—Severability—1937 c 107: See notes following RCW 39.28.010.
The powers conferred by RCW 39.28.010 through 39.28.030 shall be in addition and supplemental to and not in substitution for the powers now or hereafter conferred upon any municipality by any other law. RCW 39.28.010 through 39.28.030 is intended to aid in relieving the existing emergency by simplifying the procedure for the construction and financing of public works projects. RCW 39.28.010 through 39.28.030 is remedial in nature and the powers hereby granted shall be liberally construed. Nothing in RCW 39.28.010 through 39.28.030 shall be construed to authorize the issuance of bonds for any purpose by any municipality not authorized to issue bonds for such purpose under any other law heretofore or hereafter enacted, nor to dispense with the approval by a state department, board, officer or commission of a public works project where such approval is necessary under provisions of existing law: PROVIDED, That any port district which is now indebted in an amount equal to or in excess of the indebtedness which may be contracted without a vote of the electors of the district is hereby authorized, for the purposes of RCW 39.28.010 through 39.28.030, through its governing body, to contract a further indebtedness and borrow money for port purposes and issue general bonds therefor, as in RCW 39.28.010 through 39.28.030 provided, in an additional amount not exceeding three-sixteenths of one percent of the value of the taxable property in the district, as the term "value of the taxable property" is defined in RCW 39.36.015, without the assent of the voters of the district: PROVIDED, FURTHER, That such additional indebtedness together with the existing indebtedness of such port district shall not exceed the total indebtedness permitted to be incurred by such port district under existing laws.
[ 1970 ex.s. c 42 s 25; 1937 c 107 s 4; RRS s 10322A-10. Prior: 1935 c 107 s 4; RRS s 10322A-4. ]
NOTES:
Severability—Effective date—1970 ex.s. c 42: See notes following RCW 39.36.015.
Short title—Severability—1937 c 107: See notes following RCW 39.28.010.
The state of Washington, its various counties, municipal corporations, quasi municipal corporations, cities, towns, villages and all other political subdivisions of the state are hereby authorized to accept from the federal government all loans, advances, grants in aid, or donations that may be made available by any federal agency for the purpose of financing the cost of architectural, engineering, and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures, and other acts preliminary to the construction of public works.
[ 1971 c 76 s 5; 1945 c 106 s 1; Rem. Supp. 1945 s 10322-45. ]
Any city or town or metropolitan park district or county or library district may execute an executory conditional sales contract with a county or counties, the state or any of its political subdivisions, the government of the United States, or any private party for the purchase of any real or personal property, or property rights in connection with the exercise of any powers or duties which they now or hereafter are authorized to exercise, if the entire amount of the purchase price specified in such contract does not result in a total indebtedness in excess of three-fourths of one percent of the value of the taxable property in such library district or the maximum amount of nonvoter-approved indebtedness authorized in such county, city, town, or metropolitan park district. If such a proposed contract would result in a total indebtedness in excess of this amount, a proposition in regard to whether or not such a contract may be executed shall be submitted to the voters for approval or rejection in the same manner that bond issues for capital purposes are submitted to the voters. Any city or town or metropolitan park district or county or library district may jointly execute contracts authorized by this section, if the entire amount of the purchase price does not result in a joint total indebtedness in excess of the nonvoter-approved indebtedness limitation of any city, town, metropolitan park district, county, or library district that participates in the jointly executed contract. The term "value of the taxable property" shall have the meaning set forth in RCW 39.36.015.
[ 1997 c 361 s 2; 1970 ex.s. c 42 s 26; 1963 c 92 s 1; 1961 c 158 s 1. ]
NOTES:
Severability—Effective date—1970 ex.s. c 42: See notes following RCW 39.36.015.
In addition to any other remedies or penalties contained in any law, municipal charter, ordinance, resolution or other enactment, any municipal officer by or through whom or under whose supervision, in whole or in part, any contract is made in willful and intentional violation of any law, municipal charter, ordinance, resolution or other enactment requiring competitive bidding or procurement procedures for consulting, architectural, engineering, or other services, upon such contract shall be held liable to a civil penalty of not less than three hundred dollars and may be held liable, jointly and severally with any other such municipal officer, for all consequential damages to the municipal corporation. If, as a result of a criminal action, the violation is found to have been intentional, the municipal officer shall immediately forfeit his or her office. For purposes of this section, "municipal officer" means an "officer" or "municipal officer" as those terms are defined in RCW 42.23.020(2).
[ 2008 c 130 s 2; 1974 ex.s. c 74 s 1. ]
NOTES:
Contracts by cities or towns, bidding requirements: RCW 35.23.352.
(1) Whenever a unit of local government is required to make purchases from the lowest bidder or from the supplier offering the lowest price for the items desired to be purchased, the unit of local government may, at its option when awarding a purchase contract, take into consideration tax revenue it would receive from purchasing the supplies, materials, or equipment from a supplier located within its boundaries. The unit of local government must award the purchase contract to the lowest bidder after such tax revenue has been considered. However, any local government may allow for preferential purchase of products made from recycled materials or products that may be recycled or reused. Any local government may allow for preferential purchase of compost to meet the requirements of RCW 43.19A.120. Any unit of local government which considers tax revenue it would receive from the imposition of taxes upon a supplier located within its boundaries must also consider tax revenue it would receive from taxes it imposes upon a supplier located outside its boundaries.
(2) A unit of local government may award a contract to a bidder submitting the lowest bid before taxes are applied. The unit of local government must provide notice of its intent to award a contract based on this method prior to bids being submitted. For the purposes of this subsection (2), "taxes" means only those taxes that are included in "tax revenue" as defined in this section.
(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Tax revenue" means sales taxes that units of local government impose upon the sale of supplies, materials, or equipment from the supplier to units of local government, and business and occupation taxes that units of local government impose upon the supplier that are measured by the gross receipts of the supplier from the sale.
(b) "Unit of local government" means any county, city, town, metropolitan municipal corporation, public transit benefit area, county transportation authority, or other municipal or quasi-municipal corporation authorized to impose sales and use taxes or business and occupation taxes.
[ 2022 c 180 s 702; 2013 c 24 s 1; 1989 c 431 s 58; 1985 c 72 s 1. ]
NOTES:
Findings—Intent—Scope of authority of chapter 180, Laws of 2022—2022 c 180: See notes following RCW 70A.205.007.
Any municipality, as defined in RCW 39.04.010, may purchase any supplies, equipment, or materials at auctions conducted by the government of the United States or any agency thereof, any agency of the state of Washington, any municipality or other government agency, or any private party without being subject to public bidding requirements if the items can be obtained at a competitive price.
[ 1993 c 198 s 4; 1991 c 363 s 112. ]
NOTES:
Purpose—Captions not law—1991 c 363: See notes following RCW 2.32.180.
Any contract by a governmental unit shall require the use of paper products to the maximum extent economically feasible that meet the specifications established by the department of enterprise services under RCW 39.26.255.
[ 2015 c 225 s 41; 1982 c 61 s 4. ]
(1) Every invitation to bid on a prime contract that is expected to cost $1,000,000 or more for the construction, alteration, or repair of any public building or public work of the state or a state agency or municipality as defined under RCW 39.04.010 or an institution of higher education as defined under RCW 28B.10.016 shall require each prime contract bidder to submit:
(a) At the published bid submittal time, the names of the licensed subcontractors and proof of license with whom the bidder, if awarded the contract, will subcontract for performance of the work of: HVAC (heating, ventilation, and air conditioning); plumbing as described in chapter 18.106 RCW; and electrical as described in chapter 19.28 RCW, or to name itself for the work, if it is licensed to perform the work for which it has named itself. Errors identified by the contracting agency in the proof of license information must be corrected by the bidder within 48 hours of submission; and
(b) Within 48 hours after the published bid submittal time, the names of the subcontractors with whom the bidder, if awarded the contract, will subcontract for performance of the work of structural steel installation and rebar installation.
(2) The prime contract bidder shall not list more than one subcontractor for each category of work identified, unless subcontractors vary with bid alternates, in which case the prime contract bidder must indicate which subcontractor will be used for which alternate. Failure of the prime contract bidder to submit as part of the bid the names of such subcontractors or to name itself to perform such work or the naming of two or more subcontractors to perform the same work shall render the prime contract bidder's bid nonresponsive and, therefore, void.
(3) Substitution of a listed subcontractor in furtherance of bid shopping or bid peddling before or after the award of the prime contract is prohibited and the originally listed subcontractor is entitled to recover monetary damages from the prime contract bidder who executed a contract with the public entity and the substituted subcontractor but not from the public entity inviting the bid. It is the original subcontractor's burden to prove by a preponderance of the evidence that bid shopping or bid peddling occurred. Substitution of a listed subcontractor may be made by the prime contractor for the following reasons:
(a) Refusal of the listed subcontractor to sign a contract with the prime contractor;
(b) Bankruptcy or insolvency of the listed subcontractor;
(c) Inability of the listed subcontractor to perform the requirements of the proposed contract or the project;
(d) Inability of the listed subcontractor to obtain the necessary bonding, insurance, or other statutory requirements to perform the work detailed in the contract;
(e) Refusal or inability to provide a letter of bondability from a surety company; or
(f) The listed subcontractor is barred from participating in the project as a result of a court order or summary judgment.
(4) The requirement of this section to name the prime contract bidder's proposed subcontractors applies only to proposed HVAC, plumbing, electrical, structural steel installation, and rebar installation subcontractors who will contract directly with the prime contract bidder submitting the bid to the public entity.
(5) This section does not apply to design-build requests for proposals under RCW 39.10.330, to general contractor/construction manager requests for proposals under RCW 39.10.350, or to job order contract requests for proposals under RCW 39.10.420.
[ 2025 c 308 s 1; 2021 c 103 s 1; 2020 c 140 s 1; 2003 c 301 s 5; 2002 c 163 s 2; 1999 c 109 s 1; 1995 c 94 s 1; 1994 c 91 s 1; 1993 c 378 s 1. ]
NOTES:
Intent—2002 c 163: "This act is intended to discourage bid shopping and bid peddling on Washington state public building and works projects." [ 2002 c 163 s 1.]
Application—1994 c 91: "This act applies prospectively only and not retroactively. It applies only to invitations to bid issued on or after June 9, 1994." [ 1994 c 91 s 2.]
Application—1993 c 378: "This act applies prospectively only and not retroactively. It applies only to invitations to bid issued on or after July 25, 1993." [ 1993 c 378 s 2.]
This chapter does not apply to contracts entered into under RCW 36.102.060(4) or development agreements entered into under RCW 36.102.060(7).
[ 1997 c 220 s 403 (Referendum Bill No. 48, approved June 17, 1997). ]
NOTES:
Referendum—Other legislation limited—Legislators' personal intent not indicated—Reimbursements for election—Voters' pamphlet, election requirements—1997 c 220: See RCW 36.102.800 through 36.102.803.
For the purposes of RCW 39.32.010 through 39.32.060:
The term "eligible donee" means any public agency carrying out or promoting for the residents of a given political area one or more public purposes, such as conservation, economic development, education, parks and recreation, public health, and public safety; or nonprofit educational or public health institutions or organizations, such as medical institutions, hospitals, clinics, health centers, schools, colleges, universities, schools for persons with intellectual disabilities, schools for persons with physical disabilities, child care centers, radio and television stations licensed by the federal communications commission as educational radio or educational television stations, museums attended by the public, and public libraries serving all residents of a community, district, state, or region, and which are exempt from taxation under Section 501 of the Internal Revenue Code of 1954, for purposes of education or public health, including research for any such purpose.
The term "public agency" means the state or any subdivision thereof, including any unit of local government, economic development district, emergency services organization, or any instrumentality created by compact or other agreement between the state and a political subdivision, or any Indian tribe, band, group, or community located on a state reservation.
The term "surplus property" means any property, title to which is in the federal, state, or local government or any department or agency thereof, and which property is to be disposed of as surplus under any act of congress or the legislature or local statute, heretofore or hereafter enacted providing for such disposition.
[ 2010 c 94 s 10; 1995 c 137 s 2; 1977 ex.s. c 135 s 1; 1967 ex.s. c 70 s 1; 1945 c 205 s 1; Rem. Supp. 1945 s 10322-60. ]
NOTES:
Purpose—2010 c 94: See note following RCW 44.04.280.
The director of enterprise services is hereby authorized to purchase, lease or otherwise acquire from federal, state, or local government or any surplus property disposal agency thereof surplus property to be used in accordance with the provisions of this chapter.
[ 2015 c 225 s 42; 1995 c 137 s 3; 1977 ex.s. c 135 s 2; 1967 ex.s. c 70 s 2; 1945 c 205 s 2; Rem. Supp. 1945 s 10322-61. ]
NOTES:
Authority of superintendent of public instruction to acquire federal surplus or donated food commodities for school district hot lunch program: Chapter 28A.235 RCW.
The enterprise services account shall be administered by the director of enterprise services and be used for the purchase, lease or other acquisition from time to time of surplus property from any federal, state, or local government surplus property disposal agency. The director may purchase, lease or acquire such surplus property on the requisition of an eligible donee and without such requisition at such time or times as he or she deems it advantageous to do so; and in either case he or she shall be responsible for the care and custody of the property purchased so long as it remains in his or her possession.
[ 2011 1st sp.s. c 43 s 252; 1998 c 105 s 3; 1995 c 137 s 4; 1977 ex.s. c 135 s 3; 1967 ex.s. c 70 s 4; 1945 c 205 s 4; Rem. Supp. 1945 s 10322-63. Formerly RCW 39.32.030, part. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Effective date—1998 c 105: See note following RCW 43.19.025.
In purchasing federal surplus property on requisition for any eligible donee the director may advance the purchase price thereof from the enterprise services account, and he or she shall then in due course bill the proper eligible donee for the amount paid by him or her for the property plus a reasonable amount to cover the expense incurred by him or her in connection with the transaction. In purchasing surplus property without requisition, the director shall be deemed to take title outright and he or she shall then be authorized to resell from time to time any or all of such property to such eligible donees as desire to avail themselves of the privilege of purchasing. All moneys received in payment for surplus property from eligible donees shall be deposited by the director in the enterprise services account. The director shall sell federal surplus property to eligible donees at a price sufficient only to reimburse the enterprise services account for the cost of the property to the account, plus a reasonable amount to cover expenses incurred in connection with the transaction. Where surplus property is transferred to an eligible donee without cost to the transferee, the director may impose a reasonable charge to cover expenses incurred in connection with the transaction. The governor, through the director of enterprise services, shall administer the surplus property program in the state and shall perform or supervise all those functions with respect to the program, its agencies and instrumentalities.
[ 2015 c 225 s 43; 1998 c 105 s 4; 1995 c 137 s 5; 1977 ex.s. c 135 s 4; 1967 ex.s. c 70 s 5; 1945 c 205 s 5; Rem. Supp. 1945 s 10322-64. ]
NOTES:
Effective date—1998 c 105: See note following RCW 43.19.025.
The director of enterprise services shall have power to promulgate such rules and regulations as may be necessary to effectuate the purposes of RCW 39.32.010 through 39.32.060 and to carry out the provisions of the Federal Property and Administrative Services Act of 1949, as amended.
[ 2015 c 225 s 44; 1977 ex.s. c 135 s 5; 1967 ex.s. c 70 s 6; 1945 c 205 s 7; Rem. Supp. 1945 s 10322-66. ]
The state of Washington, through any department, division, bureau, board, commission, authority, or agency thereof, and all counties, cities, towns, and other political subdivisions thereof, is hereby authorized to enter into any contract with the United States of America, or with any agency thereof, for the purchase of any equipment, supplies, materials, or other property, without regard to the provisions of any law requiring the advertising, giving of notices, inviting or receiving bids, or which may require the delivery of purchases before payment, and to this end the executive head of any such department, division, bureau, board, commission, authority, or agency of the state, the county commissioners and the executive authority of any city or town, may designate by appropriate resolution or order any officeholder or employee of its own to enter a bid or bids in its behalf at any sale of any equipment, supplies, material or other property real or personal owned by the United States of America or any agency thereof, and may authorize said person to make any down payment, or payment in full, required in connection with such bidding.
[ 1945 c 180 s 1; Rem. Supp. 1945 s 10322-50. FORMER PART OF SECTION: 1945 c 88 s 1 now codified as RCW 39.32.090. ]
Any provisions of any law, charter, ordinance, resolution, bylaw, rule or regulation which are inconsistent with the provisions of RCW 39.32.070 and 39.32.080 are suspended to the extent such provisions are inconsistent herewith.
[ 1945 c 180 s 2; Rem. Supp. 1945 s 10322-51. ]
Whenever authorized by ordinance or resolution of its legislative authority any political subdivision of the state shall have power to purchase supplies, materials, electronic data processing and telecommunication equipment, software, services, and/or equipment from or through the United States government without calling for bids, notwithstanding any law or charter provision to the contrary.
[ 2013 c 132 s 1; 1945 c 88 s 1; Rem. Supp. 1945 s 10322-40. Formerly RCW 39.32.070, part. ]
(1) The state or any municipality or any political subdivision thereof, may sell, transfer, exchange, lease or otherwise dispose of any property, real or personal, or property rights, including but not limited to the title to real property, to the state or any municipality or any political subdivision thereof, or the federal government, or a federally recognized Indian tribe, on such terms and conditions as may be mutually agreed upon by the proper authorities of the state and/or the subdivisions concerned. In addition, the state, or any municipality or any political subdivision thereof, may sell, transfer, exchange, lease, or otherwise dispose of personal property, except weapons, to a foreign entity.
(2) This section shall be deemed to provide an alternative method for the doing of the things authorized herein, and shall not be construed as imposing any additional condition upon the exercise of any other powers vested in the state, municipalities or political subdivisions.
(3) No intergovernmental transfer, lease, or other disposition of property made pursuant to any other provision of law prior to May 23, 1972, shall be construed to be invalid solely because the parties thereto did not comply with the procedures of this section.
[ 2011 c 259 s 1; 2003 c 303 s 1; 1981 c 96 s 1; 1973 c 109 s 1; 1972 ex.s. c 95 s 1; 1953 c 133 s 1. ]
NOTES:
Effective date—2003 c 303: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 14, 2003]." [ 2003 c 303 s 2.]
Exchange of county tax title lands with other governmental agencies: Chapter 36.35 RCW.
(1) Any state agency, municipality, or political subdivision, with authority to dispose of surplus public property, may transfer, lease, or otherwise dispose of such property for a public benefit purpose, consistent with and subject to this section. Any such transfer, lease, or other disposal may be made to a public, private, or nongovernmental body on any mutually agreeable terms and conditions, including a no cost transfer, subject to and consistent with this section. Consideration must include appraisal costs, debt service, all closing costs, and any other liabilities to the agency, municipality, or political subdivision. However, the property may not be so transferred, leased, or disposed of if such transfer, lease, or disposal would violate any bond covenant or encumber or impair any contract.
(2) A deed, lease, or other instrument transferring or conveying property pursuant to subsection (1) of this section must include:
(a) A covenant or other requirement that the property shall be used for the designated public benefit purpose; and
(b) Remedies that apply if the recipient of the property fails to use it for the designated public purpose or ceases to use it for such purpose.
(3) To implement the authority granted by this section, the governing body or legislative authority of a municipality or political subdivision must enact rules to regulate the disposition of property for public benefit purposes. Any transfer, lease, or other disposition of property authorized under this section must be consistent with existing locally adopted comprehensive plans as described in RCW 36.70A.070.
(4) This section is deemed to provide a discretionary alternative method for the doing of the things authorized herein, and shall not be construed as imposing any additional condition upon the exercise of any other powers vested in any state agency, municipality, or political subdivision.
(5) No transfer, lease, or other disposition of property for public benefit purposes made pursuant to any other provision of law prior to June 7, 2018, may be construed to be invalid solely because the parties thereto did not comply with the procedures of this section.
(6) The transfer at no cost, lease, or other disposal of surplus real property for public benefit purposes is deemed a lawful purpose of any state agency, municipality, or political subdivision, for which accounts are kept on an enterprise fund or equivalent basis, regardless of the primary purpose or function of such agency.
(7) This section does not apply to the sale or transfer of any state forestlands, any state lands or property granted to the state by the federal government for the purposes of common schools or education, or subject to a legal restriction that would be violated by compliance with this section.
(8) For purposes of this section:
(a) "Affordable housing" means:
(i) For rental housing, 30 percent of the household's monthly income for rent and utilities, other than telephone; or
(ii) For permanently affordable homeownership, 38 percent of the household's monthly income for mortgage principal, interest, property taxes, homeowner's insurance, homeowner's association fees, and land lease fees, as applicable. In addition, total household debt is no more than 45 percent of the monthly household income;
(b) "Public benefit" means affordable housing, which can be rental housing or permanently affordable homeownership for low-income and very low-income households as defined in RCW 43.63A.510, and related facilities that support the goals of affordable housing development in providing economic and social stability for low-income persons; and
(c) "Surplus public property" means excess real property that is not required for the needs of or the discharge of the responsibilities of the state agency, municipality, or political subdivision.
[ 2023 c 301 s 1; 2018 c 217 s 3. ]
Before disposing of surplus property with an estimated value of more than fifty thousand dollars, the state or a political subdivision shall hold a public hearing in the county where the property or the greatest portion thereof is located. At least ten days but not more than twenty-five days prior to the hearing, there shall be published a public notice of reasonable size in display advertising form, setting forth the date, time, and place of the hearing at least once in a newspaper of general circulation in the area where the property is located. A news release pertaining to the hearing shall be disseminated among printed and electronic media in the area where the property is located. If real property is involved, the public notice and news release shall identify the property using a description which can easily be understood by the public. If the surplus is real property, the public notice and news release shall also describe the proposed use of the lands involved. If there is a failure to substantially comply with the procedures set forth in this section, then the sale, transfer, exchange, lease, or other disposal shall be subject to being declared invalid by a court. Any such suit must be brought within one year from the date of the disposal agreement.
[ 1995 c 123 s 1; 1981 c 96 s 2. ]
The legislative body of any municipal corporation, quasi municipal corporation or political subdivision of the state of Washington authorized to develop and operate a public mass transportation system shall have power to contract with the legislative body of any other municipal corporation, quasi municipal corporation or political subdivision of the state of Washington, or with any person, firm or corporation for public transportation services or for the use of all or any part of any publicly owned transportation facilities for such period and under such terms and conditions and upon such rentals, fees and charges as the legislative body operating such public transportation system may determine, and may pledge all or any portion of such rentals, fees and charges and all other revenue derived from the ownership or operation of publicly owned transportation facilities to pay and to secure the payment of general obligation bonds and/or revenue bonds of such municipality issued for the purpose of acquiring or constructing a public mass transportation system.
[ 1969 ex.s. c 255 s 16. ]
NOTES:
Construction—Severability—1969 ex.s. c 255: See notes following RCW 35.58.272.
Public transportation systems: RCW 35.58.272 and 35.58.2721.
Any governmental unit, as defined in RCW 36.93.020(1) as it now exists or is hereafter amended, may convey its real or personal property or any interest or right therein to, or contract for the use of such property by, the county or park and recreation district wherein such property is located for park or recreational purposes, by private negotiation and upon such terms and with such consideration as might be mutually agreed to by such governmental unit and the board of county commissioners or the park and recreation district board of commissioners.
[ 1971 ex.s. c 243 s 7. ]
Any school district or educational service district, after complying with the requirements of RCW 28A.335.180, and any library, as defined in RCW 27.12.010, may dispose of surplus or obsolete books, periodicals, newspapers, and other reading materials as follows:
(1) If the reading materials are estimated to have value as reading materials in excess of one thousand dollars, they shall be sold at public auction to the person submitting the highest reasonable bid following publication of notice of the auction in a newspaper with a general circulation in the library or school district.
(2) If no reasonable bids are submitted under subsection (1) of this section or if the reading materials are estimated to have value as reading materials of one thousand dollars or less, the library or school district may directly negotiate the sale of the reading materials to a public or private entity.
(3) If the reading materials are determined to have no value as reading materials or if no purchaser is found under subsection (2) of this section the reading materials may be recycled or destroyed.
These methods for disposing of surplus or obsolete reading materials shall be in addition to any other method available to libraries and school districts for disposal of the property.
[ 1990 c 33 s 567; 1979 ex.s. c 134 s 1. ]
NOTES:
Purpose—Statutory references—Severability—1990 c 33: See RCW 28A.900.100 through 28A.900.102.
This chapter does not apply to transfers of property under *sections 1 and 2 of this act.
[ 2006 c 35 s 7. ]
NOTES:
*Reviser's note: The reference to "sections 1 and 2 of this act" appears to be erroneous. Reference to "sections 2 and 3 of this act" codified as RCW 43.99C.070 and 43.83D.120 was apparently intended. RCW 43.99C.070 and 43.83D.120 were recodified as RCW 43.83.400 and 43.83.410, respectively, by the code reviser September 2015.
Findings—2006 c 35: See note following RCW 43.83.400.
It is the purpose of this chapter to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population and other factors influencing the needs and development of local communities.
[ 1967 c 239 s 1. ]
NOTES:
Joint operations by municipal corporations and political subdivisions, deposit and control of funds: RCW 43.09.285.
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Public agency" means any agency, political subdivision, or unit of local government of this state including, but not limited to, municipal corporations, quasi municipal corporations, special purpose districts, and local service districts; any agency of the state government; any agency of the United States; any Indian tribe recognized as such by the federal government; and any political subdivision of another state.
(2) "State" means a state of the United States.
(3) "Watershed management partnership" means an interlocal cooperation agreement formed under the authority of RCW 39.34.200.
(4) "WRIA" has the definition in RCW 90.82.020.
[ 2003 c 327 s 3; 1985 c 33 s 1; 1979 c 36 s 1; 1977 ex.s. c 283 s 13; 1975 1st ex.s. c 115 s 1; 1973 c 34 s 1; 1971 c 33 s 1; 1969 c 88 s 1; 1969 c 40 s 1; 1967 c 239 s 3. ]
NOTES:
Finding—Intent—2003 c 327: See note following RCW 39.34.190.
Severability—1977 ex.s. c 283: See note following RCW 28A.310.010.
(1) Any power or powers, privileges or authority exercised or capable of exercise by a public agency of this state may be exercised and enjoyed jointly with any other public agency of this state having the power or powers, privilege or authority, and jointly with any public agency of any other state or of the United States to the extent that laws of such other state or of the United States permit such joint exercise or enjoyment. Any agency of the state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges and authority conferred by this chapter upon a public agency.
(2) Any two or more public agencies may enter into agreements with one another for joint or cooperative action pursuant to the provisions of this chapter, except that any such joint or cooperative action by public agencies which are educational service districts and/or school districts shall comply with the provisions of RCW 28A.320.080. Appropriate action by ordinance, resolution or otherwise pursuant to law of the governing bodies of the participating public agencies shall be necessary before any such agreement may enter into force.
(3) Any such agreement shall specify the following:
(a) Its duration;
(b) The precise organization, composition and nature of any separate legal or administrative entity created thereby together with the powers delegated thereto, provided such entity may be legally created. Such entity may include a nonprofit corporation organized pursuant to chapter 24.03A or 24.06 RCW whose membership is limited solely to the participating public agencies or a partnership organized pursuant to chapter *25.04 or 25.05 RCW whose partners are limited solely to participating public agencies, or a limited liability company organized under chapter 25.15 RCW whose membership is limited solely to participating public agencies, and the funds of any such corporation, partnership, or limited liability company shall be subject to audit in the manner provided by law for the auditing of public funds;
(c) Its purpose or purposes;
(d) The manner of financing the joint or cooperative undertaking and of establishing and maintaining a budget therefor;
(e) The permissible method or methods to be employed in accomplishing the partial or complete termination of the agreement and for disposing of property upon such partial or complete termination; and
(f) Any other necessary and proper matters.
(4) In the event that the agreement does not establish a separate legal entity to conduct the joint or cooperative undertaking, the agreement shall contain, in addition to provisions specified in subsection (3)(a), (c), (d), (e), and (f) of this section, the following:
(a) Provision for an administrator or a joint board responsible for administering the joint or cooperative undertaking. In the case of a joint board, public agencies that are party to the agreement shall be represented; and
(b) The manner of acquiring, holding and disposing of real and personal property used in the joint or cooperative undertaking. Any joint board is authorized to establish a special fund with a state, county, city, or district treasurer servicing an involved public agency designated "Operating fund of . . . . . . joint board."
(5) No agreement made pursuant to this chapter relieves any public agency of any obligation or responsibility imposed upon it by law except that:
(a) To the extent of actual and timely performance thereof by a joint board or other legal or administrative entity created by an agreement made pursuant to this chapter, the performance may be offered in satisfaction of the obligation or responsibility; and
(b) With respect to one or more public agencies purchasing or otherwise contracting through a bid, proposal, or contract awarded by another public agency or by a group of public agencies, any obligation with respect to competitive bids or proposals that applies to the public agencies involved is satisfied if the public agency or group of public agencies that awarded the bid, proposal, or contract complied with its own statutory requirements and either (i) posted the bid or solicitation notice on a website established and maintained by a public agency, purchasing cooperative, or similar service provider, for purposes of posting public notice of bid or proposal solicitations, or (ii) provided an access link on the state's web portal to the notice.
(6)(a) Any two or more public agencies may enter into a contract providing for the joint utilization of architectural or engineering services if:
(i) The agency contracting with the architectural or engineering firm complies with the requirements for contracting for such services under chapter 39.80 RCW; and
(ii) The services to be provided to the other agency or agencies are related to, and within the general scope of, the services the architectural or engineering firm was selected to perform.
(b) Any agreement providing for the joint utilization of architectural or engineering services under this subsection must be executed for a scope of work specifically detailed in the agreement and must be entered into prior to commencement of procurement of such services under chapter 39.80 RCW.
(7) Financing of joint projects by agreement shall be as provided by law.
(8) Transit agencies, as defined in RCW 81.104.015, are exempt from the interlocal agreement requirements of subsections (2) through (4) of this section when purchasing rolling stock and related equipment from state cooperative procurement schedules established under section 3019 of P.L. 114-94.
[ 2023 c 43 s 1; 2021 c 176 s 5216; 2019 c 91 s 1; 2015 c 232 s 1; 2009 c 202 s 6. Prior: 2008 c 198 s 2; 2004 c 190 s 1; 1992 c 161 s 4; 1990 c 33 s 568; 1981 c 308 s 2; 1972 ex.s. c 81 s 1; 1967 c 239 s 4. ]
NOTES:
*Reviser's note: Chapter 25.04 RCW was repealed in its entirety by 1998 c 103 s 1308, effective January 1, 1999.
Effective date—2021 c 176: See note following RCW 24.03A.005.
Finding—2008 c 198: "The legislature finds that it is in the public interest for public utility districts to develop renewable energy projects to meet requirements enacted by the people in Initiative Measure No. 937 and goals of diversifying energy resource portfolios. By developing more efficient and cost-effective renewable energy projects, public utility districts will keep power costs as low as possible for their customers. Consolidating and clarifying statutory provisions governing various aspects of public utility district renewable energy project development will reduce planning time and expense to meet these objectives." [ 2008 c 198 s 1.]
Intent—1992 c 161: See note following RCW 70.44.450.
Purpose—Statutory references—Severability—1990 c 33: See RCW 28A.900.100 through 28A.900.102.
Severability—1981 c 308: See note following RCW 28A.320.080.
Joint operations by municipal corporations or political subdivisions, deposit and control of funds: RCW 43.09.285.
Prior to its entry into force, an agreement made pursuant to this chapter shall be filed with the county auditor or, alternatively, listed by subject on a public agency's website or other electronically retrievable public source. In the event that an agreement entered into pursuant to this chapter is between or among one or more public agencies of this state and one or more public agencies of another state or of the United States the agreement shall have the status of an interstate compact, but in any case or controversy involving performance or interpretation thereof or liability thereunder, the public agencies party thereto shall be real parties in interest and the state may maintain an action to recoup or otherwise make itself whole for any damages or liability which it may incur by reason of being joined as a party therein. Such action shall be maintainable against any public agency or agencies whose default, failure of performance, or other conduct caused or contributed to the incurring of damage or liability by the state.
[ 2006 c 32 s 1; 1995 c 22 s 1; 1992 c 161 s 5; 1967 c 239 s 5. ]
NOTES:
Intent—1992 c 161: See note following RCW 70.44.450.
In the event that an agreement made pursuant to this chapter shall deal in whole or in part with the provision of services or facilities with regard to which an officer or agency of the state government has constitutional or statutory powers of control, the agreement shall, as a condition precedent to its entry into force, be submitted to the state officer or agency having such power of control. The agreement shall be approved or disapproved by the state officer or agency with regard to matters within his, her, or its jurisdiction within ninety days after receipt of the agreement. If a state officer or agency fails to act within the ninety-day time limit, the agreement shall be deemed approved by that state officer or agency.
[ 1992 c 161 s 6; 1967 c 239 s 6. ]
NOTES:
Intent—1992 c 161: See note following RCW 70.44.450.
The department of enterprise services may enter into an agreement with a public benefit nonprofit corporation to allow the public benefit nonprofit corporation to participate in state contracts for purchases administered by the department. Such agreement must comply with the requirements of RCW 39.34.030 through 39.34.050. For the purposes of this section "public benefit nonprofit corporation" means a public benefit nonprofit corporation as defined in RCW 24.03A.245 that is receiving local, state, or federal funds either directly or through a public agency other than an Indian tribe or a political subdivision of another state.
[ 2021 c 176 s 5217; 2011 1st sp.s. c 43 s 246; 1994 c 98 s 1. ]
NOTES:
Effective date—2021 c 176: See note following RCW 24.03A.005.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Any public agency entering into an agreement pursuant to this chapter may appropriate funds and may sell, lease, give, or otherwise supply property, personnel, and services to the administrative joint board or other legal or administrative entity created to operate the joint or cooperative undertaking.
[ 1992 c 161 s 7; 1967 c 239 s 7. ]
NOTES:
Intent—1992 c 161: See note following RCW 70.44.450.
Any joint board created pursuant to the provisions of this chapter is hereby authorized to accept loans or grants of federal, state or private funds in order to accomplish the purposes of this chapter provided each of the participating public agencies is authorized by law to receive such funds.
[ 1967 c 239 s 8. ]
Any one or more public agencies may contract with any one or more other public agencies to perform any governmental service, activity, or undertaking which each public agency entering into the contract is authorized by law to perform: PROVIDED, That such contract shall be authorized by the governing body of each party to the contract. Such contract shall set forth fully the purposes, powers, rights, objectives, and responsibilities of the contracting parties.
[ 1967 c 239 s 9. ]
In addition to the other powers granted by chapter 39.34 RCW, one or more cities or towns or a county, or any combination thereof, may enter into agreements with each other or with a public transportation agency of a contiguous state, or contiguous Canadian province, to allow a city or such other transportation agency to operate bus service for the transportation of the general public within the territorial boundaries of such city and/or county or to allow such city and/or county to operate such bus service within the jurisdiction of such other public agency when no such existing bus certificate of public convenience and necessity has been authorized by the Washington utilities and transportation commission: PROVIDED, HOWEVER, That such transportation may extend beyond the territorial boundaries of either party to the agreement if the agreement so provides, and if such service is not in conflict with existing bus service authorized by the Washington utilities and transportation commission. The provisions of this section shall be cumulative and nonexclusive and shall not affect any other right granted by this chapter or any other provision of law.
[ 1977 c 46 s 1; 1969 ex.s. c 139 s 1. ]
Nothing in this chapter shall be construed to increase or decrease existing authority of any public agency of this state to enter into agreements or contracts with any other public agency of this state or of any other state or the United States with regard to the generation, transmission, or distribution of electricity or the existing powers of any private or public utilities.
[ 1967 c 239 s 10. ]
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 herein shall be construed as limiting any other powers or authority of any public agency.
[ 1967 c 239 s 11. ]
No power, privilege, or other authority shall be exercised under this chapter where prohibited by the state Constitution or the Constitution or laws of the federal government.
[ 1967 c 239 s 12. ]
Except as otherwise provided by law, the full costs of a state agency incurred in providing services or furnishing materials to or for another agency under chapter 39.34 RCW or any other statute shall be charged to the agency contracting for such services or materials and shall be repaid and credited to the fund or appropriation against which the expenditure originally was charged. Amounts representing a return of expenditures from an appropriation shall be considered as returned loans of services or of goods, supplies or other materials furnished, and may be expended as part of the original appropriation to which they belong without further or additional appropriation. Such interagency transactions shall be subject to regulation by the director of financial management, including but not limited to provisions for the determination of costs, prevention of interagency contract costs beyond those which are fully reimbursable, disclosure of reimbursements in the governor's budget and such other requirements and restrictions as will promote more economical and efficient operations of state agencies.
Except as otherwise provided by law, this section shall not apply to the furnishing of materials or services by one agency to another when other funds have been provided specifically for that purpose pursuant to law.
[ 1979 c 151 s 45; 1969 ex.s. c 61 s 1. ]
NOTES:
Duty to submit agreement of jurisdictional state officer or agency: RCW 39.34.050.
The director of financial management may establish procedures whereby some or all payments between state agencies may be made by transfers upon the accounts of the state treasurer in lieu of making such payments by warrant or check. Such procedures, when established, shall include provision for corresponding entries to be made in the accounts of the affected agencies.
[ 1979 c 151 s 46; 1969 ex.s. c 61 s 2. ]
State agencies are authorized to advance funds to defray charges for materials to be furnished or services to be rendered by other state agencies. Such advances shall be made only upon the approval of the director of financial management, or his or her order made pursuant to an appropriate regulation requiring advances in certain cases. An advance shall be made from the fund or appropriation available for the procuring of such services or materials, to the state agency which is to perform the services or furnish the materials, in an amount no greater than the estimated charges therefor.
[ 2011 c 336 s 805; 1979 c 151 s 47; 1969 ex.s. c 61 s 3. ]
An advance made under RCW 39.34.130 through 39.34.150 from appropriated funds shall be available for expenditure for no longer than the period of the appropriation from which it was made. When the actual costs of materials and services have been finally determined, and in no event later than the lapsing of the appropriation, any unexpended balance of the advance shall be returned to the agency for credit to the fund or account from which it was made.
[ 1969 ex.s. c 61 s 4. ]
The powers and authority conferred by RCW 39.34.130 through 39.34.160 shall be construed as in addition and supplemental to powers or authority conferred by any other law, and not to limit any other powers or authority of any public agency expressly granted by any other statute.
[ 1969 ex.s. c 61 s 5. ]
(1) Each county, city, and town is responsible for the prosecution, adjudication, sentencing, and incarceration of misdemeanor and gross misdemeanor offenses committed by adults in their respective jurisdictions, and referred from their respective law enforcement agencies, whether filed under state law or city ordinance, and must carry out these responsibilities through the use of their own courts, staff, and facilities, or by entering into contracts or interlocal agreements under this chapter to provide these services. Nothing in this section is intended to alter the statutory responsibilities of each county for the prosecution, adjudication, sentencing, and incarceration for not more than one year of felony offenders, nor shall this section apply to any offense initially filed by the prosecuting attorney as a felony offense or an attempt to commit a felony offense. The court of any county, city, or town that wishes to offer probation supervision services may enter into interlocal agreements under subsection (6) of this section to provide those services.
(2) The following principles must be followed in negotiating interlocal agreements or contracts: Cities and counties must consider (a) anticipated costs of services; and (b) anticipated and potential revenues to fund the services, including fines and fees, criminal justice funding, and state-authorized sales tax funding levied for criminal justice purposes.
(3) If an agreement as to the levels of compensation within an interlocal agreement or contract for gross misdemeanor and misdemeanor services cannot be reached between a city and county, then either party may invoke binding arbitration on the compensation issued by notice to the other party. In the case of establishing initial compensation, the notice shall request arbitration within thirty days. In the case of nonrenewal of an existing contract or interlocal agreement, the notice must be given one hundred twenty days prior to the expiration of the existing contract or agreement and the existing contract or agreement remains in effect until a new agreement is reached or until an arbitration award on the matter of fees is made. The city and county each select one arbitrator, and the initial two arbitrators pick a third arbitrator. This subsection does not apply to the extent that the interlocal agreement is for probation supervision services.
(4) A city or county that wishes to terminate an agreement for the provision of court services must provide written notice of the intent to terminate the agreement in accordance with RCW 3.50.810 and 35.20.010. This subsection does not apply to the extent that the interlocal agreement is for probation supervision services. The city or county shall provide a copy of the written notice to terminate an agreement for the provision of court services to the administrative office of the courts not less than one year prior to the expiration of the agreement.
(5) For cities or towns that have not adopted, in whole or in part, criminal code or ordinance provisions related to misdemeanor and gross misdemeanor crimes as defined by state law, this section shall have no application until July 1, 1998.
(6) Municipal courts or district courts may enter into interlocal agreements for pretrial and/or postjudgment probation supervision services pursuant to ARLJ 11. Such agreements shall not affect the jurisdiction of the court that imposes probation supervision, need not require the referral of all supervised cases by a jurisdiction, and may limit the referral for probation supervision services to a single case. An agreement for probation supervision services is not valid unless approved by the presiding judge of each participating court. The interlocal agreement may not require approval of the local executive and legislative bodies unless the interlocal agreement requires the expenditure of additional funds by the jurisdiction. If the jurisdiction providing probation supervision services is found liable for inadequate supervision, as provided in RCW 4.24.760(1), or is impacted by increased costs pursuant to the interlocal agreement, the presiding judge of the jurisdiction imposing probation supervision shall consult with the executive authority of the jurisdiction imposing probation supervision and determine whether to terminate the interlocal agreement for probation supervision services. All proceedings to grant, modify, or revoke probation must be held in the court that imposes probation supervision. Jail costs and the cost of other sanctions remain with the jurisdiction that imposes probation supervision.
The administrative office of the courts, in cooperation with the district and municipal court judges association and the Washington association of prosecuting attorneys, shall develop a model interlocal agreement.
[ 2024 c 61 s 6; 2021 c 41 s 2; 2001 c 68 s 4; 1996 c 308 s 1. ]
NOTES:
Effective date—1996 c 308: "This act shall take effect January 1, 1997." [ 1996 c 308 s 2.]
(1) The legislative authority of a city or county and the governing body of any special purpose district enumerated in subsection (2) of this section may authorize up to ten percent of its water-related revenues to be expended in the implementation of watershed management plan projects or activities that are in addition to the county's, city's, or district's existing water-related services or activities. Such limitation on expenditures shall not apply to water-related revenues of a public utility district organized according to Title 54 RCW. Water-related revenues include rates, charges, and fees for the provision of services relating to water supply, treatment, distribution, and management generally, and those general revenues of the local government that are expended for water management purposes. A local government may not expend for this purpose any revenues that were authorized by voter approval for other specified purposes or that are specifically dedicated to the repayment of municipal bonds or other debt instruments.
(2) The following special purpose districts may exercise the authority provided by this section:
(a) Water districts, sewer districts, and water-sewer districts organized under Title 57 RCW;
(b) Public utility districts organized under Title 54 RCW;
(c) Irrigation, reclamation, conservation, and similar districts organized under Titles 87 and 89 RCW;
(d) Port districts organized under Title 53 RCW;
(e) Diking, drainage, and similar districts organized under Title 85 RCW;
(f) Flood control and similar districts organized under Title 86 RCW;
(g) Lake or beach management districts organized under chapter 36.61 RCW;
(h) Aquifer protection areas organized under chapter 36.36 RCW; and
(i) Shellfish protection districts organized under chapter 90.72 RCW.
(3) The authority for expenditure of local government revenues provided by this section shall be applicable broadly to the implementation of watershed management plans addressing water supply, water transmission, water quality treatment or protection, or any other water-related purposes. Such plans include but are not limited to plans developed under the following authorities:
(a) Watershed plans developed under chapter 90.82 RCW;
(b) Salmon recovery plans developed under chapter 77.85 RCW;
(c) Watershed management elements of comprehensive land use plans developed under the growth management act, chapter 36.70A RCW;
(d) Watershed management elements of shoreline master programs developed under the shoreline management act, chapter 90.58 RCW;
(e) Nonpoint pollution action plans developed under the Puget Sound water quality management planning authorities of chapter 90.71 RCW and *chapter 400-12 WAC;
(f) Other comprehensive management plans addressing watershed health at a WRIA level or sub-WRIA basin drainage level;
(g) Coordinated water system plans under chapter 70A.100 RCW and similar regional plans for water supply; and
(h) Any combination of the foregoing plans in an integrated watershed management plan.
(4) The authority provided by this section to expend revenues for watershed management plan implementation shall be construed broadly to include, but not be limited to:
(a) The coordination and oversight of plan implementation, including funding a watershed management partnership for this purpose;
(b) Technical support, monitoring, and data collection and analysis;
(c) The design, development, construction, and operation of projects included in the plan; and
(d) Conducting activities and programs included as elements in the plan.
[ 2021 c 65 s 29; 2008 c 301 s 26; 2003 c 327 s 2. ]
NOTES:
*Reviser's note: Chapter 400-12 WAC was repealed by WSR 10-12-009, filed 5/20/10, effective 6/20/10.
Explanatory statement—2021 c 65: See note following RCW 53.54.030.
Finding—Intent—2003 c 327: "The legislature finds that throughout Washington state there are many active efforts to protect, manage, and restore watersheds. The state's river systems provide a variety of benefits for society's many needs, so efforts to protect these watersheds should reflect the diversity of social, environmental, and economic factors that make the state unique.
Yet, there is a conflict between the natural flow of river systems and the way watersheds are governed. From a hydrological standpoint, a watershed is a single, integrated system. But these systems usually flow through a number of cities, counties, and other municipalities as they move from their source to the sea. As a result, many are subject to the full range of management interests, including multiple government entities with jurisdiction over water. In many cases, the political boundaries of government do not align with the hydrological boundaries of watersheds and may actually hinder the implementation of coordinated, cooperative plans. Cooperative watershed management actions by local governments, special districts, and utilities can help maintain healthy watershed function and support the beneficial use of water by these entities and protect the quality of the resource that they use or affect. By participating in cooperative watershed management actions, local governments, special districts, and utilities are acting in the public interest and in a manner that is intended to sustain maximum beneficial use and high quality of water over time and to maintain the services that these entities provide.
Therefore, it is the intent of this act to remove statutory barriers that may prevent local governments from working together in the creation and implementation of cooperative, coordinated watershed plans. In addition, it is the further intent of this act to provide additional authorities to assist in such implementation." [ 2003 c 327 s 1.]
Any two or more public agencies may enter into agreements with one another to form a watershed management partnership for the purpose of implementing any portion or all elements of a watershed management plan, including the coordination and oversight of plan implementation. The plan may be any plan or plan element described in RCW 39.34.190(3). The watershed partnership agreement shall include the provisions required of all interlocal agreements under RCW 39.34.030(3). The agreement shall be filed pursuant to RCW 39.34.040 with the county auditor of each county lying within the geographical watershed area to be addressed by the partnership. The public agencies forming the partnership shall designate a treasurer for the deposit, accounting, and handling of the funds of the partnership. The treasurer shall be either a county treasurer or a city treasurer of a county or city participating in the agreement to form the partnership.
[ 2003 c 327 s 4. ]
NOTES:
Finding—Intent—2003 c 327: See note following RCW 39.34.190.
Where a watershed management partnership formed under the authority of RCW 39.34.200 establishes a separate legal entity to conduct the cooperating undertaking of the partnership, such legal entity is authorized for the purpose of carrying out such undertaking to contract indebtedness and to issue and sell general obligation bonds pursuant to and in the manner provided for general county bonds in chapters 36.67 and 39.46 RCW and other applicable statutes, and to issue revenue bonds pursuant to and in the manner provided for revenue bonds in chapter 36.67 RCW and other applicable statutes. The joint board established by the partnership agreement shall perform the functions referenced in chapter 36.67 RCW to be performed by the county legislative authority in the case of county bonds.
[ 2003 c 327 s 6. ]
NOTES:
Finding—Intent—2003 c 327: See note following RCW 39.34.190.
(1) As limited in subsection (3) of this section, a watershed management partnership formed or qualified under the authority of RCW 39.34.200 and 39.34.210, including the separate legal entity established by such a partnership under RCW 39.34.030(3)(b) to conduct the cooperative undertaking of the partnership under the same statutory authority, may exercise the power of eminent domain as provided in chapter 8.12 RCW.
(2) The eminent domain authority granted under subsection (1) of this section may be exercised only for those utility purposes for which the watershed partnership was formed and is limited solely to providing water services to its customers.
(3) Subsection (1) of this section applies only to a watershed management partnership that:
(a) Was formed or qualified before July 1, 2006, under the authority of RCW 39.34.200 and 39.34.210;
(b) Is not engaged in planning or in implementing a plan for a water resource inventory area under the terms of chapter 90.82 RCW;
(c) Is composed entirely of cities and water-sewer districts authorized to exercise the power of eminent domain in the manner provided by chapter 8.12 RCW; and
(d) Is governed by a board of directors consisting entirely of elected officials from the cities and water-sewer districts that constitute the watershed management partnership.
(4) A watershed management partnership exercising authority under this section shall:
(a) Comply with the notice requirements of RCW 8.25.290; and
(b) Provide notice to the city, town, or county with jurisdiction over the subject property by certified mail thirty days prior to the partnership board authorizing condemnation.
[ 2011 c 97 s 1; 2009 c 504 s 1. ]
The amendments by chapter 327, Laws of 2003 to the interlocal cooperation act authorities are intended to provide additional authority to public agencies for the purposes of implementing watershed management plans, and do not affect any agreements among public agencies existing on July 27, 2003.
[ 2003 c 327 s 7. ]
NOTES:
Finding—Intent—2003 c 327: See note following RCW 39.34.190.
(1) During a covered emergency, the department of commerce may enter into interlocal agreements under this chapter with one or more public agencies for the purposes of providing mutual aid and cooperation to any public agency affected by the cause of the emergency.
(2) All legal liability by a public agency and its employees for damage to property or injury or death to persons caused by acts done or attempted during, or while traveling to or from, a covered emergency, or in preparation for a covered emergency, pursuant to an interlocal agreement entered into under this section, or under the color of this section in a bona fide attempt to comply therewith, shall be the obligation of the state of Washington. Suits may be instituted and maintained against the state for the enforcement of such liability, or for the indemnification of any public agency or its employees for damage done to their private property, or for any judgment against them for acts done in good faith in compliance with this chapter: PROVIDED, That the foregoing shall not be construed to result in indemnification in any case of willful misconduct, gross negligence, or bad faith on the part of any public agency or any of a public agency's employees: PROVIDED, That should the United States or any agency thereof, in accordance with any federal statute, rule, or regulation, provide for the payment of damages to property and/or for death or injury as provided for in this section, then and in that event there shall be no liability or obligation whatsoever upon the part of the state of Washington for any such damage, death, or injury for which the United States government assumes liability.
(3) For purposes of this section, "covered emergency" means an emergency for which the governor has proclaimed a state of emergency under RCW 43.06.010, and for which the governor has authorized the department of commerce to enter into interlocal agreements under this section.
(4) This section shall not affect the right of any person to receive benefits to which he or she would otherwise be entitled under the workers' compensation law, or under any pension or retirement law, nor the right of any such person to receive any benefits or compensation under any act of congress.
[ 2023 c 470 s 2026; 2008 c 181 s 101. ]
NOTES:
Explanatory statement—2023 c 470: See note following RCW 10.99.030.
Part headings not law—2008 c 181: See note following RCW 43.06.220.
(1) If a public agency is requesting from another public agency category 3 or higher data, as defined in policy established in accordance with RCW 43.105.054, the requesting agency shall provide for a written agreement between the agencies that conforms to the policies of the office of cybersecurity.
(2) Nothing in this section shall be construed as limiting audit authorities under chapter 43.09 RCW.
[ 2021 c 291 s 6. ]
(1) Cities and towns may enter into an agreement under this chapter to share a portion of general purpose sales and use tax revenue collected under RCW 82.14.030.
(2) Any agreement to share such revenue must specify, in addition to the conditions required to be included under RCW 39.34.030, the following:
(a) If the agreement applies only to sales and use tax revenue collected in a certain area or areas, then the area or areas in which it is applicable, and how the parties to the agreement will calculate the revenue collected in those areas;
(b) The amount or proportion of the sales and use tax revenue that is to be shared; and
(c) The precise mechanism or method that will be used by the parties to the agreement to share the revenue.
(3) This section shall not be construed to diminish or reduce the authority of local governments to enter into agreements under this chapter or as otherwise allowed by law.
[ 2024 c 95 s 1. ]
This chapter may be cited as the "Interlocal Cooperation Act."
[ 1967 c 239 s 2. ]
The effective date of this chapter is July 1, 1967.
[ 1967 c 239 s 15. ]
The legislature hereby finds:
(1) That major publicly owned or leased facilities have a significant impact on our state's consumption of energy and emission of greenhouse gases from the buildings sector;
(2) That energy conservation practices including energy management systems, combined heat and power systems, and renewable energy systems adopted for the design, construction, and utilization of such facilities will have a beneficial effect on our overall supply of energy;
(3) That the beneficial effect of the electric output from combined heat and power systems includes both energy and capacity value;
(4) That the cost of the energy consumed by such facilities, and the greenhouse gas emissions associated with that energy consumption, over the life of the facilities shall be considered in addition to the initial cost of constructing such facilities;
(5) That the cost of energy is significant and major facility designs shall be based on the total life-cycle cost, including the initial construction cost, and the cost, over the economic life of a major facility, of the energy consumed, and of the operation and maintenance of a major facility as they affect energy consumption, including the costs associated with greenhouse gas emissions from energy consumption; and
(6) That the use of energy systems in these facilities which utilize combined heat and power or renewable resources such as solar energy, wood or wood waste, or other nonconventional fuels, and which incorporate energy management systems, shall be considered in the design of all publicly owned or leased facilities.
[ 2022 c 178 s 1; 2015 3rd sp.s. c 19 s 2; 2001 c 214 s 15; 1982 c 159 s 1; 1975 1st ex.s. c 177 s 1. ]
NOTES:
Finding—Intent—2015 3rd sp.s. c 19: "The legislature finds that it is in the public interest to encourage and foster the development of a thermal standard and to encourage combined heat and power (cogeneration) systems throughout the state. Combined heat and power systems can help the state achieve energy independence and comply with new federal electric energy emission efficiency standards by generating both electric power and useful thermal energy from a single fuel source, thereby increasing energy efficiency and decreasing grid-based emissions. It is the intent of the legislature to promote the deployment of combined heat and power by requiring consideration of combined heat and power systems in the construction of new critical governmental facilities, incorporating reports on combined heat and power facilities in integrated resource plans, and streamlining the process by which combined heat and power facilities obtain permits." [ 2015 3rd sp.s. c 19 s 1.]
Findings—2001 c 214: "(1) The legislature hereby finds that:
(a) The economy of the state and the health, safety, and welfare of its citizens are threatened by the current energy supply and price instabilities;
(b) Many energy efficiency programs for public buildings launched during the 1970s and 1980s were not maintained during the subsequent sustained period of low energy costs and abundant supply; and
(c) Conservation programs originally established in the 1970s and 1980s can be improved or updated. New programs drawing on recently developed technologies, including demand-side energy management systems, can materially increase the efficiency of energy use by the public sector.
(2) It is the policy of the state of Washington that:
(a) State government is committed to achieving significant gains in energy efficiency. Conventional conservation programs will be reviewed and updated in light of experience gained since their commencement;
(b) State government must play a leading role in demonstrating updated and new energy efficiency technologies. New programs or measures made possible by technological advances, such as demand-side response measures and energy management systems, shall be treated in the same manner as conventional conservation programs and will be integrated into the state's energy efficiency programs." [ 2001 c 214 s 14.]
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Applicability—1982 c 159: "This act does not apply to a major facility construction or renovation on which a life-cycle cost analysis is commenced under chapter 39.35 RCW before June 10, 1982." [ 1982 c 159 s 5.]
The legislature declares that it is the public policy of this state to ensure that energy conservation practices, greenhouse gas emissions reduction practices, and renewable energy systems are employed in the design of major publicly owned or leased facilities and that the use of all-electric energy systems and at least one renewable energy or combined heat and power system is considered. To this end the legislature authorizes and directs that public agencies analyze the cost of energy consumption of each major facility and each critical governmental facility to be planned and constructed or renovated after September 8, 1975.
[ 2022 c 178 s 2; 2015 3rd sp.s. c 19 s 3; 1982 c 159 s 2; 1975 1st ex.s. c 177 s 2. ]
NOTES:
Finding—Intent—2015 3rd sp.s. c 19: See note following RCW 39.35.010.
Applicability—1982 c 159: See notes following RCW 39.35.010.
For the purposes of this chapter the following words and phrases shall have the following meanings unless the context clearly requires otherwise:
(1) "Combined heat and power" means the sequential generation of electricity and useful thermal energy from a common fuel source where, under normal operating conditions, the facility has a useful thermal energy output of no less than thirty-three percent of the total energy output.
(2) "Critical governmental facility" means a building or district energy system owned by the state or a political subdivision of the state that is expected to:
(a) Be continuously occupied;
(b) Maintain operations for at least six thousand hours each year;
(c) Have a peak electricity demand exceeding five hundred kilowatts; and
(d) Serve a critical public health or public safety function during a natural disaster or other emergency situation that may result in a widespread power outage, including a:
(i) Command and control center;
(ii) Shelter;
(iii) Prison or jail;
(iv) Police or fire station;
(v) Communications or data center;
(vi) Water or wastewater treatment facility;
(vii) Hazardous waste storage facility;
(viii) Biological research facility;
(ix) Hospital; or
(x) Food preparation or food storage facility.
(3) "Department" means the state department of enterprise services.
(4) "Design standards" means the heating, air conditioning, ventilating, and renewable resource systems identified, analyzed, and recommended by the department as providing an efficient energy system or systems based on the economic life of the selected buildings.
(5) "Economic life" means the projected or anticipated useful life of a major facility as expressed by a term of years.
(6) "Energy management system" means a program, energy efficiency equipment, technology, device, or other measure including, but not limited to, a management, educational, or promotional program, smart appliance, meter reading system that provides energy information capability, computer software or hardware, communications equipment or hardware, thermostat or other control equipment, together with related administrative or operational programs, that allows identification and management of opportunities for improvement in the efficiency of energy use, including but not limited to a measure that allows:
(a) Energy consumers to obtain information about their energy usage and the cost of energy in connection with their usage;
(b) Interactive communication between energy consumers and their energy suppliers;
(c) Energy consumers to respond to energy price signals and to manage their purchase and use of energy; or
(d) For other kinds of dynamic, demand-side energy management.
(7) "Energy systems" means all utilities, including, but not limited to, heating, air conditioning, ventilating, lighting, and the supplying of domestic hot water.
(8)(a) "Energy-consumption analysis" means the evaluation of all energy systems and components by demand and type of energy including the internal energy load imposed on a major facility or a critical governmental facility by its occupants, equipment, and components, and the external energy load imposed on a major facility or a critical governmental facility by the climatic conditions of its location. An energy-consumption analysis of the operation of energy systems of a major facility or a critical governmental facility shall include, but not be limited to, the following elements:
(i) The comparison of three or more system alternatives, at least one of which shall include renewable energy systems, and one of which shall include all-electric energy systems;
(ii) The simulation of each system over the entire range of operation of such facility for a year's operating period;
(iii) The evaluation of the energy consumption of component equipment in each system considering the operation of such components at other than full or rated outputs;
(iv) The identification and analysis of critical loads for each energy system; and
(v) For a critical governmental facility, a combined heat and power system feasibility assessment, including but not limited to an evaluation of: (A) Whether equipping the facility with a combined heat and power system would result in expected energy savings in excess of the expected costs of purchasing, operating, and maintaining the system over a fifteen-year period; and (B) the cost of integrating the variability of combined heat and power resources.
(b) The energy-consumption analysis shall be prepared by a professional engineer or licensed architect who may use computers or such other methods as are capable of producing predictable results.
(9) "Greenhouse gas" has the same meaning as provided in RCW 70A.45.010.
(10) "Initial cost" means the moneys required for the capital construction or renovation of a major facility.
(11) "Life-cycle cost" means the initial cost and cost of operation of a major facility or a critical governmental facility over its economic life. This shall be calculated as the initial cost plus the operation, maintenance, and energy costs over its economic life, reflecting anticipated increases in these costs discounted to present value at the current rate for borrowing public funds, as determined by the office of financial management. The energy cost projections used shall be those provided by the department. The department shall update these projections at least every two years.
(12) "Life-cycle cost analysis" includes, but is not limited to, the following elements:
(a) The coordination and positioning of a major facility or a critical governmental facility on its physical site;
(b) The amount and type of fenestration employed in a major facility or a critical governmental facility;
(c) The amount of insulation incorporated into the design of a major facility or a critical governmental facility;
(d) The variable occupancy and operating conditions of a major facility or a critical governmental facility; and
(e) An energy-consumption analysis of a major facility or a critical governmental facility.
(13) "Major facility" means any publicly owned or leased building having twenty-five thousand square feet or more of usable floor space.
(14) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and all political subdivisions of the state.
(15) "Renewable energy systems" means methods of facility design and construction and types of equipment for the utilization of renewable energy sources including, but not limited to, hydroelectric power, active or passive solar space heating or cooling, domestic solar water heating, windmills, waste heat, biomass and/or refuse-derived fuels, photovoltaic devices, and geothermal energy.
(16) "Renovation" means additions, alterations, or repairs within any twelve-month period which exceed fifty percent of the value of a major facility or a critical governmental facility and which will affect any energy system.
(17) "Selected buildings" means educational, office, residential care, and correctional facilities that are designed to comply with the design standards analyzed and recommended by the department.
[ 2022 c 178 s 3; 2015 3rd sp.s. c 19 s 4. Prior: 2011 1st sp.s. c 43 s 247; 2001 c 214 s 16; 1996 c 186 s 402; 1994 c 242 s 1; 1991 c 201 s 14; 1982 c 159 s 3; 1975 1st ex.s. c 177 s 3. ]
NOTES:
Finding—Intent—2015 3rd sp.s. c 19: See note following RCW 39.35.010.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
Applicability—1982 c 159: See notes following RCW 39.35.010.
Whenever a public agency determines that any major facility or a critical governmental facility is to be constructed or renovated, such agency shall cause to be included in the design phase of such construction or renovation a provision that requires a life-cycle cost analysis conforming with the guidelines developed in RCW 39.35.050 to be prepared for such facility. Such analysis shall be approved by the agency prior to the commencement of actual construction or renovation. A public agency may accept the facility design if the agency is satisfied that the life-cycle cost analysis provides for an efficient energy system or systems based on the economic life of the facility.
Nothing in this section prohibits the construction or renovation of major facilities or critical governmental facilities that utilize renewable energy or combined heat and power systems.
[ 2015 3rd sp.s. c 19 s 5; 1994 c 242 s 2; 1982 c 159 s 4; 1975 1st ex.s. c 177 s 4. ]
NOTES:
Finding—Intent—2015 3rd sp.s. c 19: See note following RCW 39.35.010.
Applicability—1982 c 159: See notes following RCW 39.35.010.
The department, in consultation with affected public agencies, shall develop and issue guidelines for administering this chapter. The purpose of the guidelines is to define a procedure and method for performance of life-cycle cost analysis to promote the selection of low-life-cycle cost alternatives. At a minimum, the guidelines must contain provisions that:
(1) Address energy considerations during the planning phase of the project;
(2) Identify energy components and system alternatives including energy management systems, all-electric energy systems, renewable energy systems, and combined heat and power applications prior to commencing the energy consumption analysis;
(3) Identify simplified methods to assure the lowest life-cycle cost alternatives for selected buildings with between twenty-five thousand and one hundred thousand square feet of usable floor area;
(4) Establish times during the design process for preparation, review, and approval or disapproval of the life-cycle cost analysis;
(5) Specify the assumptions to be used for escalation and inflation rates, equipment service lives, economic building lives, and maintenance costs;
(6) Determine life-cycle cost analysis format and submittal requirements to meet the provisions of chapter 201, Laws of 1991;
(7) Provide for review and approval of life-cycle cost analysis.
[ 2022 c 178 s 4; 2001 c 214 s 17; 1996 c 186 s 403; 1994 c 242 s 3; 1991 c 201 s 15. ]
NOTES:
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
The department may impose fees upon affected public agencies for the review of life-cycle cost analyses. The fees shall be deposited in the enterprise services account. The purpose of the fees is to recover the costs by the department for review of the analyses. The department shall set fees at a level necessary to recover all of its costs related to increasing the energy efficiency of state-supported new construction. The fees shall not exceed one-tenth of one percent of the total cost of any project or exceed two thousand dollars for any project unless mutually agreed to. The department shall provide detailed calculation ensuring that the energy savings resulting from its review of life-cycle cost analysis justify the costs of performing that review.
[ 2015 c 225 s 45; 2001 c 292 s 1; 1996 c 186 s 404; 1991 c 201 s 16. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
The legislature finds that:
(1) Conserving energy and water in publicly owned buildings will have a beneficial effect on our overall supply of energy and water;
(2) Conserving energy and water in publicly owned buildings can result in cost savings for taxpayers; and
(3) Performance-based energy contracts are a means by which municipalities can achieve energy and water conservation without capital outlay.
Therefore, the legislature declares that it is the policy that a municipality may, after a competitive selection process, negotiate a performance-based energy contract with a firm that offers the best proposal.
[ 2007 c 39 s 1; 1985 c 169 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1)(a) "Conservation" includes reduced:
(i) Energy consumption;
(ii) Energy demand;
(iii) Energy cost; or
(iv) Greenhouse gas emissions.
(b)(i) "Conservation" includes reductions in the use or cost of water, wastewater, or solid waste.
(ii) "Conservation" does not include thermal or electric energy production from cogeneration.
(2) "Energy equipment and services" means:
(a) Energy management systems and any equipment, materials, supplies, or conservation projects that are expected, upon installation, to reduce the energy use, reduce the energy demand, reduce the energy cost, or reduce the greenhouse gas emissions, of a facility; and
(b) The services associated with the equipment, materials, supplies, or conservation projects including, but not limited to, design, engineering, financing, installation, project management, guarantees, operations, and maintenance. Reduction in energy use or energy cost may also include reductions in the use or cost of water, wastewater, or solid waste.
(3) "Energy management system" has the definition provided in RCW 39.35.030.
(4) "Facility" includes a building, structure, group of buildings or structures at a single site, site improvement, or other facility owned by a municipality.
(5) "Municipality" has the definition provided in RCW 39.04.010.
(6) "Performance-based contract" means one or more contracts for water conservation services, solid waste reduction services, or energy equipment and services between a municipality and any other persons or entities, if the payment obligation for each year under the contract, including the year of installation, is either: (a) Set as a percentage of the annual energy cost savings, water cost savings, solid waste cost savings, or benefits achieved through conservation projects attributable under the contract; or (b) guaranteed by the other persons or entities to be less than the annual energy cost savings, water cost savings, solid waste cost savings, or other benefits attributable under the contract. Such guarantee shall be, at the option of the municipality, a bond or insurance policy, or some other guarantee determined sufficient by the municipality to provide a level of assurance similar to the level provided by a bond or insurance policy. Payment obligations may include regular service payments made by a municipality to any persons or entities that own energy equipment and services under a performance-based contract.
[ 2023 c 309 s 2; 2022 c 128 s 2; 2007 c 39 s 2; 2001 c 214 s 18; 1985 c 169 s 2. ]
NOTES:
Expiration date—2023 c 309 ss 2-5: "Sections 2 through 5 of this act expire June 30, 2033. Contracts entered into under the authority granted by this act may remain in effect following expiration of this act." [ 2023 c 309 s 6.]
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
PDFRCW 39.35A.020
Definitions. (Effective June 30, 2033.)
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1)(a) "Conservation" includes reduced:
(i) Energy consumption;
(ii) Energy demand;
(iii) Energy cost; or
(iv) Greenhouse gas emissions.
(b)(i) "Conservation" includes reductions in the use or cost of water, wastewater, or solid waste.
(ii) "Conservation" does not include thermal or electric energy production from cogeneration.
(2) "Energy equipment and services" means:
(a) Energy management systems and any equipment, materials, supplies, or conservation projects that are expected, upon installation, to reduce the energy use, reduce the energy demand, reduce the energy cost, or reduce the greenhouse gas emissions, of a facility; and
(b) The services associated with the equipment, materials, supplies, or conservation projects including, but not limited to, design, engineering, financing, installation, project management, guarantees, operations, and maintenance. Reduction in energy use or energy cost may also include reductions in the use or cost of water, wastewater, or solid waste.
(3) "Energy management system" has the definition provided in RCW 39.35.030.
(4) "Facility" includes a building, structure, group of buildings or structures at a single site, site improvement, or other facility owned by a municipality.
(5) "Municipality" has the definition provided in RCW 39.04.010.
(6) "Performance-based contract" means one or more contracts for water conservation services, solid waste reduction services, or energy equipment and services between a municipality and any other persons or entities, if the payment obligation for each year under the contract, including the year of installation, is either: (a) Set as a percentage of the annual energy cost savings, water cost savings, solid waste cost savings, or benefits achieved through conservation projects attributable under the contract; or (b) guaranteed by the other persons or entities to be less than the annual energy cost savings, water cost savings, solid waste cost savings, or other benefits attributable under the contract. Such guarantee shall be, at the option of the municipality, a bond or insurance policy, or some other guarantee determined sufficient by the municipality to provide a level of assurance similar to the level provided by a bond or insurance policy.
[ 2022 c 128 s 2; 2007 c 39 s 2; 2001 c 214 s 18; 1985 c 169 s 2.]
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
(1) Each municipality shall publish in advance its requirements to procure water conservation services, solid waste reduction services, or energy equipment and services under a performance-based contract. The announcement shall state concisely the scope and nature of the equipment and services for which a performance-based contract is required, and shall encourage firms to submit proposals to meet these requirements.
(2) The municipality may negotiate a fair and reasonable performance-based contract with the firm that is identified, based on the criteria that is established by the municipality, to be the firm that submits the best proposal.
(3) If the municipality is unable to negotiate a satisfactory contract with the firm that submits the best proposal, negotiations with that firm shall be formally terminated and the municipality may select another firm in accordance with this section and continue negotiation until a performance-based contract is reached or the selection process is terminated.
[ 2007 c 39 s 3; 1985 c 169 s 3. ]
If a municipality chooses, by resolution or other appropriate mechanism, to negotiate a performance-based contract under this chapter, no otherwise applicable statutory procurement requirement applies.
[ 1985 c 169 s 4. ]
The state department of enterprise services shall maintain a registry of energy service contractors and provide assistance to municipalities in identifying available performance-based contracting services.
[ 2015 c 225 s 46; 2001 c 214 s 19. ]
NOTES:
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
For purposes of this chapter:
(1) Conservation may be achieved through the deployment of distributed energy resources; and
(2) Distributed energy resources include, but are not limited to, energy efficiency projects that are not cogeneration projects, energy storage, demand response, electric vehicle charging infrastructure, and grid-interactive efficient buildings.
[ 2022 c 128 s 5. ]
The legislature finds that:
(1) Operating costs of a facility over its lifetime may greatly exceed the initial cost of the facility;
(2) In the planning, design, and funding for new construction or major renovation of state-owned facilities it is desirable to consider not only the initial costs relating to design and construction or acquisition, but the anticipated operating costs relating to the building throughout its life;
(3) The consideration of both initial and operating costs is known as life-cycle cost or life-cycle cost analysis;
(4) Operating costs of a facility for purposes of this chapter include, but are not limited to, energy costs, maintenance and repair costs, and costs of the work or activity performed within the facility, including wages and salaries;
(5) Current law, chapter 39.35 RCW, speaks to life-cycle cost analysis only in relation to energy conservation; and
(6) Life-cycle cost may not be suitable or cost-effective for all capital projects or all components of a facility, and is not an exclusive criteria for decision-making, but is nonetheless a useful framework for evaluating design and capital investment alternatives.
[ 1986 c 127 s 1. ]
The legislature declares that:
(1) It is the policy of the state to consider life-cycle costs in the selection of facility design alternatives, to the full extent practical, reasonable, and cost-effective;
(2) Life-cycle cost should be considered by the state government, school districts, and state universities and community colleges in the planning, design, and funding for new construction or major renovations; and
(3) Use of life-cycle cost should be encouraged for cities, counties, and other governmental districts including special purpose districts.
[ 1986 c 127 s 2. ]
It is the intent of the legislature to:
(1) Expand the definition and use of "life-cycle cost" and "life-cycle cost analysis" to include consideration of all operating costs, as opposed to only energy-related costs as addressed by chapter 39.35 RCW;
(2) Encourage the recognition, development, and use of life-cycle cost concepts and procedures by both the executive and legislative branches in the state's design development and capital budgeting processes;
(3) Ensure the dissemination and use of a common and realistic discount rate by all state agencies in the calculation of the present value of future costs;
(4) Allow and encourage the executive branch to develop specific techniques and procedures for the state government and its agencies, and state universities and community colleges to implement this policy; and
(5) Encourage cities, counties, and other governmental districts including special purpose districts to adopt programs and procedures to implement this policy.
[ 1986 c 127 s 3. ]
The principal executives of all state agencies are responsible for implementing the policy set forth in this chapter. The office of financial management in conjunction with the department of enterprise services may establish guidelines for compliance by the state government and its agencies, and state universities and community colleges. The office of financial management shall include within its biennial capital budget instructions:
(1) A discount rate for the use of all agencies in calculating the present value of future costs, and several examples of resultant trade-offs between annual operating costs eliminated and additional capital costs thereby justified; and
(2) Types of projects and building components that are particularly appropriate for life-cycle cost analysis.
[ 2015 c 225 s 47; 1986 c 127 s 4. ]
The office of financial management shall:
(1) Design and implement a cost-effective life-cycle cost model by October 1, 2008, based on the work completed by the joint legislative audit and review committee in January 2007 and in consultation with legislative fiscal committees;
(2) Deploy the life-cycle cost model for use by state agencies once completed and tested;
(3) Update the life-cycle cost model periodically in consultation with legislative fiscal committees;
(4) Establish clear policies, standards, and procedures regarding the use of life-cycle cost analysis by state agencies including:
(a) When state agencies must use the life-cycle cost analysis, including the types of proposed capital projects and leased facilities to which it must be applied;
(b) Procedures state agencies must use to document the results of required life-cycle cost analyses;
(c) Standards regarding the discount rate and other key model assumptions; and
(d) A process to document and justify any deviation from the standard assumptions.
[ 2007 c 506 s 3; (2011 1st sp.s. c 48 s 7005 expired June 30, 2013). ]
NOTES:
Expiration date—2011 1st sp.s. c 48 s 7005: "Section 7005 of this act expires June 30, 2013." [ 2011 1st sp.s. c 48 s 7038.]
Effective dates—2011 1st sp.s. c 48: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [June 15, 2011], except for sections 7022 through 7025 and 7027 of this act which take effect July 1, 2011." [ 2011 1st sp.s. c 48 s 7039.]
Findings—Intent—2007 c 506: See note following RCW 43.82.035.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source. If these forms are electricity and thermal energy, then the operating and efficiency standards established by 18 C.F.R. Sec. 292.205 and the definitions established by 18 C.F.R. Sec. 292.202 (c) through (m) apply.
(2)(a) "Conservation" includes reduced:
(i) Energy consumption;
(ii) Energy demand;
(iii) Energy cost; or
(iv) Greenhouse gas emissions.
(b) "Conservation" does not include thermal or electric energy production from cogeneration.
(c) "Conservation" also includes reductions in the use or cost of water, wastewater, or solid waste.
(3)(a) "Cost-effective" means that the present value to a state agency or school district of the benefits reasonably expected to be achieved or produced by a facility, conservation activity, measure, or piece of equipment over its useful life, including any compensation received from a utility or the Bonneville power administration, is greater than the net present value of the costs of implementing, maintaining, and operating such facility, activity, measure, or piece of equipment over its useful life, when discounted at the cost of public borrowing.
(b) The expected value of energy equipment and services at the time of contract execution that are provided through a performance-based contract may exceed the fair market value.
(4) "Department" means the state department of enterprise services.
(5) "Energy" means energy as defined in RCW 43.21F.025(5).
(6) "Energy as a service" means a performance-based contract in which a state agency, public school district, public university, or municipality makes service payments to a third party or entity for energy services, which may include the provision of energy equipment that is owned and operated by a third party or entity.
(7) "Energy audit" has the definition provided in RCW 43.19.670, and may include a determination of the water or solid waste consumption characteristics of a facility.
(8) "Energy efficiency project" means a conservation or cogeneration project.
(9) "Energy efficiency services" means assistance furnished by the department to state agencies and school districts in identifying, evaluating, and implementing energy efficiency projects.
(10) "Local utility" means the utility or utilities in whose service territory a public facility is located.
(11) "Performance-based contracting" means contracts for which payment or payment obligations are conditional on achieving contractually specified energy savings, which may include regular service payments made by a state agency, public school district, public university, or municipality to any persons or entities that own energy equipment and services under a performance-based contract.
(12) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and all political subdivisions of the state.
(13) "Public facility" means a building, structure, group of buildings or structures at a single site, site improvement, or other facility owned by a state agency or school district.
(14) "State agency" means every state office or department, whether elective or appointive, state institutions of higher education, and all boards, commissions, or divisions of state government, however designated.
(15) "State facility" means a building or structure, or a group of buildings or structures at a single site, owned by a state agency.
(16) "Utility" means privately or publicly owned electric and gas utilities, electric cooperatives and mutuals, whether located within or without Washington state.
[ 2023 c 309 s 3; 2022 c 128 s 1. Prior: 2011 1st sp.s. c 43 s 248; 2007 c 39 s 4; 2001 c 214 s 20; 1996 c 186 s 405; 1991 c 201 s 2. ]
NOTES:
Expiration date—2023 c 309 ss 2-5: See note following RCW 39.35A.020.
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
PDFRCW 39.35C.010
Definitions. (Effective June 30, 2033.)
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source. If these forms are electricity and thermal energy, then the operating and efficiency standards established by 18 C.F.R. Sec. 292.205 and the definitions established by 18 C.F.R. Sec. 292.202 (c) through (m) apply.
(2)(a) "Conservation" includes reduced:
(i) Energy consumption;
(ii) Energy demand;
(iii) Energy cost; or
(iv) Greenhouse gas emissions.
(b) "Conservation" does not include thermal or electric energy production from cogeneration.
(c) "Conservation" also includes reductions in the use or cost of water, wastewater, or solid waste.
(3) "Cost-effective" means that the present value to a state agency or school district of the benefits reasonably expected to be achieved or produced by a facility, conservation activity, measure, or piece of equipment over its useful life, including any compensation received from a utility or the Bonneville power administration, is greater than the net present value of the costs of implementing, maintaining, and operating such facility, activity, measure, or piece of equipment over its useful life, when discounted at the cost of public borrowing.
(4) "Department" means the state department of enterprise services.
(5) "Energy" means energy as defined in RCW 43.21F.025(5).
(6) "Energy audit" has the definition provided in RCW 43.19.670, and may include a determination of the water or solid waste consumption characteristics of a facility.
(7) "Energy efficiency project" means a conservation or cogeneration project.
(8) "Energy efficiency services" means assistance furnished by the department to state agencies and school districts in identifying, evaluating, and implementing energy efficiency projects.
(9) "Local utility" means the utility or utilities in whose service territory a public facility is located.
(10) "Performance-based contracting" means contracts for which payment is conditional on achieving contractually specified energy savings.
(11) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and all political subdivisions of the state.
(12) "Public facility" means a building, structure, group of buildings or structures at a single site, site improvement, or other facility owned by a state agency or school district.
(13) "State agency" means every state office or department, whether elective or appointive, state institutions of higher education, and all boards, commissions, or divisions of state government, however designated.
(14) "State facility" means a building or structure, or a group of buildings or structures at a single site, owned by a state agency.
(15) "Utility" means privately or publicly owned electric and gas utilities, electric cooperatives and mutuals, whether located within or without Washington state.
[ 2022 c 128 s 1. Prior: 2011 1st sp.s. c 43 s 248; 2007 c 39 s 4; 2001 c 214 s 20; 1996 c 186 s 405; 1991 c 201 s 2.]
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
(1) Each state agency and school district shall implement cost-effective conservation improvements and maintain efficient operation of its facilities in order to minimize energy consumption and related environmental impacts and reduce operating costs. Each state agency shall undertake an energy audit and implement cost-effective conservation measures pursuant to the time schedules and requirements set forth in chapter 43.19 RCW, except that any state agency that, after December 31, 1997, has completed energy audits and implemented cost-effective conservation measures, or has contracted with an energy service company for energy audits and conservation measures, is deemed to have met the requirements of this subsection for those facilities included in the audits and conservation measures. Each school district shall undertake an energy audit and implement cost-effective conservation measures pursuant to the time schedules and requirements set forth in RCW 39.35C.025. Performance-based contracting shall be the preferred method for completing energy audits and implementing cost-effective conservation measures.
(2) The department shall assist state agencies and school districts in identifying, evaluating, and implementing cost-effective conservation projects at their facilities. The department, in consultation with affected public agencies, shall develop and issue guidelines for cost-effectiveness determination. The purpose of the guidelines is to define a procedure and method for performance of cost-effectiveness. The department's assistance to state agencies and school districts shall include the following:
(a) Notifying state agencies and school districts of their responsibilities under this chapter;
(b) Apprising state agencies and school districts of opportunities to develop and finance such projects;
(c) Providing technical and analytical support, including procurement of performance-based contracting services;
(d) Reviewing verification procedures for energy savings; and
(e) Assisting in the structuring and arranging of financing for cost-effective conservation projects.
(3) Conservation projects implemented under this chapter shall have appropriate levels of monitoring to verify the performance and measure the energy savings over the life of the project. The department shall solicit involvement in program planning and implementation from utilities and other energy conservation suppliers, especially those that have demonstrated experience in performance-based energy programs.
(4) The department shall comply with the requirements of chapter 39.80 RCW when contracting for architectural or engineering services.
(5) The department shall recover any costs and expenses it incurs in providing assistance pursuant to this section, including reimbursement from third parties participating in conservation projects. The department shall enter into a written agreement with the public agency for the recovery of costs.
[ 2022 c 128 s 3; 2001 c 214 s 21; 1996 c 186 s 406; 1991 c 201 s 3. ]
NOTES:
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
(1) Except as provided in subsections (2) and (3) of this section, each school district shall conduct an energy audit of its facilities. This energy audit may be conducted by contract or by other arrangement, including appropriate district staff. Performance-based contracting shall be the preferred method for implementing and completing energy audits.
(a) For each district facility, the energy consumption surveys shall be completed no later than December 31, 2001, and the walk-through surveys shall be completed no later than October 1, 2002. Upon completion of each walk-through survey, the district shall implement energy conservation maintenance and operation procedures that may be identified for any district facility. These procedures shall be implemented as soon as possible, but not later than twelve months after the walk-through survey.
(b) Except as provided in subsection (3) of this section, if a walk-through survey has identified potentially cost-effective energy conservation measures, the district shall undertake an investment grade audit of the facility. Investment grade audits shall be completed no later than June 30, 2003, and installation of cost-effective conservation measures recommended in the investment grade audit shall be completed no later than December 31, 2004.
(2) A school district that, after December 31, 1997, has completed energy audits and implemented cost-effective conservation measures, or has contracted with an energy service company for energy audits and conservation measures, is deemed to have met the requirements of this section for those facilities included in the audits and conservation measures.
(3) A school district that after reasonable efforts and consultation with the department is unable to obtain a contract with an energy service company to conduct an investment grade audit or install cost-effective conservation measures recommended in an investment grade audit, is exempt from the requirements of subsection (1)(b) of this section.
[ 2001 c 214 s 22. ]
NOTES:
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.
(1) The department shall consult with the local utilities to develop priorities for energy conservation projects pursuant to this chapter, cooperate where possible with existing utility programs, and consult with the local utilities prior to implementing projects in their service territory.
(2) A local utility shall be offered the initial opportunity to participate in the development of conservation projects in the following manner:
(a) Before initiating projects in a local utility service territory, the department shall notify the local utility in writing, on an annual basis, of public facilities in the local utility's service territory at which the department anticipates cost-effective conservation projects will be developed.
(b) Within sixty days of receipt of this notification, the local utility may express interest in these projects by submitting to the department a written description of the role the local utility is willing to perform in developing and acquiring the conservation at these facilities. This role may include any local utility conservation programs which would be available to the public facility, any competitive bidding or solicitation process which the local utility will be undertaking in accordance with the rules of the utilities and transportation commission or the public utility district, municipal utility, cooperative, or mutual governing body for which the public facility would be eligible, or any other role the local utility may be willing to perform.
(c) Upon receipt of the written description from the local utility, the department shall, through discussions with the local utility, and with involvement from state agencies and school districts responsible for the public facilities, develop a plan for coordinated delivery of conservation services and financing or make a determination of whether to participate in the local utility's competitive bidding or solicitation process. The plan shall identify the local utility in roles that the local utility is willing to perform and that are consistent with the provisions of RCW 39.35C.040(2) (d) and (e).
[ 1996 c 186 s 407; 1991 c 201 s 4. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
(1) It is the intent of this chapter that the state, state agencies, and school districts are compensated fairly for the energy savings provided to utilities and be allowed to participate on an equal basis in any utility conservation program, bidding, or solicitation process. State agencies and school districts shall not receive preferential treatment. For the purposes of this section, any type of compensation from a utility or the Bonneville power administration intended to achieve reductions or efficiencies in energy use which are cost-effective to the utility or the Bonneville power administration shall be regarded as a sale of energy savings. Such compensation may include credits to the energy bill, low or no interest loans, rebates, or payment per unit of energy saved. The department shall, in coordination with utilities, the Bonneville power administration, state agencies, and school districts, facilitate the sale of energy savings at public facilities including participation in any competitive bidding or solicitation which has been agreed to by the state agency or school district. Energy savings may only be sold to local utilities or, under conditions specified in this section, to the Bonneville power administration. The department shall not attempt to sell energy savings occurring in one utility service territory to a different utility. Nothing in this chapter mandates that utilities purchase the energy savings.
(2) To ensure an equitable allocation of benefits to the state, state agencies, and school districts, the following conditions shall apply to transactions between utilities or the Bonneville power administration and state agencies or school districts for sales of energy savings:
(a) A transaction shall be approved by both the state agency or school district and the department.
(b) The state agency or school district and the department shall work together throughout the planning and negotiation process for such transactions unless the department determines that its participation will not further the purposes of this section.
(c) Before making a decision under (d) of this subsection, the department shall review the proposed transaction for its technical and economic feasibility, the adequacy and reasonableness of procedures proposed for verification of project or program performance, the degree of certainty of benefits to the state, state agency, or school district, the degree of risk assumed by the state or school district, the benefits offered to the state, state agency, or school district and such other factors as the department determines to be prudent.
(d) The department shall approve a transaction unless it finds, pursuant to the review in (c) of this subsection, that the transaction would not result in an equitable allocation of costs and benefits to the state, state agency, or school district, in which case the transaction shall be disapproved.
(e) In addition to the requirements of (c) and (d) of this subsection, in areas in which the Bonneville power administration has a program for the purchase of energy savings at public facilities, the department shall approve the transaction unless the local utility cannot offer a benefit substantially equivalent to that offered by the Bonneville power administration, in which case the transaction shall be disapproved. In determining whether the local utility can offer a substantially equivalent benefit, the department shall consider the net present value of the payment for energy savings; any goods, services, or financial assistance provided by the local utility; and any risks borne by the local utility. Any direct negative financial impact on a nongrowing, local utility shall be considered.
(3) Any party to a potential transaction may, within thirty days of any decision to disapprove a transaction made pursuant to subsection (2)(c), (d), or (e) of this section, request an independent reviewer who is mutually agreeable to all parties to the transaction to review the decision. The parties shall within thirty days of selection submit to the independent reviewer documentation supporting their positions. The independent reviewer shall render advice regarding the validity of the disapproval within an additional thirty days.
[ 1996 c 186 s 408; 1991 c 201 s 5. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
In addition to any other authorities conferred by law:
(1) The department, with the consent of the state agency or school district responsible for a facility, a state or regional university acting independently, and any other state agency or school district acting through the department or acting independently, may:
(a) Develop and finance conservation at public facilities in accordance with express provisions of this chapter;
(b) Contract for energy services, including through a performance-based contract; and
(c) Contract to sell energy savings from a conservation project at public facilities to local utilities or the Bonneville power administration.
(2)(a) This subsection authorizes state agencies, public school districts, public universities, and municipalities to enter into energy as a service contracts. Pursuant to this subsection, a state agency, public school district, public university, or municipality may, whether acting independently or through the department:
(i) Develop conservation projects and services that require the ownership of energy equipment to be held by other persons or entities;
(ii) Contract for energy services, including through a performance-based contract;
(iii) Contract to sell energy savings from a conservation project at public facilities to local utilities or the Bonneville power administration; and
(iv) Contract with a person or entity for energy equipment or services.
(b) Any contract for energy as a service entered into pursuant to the authority of this subsection is subject to the following conditions:
(i) The contract may include terms that transfer ownership of energy equipment from the state agency, public school district, public university, or municipality to the person or entity;
(ii) The person or entity is responsible for cost-savings and performance guarantees through the terms of the contract;
(iii) The value of energy equipment or services at the time of contract execution may exceed the fair market value;
(iv) At the end of the term of the contract, equipment ownership may be transferred back to the state agency, public school district, public university, or municipality;
(v) The state agency, public school district, public university, or municipality will ensure that a contract does not directly result in loss of any position of employment by state employees in the classified service under RCW 41.06.020, employees included in the Washington management service under RCW 41.06.022, or school district employees under RCW 28A.150.203;
(vi) Training must be offered in the preventative maintenance and other related activities of energy equipment and services as detailed in the contract for energy services to existing classified employees who currently provide maintenance of energy equipment for the state agency, public school district, public university, or municipality; and
(vii) Prior to entering into a contract, the state agency, public school district, public university, or municipality must coordinate with the department to analyze the cost-effectiveness of the proposed performance-based contract compared to alternative available financing and service mechanisms, including certificates of participation. The state agency, public school district, public university, or municipality may enter into a contract only if the cost-effectiveness is greater than other available alternatives.
(3) A state or regional university acting independently, and any other state agency acting through the department or as otherwise authorized by law, may undertake procurements for third-party development of conservation at its facilities.
(4) A school district may also:
(a) Develop and finance conservation at school district facilities; and
(b) Contract to sell energy savings from energy conservation projects at school district facilities to local utilities or the Bonneville power administration directly or through third parties.
(5) Direct financial grants and incentives received on behalf of the state agency, public school district, public university, or municipality will be passed on to the state agency, public school district, public university, or municipality.
(6) In exercising the authority granted by subsections (1), (3), and (4) of this section, a school district or state agency must comply with the provisions of RCW 39.35C.040.
[ 2023 c 309 s 4; 2015 c 79 s 10; 1996 c 186 s 409; 1991 c 201 s 6. ]
NOTES:
Expiration date—2023 c 309 ss 2-5: See note following RCW 39.35A.020.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
PDFRCW 39.35C.050
Authority of state agencies and school districts to implement conservation. (Effective June 30, 2033.)
In addition to any other authorities conferred by law:
(1) The department, with the consent of the state agency or school district responsible for a facility, a state or regional university acting independently, and any other state agency acting through the department or as otherwise authorized by law, may:
(a) Develop and finance conservation at public facilities in accordance with express provisions of this chapter;
(b) Contract for energy services, including performance-based contracts;
(c) Contract to sell energy savings from a conservation project at public facilities to local utilities or the Bonneville power administration.
(2) A state or regional university acting independently, and any other state agency acting through the department or as otherwise authorized by law, may undertake procurements for third-party development of conservation at its facilities.
(3) A school district may:
(a) Develop and finance conservation at school district facilities;
(b) Contract for energy services, including performance-based contracts at school district facilities; and
(c) Contract to sell energy savings from energy conservation projects at school district facilities to local utilities or the Bonneville power administration directly or to local utilities or the Bonneville power administration through third parties.
(4) In exercising the authority granted by subsections (1), (2), and (3) of this section, a school district or state agency must comply with the provisions of RCW 39.35C.040.
[ 2015 c 79 s 10; 1996 c 186 s 409; 1991 c 201 s 6.]
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
State agencies, public school districts, public universities, and municipalities may use financing contracts under chapter 39.94 RCW, as well as performance-based contracts, to provide all or part of the funding for conservation projects. The department shall determine the eligibility of such projects for financing contracts. The repayments of the financing contracts or performance-based contracts shall be sufficient to pay, when due, the principal and interest on the contracts or the services payments over the agreed upon term. Performance-based contracts entered into by state agencies, public school districts, public universities, and municipalities under chapter 309, Laws of 2023 that include the purchase of real or personal property are subject to the requirements of chapter 39.94 RCW. Pursuant to chapter 39.94 RCW, no later than December 31, 2023, the department shall complete development of approved model contracts authorized by chapter 309, Laws of 2023.
[ 2023 c 309 s 5; 1996 c 186 s 410; 1991 c 201 s 7. ]
NOTES:
Expiration date—2023 c 309 ss 2-5: See note following RCW 39.35A.020.
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
PDFRCW 39.35C.060
Authority to finance conservation in school districts and state agencies. (Effective June 30, 2033.)
State agencies may use financing contracts under chapter 39.94 RCW to provide all or part of the funding for conservation projects. The department shall determine the eligibility of such projects for financing contracts. The repayments of the financing contracts shall be sufficient to pay, when due, the principal and interest on the contracts.
[ 1996 c 186 s 410; 1991 c 201 s 7.]
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
(1) Consistent with the region's need to develop cost-effective, high-efficiency electric energy resources, the state shall investigate and, if appropriate, pursue development of cost-effective opportunities for cogeneration in existing or new state facilities.
(2) To assist state agencies in identifying, evaluating, and developing potential cogeneration projects at their facilities, the department shall notify state agencies of their responsibilities under this chapter; apprise them of opportunities to develop and finance such projects; and provide technical and analytical support. The department shall recover costs for such assistance through written agreements, including reimbursement from third parties participating in such projects, for any costs and expenses incurred in providing such assistance.
(3)(a) The department shall identify priorities for cogeneration projects at state facilities, and, where such projects are initially deemed desirable by the department and the appropriate state agency, the department shall notify the local utility serving the state facility of its intent to conduct a feasibility study at such facility. The department shall consult with the local utility and provide the local utility an opportunity to participate in the development of the feasibility study for the state facility it serves.
(b) If the local utility has an interest in participating in the feasibility study, it shall notify the department and the state agency whose facility or facilities it serves within sixty days of receipt of notification pursuant to (a) of this subsection as to the nature and scope of its desired participation. The department, state agency, and local utility shall negotiate the responsibilities, if any, of each in conducting the feasibility study, and these responsibilities shall be specified in a written agreement.
(c) If a local utility identifies a potential cogeneration project at a state facility for which it intends to conduct a feasibility study, it shall notify the department and the appropriate state agency. The department, state agency, and local utility shall negotiate the responsibilities, if any, of each in conducting the feasibility study, and these responsibilities shall be specified in a written agreement. Nothing in this section shall preclude a local utility from conducting an independent assessment of a potential cogeneration project at a state facility.
(d) Agreements written pursuant to (a) and (b) of this subsection shall include a provision for the recovery of costs incurred by a local utility in performing a feasibility study in the event such utility does not participate in the development of the cogeneration project. If the local utility does participate in the cogeneration project through energy purchase, project development or ownership, recovery of the utility's costs may be deferred or provided for through negotiation on agreements for energy purchase, project development or ownership.
(e) If the local utility declines participation in the feasibility study, the department and the state agency may receive and solicit proposals to conduct the feasibility study from other parties. Participation of these other parties shall also be secured and defined by a written agreement which may include the provision for reimbursement of costs incurred in the formulation of the feasibility study.
(4) The feasibility study shall include consideration of regional and local utility needs for power, the consistency of the proposed cogeneration project with the state energy strategy, the cost and certainty of fuel supplies, the value of electricity produced, the capability of the state agency to own and/or operate such facilities, the capability of utilities or third parties to own and/or operate such facilities, requirements for and costs of standby sources of power, costs associated with interconnection with the local electric utility's transmission system, the capability of the local electric utility to wheel electricity generated by the facility, costs associated with obtaining wheeling services, potential financial risks and losses to the state and/or state agency, measures to mitigate the financial risk to the state and/or state agency, and benefits to the state and to the state agency from a range of design configurations, ownership, and operation options.
(5) Based upon the findings of the feasibility study, the department and the state agency shall determine whether a cogeneration project will be cost-effective and whether development of a cogeneration project should be pursued. This determination shall be made in consultation with the local utility or, if the local utility had not participated in the development of the feasibility study, with any third party that may have participated in the development of the feasibility study.
(a) Recognizing the local utility's expertise, knowledge, and ownership and operation of the local utility systems, the department and the state agency shall have the authority to negotiate directly with the local utility for the purpose of entering into a sole source contract to develop, own, and/or operate the cogeneration facility. The contract may also include provisions for the purchase of electricity or thermal energy from the cogeneration facility, the acquisition of a fuel source, and any financial considerations which may accrue to the state from ownership and/or operation of the cogeneration facility by the local utility.
(b) The department may enter into contracts through competitive negotiation under this subsection for the development, ownership, and/or operation of a cogeneration facility. In determining an acceptable bid, the department and the state agency may consider such factors as technical knowledge, experience, management, staff, or schedule, as may be necessary to achieve economical construction or operation of the project. The selection of a developer or operator of a cogeneration facility shall be made in accordance with procedures for competitive bidding under chapter 43.19 RCW.
(c) The department shall comply with the requirements of chapter 39.80 RCW when contracting for architectural or engineering services.
(6)(a) The state may own and/or operate a cogeneration project at a state facility. However, unless the cogeneration project is determined to be cost-effective, based on the findings of the feasibility study, the department and state agency shall not pursue development of the project as a state-owned facility. If the project is found to be cost-effective, and the department and the state agency agree development of the cogeneration project should be pursued as a state-owned and/or operated facility, the department shall assist the state agency in the preparation of a finance and development plan for the cogeneration project. Any such plan shall fully account for and specify all costs to the state for developing and/or operating the cogeneration facility.
(b) It is the general intent of this chapter that cogeneration projects developed and owned by the state will be sized to the projected thermal energy load of the state facility over the useful life of the project. The principal purpose and use of such projects is to supply thermal energy to a state facility and not primarily to develop generating capacity for the sale of electricity. For state-owned projects with electricity production in excess of projected thermal requirements, the department shall seek and obtain legislative appropriation and approval for development. Nothing in chapter 201, Laws of 1991 shall be construed to authorize any state agency to sell electricity or thermal energy on a retail basis.
(7) When a cogeneration facility will be developed, owned, and/or operated by a state agency or third party other than the local serving utility, the department and the state agency shall negotiate a written agreement with the local utility. Elements of such an agreement shall include provisions to ensure system safety, provisions to ensure reliability of any interconnected operations equipment necessary for parallel operation and switching equipment capable of isolating the generation facility, the provision of and reimbursement for standby services, if required, and the provision of and reimbursement for wheeling electricity, if the provision of such has been agreed to by the local utility.
(8) The state may develop and own a thermal energy distribution system associated with a cogeneration project for the principal purpose of distributing thermal energy at the state facility. If thermal energy is to be sold outside the state facility, the state may only sell the thermal energy to a utility.
[ 1996 c 186 s 411; 1991 c 201 s 8. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
It is the intention of chapter 201, Laws of 1991 that the state and its agencies are compensated fairly for the energy provided to utilities from cogeneration at state facilities. Such compensation may include revenues from sales of electricity or thermal energy to utilities, lease of state properties, and value of thermal energy provided to the facility. It is also the intent of chapter 201, Laws of 1991 that the state and its agencies be accorded the opportunity to compete on a fair and reasonable basis to fulfill a utility's new resource acquisition needs when selling the energy produced from cogeneration projects at state facilities through energy purchase agreements.
(1)(a) The department and state agencies may participate in any utility request for resource proposal process, as either established under the rules and regulations of the utilities and transportation commission, or by the governing board of a public utility district, municipal utility, cooperative, or mutual.
(b) If a local utility does not have a request for resource proposal pending, the energy office [department] or a state agency may negotiate an equitable and mutually beneficial energy purchase agreement with that utility.
(2) To ensure an equitable allocation of benefits to the state and its agencies, the following conditions shall apply to energy purchase agreements negotiated between utilities and state agencies:
(a) An energy purchase agreement shall be approved by both the department and the affected state agency.
(b) The department and the state agency shall work together throughout the planning and negotiation process for energy purchase agreements, unless the department determines that its participation will not further the purposes of this section.
(c) Before approving an energy purchase agreement, the department shall review the proposed agreement for its technical and economic feasibility, the degree of certainty of benefits, the degree of financial risk assumed by the state and/or the state agency, the benefits offered to the state and/or state agency, and other such factors as the department deems prudent. The department shall approve an energy purchase agreement unless it finds that such an agreement would not result in an equitable allocation of costs and benefits, in which case the transaction shall be disapproved.
(3)(a) The state or state agency shall comply with and shall be bound by applicable avoided cost schedules, electric power wheeling charges, interconnection requirements, utility tariffs, and regulatory provisions to the same extent it would be required to comply and would be bound if it were a private citizen. The state shall neither seek regulatory advantage, nor change regulations, regulatory policy, process, or decisions to its advantage as a seller of cogenerated energy. Nothing contained in chapter 201, Laws of 1991 shall be construed to mandate or require public or private utilities to wheel electric energy resources within or beyond their service territories. Nothing in chapter 201, Laws of 1991 authorizes any state agency or school district to make any sale of energy or waste heat beyond the explicit provisions of chapter 201, Laws of 1991. Nothing contained in chapter 201, Laws of 1991 requires a utility to purchase energy from the state or a state agency or enter into any agreement in connection with a cogeneration facility.
(b) The state shall neither construct, nor be party to an agreement for developing a cogeneration project at a state facility for the purpose of supplying its own electrical needs, unless it can show that such an arrangement would be in the economic interest of the state taking into account the cost of (i) interconnection requirements, as specified by the local electric utility, (ii) standby charges, as may be required by the local electric utility, and (iii) the current price of electricity offered by the local electric utility. If the local electric utility can demonstrate that the cogeneration project may place an undue burden on the electric utility, the department or the state agency shall attempt to negotiate a mutually beneficial agreement that would minimize the burden upon the ratepayers of the local electric utility.
(4) Any party to an energy purchase agreement may, within thirty days of any decision made pursuant to subsection (2)(c) of this section to disapprove the agreement made pursuant to this section, request an independent reviewer who is mutually agreeable to all parties to review the decision. The parties shall within thirty days of selection submit to the independent reviewer documentation supporting their positions. The independent reviewer shall render advice regarding the validity of the disapproval within an additional thirty days.
(5) For the purposes of this section, "waste heat" means the thermal energy that otherwise would be released to the environment from an industrial process, electric generation, or other process.
[ 1996 c 186 s 412; 1996 c 33 s 4; 1991 c 201 s 9. ]
NOTES:
Reviser's note: This section was amended by 1996 c 33 s 4 and by 1996 c 186 s 412, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
Findings—1996 c 33: See note following RCW 80.04.550.
In addition to any other authorities conferred by law:
(1) The department, with the consent of the state agency responsible for a facility, a state or regional university acting independently, and any other state agency acting through the department or as otherwise authorized by law, may:
(a) Contract to sell electric energy generated at state facilities to a utility; and
(b) Contract to sell thermal energy produced at state facilities to a utility.
(2) A state or regional university acting independently, and any other state agency acting through the department or as otherwise authorized by law, may:
(a) Acquire, install, permit, construct, own, operate, and maintain cogeneration and facility heating and cooling measures or equipment, or both, at its facilities;
(b) Lease state property for the installation and operation of cogeneration and facility heating and cooling equipment at its facilities;
(c) Contract to purchase all or part of the electric or thermal output of cogeneration plants at its facilities;
(d) Contract to purchase or otherwise acquire fuel or other energy sources needed to operate cogeneration plants at its facilities; and
(e) Undertake procurements for third-party development of cogeneration projects at its facilities, with successful bidders to be selected based on the responsible bid, including nonprice elements listed in RCW 39.26.160, that offers the greatest net achievable benefits to the state and its agencies.
(3) After July 28, 1991, a state agency shall consult with the department prior to exercising any authority granted by this section.
(4) In exercising the authority granted by subsections (1) and (2) of this section, a state agency must comply with the provisions of RCW 39.35C.080.
[ 2015 c 79 s 11; 1996 c 186 s 413; 1991 c 201 s 10. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
The department may adopt rules to implement RCW 39.35C.020 through 39.35C.040, 39.35C.070, 39.35C.080, and 39.35.050.
[ 1996 c 186 s 416; 1991 c 201 s 17. ]
NOTES:
Findings—Intent—Part headings not law—Effective date—1996 c 186: See notes following RCW 43.330.904.
For purposes of this chapter:
(1) Conservation may be achieved through the deployment of distributed energy resources; and
(2) Distributed energy resources include, but are not limited to, energy efficiency projects that are not cogeneration projects, energy storage, demand response, electric vehicle charging infrastructure, and grid-interactive efficient buildings.
[ 2022 c 128 s 4. ]
(1) The objective of chapter 309, Laws of 2023 is to promote private-public partnerships to reduce the amount of deferred maintenance required by the clean building performance standard and decarbonize buildings and central energy systems in public facilities in a cost-effective manner.
(2) By June 30, 2031, the department must submit a report to the governor and the appropriate committees of the legislature on the adoption rate and cost-effectiveness of the performance-based contract authorized under chapter 309, Laws of 2023. The report must include:
(a) The number of performance-based contracts issued;
(b) The cost-effectiveness of performance-based contracts issued, compared to alternative available financing mechanisms, including certificates of participation;
(c) Recommendations to improve the use of performance-based contracts; and
(d) Any other significant information associated with the implementation of chapter 309, Laws of 2023.
(3) It is the intent of the legislature to consider the findings of the report and extend the expiration date of chapter 309, Laws of 2023 if performance-based contracts are achieving the legislative objective.
(4) This section expires June 30, 2033.
[ 2023 c 309 s 1. ]
(1) The legislature finds that public buildings can be built and renovated using high-performance methods that save money, improve school performance, and make workers more productive. High-performance public buildings are proven to increase student test scores, reduce worker absenteeism, and cut energy and utility costs.
(2) It is the intent of the legislature that state-owned buildings and schools be improved by adopting recognized standards for high-performance public buildings, reducing energy consumption, and allowing flexible methods and choices in how to achieve those standards and reductions. The legislature also intends that public agencies and public school districts shall document costs and savings to monitor this program and ensure that economic, community, and environmental goals are achieved each year, and that an independent performance review be conducted to evaluate this program and determine the extent to which the results intended by this chapter are being met.
(3) The legislature further finds that state agency leadership is needed in the development of preparation and adaptation actions for climate change to ensure the economic health, safety, and environmental well-being of the state and its citizens.
[ 2009 c 519 s 8; 2005 c 12 s 1. ]
NOTES:
Findings—2009 c 519: See RCW 70A.05.900.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Department" means the department of enterprise services.
(2) "High-performance public buildings" means high-performance public buildings designed, constructed, and certified to a standard as identified in this chapter.
(3) "Institutions of higher education" means the state universities, the regional universities, The Evergreen State College, the community colleges, and the technical colleges.
(4) "LEED silver standard" means the United States green building council leadership in energy and environmental design green building rating standard, referred to as silver standard.
(5)(a) "Major facility project" means: (i) A construction project larger than five thousand gross square feet of occupied or conditioned space as defined in the Washington state energy code; or (ii) a building renovation project when the cost is greater than fifty percent of the assessed value and the project is larger than five thousand gross square feet of occupied or conditioned space as defined in the Washington state energy code.
(b) "Major facility project" does not include: (i) Projects for which the department, public school district, or other applicable agency and the design team determine the LEED silver standard or the Washington sustainable school design protocol to be not practicable; or (ii) transmitter buildings, pumping stations, hospitals, research facilities primarily used for sponsored laboratory experimentation, laboratory research, or laboratory training in research methods, or other similar building types as determined by the department. When the LEED silver standard is determined to be not practicable for a project, then it must be determined if any LEED standard is practicable for the project. If LEED standards or the Washington sustainable school design protocol are not followed for the project, the public school district or public agency shall report these reasons to the department.
(6) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and public higher education institution.
(7) "Public school district" means a school district eligible to receive state basic education moneys pursuant to RCW 28A.150.250 and 28A.150.260.
(8) "Washington sustainable school design protocol" means the school design protocol and related information developed by the office of the superintendent of public instruction, in conjunction with school districts and the school facilities advisory board.
[ 2011 1st sp.s. c 43 s 249; 2006 c 263 s 330; 2005 c 12 s 2. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Findings—Purpose—Part headings not law—2006 c 263: See notes following RCW 28A.150.230.
(1) All major facility projects of public agencies receiving any funding in a state capital budget, or projects financed through a financing contract as defined in RCW 39.94.020, must be designed, constructed, and certified to at least the LEED silver standard. This subsection applies to major facility projects that have not entered the design phase prior to July 24, 2005, and to the extent appropriate LEED silver standards exist for that type of building or facility.
(2) All major facility projects of any entity other than a public agency or public school district receiving any funding in a state capital budget must be designed, constructed, and certified to at least the LEED silver standard. This subsection applies to major facility projects that have not entered the grant application process prior to July 24, 2005, and to the extent appropriate LEED silver standards exist for that type of building or facility.
(3)(a) Public agencies, under this section, shall monitor and document ongoing operating savings resulting from major facility projects designed, constructed, and certified as required under this section.
(b) Public agencies, under this section, shall report annually to the department on major facility projects and operating savings.
(4) The department shall consolidate the reports required in subsection (3) of this section into one report and report to the governor and legislature by September 1st of each even-numbered year beginning in 2006 and ending in 2016. In its report, the department shall also report on the implementation of this chapter, including reasons why the LEED standard was not used as required by RCW 39.35D.020(5)(b). The department shall make recommendations regarding the ongoing implementation of this chapter, including a discussion of incentives and disincentives related to implementing this chapter.
(5) For the purposes of determining compliance with the requirement for a project to be designed, constructed, and certified to at least the LEED silver standard, the department must credit one additional point for a project that uses wood products with a credible third-party sustainable forest certification or from forests regulated under chapter 76.09 RCW, the Washington forest practices act. For projects that qualify for this additional point, and for which an additional point would have resulted in formal certification under the LEED silver standard, the project must be deemed to meet the standard under this section.
(6) During the 2023-2025 and 2025-2027 fiscal biennia, an alternative high-performance building certification, as determined by the legislature, may be used instead of the LEED silver building design, construction, and certification standard required by this section.
[ 2025 c 414 s 8031; 2023 c 474 s 8029; 2021 c 332 s 7049; 2011 c 99 s 1; 2005 c 12 s 3. ]
NOTES:
Effective date—2025 c 414: See note following RCW 79A.25.210.
Conflict with federal requirements—Effective date—2023 c 474: See notes following RCW 28A.320.330.
Effective date—2021 c 332: See note following RCW 43.19.501.
(1) All major facility projects of public school districts receiving any funding in a state capital budget must be designed and constructed to at least the LEED silver standard or the Washington sustainable school design protocol. To the extent appropriate LEED silver or Washington sustainable school design protocol standards exist for the type of building or facility, this subsection applies to major facility projects that have not received project approval from the superintendent of public instruction prior to: (a) July 1, 2006, for volunteering school districts; (b) July 1, 2007, for class one school districts; and (c) July 1, 2008, for class two school districts.
(2) Public school districts under this section shall: (a) Monitor and document appropriate operating benefits and savings resulting from major facility projects designed and constructed as required under this section for a minimum of five years following local board acceptance of a project receiving state funding; and (b) report annually to the superintendent of public instruction. The form and content of each report must be mutually developed by the office of the superintendent of public instruction in consultation with school districts.
(3) The superintendent of public instruction shall consolidate the reports required in subsection (2) of this section into one report and report to the governor and legislature by September 1st of each even-numbered year beginning in 2006 and ending in 2016. In its report, the superintendent of public instruction shall also report on the implementation of this chapter, including reasons why the LEED standard or Washington sustainable school design protocol was not used as required by RCW 39.35D.020(5)(b). The superintendent of public instruction shall make recommendations regarding the ongoing implementation of this chapter, including a discussion of incentives and disincentives related to implementing this chapter.
(4) The superintendent of public instruction shall develop and issue guidelines for administering this chapter for public school districts. The purpose of the guidelines is to define a procedure and method for employing and verifying compliance with the LEED silver standard or the Washington sustainable school design protocol.
(5) The superintendent of public instruction shall utilize the school facilities advisory board as a high-performance buildings advisory committee comprised of affected public schools, the superintendent of public instruction, the department, and others at the superintendent of public instruction's discretion to provide advice on implementing this chapter. Among other duties, the advisory committee shall make recommendations regarding an education and training process and an ongoing evaluation or feedback process to help the superintendent of public instruction implement this chapter.
(6) For projects that comply with this section by meeting the LEED silver standard, the superintendent of public instruction must credit one additional point for a project that uses wood products with a credible third-party sustainable forest certification or from forests regulated under chapter 76.09 RCW, the Washington forest practices act. For projects that qualify for this additional point, and for which an additional point would have resulted in formal certification under the LEED silver standard, the project must be deemed to meet the requirements of subsection (1) of this section.
[ 2011 c 99 s 2; 2006 c 263 s 331; 2005 c 12 s 4. ]
NOTES:
Findings—Purpose—Part headings not law—2006 c 263: See notes following RCW 28A.150.230.
On or before January 1, 2009, the department and the superintendent of public instruction shall summarize the reports submitted under RCW 39.35D.030(4) and 39.35D.040(3) and submit the individual reports to the legislative committees on capital budget and ways and means for review of the program's performance and consideration of any changes that may be needed to adapt the program to any new or modified standards for high-performance buildings that meet the intent of this chapter.
[ 2005 c 12 s 5. ]
(1)(a) The department, in consultation with affected public agencies, shall develop and issue guidelines for administering this chapter for public agencies. The purpose of the guidelines is to define a procedure and method for employing and verifying activities necessary for certification to at least the LEED silver standard for major facility projects.
(b) The department and the office of the superintendent of public instruction shall amend their fee schedules for architectural and engineering services to accommodate the requirements in the design of major facility projects under this chapter.
(c) The department and the office of the superintendent of public instruction shall procure architecture and engineering services consistent with chapter 39.80 RCW.
(d) Major facility projects designed to meet standards identified in this chapter must include building commissioning as a critical cost-saving part of the construction process. This process includes input from the project design and construction teams and the project ownership representatives.
(e) As provided in the request for proposals for construction services, the operating agency shall hold a preproposal conference for prospective bidders to discuss compliance with and achievement of standards identified in this chapter for prospective respondents.
(2) The department shall create a high-performance buildings advisory committee comprised of representatives from the design and construction industry involved in public works contracting, personnel from the affected public agencies responsible for overseeing public works projects, the office of the superintendent of public instruction, and others at the department's discretion to provide advice on implementing this chapter. Among other duties, the advisory committee shall make recommendations regarding an education and training process and an ongoing evaluation or feedback process to help the department implement this chapter.
(3) The department and the office of the superintendent of public instruction shall adopt rules to implement this section.
[ 2006 c 263 s 332; 2005 c 12 s 6. ]
NOTES:
Findings—Purpose—Part headings not law—2006 c 263: See notes following RCW 28A.150.230.
A member of the design or construction teams may not be held liable for the failure of a major facility project to meet the LEED silver standard or other LEED standard established for the project as long as a good faith attempt was made to achieve the LEED standard set for the project.
[ 2005 c 12 s 10. ]
Except as provided in this section, affordable housing projects funded out of the state capital budget are exempt from the provisions of this chapter. On or before July 1, 2008, the department of commerce shall identify, implement, and apply a sustainable building program for affordable housing projects that receive housing trust fund (under chapter 43.185A RCW) funding in a state capital budget. The department of commerce shall not develop its own sustainable building standard, but shall work with stakeholders to adopt an existing sustainable building standard or criteria appropriate for affordable housing. Any application of the program to affordable housing, including any monitoring to track the performance of either sustainable features or energy standards or both, is the responsibility of the department of commerce. Beginning in 2009 and ending in 2016, the department of commerce shall report to the department as required under RCW 39.35D.030(3)(b).
[ 2023 c 275 s 16; 2005 c 12 s 12. ]
It is the intent and an established goal of the LEED program as authored by the United States green building council to increase demand for building materials and products that are extracted and manufactured locally, thereby reducing the environmental impacts and to support the local economy. Therefore, it is the intent of the legislature to emphasize this defined goal and establish a priority to use Washington state based resources, building materials, products, industries, manufacturers, and other businesses to provide economic development to Washington state and to meet the objectives of this chapter.
[ 2005 c 12 s 13. ]
(1)(a) The legislature intends to encourage the use of landscaping design techniques that meet the highest standards for water efficiency in the design and construction of state-funded buildings. Except as provided in subsection (2) of this section, any public agency, public school district, or other entity undertaking a major facility project subject to the requirements of RCW 39.35D.030 or 39.35D.040 are encouraged to design and construct such projects to receive all practical water efficient landscaping credits available under the United States green building council rating system, international green construction code, other nationally recognized consensus standard, or the Washington sustainable school design protocol, as each standard existed on June 11, 2020. Entities undertaking major facility projects may consider costs and potential benefits when determining the practicality of incorporating water efficient landscaping measures into the design and construction of the projects.
(b) Water efficient landscaping techniques may include:
(i) Reducing or eliminating the use of potable water for irrigation; and
(ii) Configuring irrigation and sprinkler systems to avoid spraying water directly on buildings, sidewalks, or other hardscapes.
(2) This section does not apply to athletic fields or other project elements that are eligible for exclusion from water efficient landscaping standards under either the United States green building council rating system, international green construction code, other nationally recognized consensus standard, or the Washington sustainable school design protocol, as each standard existed on June 11, 2020.
(3)(a) Nothing in this section may prohibit or restrict the use of wildfire ignition resistant landscaping, including the establishment and maintenance of a fire buffer in the building ignition zone, in the design and construction of major facility projects subject to the requirements of RCW 39.35D.030 or 39.35D.040.
(b) The definitions in this subsection (3)(b) apply throughout this subsection unless the context clearly requires otherwise.
(i) "Building ignition zone" means a building and surrounding area up to two hundred feet from the foundation.
(ii) "Firewise" means the firewise communities program developed by the national fire protection association, which encourages local solutions for wildfire safety by involving homeowners, community leaders, planners, developers, firefighters, and others in the effort to protect people and property from wildfire risks.
(iii) "Wildfire ignition resistant landscaping" includes:
(A) Any landscaping tools or techniques, or noninvasive vegetation, that do not readily ignite from a flame or other ignition source; or
(B) The use of firewise methods to reduce ignition risk in a building ignition zone.
[ 2020 c 9 s 5. ]
NOTES:
Findings—Intent—2020 c 9: See note following RCW 64.38.057.
The joint legislative audit and review committee, or its successor legislative agency, shall conduct a performance review of the high-performance buildings program established under this chapter.
(1) The performance audit shall include, but not be limited to:
(a) The identification of the costs of implementation of high-performance building[s] standards in the design and construction of major facility projects subject to this chapter;
(b) The identification of operating savings attributable to the implementation of high-performance building[s] standards, including but not limited to savings in energy, utility, and maintenance costs;
(c) The identification of any impacts of high-performance buildings standards on worker productivity and student performance; and
(d) An evaluation of the effectiveness of the high-performance building[s] standards established under this chapter, and recommendations for any changes in those standards that may be supported by the committee's findings.
(2) The committee shall make a preliminary report of its findings and recommendations on or before December 1, 2010, and a final report on or before July 1, 2011.
[ 2005 c 12 s 14. ]
The term "taxing district" as herein used shall be held to mean and embrace all counties, cities, towns, townships, port districts, school districts, metropolitan park districts or other municipal corporations which now, or may hereafter exist.
The term "the last assessed valuation of the taxable property in such taxing district" as used herein shall be held to mean and embrace the aggregate assessed valuation for such taxing district as placed on the last completed and balanced tax rolls of the county next preceding the date of contracting the debt or incurring the liability.
[ 1917 c 143 s 4; RRS s 5608. ]
Whenever used in chapter 42, Laws of 1970 ex. sess., the term "value of the taxable property" shall mean the actual value of the taxable property in a taxing district incurring indebtedness, as the term "taxing district" is defined in RCW 39.36.010, to be ascertained by the last assessment for state and county purposes previous to the incurring of such indebtedness except that in incorporated cities the assessment shall be taken from the last assessment for city purposes, plus the timber assessed value for the district as defined in RCW 84.33.035.
[ 1984 c 204 s 15; 1970 ex.s. c 42 s 1. ]
NOTES:
Savings—Effective date—1984 c 204: See notes following RCW 84.33.035.
Severability—1970 ex.s. c 42: "If any provision of this 1970 amendatory act, or its application to any person or circumstance is held invalid, the remainder of this 1970 amendatory act, or the application of the provision to other persons or circumstances is not affected." [ 1970 ex.s. c 42 s 41.]
Effective date—1970 ex.s. c 42: "The effective date of this 1970 amendatory act is November 1, 1970." [ 1970 ex.s. c 42 s 42.]
(1) Except as otherwise expressly provided by law or in subsections (2), (3) and (4) of this section, no taxing district shall for any purpose become indebted in any manner to an amount exceeding three-eighths of one percent of the value of the taxable property in such taxing district without the assent of three-fifths of the voters therein voting at an election to be held for that purpose, nor in cases requiring such assent shall the total indebtedness incurred at any time exceed one and one-fourth percent on the value of the taxable property therein.
(2)(a)(i) Public hospital districts are limited to an indebtedness amount not exceeding three-fourths of one percent of the value of the taxable property in such public hospital districts without the assent of three-fifths of the voters therein voting at an election held for that purpose.
(ii) Counties, cities, and towns are limited to an indebtedness amount not exceeding one and one-half percent of the value of the taxable property in such counties, cities, or towns without the assent of three-fifths of the voters therein voting at an election held for that purpose.
(b) In cases requiring such assent counties, cities, towns, and public hospital districts are limited to a total indebtedness of two and one-half percent of the value of the taxable property therein. However, any county that has assumed the rights, powers, functions, and obligations of a metropolitan municipal corporation under chapter 36.56 RCW may become indebted to a larger amount for its authorized metropolitan functions, as provided under chapter 35.58 RCW, but not exceeding an additional three-fourths of one percent of the value of the taxable property in the county without the assent of three-fifths of the voters therein voting at an election held for that purpose, and in cases requiring such assent not exceeding an additional two and one-half percent of the value of the taxable property in the county.
(3) School districts are limited to an indebtedness amount not exceeding three-eighths of one percent of the value of the taxable property in such district without the assent of three-fifths of the voters therein voting at an election held for that purpose. In cases requiring such assent school districts are limited to a total indebtedness of two and one-half percent of the value of the taxable property therein.
(4) No part of the indebtedness allowed in this chapter shall be incurred for any purpose other than strictly county, city, town, school district, township, port district, metropolitan park district, or other municipal purposes: PROVIDED, That a city or town, with such assent, may become indebted to a larger amount, but not exceeding two and one-half percent additional, determined as herein provided, for supplying such city or town with water, artificial light, and sewers, when the works for supplying such water, light, and sewers shall be owned and controlled by the city or town; and a city or town, with such assent, may become indebted to a larger amount, but not exceeding two and one-half percent additional for acquiring or developing open space, park facilities, and capital facilities associated with economic development: PROVIDED FURTHER, That any school district may become indebted to a larger amount but not exceeding two and one-half percent additional for capital outlays.
(5) Such indebtedness may be authorized in any total amount in one or more propositions and the amount of such authorization may exceed the amount of indebtedness which could then lawfully be incurred. Such indebtedness may be incurred in one or more series of bonds from time to time out of such authorization but at no time shall the total general indebtedness of any taxing district exceed the above limitation.
The term "value of the taxable property" as used in this section shall have the meaning set forth in RCW 39.36.015.
[ 2000 c 156 s 1; 1994 c 277 s 1; 1993 c 240 s 12; 1971 ex.s. c 218 s 1; 1971 c 38 s 1; 1970 ex.s. c 42 s 27; 1969 c 142 s 3; 1967 c 107 s 4; 1959 c 227 s 1; 1953 c 163 s 2; 1917 c 143 s 1; RRS s 5605. ]
NOTES:
Effective date—2000 c 156: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 27, 2000]." [ 2000 c 156 s 2.]
Severability—Effective date—1970 ex.s. c 42: See notes following RCW 39.36.015.
Validating—1953 c 163: "Bonds authorized, issued and sold by any school district prior to the effective date of this act [March 18, 1953] and not in excess of the limitations provided in sections 1 and 2 thereof are hereby approved, ratified and validated, and are a legal and irrevocable obligation of such school district." [ 1953 c 163 s 3.]
Cemetery districts, limitation upon indebtedness: RCW 68.52.310.
Cities other than first class, limitations upon indebtedness: RCW 35.37.040, 35.37.050.
Conditional sales contract debt, not counted as part of debt limit: RCW 28A.335.200, 39.30.010.
Counties, limitations upon indebtedness: Chapter 36.67 RCW.
Executory conditional sales contracts, limitations on indebtedness: RCW 28A.335.200, 39.30.010.
Leases by cities and towns, limitations on indebtedness: RCW 35.42.200.
Metropolitan municipal corporations, limitations on indebtedness: RCW 35.58.450.
Metropolitan park districts, incurring indebtedness: RCW 35.61.100, 35.61.110.
Municipal corporations, limitations upon indebtedness: State Constitution Art. 8 s 6 (Amendment 27).
Port districts, limitations upon indebtedness: RCW 39.28.030, 53.36.030.
Public utility districts, limitations upon indebtedness: RCW 54.24.018.
School districts, limitations upon indebtedness: Chapters 28A.530, 28A.535 RCW.
Validation requirement: RCW 39.40.010.
Water-sewer districts, limitations upon indebtedness: RCW 57.20.110, 57.20.120.
(1) Whenever it shall be necessary to compute the indebtedness of a taxing district for bonding or any other indebtedness purposes, taxes levied for the current year and cash on hand received for the purpose of carrying on the business of such taxing district for such current year shall be considered as an asset only as against indebtedness incurred during such current year which is payable from such taxes or cash on hand: PROVIDED, HOWEVER, That all taxes levied for the payment of bonds, warrants or other public debts of such taxing district, shall be deemed a competent and sufficient asset of the taxing district to be considered in calculating the constitutional debt limit or the debt limit prescribed by this chapter for any taxing district: PROVIDED, That the provisions of this section shall not apply in computing the debt limit of a taxing district in connection with bonds authorized pursuant to a vote of the electors at an election called prior to March 1, 1917.
(2) If reductions in assessed valuation of property within a taxing district result in the outstanding indebtedness of the taxing district exceeding its statutory indebtedness limitations, the amount of such excess indebtedness shall not be included in the statutory indebtedness ceiling. Additional indebtedness that is subject to indebtedness limitations, other than refinancing indebtedness that does not increase the total amount of indebtedness, may not be issued by such a taxing district until its total outstanding indebtedness, including that which this subsection removes from the statutory indebtedness limitations, is below these limitations.
(3) Nothing in this section authorizes taxing districts to incur indebtedness beyond constitutional indebtedness limitations.
[ 1986 c 50 s 1; 1921 c 123 s 1; 1917 c 143 s 2; RRS s 5606. ]
All orders, authorizations, allowances, contracts, payments or liabilities to pay, made or attempted to be made in violation of this chapter, shall be absolutely void and shall never be the foundation of a claim against a taxing district.
[ 1994 c 81 s 75; 1923 c 45 s 1; 1917 c 143 s 3; RRS s 5607. ]
The governing body of a taxing district desiring to place a ballot proposition authorizing indebtedness before the voters may submit the proposition at any special election held on the dates authorized in RCW 29A.04.330. The ballot proposition shall include the maximum amount of the indebtedness to be authorized, the maximum term any bonds may have, a description of the purpose or purposes of the bond issue, and whether excess property tax levies authorized under RCW 84.52.056 will be authorized.
When it is required that such bonds be retired by excess property tax levies, or when the governing body desires such bonds be retired by excess property tax levies, the ballot proposition shall also include authorization for such excess bond retirement property tax levies provided under RCW 84.52.056.
Notice of the proposed election shall be published as required by RCW 29A.52.355.
[ 2015 c 53 s 69; 1984 c 186 s 3. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
This chapter does not apply to a loan made pursuant to a loan agreement under chapter 39.69 RCW, and any computation of indebtedness under this chapter shall exclude the amount of any loan under such a loan agreement.
[ 1987 c 19 s 5. ]
All bonds heretofore issued, or heretofore voted and which may have been or may hereafter be issued, by any taxing district pursuant to any of the foregoing sections as amended or for any of the purposes authorized by any of said sections are hereby validated.
[ 1969 c 142 s 6. ]
No general obligation bonds of any county, port district, or metropolitan park district upon which a vote of the people is required under existing laws shall be issued, nor shall they become a lien upon the taxable property within such county or district unless, in addition to all other requirements provided by law in the matter of the issuance of general obligation bonds by such county or district, the total vote cast upon such proposition shall exceed forty percent of the total number of voters voting in such county or district at the general county or state election next preceding such bond election.
[ 1961 ex.s. c 15 s 1; 1959 c 290 s 3; 1925 c 13 s 1; RRS s 5646-1. ]
NOTES:
Exceeding debt limitation by municipalities: State Constitution Art. 8 s 6 (Amendment 27).
Vote required for excess levy to retire bonds issued for capital purposes: RCW 84.52.056.
In all such elections the provisions of existing law with respect to registration, opening and closing of registration books and the duties of officers and the appointment and selection of election officials shall apply.
[ 1925 c 13 s 2; RRS s 5646-2. ]
NOTES:
Election laws in general: Title 29A RCW.
The election officials in each of the precincts included within any such district shall, as soon as possible and in no case later than five days after the closing of the polls of any election involving the issuance of bonds, certify to the county auditor of the county within which such district is located the total number of votes cast for and against each separate proposal and the vote shall be canvassed and certified by a canvassing board consisting of the chair of the board of county commissioners, the county auditor, and the prosecuting attorney who shall declare the result thereof.
[ 2011 c 336 s 806; 1959 c 290 s 4; 1925 c 13 s 3; RRS s 5646-3. ]
This chapter shall not affect the validity or the issuance of any such bonds voted at any lawful election held prior to the taking effect of this chapter.
[ 1925 c 13 s 4; RRS s 5646-4. ]
This chapter shall apply to all bonds, notes and other evidences of indebtedness of the state authorized by the legislature after *the effective date of this chapter, unless otherwise provided in the authorizing acts.
[ 1971 ex.s. c 184 s 1. ]
NOTES:
*Reviser's note: For "the effective date of this chapter," see RCW 39.42.900.
Bonds, notes or other evidences of indebtedness shall be issued by the state finance committee. They may be issued at one time or in a series from time to time. The maturity date of each series shall be determined by the state finance committee, but in no case shall any bonds mature later than thirty years from the date of issue. All evidences of indebtedness shall be signed in the name of the state by the governor and the treasurer. The facsimile signature of said officials is authorized and said evidences of indebtedness may be issued notwithstanding that any of the officials signing them or whose facsimile signatures appear on such evidences of indebtedness has ceased to hold office at the time of issue or at the time of delivery to the purchaser.
[ 1971 ex.s. c 184 s 2. ]
(1) The state finance committee shall meet not less than twice per calendar year and shall determine by resolution the amount, date or dates, terms, conditions, covenants, denominations, interest rate or rates (which may be fixed or variable), maturity or maturities, redemption rights, manner of execution and authentication, manner and price of sale and form of all bonds, notes, or other evidences of indebtedness.
(2) The state finance committee may authorize the state treasurer, by resolution[,] to:
(a) Accept offers to purchase the bonds, notes, or other evidences of indebtedness and to sell and deliver the bonds, notes, or other evidences of indebtedness to the purchases thereof;
(b) Determine the date or dates, price or prices, principal amounts per maturity, delivery dates, interest rate or rates (or mechanisms for determining the interest rate or rates); and
(c) Set other terms and conditions as the state finance committee may deem necessary and appropriate. Each delegation is limited to bonds, notes, or other indebtedness that the state finance committee has authorized to be issued. Bonds, notes, or other evidences of indebtedness shall be payable either to the bearer or to the registered owner as provided in RCW 39.46.030. The resolution may provide for the deposit in trust with any qualified public depository of all or any part of the proceeds of the bonds, notes, or other evidences of indebtedness or money set aside for the payment thereof.
(3) The state finance committee shall also determine by resolution whether interest on all or any part of the bonds is to be payable periodically during the term of such bonds or only at the maturity of the bonds. For purposes of the limitations on the amount of bonds authorized to be issued contained in the acts authorizing their issuance, the amount of bonds which pay interest only at maturity must be equal to the price, exclusive of accrued interest, at which the bonds are initially offered to the public.
(4) The state finance committee may issue, under chapter 39.53 RCW and this chapter, bonds, notes, or other evidences of indebtedness to refund at or prior to maturity any outstanding state bonds, notes, or other evidences of indebtedness.
(5) The state finance committee may obtain or provide for obtaining bond insurance, letters of credit or other credit support instruments for the purpose of guaranteeing the payment or enhancing the marketability, or both, of any state bonds, notes, or other evidences of indebtedness, and may authorize the execution and delivery of agreements, promissory notes, and other related instruments.
[ 2010 1st sp.s. c 18 s 1; 1989 1st ex.s. c 14 s 16; 1983 c 167 s 104; 1971 ex.s. c 184 s 3. ]
NOTES:
Effective dates—1989 1st ex.s. c 14: See RCW 43.99H.901.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
The proceeds of the sale of any bonds shall be used solely for the purposes, including any expense incurred in connection with the issuance and sale of such bonds, specified in the general statute or special act authorizing the issuance of such bonds.
[ 1971 ex.s. c 184 s 4. ]
When the state finance committee has decided to issue such bonds or a portion thereof, it may, pending the issuing of such bonds, issue, in the name of the state, temporary notes in anticipation of the money to be derived from the sale of such bonds, which notes shall be designated as "anticipation notes". If, prior to the issuance of the bonds, it becomes necessary to redeem outstanding notes, additional bond anticipation notes may be issued to redeem the outstanding notes. Such portion of the proceeds of the sale of such bonds as may be required for such purpose shall be applied to the payment of the principal of such anticipation notes which have been issued. The interest on anticipation notes shall be paid from the revenue source and with the same priority of payment specified in the respective bond acts for payment of principal of and interest on the bonds against which anticipation notes are sold. The procedure for paying the interest on the notes, including the transfer of necessary funds for that purpose, shall be the same as prescribed for the bonds.
If the bonds shall constitute general obligations of the state and pledge the full faith and credit of the state to the payment thereof, then the notes issued in anticipation thereof shall state that they are a general obligation of the state of Washington, shall pledge the full faith and credit of the state to the payment of the principal thereof and the interest thereon, and shall contain an unconditional promise to pay the principal and interest as the same shall become due. The owner and holder of any of the notes or the trustee for the owner and holder of any of the notes may, by a mandamus or other appropriate proceeding, require the transfer and payment of funds as directed in this section.
[ 1981 c 29 s 1; 1971 ex.s. c 184 s 5. ]
NOTES:
Application—1981 c 29: "This act shall apply to all outstanding bond anticipation notes of the state, and interest on the notes shall be paid as provided in RCW 39.42.050: PROVIDED, That in the event such interest is not paid as provided in RCW 39.42.050 it shall be paid from such source or sources as are specified in such notes." [ 1981 c 29 s 2.]
On or after *the effective date of this act, the treasurer shall compute general state revenues for the three fiscal years immediately preceding such date and shall determine the arithmetic mean thereof. As soon as is practicable after the close of each fiscal year thereafter, he or she shall do likewise. In determining the amount of general state revenues, the treasurer shall include all state money received in the treasury from each and every source whatsoever except: (1) Fees and revenues derived from the ownership or operation of any undertaking, facility or project; (2) moneys received as gifts, grants, donations, aid or assistance or otherwise from the United States or any department, bureau or corporation thereof, or any person, firm or corporation, public or private, when the terms and conditions of such gift, grant, donation, aid or assistance require the application and disbursement of such moneys otherwise than for the general purposes of the state of Washington; (3) moneys to be paid into and received from retirement system funds, and performance bonds and deposits; (4) moneys to be paid into and received from trust funds including but not limited to moneys received from taxes levied for specific purposes and the several permanent funds of the state and the moneys derived therefrom but excluding bond redemption funds; (5) proceeds received from the sale of bonds or other evidences of indebtedness. Upon computing general state revenues, the treasurer shall make and file in the office of the secretary of state, a certificate containing the results of such computations. Copies of said certificate shall be sent to each elected official of the state and each member of the legislature. The treasurer shall, at the same time, advise each elected official and each member of the legislature of the current available debt capacity of the state, and may make estimated projections for one or more years concerning debt capacity.
[ 2009 c 500 s 1; 2009 c 479 s 24; 2007 c 215 s 2; 2003 1st sp.s. c 9 s 1; 2002 c 240 s 8; 1971 ex.s. c 184 s 7. ]
NOTES:
Reviser's note: *(1) For "the effective date of this act," see RCW 39.42.900.
(2) This section was amended by 2009 c 479 s 24 and by 2009 c 500 s 1, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Effective date—2009 c 500: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2009." [ 2009 c 500 s 14.]
Effective date—2009 c 479: See note following RCW 2.56.030.
Finding—Intent—2007 c 215: "The legislature finds that after passage of a constitutional amendment (*House Joint Resolution No. 4215 or Senate Joint Resolution No. 8220), the state investment board will be permitted in accordance with RCW 43.33A.140 to invest a portion of the higher education permanent funds in equities. The legislature further recognizes that by investing in equities, the value of the higher education permanent funds may fluctuate over time due to market changes even if no disposition of the fund principal is made. The removal of the word "irreducible" in this act, describing the higher education permanent funds, is needed to clarify that the mere reduction in market value of a permanent fund due to such fluctuations would not violate the mandate of the statute. It is the intent of the legislature to clarify state law to permit equity investment of higher education permanent funds even if there is a decline in the value of a permanent fund due to market changes. It is not the intent of the legislature to change the requirement that unless otherwise allowed by law the principal amounts in the higher education permanent funds are to be held in perpetuity for the benefit of the designated institutions and future generations, and that only the earnings from a higher education permanent fund may be appropriated to support the benefited institution." [ 2007 c 215 s 1.]
*Reviser's note: House Joint Resolution No. 4215 passed the legislature on April 11, 2007.
Contingent effective date—2007 c 215: "This act takes effect if the proposed amendment to Article XVI of the state Constitution regarding investment of certain state moneys is validly submitted to and is approved and ratified by the voters at the next general election. If the proposed amendment is not approved and ratified, this act is void in its entirety." [ 2007 c 215 s 10.] The proposed amendment to Article XVI of the state Constitution (Substitute House Joint Resolution No. 4215) was approved by the people at the November 6, 2007, general election.
Effective date—2002 c 240: See RCW 43.99G.903.
The foregoing limitation on the aggregate amount of indebtedness of the state shall not prevent:
(1) The issuance of obligations to refund or replace any such indebtedness existing at any time in an amount not exceeding 1.05 times the amount which, taking into account earnings from the investment of the proceeds of the issue, is required to pay the principal thereof, interest thereon, and any premium payable with respect thereto, and the costs incurred in accomplishing such refunding, as provided in chapter 39.53 RCW, as now or hereafter amended: PROVIDED, That any proceeds of the refunding, bonds in excess of those acquired to accomplish such refunding or any obligations acquired with such excess proceeds, shall be applied exclusively for the payment of principal, interest, or call premiums with respect to such refunding obligations;
(2) The issuance of obligations in anticipation of revenues to be received by the state during a period of twelve calendar months next following their issuance;
(3) The issuance of obligations payable solely from revenues of particular public improvements;
(4) A pledge of the full faith, credit, and taxing power of the state to guarantee the payment of any obligation payable from any of revenues received from any of the following sources:
(a) the fees collected by the state as license fees for motor vehicles;
(b) excise taxes collected by the state on the sale, distribution, or use of motor vehicle fuel; and
(c) interest on the permanent common school fund:
PROVIDED, That the legislature shall, at all times, provide sufficient revenues from such sources to pay the principal and interest due on all obligations for which said source of revenue is pledged.
[ 1974 ex.s. c 111 s 1; 1971 ex.s. c 184 s 8. ]
NOTES:
Severability—1974 ex.s. c 111: "If any provision of this 1974 amendatory act, or its application to any person or circumstance is held invalid, the remainder of the act, or the application of the provision to other persons or circumstances is not affected." [ 1974 ex.s. c 111 s 6.]
The state finance committee may issue certificates of indebtedness in such sum or sums that may be necessary to meet temporary deficiencies of the treasury. Such certificates may be issued only to provide for the appropriations already made by the legislature and such certificates must be retired and the debt discharged other than by refunding within twelve months after the date of issuance.
For the purposes of this section, the state treasury shall include all statutorily established funds and accounts except for any of the permanent funds of the state treasury.
[ 2007 c 215 s 3; 1985 c 57 s 21; 1971 ex.s. c 184 s 9. ]
NOTES:
Finding—Intent—Contingent effective date—2007 c 215: See notes following RCW 39.42.070.
Effective date—1985 c 57: See note following RCW 18.04.105.
Bonds, notes, or other obligations issued and sold by the state of Washington pursuant to and in conformity with this chapter shall not be invalid for any irregularity or defect in the proceedings of the issuance or sale thereof, except as provided in this paragraph, and shall be incontestable in the hands of a bona fide purchaser or holder thereof. Whenever the state finance committee determines to issue bonds, notes or other evidences of indebtedness, it shall file with the treasurer a certified copy of the resolution authorizing their issuance at least thirty days prior to delivery to the purchaser of such bonds, notes, of other evidences of indebtedness. At any time prior to delivery, any person in interest shall have the right to institute an appropriate action or proceeding to contest the validity of the authorized indebtedness, the pledge of revenues for the payment of principal and interest on such indebtedness, the validity of the collection and disposition of revenue necessary to pay the principal and interest on such indebtedness, the expenditure of the proceeds derived from the sale of the evidences of indebtedness for the purposes specified by law, and the validity of all other provisions and proceedings in connection with the authorization and issuance of the evidences of indebtedness. If such action or proceeding shall not have been instituted prior to delivery, then the validity of the evidences of indebtedness shall be conclusively presumed and no court shall have authority to inquire into such matters.
[ 1971 ex.s. c 184 s 10. ]
All evidences of indebtedness issued under the provisions of this chapter shall be fully negotiable instruments and shall be legal investment for all state funds or for funds under state control and all funds of municipal corporations, and shall be legal security for all state, county and municipal deposits.
[ 1971 ex.s. c 184 s 11. ]
The excess earnings account is created in the state treasury. From the revenue funds from which principal and interest payments on bonds are provided, the state treasurer shall periodically transfer to the excess earnings account such amounts as are owed to the federal government under section 148 of the federal internal revenue code. Pursuant to legislative appropriation from the excess earnings account, the state treasurer shall periodically remit to the United States treasury any amounts owed to the federal government under section 148 of the federal internal revenue code.
[ 1988 c 92 s 1. ]
(1) The state shall not contract any bonds, notes, or other evidences of indebtedness for borrowed money that would cause the aggregate state debt to exceed the debt limitation, as specified in Article VIII, section 1(b) of the state Constitution.
(2) It shall be the duty of the state finance committee to compute annually the amount required to pay principal of and interest on outstanding debt.
(3) To the extent necessary because of the state constitutional debt limitation, priorities with respect to the issuance or guaranteeing of bonds, notes, or other evidences of indebtedness by the state shall be determined by the state finance committee.
[ 2009 c 500 s 2. ]
NOTES:
Effective date—2009 c 500: See note following RCW 39.42.070.
The state finance committee must recommend a working debt limit for purposes of budget development for various purpose capital bond appropriations. Nothing in this section shall in any manner affect the validity of indebtedness incurred in compliance with the provisions of Article VIII, section 1 of the state Constitution. The working debt limit must be updated periodically following forecasts of the economic and revenue forecast council. The governor and legislature must develop capital bond budgets within the most recent recommended working debt limit. The working debt limit must be lower than the state constitutional debt limit in order to reserve capacity under the constitutional limit for emergencies and economic uncertainties. In order to begin to accomplish the objectives of stabilizing debt capacity and reducing the debt service burden on the operating budget, the state finance committee must recommend working debt limits of eight and one-half percent from July 1, 2015, to and including June 30, 2017; eight and one-quarter percent from July 1, 2017, to and including June 30, 2019; eight percent from July 1, 2019, to and including June 30, 2021; seven and three-quarters percent from July 1, 2021, and thereafter. The state finance committee may recommend modified working debt limits in response to extraordinary economic conditions. The state finance committee is authorized to reduce or delay the issuance of bonds if an issuance would result in exceeding the recommended working debt limit.
[ 2011 1st sp.s. c 46 s 3. ]
NOTES:
Intent—2011 1st sp.s. c 46: "The legislature intends to examine the various kinds of debt incurred by Washington state and the limitations that control the amount and use of debt. To assist in this examination, the legislature seeks the assistance and recommendations of a commission on state debt." [ 2011 1st sp.s. c 46 s 1.]
(1) The purpose of eliminating a portion of the sales tax exemption under RCW 82.08.0261 for liquefied natural gas sold for use as a marine vessel transportation fuel is to support the Washington state ferries and other state highway system needs. For this reason, general state revenues transferred under RCW 82.32.860 to the motor vehicle fund are excluded from the calculation of general state revenues for purposes of Article VIII, section 1 of the state Constitution and RCW 39.42.130 and 39.42.140.
(2) This section expires July 1, 2028.
[ 2014 c 216 s 408. ]
NOTES:
Effective date—Findings—Tax preference performance statement—2014 c 216: See notes following RCW 82.38.030.
This act shall become effective coincident with the effective date of the constitutional amendment to Article VIII, section 1 and to Article VIII, section 3 of the Washington state Constitution as presented for a vote of the people by HJR 52, 1971 regular session. Unless such constitutional amendment shall be approved by the people at the next general election, this chapter shall be null and void.
[ 1971 ex.s. c 184 s 12. ]
NOTES:
Reviser's note: House Joint Resolution No. 52 was approved by the voters at the November 1972 general election.
Notwithstanding the provisions of any charter to the contrary, bonds issued under *RCW 39.44.010 through 39.44.080 may be issued to run for a period up to forty years from the date of the issue and shall, as near as practicable, be issued for a period which shall not exceed the life of the improvement to be acquired by the use of the bonds.
[ 1967 c 107 s 5; 1923 c 151 s 5; RRS s 5583-5. ]
NOTES:
*Reviser's note: RCW 39.44.010, 39.44.011, 39.44.020, 39.44.030, 39.44.060, and 39.44.080 were repealed by 1984 c 186 s 70.
On all bonds hereafter issued by the state or any agency thereof or by any county, city, town, municipal corporation, quasi municipal corporation, junior taxing district, school district or other political subdivision of the state, the printed, engraved or lithographed facsimile signatures of the officers required by law to sign the bonds or any interest coupons thereon shall be sufficient signature on such bonds or coupons: PROVIDED, That such facsimile signatures shall not be used on the bonds of issues of less than one hundred thousand dollars par value and may always be used on interest coupons.
Whenever such facsimile signature reproduction of the signature of any officer is used in place of the personal signature of such officer, the issuing authority shall specify in a written order or requisition to the printer, engraver, or lithographer, the number of bonds or coupons upon which such facsimile signature is to be printed, engraved, or lithographed, and the manner of numbering the bonds or coupons upon which such signature shall be placed. Within ninety days after the completion of the printing, engraving, or lithographing of such bonds or coupons, the plate or plates used for the purpose of affixing the facsimile signature shall be destroyed and it shall be the duty of the issuing authority, within ninety days after receipt of the completed bonds or coupons, to ascertain that such plate or plates have been destroyed.
[ 1983 c 167 s 107; 1961 c 141 s 3; 1955 c 375 s 1; 1941 c 52 s 1; Rem. Supp. 1941 s 5583-1a. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Uniform facsimile signature of public officials act: Chapter 39.62 RCW.
Every printer, engraver, or lithographer, who with the intent to defraud, prints, engraves, or lithographs a facsimile signature upon any bond or coupon without written order of the issuing authority, or fails to destroy such plate or plates containing the facsimile signature upon direction of such issuing authority, is guilty of a class B felony punishable according to chapter 9A.20 RCW.
[ 2003 c 53 s 212; 1955 c 375 s 2. ]
NOTES:
Intent—Effective date—2003 c 53: See notes following RCW 2.48.180.
Fraud, forgery: Chapter 9A.60 RCW.
Where any bond so issued requires registration by the county treasurer, that bond shall bear a statement on the back thereof showing the name of the person to whom sold, date of issue, the number and series of the bond, and shall be signed by the county treasurer in his or her own name or by a deputy county treasurer in his or her own name.
[ 2011 c 336 s 807; 1955 c 375 s 3. ]
Upon the presentation at the office of the officer or agent hereinafter provided for, any bond which is bearer in form that has heretofore been or may hereafter be issued by any county, city, town, port, school district, or other municipal or quasi municipal corporation in this state, may, if so provided in the proceedings authorizing the issuance of the same, be registered as to principal in the name of the owner upon the books of such municipality to be kept in said office, such registration to be noted on the reverse of the bond by such officer or agent. The principal of any bond so registered shall be payable only to the payee, his or her legal representative, successors or assigns, and such bond shall be transferable to another registered holder or back to bearer only upon presentation to such officer or agent, with a written assignment duly acknowledged or proved. The name of the assignee shall be written upon any bond so transferred and in the books so kept in the office of such officer or agent.
[ 2011 c 336 s 808; 1983 c 167 s 108; 1961 c 141 s 4; 1915 c 91 s 1; RRS s 5494. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
If so provided in the proceedings authorizing the issuance of any such bonds, upon the registration thereof as to principal, or at any time thereafter, the coupons thereto attached, evidencing all interest to be paid thereon to the date of maturity, may be surrendered to the officer or agent hereinafter provided and the bonds shall also become registered as to interest. Such coupons shall be canceled by such officer or agent, who shall sign a statement endorsed upon such bond of the cancellation of all unmatured coupons and the registration of such bond. Thereafter the interest evidenced by such canceled coupons shall be paid at the times provided therein to the registered owner of such bond in lawful money of the United States of America mailed to his or her address.
[ 2011 c 336 s 809; 1983 c 167 s 109; 1961 c 141 s 5; 1915 c 91 s 2; RRS s 5495. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
(1) The duties prescribed in this chapter as to the registration of bonds of any city or town shall be performed by the treasurer thereof, and as to those of any county, port or school district by the county treasurer of the county in which such port or school district lies; but any treasurer as defined in RCW 39.46.020 may designate its legally designated fiscal agency or agencies for the performance of such duties, after making arrangements with such fiscal agency therefor, which arrangements may include provision for the payment by the bond owner of a fee for each registration.
(2) The county treasurer as ex officio treasurer of a special district shall act as fiscal agent or may appoint the fiscal agent to be used by the county.
[ 1995 c 38 s 5; 1994 c 301 s 9; 1985 c 84 s 2; 1983 c 167 s 110; 1971 ex.s. c 79 s 1; 1915 c 91 s 3; RRS s 5496. ]
NOTES:
Acts of municipal officers ratified and confirmed—1995 c 38: See note following RCW 3.02.045.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Fiscal agencies: Chapter 43.80 RCW.
Any county, city, town, political subdivision, or other municipal or quasi municipal corporation authorized to issue revenue bonds may include in the amount of any such issue funds for the purpose of establishing, maintaining or increasing reserves to:
(1) Secure the payment of the principal of and interest on such revenue bonds; or
(2) Provide for replacements or renewals of or repairs or betterments to revenue producing facilities; or
(3) Provide for contingencies, including, but not limited to, loss of revenue caused by such contingencies.
The authority granted pursuant to this section is additional and supplemental to any existing authority to issue revenue bonds and nothing in this section shall prevent the issuance of such bonds pursuant to any other law: PROVIDED, That no such bond issue may include an amount in excess of fifteen percent thereof for the purpose of establishing, maintaining or increasing reserves as enumerated above.
[ 1983 c 167 s 111; 1977 ex.s. c 229 s 1. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Unless the context clearly requires otherwise, the definitions in this section apply throughout RCW 39.44.200 through 39.44.240.
(1) "Bond" means "bond" as defined in RCW 39.46.020, but also includes any other indebtedness that may be issued by any local government to fund private activities or purposes where the indebtedness is of a nonrecourse nature payable from private sources, including debt issued under chapter 39.50 RCW.
(2) "Local government" means "local government" as defined in RCW 39.46.020.
(3) "Type of bond" includes: (a) General obligation bonds, including councilmanic and voter-approved bonds; (b) revenue bonds; (c) local improvement district bonds; (d) special assessment bonds such as those issued by irrigation districts and diking districts; and (e) other classes of bonds.
(4) "State" means "state" as defined in RCW 39.46.020 but also includes any commissions or other entities of the state.
[ 2001 c 299 s 14; 1990 c 220 s 1; 1989 c 225 s 1; 1987 c 297 s 12; 1985 c 130 s 5. ]
For each state or local government bond issued, the underwriter of the issue shall supply the department of commerce with information on the bond issue within twenty days of its issuance. In cases where the issuer of the bond makes a direct or private sale to a purchaser without benefit of an underwriter, the issuer shall supply the required information. The bond issue information shall be provided on a form prescribed by the department of commerce and shall include but is not limited to: (1) The par value of the bond issue; (2) the effective interest rates; (3) a schedule of maturities; (4) the purposes of the bond issue; (5) cost of issuance information; and (6) the type of bonds that are issued. A copy of the bond covenants shall be supplied with this information.
For each state or local government bond issued, the issuer's bond counsel promptly shall provide to the underwriter or to the department of commerce information on the amount of any fees charged for services rendered with regard to the bond issue.
Each local government that issues any type of bond shall make a report annually to the department of commerce that includes a summary of all the outstanding bonds of the local government as of the first day of January in that year. Such report shall distinguish the outstanding bond issues on the basis of the type of bond, as defined in RCW 39.44.200, and shall report the local government's outstanding indebtedness compared to any applicable limitations on indebtedness, including RCW 35.42.200, 39.30.010, and 39.36.020.
[ 2023 c 470 s 2028; 1995 c 399 s 54; 1990 c 220 s 2; 1989 c 225 s 2; 1985 c 130 s 1. ]
NOTES:
Explanatory statement—2023 c 470: See note following RCW 10.99.030.
Fiscal agencies: Chapter 43.80 RCW.
Publication of local government bond information by department of commerce—Adoption of rules: RCW 43.63A.155.
The department of commerce may adopt rules and regulations pursuant to the administrative procedure act to require (1) the submission of bond issuance information by underwriters and bond counsel to the department of commerce in a timely manner and (2) the submission of additional information on bond issues by state and local governments, including summaries of outstanding bond issues.
[ 2023 c 470 s 2029; 1995 c 399 s 55; 1989 c 225 s 3; 1985 c 130 s 3. ]
NOTES:
Explanatory statement—2023 c 470: See note following RCW 10.99.030.
Failure to file the information required by RCW 39.44.210 and 39.44.230 shall not affect the validity of the bonds that are issued.
[ 1989 c 225 s 4; 1985 c 130 s 4. ]
All bonds, the issuance of which was authorized or ratified at a general or special election held within the issuing jurisdiction prior to April 3, 1982, or the proposition for the issuance of which will be submitted at such an election pursuant to action of the legislative authority of the issuer taken prior to April 3, 1982, may be sold and issued with an interest rate or rates greater than any interest rate restriction contained in the ballot proposition or ordinance or resolution relating to such authorization or ratification if such bonds are or were sold and issued in accordance with the sale provisions and with an interest rate or rates not greater than those permitted by the applicable provision of *this amendatory act, and any such bonds heretofore sold are declared valid obligations of the issuer. This section shall not apply to bonds having a total value exceeding fifteen million dollars.
[ 1982 c 216 s 12. ]
NOTES:
*Reviser's note: For codification of "this amendatory act" [1982 c 216], see Codification Tables.
The purposes of this chapter are to permit the state and local governments to conform with registration requirements of federal law which are necessary to exempt interest payments from federal income taxes when the state or local governments issue bonds or incur other obligations and to authorize the establishment and maintenance of differing systems of registering bonds and other obligations as these systems are developed and recognized, which may be instituted, discontinued, and reinstituted from time to time. It is further the purpose of this chapter to grant local governments an alternative flexible authority to structure and sell their bond issues and to include a variety of features on their bonds.
This act shall be liberally construed to effect its purposes.
[ 1983 c 167 s 1. ]
NOTES:
Severability—1983 c 167: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1983 c 167 s 273.]
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Bond" means any agreement, which may or may not be represented by a physical instrument, including notes, warrants, or certificates of indebtedness, that evidences an indebtedness of the state or a local government or a fund thereof, where the state or local government agrees to pay a specified amount of money, with or without interest, at a designated time or times to either registered owners or bearers, including debt issued under chapter 39.50 RCW.
(2) "Host approval" means an approval of an issue of bonds by an applicable elected representative of the state or local government, having jurisdiction, for purposes of section 147(f)(2)(A)(ii) of the internal revenue code, over the area in which a facility is located that is to be financed with bonds issued by an issuer that is not the state or a local government.
(3) "Local government" means any county, city, town, special purpose district, political subdivision, municipal corporation, or quasi-municipal corporation, including any public corporation or instrumentality created by such an entity.
(4) "Obligation" means an agreement that evidences an indebtedness of the state or a local government or a fund thereof, other than a bond, and includes, but is not limited to, conditional sales contracts, lease obligations, and promissory notes.
(5) "State" includes the state, agencies of the state, and public corporations and instrumentalities created by the state or agencies of the state.
(6) "Treasurer" means the state treasurer, county treasurer, city treasurer, or other officer responsible for treasury functions of any other local government.
[ 2016 c 105 s 6; 2011 c 211 s 1; 2001 c 299 s 15; 1995 c 38 s 6; 1994 c 301 s 10; 1983 c 167 s 2. ]
NOTES:
Acts of municipal officers ratified and confirmed—1995 c 38: See note following RCW 3.02.045.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
(1) The state and local governments are authorized to establish a system of registering the ownership of their bonds or other obligations as to principal and interest, or principal only. Registration may include, without limitation: (a) A book entry system of recording the ownership of a bond or other obligation whether or not a physical instrument is issued; or (b) recording the ownership of a bond or other obligation together with the requirement that the transfer of ownership may only be effected by the surrender of the old bond or other obligation and either the reissuance of the old bond or other obligation or the issuance of a new bond or other obligation to the new owner.
(2) The system of registration shall define the method or methods by which transfer of the registered bonds or other obligations shall be effective, and by which payment of principal and any interest shall be made. The system of registration may permit the issuance of bonds or other obligations in any denomination to represent several registered bonds or other obligations of smaller denominations. The system of registration may also provide for any writing relating to a bond or other obligation that is not issued as a physical instrument, for identifying numbers or other designations, for a sufficient supply of certificates for subsequent transfers, for record and payment dates, for varying denominations, for communications to the owners of bonds or other obligations, for accounting, canceled certificate destruction, registration and release of securing interests, and for such other incidental matters pertaining to the registration of bonds or other obligations as the issuer may deem to be necessary or appropriate.
(3)(a) The state treasurer or the treasurer of a local government may appoint (i) one or more of the state fiscal agents or (ii) other fiscal agents to act with respect to an issue of its bonds or other obligations as authenticating agent, transfer agent, registrar, and paying or other agent and specify the rights and duties and means of compensation of any such fiscal agent so acting.
(b) The county treasurer as ex officio treasurer of a special district shall act as fiscal agent for such special district, unless the county treasurer appoints either one or more of the state fiscal agents or other fiscal agent selected by the county treasurer to act with respect to an issue of the special district's bonds or other obligations as authenticating agent, transfer agent, registrar, and paying or other fiscal agent and specify the rights and duties and means of compensation of any such fiscal agent.
(4) Nothing in this section precludes the issuer, or a trustee appointed by the issuer pursuant to any other provision of law, from itself performing, either alone or jointly with other issuers, fiscal agencies, or trustees, any transfer, registration, authentication, payment, or other function described in this section.
[ 2016 c 105 s 7; 1995 c 38 s 7; 1994 c 301 s 11; 1985 c 84 s 1; 1983 c 167 s 3. ]
NOTES:
Acts of municipal officers ratified and confirmed—1995 c 38: See note following RCW 3.02.045.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
(1) A local government authorized to issue bonds must determine for the bond issue its amount, date or dates, terms not in excess of the maximum term otherwise provided in law, conditions, bond denominations, interest rate or rates, which may be fixed or variable, interest payment dates, maturity or maturities, redemption rights, registration privileges, manner of execution, price, manner of sale, covenants, and form, including registration as to principal and interest, registration as to principal only, or bearer. Registration may be as provided in RCW 39.46.030.
(2) If an ordinance or resolution approving the issuance of bonds authorizes an officer or employee of the local government to serve as its designated representative and to accept, on behalf of the local government, an offer to purchase those bonds, the acceptance of the offer by the designated representative must be consistent with terms established by the ordinance or resolution, and with additional parameters set by the governing body of the local government in the ordinance or resolution. That ordinance or resolution must establish the following terms for the bonds or set forth parameters with respect thereto: The amount, date or dates, denominations, interest rate or rates (or mechanism for determining interest rate or rates), payment dates, final maturity, redemption rights, price, minimum savings for refunding bonds (if the refunding bonds are issued for savings purposes), and any other terms and conditions deemed appropriate by the legislative body of the local government. A county designating a representative in accordance with this subsection must act in a manner that is consistent with the approved county debt policy adopted in accordance with RCW 36.48.070.
[ 2011 c 210 s 1; 1983 c 167 s 4. ]
NOTES:
Application to previously issued bonds—2011 c 210: "All bonds previously issued and any reimbursements previously made with bond proceeds by any local government and consistent with the provisions of this act are hereby validated, ratified, and confirmed." [ 2011 c 210 s 6.]
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Each local government authorized to issue bonds is authorized to establish lines of credit with any qualified public depository to be drawn upon in exchange for its bonds or other obligations, to delegate to its treasurer authority to determine the amount of credit extended, and to pay interest and other finance or service charges. The interest rates on such bonds or other obligations may be a fixed rate or rates set periodically or a variable rate or rates determined by agreement of the parties.
[ 2003 c 23 s 1; 1983 c 167 s 5. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Where bonds are issued by the state or a local government as physical instruments, the bonds shall be printed, engraved, lithographed, typed, or reproduced and the manual or facsimile signatures of both a designated officer and chairperson of the governing body or chief executive shall be included on each bond.
[ 1983 c 167 s 6. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
(1) Except as provided in subsection (2) of this section, the proceeds of any bonds issued by the state or a local government may be used to pay incidental costs and costs related to the sale and issuance of the bonds. Such costs include payments for fiscal and legal expenses, obtaining bond ratings, printing, engraving, advertising, establishing and funding reserve accounts and other accounts, an amount for working capital, capitalized interest for up to six months after completion of construction, necessary and related engineering, architectural, planning, and inspection costs, and other similar activities or purposes.
(2) In addition to the costs enumerated in subsection (1) of this section, costs authorized under this section include capitalized interest for up to seventy-two months from the date of issuance for bonds issued by the state for the construction of a public toll bridge under chapter 47.46 RCW.
[ 2002 c 114 s 22; 1983 c 167 s 7. ]
NOTES:
Finding—Intent—2002 c 114: See RCW 47.46.011.
Captions not law—2002 c 114: See note following RCW 47.46.011.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
RCW 39.46.010 through 39.46.070 shall be deemed to provide a complete, additional, and alternative method for the performance of those subjects authorized by these sections and shall be regarded as supplemental and additional to powers conferred by other state laws. Whenever bonds and other obligations are issued and sold in conformance with RCW 39.46.010 through 39.46.070, such issuance and sale need not comply with contrary requirements of other state laws applicable to the issuance and sale of bonds or other obligations.
[ 1983 c 167 s 8. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
(1) General obligation bonds of local governments shall be subject to this section. Unless otherwise stated in law, the maximum term of any general obligation bond issue shall be forty years.
(2) General obligation bonds constitute an indebtedness of the local government issuing the bonds that are subject to the indebtedness limitations provided in Article VIII, section 6 of the state Constitution and are payable from tax revenues of the local government and such other money lawfully available and pledged or provided by the governing body of the local government for that purpose. Such governing body may pledge the full faith, credit and resources of the local government for the payment of general obligation bonds. The payment of such bonds shall be enforceable in mandamus against the local government and its officials. The officials now or hereafter charged by law with the duty of levying taxes pledged for the payment of general obligation bonds and interest thereon shall, in the manner provided by law, make an annual levy of such taxes sufficient together with other moneys lawfully available and pledge [pledged] therefor to meet the payments of principal and interest on the bonds as they come due.
(3) General obligation bonds, whether or not issued as physical instruments, shall be executed in the manner determined by the governing body or legislative body of the issuer. If the issuer is the county or a special district for which the county treasurer is the treasurer, the issuer shall notify the county treasurer at least thirty days in advance of authorizing the issuance of bonds or the incurrence of other certificates of indebtedness.
(4) Unless another statute specifically provides otherwise, the owner of a general obligation bond, or the owner of an interest coupon, issued by a local government shall not have any claim against the state arising from the general obligation bond or interest coupon.
(5) As used in this section, the term "local government" means every unit of local government, including municipal corporations, quasi municipal corporations, and political subdivisions, where property ownership is not a prerequisite to vote in the local government's elections.
[ 1998 c 106 s 7; 1995 c 38 s 8; 1994 c 301 s 12; 1984 c 186 s 2. ]
NOTES:
Acts of municipal officers ratified and confirmed—1995 c 38: See note following RCW 3.02.045.
Purpose—1984 c 186: "The purpose of this 1984 act is to provide simplified and uniform authorities for various local governments to issue and sell general obligation bonds. It is not the purpose of this 1984 act to alter the indebtedness limitation of local governments." [ 1984 c 186 s 1.]
Notice of intent to sell general obligation bonds at a public sale shall be provided in a reasonable manner as determined by the legislative authority or governing body of the issuer.
[ 1984 c 186 s 4. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
(1) Any local government authorized to issue revenue bonds may issue revenue bonds under this section and RCW 39.46.160. If a local government chooses to issue revenue bonds under this section and RCW 39.46.160, the issue shall be subject to the limitations and restrictions of these sections. The authority to issue revenue bonds under this section and RCW 39.46.160 is supplementary and in addition to any authority otherwise existing. The maximum term of any revenue bonds shall be forty years unless another statute authorizing the local government to issue revenue bonds provides for a different maximum term, in which event the local government may issue revenue bonds only with terms not in excess of such different maximum term.
(2) The governing body of a local government issuing revenue bonds shall create a special fund or funds, or use an existing special fund or funds, exclusively from which, along with reserve funds which may be created by the governing body, the principal and interest on such revenue bonds shall be payable. These reserve funds include those authorized to be created by RCW 39.46.160.
Subject to the limitations contained in this section, the governing body of a local government may provide such covenants as it may deem necessary to secure the payment of the principal of and interest on revenue bonds, and premium on revenue bonds, if any. Such covenants may include, but are not limited to, depositing certain revenues into a special fund or funds as provided in subsection (3) of this section; establishing, maintaining, and collecting fees, rates, charges, tariffs, or rentals, on facilities and services, the income of which is pledged for the payment of such bonds; operating, maintaining, managing, accounting, and auditing the local government; appointing trustees, depositaries, and paying agents; and any and all matters of like or different character, which affect the security or protection of the revenue bonds.
(3) The governing body may obligate the local government to set aside and pay into a special fund or funds created under subsection (2) of this section a proportion or a fixed amount of the revenues from the following: (a) The public improvements, projects, or facilities that are financed by the revenue bonds; or (b) the public utility or system, or an addition or extension to the public utility or system, where the improvements, projects, or facilities financed by the revenue bonds are a portion of the public utility or system; or (c) all the revenues of the local government; or (d) any other money legally available for such purposes. As used in this subsection, the term "revenues" includes the operating revenues of a local government that result from fees, rates, charges, tariffs, or rentals imposed upon the use or availability or benefit from projects, facilities, or utilities owned or operated by the local government and from related services provided by the local government and other revenues legally available to be pledged to secure the revenue bonds.
The proportion or fixed amount of revenue so obligated shall be a lien and charge against these revenues, subject only to maintenance and operating expenses. The governing body shall have due regard for the cost of maintenance and operation of the public utility, system, improvement, project, facility, addition, or extension that generates revenues obligated to be placed into the special fund or funds from which the revenue bonds are payable, and shall not set aside into the special fund or funds a greater amount or proportion of the revenues that in its judgment will be available over and above such cost of maintenance and operation and the proportion or fixed amount, if any, of the revenue so previously pledged. Other revenues, including tax revenues, lawfully available for maintenance or operation of revenue generating facilities may be used for maintenance and operation purposes even though the facilities are acquired, constructed, expanded, replaced, or repaired with moneys arising from the sale of revenue bonds. However, the use of these other revenues for maintenance and operation purposes shall not be deemed to directly or indirectly guarantee the revenue bonds or create a general obligation. The obligation to maintain and impose fees, rates, charges, tariffs, or rentals at levels sufficient to finance maintenance and operations shall remain if the other revenues available for such purposes diminish or cease.
The governing body may also provide that revenue bonds payable out of the same source or sources of revenue may later be issued on a parity with any revenue bonds being issued and sold.
(4) A revenue bond issued by a local government shall not constitute an obligation of the state, either general or special, nor a general obligation of the local government issuing the bond, but is a special obligation of the local government issuing the bond, and the interest and principal on the bond shall only be payable from the special fund or funds established pursuant to subsection (2) of this section, the revenues lawfully pledged to the special fund or funds, and any lawfully created reserve funds. The owner of a revenue bond shall not have any claim for the payment thereof against the local government arising from the revenue bond except for payment from the special fund or funds, the revenues lawfully pledged to the special fund or funds, and any lawfully created reserve funds. The owner of a revenue bond issued by a local government shall not have any claim against the state arising from the revenue bond. Tax revenues shall not be used directly or indirectly to secure or guarantee the payment of the principal of or interest on revenue bonds.
[(5)] The substance of the limitations included in this subsection shall be plainly printed, written, engraved, or reproduced on: (a) Each revenue bond that is a physical instrument; (b) the official notice of sale; and (c) each official statement associated with the bonds.
(6) The authority to create a fund shall include the authority to create accounts within a fund.
(7) Local governments issuing revenue bonds, payable from revenues derived from projects, facilities, or utilities, shall covenant to maintain and keep these projects, facilities, or utilities in proper operating condition for their useful life.
[ 1986 c 168 s 1. ]
NOTES:
Funds for reserve purposes may be included in issue amount: RCW 39.44.140.
Any local government issuing revenue bonds under this section and RCW 39.46.150 may include in the amount of any such issue money for the purpose of establishing, maintaining, or increasing reserve funds to:
(1) Secure the payment of the principal of and interest on such revenue bonds; or
(2) Provide for replacements or renewals of or repairs or betterments to revenue producing facilities; or
(3) Provide for contingencies, including, but not limited to, loss of revenue caused by such contingencies.
[ 1986 c 168 s 2. ]
(1) It is the policy of this state that in order to maintain an effective system of monitoring the use of federal subsidies within the state, facilities within the state proposed to be financed with bonds issued by an issuer formed or organized under the laws of another state must receive prior approval from the statewide issuer authorized by the laws of Washington to issue bonds for the proposed project in accordance with this section.
(2)(a) At least one hundred twenty days prior to the public hearing for the proposed issuance of bonds for a project located in this state by an issuer formed or organized under the laws of another state, the issuer must notify the statewide issuer authorized under the laws of Washington to issue bonds for the proposed project and provide the information required under (b) of this subsection.
(b) The following items and information must be received by the statewide issuer authorized under the laws of Washington to issue bonds for the proposed project:
(i) A copy of the proposed notice of public hearing pertaining to the facilities, providing the date and location of the proposed hearing;
(ii) The maximum stated principal amount of the bonds;
(iii) A description of the facility, including its location;
(iv) A description of the plan of finance;
(v) The name of the issuer of the bonds;
(vi) The name of the initial owner or principal user of the facility;
(vii) A description of how the project will meet the public policy requirements and objectives of this state including the policies of the statewide issuer under Washington law; and
(viii) A check in the amount established by the statewide issuer under Washington law to perform the review.
(c) If the statewide issuer authorized to issue the bonds under Washington law determines that the facility and the items and information submitted under (b) of this subsection are consistent with the laws and public policy of the state and are in the best interest of the state, then the statewide issuer shall issue a written approval under this section authorizing the governmental unit to grant its host approval of the public hearing in its discretion.
(d) If the statewide issuer authorized to issue the bonds under Washington law determines that the facility and the items and information submitted under (b) of this subsection are not consistent with the laws and public policy of the state and are not in the best interest of the state, then the public hearing may not proceed and the bonds may not be issued by an issuer formed or organized under the laws of another state.
(3)(a) By December 1, 2011, annually each December 1st until December 1, 2014, and December 1st every five years thereafter, each statewide issuer receiving the notice required by subsection (2) of this section from an issuer formed or organized under the laws of another state shall, within existing funds, submit a report to the appropriate committees of the legislature.
(b) Each report under (a) of this subsection must provide, for annual reports the following information from the previous fiscal year, and for other reports the following information from each of the previous fiscal years:
(i) The number of proposed projects for which the statewide issuer received notice and the information described under subsection (2) of this section;
(ii) A description of the projects for which notice was submitted;
(iii) The dollar amount of each proposed project;
(iv) The location of each proposed project;
(v) Whether the proposed project was approved by the statewide issuer; and
(vi) For any project that was not approved by the statewide issuer, the reasons for the statewide issuer's decision.
[ 2011 c 211 s 2. ]
Bonds and securities of all kinds heretofore or hereafter authorized, issued by any issuing corporation or district (hereinafter called the "issuer" and as hereinafter specified), whether such bonds and securities be issued for such issuer itself or for any other taxing or assessment district within its limits, and whether payable in whole or in part out of and from general taxes or payable in whole or in part out of and from the earnings to be derived from any utility, system, construction, work, or works, belonging to or operated by any such issuer, or payable in whole or in part out of and from "local" or "benefit" assessments upon lands within any assessment district or assessment subdivision within any such issuer, may be sold to the United States government or to any department, corporation or agency thereof by private sale without giving any prior notice thereof by publication or otherwise and in such manner as the governing authority of such issuer may provide: PROVIDED, Only that bonds or other securities sold at private sale under the authority of this chapter shall bear interest at a rate or rates as authorized by the issuer and that all bonds and securities sold and issued under the authority of this chapter shall be sold, if now required by existing law, at not less than par and accrued interest.
[ 1970 ex.s. c 56 s 59; 1969 ex.s. c 232 s 76; 1933 ex.s. c 30 s 1; RRS s 5583-11. ]
NOTES:
Purpose—1970 ex.s. c 56: See note following RCW 39.52.020.
Validation—Saving—Severability—1969 ex.s. c 232: See notes following RCW 39.52.020.
It shall be proper to provide with respect to any bonds now required to be amortized as provided by *RCW 39.44.010 through 39.44.080, that such amortized annual maturities shall commence to be payable at any time on or before five years from the date of said bonds, and that any bonds, or any part thereof, issued under the authority of this chapter, shall be redeemable prior to their fixed maturities, as provided by the governing board or authority of any such issuer.
[ 1933 ex.s. c 30 s 2; RRS s 5583-12. ]
NOTES:
*Reviser's note: RCW 39.44.010, 39.44.011, 39.44.020, 39.44.030, 39.44.060, and 39.44.080 were repealed by 1984 c 186 s 70.
The issuing corporations, districts, and subdivisions hereinbefore referred to and described as "issuer", shall include any county, city, town, school district, port district, metropolitan park district, taxing district, assessment district or any public corporation or municipal corporation authorized by existing law to issue bonds, securities or other evidences of indebtedness for itself or for any other taxing or assessment district therein or department thereof.
[ 1933 ex.s. c 30 s 3; RRS s 5583-13. ]
It shall be optional with any such issuer, at its discretion, to exercise all or any of the powers conferred by this chapter in connection with the adoption and exercise by any such issuer of the provisions and powers granted by existing law.
[ 1933 ex.s. c 30 s 4; RRS s 5583-14. ]
As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.
(1) "Governing body" means the legislative authority of a municipal corporation by whatever name designated;
(2) "Local improvement district" includes local improvement districts, utility local improvement districts, road improvement districts, and other improvement districts that a municipal corporation is authorized by law to establish;
(3) "Municipal corporation" means any city, town, county, water-sewer district, school district, port district, public utility district, metropolitan municipal corporation, public transportation benefit area, park and recreation district, irrigation district, fire protection district or any other municipal or quasi municipal corporation described as such by statute, or regional transit authority, except joint operating agencies under chapter 43.52 RCW;
(4) "Ordinance" means an ordinance of a city or town or resolution or other instrument by which the governing body of the municipal corporation exercising any power under this chapter takes formal action and adopts legislative provisions and matters of some permanency; and
(5) "Short-term obligations" are warrants, notes, capital leases, or other evidences of indebtedness, except bonds.
[ 2001 c 299 s 16; 1999 c 153 s 54; 1998 c 106 s 8; 1985 c 332 s 8; 1982 c 216 s 2. ]
NOTES:
Part headings not law—1999 c 153: See note following RCW 57.04.050.
Subject to any applicable budget requirements, any municipal corporation may borrow money and issue short-term obligations as provided in this chapter, the proceeds of which may be used for any lawful purpose of the municipal corporation. Short-term obligations may be issued in anticipation of the receipt of revenues, taxes, or grants or the sale of (1) general obligation bonds if the bonds may be issued without the assent of the voters or if previously ratified by the voters; (2) revenue bonds if the bonds have been authorized by ordinance; (3) local improvement district bonds if the bonds have been authorized by ordinance. These short-term obligations shall be repaid out of money derived from the source or sources in anticipation of which they were issued or from any money otherwise legally available for this purpose.
[ 1982 c 216 s 3. ]
(1) The issuance of short-term obligations shall be authorized by ordinance of the governing body which ordinance shall fix the maximum amount of the obligations to be issued or, if applicable, the maximum amount which may be outstanding at any time, the maximum term and interest rate or rates to be borne thereby, the manner of sale, maximum price, form including bearer or registered as provided in RCW 39.46.030, terms, conditions, and the covenants thereof. For those municipalities and taxing and assessment districts for which the county treasurer is not the designated treasurer by law, the ordinance may provide for designation and employment of a paying agent for the short-term obligations and may authorize a designated representative of the municipal corporation, subject to the terms of the ordinance in selling and delivering short-term obligations authorized and fixing the dates, price, interest rates, and other details as may be specified in the ordinance. For the county and those taxing and assessment districts for which the county treasurer is the designated treasurer by law or other appointment, the county treasurer shall be notified thirty days in advance of borrowing under this chapter and will be the designated paying agent to act on its behalf for all payments of principal, interest, and penalties for that obligation, subject to the terms of the ordinance in selling and delivering short-term obligations authorized and fixing the dates, price, interest rates, and other details as may be specified in the ordinance. Short-term obligations issued under this section shall bear such fixed or variable rate or rates of interest as the governing body considers to be in the best interests of the municipal corporation. Variable rates of interest may be fixed in relationship to such standard or index as the governing body designates.
The governing body may make contracts for the future sale of short-term obligations pursuant to which the purchasers are committed to purchase the short-term obligations from time to time on the terms and conditions stated in the contract, and may pay such consideration as it considers proper for the commitments. Short-term obligations issued in anticipation of the receipt of taxes shall be paid within six months from the end of the fiscal year in which they are issued. For the purpose of this subsection, short-term obligations issued in anticipation of the sale of general obligation bonds shall not be considered to be obligations issued in anticipation of the receipt of taxes.
(2) Notwithstanding subsection (1) of this section, such short-term obligations may be issued and sold in accordance with chapter 39.46 RCW.
[ 2001 c 299 s 17; 1995 c 38 s 9; 1994 c 301 s 13; 1985 c 71 s 1; 1983 c 167 s 112; 1982 c 216 s 4. ]
NOTES:
Acts of municipal officers ratified and confirmed—1995 c 38: See note following RCW 3.02.045.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Short-term obligations may, from time to time, be renewed or refunded by the issuance of short-term obligations and may be funded by the issuance of revenue, local improvement district, special assessment, or general obligation bonds. Short-term obligations payable from taxes shall not be renewed or refunded to a date later than six months from the end of the fiscal year in which the original short-term obligation was issued. For the purpose of this section, short-term obligations issued in anticipation of the sale of general obligation bonds shall not be considered to be short-term obligations payable from taxes.
[ 1985 c 332 s 9; 1985 c 71 s 2; 1982 c 216 s 5. ]
Short-term obligations issued in anticipation of the receipt of taxes or the sale of general obligation bonds and the interest thereon shall be secured by the full faith, credit, taxing power, and resources of the municipal corporation. Short-term obligations issued in anticipation of the sale of revenue or local improvement district bonds and the interest thereon may be secured in the same manner as the revenue and local improvement district bonds in anticipation of which the obligations are issued and by an undertaking to issue the bonds. Short-term obligations issued in anticipation of grants, loans, or other sources of money shall be secured in the manner set forth in the ordinance authorizing their issuance.
[ 1982 c 216 s 6. ]
A municipal corporation may incur nonvoted general indebtedness under this chapter up to an amount which, when added to all other authorized and outstanding nonvoted indebtedness of the municipal corporation, is equal to the maximum amount of indebtedness the municipal corporation is otherwise permitted to incur without a vote of the electors.
[ 1982 c 216 s 7. ]
For the purpose of providing funds for the payment of principal of and interest on short-term obligations, the governing body may authorize the creation of a special fund or funds and provide for the payment from authorized sources to such funds of amounts sufficient to meet principal and interest requirements.
[ 1982 c 216 s 8. ]
The authority granted by this chapter shall be in addition and supplemental to any authority previously granted and shall not limit any other powers or authority previously granted to any municipal corporation. The authority granted by this chapter to public utility districts organized under Title 54 RCW shall not extend to joint operating agencies organized under chapter 43.52 RCW.
[ 1982 c 216 s 9. ]
Any county, city, or town in the state of Washington which now has or may hereafter have an outstanding indebtedness evidenced by warrants or bonds, including warrants or bonds of any county, city, or town which are special fund obligations of and constitute a lien upon the waterworks or other public utilities of such county, city, or town, and are payable only from the income or funds derived or to be derived therefrom, whether issued originally within the limitations of the Constitution of this state, or of any law thereof, or whether such outstanding indebtedness has been or may hereafter be validated or legalized in the manner prescribed by law, may, by its corporate authorities, provide by ordinance or resolution for the issuance of funding bonds with which to take up and cancel such outstanding indebtedness in the manner hereinafter described, said bonds to constitute general obligations of such county, city, or town: PROVIDED, That special fund obligations payable only from the income funds of the public utility, shall not be refunded by the issuance of general municipal bonds where voter approval is required before general municipal bonds may be issued for such public utility purposes, unless such general municipal bonds shall have been previously authorized. Nothing in this chapter shall be so construed as to prevent any such county, city, or town from funding its indebtedness as now provided by law.
[ 1995 2nd sp.s. c 17 s 6; 1984 c 186 s 36; 1917 c 145 s 1; 1895 c 170 s 1; RRS s 5617. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
That all bonds heretofore voted or issued, and which may have been or may hereafter be issued by any county, city or town, for any of the purposes authorized by the preceding section as hereby amended, including general fund bonds issued for the purpose of refunding special utility fund bonds or warrants, shall be validated and have the same force and effect as though said section had been in full force and effect at the time said bonds were either authorized or issued.
[ 1917 c 145 s 2; RRS s 5618. ]
No bonds issued under this chapter shall be issued for a longer period than twenty years. Nothing in this chapter shall be deemed to authorize the issuing of any funding bonds which exceeds any constitutional or statutory limitations of indebtedness. Such bonds shall be issued and sold in accordance with chapters 39.46 and 39.53 RCW, exclusive of RCW 39.53.120.
[ 1995 2nd sp.s. c 17 s 7; 1984 c 186 s 37; 1983 c 167 s 113; 1970 ex.s. c 56 s 60; 1969 ex.s. c 232 s 31; 1895 c 170 s 2; RRS s 5619. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Purpose—1970 ex.s. c 56: "Because market conditions are such that the state, state agencies, state colleges and universities, and the political subdivisions, municipal corporations and quasi municipal corporations of this state are finding it increasingly difficult and, in some cases, impossible to market bond issues and all other obligations, at the maximum permissible rate of interest payable on such bonds and obligations, it is the purpose of this 1970 amendatory act to remove all maximum rates of interest payable on such bonds and obligations." [ 1970 ex.s. c 56 s 1; 1969 ex.s. c 232 s 1.]
Validation—Saving—1969 ex.s. c 232: "All bonds, the issuance of which was authorized or ratified at a general or special election held within the issuing jurisdiction prior to the effective date of this amendatory act or the proposition for the issuance of which will be submitted at such an election pursuant to action of the legislative authority of the issuer taken prior to the effective date of this amendatory act, may be sold and issued with an interest rate or rates greater than any interest rate restriction contained in the ballot proposition or ordinance or resolution relating to such authorization or ratification if such bonds are sold and issued with an interest rate or rates not greater than those permitted by the applicable provision of this amendatory act." [ 1969 ex.s. c 232 s 94.]
Severability—1969 ex.s. c 232: "If a court of competent jurisdiction shall adjudge to be invalid or unconstitutional any clause, sentence, paragraph, section, or part of this 1969 amendatory act, such judgment or decree shall not affect, impair or nullify the remainder of this act, but the effect thereof shall be confined to the clause, sentence, paragraph, section, or part of this act so adjudged to be invalid or unconstitutional." [ 1969 ex.s. c 232 s 95.]
Bonds, form, terms of sale, payment, etc.: Chapter 39.44 RCW.
The corporate authorities of any such county, city or town shall provide annually by ordinance or resolution for the levy and extension on the tax rolls of such county, city or town, and for the collection thereof, of a direct annual tax in addition to all other county, city or town taxes to be levied according to law, which shall be sufficient to meet the interest on all of said bonds promptly as the same matures, and also sufficient to fully pay each series of bonds as the same matures: PROVIDED, That such ordinance or resolution shall not be repealed until the levy therein provided for shall be fully paid, or the bonds both principal and interest shall be paid or canceled.
[ 1895 c 170 s 4; RRS s 5621. Formerly RCW 39.52.030, part. ]
The words "corporate authorities", used in this chapter, shall be held to mean the county legislative authority, or the council or commission of the city or town.
[ 1984 c 186 s 38; 1895 c 170 s 6; RRS s 5623. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
Except where the context otherwise requires, the definitions in this section apply throughout this chapter:
(1) "Bond" means any revenue bond or general obligation bond.
(2) "General obligation bond" means any bond, note, warrant, certificate of indebtedness, or other obligation of a public body which constitutes an indebtedness within the meaning of the constitutional debt limitation.
(3) "Governing body" means the council, commission, board of commissioners, board of directors, board of trustees, board of regents, or other legislative body of the public body designated herein in which the legislative powers of the public body are vested. With respect to the state, "governing body" means the state finance committee.
(4) "Government obligations" means any of the following: (a) Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and bank certificates of deposit secured by such obligations; (b) bonds, debentures, notes, participation certificates, or other obligations issued by the banks for cooperatives, the federal intermediate credit bank, the federal home loan bank system, the export-import bank of the United States, federal land banks, or the federal national mortgage association; (c) public housing bonds and project notes fully secured by contracts with the United States; and (d) obligations of financial institutions insured by the federal deposit insurance corporation or the federal savings and loan insurance corporation, to the extent insured or to the extent guaranteed as permitted under any other provision of state law.
(5) "Issuer" means the public body issuing any bond or bonds.
(6) "Ordinance" means an ordinance of a city or town, or ordinance, resolution or other instrument by which the governing body of the public body exercising any power under this chapter takes formal action and adopts legislative provisions and matters of some permanency.
(7) "Public body" means the state of Washington, its agencies, institutions, political subdivisions, and municipal and quasi-municipal corporations now or hereafter existing under the laws of the state of Washington.
(8) "Refunding bonds" means bonds issued for the purpose of paying the principal of or redemption premiums or interest on any outstanding bonds of the issuer, its predecessor, or a related public body.
(9) "Refunding plan" means the plan adopted by an ordinance of a public body to issue refunding bonds and redeem the bonds to be refunded.
(10) "Revenue bond" means any bond, note, warrant, certificate of indebtedness, or other obligation for the payment of money that is payable from designated revenues, special assessments, or a special fund but excluding any obligation constituting an indebtedness within the meaning of the constitutional debt limitation.
[ 1999 c 230 s 1; 1984 c 186 s 68; 1973 1st ex.s. c 25 s 1; 1965 ex.s. c 138 s 2. ]
NOTES:
Application—Construction—1999 c 230: "The authority of a public body to issue refunding bonds pursuant to this act is additional to any existing authority to issue such bonds and nothing in this act shall prevent the issuance of such bonds pursuant to any other law, and this act shall not be construed to amend any existing law authorizing the issuance of refunding bonds by a public body." [ 1999 c 230 s 13.]
Severability—1999 c 230: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1999 c 230 s 14.]
Purpose—1984 c 186: See note following RCW 39.46.110.
The governing body of any public body may by ordinance provide for the issuance of refunding bonds without an election (1) in order to pay or discharge all or any part of an outstanding series or issue of bonds, including any redemption premiums or interest thereon, in arrears or about to become due, and for which sufficient funds are not available, (2) when necessary or in the best interest of the public body to modify debt service or reserve requirements, sources of payment, covenants, or other terms of the bonds to be refunded, or (3) in order to effect a saving to the public body. To determine whether or not a saving will be effected, consideration shall be given to the interest to fixed maturities of the refunding bonds and the bonds to be refunded, the costs of issuance of the refunding bonds, including any sale discount, the redemption premiums, if any, to be paid, and the known earned income from the investment of the refunding bond proceeds pending redemption of the bonds to be refunded.
[ 1999 c 230 s 2; 1977 ex.s. c 262 s 1; 1974 ex.s. c 111 s 2; 1965 ex.s. c 138 s 3. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
Severability—1974 ex.s. c 111: See note following RCW 39.42.080.
Any refunding bonds issued may be delivered in exchange for the bonds to be refunded or may be sold in such manner and at such price as the governing body may in its discretion determine advisable.
[ 1999 c 230 s 3; 1973 1st ex.s. c 25 s 2; 1965 ex.s. c 138 s 4. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
Bonds may be refunded under this chapter or under any other law of this state which authorizes the issuance of refunding bonds. In any refunding plan under this chapter the governing body shall provide irrevocably in the ordinance authorizing the issuance of the advance refunding bonds for the redemption or payment of the bonds to be refunded.
The ordinance authorizing the issuance of refunding bonds under this chapter may contain such provisions for the redemption of the refunding bonds prior to maturity and for payment of a premium upon such redemption as the governing body in its discretion may determine advisable.
[ 1999 c 230 s 4; 1977 ex.s. c 262 s 2; 1973 1st ex.s. c 25 s 3; 1965 ex.s. c 138 s 5. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
Bonds payable solely from special assessments or special assessments and a guaranty fund issued on or prior to June 7, 1984, shall not be subject to refunding under this chapter.
[ 1984 c 186 s 69. ]
NOTES:
Purpose—1984 c 186: See note following RCW 39.46.110.
The principal amount of refunding bonds may exceed the principal amount of the bonds to be refunded by an amount deemed reasonably required to effect such refunding. The principal amount of the refunding bonds may be less than or the same as the principal amount of the bonds to be refunded so long as provision is duly and sufficiently made for the retirement or redemption of such bonds to be refunded. Any reserves held to secure the bonds to be refunded, or other available money, may be used to accomplish the refunding in accordance with the refunding plan. Reserves not so used shall be pledged as security for the refunding bonds to the extent the reserves, if any, are required. The balance of any such reserves may be used for any lawful purpose.
[ 1999 c 230 s 5; 1983 1st ex.s. c 69 s 1; 1977 ex.s. c 262 s 3; 1974 ex.s. c 111 s 3; 1965 ex.s. c 138 s 6. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
Severability—1974 ex.s. c 111: See note following RCW 39.42.080.
Prior to the application of the proceeds derived from the sale of refunding bonds to the purposes for which such bonds have been issued, such proceeds, together with any other funds the governing body may set aside for the payment of the bonds to be refunded, may be invested and reinvested only in government obligations maturing or having guaranteed redemption prices at the option of the holder at such time or times as may be required to provide funds sufficient to pay principal, interest and redemption premiums, if any, in accordance with the refunding plan. To the extent incidental expenses have been capitalized, such bond proceeds may be used to defray such expenses.
[ 1999 c 230 s 6; 1973 1st ex.s. c 25 s 4; 1965 ex.s. c 138 s 7. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
The governing body may contract with respect to the safekeeping and application of the refunding bond proceeds and other funds included therewith and the income therefrom including the right to appoint a trustee which may be any trust company or state or national bank having powers of a trust company within or without the state of Washington. The governing body may provide in the refunding plan that until such moneys are required to redeem or retire the bonds to be refunded, the refunding bond proceeds and other funds, and the income therefrom shall be used to pay and secure the payment of the principal of and interest on the refunding bonds. The governing body may additionally pledge for the payment of revenue refunding bonds any revenues which might legally be pledged for the payment of revenue bonds of the issuer of the type to be refunded. Provisions must be made by the governing body for moneys sufficient in amount to accomplish the refunding as scheduled.
[ 1999 c 230 s 7; 1973 1st ex.s. c 25 s 5; 1965 ex.s. c 138 s 8. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
When a public body has irrevocably set aside for and pledged to the payment of revenue bonds to be refunded refunding bond proceeds and other moneys in amounts which together with known earned income from the investment thereof are sufficient in amount to pay the principal of and interest and any redemption premiums on such revenue bonds as the same become due and to accomplish the refunding as scheduled, the governing body may provide that the refunding revenue bonds shall be payable from any source which, either at the time of the issuance of the refunding bonds or the revenue bonds to be refunded, might legally be or have been pledged for the payment of the revenue bonds to be refunded to the extent it may legally do so, notwithstanding the pledge of such revenues for the payment of the revenue bonds to be refunded.
[ 1999 c 230 s 8; 1965 ex.s. c 138 s 9. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
The various annual maturities of general obligation refunding bonds issued to refund voted general obligation bonds shall not extend over a longer period of time than the bonds to be refunded. Such maturities may be changed in amount or shortened in term if the estimated respective annual principal and interest requirements of the refunding bonds, computed upon the anticipated effective interest rate the governing body shall in its discretion determine will be borne by such bonds, will not exceed the respective annual principal and interest requirements of the bonds to be refunded, except the issuer may increase the principal amount of annual maturities for the purpose of rounding out maturities to the nearest five thousand dollars.
[ 1999 c 230 s 9; 1965 ex.s. c 138 s 10. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
In computing indebtedness for the purpose of any constitutional or statutory debt limitation there shall be deducted from the amount of outstanding indebtedness the amounts of money and investments credited to or on deposit for general obligation bond retirement.
[ 1973 1st ex.s. c 25 s 6; 1965 ex.s. c 138 s 11. ]
Refunding bonds and bonds for any other purpose or purposes authorized may be issued separately or issued in combination in one or more series or issues by the same issuer.
[ 1999 c 230 s 10; 1965 ex.s. c 138 s 12. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
(1) Except as specifically provided in this chapter, refunding bonds issued under this chapter shall be issued in accordance with the provisions of law applicable to the type of bonds of the issuer to be refunded, at the time of the issuance of either the refunding bonds or the bonds to be refunded.
(2) Any refunding bonds hereafter issued by the state of Washington to refund highway bonds that were issued under a highway bond act prior to June 9, 2022, or to refund refunding bonds issued under the refunding bond act prior to June 9, 2022, to refund highway bonds issued under a highway bond act prior to June 9, 2022, shall be issued in accordance with the provisions of law applicable to highway bonds at the time of the issuance of the refunding bonds.
(3) For all refunding bonds previously or hereafter issued by the state of Washington under this chapter, the state treasurer shall transfer from the designated funds or accounts the amount necessary for the payment of principal of and interest on the refunding bonds to the applicable bond retirement account for such refunding bonds on each date on which the interest or principal and interest payment is due on such refunding bonds unless an earlier transfer date, as determined by the state finance committee, is necessary or appropriate to the financial framework of the refunding bonds.
[ 2022 c 103 s 34; 2005 c 487 s 7; 1999 c 230 s 11; 1965 ex.s. c 138 s 13. ]
NOTES:
Intent—2022 c 103: See note following RCW 47.10.908.
Effective date—2005 c 487: See RCW 43.99S.901.
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
If bonds are to be issued under this chapter for refunding of any bonds issued specifically to finance any electric power and energy project or facility and there are contracts in existence for the sale of electric power and energy generated by such project or facility wherein the cost of power to a purchaser specifically includes a portion of the debt service on the bonds to be refunded, such power contracts shall be amended to reflect in each year during the remaining terms of such contracts that portion of the savings to be realized from such refunding during each such year equal to the percentage of power output from such project or facility purchased by the purchaser under such power contracts. Nothing in this chapter shall be construed to alter, modify or change any such power contracts without the mutual agreement of the parties thereto.
[ 1965 ex.s. c 138 s 15. ]
Any public body may issue general obligation refunding bonds to refund any general obligation or revenue bonds of such issuer or its agencies or instrumentalities. The payment of general obligation refunding bonds may be additionally secured by a pledge of the revenues pledged to the payment of the revenue bonds to be refunded.
If the payment of revenue bonds to be refunded by general obligation bonds of the state is secured by (1) fees collected by the state as license fees for motor vehicles, or (2) excise taxes collected by the state on the sale, distribution or use of motor vehicle fuel, or (3) interest on the permanent school fund, then the state shall also pledge to the payment of such refunding bonds the same fees, excise taxes, or interest that were pledged to the payment of the revenue bonds to be refunded.
Any public body may issue revenue refunding bonds to refund any general obligation of such issuer or its agencies or instrumentalities if the bonds to be refunded were issued for purposes for which those revenue refunding bonds could be issued.
[ 1999 c 230 s 12; 1974 ex.s. c 111 s 4; 1973 1st ex.s. c 25 s 7. ]
NOTES:
Application—Construction—Severability—1999 c 230: See notes following RCW 39.53.010.
Severability—1974 ex.s. c 111: See note following RCW 39.42.080.
This chapter shall be known as the "Refunding Bond Act."
[ 1965 ex.s. c 138 s 1. ]
The authority of a public body to issue refunding bonds pursuant to this chapter is additional to any existing authority to issue such bonds and nothing in this chapter shall prevent the issuance of such bonds pursuant to any other law, and this chapter shall not be construed to amend any existing law authorizing the issuance of refunding bonds by a public body.
[ 1965 ex.s. c 138 s 14. ]
All county, city, town and school warrants, and all warrants or other evidences of indebtedness, drawn upon or payable from any public funds, shall bear interest at a rate or rates as authorized by the issuing authority.
[ 1970 ex.s. c 56 s 106; 1899 c 80 s 4; RRS s 7302. Prior: 1895 c 136 s 3. ]
NOTES:
Purpose—1970 ex.s. c 56: See note following RCW 39.52.020.
Cities and towns, local improvement district warrants, interest rate: RCW 35.45.130.
It shall be the duty of every public officer issuing public warrants to make monthly investigation to ascertain the market value of the current warrants issued by him or her, and he or she shall, so far as practicable, fix the rate of interest on the warrants issued by him or her during the ensuing month so that the par value shall be the market value thereof.
[ 2011 c 336 s 810; 1981 c 156 s 16; 1981 c 10 s 4; 1899 c 80 s 5; RRS s 7303. ]
Registered or interest bearing warrants of any municipal corporation not presented within one year of the date of their call, or other warrants not presented within one year of their issue, shall be canceled by passage of a resolution of the governing body of the municipal corporation, and upon notice of the passage of such resolution the auditor of the municipal corporation and the treasurer of the municipal corporation shall transfer all records of such warrants so as to leave the funds as if such warrants had never been drawn.
[ 1975 1st ex.s. c 131 s 1. ]
In this chapter, unless the context otherwise requires:
(1) "Capitalization" means the measure or measures of capitalization, other than net worth, of a depositary applying for designation as or operating as a public depositary pursuant to this chapter, based upon regulatory standards of financial institution capitalization adopted by rule or resolution of the commission after consultation with the director of the department of financial institutions;
(2) "Collateral" means the particular assets pledged as security to insure payment or performance of the obligations under this chapter as enumerated in RCW 39.58.050;
(3) "Commission" means the Washington public deposit protection commission created under RCW 39.58.030;
(4) "Commission report" means a formal accounting rendered by all public depositaries to the commission in response to a demand for specific information made by the commission detailing pertinent affairs of each public depositary as of the close of business on a specified date, which is the "commission report date." "Commission report due date" is the last day for the timely filing of a commission report;
(5) "Depositary pledge agreement" means a tripartite agreement executed by the commission with a financial institution and its designated trustee. Such agreement shall be approved by the directors or the loan committee of the financial institution and shall continuously be a record of the financial institution. New securities may be pledged under this agreement in substitution of or in addition to securities originally pledged without executing a new agreement;
(6) "Director of the department of financial institutions" means the Washington state director of the department of financial institutions;
(7) "Eligible collateral" means the securities or letters of credit enumerated in RCW 39.58.050 (5), (6), and (7);
(8) "Financial institution" means any national or state chartered commercial bank or trust company, savings bank, savings association, or federal or state chartered credit union, or branch or branches thereof, located in this state and lawfully engaged in business;
(9) "Investment deposits" means time deposits, money market deposit accounts, and savings deposits of public funds available for investment. "Investment deposits" do not include time deposits represented by a transferable or a negotiable certificate, instrument, passbook, or statement, or by book entry or otherwise;
(10) "Liquidity" means the measure or measures of liquidity of a depositary applying for designation as or operating as a public depositary pursuant to this chapter, based upon regulatory standards of financial institution liquidity adopted by rule or resolution of the commission after consultation with the director of the department of financial institutions;
(11) "Loss" means the issuance of an order by a regulatory or supervisory authority or a court of competent jurisdiction (a) restraining a public depositary from making payments of deposit liabilities or (b) appointing a receiver for a public depositary;
(12) "Maximum liability," with reference to a public depositary's liability under this chapter for loss per occurrence by another public depositary, on any given date means:
(a) A sum equal to ten percent of:
(i) All uninsured public deposits held by a public depositary that has not incurred a loss by the then most recent commission report date; or
(ii) The average of the balances of said uninsured public deposits on the last four immediately preceding reports required pursuant to RCW 39.58.100, whichever amount is greater; or
(b) Such other sum or measure as the commission may from time to time set by resolution according to criteria established by rule, consistent with the commission's broad administrative discretion to achieve the objective of RCW 39.58.020.
As long as the uninsured public deposits of a public depositary are one hundred percent collateralized by eligible collateral as provided for in RCW 39.58.050, the "maximum liability" of a public depositary that has not incurred a loss may not exceed the amount set forth in (a) of this subsection.
This definition of "maximum liability" does not limit the authority of the commission to adjust the collateral requirements of public depositaries pursuant to RCW 39.58.040;
(13) "Net worth" of a public depositary means (a) the equity capital as reported to its primary regulatory authority on the quarterly report of condition or statement of condition, or other required report required by its primary regulatory authority or federal deposit insurer, and may include capital notes and debentures which are subordinate to the interests of depositors, or (b) equity capital adjusted by rule or resolution of the commission after consultation with the director of the department of financial institutions;
(14) "Public deposit" means public funds on deposit with a public depositary;
(15) "Public depositary" means a financial institution that has been approved by the commission to hold public deposits, and has segregated, for the benefit of the commission, eligible collateral having a value of not less than its maximum liability;
(16) "Public funds" means moneys under the control of a treasurer, the state treasurer, or custodian belonging to, or held for the benefit of, the state or any of its political subdivisions, public corporations, municipal corporations, agencies, courts, boards, commissions, or committees, including moneys held as trustee, agent, or bailee belonging to, or held for the benefit of, the state or any of its political subdivisions, public corporations, municipal corporations, agencies, courts, boards, commissions, or committees;
(17) "Public funds available for investment" means such public funds as are in excess of the anticipated cash needs throughout the duration of the contemplated investment period;
(18) "State public depositary" means a Washington state-chartered financial institution that is authorized as a public depositary under this chapter;
(19) "State treasurer" means the treasurer of the state of Washington;
(20) "Treasurer" means a county treasurer, a city treasurer, a treasurer of any other municipal corporation, and any other custodian of public funds, except the state treasurer;
(21) "Trustee" means a third-party safekeeping agent which has completed a depositary pledge agreement with a public depositary and the commission. Such third-party safekeeping agent may be a federal home loan bank, or such other third-party safekeeping agent approved by the commission.
[ 2018 c 237 s 1; 2016 c 152 s 1; 2009 c 9 s 1; 1996 c 256 s 1; 1994 c 92 s 494; 1984 c 177 s 10; 1983 c 66 s 3; 1977 ex.s. c 95 s 1; 1975 1st ex.s. c 77 s 1; 1973 c 126 s 9; 1969 ex.s. c 193 s 1. ]
NOTES:
Alphabetization—2009 c 9: "The code reviser shall alphabetize and renumber the definitions in RCW 39.58.010." [ 2009 c 9 s 19.]
Effective date—2009 c 9: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 6, 2009]." [ 2009 c 9 s 20.]
Severability—1983 c 66: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1983 c 66 s 24.]
Severability—1969 ex.s. c 193: "If any provision of this act, or its application to any person or circumstance is held invalid, the remainder of this act, or the application of the provision to other persons or circumstances is not affected." [ 1969 ex.s. c 193 s 32.]
Construction—1969 ex.s. c 193: "Nothing in this act shall be construed so as to impair the obligation of any contract or agreement entered into prior to its effective date." [ 1969 ex.s. c 193 s 33.]
City depositaries: Chapter 35.38 RCW.
County depositaries: Chapter 36.48 RCW.
State depositaries: Chapter 43.85 RCW.
All public funds deposited in public depositaries, including investment deposits and accrued interest thereon, shall be protected against loss, as provided in this chapter.
[ 1996 c 256 s 2; 1984 c 177 s 11; 1983 c 66 s 5; 1973 c 126 s 10; 1969 ex.s. c 193 s 2. ]
NOTES:
Severability—1983 c 66: See note following RCW 39.58.010.
The Washington public deposit protection commission shall be the state finance committee. The record of the proceedings of the public deposit protection commission shall be kept in the office of the commission and a duly certified copy thereof, or any part thereof, shall be admissible in evidence in any action or proceedings in any court of this state.
[ 1983 c 66 s 6; 1969 ex.s. c 193 s 3. ]
NOTES:
Severability—1983 c 66: See note following RCW 39.58.010.
The commission shall have the power and broad administrative discretion:
(1) To make and enforce regulations necessary and proper to the full and complete performance of its functions under this chapter;
(2) To require any public depositary to furnish such information dealing with public deposits and the exact status of its capitalization, collateral, liquidity, and net worth as the commission shall request;
(3) To take such action as it deems best for the protection, collection, compromise or settlement of any claim arising in case of loss;
(4) To fix by rule or resolution, consistent with this chapter, the requirements for initial and continued qualification of financial institutions as public depositaries on the basis of a depositary's financial condition, including its capitalization, collateral, liquidity, and net worth, and fixing other terms and conditions consistent with this chapter, under which public deposits may be received and held;
(5) To make and enforce rules setting forth criteria for the establishment by policy of standards governing matters that are subject to the commission's powers to fix requirements, terms, and conditions under subsection (4) of this section for a public depositary, and, if these standards are not met, providing for additional collateral or other conditional or unconditional requirements or restrictions applicable to the public depositary's right to receive or hold public deposits;
(6) To require additional or different types and amounts of collateral, or to restrict a public depositary's right to receive or hold public deposits if the standards for the financial condition of public depositaries are not met;
(7) To fix the official date on which any loss shall be deemed to have occurred taking into consideration the orders, rules, and regulations of the supervisory authority of a public depositary's primary regulatory authority and federal deposit insurer as they affect the failure or inability of a public depositary to repay public deposits in full;
(8) In case loss occurs in more than one public depositary, to determine the allocation and time of payment of any sums due to public depositors under this chapter; and
(9) To make and enforce sanctions against a public depositary for noncompliance with the provisions of this chapter and rules or policies of the commission.
[ 2009 c 9 s 2; 1996 c 256 s 3; 1986 c 25 s 2; 1984 c 177 s 12; 1983 c 66 s 7; 1975 1st ex.s. c 77 s 2; 1969 ex.s. c 193 s 4. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
(1) Every public depositary shall complete a depositary pledge agreement with the commission and a trustee, and shall at all times maintain, segregated from its other assets, eligible collateral having a value at least equal to its maximum liability and as otherwise prescribed in this chapter. Eligible securities used as collateral shall be segregated by deposit with the depositary's trustee and shall be clearly designated as security for the benefit of public depositors under this chapter.
(2) Securities eligible as collateral shall be valued at market value, and the total market value of securities pledged in accordance with this chapter shall not be reduced by withdrawal or substitution of securities except by prior authorization, in writing, by the commission.
(3) The public depositary shall have the right to make substitutions of an equal or greater amount of eligible securities at any time.
(4) The income from the securities which have been segregated as collateral shall belong to the public depositary without restriction.
(5) Each of the following enumerated classes of securities, providing there has been no default in the payment of principal or interest thereon, shall be eligible to qualify as collateral:
(a) Certificates, notes or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States;
(b) State, county, municipal, or school district bonds or warrants of taxing districts of the state of Washington or any other state of the United States, provided that such bonds and warrants shall be only those found to be within the limit of indebtedness prescribed by law for the taxing district issuing them and to be general obligations;
(c) The obligations of any United States government-sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;
(d) Bonds, notes, or other securities or evidence of indebtedness constituting the direct and general obligation of a federal home loan bank or federal reserve bank;
(e) Revenue bonds of this state or any authority, board, commission, committee, or similar agency thereof, and any municipality or taxing district of this state;
(f) Direct and general obligation bonds and warrants of any city, town, county, school district, port district, or other political subdivision of any state, having the power to levy general taxes, which are payable from general ad valorem taxes;
(g) Bonds issued by public utility districts as authorized under the provisions of Title 54 RCW, as now or hereafter amended;
(h) Bonds of any city of the state of Washington for the payment of which the entire revenues of the city's water system, power and light system, or both, less maintenance and operating costs, are irrevocably pledged, even though such bonds are not general obligations of such city.
(6) In addition to the securities enumerated in this section, the commission may also accept as collateral a letter of credit from a federal home loan bank or a federal reserve bank on behalf of a public depositary, naming the commission as beneficiary. Such letters are not subject to a completed depositary pledge agreement. As such, the commission must act as the safekeeping agent for letters of credit.
(7) A public depositary may also segregate such bonds, securities, and other obligations as are designated to be authorized security for public deposits under the laws of this state.
(8) The commission may determine by rule or resolution whether any security, whether or not enumerated in this section, is or shall remain eligible as collateral when in the commission's judgment it is desirable or necessary to do so.
[ 2016 c 152 s 2; 2009 c 9 s 4; 1996 c 256 s 4; 1989 c 97 s 4; 1984 c 177 s 13; 1983 c 66 s 8; 1975 1st ex.s. c 77 s 3; 1973 c 126 s 11; 1969 ex.s. c 193 s 5. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
When the commission determines that a loss has occurred in a public depositary, it shall as soon as possible make payment to the proper public officers of all funds subject to such loss, pursuant to the following procedures:
(1) For the purposes of determining the sums to be paid, the director of the department of financial institutions or the receiver shall, within twenty days after issuance of a restraining order or taking possession of any public depositary, ascertain the amount of public funds on deposit therein as disclosed by its records and the amount thereof covered by deposit insurance and provide written verification of the amounts thereof to the commission and each public depositor;
(2) Within ten days after receipt of written verification, each public depositor shall furnish to the commission verified statements of its deposits in the public depositary, including the uninsured and uncollateralized status of the public deposits, as disclosed by its records;
(3) Upon receipt of written verification and statements, the commission shall ascertain and fix the amount of the public deposits, net after deduction of any amount received from deposit insurance and held collateral, and, after determining and declaring the apparent net loss, assess the same against all public depositaries, as follows: First, against the public depositary in which the loss occurred, to the extent of the full value of collateral segregated pursuant to this chapter; second, against all other public depositaries pro rata in proportion to the maximum liability of each depositary as it existed on the date of loss;
(4) Assessments made by the commission shall be payable on the second business day following demand, and in case of the failure of any public depositary so to pay, the commission shall take possession of the securities segregated as collateral by the depositary pursuant to this chapter and liquidate the same for the purpose of paying such assessment;
(5) Upon receipt of the assessment payments, the commission shall reimburse the public depositors of the public depositary in which the loss occurred to the extent of the depositary's net deposit liability to them;
(6) Any owner of public deposits receiving assessment proceeds shall provide a receivership certificate to the commission.
[ 2009 c 9 s 5; 1996 c 256 s 5; 1983 c 66 s 9; 1973 c 126 s 12; 1969 ex.s. c 193 s 6. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
Upon payment to any public depositor, the commission shall be subrogated to all of such depositor's right, title and interest against the public depositary in which the loss occurred and shall share in any distribution of its assets ratably with other depositors. Any sums received from any distribution shall be paid to the public depositors to the extent of any unpaid net deposit liability and the balance remaining shall be paid to the public depositaries against which assessments were made, pro rata in proportion to the assessments actually paid by each such depositary: PROVIDED, That the public depositary in which the loss occurred shall not share in any such distribution of the balance remaining. If the commission incurs expense in enforcing any such claim, the amount thereof shall be paid as a liquidation expense of the public depositary in which the loss occurred.
[ 1996 c 256 s 7; 1973 c 126 s 13; 1969 ex.s. c 193 s 7. ]
(1) Except for funds deposited pursuant to a fiscal agency contract with the state fiscal agent or its correspondent bank, funds deposited pursuant to a custodial bank contract with the state's custodial bank, and funds deposited pursuant to a local government multistate joint self-insurance program as provided in RCW 48.62.081, no public funds shall be deposited in demand or investment deposits except in a public depositary located in this state or as otherwise expressly permitted by statute: PROVIDED, That the commission, or the chair upon delegation by the commission, upon good cause shown, may authorize, for such time and upon such terms and conditions as the commission or chair deem appropriate, a treasurer to maintain a demand deposit account with a banking institution located outside the state of Washington solely for the purpose of transmitting money received to public depositaries in the state of Washington for deposit.
(2) Notwithstanding subsection (1) of this section, the commission, or the chair upon delegation by the commission, upon good cause shown, may authorize, for that time and upon the terms and conditions as the commission or chair deems appropriate, a treasurer to maintain a demand deposit account with a banking institution located outside the state of Washington for deposit of certain higher education endowment funds, for a specified instructional program or research project being performed outside the state of Washington.
(3) Notwithstanding subsection (1) of this section, public funds may be deposited in institutions located outside of Washington state if the following conditions are met:
(a) The funds must initially be deposited in a public depositary selected by the state or local government that is located in the state of Washington;
(b) The selected Washington state public depositary must arrange for the funds to be deposited in one or more federally insured banks or savings and loan associations, including out-of-state institutions, for the account of the state or local government;
(c) The full amount of the principal and any accrued interest of each deposit of funds into a depositary pursuant to (b) of this subsection must be insured by an agency of the federal government;
(d) The public depositary selected under (a) of this subsection must act as a custodian for the state or local government with respect to any deposits made pursuant to (b) of this subsection; and
(e) On the same date that the state or local government funds are deposited, the selected public depositary must receive deposits from customers of other financial institutions, which may include out-of-state institutions, in an amount equal to or greater than the amount of the funds initially deposited by the state or local government.
[ 2016 sp.s. c 2 s 1; 2005 c 203 s 1; 1996 c 256 s 8; 1991 sp.s. c 30 s 27; 1986 c 160 s 1; 1984 c 177 s 14; 1983 c 66 s 11; 1969 ex.s. c 193 s 8. ]
NOTES:
Effective date, implementation, application—1991 sp.s. c 30: See RCW 48.62.900.
Severability—1983 c 66: See note following RCW 39.58.010.
(1)(a) The commission, or the chair upon delegation by the commission, may authorize state and local governmental entities to establish demand accounts in out-of-state and alien banks in an aggregate amount not to exceed one million dollars. No single governmental entity shall be authorized to hold more than fifty thousand dollars in one demand account.
(b) The governmental entities establishing such demand accounts shall be solely responsible for their proper and prudent management and shall bear total responsibility for any losses incurred by such accounts. Accounts established under the provisions of this section shall not be considered insured by the commission.
(c) The state auditor shall annually monitor compliance with this section and the financial status of such demand accounts.
(2) Subsection (1)(a) of this section does not apply to RCW 39.58.080 (2) and (3).
[ 2016 sp.s. c 2 s 2; 2005 c 203 s 2; 1996 c 256 s 9; 1987 c 505 s 21; 1986 c 160 s 2. ]
All institutions located in this state which are permitted by the statutes of this state to hold and receive public funds shall have power to secure such deposits in accordance with this chapter. Except as provided in this chapter, no bond or other security shall be required of or given by any public depositary for any public funds on deposit.
[ 1996 c 256 s 10; 1984 c 177 s 15; 1969 ex.s. c 193 s 9. ]
(1) On or before each commission report due date, each public depositary shall render to the commission a written report, certified under oath, indicating the total amount of public funds on deposit held by it, the uninsured amount of those funds, the net worth of the depositary, and the amount and nature of eligible collateral then segregated for the benefit of the commission.
(2) The commission may instruct the director of the department of financial institutions to examine and thereafter certify as to the accuracy of any statement to the commission by any state public depositary, or to provide such other examination report information or data as may be required by the commission. The type, content, and frequency of the reports may be determined by the director of the department of financial institutions, consistent with the requirements of the commission as defined by rule.
[ 2009 c 9 s 7; 1996 c 256 s 11; 1984 c 177 s 16; 1983 c 66 s 12; 1969 ex.s. c 193 s 10. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
Each public depositary shall notify the commission in writing within forty-eight hours, or by close of business of the next business day thereafter, of the happening of an event which causes its net worth to be reduced by an amount greater than ten percent of the amount shown as its net worth on the most recent report submitted pursuant to RCW 39.58.100.
[ 2009 c 9 s 8; 1983 c 66 s 13; 1975 1st ex.s. c 77 s 4. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
(1) The commission may require the state auditor or the director of the department of financial institutions, to the extent of their respective authority under applicable federal and Washington state law, to thoroughly investigate and report to it concerning the condition of any financial institution which makes application to become a public depositary, and may also as often as it deems necessary require the state auditor or the director of the department of financial institutions, to the extent of their respective authority under applicable federal and Washington state law, to make such investigation and report concerning the condition of any financial institution which has been designated as a public depositary. The expense of all such investigations or reports shall be borne by the financial institution examined.
(2) In lieu of any such investigation or report, the commission may rely upon information made available to it or the director of the department of financial institutions by the office of the comptroller of the currency, the national credit union administration, the federal deposit insurance corporation, the federal reserve board, any state financial institutions regulatory agency, or any successor state or federal financial institutions regulatory agency, and any such information or data received by the commission shall be kept and maintained in the same manner and have the same protections as examination reports received by the commission from the director of the department of financial institutions pursuant to RCW 30A.04.075(2)(h), 32.04.220(2)(h), and * 31.12.565(2)(j).
(3) The director of the department of financial institutions shall in addition advise the commission of any action he or she has directed any state public depositary to take which will result in a reduction of greater than ten percent of the net worth of such depositary as shown on the most recent report it submitted pursuant to RCW 39.58.100.
[ 2018 c 237 s 2; 2016 c 152 s 3; 2009 c 9 s 9; 1996 c 256 s 12; 1983 c 66 s 14; 1975 1st ex.s. c 77 s 5. ]
NOTES:
*Reviser's note: RCW 31.12.565 was amended by 2022 c 49 s 8, changing subsection (2)(j) to subsection (2)(k).
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
Any financial institution may become, and thereafter operate as, a public depositary upon approval by the commission and segregation of collateral in the manner as set forth in this chapter, and subject to compliance with all rules and policies adopted by the commission. A public depositary shall at all times pledge and segregate eligible collateral in an amount established by the commission by rule or noticed resolution.
[ 2016 c 152 s 4; 2009 c 9 s 10; 1996 c 256 s 13; 1984 c 177 s 17; 1983 c 66 s 15; 1975 1st ex.s. c 77 s 6. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
A treasurer and the state treasurer are authorized to deposit in a public depositary any public funds available for investment and secured by collateral in accordance with the provisions of this chapter, and receive interest thereon. The authority provided by this section is additional to any authority now or hereafter provided by law for the investment or deposit of public funds by any such treasurer: PROVIDED, That in no case shall the aggregate of demand and investment deposits of public funds by any such treasurer in any one public depositary exceed at any time the net worth of that depositary. If a public depositary's net worth is reduced, a treasurer and the state treasurer may allow public funds on deposit in excess of the reduced net worth to remain until maturity upon pledging by the depositary of eligible securities valued at market value in an amount at least equal to the amount of the excess deposits. The collateral shall be segregated as provided in RCW 39.58.050. If the additional securities required by this section are not pledged by the depositary, the depositary shall permit withdrawal prior to maturity by the treasurer of deposits, including accrued interest, in accordance with applicable statutes and governmental regulations.
[ 2009 c 9 s 11; 1996 c 256 s 14; 1984 c 177 s 18; 1983 c 66 s 16; 1969 ex.s. c 193 s 13. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Severability—1983 c 66: See note following RCW 39.58.010.
Notwithstanding RCW 39.58.130, (1) aggregate deposits received by a public depositary from all treasurers and the state treasurer shall not exceed at any time one hundred fifty percent of the value of the depositary's net worth, nor (2) shall the aggregate deposits received by any public depositary exceed thirty percent of the total aggregate deposits of all public treasurers in all depositaries as determined by the commission. However, a public depositary may receive deposits in excess of the limits provided in this section if eligible collateral, as prescribed in RCW 39.58.050, are pledged in an amount equal to one hundred percent of the value of deposits received in excess of the limitations prescribed in this section.
[ 2016 c 152 s 5; 2009 c 9 s 12; 1996 c 256 s 15; 1986 c 25 s 1; 1984 c 177 s 19. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
When deposits are made in accordance with this chapter, a treasurer and the state treasurer shall not be liable for any loss thereof resulting from the failure or default of any public depositary without fault or neglect on his or her part or on the part of his or her assistants or clerks.
[ 2009 c 9 s 13; 1996 c 256 s 16; 1969 ex.s. c 193 s 29. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Liability of state treasurer: RCW 43.85.070.
A statewide custodian under RCW 43.08.280 may be exempted from the requirements of this chapter, based on rules adopted by the commission.
[ 2016 c 152 s 6; 1999 c 293 s 3. ]
NOTES:
Purpose—Effective date—1999 c 293: See notes following RCW 43.08.280.
For the purposes of this chapter, the commission shall include all public depositaries in a single public depositary pool. All public depositaries, as defined in RCW 39.58.010, shall be treated uniformly by the commission without regard to distinctions in the nature of its financial institution charter.
[ 2009 c 9 s 3. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
If a depositary neglects or refuses to promptly and accurately furnish, or to allow verification of, any required information requested by the commission or by the director of the department of financial institutions when acting on behalf of the commission pursuant to this chapter, or if a public depositary otherwise fails to comply with this chapter or any rules or policies of the commission, the commission may at its option deny or revoke the authority of such depositary to act as a public depositary pursuant to this chapter, or otherwise suspend such depositary from receiving or holding public deposits until such time as the depositary receives the information or complies with the commission's rules and policies. The commission shall have the authority to assess by rule costs for a depositary's noncompliance with this chapter and rules and resolutions adopted pursuant to this chapter.
[ 2009 c 9 s 15. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
The commission may by resolution delegate all of its authority to the state treasurer except rule making.
[ 2009 c 9 s 16. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
The liability of a public depositary under this chapter shall not be altered by any merger, takeover, or acquisition, except to the extent that such liability is assumed by agreement or operation of law by the successor entity or resulting financial institution.
[ 2009 c 9 s 17. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Notwithstanding any provision of law to the contrary, the state treasurer or any treasurer or other custodian of public funds may receive, disburse, or transfer public funds under his or her jurisdiction by means of wire or other electronic communication in accordance with accounting standards established by the state auditor under RCW 43.09.200 with regard to treasurers of municipalities or other custodians or by the office of financial management under RCW 43.88.160 in the case of the state treasurer and other state custodians to safeguard and insure accountability for the funds involved.
[ 2009 c 9 s 14; 1996 c 256 s 17; 1981 c 101 s 1; 1979 c 151 s 48; 1977 ex.s. c 15 s 1. Formerly RCW 39.58.150. ]
NOTES:
Effective date—2009 c 9: See note following RCW 39.58.010.
Effective date—1977 ex.s. c 15: "The effective date of this act shall be July 1, 1977." [ 1977 ex.s. c 15 s 2.]
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Bond" means any agreement which may or may not be represented by a physical instrument, including but not limited to bonds, notes, warrants, or certificates of indebtedness, that evidences an obligation under which the issuer agrees to pay a specified amount of money, with or without interest, at a designated time or times either to registered owners or bearers.
(2) "Local government" means any county, city, town, special purpose district, political subdivision, municipal corporation, or quasi-municipal corporation, including any public corporation, authority, or other instrumentality created by such an entity.
(3) "State" includes any state in the United States, other than the state of Washington.
[ 2016 c 152 s 9; 2015 c 225 s 50; 2002 c 332 s 22; 1988 c 281 s 1. ]
NOTES:
Intent—Effective date—2002 c 332: See notes following RCW 43.19.760.
(1) Local governments in the state of Washington are authorized to invest their funds and money in their custody or possession, eligible for investment, in investments authorized by this chapter.
(2) Nothing in this section is intended to limit or otherwise restrict a local government from investing in additional authorized investments if that local government has specific authority to do so.
[ 2016 c 152 s 10; 1988 c 281 s 2. ]
Any local government in the state of Washington may invest in:
(1) Bonds of the state of Washington and any local government in the state of Washington;
(2) General obligation bonds of a state and general obligation bonds of a local government of a state, which bonds have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency;
(3) Subject to compliance with RCW 39.56.030, registered warrants of a local government in the same county as the government making the investment;
(4) Certificates, notes, or bonds of the United States, or other obligations of the United States or its agencies, or of any corporation wholly owned by the government of the United States; or United States dollar denominated bonds, notes, or other obligations that are issued or guaranteed by supranational institutions, provided that, at the time of investment, the institution has the United States government as its largest shareholder;
(5) Federal home loan bank notes and bonds, federal land bank bonds and federal national mortgage association notes, debentures and guaranteed certificates of participation, or the obligations of any other government sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the board of governors of the federal reserve system;
(6) Bankers' acceptances purchased on the secondary market;
(7) Commercial paper purchased in the secondary market, provided that any local government of the state of Washington that invests in such commercial paper must adhere to the investment policies and procedures adopted by the state investment board; and
(8) Corporate notes purchased on the secondary market, provided that any local government of the state of Washington that invests in such notes must adhere to the investment policies and procedures adopted by the state investment board.
[ 2016 c 152 s 11. ]
Notwithstanding the provisions of any other statute of the state of Washington to the contrary, it shall be lawful for any insurance company, savings and loan association, or for any bank, trust company or other financial institution, operating under the laws of the state of Washington, or for any executor, administrator, guardian or conservator, trustee or other fiduciary to invest its funds or the moneys in its custody or possession, eligible for investment, in notes or bonds secured by mortgage which the Federal Housing Administrator has insured or has made a commitment to insure in obligations of national mortgage associations, in debentures issued by the Federal Housing Administrator, and in the bonds of the Home Owner's Loan Corporation, a corporation organized under and by virtue of the authority granted in H.R. 5240, designated as the Home Owner's Loan Act of 1933, passed by the congress of the United States and approved June 13, 1933, and in bonds of any other corporation which is or hereafter may be created by the United States, as a governmental agency or instrumentality.
[ 2016 c 152 s 13; 1939 c 32 s 1; 1935 c 11 s 1; 1933 ex.s. c 37 s 1; RRS s 5545-1. ]
NOTES:
Severability—1933 ex.s. c 37: "If any section, subsection, sentence, clause or phrase of this act for any reason shall be held to be unconstitutional, such holding shall not affect the validity of the remaining portion of this act. The legislature hereby declares that it would have passed this act in each section, subsection, sentence, clause and phrase thereof, separately and irrespective of the fact that any one or more of the sections, subsections, sentences, clauses or phrases be unconstitutional." [ 1933 ex.s. c 37 s 4.]
Notwithstanding the provisions of any other statute of the state of Washington to the contrary, it shall be also lawful for any insurance company, savings and loan association, building and loan association, or for any bank, trust company or other financial institution, operating under the laws of the state of Washington, or for any executor, administrator, guardian or conservator, trustee or other fiduciary, to exchange any mortgages, contracts, judgments or liens owned or held by it, for the bonds of the Home Owners' Loan Corporation, a corporation organized under and by virtue of the authority granted in H.R. 5240, designated as The Home Owners' Loan Act of 1933, passed by the congress of the United States and approved June 13, 1933, or for the bonds of any other corporation which is or hereafter may be created by the United States as a governmental agency or instrumentality; and to accept said bonds at their par value in any such exchange.
[ 2016 c 152 s 14; 1933 ex.s. c 37 s 2; RRS s 5545-2. ]
NOTES:
Severability—1933 ex.s. c 37: See note following RCW 39.60.010.
Wherever, by statute of this state, collateral is required as security for the deposit of funds; or deposits are required to be made with any public official or department; or an investment of capital or surplus, or a reserve or other fund is required to be maintained consisting of designated securities, the bonds and other securities herein made eligible for investment shall also be eligible for such purpose.
[ 2016 c 152 s 15; 1939 c 32 s 2; 1935 c 11 s 2; 1933 ex.s. c 37 s 3; RRS s 5545-3. ]
NOTES:
Severability—1933 ex.s. c 37: See note following RCW 39.60.010.
The obligations issued pursuant to said Federal Home Loan Bank Act and to said Title IV of the National Housing Act as such acts are now or hereafter amended, and the shares, deposits or accounts of any institution which has the insurance protection provided by Title IV of the National Housing Act, as now or hereafter amended, may be used at face value or withdrawal value, and bonds or other interest bearing obligations as to which the payment of some but less than the full principal and interest is guaranteed by the United States of America or any agency thereof may be used to the extent of the portion so guaranteed, wherever, by statute of this state or otherwise, collateral is required as security for the deposit of funds, or deposits are required to be made with any public official or department, or an investment of capital or surplus, or a reserve or other fund, is required to be maintained consisting of designated security, or wherever by statute of this state or otherwise, any surety, whether personal, corporate, or otherwise, or any collateral or security, is required or permitted for any purpose, including without limitation on the generality of the foregoing, any bond, recognizance, or undertaking.
[ 2016 c 152 s 16; 1967 ex.s. c 48 s 1; 1941 c 249 s 2; Rem. Supp. 1941 s 3791-2. ]
Notwithstanding the provisions of any other statute of the state of Washington to the contrary, it shall be lawful for any executor, administrator, guardian, or conservator, trustee or other fiduciary, to invest its funds or the moneys in its custody or possession, eligible for investment, in notes, bonds, or debentures of savings and loan associations, banks, mutual savings banks, savings and loan service corporations operating with approval of the federal home loan bank, and corporate mortgage companies: PROVIDED, That the notes, bonds or debentures are rated not less than "A" by a nationally recognized rating agency, or are insured or guaranteed by an agency of the federal government or by private insurer authorized to do business in the state: PROVIDED FURTHER, That the notes, bonds and debentures insured or guaranteed by a private insurer shall also be backed by a pool of mortgages equal to the amount of the notes, bonds or debentures.
[ 2016 c 152 s 17; 1970 ex.s. c 93 s 1. ]
NOTES:
Severability—1970 ex.s. c 93: "If any provision of this act, or its application to any person or circumstance is held invalid, the remainder of the act, or the application of the provision to other persons or circumstances is not affected." [ 1970 ex.s. c 93 s 4.]
Investment in local improvement district notes: RCW 35.45.150.
As used in this chapter:
(1) "Public security" means a bond, note, certificate of indebtedness, or other obligation for the payment of money, issued by this state or by any of its departments, agencies, counties, cities, towns, municipal corporations, junior taxing districts, school districts, or other instrumentalities or by any of its political subdivisions.
(2) "Instrument of payment" means a check, draft, warrant, or order for the payment, delivery, or transfer of funds.
(3) "Authorized officer" means any official of this state or any of its departments, agencies, counties, cities, towns, municipal corporations, junior taxing districts, school districts, or other instrumentalities or any of its political subdivisions whose signature to a public security or instrument of payment is required or permitted.
(4) "Facsimile signature" means a reproduction by engraving, imprinting, stamping, or other means of the manual signature of an authorized officer.
[ 1969 c 86 s 1. ]
Any authorized officer, after filing with the secretary of state his or her manual signature certified by him or her under oath, may execute or cause to be executed with a facsimile signature in lieu of his or her manual signature:
(1) Any public security: PROVIDED, That at least one signature required or permitted to be placed thereon shall be manually subscribed, and
(2) Any instrument of payment.
Upon compliance with this chapter by the authorized officer, his or her facsimile signature has the same legal effect as his or her manual signature.
[ 2011 c 336 s 811; 1969 c 86 s 2. ]
When the seal of this state or any of its departments, agencies, counties, cities, towns, municipal corporations, junior taxing districts, school districts, or other instrumentalities or of any of its political subdivisions is required in the execution of a public security or instrument of payment, the authorized officer may cause the seal to be printed, engraved, stamped or otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the impression of the seal.
[ 1969 c 86 s 3. ]
Any person who with intent to defraud uses on a public security or an instrument of payment:
(1) A facsimile signature, or any reproduction of it, of any authorized officer, or
(2) Any facsimile seal, or any reproduction of it, of this state or any of its departments, agencies, counties, cities, towns, municipal corporations, junior taxing districts, school districts, or other instrumentalities or of any of its political subdivisions is guilty of a class B felony punishable according to chapter 9A.20 RCW.
[ 2003 c 53 s 213; 1969 c 86 s 4. ]
NOTES:
Intent—Effective date—2003 c 53: See notes following RCW 2.48.180.
This chapter shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.
[ 1969 c 86 s 5. ]
This act may be cited as the uniform facsimile signature of public officials act.
[ 1969 c 86 s 6. ]
This chapter may be cited as the taxing district relief act.
[ 1935 c 143 s 1; RRS s 5608-1. ]
The purpose of this chapter is to facilitate and permit taxing districts which are unable to meet their debts either in their present amount and/or at the time they fall due, to obtain relief by the readjustment of such debts as provided for by the act of congress hereinafter referred to, by supplementing the powers of those taxing districts for which refunding of debts is provided for by existing statutes, and by providing a method of refunding of debts for those taxing districts for which no method of refunding such debts has heretofore been provided, and by other provisions appropriate to such purposes.
This chapter shall not be construed as in anywise limiting the powers of the federal courts to grant relief as provided for in said act of congress.
[ 1935 c 143 s 2; RRS s 5608-2. ]
For the purposes of this chapter a "taxing district" is defined to be a "taxing district" as described in section 80 of chapter IX of the act of congress entitled "An act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898, as amended, to wit:
"Any municipality or other political subdivision of any state, including (but not hereby limiting the generality of the foregoing) any county, city, borough, village, parish, town, or township, unincorporated tax or special assessment district, and any school, drainage, irrigation, reclamation, levee, sewer, or paving, sanitary, port, improvement or other district (hereinafter referred to as a 'taxing district')."
Said act of congress and acts amendatory thereof and supplementary thereto, as the same may be amended from time to time, are herein referred to as the "federal bankruptcy act."
[ 1935 c 143 s 3; RRS s 5608-3. ]
All powers herein granted to taxing districts in state of Washington may be exercised by such districts. If a taxing district has no officers of its own, such powers may be exercised in its behalf by the officer or officers, board, council or commission having the power to contract in behalf of such district or to levy special assessments or special taxes within such district.
[ 1935 c 143 s 4; RRS s 5608-4. ]
Subject to the requirement in RCW 28A.315.225(2), any taxing district in the state of Washington is hereby authorized to file the petition mentioned in section 80 of chapter IX of the federal bankruptcy act.
[ 2012 c 186 s 19; 1935 c 143 s 5; RRS s 5608-5. ]
NOTES:
Effective date—2012 c 186: See note following RCW 28A.315.025.
Rule-making authority—2012 c 186: See RCW 28A.315.902.
Before the filing of any petition referred to in RCW 39.64.040, such taxing district shall adopt a resolution authorizing the filing thereof and authorizing its duly and regularly elected or appointed attorney or special counsel duly appointed for such purpose to file the same and to represent it in the proceedings with respect thereto in the competent United States district court.
[ 1935 c 143 s 6; RRS s 5608-6. ]
No final decree or order of such United States district court confirming a plan of readjustment shall be effective for the purpose of binding such taxing district unless and until such taxing district files with such court a certified copy of a resolution of such taxing district, adopted by it or by the officer or officers, board, council or commission referred to in RCW 39.64.030, consenting to the plan of readjustment set forth or referred to in such final decree or order.
[ 1935 c 143 s 7; RRS s 5608-7. ]
Such taxing district is hereby authorized and empowered to take any and all action necessary to carry out any plan of readjustment contemplated in said petition, or as the same may be modified from time to time, notwithstanding any other provisions of law. In case of the refunding of debts of irrigation districts, diking or drainage improvement districts, general debts of cities, or debts of other taxing districts for the refunding of which provision is already made under existing statutes, such refunding shall be had and done as provided for in such existing statutes, except that the tenor and character of the refunding bonds and the assessments levied to meet such bonds may be modified to conform to the capacity of the taxing district, or the individual lots, tracts, or parcels of real property therein, to meet and carry the charges, both direct and contingent, against them, as found and set forth in the plan of readjustment and decree of court; and except also as such existing provisions of law may be otherwise supplemented by such plan of readjustment or the provisions of this chapter.
[ 1935 c 143 s 8; RRS s 5608-8. ]
Such taxing district shall have power to consummate the plan of readjustment, as adopted by the court's decree and approved by it as aforesaid, and if such plan, as approved by such decree, so requires, may, for such purpose, exercise any of the following powers:
(1) Cancel in whole or in part any assessments or any interest or penalties assessed thereon which may be outstanding and a lien upon any property in such taxing district, as and when such assessments are replaced by the readjusted or revised assessments provided for in the plan of readjustment approved by such decree.
(2) Issue refunding bonds to refund bonds theretofore issued by such taxing district. Such refunding bonds shall have such denominations, rates of interest, and maturities as shall be provided in such plan of readjustment and shall be payable by special assessments or by general taxes, according to the nature of the taxing district, in the manner provided in such plan of readjustment and decree.
(3) Apportion and levy new assessments or taxes appropriate in time or times of payment to provide funds for the payment of principal and interest of such refunding bonds, and of all expenses incurred by such taxing district in filing the petition mentioned in RCW 39.64.040, and any and all other expenses necessary or incidental to the consummation of the plan of readjustment.
In the case of special assessment districts for the refunding of whose debts no procedure is provided by existing laws, such assessments shall be equitably apportioned and levied upon each lot, tract, or parcel of real property within such taxing district, due consideration being given to the relative extent to which the original apportionments upon the various lots, tracts, or parcels of real property within such taxing district have already been paid and due consideration also being given to the capacity of the respective lots, tracts, or parcels of real property to carry such charges against them. Before levying or apportioning such assessment such taxing district or the officer or officers, board, council, or commission mentioned in RCW 39.64.030 shall hold a hearing with reference thereto, notice of which hearing shall be published once a week for four consecutive weeks in the newspaper designated for the publication of legal notices by the legislative body of the city or town, or by the board of county commissioners of the county within which such taxing district or any part thereof is located, or in any newspaper published in the city, town, or county within which such taxing district or any part thereof is located and of general circulation within such taxing district. At such hearing every owner of real property within such taxing district shall be given an opportunity to be heard with respect to the apportionment and levy of such assessment.
(4) In the case of special assessment districts, of cities or towns, provide that if any of the real property within such taxing district shall not, on foreclosure of the lien of such new assessment for delinquent assessments and penalties and interest thereon, be sold for a sufficient amount to pay such delinquent assessments, penalties, and interest, or if any real property assessed was not subject to assessment, or if any assessment or installment or installments thereof shall have been eliminated by foreclosure of a tax lien or made void in any other manner, such taxing district shall cause a supplemental assessment sufficient in amount to make up such deficiency to be made on the real property within such taxing district, including real property upon which any such assessment or any installment or installments thereof shall have been so eliminated or made void. Such supplemental assessment shall be apportioned to the various lots, tracts, and parcels of real property within such taxing district in proportion to the amounts apportioned thereto in the assessment originally made under such plan of readjustment.
(5) Provide that refunding bonds may, at the option of the holders thereof, be converted into warrants of such denominations and bearing such rate of interest as may be provided in the plan of readjustment, and that the new assessments mentioned in subsection (3) of this section and the supplemental assessments mentioned in subsection (4) of this section may be paid in refunding bonds or warrants of such taxing district without regard to the serial numbers thereof, or in money, at the option of the person paying such assessments, such refunding bonds and warrants to be received at their par value in payment of such assessments. In such case such refunding bonds and warrants shall bear the following legend: "This bond (or warrant) shall be accepted at its face value in payment of assessments (including interest and penalties thereon) levied to pay the principal and interest of the series of bonds and warrants of which this bond (or warrant) is one without regard to the serial number appearing upon the face hereof."
(6) Provide that all sums of money already paid to the treasurer of such taxing district or other authorized officer in payment, in whole or in part, of any assessment levied by or for such taxing district or of interest or penalties thereon, shall be transferred by such treasurer or other authorized officer to a new account and made applicable to the payment of refunding bonds and warrants to be issued under such plan of readjustment.
(7) Provide that such treasurer or other authorized officer shall have authority to use funds in his or her possession not required for payment of current interest of such bonds and warrants, to buy such bonds and warrants in the open market through tenders or by call at the lowest prices obtainable at or below par and accrued interest, without preference of one bond or warrant over another because of its serial number, or for any other cause other than the date and hour of such tender or other offer and the amount which the owner of such bond or warrant agrees to accept for it. In such case such refunding bonds and warrants shall bear the following legend: "This bond (or warrant) may be retired by tender or by call without regard to the serial number appearing upon the face hereof."
(8) Provide that if, after the payment of all interest on refunding bonds and warrants issued under any plan of readjustment adopted pursuant to this chapter and chapter IX of the federal bankruptcy act and the retirement of such bonds and warrants, there shall be remaining in the hands of the treasurer or other authorized officer of the taxing district which issued such bonds and warrants money applicable under the provisions of this chapter to the payment of such interest, bonds, and warrants, such money shall be applied by such treasurer or other authorized officer to the maintenance, repair, and replacement of the improvements originally financed by the bonds readjusted under this chapter and the federal bankruptcy act.
(9) The above enumeration of powers shall not be deemed to exclude powers not herein mentioned that may be necessary for or incidental to the accomplishment of the purposes hereof.
[ 2011 c 336 s 812; 1935 c 143 s 9; RRS s 5608-9. ]
Nothing in this chapter may be deemed to grant to any operating agency organized under chapter 43.52 RCW, or a project of any such operating agency, the authority to levy any tax or assessment not otherwise authorized by law.
[ 1983 2nd ex.s. c 3 s 54. ]
NOTES:
Construction—Severability—Effective dates—1983 2nd ex.s. c 3: See notes following RCW 82.04.255.
In the event that any taxing district in the state of Washington, before this chapter takes effect, shall have filed or purported or attempted to file a petition under the provisions of chapter IX of the federal bankruptcy act, or shall have taken or purported or attempted to take any other proceedings under or in contemplation of proceedings under the provisions of said chapter IX, then and in every such case all acts and proceedings of such taxing district, in connection with such petition or proceedings, are hereby, to all intents and purposes, declared as legal and valid as though taken after the *effective date of this chapter.
[ 1935 c 143 s 10; RRS s 5608-10. ]
NOTES:
*Reviser's note: The "effective date of this chapter" was March 21, 1935.
This chapter and all its provisions shall be liberally construed to the end that the purposes hereof may be made effective. If any section, part or provision of this chapter shall be adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the chapter as a whole, or of any section, provision or part thereof not adjudged invalid or unconstitutional.
[ 1935 c 143 s 11; RRS s 5608-11. ]
Any agreement or contract between two taxing districts other than the state which is otherwise authorized by law may be made contingent upon a particular property tax levy rate of an identified taxing district other than the state where such rate affects the regular property tax rate of one of the parties to the contract and therefore affects the party's resources with which to perform under the contract. The governing body of every taxing district that could have its tax levy adversely affected by such a contract shall be notified about the contract.
[ 1988 c 274 s 2; 1986 c 107 s 1. ]
NOTES:
Purpose—Severability—1988 c 274: See notes following RCW 84.52.010.
Severability—1986 c 107: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1986 c 107 s 5.]
Construction—1986 c 107 ss 1 and 2: "Sections 1 and 2 of this act are supplementary and in addition to any other authority granted by law and shall not be construed to limit any other law." [ 1986 c 107 s 6.]
Any taxing district other than the state may transfer funds to another taxing district other than the state where the regular property tax levy rate of the second district may affect the regular property tax levy rate of the first district and where such transfer is part of an agreement whereby proration or reduction of property taxes is lessened or avoided. The governing body of every taxing district that could have its tax levy adversely affected by such an agreement shall be notified about the agreement.
[ 1988 c 274 s 3; 1986 c 107 s 2. ]
NOTES:
Purpose—Severability—1988 c 274: See notes following RCW 84.52.010.
Severability—Construction—1986 c 107: See notes following RCW 39.67.010.
As used in this chapter, "municipal corporation" includes counties, cities, towns, port districts, water-sewer districts, school districts, metropolitan park districts, or such other units of local government which are authorized to issue obligations.
[ 1999 c 153 s 53; 1987 c 19 s 1. ]
NOTES:
Part headings not law—1999 c 153: See note following RCW 57.04.050.
Any municipal corporation may enter into a loan agreement containing the terms and conditions of a loan from an agency of the state of Washington or the United States of America and evidencing the obligation of the municipal corporation to repay that loan under the terms and conditions set forth in the loan agreement. A loan agreement may provide that the municipal corporation will repay the loan solely from revenues set aside into a special fund for repayment of that loan. In the case of a municipal corporation authorized to borrow money payable from taxes, and authorized to levy such taxes, the loan agreement may provide that repayment of the loan is a general obligation of the municipal corporation, or both a general obligation and an obligation payable from revenues set aside into a special fund.
The state or federal agency making the loan shall have such rights of recovery in the event of default in payment or other breach of the loan agreement as may be provided in the loan agreement or otherwise by law.
[ 1987 c 19 s 2. ]
Nothing in this chapter authorizes municipal corporations to incur indebtedness beyond constitutional indebtedness limitations.
[ 1987 c 19 s 3. ]
The authority under this chapter is supplemental and in addition to the authority to issue obligations under any other provision of law.
[ 1987 c 19 s 4. ]
(1) In case of the loss or destruction of a warrant for the payment of money, or any bond or other instrument or evidence of indebtedness, issued by a municipality, the municipality may issue or cause to be issued a duplicate in lieu thereof, bearing the same designation and for the same amount as the original. The duplicate instrument is subject in all other respects to the same provisions of law as the original instrument.
(a) Before a duplicate instrument is issued in accordance with this section, the issuing officer shall require the person making application for issuance of the duplicate to file a written affidavit specifically alleging on oath:
(i) That the applicant is the proper owner, payee, or legal representative of the owner or payee of the original instrument;
(ii) The date of issue, number, amount, and for what services, claim, or purpose the original instrument or series of instruments of which it is a part was issued;
(iii) That the original instrument has been lost or destroyed; and
(iv) That the original instrument has not been paid or has not been received by the applicant.
(b) In the event that an original instrument and its duplicate instrument are both presented for payment as a result of forgery or fraud, the agency, department, or officer that issues a duplicate under this section is responsible for endeavoring to recover any losses suffered by the municipality.
(2) For purposes of this section, "municipality" means any county, city, town, district, or other political subdivision or municipal corporation of the state of Washington, or an agency, department, or officer of the municipality.
[ 2016 sp.s. c 5 s 2; 1975-'76 2nd ex.s. c 77 s 1; 1965 ex.s. c 61 s 4. ]
NOTES:
Lost or destroyed evidence of indebtedness issued by state: RCW 43.08.064 through 43.08.068.
When a municipal corporation issues a duplicate instrument, as authorized in this chapter, the issuing officer of such municipal corporation shall keep a full and complete record of all warrants, bonds, or other instruments alleged to have been lost or destroyed, which were issued by such municipal corporation, and of the issue of any duplicate therefor; and upon the issuance of any duplicate such officer shall enter upon his or her books the cancellation of the original instrument and immediately notify the treasurer of the county, city or other municipal corporation, the state auditor, and all trustees and paying agencies authorized to redeem such instruments on behalf of the municipal corporation, of such cancellation. The treasurer shall keep a similar list of all warrants, bonds, or other instruments so canceled.
[ 2011 c 336 s 813; 1965 ex.s. c 61 s 5. ]
(1) Except as provided in RCW 39.76.020, every state agency, county, city, town, school district, board, commission, or any other public body shall pay interest at a rate of one percent per month, but at least one dollar per month, on amounts due on written contracts for public works, personal services, goods and services, equipment, and travel, whenever the public body fails to make timely payment.
(2) For purposes of this section, payment shall be timely if:
(a) Except as provided otherwise in this subsection, a check or warrant is mailed or is available on the date specified for the amount specified in the applicable contract documents but not later than thirty days of receipt of a properly completed invoice or receipt of goods or services, whichever is later. If a contract is funded by grant or federal money, the public body shall pay the prime contractor for satisfactory performance within thirty calendar days of the date the public body receives a payment request that complies with the contract or within thirty calendar days of the date the public body actually receives the grant or federal money, whichever is later.
(b) On written contracts for public works, when part or all of a payment is going to be withheld for unsatisfactory performance or if the payment request made does not comply with the requirements of the contract, the public body shall notify the prime contractor in writing within eight working days after receipt of the payment request stating specifically why part or all of the payment is being withheld and what remedial actions must be taken by the prime contractor to receive the withheld amount.
(c) If the notification by the public body required by (b) of this subsection does not comply with the notice contents required under (b) of this subsection, the public body shall pay the interest under subsection (1) of this section from the ninth working day after receipt of the initial payment request until the contractor receives notice that does comply with the notice contents required under (b) of this subsection.
(d) If part or all of a payment is withheld under (b) of this subsection, the public body shall pay the withheld amount within thirty calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice. If the withheld amount is not paid within the thirty calendar days, the public body shall pay interest under subsection (1) of this section from the thirty-first calendar day until the date paid.
(e)(i) If the prime contractor on a public works contract, after making a request for payment to the public body but before paying a subcontractor for the subcontractor's performance covered by the payment request, discovers that part or all of the payment otherwise due to the subcontractor is subject to withholding from the subcontractor under the subcontract for unsatisfactory performance, the prime contractor may withhold the amount as allowed under the subcontract. If the prime contractor withholds an amount under this subsection, the prime contractor shall:
(A) Give the subcontractor notice of the remedial actions that must be taken as soon as practicable after determining the cause for the withholding but before the due date for the subcontractor payment;
(B) Give the contracting officer of the public body a copy of the notice furnished to the subcontractor under (e)(i)(A) of this subsection; and
(C) Pay the subcontractor within eight working days after the subcontractor satisfactorily completes the remedial action identified in the notice.
(ii) If the prime contractor does not comply with the notice and payment requirements of (e)(i) of this subsection, the contractor shall pay the subcontractor interest on the withheld amount from the eighth working day at an interest rate that is equal to the amount set forth in subsection (1) of this section.
(3) For the purposes of this section:
(a) A payment is considered to be made when mailed or personally delivered to the party being paid.
(b) An invoice is considered to be received when it is date-stamped or otherwise marked as delivered. If the invoice is not date-stamped or otherwise marked as delivered, the date of the invoice is considered to be the date when the invoice is received.
[ 1992 c 223 s 1. ]
NOTES:
Effective date—1992 c 223: "This act shall take effect September 1, 1992." [ 1992 c 223 s 9.]
Waiver of rights, construction—Application—1992 c 223: See RCW 39.04.900 and 39.04.901.
RCW 39.76.011 does not apply to the following:
(1) Interagency or intergovernmental transactions;
(2) Amounts payable to employees or prospective employees of state agencies or local governmental units as reimbursement for expenses;
(3) Belated claims for any time of delinquency after July 31 following the second year of the fiscal biennium;
(4) Claims subject to a good faith dispute, when before the date of timely payment, notice of the dispute is:
(a) Sent by certified mail;
(b) Personally delivered; or
(c) Sent in accordance with procedures in the contract;
(5) Delinquencies due to natural disasters, disruptions in postal or delivery service, work stoppages due to labor disputes, power failures, or any other cause resulting from circumstances clearly beyond the control of the unit of local government or state agency;
(6) Contracts entered before July 26, 1981; and
(7) Payment from any retirement system listed in RCW 41.50.030 and chapter 41.24 RCW.
[ 2009 c 219 s 5; 1981 c 68 s 2. ]
Any state agency required to pay late payment penalties under this chapter shall pay the penalties from funds designated for administrative costs of the agency receiving the public works, personal services, goods and services, equipment, or travel and shall not be paid from funds appropriated for client services.
[ 1981 c 68 s 3. ]
In any action brought to collect interest due under this chapter, the prevailing party is entitled to an award of reasonable attorney fees.
[ 1981 c 68 s 4. ]
The legislature hereby establishes a state policy, to the extent provided in this chapter, that governmental agencies publicly announce requirements for architectural and engineering services, and negotiate contracts for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.
[ 1981 c 61 s 1. ]
NOTES:
Effective date—1981 c 61: "This act shall take effect on January 1, 1982." [ 1981 c 61 s 9.]
Unless the context clearly requires otherwise, the definitions in this section shall apply throughout this chapter.
(1) "State agency" means any department, agency, commission, bureau, office, or any other entity or authority of the state government.
(2) "Local agency" means any city and any town, county, special district, municipal corporation, agency, port district or authority, or political subdivision of any type, or any other entity or authority of local government in corporate form or otherwise.
(3) "Special district" means a local unit of government, other than a city, town, or county, authorized by law to perform a single function or a limited number of functions, and including but not limited to, water-sewer districts, irrigation districts, fire districts, school districts, community college districts, hospital districts, transportation districts, and metropolitan municipal corporations organized under chapter 35.58 RCW.
(4) "Agency" means both state and local agencies and special districts as defined in subsections (1), (2), and (3) of this section.
(5) "Architectural and engineering services" or "professional services" means professional services rendered by any person, other than as an employee of the agency, contracting to perform activities within the scope of the general definition of professional practice in chapters 18.08, 18.43, or 18.96 RCW.
(6) "Person" means any individual, organization, group, association, partnership, firm, joint venture, corporation, or any combination thereof.
(7) "Consultant" means any person providing professional services who is not an employee of the agency for which the services are provided.
(8) "Application" means a completed statement of qualifications together with a request to be considered for the award of one or more contracts for professional services.
[ 1999 c 153 s 55; 1981 c 61 s 2. ]
NOTES:
Part headings not law—1999 c 153: See note following RCW 57.04.050.
Effective date—1981 c 61: See note following RCW 39.80.010.
Each agency shall publish in advance that agency's requirement for professional services. The announcement shall state concisely the general scope and nature of the project or work for which the services are required and the address of a representative of the agency who can provide further details. An agency may comply with this section by: (1) Publishing an announcement on each occasion when professional services provided by a consultant are required by the agency; or (2) announcing generally to the public its projected requirements for any category or type of professional services.
[ 1981 c 61 s 3. ]
NOTES:
Effective date—1981 c 61: See note following RCW 39.80.010.
In the procurement of architectural and engineering services, the agency shall encourage firms engaged in the lawful practice of their profession to submit annually a statement of qualifications and performance data. The agency shall evaluate current statements of qualifications and performance data on file with the agency, together with those that may be submitted by other firms regarding the proposed project, and shall conduct discussions with one or more firms regarding anticipated concepts and the relative utility of alternative methods of approach for furnishing the required services and then shall select therefrom, based upon criteria established by the agency, the firm deemed to be the most highly qualified to provide the services required for the proposed project. Such agency procedures and guidelines shall include a plan to ensure that minority and women-owned firms and veteran-owned firms are afforded the maximum practicable opportunity to compete for and obtain public contracts for services. The level of participation by minority and women-owned firms and veteran-owned firms shall be consistent with their general availability within the professional communities involved. For the 2015-2017 biennium the procurement for services related to modular classrooms may be expedited.
[ 2016 sp.s. c 35 s 6010; 2010 c 5 s 10; 1981 c 61 s 4. ]
NOTES:
Effective date—2016 sp.s. c 35: See note following RCW 28B.10.027.
Purpose—Construction—2010 c 5: See notes following RCW 43.60A.010.
Effective date—1981 c 61: See note following RCW 39.80.010.
(1) The agency shall negotiate a contract with the most qualified firm for architectural and engineering services at a price which the agency determines is fair and reasonable to the agency. In making its determination, the agency shall take into account the estimated value of the services to be rendered as well as the scope, complexity, and professional nature thereof.
(2) If the agency is unable to negotiate a satisfactory contract with the firm selected at a price the agency determines to be fair and reasonable, negotiations with that firm shall be formally terminated and the agency shall select other firms in accordance with RCW 39.80.040 and continue in accordance with this section until an agreement is reached or the process is terminated.
[ 1981 c 61 s 5. ]
NOTES:
Effective date—1981 c 61: See note following RCW 39.80.010.
(1) This chapter need not be complied with by any agency when the contracting authority makes a finding in accordance with this or any other applicable law that an emergency requires the immediate execution of the work involved.
(2) Nothing in this chapter shall relieve the contracting authority from complying with applicable law limiting emergency expenditures.
[ 1981 c 61 s 6. ]
NOTES:
Effective date—1981 c 61: See note following RCW 39.80.010.
Nothing in this chapter shall affect the validity or effect of any contract in existence on January 1, 1982.
[ 1981 c 61 s 7. ]
NOTES:
Effective date—1981 c 61: See note following RCW 39.80.010.
The legislature hereby finds and declares that this state urgently needs to do the following: Promote higher employment; encourage the development of new jobs; maintain and supplement the capital investments in industry that currently exist in this state; encourage future employment by ensuring future capital investment; attract environmentally sound industry to the state; protect and enhance the quality of natural resources and the environment; and promote the production and conservation of energy.
[ 1981 c 300 s 1. ]
As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.
(1) "Board of directors" means the board of directors of a public corporation.
(2) "Construction" or "construct" means construction and acquisition, whether by devise, purchase, gift, lease, or otherwise.
(3) "Facilities" means land, rights in land, buildings, structures, docks, wharves, machinery, transmission equipment, public broadcast equipment, landscaping, utilities, approaches, roadways and parking, handling and storage areas, and similar ancillary facilities.
(4) "Financing document" means a lease, sublease, installment sale agreement, conditional sale agreement, loan agreement, mortgage, deed of trust guaranty agreement, or other agreement for the purpose of providing funds to pay or secure debt service on revenue bonds.
(5) "Improvement" means reconstruction, remodeling, rehabilitation, extension, and enlargement; and "to improve" means to reconstruct, to remodel, to rehabilitate, to extend, and to enlarge.
(6) "Industrial development facilities" means manufacturing, processing, research, production, assembly, warehousing, transportation, public broadcasting, pollution control, solid waste disposal, energy facilities, sports facilities, parking facilities associated with industrial development facilities as defined in this section or with historic properties as defined in RCW 84.26.020 and industrial parks. For the purposes of this section, the term "sports facilities" shall not include facilities which are constructed for use by members of a private club or as integral or subordinate parts of a hotel or motel, or which are not available on a regular basis for general public use.
(7) "Industrial park" means acquisition and development of land as the site for an industrial park. For the purposes of this chapter, "development of land" includes the provision of water, sewage, drainage, or similar facilities, or of transportation, energy, or communication facilities, which are incidental to the use of the site as an industrial park, but does not include the provision of structures or buildings.
(8) "Municipality" means a city, town, county, or port district of this state.
(9) "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.
(10) "Project costs" means costs of (a) acquisition, construction, and improvement of any facilities included in an industrial development facility; (b) architectural, engineering, consulting, accounting, and legal costs related directly to the development, financing, and construction of an industrial development facility, including costs of studies assessing the feasibility of an industrial development facility; (c) finance costs, including discounts, if any, the costs of issuing revenue bonds, and costs incurred in carrying out any trust agreement; (d) interest during construction and during the six 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 section.
(11) "Revenue bond" means a nonrecourse revenue bond, nonrecourse revenue note, or other nonrecourse revenue obligation issued for the purpose of financing an industrial development facility on an interim or permanent basis.
(12) "User" means one or more persons acting as lessee, purchaser, mortgagor, or borrower under a financing document and may include a party who transfers the right of use and occupancy to another party by lease, sublease, or otherwise.
[ 1986 c 309 s 1; 1986 c 308 s 2; 1985 c 439 s 1; 1983 1st ex.s. c 51 s 1; 1981 c 300 s 2. ]
NOTES:
Reviser's note: This section was amended by 1986 c 308 s 2 and by 1986 c 309 s 1, each without reference to the other. Both amendments are incorporated in the publication of this section pursuant to RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Severability—1986 c 308: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1986 c 308 s 3.]
(1) For the purpose of facilitating economic development and employment opportunities in the state of Washington through the financing of the project costs of industrial development facilities, a municipality may enact an ordinance creating a public corporation for the purposes authorized in this chapter. The ordinance creating the public corporation shall approve a charter for the public corporation containing such provisions as are authorized by and not in conflict with this chapter. Any charter issued under this chapter shall contain in substance the limitations set forth in RCW 39.84.060. In any suit, action, or proceeding involving the validity or enforcement of or relating to any contract of the public corporation, the public corporation 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 public corporation by the governing body. A copy of the ordinance duly certified by the clerk of the governing body of the municipality shall be admissible in evidence in any suit, action, or proceeding.
(2) A public corporation created by a municipality pursuant to this chapter may be dissolved by the municipality if the public corporation: (a) 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 its outstanding obligations have been satisfied. Such a dissolution shall 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 a public corporation, including termination of the public corporation if contracts entered into by the public corporation are not impaired. Any net earnings of a public corporation, beyond those necessary for retirement of indebtedness incurred by it, shall not inure to the benefit of any person other than the creating municipality. Upon dissolution of a public corporation, title to all property owned by the public corporation shall vest in the municipality.
[ 1981 c 300 s 3. ]
The ordinance creating a public corporation shall include provisions establishing a board of directors to govern the affairs of the public corporation, what constitutes a quorum of the board of directors, and how the public corporation shall conduct its affairs.
[ 1981 c 300 s 4. ]
It shall be illegal for a director, officer, agent, or employee of a public corporation 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 industrial development facility financed through the public corporation. Violation of any provision of this section is a gross misdemeanor.
[ 1981 c 300 s 5. ]
No municipality may give or lend any money or property in aid of a public corporation. The municipality that creates a public corporation shall annually review any financial statements of the public corporation and at all times shall have access to the books and records of the public corporation. No public corporation 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 proposed industrial development facility lies. No revenue bonds may be issued pursuant to this chapter unless the board of directors of the public corporation proposing to issue revenue bonds makes a finding that in its opinion the interest paid on the bonds will be exempt from income taxation by the federal government. Revenue bonds issued by a public corporation under this chapter shall not be 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 shall be payable solely from both the revenues derived as a result of the industrial development facilities 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 the user of the industrial development facility in connection with the financing thereof, and money and other property received from private sources. Each revenue bond shall contain on its face statements to the effect that: (1) 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; (2) no tax funds or governmental revenue may be used to pay the principal or interest thereon; and (3) 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. A public corporation may incur only those financial obligations which will be paid from revenues received pursuant to financing documents, from fees or charges paid by users or prospective users of the industrial development facilities funded by the revenue bonds, or from the proceeds of revenue bonds. A public corporation 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 section 103 of the Internal Revenue Code of 1954, as amended) and may act on behalf of the municipality under whose auspices it is created for the specific public purposes authorized by this chapter. The public corporation 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 shall not delegate to a public corporation any of the municipality's attributes of sovereignty, including, without limitation, the power to tax, the power of eminent domain, and the police power.
[ 1981 c 300 s 6. ]
The finances of any public corporation are subject to examination by the state auditor's office pursuant to RCW 43.09.260.
[ 1981 c 300 s 7. ]
(1) A public corporation created under this chapter has the following powers with respect to industrial development facilities together with all powers incidental thereto or necessary for the performance thereof:
(a) To construct and maintain one or more industrial development facilities;
(b) To lease to a lessee all or any part of any industrial development facility for such rentals and upon such terms and conditions, including options to purchase, as its board of directors considers advisable and not in conflict with this chapter;
(c) To sell by installment contract or otherwise and convey all or any part of any industrial development facility for such purchase price and upon such terms and conditions as its board of directors considers advisable which are not in conflict with this chapter;
(d) To make secured loans for the purpose of providing temporary or permanent financing or refinancing of all or part of the project cost of any industrial development facility, including the refunding of any outstanding obligations, mortgages, or advances issued, made, or given by any person for the project costs; and to charge and collect interest on the loans for the loan payments upon such terms and conditions as its board of directors considers advisable which are not in conflict with this chapter;
(e) To issue revenue bonds for the purpose of financing all or part of the project cost of any industrial development facility and to secure the payment of the revenue bonds as provided in this chapter;
(f) As security for the payment of the principal of and interest on any revenue bonds issued and any agreements made in connection therewith, to mortgage, pledge, or otherwise encumber any or all of its industrial development facilities or any part or parts thereof, whether then owned or thereafter acquired, and to assign any mortgage and repledge any security conveyed to the public corporation, to secure any loan made by the public corporation and to pledge the revenues and receipts therefrom;
(g) To sue and be sued, complain, and defend in its corporate name;
(h) To make contracts and to execute all instruments necessary or convenient for the carrying out of its business;
(i) To have a corporate seal and to use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced;
(j) Subject to the limitations of RCW 39.84.060, to borrow money, accept grants from, or contract with any local, state, or federal governmental agency or with any financial, public, or private corporation;
(k) To make and alter bylaws not inconsistent with its charter for the administration and regulation of the affairs of the corporation;
(l) To collect fees or charges from users or prospective users of industrial development facilities to recover actual or anticipated administrative costs;
(m) To execute financing documents incidental to the powers enumerated in this subsection.
(2) No public corporation created under this chapter may operate any industrial development facility as a business other than as lessor, seller, or lender. The purchase and holding of mortgages, deeds of trust, or other security interests and contracting for any servicing thereof is not considered the operation of an industrial development facility.
(3) No public corporation may exercise any of the powers authorized in this section or issue any revenue bonds with respect to any industrial development facility unless the industrial development facility is located wholly within the boundaries of the municipality under whose auspices the public corporation is created or unless the industrial development facility comprises energy facilities or solid waste disposal facilities which provide energy for or dispose of solid waste from the municipality or the residents thereof.
[ 1981 c 300 s 8. ]
(1) Prior to issuance of any revenue bonds, each public corporation shall submit a copy of its enabling ordinance and charter, a description of any industrial development facility proposed to be undertaken, and the basis for its qualification as an industrial development facility to the department of commerce.
(2) If the industrial development facility is not eligible under this chapter, the department of commerce shall give notice to the public corporation, in writing and by certified mail, within twelve working days of receipt of the description.
(3) The department of commerce shall provide such advice and assistance to public corporations and municipalities which have created or may wish to create public corporations as the public corporations or municipalities request and the department of commerce considers appropriate.
[ 2023 c 470 s 2030; 1998 c 245 s 34; 1995 c 399 s 56; 1987 c 505 s 22; 1985 c 466 s 46; 1981 c 300 s 9. ]
NOTES:
Explanatory statement—2023 c 470: See note following RCW 10.99.030.
Effective date—Severability—1985 c 466: See notes following RCW 43.31.125.
Department of commerce: Chapter 43.330 RCW.
(1) The principal of and the interest on any revenue bonds issued by a public corporation shall be payable solely from the funds provided for this payment from the revenues of the industrial development facilities funded by the revenue bonds. Each issue of revenue bonds shall be dated, shall bear interest at such rate or rates, and shall mature at such time or times as may be determined by the board of directors, and may be made redeemable before maturity at such price or prices and under such terms and conditions as may be fixed by the board of directors prior to the issuance of the revenue bonds or other revenue obligations.
(2) The board of directors shall determine the form and the manner of execution of the revenue bonds and shall fix the denomination or denominations of the revenue bonds and the place or places of payment of principal and interest. If any officer whose signature or a facsimile of whose signature appears on any revenue bonds or any coupons ceases to be an officer before the delivery of the revenue bonds, the signature shall for all purposes have the same effect as if he or she had remained in office until delivery. The revenue bonds may be issued in coupon or in registered form, as provided in RCW 39.46.030, or both as the board of directors may determine, and provisions may be made for the registration of any coupon revenue bonds as to the principal alone and also as to both principal and interest and for the reconversion into coupon bonds of any bonds registered as to both principal and interest. A public corporation may sell revenue bonds at public or private sale for such price and bearing interest at such fixed or variable rate as may be determined by the board of directors.
(3) The proceeds of the revenue bonds of each issue shall be used solely for the payment of all or part of the project cost of or for the making of a loan in the amount of all or part of the project cost of the industrial development facility for which authorized and shall be disbursed in such manner and under such restrictions, if any, provided in the resolution authorizing the issuance of the revenue bonds or in the trust agreement securing the bonds. If the proceeds of the revenue bonds of any series issued with respect to the cost of any industrial development facility exceeds the cost of the industrial development facility for which issued, the surplus shall be deposited to the credit of the debt service fund for the revenue bonds or used to purchase revenue bonds in the open market.
(4) A public corporation may issue interim notes in the manner provided for the issuance of revenue bonds to fund industrial development facilities prior to issuing other revenue bonds to fund such facilities. A public corporation may issue revenue bonds to fund industrial development facilities that are exchangeable for other revenue bonds when these other revenue bonds are executed and available for delivery.
(5) The principal of and interest on any revenue bonds issued by a public corporation shall be secured by a pledge of unexpended bond proceeds and the revenues and receipts received by the public corporation from the industrial development facilities funded by the revenue bonds pursuant to financing documents. The resolution under which the revenue bonds are authorized to be issued and any financing document may contain agreements and provisions respecting the maintenance or use of the industrial development facility covered thereby, the fixing and collection of rents, purchase price payments or loan payments, the creation and maintenance of special funds from such revenues or from revenue bond proceeds, the rights and remedies available in the event of default, and other provisions relating to the security for the bonds, all as the board of directors consider advisable which are not in conflict with this chapter.
(6) The governing body of the municipality under whose auspices the public corporation is created shall approve by resolution any agreement to issue revenue bonds adopted by a public corporation, which agreement and resolution shall set out the amount and purpose of the revenue bonds. Additionally, no issue of revenue bonds, including refunding bonds, may be sold and delivered by a public corporation without a resolution of the governing body of the municipality under whose auspices the public corporation is created, adopted no more than sixty days before the date of sale of the revenue bonds specifically, approving the resolution of the public corporation providing for the issuance of the revenue bonds.
(7) All revenue bonds issued under this chapter and any interest coupons applicable thereto are negotiable instruments within the meaning of Article 8 of the Uniform Commercial Code, Title 62A RCW, regardless of form or character.
(8) Notwithstanding subsections (1) and (2) of this section, such bonds and interim notes may be issued and sold in accordance with chapter 39.46 RCW.
[ 2011 c 336 s 814; 1983 c 167 s 115; 1981 c 300 s 10. ]
NOTES:
Liberal construction—Severability—1983 c 167: See RCW 39.46.010 and note following.
Each public corporation may provide by resolution for the issuance of revenue refunding bonds for the purpose of refunding any revenue bonds issued for an industrial development facility under this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption or maturity of the revenue bonds and, if considered advisable by the public corporation, for the additional purpose of financing improvements, extensions, or enlargements to the industrial development facility for another industrial development facility. The issuance of the revenue bonds, the maturities and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations of the public corporation in respect to the same shall be governed by this chapter insofar as applicable.
[ 1981 c 300 s 11. ]
Any bonds issued under this chapter may be secured by a trust agreement between the public corporation and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. The trust agreement may evidence a pledge or assignment of the financing documents and lease, sale, or loan revenues to be received from a lessee or purchaser of or borrower with respect to an industrial development facility for the payment of principal of and interest and any premium on the bonds as the same shall become due and payable and may provide for creation and maintenance of reserves for these purposes. A trust agreement or resolution providing for the issuance of the revenue bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties in relation to the acquisition of property and the construction, improvement, maintenance, use, repair, operation, and insurance of the industrial development facility for which the bonds are authorized, and the custody, safeguarding, and application of all money. Any bank or trust company incorporated under the laws of the state which may act as depository of the proceeds of revenue bonds or of revenues may furnish such indemnifying bonds or pledge such securities as may be required by the corporation. A trust agreement may set forth the rights and remedies of the bondholders and of the trustee and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds and debentures of private corporations. In addition, a trust agreement may contain such provisions as the public corporation considers reasonable and proper for the security of the bondholders which are not in conflict with this chapter.
[ 1981 c 300 s 12. ]
No part of the proceeds received from the sale of any revenue bonds under this chapter, of any revenues derived from any industrial development facility acquired or held under this chapter, or of any interest realized on moneys received under this chapter may be commingled by the public corporation with funds of the municipality creating the public corporation. However, those funds of the public corporation, other than proceeds received from the sale of revenue bonds, that are not otherwise encumbered for the payment of revenue bonds and are not reasonably anticipated by the board of directors to be necessary for administrative expenses of the public corporation may be transferred to the creating municipality and used for growth management, planning, or other economic development purposes.
[ 1993 c 139 s 1; 1981 c 300 s 13. ]
A lessee or contracting party under a sale contract or loan agreement shall not be required to be the eventual user of an industrial development facility if any sublessee or assignee assumes all of the obligations of the lessee or contracting party under the lease, sale contract, or loan agreement, but the lessee or contracting party or their successors shall remain primarily liable for all of its obligations under the lease, sale contract, or loan agreement and the use of the industrial development facility shall be consistent with the purposes of this chapter.
[ 1981 c 300 s 14. ]
Before entering into a lease, sale contract, or loan agreement with respect to any industrial development facility, the public corporation shall determine that there are sufficient revenues to pay (1) the principal of and the interest on the revenue bonds proposed to be issued to finance the industrial development facility; (2) the amount necessary to be paid each year into any reserve funds which the public corporation considers advisable to establish in connection with the retirement of the proposed bonds and the maintenance of the industrial development facility; and (3) unless the terms of the lease, sale contract, or loan agreement provide that the lessee or contracting party shall maintain the industrial development facility and carry all proper insurance with respect thereto, the estimated cost of maintaining the industrial development facility in good repair and keeping it properly insured.
[ 1981 c 300 s 15. ]
The proceedings authorizing any revenue bonds under this chapter or any financing document securing the revenue bonds may provide that if there is a default in the payment of the principal of or the interest on the bonds or in the performance of any agreement contained in the proceedings or financing document, the payment and performance may be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect rents, purchase price payments, and loan repayments, and to apply the revenues from the industrial development facility in accordance with the proceedings or provisions of the financing document. Any financing document entered into under this chapter to secure revenue bonds issued under this chapter may also provide that if there is a default in the payment thereof or a violation of any agreement contained in the financing document, the industrial development facility may be foreclosed and sold under proceedings in equity or in any other manner now or hereafter permitted by law. Any financing document may also provide that any trustee under the financing document or the holder of any revenue bonds secured thereby may become the purchaser at any foreclosure sale if it is the highest bidder.
[ 1981 c 300 s 16. ]
Funds received by a port district under RCW 39.84.130 may be transferred to a nonprofit corporation created or re-created for the exclusive purpose of providing training, education, and general improvement to the public sector management skills necessary to implement the economic development programs of the port district. The nonprofit corporation selected for that purpose may be, without limitation, a corporation formed by the Washington public ports association.
Any nonprofit corporation selected for the purposes of this section must have tax exempt status under 26 U.S.C. Sec. 501(c)(3).
Transfers and expenditures of funds shall be deemed to be for industrial development and trade promotion as provided in Article VIII, section 8 of the Washington state Constitution.
Nothing in this chapter shall be construed to prohibit the receipt of additional public or private funds by a nonprofit corporation for the purposes described in this section.
[ 2000 c 198 s 2. ]
The community economic revitalization board under chapter 43.160 RCW shall have all the powers of a public corporation under this chapter. To the extent applicable, all duties of a public corporation apply to the community economic revitalization board in exercising its powers under this chapter.
[ 1984 c 257 s 11. ]
This chapter supplements and neither restricts nor limits any powers which a municipality or presently authorized public corporation might otherwise have under any laws of this state.
[ 1981 c 300 s 17. ]
As used in this chapter, captions constitute no part of the law.
[ 1981 c 300 s 19. ]
The federal internal revenue code of 1986, as amended imposes ceilings on the aggregate amount of certain types of bonds, including tax-exempt private activity bonds and other types, that may be issued during any calendar year by or on behalf of states and their political subdivisions. The code provides a formula for allocating the annual tax-exempt private activity bond ceiling among various issuers of private activity bonds for housing, student loans, exempt facilities, and redevelopment projects within a state, but permits each state to enact a different allocation method that is appropriate to that state's needs. In addition, congress might, from time to time, amend the code by authorizing state ceilings on additional types of bonds. The purpose of this chapter is to provide a flexible and efficient method of allocating the annual state ceiling in Washington in a manner that recognizes the need of the state and its political subdivisions to finance activities or projects that satisfy a substantial public purpose.
[ 2010 1st sp.s. c 6 s 3; 2001 c 330 s 1; 1987 c 297 s 1. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Agency" means the department of commerce.
(2) "Bond use category" means: (a) Any of the following categories of bonds which are subject to the annual state tax-exempt private activity bond ceiling: (i) Housing, (ii) student loans, (iii) small issue, (iv) exempt facility, (v) redevelopment, and (vi) remainder; and (b) any other categories of bonds described in the code for which there is a separate ceiling, with the exception of bonds designated solely for school district purposes.
(3) "Bonds" means bonds, notes, or other obligations of an issuer.
(4) "Carryforward" is an allocation or reallocation of the state ceiling which is carried from one calendar year to a later year, in accordance with the code.
(5) "Code" means the federal internal revenue code of 1986, as amended.
(6) "Director" means the director of the agency or the director's designee.
(7) "Exempt facility" means the bond use category which includes all bonds which are exempt facility bonds as described in the code, except those for qualified residential rental projects.
(8) "Firm and convincing evidence" means documentation that satisfies the director that the issuer is committed to the prompt financing of, and will issue bonds for, the project or program for which it requests an allocation from the state ceiling.
(9) "Housing" means the bond use category which includes: (a) Mortgage revenue bonds and mortgage credit certificates as described in the code; and (b) exempt facility bonds for qualified residential rental projects as described in the code.
(10) "Initial allocation" means the portion or dollar value of the annual state tax-exempt private activity bond ceiling which initially in each calendar year is allocated to a bond use category for the issuance of private activity bonds, in accordance with RCW 39.86.120.
(11) "Issuer" means the state, any agency or instrumentality of the state, any political subdivision, or any other entity authorized to issue bonds under state law.
(12) "Original allocation" means any allocation of bond authority by a mandatory formula in the code, except for the initial allocations of the annual state ceiling on tax-exempt private activity bonds.
(13) "Private activity bonds" means obligations that are private activity bonds as defined in the code or bonds for purposes described in section 1317(25) of the federal internal revenue code of 1986, as amended.
(14) "Program" means the activities for which housing bonds may be issued.
(15) "Redevelopment" means the bond use category which includes qualified redevelopment bonds as described in the code.
(16) "Remainder" means that portion of the annual state tax-exempt private activity bond ceiling remaining after initial allocations are made under RCW 39.86.120 for any other bond use category.
(17) "Small issue" means the bond use category which includes all industrial development bonds that constitute qualified small issue bonds, as described in the code.
(18) "State" means the state of Washington.
(19) "State ceiling" means the volume limitation for each calendar year on specific bond types, including tax-exempt private activity bonds and other bonds, as imposed by the code.
(20) "Student loans" means the bond use category which includes qualified student loan bonds as described in the code.
[ 2010 1st sp.s. c 6 s 4; 2009 c 565 s 23; 1995 c 399 s 57; 1987 c 297 s 2. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
(1) Except as provided in subsections (2) and (4) of this section, the initial allocation of the state ceiling shall be for each year as follows:
| BOND USE CATEGORY | | 2010 and THEREAFTER | | --- | --- | --- | | Housing | | 42.0% | | Small Issue | | 25.0% | | Exempt Facility | | 20.0% | | Student Loans | | 5.0% | | Public Utility | | 0.0% | | Remainder and Redevelopment | | 8.0% |
(2) Initial allocations may be modified by the agency only to reflect an issuer's carryforward amount. Any reduction of the initial allocation shall be added to the remainder and be available for allocation or reallocation.
(3) The remainder shall be allocated by the agency among one or more issuers from any bond use category with regard to the criteria specified in RCW 39.86.130.
(4) Should any bond use category no longer be subject to the state ceiling due to federal or state provisions of law, the agency shall divide the amount of that initial allocation among the remaining categories as necessary or appropriate with regard to the criteria specified in RCW 39.86.130.
(5)(a) Prior to July 1st of each calendar year, any available portion of an initial allocation may be allocated or reallocated only to an issuer within the same bond use category, except that the remainder category, or portions thereof, may be allocated at any time to any bond use category.
(b) Beginning July 1st of each calendar year, the agency may allocate or reallocate any available portion of the state ceiling to any bond use category with regard to the criteria specified in RCW 39.86.130.
[ 2016 sp.s. c 18 s 1; 2010 1st sp.s. c 6 s 6; 2001 c 330 s 2; 1990 c 50 s 1; 1987 c 297 s 3. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
(1) In granting an allocation, reallocation, or carryforward of the state ceiling as provided in this chapter, the agency shall consider existing state priorities and other such criteria, including but not limited to, the following criteria:
(a) Need of issuers to issue bonds within a bond use category subject to a state ceiling;
(b) Amount of the state ceiling available;
(c) Public benefit and purpose to be satisfied, including economic development, educational opportunity, and public health, safety, or welfare;
(d) Cost or availability of alternative methods of financing for the project or program; and
(e) Certainty of using the allocation which is being requested.
(2) In determining whether to allocate an amount of the state ceiling to an issuer within any bond use category, the agency shall consider, but is not limited to, the following criteria for each of the bond use categories:
(a) Housing: Criteria which comply with RCW 43.180.200.
(b) Student loans: Criteria which comply with the applicable provisions of Title 28B RCW and rules adopted by the office of student financial assistance or applicable state agency dealing with student financial aid.
(c) Small issue: Factors which may include:
(i) The number of employment opportunities the project is likely to create or retain in relation to the amount of the bond issuance;
(ii) The level of unemployment existing in the geographic area likely to be affected by the project;
(iii) A commitment to providing employment opportunities to low-income persons in cooperation with the employment security department;
(iv) Geographic distribution of projects;
(v) The number of persons who will benefit from the project;
(vi) Consistency with criteria identified in subsection (1) of this section; and
(vii) Order in which requests were received.
(d) Exempt facility or redevelopment: Factors which may include:
(i) State issuance needs;
(ii) Consistency with criteria identified in subsection (1) of this section;
(iii) Order in which requests were received;
(iv) The proportionate number of persons in relationship to the size of the community who will benefit from the project; and
(v) The unique timing and issuance needs of large scale projects that may require allocations in more than one year.
(e) Public utility: Factors which may include:
(i) Consistency with criteria identified in subsection (1) of this section; and
(ii) Timing needs for issuance of bonds over a multi-year period.
[ 2011 1st sp.s. c 11 s 243; 2010 1st sp.s. c 6 s 7; 1987 c 297 s 4. ]
NOTES:
Effective date—2011 1st sp.s. c 11 ss 101-103, 106-202, 204-244, and 301: See note following RCW 28B.76.020.
Intent—2011 1st sp.s. c 11: See note following RCW 28B.76.020.
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
(1) No issuer may receive an allocation of the state ceiling without a certificate of approval from the agency. The agency may not make an allocation of the state ceiling to an issuer formed or organized under the laws of another state.
(2) For each state ceiling allocation request, an issuer shall submit to the agency, no sooner than ninety days prior to the beginning of a calendar year for which an allocation of the state ceiling is being requested, a form identifying:
(a) The amount of the allocation sought;
(b) The bond use category from which the allocation sought would be made;
(c) The project or program for which the allocation is requested;
(d) The financing schedule for which the allocation is needed; and
(e) Any other such information required by the agency, including information which corresponds to the allocation criteria of RCW 39.86.130.
(3) The agency may approve or deny an allocation for all or a portion of the issuer's request. Any denied request, however, shall remain on file with the agency for the remainder of the calendar year and shall be considered for receiving any allocation, reallocation, or carryforward of unused portions of the state ceiling during that period.
(4) After receiving an allocation request, the agency shall mail to the requesting issuer a written certificate of approval or notice of denial for an allocation amount, by a date no later than the latest of the following:
(a) February 1st of the calendar year for which the request is made; or
(b) Fifteen days from the date the agency receives an allocation request.
(5)(a) For requests of the state ceiling of any calendar year, the following applies to all bond use categories except housing and student loans:
(i) Except for housing and student loans, any allocations granted prior to April 1st, for which bonds have not been issued by July 1st of the same calendar year, shall revert to the agency on July 1st of the same calendar year for reallocation unless an extension or carryforward is granted;
(ii) Except for housing and student loans, any allocations granted on or after April 1st, for which bonds have not been issued by October 15th of the same calendar year, shall revert to the agency on October 15th of the same calendar year for reallocation unless an extension or carryforward is granted.
(b) For each calendar year, any housing or student loan allocations, for which bonds have not been issued by December 15th of the same calendar year, shall revert to the agency on December 15th of the same calendar year for reallocation unless an extension or carryforward is granted.
(c) In any calendar year for which no allocation for student loan bonds has been granted by February 1st of that year, the entire initial allocation for student loans may be reallocated to housing on February 1st of the same calendar year.
(6) An extension of the deadlines provided by subsection (5) of this section may be granted by the agency for the approved allocation amount or a portion thereof, based on:
(a) Firm and convincing evidence that the bonds will be issued before the end of the calendar year if the extension is granted; and
(b) Any other criteria the agency deems appropriate.
(7) If an issuer determines that bonds subject to the state ceiling will not be issued for the project or program for which an allocation was granted, the issuer shall promptly notify the agency in writing so that the allocation may be canceled and the amount may be available for reallocation.
(8) Bonds subject to the state ceiling may be issued only to finance the project or program for which a certificate of approval is granted.
(9) Within three business days of the date that bonds for which an allocation of the state ceiling is granted have been delivered to the original purchasers, the issuer shall mail to the agency a written notification of the bond issuance. In accordance with chapter 39.44 RCW, the issuer shall also complete bond issuance information on the form provided by the agency.
(10) If the total amount of bonds issued under the authority of a state ceiling for a project or program is less than the amount allocated, the remaining portion of the allocation shall revert to the agency for reallocation in accordance with the criteria in RCW 39.86.130. If the amount of bonds actually issued under the authority of a state ceiling is greater than the amount allocated, the entire allocation shall be disallowed.
[ 2016 sp.s. c 18 s 2; 2011 c 211 s 3; 2010 1st sp.s. c 6 s 8; 1987 c 297 s 5. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
(1) Beginning July 1st of each calendar year, the agency may allocate or reallocate any portions of the annual state tax-exempt private activity bond ceiling for which no certificate of approval is in effect. Reallocations may also be made from the remainder category at any time during the year.
(2) Prior to the end of each calendar year, the agency shall allocate or reallocate any unused portions of the state ceiling among one or more issuers as carryforward, to be used within three years, in accordance with the code and relevant criteria described in RCW 39.86.130.
(3) Reallocations of state bond ceilings other than the annual tax-exempt private activity bond ceiling may be made by the agency in accordance with the code or as established in agency rule when not specified in the code.
[ 2010 1st sp.s. c 6 s 9; 1987 c 297 s 6. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
Original allocations or any reallocations of state bond ceilings other than the tax-exempt private activity bond ceiling must be determined by formula as provided in the code, or by department rule if no formula is provided in the code.
[ 2010 1st sp.s. c 6 s 5. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
If federal legislation is enacted or federal regulations are promulgated which affect the state ceiling, when the legislature is not in session or is less than forty-five days from the constitutional end of session, the governor may establish by executive order an alternative system for the allocation of tax exempt bonds under the state ceiling, effective until the legislature acts. In allocating or reallocating under this section, the governor shall take into account the requirements of federal law, the policy choices expressed in state law, and the projected needs of issuers.
[ 1987 c 297 s 7. ]
A fee schedule shall be established by rule by the agency to assist in support of bond allocation activities. Fees shall reflect costs actually incurred or expected to be incurred by the agency in its bond allocation and bond users clearinghouse activities.
[ 2010 1st sp.s. c 6 s 10; 1987 c 297 s 8. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
In order to permit the full use of the authorized state ceiling under federal law, the agency may adopt rules approving any amendments made to the code after May 8, 1987.
[ 1987 c 297 s 9. ]
Beginning in June 2018 and thereafter by June 30th of each even-numbered year, the agency shall submit a biennial report to the legislature summarizing usage of the bond allocation proceeds and any policy concerns for future bond allocations.
[ 2016 sp.s. c 18 s 3; 2010 1st sp.s. c 6 s 11; 2009 c 518 s 19; 1987 c 297 s 10. ]
NOTES:
Short title—2010 1st sp.s. c 6: See note following RCW 43.180.160.
As used in this chapter, captions constitute no part of the law.
[ 1987 c 297 s 15. ]
(1) It is declared to be the public policy of the state of Washington to promote and facilitate the orderly development and economic stability of its communities. Local governments need the ability to raise revenue to finance public improvements that are designed to encourage economic growth and development in geographic areas characterized by high levels of unemployment and stagnate employment and income growth. The construction of necessary public improvements in accordance with local economic development plans will encourage investment in job-producing private development and expand the public tax base.
(2) It is the purpose of this chapter:
(a) To encourage taxing districts to cooperate in the allocation of future tax revenues that are used to finance public improvements designed to encourage private development in selected areas, in particular in those local governments that are located adjacent to another state or international border;
(b) To assist those local governments that have a competitive disadvantage in its ability to attract business, private investment, or commercial development due to its location near a state or international border; and
(c) To prevent or arrest the decay of selected areas due to the inability of existing financial methods to provide needed public improvements, and to encourage private investment designed to promote and facilitate the orderly redevelopment of selected areas.
[ 2001 c 212 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Assessed value of real property" means the valuation of real property as placed on the last completed assessment roll.
(2) "Increment area" means the geographic area from which taxes are to be appropriated to finance public improvements authorized under this chapter.
(3) "Increment value" means 75 percent of any increase in the true and fair value of real property in an increment area that is placed on the tax rolls after the increment area is created.
(4) "Local government" means any city, town, county, port district, or any combination thereof.
(5) "Ordinance" means any appropriate method of taking legislative action by a local government.
(6) "Permanently affordable housing" means housing, regardless of ownership, for which there is a legally binding, recorded document in effect that limits the price at which the owner may sell or restricts the occupancy of the unit to a qualified, low-income household, for a period of at least 40 years for a property used for shelter or rental housing, or for a period of at least 25 years for a property to be owned by a low-income household. These documents include, but are not limited to, affordability covenants, deed restrictions, and community land trust leases. Resale restrictions exercised by providers of permanently affordable housing can include, but are not limited to:
(a) Continuous ownership of land by a public entity or nonprofit housing provider with a lease allowing ownership of the structure by an income-eligible household;
(b) A nonpossessory interest or right in real property, such as a deed restriction, restrictive covenant, resale restriction, or other contractual agreement, that ensures affordability.
(7) "Public improvement costs" means the costs of: (a) Design, planning, acquisition, site preparation, construction, reconstruction, rehabilitation, improvement, and installation of public improvements; (b) purchasing, rehabilitating, retrofitting for energy efficiency, and constructing housing for the purpose of creating or preserving permanently affordable housing; (c) relocating, maintaining, and operating property pending construction of public improvements; (d) relocating utilities as a result of public improvements; (e) 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; (f) assessments incurred in revaluing real property for the purpose of determining the tax allocation base value that are in excess of costs incurred by the assessor in accordance with the revaluation plan under chapter 84.41 RCW, and the costs of apportioning the taxes and complying with this chapter and other applicable law; and (g) 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 community revitalization financing to fund the costs of the public improvements.
(8) "Public improvements" means:
(a) Infrastructure improvements within the increment area that include:
(i) Street and road construction and maintenance;
(ii) Water and sewer system construction and improvements;
(iii) Sidewalks and streetlights;
(iv) Parking, terminal, and dock facilities;
(v) Park and ride facilities of a transit authority;
(vi) Park facilities and recreational areas;
(vii) Stormwater and drainage management systems;
(viii) Permanently affordable housing; and
(ix) Public safety facilities; and
(b) Expenditures for any of the following purposes:
(i) Providing environmental analysis, professional management, planning, and promotion within the increment area, including the management and promotion of retail trade activities in the increment area;
(ii) Providing maintenance and security for common or public areas in the increment area; or
(iii) Historic preservation activities authorized under RCW 35.21.395.
(9) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) 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; and (b) 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.
(10) "Tax allocation base value" means the true and fair value of real property located within an increment area for taxes imposed in the year in which the increment area is created, plus 25 percent of any increase in the true and fair value of real property located within an increment area that is placed on the assessment rolls after the increment area is created.
(11) "Tax allocation revenues" means those tax revenues derived from the imposition of regular property taxes on the increment value and distributed to finance public improvements.
(12) "Taxing districts" means a governmental entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved increment area.
(13) "Value of taxable property" means the value of the taxable property as defined in RCW 39.36.015.
[ 2026 c 141 s 7; 2022 c 38 s 1. Prior: 2020 c 280 s 1; 2001 c 212 s 2. ]
NOTES:
Modification—Impact—Effective date—2026 c 141: See notes following RCW 39.114.010.
A local government may finance public improvements using community revitalization financing subject to the following conditions:
(1) The local government adopts an ordinance designating an increment area within its boundaries and specifying the public improvements proposed to be financed in whole or in part with the use of community revitalization financing;
(2) The public improvements proposed to be financed in whole or in part using community revitalization financing are expected to encourage private development within the increment area and to increase the fair market value of real property within the increment area;
(3) Private development that is anticipated to occur within the increment 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 local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;
(4) Taxing districts, in the aggregate, that levy at least seventy-five percent of the regular property tax within which the increment area is located approves the community revitalization financing of the project under RCW 39.89.050(1); and
(5) In an increment area that includes any portion of a fire protection district as defined in Title 52 RCW, the fire protection district must agree to participate in the community revitalization financing of the project under chapter 212, Laws of 2001, for the project to proceed. Approval by the fire protection district shall be considered as part of the required participation by taxing districts under subsection (4) of this section.
[ 2002 c 12 s 1; 2001 c 212 s 3. ]
(1) Public improvements that are financed with community revitalization financing may be undertaken and coordinated with other programs or efforts undertaken by the local government and other taxing districts and may be funded in part from revenue sources other than community revitalization financing.
(2) Public improvements that are constructed by a private developer must meet all applicable state and local laws.
[ 2002 c 12 s 2; 2001 c 212 s 4. ]
Before adopting an ordinance creating the increment area, a local government must:
(1) Obtain written agreement for the use of community revitalization financing to finance all or a portion of the costs of the designated public improvements from taxing districts that, in the aggregate, levy at least seventy-five percent of the regular property tax on property within the increment area. A signed, written agreement from taxing districts that in the aggregate levy at least seventy-five percent of the regular property tax within the increment area, constitutes concurrence by all taxing districts in the increment area in the public improvement and participation in the public improvement to the extent of providing limited funding under community revitalization financing authorized under this chapter. The agreement must be authorized by the governing body of taxing districts that in the aggregate levy at least seventy-five percent of the regular property tax on property within the increment area;
(2) Hold a public hearing on the proposed financing of the public improvement in whole or in part with community revitalization financing. Notice of the public hearing must be published in a legal newspaper of general circulation within the proposed increment area at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed increment 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 community revitalization financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed increment area, and estimate the period during which community revitalization financing is contemplated to be used. The public hearing may be held by either the governing body of the local government, or a committee of the governing body that includes at least a majority of the whole governing body; and
(3) Adopt an ordinance establishing the increment area that describes the public improvements, describes the boundaries of the increment area, estimates the cost of the public improvements and the portion of these costs to be financed by community revitalization 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 39.89.030 are met.
[ 2001 c 212 s 5. ]
The local government shall:
(1) Publish notice in a legal newspaper of general circulation within the increment area that describes the public improvement, describes the boundaries of the increment 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 increment area is located.
[ 2001 c 212 s 6. ]
(1) Commencing in the calendar year following the passage of the ordinance, the county treasurer shall distribute receipts from regular taxes imposed on real property located in the increment area as follows:
(a) Each taxing district shall receive that portion of its regular property taxes produced by the rate of tax levied by or for the taxing district on the tax allocation base value for that community revitalization financing project in the taxing district, or upon the total assessed value of real property in the taxing district, whichever is smaller; and
(b) The local government that created the increment area shall receive an additional portion of the regular property taxes levied by or for each taxing district upon the increment value within the increment area. However, the local government that created the increment area may agree to receive less than the full amount of this portion as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts shall be allocated to the taxing districts that imposed regular property taxes, or have regular property taxes imposed for them, in the increment area for collection that year in proportion to their regular tax levy rates for collection that year. The local government 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 local government or its agent under this subsection (1)(b) may only be expended to finance public improvement costs associated with the public improvements financed in whole or in part by community revitalization financing.
(2) The county assessor shall allocate twenty-five percent of any increased real property value occurring in the increment area to the tax allocation base value and seventy-five percent to the increment 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) The apportionment of increases in assessed valuation in an increment area, and the associated distribution to the local government of receipts from regular property taxes that are imposed on the increment value, must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any excess tax allocation revenues and earnings on the tax allocation revenues remaining at the time the apportionment of tax receipts terminates must be returned to the county treasurer and distributed to the taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the increment area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
[ 2001 c 212 s 7. ]
(1) A local government designating an increment area and authorizing the use of community revitalization financing may incur general indebtedness, and issue general obligation bonds, to finance the public improvements and retire the indebtedness in whole or in part from tax allocation revenues it receives, subject to the following requirements:
(a) The ordinance adopted by the local government creating the increment area and authorizing the use of community revitalization financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and
(b) The local government includes this statement of the intent in all notices required by RCW 39.89.050.
(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 local government, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the local government 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 local government designating an increment area and authorizing the use of community revitalization financing may require the nonpublic participant to provide adequate security to protect the public investment in the public improvement within the increment area.
[ 2001 c 212 s 8. ]
A direct or collateral attack on a public improvement, public improvement ordinance, or increment area purported to be authorized or created in conformance with applicable legal requirements, including this chapter, may not be commenced more than thirty days after publication of notice as required by RCW 39.89.060.
[ 2001 c 212 s 9. ]
(1) A local government may issue revenue bonds to fund revenue-generating public improvements, or portions of public improvements, that are located within an increment area and that it is authorized to provide or operate. Whenever revenue bonds are to be issued, the legislative authority of the local government shall create or have created a special fund or funds from which, along with any reserves created pursuant to RCW 39.44.140, the principal and interest on these revenue bonds shall exclusively be payable. The legislative authority of the local government may obligate the local government to set aside and pay into the special fund or funds a fixed proportion or a fixed amount of the revenues from the public improvements that are funded by the revenue bonds. This amount or proportion is a lien and charge against these revenues, subject only to operating and maintenance expenses. The local government shall have due regard for the cost of operation and maintenance of the public improvements that are funded by the revenue bonds, and shall not set aside into the special fund or funds a greater amount or proportion of the revenues that in its judgment will be available over and above the cost of maintenance and operation and the amount or proportion, if any, of the revenue previously pledged. The local government may also provide that revenue bonds payable out of the same source or sources of revenue may later be issued on a parity with any revenue bonds being issued and sold.
(2) Revenue bonds issued pursuant to this section are not an indebtedness of the local government issuing the bonds, and the interest and principal on the bonds shall only be payable from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The owner or bearer of a revenue bond or any interest coupon issued pursuant to this section shall not have any claim against the local government arising from the bond or coupon except for payment from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The substance of the limitations included in this subsection shall be plainly printed, written, or engraved on each bond issued pursuant to this section.
(3) Revenue bonds with a maturity in excess of thirty years shall not be issued. The legislative authority of the local government shall by resolution determine for each revenue bond issue the amount, date, form, terms, conditions, denominations, maximum fixed or variable interest rate or rates, maturity or maturities, redemption rights, registration privileges, manner of execution, manner of sale, callable provisions, if any, and covenants including the refunding of existing revenue bonds. Facsimile signatures may be used on the bonds and any coupons. Refunding revenue bonds may be issued in the same manner as revenue bonds are issued.
[ 2002 c 12 s 3. ]
This chapter supplements and neither restricts nor limits any powers which the state or any local government might otherwise have under any laws of this state.
[ 2001 c 212 s 10. ]
As used in this chapter, the term "public body" means any city, town, district or other governmental agency created by or under the laws of this state.
[ 1947 c 242 s 1; Rem. Supp. 1947 s 5616-20. ]
All bonds heretofore issued for the purpose of financing or aiding in the financing of any work, undertaking, or project by any public body, including all proceedings for the authorization and issuance of such bonds, and the sale, execution, and delivery thereof, are hereby validated, ratified, approved, and confirmed, notwithstanding any lack of power (other than constitutional) of such public body, or the governing body or commission or officers thereof, to authorize and issue such bonds, or to sell, execute, or deliver the same, and notwithstanding any defects or irregularities (other than constitutional), including the failure to publish notices of elections, in such proceedings, or in such sale, execution or delivery, and notwithstanding that such governing body or commission or officers may not have been elected, appointed or qualified for the offices they purported to hold; and such bonds are and shall be binding, legal, valid, and enforceable obligations of such public body.
[ 1947 c 242 s 2; Rem. Supp. 1947 s 5616-21. ]
All proceedings which have been taken prior to March 19, 1947, for the purpose of financing or aiding in the financing of any work, undertaking, or project by any public body, including all proceedings for the authorization and issuance of bonds and for the sale, execution, and delivery thereof, are hereby validated, ratified, approved, and confirmed, notwithstanding any lack of power (other than constitutional) of such public body, or the governing body or commission or officers thereof, to authorize and issue such bonds, or to sell, execute, or deliver the same, and notwithstanding any defects or irregularities (other than constitutional) in such proceedings.
[ 1947 c 242 s 3; Rem. Supp. 1947 s 5616-22. ]
All revenue bonds, the issuance of which was authorized or ratified at a general or special election held within the issuing jurisdiction prior to July 1, 1970 or the proposition for the issuance of which will be submitted at such an election pursuant to action of the legislative authority of the issuer taken prior to July 1, 1970, may be sold and issued with an interest rate or rates greater than any interest rate restriction contained in the ballot proposition or ordinance or resolution relating to such authorization or ratification.
[ 1970 ex.s. c 66 s 6. ]
All debts, contracts and obligations heretofore made or incurred by or in favor of the state, state agencies, The Evergreen State College, community colleges, and regional and state universities, and the political subdivisions, municipal corporations and quasi municipal corporations of this state, are hereby declared to be legal and valid and of full force and effect from the date thereof, regardless of the interest rate borne by any such debts, contracts and obligations.
[ 1977 ex.s. c 169 s 93; 1970 ex.s. c 66 s 7. ]
NOTES:
Severability—Nomenclature—Savings—1977 ex.s. c 169: See notes following RCW 28B.10.016.
The legislature finds that there is an increasing need for local and regional transportation improvements as the result of both existing demands and the foreseeable future demands from economic growth and development within the state, including residential, commercial, and industrial development.
The legislature intends with this chapter to enable local governments to develop and adopt programs for the purpose of jointly funding, from public and private sources, transportation improvements necessitated in whole or in part by economic development and growth within their respective jurisdictions. The programs should provide a fair and predictable method for allocating the cost of necessary transportation improvements between the public and private sectors. The programs should include consideration of public transportation as a method of reducing off-site transportation impacts from development. The legislature finds that the private funds authorized to be collected pursuant to this chapter are for the purpose of mitigating the impacts of development and are not taxes. The state shall encourage and give priority to the state funding of local and regional transportation improvements that are funded in part by local, public, and private funds.
The authority provided by this chapter, RCW 35.43.182 through 35.43.188, and 36.88.072 through 36.88.078 for local governments to create and implement local transportation programs is intended to be supplemental, except as expressly provided in RCW 39.92.030(9), 82.02.020, and 36.73.120, to the existing authorities and responsibilities of local governments to regulate development and provide public facilities.
[ 1988 c 179 s 1. ]
The definitions set forth in this section apply throughout this chapter.
(1) "Developer" means an individual, group of individuals, partnership, corporation, association, municipal corporation, state agency, or other person undertaking development and their successors and assigns.
(2) "Development" means the subdivision or short platting of land or the construction or reconstruction of residential, commercial, industrial, public, or any other building, building space, or land.
(3) "Direct result of the proposed development" means those quantifiable transportation impacts that are caused by vehicles or pedestrians whose trip origin or destination is the proposed development.
(4) "Local government" means all counties, cities, and towns in the state of Washington and transportation benefit districts created pursuant to chapter 36.73 RCW.
(5) "Off-site transportation improvements" means those transportation capital improvements designated in the local plan adopted under this chapter that are authorized to be undertaken by local government and that serve the transportation needs of more than one development.
(6) "Transportation impact fee" means a monetary charge imposed on new development for the purpose of mitigating off-site transportation impacts that are a direct result of the proposed development.
(7) "Fair market value" means the price in terms of money that a property will bring in a competitive and open market under all conditions of a fair sale, the buyer and seller each prudently knowledgeable, and assuming the price is not affected by undue stimulus, measured at the time of the dedication to local government of land or improved transportation facilities.
[ 1988 c 179 s 2. ]
Local governments may develop and adopt programs for the purpose of jointly funding, from public and private sources, transportation improvements necessitated in whole or in part by economic development and growth within their respective jurisdictions. Local governments shall adopt the programs by ordinance after notice and public hearing. Each program shall contain the elements described in this section.
(1) The program shall identify the geographic boundaries of the entire area or areas generally benefited by the proposed off-site transportation improvements and within which transportation impact fees will be imposed under this chapter.
(2) The program shall be based on an adopted comprehensive, long-term transportation plan identifying the proposed off-site transportation improvements reasonable and necessary to meet the future growth needs of the designated plan area and intended to be covered by this joint funding program, including acquisition of right-of-way, construction and reconstruction of all major and minor arterials and intersection improvements, and identifying design standards, levels of service, capacities, and costs applicable to the program. The program shall also indicate how the transportation plan is coordinated with applicable transportation plans for the region and for adjacent jurisdictions. The program shall also indicate how public transportation and ride-sharing improvements and services will be used to reduce off-site transportation impacts from development.
(3) The program shall include at least a six-year capital funding program, updated annually, identifying the specific public sources and amounts of revenue necessary to pay for that portion of the cost of all off-site transportation improvements contained in the transportation plan that will not foreseeably be funded by transportation impact fees. The program shall include a proposed schedule for construction and expenditures of funds. The funding plan shall consider the additional local tax revenue estimated to be generated by new development within the plan area if all or a portion of the additional revenue is proposed to be earmarked as future appropriations for such off-site transportation improvements.
(4) The program shall authorize transportation impact fees to be imposed on new development within the plan area for the purpose of providing a portion of the funding for reasonable and necessary off-site transportation improvements to solve the cumulative impacts of planned growth and development in the plan area. Off-site transportation impacts shall be measured as a pro rata share of the capacity of the off-site transportation improvements being funded under the program. The fees shall not exceed the amount that the local government can demonstrate is reasonably necessary as a direct result of the proposed development.
(5) The program shall provide that the funds collected as a result of a particular new development shall be used in substantial part to pay for improvements mitigating the impacts of the development or be refunded to the property owners of record. Fees paid toward more than one transportation improvement may be pooled and expended on any one of the improvements mitigating the impact of the development. The funds shall be expended in all cases within six years of collection by the local government or the unexpended funds shall be refunded.
(6) The program shall also describe the formula, timing, security, credits, and other terms and conditions affecting the amount and method of payment of the transportation impact fees as further provided for in RCW 39.92.040. In calculating the amount of the fee, local government shall consider and give credit for the developer's participation in public transportation and ride-sharing improvements and services.
(7) The administrative element of the program shall include: An opportunity for administrative appeal by the developer and hearing before an independent examiner of the amount of the transportation impact fee imposed; establishment of a designated account for the public and private funds appropriated or collected for the transportation improvements identified in the plan; methods to enforce collection of the public and private funds identified in the program; designation of the administrative departments or other entities responsible for administering the program, including determination of fee amounts, transportation planning, and construction; and provisions for future amendment of the program including the addition of other off-site transportation improvements. The program shall not be amended in a manner to relieve local government of any contractual obligations made to prior developers.
(8) The program shall provide that private transportation impact fees shall not be collected for any off-site transportation improvement that is incapable of being reasonably carried out because of lack of public funds or other foreseeable impediment.
(9) The program shall provide that no transportation impact fee may be imposed on a development by local government pursuant to this program when mitigation of the same off-site transportation impacts for the development is being required by any government agency pursuant to any other local, state, or federal law.
[ 1988 c 179 s 3. ]
The program shall describe the formula or method for calculating the amount of the transportation impact fees to be imposed on new development within the plan area. The program may require developers to pay a transportation impact fee for off-site transportation improvements not yet constructed and for those jointly-funded improvements constructed since the commencement of the program.
The program shall define the event in the development approval process that triggers a determination of the amount of the transportation impact fees and the event that triggers the obligation to make actual payment of the fees. However, the payment obligation shall not commence before the date the developer has obtained a building permit for the new development or, in the case of residential subdivisions or short plats, at the time of final plat approval, at the developer's option. If the developer of a residential subdivision or short plat elects to pay the fee at the date a building permit has been obtained, the option to pay the transportation impact fee by installments as authorized by this section is deemed to have been waived by the developer. The developer shall be given the option to pay the transportation impact fee in a lump sum, without interest, or by installment with reasonable interest over a period of five years or more as specified by the local government.
The local government shall require security for the obligation to pay the transportation impact fee, in the form of a recorded agreement, deed of trust, letter of credit, or other instrument determined satisfactory by the local government. The developer shall also be given credit against its obligations for the transportation impact fee, for the fair market value of off-site land and/or the cost of constructing off-site transportation improvements dedicated to the local government. If the value of the dedication exceeds the amount of transportation impact fee obligation, the developer is entitled to reimbursement from transportation impact fees attributable to the dedicated improvements and paid by subsequent developers within the plan area.
Payment of the transportation impact fee entitles the developer and its successors and assigns to credit against any other fee, local improvement district assessment, or other monetary imposition made specifically for the designated off-site transportation improvements intended to be covered by the transportation impact fee imposed pursuant to this program. The program shall also define the criteria for establishing periodic fee increases attributable to construction and related cost increases for the improvements designated in the program.
[ 1989 c 296 s 1; 1988 c 179 s 4. ]
Local governments are authorized and encouraged to enter into interlocal agreements to jointly develop and adopt with other local governments the transportation programs authorized by this chapter for the purpose of accomplishing regional transportation planning and development. Local governments shall also seek, to the greatest degree practicable, consistency among jurisdictions in the terms and conditions of their programs for the purpose of increasing fairness and predictability on a regional basis. Local governments shall seek comment, in the development of their programs, from other affected local governments, state agencies, and governments authorized to perform public transportation functions. Local governments are also encouraged to enter into interlocal agreements to provide technical assistance to each other, in return for reasonable reimbursement, for the purpose of developing and implementing such transportation programs.
[ 1988 c 179 s 5. ]
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected. This act is intended to be prospective, not retroactive, in its application.
[ 1988 c 179 s 17. ]
Section captions used in this act do not constitute any part of the law.
[ 1988 c 179 s 18. ]
The purposes of this chapter are to confirm the authority of the state, its agencies, departments, and instrumentalities, the state board for community and technical colleges, and the state institutions of higher education to enter into contracts for the acquisition of real and personal property which provide for payments over a term of more than one year and to exclude such contracts from the computation of indebtedness under Article VIII, section 1 of the state Constitution. It is further the purpose of this chapter to permit the state, its agencies, departments, and instrumentalities, the state board for community and technical colleges, and the state institutions of higher education to enter into financing contracts which make provision for the issuance of certificates of participation and other financing structures. Financing contracts of the state, whether or not entered into under this chapter, shall be subject to approval by the state finance committee except as provided in this chapter.
This chapter shall be liberally construed to effect its purposes.
[ 2009 c 500 s 6; 1998 c 291 s 2; 1989 c 356 s 1. ]
NOTES:
Effective date—2009 c 500: See note following RCW 39.42.070.
Application—1998 c 291: See note following RCW 39.94.050.
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Credit enhancement" includes insurance, letters of credit, lines of credit, or other similar agreements which enhance the security for the payment of the state's or an other agency's obligations under financing contracts.
(2) "Financing contract" means any contract entered into by the state for itself or on behalf of an other agency which provides for the use and purchase of real or personal property by the state and provides for payment by the state over a term of more than one year, and which provides that title to the subject property may secure performance of the state or transfer to the state or an other agency by the end of the term, upon exercise of an option, for a nominal amount or for a price determined without reference to fair market value. Financing contracts include, but are not limited to, conditional sales contracts, financing leases, lease purchase contracts, or refinancing contracts, but do not include operating or true leases. For purposes of this chapter, the term "financing contract" does not include any nonrecourse financing contract or other obligation payable only from money or other property received from private sources and not payable from any public money or property. The term "financing contract" includes a "master financing contract."
(3) "Master financing contract" means a financing contract which provides for the use and purchase of property by the state, and which may include more than one financing contract and appropriation.
(4) "Other agency" means any commission established under Title 15 RCW, a library or regional library, an educational service district, the superintendent of public instruction, the school directors' association, a health district, a public facilities district, or any county, city, town, school district, or other municipal corporation or quasi-municipal corporation.
(5) "State" means the state, agency, department, or instrumentality of the state, the state board for community and technical colleges, and any state institution of higher education.
(6) "State finance committee" means the state finance committee under chapter 43.33 RCW.
(7) "Trustee" means a bank or trust company, within or without the state, authorized by law to exercise trust powers.
[ 2010 1st sp.s. c 15 s 13; 2010 c 115 s 1; 1998 c 291 s 3; 1990 c 47 s 3; 1989 c 356 s 2. ]
NOTES:
Findings—Intent—Construction—2010 1st sp.s. c 15: See notes following RCW 36.100.010.
Authority—2010 c 115: See note following RCW 39.94.030.
Application—1998 c 291: See note following RCW 39.94.050.
(1) The state may enter into financing contracts for itself or on behalf of an other agency for the use and acquisition for public purposes of real and personal property. Payments under financing contracts of the state shall be made by the state from currently appropriated funds or funds not constituting "general state revenues" as defined in Article VIII, section 1 of the state Constitution. Except as provided in subsection (4)(b) of this section, payments under financing contracts of the state on behalf of any other agency shall be made solely from the sources identified in the financing contract, which may not obligate general state revenues as defined in Article VII [VIII], section 1 of the state Constitution. The treasurer of an other agency shall remit payments under financing contracts to the office of the state treasurer or to the state treasurer's designee. In the event of any deficiency of payments by an other agency under a financing contract, the treasurer of the other agency shall transfer any legally available funds of the other agency in satisfaction of the other agency's obligations under the financing contract if such funds have been obligated by the other agency under the financing contract and, if such deficiency is not thereby cured, the office of the state treasurer is directed to withdraw from that agency's share of state revenues for distribution or other money an amount sufficient to fulfill the terms and conditions of the financing contract. The term of any financing contract shall not exceed thirty years or the remaining useful life of the property, whichever is shorter. Financing contracts may include other terms and conditions agreed upon by the parties.
(2) The state for itself or on behalf of an other agency may enter into contracts for credit enhancement, which limits the recourse of the provider of credit enhancement solely to the security provided under the financing contract secured by the credit enhancement.
(3) The state or an other agency may grant a security interest in real or personal property acquired under financing contracts. The security interest may be perfected as provided by the uniform commercial code - secured transactions, or otherwise as provided by law for perfecting liens on real estate. Other terms and conditions may be included as agreed upon by the parties. An other agency that is authorized by applicable law to enter into a financing contract may make payments due under such a contract from the proceeds of annual tax levies approved by the voters under RCW 84.52.056, among other sources.
(4)(a) Financing contracts and contracts for credit enhancement entered into under the limitations set forth in this chapter do not constitute a debt or the contracting of indebtedness under any law limiting debt of the state. It is the intent of the legislature that such contracts also do not constitute a debt or the contracting of indebtedness under Article VIII, section 1 of the state Constitution. Certificates of participation in payments to be made under financing contracts also do not constitute a debt or the contracting of an indebtedness under any law limiting debt of the state if payment is conditioned upon payment by the state under the financing contract with respect to which the same relates. It is the intent of the legislature that such certificates also do not constitute a debt or the contracting of indebtedness under Article VIII, section 1 of the state Constitution if payment of the certificates is conditioned upon payment by the state under the financing contract with respect to which those certificates relate.
(b) An other agency authorized by law to issue bonds, notes[,] or other evidences of indebtedness or to enter into conditional sales contracts or lease obligations, may participate in a program under this chapter in which the state enters into a financing contract on behalf of that other agency, and the other agency's obligations to the state under the program may be evidenced by an agreement, lease, bond, note, or other appropriate instrument. A financing contract made by the state on behalf of an other agency may be secured by the pledge of revenues of the other agency or other agency's full faith and credit or may, at the option of the state finance committee, include a contingent obligation by the state for payment under such financing contract.
[ 2010 c 115 s 2; 2009 c 500 s 7; 1998 c 291 s 4; 1989 c 356 s 3. ]
NOTES:
Authority—2010 c 115: "The authority conferred on the state and any municipal corporation or other agency under this act is in addition and supplemental to any other authority granted by applicable law. Any action previously taken by the state, a municipal corporation, or other agency consistent with the provisions of this act is approved and confirmed." [ 2010 c 115 s 4.]
Effective date—2009 c 500: See note following RCW 39.42.070.
Application—1998 c 291: See note following RCW 39.94.050.
(1) Except as provided in RCW 28B.10.022, the state may not enter into any financing contract for itself if the aggregate principal amount payable thereunder is greater than an amount to be established from time to time by the state finance committee or participate in a program providing for the issuance of certificates of participation, including any contract for credit enhancement, without the prior approval of the state finance committee. Except as provided in RCW 28B.10.022, the state finance committee shall approve the form of all financing contracts or a standard format for all financing contracts. The state finance committee also may:
(a) Consolidate existing or potential financing contracts into master financing contracts with respect to property acquired by one or more agencies, departments, instrumentalities of the state, the state board for community and technical colleges, or a state institution of higher learning; or to be acquired by another agency;
(b) Approve programs providing for the issuance of certificates of participation in master financing contracts for the state or for other agencies;
(c) Enter into agreements with trustees relating to master financing contracts; and
(d) Make appropriate rules for the performance of its duties under this chapter.
(2) In the performance of its duties under this chapter, the state finance committee may consult with representatives from the department of general administration, the office of financial management, and Washington technology solutions.
(3) With the approval of the state finance committee, the state also may enter into agreements with trustees relating to financing contracts and the issuance of certificates of participation.
(4) Except for financing contracts for real property used for the purposes described under chapter 28B.140 RCW, the state may not enter into any financing contract for real property of the state without prior approval of the legislature. For the purposes of this requirement, a financing contract must be treated as used for real property if it is being entered into by the state for the acquisition of land; the acquisition of an existing building; the construction of a new building; or a major remodeling, renovation, rehabilitation, or rebuilding of an existing building. Prior approval of the legislature is not required under this chapter for a financing contract entered into by the state under this chapter for energy conservation improvements to existing buildings where such improvements include: (a) Fixtures and equipment that are not part of a major remodeling, renovation, rehabilitation, or rebuilding of the building, or (b) other improvements to the building that are being performed for the primary purpose of energy conservation. Such energy conservation improvements must be determined eligible for financing under this chapter by the office of financial management in accordance with financing guidelines established by the state treasurer, and are to be treated as personal property for the purposes of this chapter.
(5) The state may not enter into any financing contract on behalf of another agency without the approval of such a financing contract by the governing body of the other agency.
[ 2024 c 54 s 31. Prior: 2011 1st sp.s. c 43 s 726; 2011 c 151 s 7; prior: 2010 1st sp.s. c 36 s 6015; 2010 1st sp.s. c 35 s 406; 2003 c 6 s 2; 2002 c 151 s 6; 1998 c 291 s 5; 1989 c 356 s 4. ]
NOTES:
Effective date—Purpose—2011 1st sp.s. c 43: See notes following RCW 43.19.003.
Effective date—2010 1st sp.s. c 36: See note following RCW 43.155.050.
Contingent effective date—2010 1st sp.s. c 35: See note following RCW 43.331.040.
Application—1998 c 291: See note following RCW 39.94.050.
(1) It is the intent of the legislature that the financing program authorized by this chapter be self-supporting.
(2) The state treasurer is authorized to levy fees and apply specified investment earnings from time to time in amounts not to exceed sums sufficient to pay program expenses including, but not limited to, costs of issuance, and to create reserves to assure timely payment of financing contracts. The investment earnings available for this purpose represent the earnings on payments received from state and other agencies.
[ 1998 c 291 s 1. ]
NOTES:
Application—1998 c 291: "Chapter 291, Laws of 1998 is applicable to an other agency, as defined in RCW 39.94.020, for the financing of equipment on September 1, 1998, and for the financing of real estate on July 1, 2000." [ 1998 c 291 s 6.]
The provisions of this chapter shall apply to all financing contracts entered into following July 23, 1989.
[ 1989 c 356 s 5. ]
The legislature finds and declares that the issuance by state and local governments of bonds and other obligations involves exposure to changes in interest rates; that a number of financial instruments are available to lower the net cost of these borrowings, or to reduce the exposure of state and local governments to changes in interest rates; that these reduced costs for state and local governments will benefit taxpayers and ratepayers; and that the legislature desires to provide state and local governments with express statutory authority to take advantage of these instruments. In recognition of the complexity of these financial instruments, the legislature desires that this authority be subject to certain limitations.
[ 2004 c 108 s 1; 2000 c 184 s 1; 1995 c 192 s 1; 1993 c 273 s 1. ]
NOTES:
Effective date—2000 c 184: "This act takes effect July 1, 2000." [ 2000 c 184 s 7.]
Effective date—1995 c 192: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995." [ 1995 c 192 s 3.]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Financial advisor" means a financial services or financial advisory firm:
(a) With recognized knowledge and experience in connection with the negotiation and execution of payment agreements;
(b) That is acting solely as financial advisor to the governmental entity in connection with the execution of the payment agreement and the issuance or incurring of any related obligations, and not as a principal, placement agent, purchaser, underwriter, or other similar party, and that does not control, nor is it controlled by or under common control with, any such party;
(c) That is compensated for its services in connection with the execution of payment agreements, either directly or indirectly, solely by the governmental entity; and
(d) Whose compensation is not based on a percentage of the notional amount of the payment agreement or of the principal amount of any related obligations.
(2) "Governmental entity" means state government or local government.
(3) "Local government" means any city, county, city transportation authority, regional transit authority established under chapter 81.112 RCW, port district, public hospital district, public facilities district, or public utility district, or any joint operating agency formed under RCW 43.52.360, that has or will have outstanding obligations in an aggregate principal amount of at least one hundred million dollars as of the date a payment agreement is executed or is scheduled by its terms to commence or had at least one hundred million dollars in gross revenues during the preceding calendar year.
(4) "Obligations" means bonds, notes, bond anticipation notes, commercial paper, or other obligations for borrowed money, or lease, installment purchase, or other similar financing agreements or certificates of participation in such agreements.
(5) "Payment agreement" means a written agreement which provides for an exchange of payments based on interest rates, or for ceilings or floors on these payments, or an option on these payments, or any combination, entered into on either a current or forward basis.
(6) "State government" means (a) the state of Washington, acting by and through its state finance committee, (b) the Washington health care facilities authority, (c) the Washington higher education facilities authority, (d) the Washington state housing finance commission, or (e) the state finance committee upon adoption of a resolution approving a payment agreement on behalf of any state institution of higher education as defined under RCW 28B.10.016: PROVIDED, That such approval shall not constitute the pledge of the full faith and credit of the state, but a pledge of only those funds specified in the approved agreement.
[ 2005 c 154 s 1; 2004 c 108 s 2; 2003 c 47 s 1; 1993 c 273 s 2. ]
(1) Subject to subsections (2) and (3) of this section, any governmental entity may enter into a payment agreement in connection with, or incidental to, the issuance, incurring, or carrying of specific obligations, for the purpose of managing or reducing the governmental entity's exposure to fluctuations or levels of interest rates. No governmental entity may carry on a business of acting as a dealer in payment agreements. Nothing in this chapter shall be construed to provide governmental entities with separate or additional authority to invest funds or moneys relating to or held in connection with any obligations.
(2) No governmental entity may enter into a payment agreement under this chapter unless it first:
(a) Finds and determines, by ordinance or resolution, that the payment agreement, if fully performed by all parties thereto, will (i) reduce the amount or duration of its exposure to changes in interest rates; or (ii) result in a lower net cost of borrowing with respect to the related obligations;
(b) Obtains, on or prior to the date of execution of the payment agreement, a written certification from a financial advisor that (i) the terms and conditions of the payment agreement and any ancillary agreements, including without limitation, the interest rate or rates and any other amounts payable thereunder, are commercially reasonable in light of then existing market conditions; and (ii) the finding and determination contained in the ordinance or resolution required by (a) of this subsection is reasonable.
(3) Prior to selecting the other party to a payment agreement, a governmental entity shall solicit and give due consideration to proposals from at least two entities that meet the criteria set forth in RCW 39.96.040(2). Such solicitation and consideration shall be conducted in such manner as the governmental entity shall determine is reasonable.
[ 2000 c 184 s 2; 1993 c 273 s 3. ]
NOTES:
Effective date—2000 c 184: See note following RCW 39.96.010.
(1) Subject to subsections (2), (3), and (4) of this section, payment agreements entered into by any governmental entity may include those payment, term, security, default, remedy, termination, and other terms and conditions, and may be with those parties, as the governmental entity deems reasonably necessary or desirable.
(2) No governmental entity may enter into a payment agreement under this chapter unless:
(a) The other party to the agreement has a rating from at least two nationally recognized credit rating agencies, as of the date of execution of the agreement, that is within the two highest long-term investment grade rating categories, without regard to subcategories, or the payment obligations of the party under the agreement are unconditionally guaranteed by an entity that then has the required ratings; or
(b)(i) The other party to the agreement has a rating from at least two nationally recognized credit rating agencies, as of the date of execution of the agreement, that is within the three highest long-term investment grade rating categories, without regard to subcategories, or the payment obligations of the party under the agreement are unconditionally guaranteed by an entity that has the required ratings; and
(ii) The payment obligations of the other party under the agreement are collateralized by direct obligations of, or obligations the principal and interest on which are guaranteed by, the United States of America, that (A) are deposited with the governmental entity or an agent of the governmental entity; and (B) maintain a market value of not less than one hundred two percent of the net market value of the payment agreement to the governmental entity, as such net market value may be defined and determined from time to time under the terms of the payment agreement.
(3) No governmental entity may enter into a payment agreement with a party who qualifies under subsection (2)(a) of this section unless the payment agreement provides that, in the event the credit rating of the other party or its guarantor falls below the level required by subsection (2)(a) of this section, such party will comply with the collateralization requirements contained in subsection (2)(b) of this section.
(4) No governmental entity may enter into a payment agreement unless:
(a) The notional amount of the payment agreement does not exceed the principal amount of the obligations with respect to which the payment agreement is made; and
(b) The term of the payment agreement does not exceed the final term of the obligations with respect to which the payment agreement is made.
[ 1993 c 273 s 4. ]
(1) Subject to any covenants or agreements applicable to the obligations issued or incurred by the governmental entity, any payments required to be made by the governmental entity under a payment agreement entered into in connection with the issuance, incurring, or carrying of those obligations may be made from money set aside or pledged to pay or secure the payment of those obligations or from any other legally available source.
(2) Any governmental entity may enter into credit enhancement, liquidity, line of credit, or other similar agreements in connection with, or incidental to, the execution of a payment agreement. The credit enhancement, liquidity, line of credit, or other similar agreement may include those payment, term, security, default, remedy, termination, and other terms and conditions, and may be with those parties, as the governmental entity deems reasonably necessary or desirable.
[ 1993 c 273 s 5. ]
(1) Subject to any covenants or agreements applicable to the obligations issued or incurred by the governmental entity, if the governmental entity enters into a payment agreement with respect to those obligations, then it may elect to treat the amounts payable from time to time with respect to those obligations as the amounts payable after giving effect to the payment agreement for the purposes of calculating:
(a) Rates and charges to be imposed by a revenue-producing enterprise if the revenues are pledged or used to pay those obligations;
(b) Any taxes to be levied and collected to pay those obligation[s]; and
(c) Payments or debt service on those obligations for any other purpose.
(2) A payment agreement and any obligation of the governmental entity to make payments under the agreement in future fiscal years shall not constitute debt or indebtedness of the governmental entity for purposes of state constitutional and statutory debt limitation provisions if the obligation to make any payments is contingent upon the performance of the other party or parties to the agreement, and no moneys are paid to the governmental entity under the payment agreement that must be repaid in future fiscal years.
[ 1993 c 273 s 6. ]
The powers conferred by this chapter are in addition to, and not in substitution for, the powers conferred by any existing law, and the limitations imposed by this chapter do not directly or indirectly modify, limit, or affect the powers conferred by any existing law.
[ 1993 c 273 s 8. ]
This chapter shall be liberally construed to effect its purposes.
[ 1993 c 273 s 9. ]
This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately [May 7, 1993].
[ 1993 c 273 s 13. ]
The legislature finds that implementation of the credit enhancement program provided for in this chapter can provide substantial savings to the taxpayers of the state of Washington with minimal cost or risk to the state government. The guaranty provided by pledging the credit of the state to the payment of voter-approved school district general obligation bonds will encourage lower interest rates, and therefore lower taxes, for such bonds than school districts alone can command, despite the excellent credit history of such obligations. Any such guarantee does not remove the debt obligation of the school district and is not state debt.
[ 1999 c 273 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Bond" means any voted general obligation bond issued by a school district, holding a certificate issued pursuant to this chapter for such a bond.
(2) "Credit enhancement program" means the school district bond guaranty established by this chapter.
(3) "General obligation bond" means any bond, note, warrant, certificate of indebtedness, or other obligation of a district that constitutes an indebtedness within the meaning of any applicable constitutional or statutory debt limitations.
(4) "Paying agent" means the paying agent selected, from time to time, for a bond issue pursuant to state law.
(5) "Refunding bond" means any general obligation bond issued by a district for the purpose of refunding its outstanding general obligation bonds.
(6) "School district" or "district" means any school district existing now or later under the laws of the state.
[ 1999 c 273 s 2. ]
(1)(a) The full faith, credit, and taxing power of the state is pledged to guarantee full and timely payment of the principal of and interest on bonds as such payments become due. However, in the event of any acceleration of the due date of the principal by reason of mandatory redemption or acceleration resulting from default, the payments guaranteed shall be made in the amounts and at the times as payments of principal would have been due had there not been any acceleration.
(b) This guaranty does not extend to the payment of any redemption premium.
(c) Reference to this chapter by its title on the face of any bond conclusively establishes the guaranty provided to that bond under the provisions of this chapter.
(2)(a) The state pledges to and agrees with the owners of any bonds that the state will not alter, impair, or limit the rights vested by the credit enhancement program with respect to the bonds until the bonds, together with applicable interest, are fully paid and discharged. However, this chapter does not preclude an alteration, impairment, or limitation if full provision is made by law for the payment of the bonds.
(b) Each district may refer to this pledge and undertaking by the state in its bonds.
(3) Only validly issued bonds issued after January 1, 2000, may be guaranteed under this chapter.
[ 1999 c 273 s 3. ]
(1)(a) Any district, by resolution of its board of directors, may request that the state treasurer issue a certificate evidencing the state's guaranty, under this chapter, of its bonds.
(b) After reviewing the request, if the state treasurer determines that the district is eligible under rules adopted by the state finance committee, the state treasurer shall promptly issue the certificate as to specific bonds of the district and provide it to the requesting district.
(c)(i) The district receiving the certificate and all other persons may rely on the certificate as evidencing the guaranty for bonds issued within one year from and after the date of the certificate, without making further inquiry during that year.
(ii) The certificate of eligibility is valid for one year even if the state treasurer later determines that the school district is ineligible.
(2) Any district that chooses to forego the benefits of the guaranty provided by this chapter for a particular issue of bonds may do so by not referring to this chapter on the face of its bonds.
(3) Any district that has bonds, the principal of or interest on which has been paid, in whole or in part, by the state under this chapter, may not issue any additional bonds guaranteed by this chapter until:
(a) All payment obligations of the district to the state under the credit enhancement program are satisfied; and
(b) The state treasurer and the state superintendent of public instruction each certify in writing, to be kept on file by the state treasurer and the state superintendent of public instruction, that the district is fiscally solvent.
(4) The state finance committee may establish by rule fees sufficient to cover the costs of administering this chapter.
[ 1999 c 273 s 4. ]
(1)(a) The county treasurer for each district with outstanding, unpaid bonds shall transfer money sufficient for each scheduled debt service payment to its paying agent on or before any principal or interest payment date for the bonds.
(b) A county treasurer who is unable to transfer a scheduled debt service payment to the paying agent on the transfer date shall immediately notify the paying agent and the state treasurer by:
(i) Telephone;
(ii) A writing sent by facsimile or electronic transmission; and
(iii) A writing sent by first-class United States mail.
(2) If sufficient funds are not transferred to the paying agent as required by subsection (1) of this section, the paying agent shall immediately notify the state treasurer of that failure by:
(a) Telephone;
(b) A writing sent by facsimile or electronic transmission; and
(c) A writing sent by first-class United States mail.
(3)(a) If sufficient money to pay the scheduled debt service payment have not been so transferred to the paying agent, the state treasurer shall, forthwith, transfer sufficient money to the paying agent to make the scheduled debt service payment.
(b) The payment by the state treasurer:
(i) Discharges the obligation of the issuing district to its bond owners for the payment, but does not retire any bond that has matured. The terms of that bond remain in effect until the state is repaid; and
(ii) Transfers the rights represented by the general obligation of the district from the bond owners to the state.
(c) The district shall repay to the state the money so transferred as provided in this chapter.
[ 1999 c 273 s 5. ]
(1) Any district that has issued bonds for which the state has made all or part of a debt service payment shall:
(a) Reimburse all money drawn by the state treasurer on its behalf;
(b) Pay interest to the state on all money paid by the state from the date that money was drawn to the date the state is repaid at a rate to be prescribed by rule by the state finance committee; and
(c) Pay all penalties required by this chapter.
(2)(a) The state treasurer shall establish the reimbursement interest rate after considering the circumstances of any prior draws by the district on the state, market interest and penalty rates, and the cost of funds or opportunity cost of investments, if any, that were required to be borrowed or liquidated by the state to make payment on the bonds.
(b) The state treasurer may, after considering the circumstances giving rise to the failure of the district to make payment on its bonds in a timely manner, impose on the district a penalty of not more than five percent of the amount paid by the state pursuant to its guaranty for each instance in which a payment by the state is made.
(3)(a)(i) If the state treasurer determines that amounts obtained under this chapter will not reimburse the state in full within one year from the state's payment of a district's scheduled debt service payment, the state treasurer may pursue any legal action, including mandamus, against the district to compel it to meet its repayment obligations to the state.
(ii) In pursuing its rights under (a)(i) of this subsection, the state shall have the same substantive and procedural rights as would a holder of the bonds of a district. If and to the extent that the state has made payments to the holders of bonds of a district under RCW 39.98.050 and has not been reimbursed by the district, the state shall be subrogated to the rights of those bondholders.
(iii) The state treasurer may also direct the district and the appropriate county officials to restructure and revise the collection of taxes for the payment of bonds on which the state treasurer has made payments under this chapter and, to the extent permitted by law, may require that the proceeds of such taxes be applied to the district's obligations to the state if all outstanding obligations of the school district payable from such taxes are fully paid or their payment is fully provided for.
(b) The district shall pay the fees, expenses, and costs incurred by the state in recovering amounts paid under the guaranty authorized by this chapter.
[ 1999 c 273 s 6. ]
In order to effect the provisions of Article VIII, section 1(e) of the state Constitution, Senate Joint Resolution No. 8206, the legislature shall make provision for such amounts as may be required to make timely payments under the state school district credit enhancement program under this chapter in each and every biennial appropriations act.
[ 1999 c 273 s 7. ]
The state finance committee may adopt, under chapter 34.05 RCW, all rules necessary and appropriate for the implementation and administration of this chapter.
[ 1999 c 273 s 8. ]
This act takes effect January 1, 2000, if the proposed amendment to Article VIII, section 1 of the state Constitution, guaranteeing the general obligation debt of school districts, is validly submitted to and is approved and ratified by the voters at the next general election. If the proposed amendment is not approved and ratified, this act is void in its entirety.
[ 1999 c 273 s 10. ]
NOTES:
Reviser's note: 1999 Senate Joint Resolution No. 8206 was approved at the November 1999 general election. See Article VIII, section 1 and Amendment 78 of the state Constitution.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Benefit zone" means the geographic zone from which taxes are to be appropriated to finance public improvements authorized under this chapter and in which a hospital that has received a certificate of need is to be constructed.
(2) "Department" means the department of revenue.
(3) "Local government" means any city, town, county, or any combination thereof.
(4) "Ordinance" means any appropriate method of taking legislative action by a local government.
(5) "Participating taxing authority" means a taxing authority that has entered into a written agreement with a local government for the use of hospital benefit zone financing to the extent of allocating excess local excise taxes to the local government for the purpose of financing all or a portion of the costs of designated public improvements.
(6) "Public improvements" means:
(a) Infrastructure improvements within the benefit zone that include:
(i) Street and road construction and maintenance;
(ii) Water and sewer system construction and improvements;
(iii) Sidewalks and streetlights;
(iv) Parking, terminal, and dock facilities;
(v) Park and ride facilities of a transit authority;
(vi) Park facilities and recreational areas; and
(vii) Stormwater and drainage management systems; and
(b) The construction, maintenance, and improvement of state highways that are connected to the benefit zone, including interchanges connected to the benefit zone.
(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; and (d) financing public improvements, including interest during construction, legal and other professional services, taxes, insurance, principal and interest costs on indebtedness issued to finance public improvements, and any necessary reserves for indebtedness; and 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 hospital benefit zone financing to fund the costs of the public improvements.
(8) "Tax allocation revenues" means those tax revenues derived from the receipt of excess local excise taxes under RCW 39.100.050 and distributed by a local government, participating taxing authority, or both, to finance public improvements.
(9) "Taxing authority" means a governmental entity that imposes a sales or use tax under chapter 82.14 RCW upon the occurrence of any taxable event within a proposed or approved benefit zone.
[ 2011 c 363 s 1; 2007 c 266 s 2; 2006 c 111 s 1. ]
NOTES:
Finding—2007 c 266: "The legislature finds that local governments need flexible financing for public improvements that do not increase the combined state and local sales tax rate." [ 2007 c 266 s 1.]
Application—2007 c 266: "This act applies retroactively to July 1, 2006." [ 2007 c 266 s 10.]
Effective date—2007 c 266: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2007." [ 2007 c 266 s 11.]
A local government may finance public improvements using hospital benefit zone financing subject to the following conditions:
(1)(a) The local government adopts an ordinance designating a benefit zone within its boundaries and specifying the public improvements proposed to be financed in whole or in part with the use of hospital benefit zone financing;
(b) A local government may modify the public improvements to be financed in whole or in part with the use of hospital benefit zone financing by amending the ordinance adopted under (a) of this subsection and holding a public hearing consistent with RCW 39.100.030(1)(b); provided that the total cost of the public improvements is not increased;
(2) The public improvements proposed to be financed in whole or in part using hospital benefit zone financing are expected both to encourage private development within the benefit zone and to support the development of a hospital that has received a certificate of need;
(3) Private development that is anticipated to occur within the benefit zone, 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 local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;
(4) The governing body of the local government finds that the public improvements proposed to be financed in whole or in part using hospital benefit zone financing are reasonably likely to:
(a) Increase private investment within the benefit zone;
(b) Increase employment within the benefit zone; and
(c) Generate, over the period of time that the local sales and use tax will be imposed under RCW 82.14.465, excess state excise taxes that are equal to or greater than the state contributions made under this chapter;
(5) The boundaries of a hospital benefit zone may not overlap any part of the boundaries of another hospital benefit zone or a revenue development area defined in chapter 39.102 RCW; and
(6) The boundaries of a hospital benefit zone may not change once the hospital benefit zone is established and approved by the department.
[ 2011 c 363 s 2; 2007 c 266 s 3; 2006 c 111 s 2. ]
NOTES:
Finding—Application—Effective date—2007 c 266: See notes following RCW 39.100.010.
(1) Before adopting an ordinance creating the benefit zone, a local government must:
(a) Obtain written agreement for the use of hospital benefit zone financing to finance all or a portion of the costs of the designated public improvements from any taxing authority that imposes a sales or use tax under chapter 82.14 RCW within the benefit zone if the taxing authority chooses to participate in the public improvements to the extent of providing limited funding under hospital benefit zone financing authorized under this chapter. The agreement must be authorized by the governing body of such participating taxing authorities; and
(b) Hold a public hearing on the proposed financing of the public improvement in whole or in part with hospital benefit zone financing.
(i) Notice of the public hearing must be published in a legal newspaper of general circulation within the proposed benefit zone at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed benefit zone.
(ii) 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 hospital benefit zone financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed benefit zone, and estimate the period during which hospital benefit zone financing is contemplated to be used. The public hearing may be held by either the governing body of the local government, or a committee of the governing body that includes at least a majority of the whole governing body.
(2) In order to create a benefit zone, a local government must adopt an ordinance establishing the benefit zone that:
(a) Describes the public improvements;
(b) Describes the boundaries of the benefit zone;
(c) Estimates the cost of the public improvements and the portion of these costs to be financed by hospital benefit zone financing;
(d) Estimates the time during which excess local excise taxes are to be used to finance public improvement costs associated with the public improvements financed in whole or in part by hospital benefit zone financing;
(e) Estimates the average amount of tax revenue to be received in all fiscal years through the imposition of a sales and use tax under RCW 82.14.465;
(f) Provides the date when the use of excess local excise taxes will commence; and
(g) Finds that the conditions of RCW 39.100.020 are met.
(3) For purposes of this section, "fiscal year" means the year beginning July 1st and ending the following June 30th.
[ 2007 c 266 s 4; 2006 c 111 s 3. ]
NOTES:
Finding—Application—Effective date—2007 c 266: See notes following RCW 39.100.010.
(1) A local government that adopts an ordinance creating a benefit zone under this chapter shall, within ninety days of adopting the ordinance:
(a) Publish notice in a legal newspaper of general circulation within the benefit zone that describes the public improvement, describes the boundaries of the benefit zone, and identifies the location and times where the ordinance and other public information concerning the public improvement may be inspected; and
(b) Deliver a certified copy of the ordinance to the county treasurer, the county assessor, the department of revenue, and the governing body of each participating taxing authority within which the benefit zone is located.
(2) Any challenge to the formation shall be brought within sixty days of the later of the date of its formation or July 1, 2007. All parties, including the holders of bonds payable from tax revenue under chapter 266, Laws of 2007, may rely upon the presumption of validity of formation of the benefit zone following the expiration of the sixty-day period.
[ 2007 c 266 s 5; 2006 c 111 s 4. ]
NOTES:
Finding—Application—Effective date—2007 c 266: See notes following RCW 39.100.010.
(1) A local government that creates a benefit zone and has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465 may use annually any excess local excise taxes received by it from taxable activity within the benefit zone to finance public improvement costs associated with the public improvements financed in whole or in part by hospital benefit zone financing. The use of excess local excise taxes must cease when tax allocation revenues are no longer necessary or obligated to pay the costs of the public improvements. Any participating taxing authority is authorized to allocate excess local excise taxes to the local government as long as the local government has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465. The legislature declares that it is a proper purpose of a local government or participating taxing authority to allocate excess local excise taxes for purposes of financing public improvements under this chapter.
(2) A local government must provide the department accurate information describing the geographical boundaries of the benefit zone at least seventy-five days before the effective date of the ordinance creating the benefit zone. The local government must ensure that the boundary information provided to the department is kept current.
(3) The department must provide the necessary information to calculate excess local excise taxes to each local government that has provided boundary information to the department as provided in this section and that has received approval from the department under RCW 82.32.700 to impose the local option sales and use tax authorized in RCW 82.14.465.
(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Base year" means the calendar year immediately following the creation of a benefit zone.
(b) "Excess local excise taxes" means the amount of local excise taxes received by the local government during the measurement year from taxable activity within the benefit zone over and above the amount of local excise taxes received by the local government during the base year from taxable activity within the benefit zone. However, if a local government creates the benefit zone and reasonably determines that no activity subject to tax under chapters 82.08 and 82.12 RCW occurred in the twelve months immediately preceding the creation of the benefit zone within the boundaries of the area that became the benefit zone, "excess local excise taxes" means the entire amount of local excise taxes received by the local government during a calendar year period beginning with the calendar year immediately following the creation of the benefit zone and continuing with each measurement year thereafter.
(c) "Local excise taxes" means local revenues derived from the imposition of sales and use taxes authorized in RCW 82.14.030 at the tax rate that was in effect at the time the hospital benefit zone is approved by the department, except that if a local government reduces the rate of such tax after the hospital benefit zone was approved, "local excise taxes" means the local revenues derived from the imposition of the sales and use taxes authorized in RCW 82.14.030 at the lower tax rate.
(d) "Measurement year" means a calendar year, beginning with the calendar year following the base year and each calendar year thereafter, that is used annually to measure the amount of excess state excise taxes and excess local excise taxes required to be used to finance public improvement costs associated with public improvements financed in whole or in part by hospital benefit zone financing.
[ 2010 c 106 s 201; 2007 c 266 s 6; 2006 c 111 s 5. ]
NOTES:
Effective date—2010 c 106: See note following RCW 35.102.145.
Finding—Application—Effective date—2007 c 266: See notes following RCW 39.100.010.
(1) A local government may issue revenue bonds to fund public improvements, or portions of public improvements, that are located within a benefit zone and that it is authorized to provide or operate. Whenever revenue bonds are to be issued, the legislative authority of the local government shall create or have created a special fund or funds from which, along with any reserves created pursuant to RCW 39.44.140, the principal and interest on these revenue bonds shall exclusively be payable. The legislative authority of the local government may obligate the local government to set aside and pay into the special fund or funds a fixed proportion or a fixed amount of the revenues obtained from within the benefit zone of the development, construction, operation, and maintenance of businesses supported by the public improvements that are funded by the revenue bonds. This amount or proportion is a lien and charge against these revenues, subject only to operating and maintenance expenses. The local government shall have due regard for the cost of operation and maintenance of the public improvements that are funded by the revenue bonds, and shall not set aside into the special fund or funds a greater amount or proportion of the revenues that in its judgment will be available over and above the cost of maintenance and operation and the amount or proportion, if any, of the revenue previously pledged. The local government may also provide that revenue bonds payable out of the same source or sources of revenue may later be issued on a parity with any revenue bonds being issued and sold.
(2) Revenue bonds issued pursuant to this section are not an indebtedness of the local government issuing the bonds, and the interest and principal on the bonds shall only be payable from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The owner or bearer of a revenue bond or any interest coupon issued pursuant to this section shall not have any claim against the local government arising from the bond or coupon except for payment from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The substance of the limitations included in this subsection shall be plainly printed, written, or engraved on each bond issued pursuant to this section.
(3) Revenue bonds with a maturity in excess of thirty years shall not be issued. The legislative authority of the local government shall by resolution determine for each revenue bond issue the amount, date, form, terms, conditions, denominations, maximum fixed or variable interest rate or rates, maturity or maturities, redemption rights, registration privileges, manner of execution, manner of sale, callable provisions, if any, and covenants including the refunding of existing revenue bonds. Facsimile signatures may be used on the bonds and any coupons. Refunding revenue bonds may be issued in the same manner as revenue bonds are issued.
[ 2006 c 111 s 6. ]
This act takes effect July 1, 2006.
[ 2006 c 111 s 11. ]
The legislature recognizes that the state as a whole benefits from investment in public infrastructure because it promotes community and economic development. Public investment stimulates business activity and helps create jobs; stimulates the redevelopment of brownfields and blighted areas in the inner city; lowers the cost of housing; and promotes efficient land use. The legislature finds that these activities generate revenue for the state and that it is in the public interest to invest in these projects through a credit against the state sales and use tax and an allocation of property tax revenue to those sponsoring local governments that can demonstrate the expected returns to the state.
[ 2006 c 181 s 101. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Annual state contribution limit" means seven million five hundred thousand dollars statewide per fiscal year.
(2) "Assessed value" means the valuation of taxable real property as placed on the last completed assessment roll.
(3) "Board" means the community economic revitalization board under chapter 43.160 RCW.
(4) "Dedicated" means pledged, set aside, allocated, received, budgeted, or otherwise identified.
(5) "Demonstration project" means one of the following projects:
(a) Bellingham waterfront redevelopment project;
(b) Spokane river district project at Liberty Lake; and
(c) Vancouver riverwest project.
(6) "Department" means the department of revenue.
(7) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.
(8) "Local excise tax allocation revenue" means an amount of local excise taxes equal to some or all of the sponsoring local government's local excise tax increment, amounts of local excise taxes equal to some or all of any participating local government's excise tax increment as agreed upon in the written agreement under RCW 39.102.080(1), or both, and dedicated to local infrastructure financing.
(9) "Local excise tax increment" means an amount equal to the estimated annual increase in local excise taxes in each calendar year following the approval of the revenue development area by the board from taxable activity within the revenue development area, as set forth in the application provided to the board under RCW 39.102.040, and updated in accordance with RCW 39.102.140(1)(f).
(10) "Local excise taxes" means local revenues derived from the imposition of sales and use taxes authorized in RCW 82.14.030.
(11) "Local government" means any city, town, county, port district, and any federally recognized Indian tribe.
(12) "Local infrastructure financing" means the use of revenues received from local excise tax allocation revenues, local property tax allocation revenues, other revenues from local public sources, and revenues received from the local option sales and use tax authorized in RCW 82.14.475, dedicated to pay either the principal and interest on bonds authorized under RCW 39.102.150 or to pay public improvement costs on a pay-as-you-go basis subject to RCW 39.102.195, or both.
(13) "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 financing.
(14) "Low-income housing" means residential housing for low-income persons or families who lack the means which is necessary to enable them, without financial assistance, to live in decent, safe, and sanitary dwellings, without overcrowding. For the purposes of this subsection, "low income" means income that does not exceed eighty percent of the median family income for the standard metropolitan statistical area in which the revenue development area is located.
(15) "Ordinance" means any appropriate method of taking legislative action by a local government.
(16) "Participating local government" means a local government having a revenue development area within its geographic boundaries that has entered into a written agreement with a sponsoring local government as provided in RCW 39.102.080 to allow the use of all or some of its local excise tax allocation revenues or other revenues from local public sources dedicated for local infrastructure financing.
(17) "Participating taxing district" means a local government having a revenue development area within its geographic boundaries that has entered into a written agreement with a sponsoring local government as provided in RCW 39.102.080 to allow the use of some or all of its local property tax allocation revenues or other revenues from local public sources dedicated for local infrastructure financing.
(18) "Permanently affordable housing" means housing, regardless of ownership, for which there is a legally binding, recorded document in effect that limits the price at which the owner may sell or restricts the occupancy of the unit to a qualified, low-income household, for a period of at least forty years for a property used for shelter or rental housing, or for a period of at least twenty-five years for a property to be owned by a low-income household. These documents include, but are not limited to, affordability covenants, deed restrictions, and community land trust leases. Resale restrictions exercised by providers of permanently affordable housing can include, but are not limited to:
(a) Continuous ownership of land by a public entity or nonprofit housing provider with a lease allowing ownership of the structure by an income-eligible household;
(b) A nonpossessory interest or right in real property, such as a deed restriction, restrictive covenant, resale restriction[,] or other contractual agreement, that ensures affordability.
(19) "Property tax allocation revenue base value" means the assessed value of real property located within a revenue development area less the property tax allocation revenue value.
(20)(a)(i) "Property tax allocation revenue value" means seventy-five percent of any increase in the assessed value of real property in a revenue development 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 revenue development area is approved by the board;
(B) The cost of new housing construction, conversion, and rehabilitation improvements, when such 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 revenue development area is approved by the board;
(C) The cost of rehabilitation of historic property, when such 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 revenue development area is approved by the board.
(ii) Increases in the assessed value of real property in a revenue development area 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 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 revenue development 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 such 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; and
(iii) For the cost of rehabilitation of historic property, when such 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.
(21) "Public improvement costs" means the cost 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) the local government's portion of 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; (e) assessments incurred in revaluing real property for the purpose of determining the property tax allocation revenue base value that are in excess of costs incurred by the assessor in accordance with the revaluation plan under chapter 84.41 RCW, and the costs of apportioning the taxes and complying with this chapter and other applicable law; (f) administrative expenses and feasibility studies reasonably necessary and related to these costs; and (g) any of the above-described costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of local infrastructure financing to fund the costs of the public improvements.
(22) "Public improvements" means:
(a) Infrastructure improvements within the revenue development area that include:
(i) Street, bridge, and road construction and maintenance, including highway interchange construction;
(ii) Water and sewer system construction and improvements, including wastewater reuse facilities;
(iii) Sidewalks, traffic controls, and streetlights;
(iv) Parking, terminal, and dock facilities;
(v) Park and ride facilities of a transit authority;
(vi) Park facilities and recreational areas, including trails; and
(vii) Stormwater and drainage management systems;
(b) Expenditures for facilities and improvements that support affordable housing as defined in RCW 43.63A.510; and
(c) Expenditures to purchase, rehabilitate, retrofit for energy efficiency, and construct housing for the purpose of creating or preserving permanently affordable housing.
(23) "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.
(24) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) Regular property taxes levied by public utility districts specifically for the purpose of making required payments of principal and interest on general indebtedness; (b) regular property taxes levied by the state for the support of the common schools under RCW 84.52.065; and (c) regular property taxes authorized by RCW 84.55.050 that are limited to a specific purpose. "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.
(25) "Relocating a business" means the closing of a business and the reopening of that business, or the opening of a new business that engages in the same activities as the previous business, in a different location within a one-year period, when an individual or entity has an ownership interest in the business at the time of closure and at the time of opening or reopening. "Relocating a business" does not include the closing and reopening of a business in a new location where the business has been acquired and is under entirely new ownership at the new location, or the closing and reopening of a business in a new location as a result of the exercise of the power of eminent domain.
(26) "Revenue development area" means the geographic area adopted by a sponsoring local government and approved by the board, from which local excise and property tax allocation revenues are derived for local infrastructure financing.
(27)(a) "Revenues from local public sources" means:
(i) Amounts of local excise tax allocation revenues and local property tax allocation revenues, dedicated by sponsoring local governments, participating local governments, and participating taxing districts, for local infrastructure financing; and
(ii) Any other local revenues, except as provided in (b) of this subsection, including revenues derived from federal and private sources.
(b) Revenues from local public sources do not include any local funds derived from state grants, state loans, or any other state moneys including any local sales and use taxes credited against the state sales and use taxes imposed under chapter 82.08 or 82.12 RCW.
(28) "Small business" has the same meaning as provided in RCW 19.85.020.
(29) "Sponsoring local government" means a city, town, or county, and for the purpose of this chapter a federally recognized Indian tribe or any combination thereof, that adopts a revenue development area and applies to the board to use local infrastructure financing.
(30) "State contribution" means the lesser of:
(a) One million dollars;
(b) The total amount of local excise tax allocation revenues, local property tax allocation revenues, and other revenues from local public sources, that are dedicated by a sponsoring local government, any participating local governments, and participating taxing districts, in the preceding calendar year to the payment of principal and interest on bonds issued under RCW 39.102.150 or to pay public improvement costs on a pay-as-you-go basis subject to RCW 39.102.195, or both. Revenues from local public sources dedicated in the preceding calendar year that are in excess of the project award may be carried forward and used in later years for the purpose of this subsection (30)(b);
(c) The amount of project award granted by the board in the notice of approval to use local infrastructure financing under RCW 39.102.040; or
(d) The highest amount of state excise tax allocation revenues and state property tax allocation revenues for any one calendar year as determined by the sponsoring local government and reported to the board and the department as required by RCW 39.102.140.
(31) "State excise tax allocation revenue" means an amount equal to the annual increase in state excise taxes estimated to be received by the state in each calendar year following the approval of the revenue development area by the board, from taxable activity within the revenue development area as set forth in the application provided to the board under RCW 39.102.040 and periodically updated and reported as required in RCW 39.102.140(1)(f).
(32) "State excise taxes" means revenues derived from state retail sales and use taxes under RCW 82.08.020(1) and 82.12.020 at the rate provided in RCW 82.08.020(1), less the amount of tax distributions from all local retail sales and use taxes, other than the local sales and use taxes authorized by RCW 82.14.475 for the applicable revenue development area, imposed on the same taxable events that are credited against the state retail sales and use taxes under chapters 82.08 and 82.12 RCW.
(33) "State property tax allocation revenue" means an amount equal to the estimated tax revenues derived from the imposition of property taxes levied by the state for the support of common schools under RCW 84.52.065 on the property tax allocation revenue value, as set forth in the application submitted to the board under RCW 39.102.040 and updated annually in the report required under RCW 39.102.140(1)(f).
(34) "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 revenue development area.
[ 2020 c 280 s 2; 2018 c 178 s 1; 2013 2nd sp.s. c 21 s 6; 2010 c 164 s 11. Prior: 2009 c 267 s 1; 2008 c 209 s 1; 2007 c 229 s 1; 2006 c 181 s 102. ]
NOTES:
Reviser's note: The definitions in this section have been alphabetized pursuant to RCW 1.08.015(2)(k).
Application—2007 c 229: "This act applies retroactively as well as prospectively." [ 2007 c 229 s 15.]
Severability—2007 c 229: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 2007 c 229 s 16.]
The local infrastructure financing tool program is created to assist local governments in financing authorized public infrastructure projects designed to promote economic development in the jurisdiction. The local infrastructure financing tool program is not created to enable existing Washington-based businesses from outside a revenue development area to relocate into a revenue development area.
[ 2006 c 181 s 201. ]
(1) Prior to applying to the board to use local infrastructure financing, a sponsoring local government shall:
(a) Designate a revenue development area within the limitations in RCW 39.102.060;
(b) Certify that the conditions in RCW 39.102.070 are met;
(c) Complete the process in RCW 39.102.080;
(d) Provide public notice as required in RCW 39.102.100; and
(e) Pass an ordinance adopting the revenue development area as required in RCW 39.102.090.
(2) Any local government that has created an increment area under chapter 39.89 RCW and has not issued bonds to finance any public improvement may apply to the board and have its increment area considered for approval as a revenue development area under this chapter without adopting a new revenue development area under RCW 39.102.090 and 39.102.100 if it amends its ordinance to comply with RCW 39.102.090(1) and otherwise meets the conditions and limitations under this chapter.
(3) As a condition to imposing a sales and use tax under RCW 82.14.475, a sponsoring local government, including any cosponsoring local government seeking authority to impose a sales and use tax under RCW 82.14.475, must apply to the board and be approved for a project award amount. The application shall be in a form and manner prescribed by the board and include but not be limited to information establishing that the applicant is an eligible candidate to impose the local sales and use tax under RCW 82.14.475, the anticipated effective date for imposing the tax, the estimated number of years that the tax will be imposed, and the estimated amount of tax revenue to be received in each fiscal year that the tax will be imposed. The board shall make available forms to be used for this purpose. As part of the application, each applicant must provide to the board a copy of the ordinance or ordinances creating the revenue development area as required in RCW 39.102.090. A notice of approval to use local infrastructure financing shall contain a project award that represents the maximum amount of state contribution that the applicant, including any cosponsoring local governments, can earn each year that local infrastructure financing is used. The total of all project awards shall not exceed the annual state contribution limit. The determination of a project award shall be made based on information contained in the application and the remaining amount of annual state contribution limit to be awarded. Determination of a project award by the board is final.
(4)(a) Sponsoring local governments, and any cosponsoring local governments, applying in calendar year 2007 for a competitive project award, must submit completed applications to the board no later than July 1, 2007. By September 15, 2007, in consultation with the department of revenue and the department of commerce, the board shall approve competitive project awards from competitive applications submitted by the 2007 deadline. No more than two million five hundred thousand dollars in competitive project awards shall be approved in 2007. For projects not approved by the board in 2007, sponsoring and cosponsoring local governments may apply again to the board in 2008 for approval of a project.
(b) Sponsoring local governments, and any cosponsoring local governments, applying in calendar year 2008 for a competitive project award, must submit completed applications to the board no later than July 1, 2008. By September 18, 2008, in consultation with the department of revenue and the department of commerce, the board shall approve competitive project awards from competitive applications submitted by the 2008 deadline.
(c) Except as provided in RCW 39.102.050(2), a total of no more than five million dollars in competitive project awards shall be approved for local infrastructure financing.
(d) The project selection criteria and weighting developed prior to July 22, 2007, for the application evaluation and approval process shall apply to applications received prior to November 1, 2007. In evaluating applications for a competitive project award after November 1, 2007, the board shall develop the relative weight to be assigned to the following criteria:
(i) The project's potential to enhance the sponsoring local government's regional and/or international competitiveness;
(ii) The project's ability to encourage mixed-use and transit-oriented development and the redevelopment of a geographic area;
(iii) Achieving an overall distribution of projects statewide that reflect geographic diversity;
(iv) The estimated wages and benefits for the project is greater than the average labor market area;
(v) The estimated state and local net employment change over the life of the project;
(vi) The current economic health and vitality of the proposed revenue development area and the contiguous community and the estimated impact of the proposed project on the proposed revenue development area and contiguous community;
(vii) The estimated state and local net property tax change over the life of the project;
(viii) The estimated state and local sales and use tax increase over the life of the project;
(ix) An analysis that shows that, over the life of the project, neither the local excise tax allocation revenues nor the local property tax allocation revenues will constitute more than eighty percent of the total local funds as described in *RCW 39.102.020(29)(b); and
(x) If a project is located within an urban growth area, evidence that the project utilizes existing urban infrastructure and that the transportation needs of the project will be adequately met through the use of local infrastructure financing or other sources.
(e)(i) Except as provided in this subsection (4)(e), the board may not approve the use of local infrastructure financing within more than one revenue development area per county.
(ii) In a county in which the board has approved the use of local infrastructure financing, the use of such financing in additional revenue development areas may be approved, subject to the following conditions:
(A) The sponsoring local government is located in more than one county; and
(B) The sponsoring local government designates a revenue development area that comprises portions of a county within which the use of local infrastructure financing has not yet been approved.
(iii) In a county where the local infrastructure financing tool is authorized under RCW 39.102.050, the board may approve additional use of the local infrastructure financing tool.
(5) Once the board has approved the sponsoring local government, and any cosponsoring local governments, to use local infrastructure financing, notification must be sent by the board to the sponsoring local government, and any cosponsoring local governments, authorizing the sponsoring local government, and any cosponsoring local governments, to impose the local sales and use tax authorized under RCW 82.14.475, subject to the conditions in RCW 82.14.475.
[ 2014 c 112 s 105; 2007 c 229 s 2; 2006 c 181 s 202. ]
NOTES:
*Reviser's note: RCW 39.102.020 was amended by 2020 c 280 s 2, changing subsection (29)(b) to subsection (30)(b).
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
(1) In addition to a competitive process, demonstration projects are provided to determine the feasibility of the local infrastructure financing tool. Notwithstanding RCW 39.102.040, the board shall approve each demonstration project. Demonstration project applications must be received by the board no later than July 1, 2008. The Bellingham waterfront redevelopment project award shall not exceed one million dollars per year, the Spokane river district project award shall not exceed one million dollars per year, and the Vancouver riverwest project award shall not exceed five hundred thousand dollars per year. The board shall approve by September 15, 2007, demonstration project applications submitted no later than July 1, 2007. The board shall approve by September 18, 2008, demonstration project applications submitted by July 1, 2008.
(2) If before board approval of the final competitive project award in 2008, a demonstration project has not received approval by the board, the state dollars set aside for the demonstration project in subsection (1) of this section shall be available for the competitive application process. If a demonstration project has received a partial award before the approval of the final competitive project award, the remaining state dollars set aside for the demonstration project in subsection (1) of this section shall be available for the competitive process.
[ 2007 c 229 s 3; 2006 c 181 s 203. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
The designation of a revenue development area is subject to the following limitations:
(1) The taxable real property within the revenue development area boundaries may not exceed one billion dollars in assessed value at the time the revenue development area is designated;
(2) The average assessed value per square foot of taxable land within the revenue development area boundaries, as of January 1st of the year the application is submitted to the board under RCW 39.102.040, may not exceed seventy dollars at the time the revenue development area is designated;
(3) No revenue development area shall have within its geographic boundaries any part of a hospital benefit zone under chapter 39.100 RCW or any part of another revenue development area created under this chapter;
(4) A revenue development area is limited to contiguous tracts, lots, pieces, or parcels of land without the creation of islands of property not included in the revenue development area;
(5) The boundaries may not be drawn to purposely exclude parcels where economic growth is unlikely to occur;
(6) The public improvements financed through local infrastructure financing must be located in the revenue development area;
(7) A revenue development 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 sponsoring local government, including any cosponsoring local government, at the time the revenue development area is designated;
(8) The boundaries of the revenue development area shall not be changed for the time period that local infrastructure financing is used; and
(9) A revenue development area cannot include any part of an increment area created under chapter 39.89 RCW, except those increment areas created prior to January 1, 2006.
[ 2007 c 229 s 4; 2006 c 181 s 204. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
The use of local infrastructure financing under this chapter is subject to the following conditions:
(1) No funds may be used to finance, design, acquire, construct, equip, operate, maintain, remodel, repair, or reequip public facilities funded with taxes collected under RCW 82.14.048 or 82.14.390;
(2)(a) Except as provided in (b) of this subsection no funds may be used for public improvements other than projects identified within the capital facilities, utilities, housing, or transportation element of a comprehensive plan required under chapter 36.70A RCW;
(b) Funds may be used for public improvements that are historical preservation activities as defined in RCW 39.89.020;
(3) The public improvements proposed to be financed in whole or in part using local infrastructure financing are expected to encourage private development within the revenue development area and to increase the fair market value of real property within the revenue development area;
(4) A sponsoring local government, participating local government, or participating taxing district has entered or expects to enter into a contract with a private developer relating to the development of private improvements within the revenue development area or has received a letter of intent from a private developer relating to the developer's plans for the development of private improvements within the revenue development area;
(5) Private development that is anticipated to occur within the revenue development 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 local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;
(6) The governing body of the sponsoring local government, and any cosponsoring local government, must make a finding that local infrastructure financing:
(a) Is not expected to be used for the purpose of relocating a business from outside the revenue development area, but within this state, into the revenue development area; and
(b) Will improve the viability of existing business entities within the revenue development area;
(7) The governing body of the sponsoring local government, and any cosponsoring local government, finds that the public improvements proposed to be financed in whole or in part using local infrastructure financing are reasonably likely to:
(a) Increase private residential and commercial investment within the revenue development area;
(b) Increase employment within the revenue development area;
(c) Improve the viability of any existing communities that are based on mixed-use development within the revenue development area; and
(d) Generate, over the period of time that the local option sales and use tax will be imposed under RCW 82.14.475, state excise tax allocation revenues and state property tax allocation revenues derived from the revenue development area that are equal to or greater than the respective state contributions made under this chapter;
(8) The sponsoring local government may only use local infrastructure financing in areas deemed in need of economic development or redevelopment within boundaries of the sponsoring local government.
[ 2009 c 267 s 2; 2006 c 181 s 205. ]
Before adopting an ordinance creating the revenue development area, a sponsoring local government must:
(1) Obtain written agreement from any participating local government and participating taxing district to use dedicated amounts of local excise tax allocation revenues, local property tax allocation revenues, and other revenues from local public sources in whole or in part, for local infrastructure financing authorized under this chapter. The agreement to opt into the local infrastructure financing public improvement project must be authorized by the governing body of such participating local government and participating taxing district;
(2) Estimate the impact of the revenue development area on small business and low-income housing and develop a mitigation plan for the impacted businesses and housing. In analyzing the impact of the revenue development area, the sponsoring local government must develop:
(a) An inventory of existing low-income housing units, and businesses and retail activity within the revenue development area;
(b) A reasonable estimate of the number of low-income housing units, small businesses, and other commercial activity that may be vulnerable to displacement within the revenue development area;
(c) A reasonable estimate of projected net job growth and net housing growth caused by creation of the revenue development area when compared to the existing jobs or housing balance for the area; and
(d) A reasonable estimate of the impact of net housing growth on the current housing price mix.
[ 2006 c 181 s 206. ]
(1) To adopt a revenue development area, a sponsoring local government, and any cosponsoring local government, must adopt an ordinance establishing the revenue development area that:
(a) Describes the public improvements proposed to be made in the revenue development area;
(b) Describes the boundaries of the revenue development area, subject to the limitations in RCW 39.102.060;
(c) Estimates the cost of the proposed public improvements and the portion of these costs to be financed by local infrastructure financing;
(d) Estimates the time during which local excise tax allocation revenues, local property tax allocation revenues, and other revenues from local public sources are to be used for local infrastructure financing;
(e) Provides the date when the use of local excise tax allocation revenues and local property tax allocation revenues will commence; and
(f) Finds that the conditions in RCW 39.102.070 are met and the findings in RCW 39.102.080 are complete.
(2) The sponsoring local government, and any cosponsoring local government, must hold a public hearing on the proposed financing of the public improvements in whole or in part with local infrastructure financing before passage of the ordinance establishing the revenue development area. The public hearing may be held by either the governing body of the sponsoring local government and the governing body of any cosponsoring local government, or by a committee of those governing bodies that includes at least a majority of the whole governing body or bodies. The public hearing is subject to the notice requirements in RCW 39.102.100.
(3) The sponsoring local government, and any cosponsoring local government, shall deliver a certified copy of the adopted ordinance to the county treasurer, the governing body of each participating local government and participating taxing district within which the revenue development area is located, the board, and the department.
[ 2007 c 229 s 5; 2006 c 181 s 207. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
Prior to adopting the ordinance creating the revenue development area and to meet the requirements of *RCW 39.102.150(1)(b), a sponsoring local government and any cosponsoring local government must provide public notice.
(1) Notice of the public hearing must be published in a legal newspaper of general circulation within the proposed revenue development area at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed revenue development area.
(2) Notice must also be sent by United States mail to the property owners, all identifiable community-based organizations with involvement in the proposed revenue development area, and the business enterprises located within the proposed revenue development area at least thirty days prior to the hearing. In implementing provisions under this chapter, the local governing body may also consult with community-based groups, business organizations, including the local chamber of commerce, and the office of minority and women's business enterprises to assist with providing appropriate notice to business enterprises and property owners for whom English is a second language.
(3) Notices must describe the contemplated public improvements, estimate the public improvement costs, describe the portion of the public improvement costs to be borne by local infrastructure financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed revenue development area, estimate the impact that the public improvements will have on small businesses and low-income housing, and estimate the period during which local infrastructure financing is contemplated to be used.
(4) Notices must inform the public where to obtain the information that shows how the limitations, conditions, and findings required in RCW 39.102.060 through 39.102.080 are met.
(5) The sponsoring local government and any cosponsoring local government shall deliver a certified copy of the proposed ordinance to the county treasurer, the governing body of each participating local government and participating taxing district within which the revenue development area is located, the board, and the department.
[ 2006 c 181 s 208. ]
NOTES:
*Reviser's note: RCW 39.102.150 was amended by 2009 c 267 s 6, changing subsection (1)(b) to subsection (1)(a)(ii).
(1) A sponsoring local government or participating local government that has received approval by the board to use local infrastructure financing may use annually its local excise tax allocation revenues to finance public improvements in the revenue development area financed in whole or in part by local infrastructure financing. The use of local excise tax allocation revenues dedicated by participating local governments must cease on the date specified in the written agreement required in RCW 39.102.080(1), or if no date is specified then the date when the local tax under RCW 82.14.475 expires. Any participating local government is authorized to dedicate local excise tax allocation revenues to the sponsoring local government as authorized in RCW 39.102.080(1).
(2) A sponsoring local government shall provide the board accurate information describing the geographical boundaries of the revenue development area at the time of application. The information shall be provided in an electronic format or manner as prescribed by the department. The sponsoring local government shall ensure that the boundary information provided to the board and department is kept current.
(3) In the event a city annexes a county area located within a county-sponsored revenue development area, the city shall remit to the county the portion of the local excise tax allocation revenue that the county would have received had the area not been annexed to the city. The city shall remit such revenues until such time as the bonds issued under RCW 39.102.150 are retired.
[ 2009 c 267 s 3; 2007 c 229 s 6; 2006 c 181 s 301. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
(1) Commencing in the second calendar year following board approval of a revenue development area, the county treasurer shall distribute receipts from regular taxes imposed on real property located in the revenue development area as follows:
(a) Each participating taxing district and the sponsoring local government shall 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 financing project in the taxing district; and
(b) The sponsoring local government shall 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 revenue development area. However, if there is no property tax allocation revenue value, the sponsoring local government shall not receive any additional regular property taxes under this subsection (1)(b). The sponsoring local government 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 shall be allocated to the participating taxing districts that levied regular property taxes, or have regular property taxes levied for them, in the revenue development area for collection that year in proportion to their regular tax levy rates for collection that year. The sponsoring local government 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 finance public improvement costs associated with the public improvements financed in whole or in part by local infrastructure financing.
(2) The county assessor shall 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) The distribution of local property tax allocation revenue to the sponsoring local government must cease when local property tax allocation revenues are no longer obligated to pay the costs of the public improvements. Any excess local property tax allocation revenues and earnings on such 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 revenue development area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
(4) The allocation to the revenue development area of that portion of the sponsoring local government's and each participating taxing district's regular property taxes levied by or for each taxing district upon the property tax allocation revenue value within that revenue development area is declared to be a public purpose of and benefit to the sponsoring local government and each participating taxing district.
(5) The distribution of local property tax allocation revenues pursuant to this section shall 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.
(6) This section does not apply to those revenue development areas that include any part of an increment area created under chapter 39.89 RCW.
[ 2009 c 267 s 4; 2007 c 229 s 7; 2006 c 181 s 302. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
Money collected from the taxes imposed under RCW 82.14.475 may be used only for the purpose of paying debt service on bonds issued under the authority of RCW 39.102.150 or to pay public improvement costs on a pay-as-you-go basis as provided in RCW 39.102.195, or both.
[ 2007 c 229 s 11; 2006 c 181 s 402. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
(1) A sponsoring local government shall provide a report to the board and the department by March 1st of each year. The report shall contain the following information:
(a) The amount of local excise tax allocation revenues, local property tax allocation revenues, other revenues from local public sources, and taxes under RCW 82.14.475 received by the sponsoring local government, cosponsoring local government, or any participating local government during the preceding calendar year that were dedicated to pay the public improvements financed in whole or in part with local infrastructure financing, and a summary of how these revenues were expended;
(b) The names of any businesses locating within the revenue development area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local infrastructure financing;
(c) The total number of permanent jobs created in the revenue development area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local infrastructure financing;
(d) The average wages and benefits received by all employees of businesses locating within the revenue development area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local infrastructure financing;
(e) That the sponsoring local government is in compliance with RCW 39.102.070; and
(f) Beginning with the reports due March 1, 2010, the following must also be included:
(i) A list of public improvements financed on a pay-as-you-go basis in previous calendar years and by indebtedness issued under this chapter;
(ii) The date when any indebtedness issued under this chapter is expected to be retired;
(iii) At least once every three years, updated estimates of state excise tax allocation revenues, state property tax allocation revenues, and local excise tax increments, as determined by the sponsoring local government, that are estimated to have been received by the state, any participating local government, sponsoring local government, and cosponsoring local government, since the approval of the project award under RCW 39.102.040 by the board; and
(iv) Any other information required by the department or the board to enable the department or the board to fulfill its duties under this chapter and RCW 82.14.475.
(2) The board shall make a report available to the public and the legislature by June 1st of each even-numbered year. The report shall include a list of public improvements undertaken by sponsoring local governments and financed in whole or in part with local infrastructure financing and it shall also include a summary of the information provided to the department by sponsoring local governments under subsection (1) of this section.
(3) The department, upon request, must assist a sponsoring local government in estimating the amount of state excise tax allocation revenues and local excise tax increments required in subsection (1)(f)(iii) of this section.
[ 2013 2nd sp.s. c 21 s 5. Prior: 2009 c 518 s 12; 2009 c 267 s 5; 2007 c 229 s 9; 2006 c 181 s 403. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
(1) A sponsoring local government that has designated a revenue development area and instead of paying public improvement costs on a pay-as-you-go basis has been authorized the use of local infrastructure 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 local excise tax allocation revenues, local property tax allocation revenues, and sales and use taxes imposed under the authority of RCW 82.14.475 that it receives, subject to the following requirements:
(a)(i) The ordinance adopted by the sponsoring local government and authorizing the use of local infrastructure financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and
(ii) The sponsoring local government includes this statement of the intent in all notices required by RCW 39.102.100; or
(b) The sponsoring local government adopts a resolution, after opportunity for public comment, that indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated.
(2)(a) Except as provided in (b) of this subsection, the general indebtedness incurred under subsection (1) of this section may be payable from other tax revenues, the full faith and credit of the local government, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the local government for payment of costs of the public improvements or associated debt service on the general indebtedness.
(b) A sponsoring local government that issues bonds under this section may not pledge any money received from the state of Washington for the payment of such bonds, other than the local sales and use taxes imposed under the authority of RCW 82.14.475 and collected by the department.
(3) In addition to the requirements in subsection (1) of this section, a sponsoring local government designating a revenue development area and authorizing the use of local infrastructure financing may require the nonpublic participant to provide adequate security to protect the public investment in the public improvement within the revenue development area.
(4) Bonds issued under this section must be authorized by ordinance of the governing body of the sponsoring local government and may be issued in one or more series and must bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, be in such denomination or denominations, be in such form either coupon or registered as provided in RCW 39.46.030, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption with or without premium, be secured in such manner, and have such other characteristics, as may be provided by such ordinance or trust indenture or mortgage issued pursuant thereto.
(5) The sponsoring local government may annually pay into a fund to be established for the benefit of bonds issued under this section a fixed proportion or a fixed amount of any local excise tax allocation revenues and local property tax allocation revenues derived from property or business activity within the revenue development area containing the public improvements funded by the bonds, such payment to continue until all bonds payable from the fund are paid in full. The local government may also annually pay into the fund established in this section a fixed proportion or a fixed amount of any revenues derived from taxes imposed under RCW 82.14.475, such payment to continue until all bonds payable from the fund are paid in full. Revenues derived from taxes imposed under RCW 82.14.475 are subject to the use restriction in RCW 39.102.130.
(6) In case any of the public officials of the sponsoring local government whose signatures appear on any bonds or any coupons issued under this chapter cease to be such officials before the delivery of such bonds, such signatures, nevertheless, are valid and sufficient for all purposes, the same as if such officials had remained in office until such delivery. Any provision of any law to the contrary notwithstanding, any bonds issued under this chapter are fully negotiable.
(7) Notwithstanding subsections (4) through (6) of this section, bonds issued under this section may be issued and sold in accordance with chapter 39.46 RCW.
[ 2013 2nd sp.s. c 21 s 4; 2009 c 267 s 6; 2007 c 229 s 10; 2006 c 181 s 501. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
A sponsoring local government that issues bonds under RCW 39.102.150 to finance public improvements may pledge for the payment of such bonds all or part of any local excise tax allocation revenues and all or part of any local property tax allocation revenues dedicated by the sponsoring local government, any participating local government, or participating taxing district. The sponsoring local government may also pledge all or part of any revenues derived from taxes imposed under RCW 82.14.475 and held in connection with the public improvements. All of such tax revenues are subject to the use restrictions in RCW 39.102.040 through 39.102.070, and the process requirements in RCW 39.102.080(1).
[ 2006 c 181 s 502. ]
The bonds issued by a sponsoring local government under RCW 39.102.150 to finance public improvements shall not constitute an obligation of the state of Washington, either general or special.
[ 2006 c 181 s 503. ]
(1) A sponsoring local government may issue revenue bonds to fund revenue-generating public improvements, or portions of public improvements, that are located within a revenue development area. Whenever revenue bonds are to be issued, the legislative authority of the sponsoring local government shall create or have created a special fund or funds from which, along with any reserves created pursuant to RCW 39.44.140, the principal and interest on these revenue bonds shall exclusively be payable. The legislative authority of the sponsoring local government may obligate the sponsoring local government to set aside and pay into the special fund or funds a fixed proportion or a fixed amount of the revenues from the public improvements that are funded by the revenue bonds. This amount or proportion is a lien and charge against these revenues, subject only to operating and maintenance expenses. The sponsoring local government shall have due regard for the cost of operation and maintenance of the public improvements that are funded by the revenue bonds, and shall not set aside into the special fund or funds a greater amount or proportion of the revenues that in its judgment will be available over and above the cost of maintenance and operation and the amount or proportion, if any, of the revenue previously pledged. The sponsoring local government may also provide that revenue bonds payable out of the same source or sources of revenue may later be issued on a parity with any revenue bonds being issued and sold.
(2) Revenue bonds issued pursuant to this section are not an indebtedness of the sponsoring local government issuing the bonds, and the interest and principal on the bonds shall only be payable from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The owner or bearer of a revenue bond or any interest coupon issued pursuant to this section shall not have any claim against the sponsoring local government arising from the bond or coupon except for payment from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The substance of the limitations included in this subsection shall be plainly printed, written, or engraved on each bond issued pursuant to this section.
(3) Revenue bonds with a maturity in excess of twenty-five years shall not be issued. The legislative authority of the sponsoring local government shall by resolution determine for each revenue bond issue the amount, date, form, terms, conditions, denominations, maximum fixed or variable interest rate or rates, maturity or maturities, redemption rights, registration privileges, manner of execution, manner of sale, callable provisions, if any, and covenants including the refunding of existing revenue bonds. Facsimile signatures may be used on the bonds and any coupons. Refunding revenue bonds may be issued in the same manner as revenue bonds are issued.
(4) Notwithstanding subsections (1) through (3) of this section, bonds issued under this section may be issued and sold in accordance with chapter 39.46 RCW.
[ 2006 c 181 s 505. ]
To the extent that amounts received as local excise tax allocation revenues, local property tax allocation revenues, other revenues from local public sources, that are dedicated to local infrastructure financing, and revenues received from the local option sales and use tax authorized in RCW 82.14.475, are set aside in a debt service fund that is pledged to the repayment of bonds, those amounts so set aside and pledged may not be used to pay for public improvement costs on a pay-as-you-go basis after the date that the sponsoring local government that issued the bonds as provided in RCW 39.102.150 is required to begin paying debt service on those bonds, unless and until those bonds to which the amounts have been so pledged have been retired.
[ 2009 c 267 s 7; 2007 c 229 s 14. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
Beginning September 1, 2013, and continuing every five years thereafter, the joint legislative audit and review committee shall submit a report to the appropriate committees of the legislature.
(1) The report shall, at a minimum, evaluate the effectiveness of the local infrastructure financing tool program, including a project-by-project review. The report shall evaluate the project's interim results based on the selection criteria. The report shall also measure:
(a) Employment changes in the revenue development area;
(b) Property tax changes in the revenue development area;
(c) Sales and use tax changes in the revenue development area;
(d) Property value changes in the revenue development area; and
(e) Changes in housing and existing commercial activities based on the impact analysis and mitigation plan required in RCW 39.102.080(2).
(2) The report that is due September 1, 2028, should also include any recommendations regarding whether or not the program should be expanded statewide and what impact the expansion would have on economic development in Washington.
[ 2006 c 181 s 601. ]
The department of revenue and the community economic revitalization board shall evaluate and periodically report on the implementation of the local infrastructure financing [tool] program to the governor and legislature as the department and the board deems appropriate and recommend such amendments, changes in, and modifications of chapter 181, Laws of 2006 as seem proper.
[ 2006 c 181 s 701. ]
The department of revenue and the community economic revitalization board may adopt any rules under chapter 34.05 RCW they consider necessary for the administration of this chapter.
[ 2007 c 229 s 13. ]
NOTES:
Application—Severability—2007 c 229: See notes following RCW 39.102.020.
Nothing in this act shall be construed to give port districts the authority to impose a sales or use tax under chapter 82.14 RCW.
[ 2006 c 181 s 705. ]
This act takes effect July 1, 2006.
[ 2006 c 181 s 706. ]
This chapter expires June 30, 2044.
[ 2013 2nd sp.s. c 21 s 1. ]
The legislature recognizes that the state as a whole benefits from investment in public infrastructure because it promotes community and economic development. Public investment stimulates business activity and helps create jobs, stimulates the redevelopment of brownfields and blighted areas in the inner city, lowers the cost of housing, and promotes efficient land use. The legislature finds that these activities generate revenue for the state and that it is in the public interest to invest in these projects through a credit against the state sales and use tax to those local governments that can demonstrate the expected returns to the state.
[ 2009 c 270 s 101. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Annual state contribution limit" means two million five hundred thousand dollars statewide per fiscal year, plus the additional amounts approved for demonstration projects in RCW 82.14.505.
(2) "Approving agency" means the department of revenue for project awards approved before June 9, 2016, and the department of commerce for project awards approved after June 9, 2016.
(3) "Assessed value" means the valuation of taxable real property as placed on the last completed assessment roll.
(4) "Bond" means a bond, a note or other evidence of indebtedness, including but not limited to a lease-purchase agreement or an executory conditional sales contract.
(5) "Department" means the department of revenue.
(6) "Fiscal year" means the twelve-month period beginning July 1st and ending the following June 30th.
(7) "Local government" means any city, town, county, and port district.
(8) "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 revitalization financing.
(9) "Local revitalization financing" means the use of revenues from local public sources, dedicated to pay the principal and interest on bonds authorized under RCW 39.104.110 and public improvement costs within the revitalization area on a pay-as-you-go basis, and revenues received from the local option sales and use tax authorized in RCW 82.14.510, dedicated to pay the principal and interest on bonds authorized under RCW 39.104.110.
(10) "Local sales and use tax increment" means the estimated annual increase in local sales and use taxes as determined by the local government in the calendar years following the approval of the revitalization area by the department from taxable activity within the revitalization area.
(11) "Local sales and use taxes" means local revenues derived from the imposition of sales and use taxes authorized in RCW 82.14.030.
(12) "Ordinance" means any appropriate method of taking legislative action by a local government.
(13) "Participating local government" means a local government having a revitalization area within its geographic boundaries that has taken action as provided in RCW 39.104.070(1) to allow the use of all or some of its local sales and use tax increment or other revenues from local public sources dedicated for local revitalization financing.
(14) "Participating taxing district" means a taxing district that:
(a) Has a revitalization area wholly or partially within its geographic boundaries;
(b) Levies or has levied for it regular property taxes as defined in this section; and
(c) Has not taken action as provided in RCW 39.104.060(2).
(15) "Permanently affordable housing" means housing, regardless of ownership, for which there is a legally binding, recorded document in effect that limits the price at which the owner may sell or restricts the occupancy of the unit to a qualified, low-income household, for a period of at least forty years for a property used for shelter or rental housing, or for a period of at least twenty-five years for a property to be owned by a low-income household. These documents include, but are not limited to, affordability covenants, deed restrictions, and community land trust leases. Resale restrictions exercised by providers of permanently affordable housing can include, but are not limited to:
(a) Continuous ownership of land by a public entity or nonprofit housing provider with a lease allowing ownership of the structure by an income-eligible household;
(b) A nonpossessory interest or right in real property, such as a deed restriction, restrictive covenant, resale restriction[,] or other contractual agreement, that ensures affordability.
(16) "Property tax allocation revenue base value" means the assessed value of real property located within a revitalization area, less the property tax allocation revenue value.
(17)(a)(i) "Property tax allocation revenue value" means seventy-five percent of any increase in the assessed value of real property in a revitalization 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 revitalization area is approved;
(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 revitalization area is approved;
(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 revitalization area is approved.
(ii) Increases in the assessed value of real property in a revitalization area 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 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 revitalization 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.
(18) "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 local revitalization financing to fund the costs of the public improvements.
(19) "Public improvements" means:
(a) Infrastructure improvements within the revitalization area that include:
(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, terminal, and dock facilities;
(v) Park and ride facilities of a transit authority;
(vi) Park facilities, recreational areas, and environmental remediation;
(vii) Stormwater and drainage management systems;
(viii) Electric, gas, fiber, and other utility infrastructures;
(b) Expenditures for any of the following purposes:
(i) Providing environmental analysis, professional management, planning, and promotion within the revitalization area, including the management and promotion of retail trade activities in the revitalization area;
(ii) Providing maintenance and security for common or public areas in the revitalization area; or
(iii) Historic preservation activities authorized under RCW 35.21.395; and
(c) Expenditures to purchase, rehabilitate, retrofit for energy efficiency, and construct housing for the purpose of creating or preserving permanently affordable housing.
(20) "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.
(21)(a) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (i) Regular property taxes levied by 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).
(22)(a) "Revenues from local public sources" means:
(i) The local sales and use tax amounts received as a result of interlocal agreement, local sales and use tax amounts from sponsoring local governments based on its local sales and use tax increment, and local property tax allocation revenues, which are dedicated by a sponsoring local government, participating local governments, and participating taxing districts, for payment of bonds under RCW 39.104.110 or public improvement costs within the revitalization area on a pay-as-you-go basis; and
(ii) Any other local revenues, except as provided in (b) of this subsection, including revenues derived from federal and private sources and amounts received by taxing districts as set forth by an interlocal agreement as described in RCW 39.104.060(4), which are dedicated for the payment of bonds under RCW 39.104.110 or public improvement costs within the revitalization area on a pay-as-you-go basis.
(b) Revenues from local public sources do not include any local funds derived from state grants, state loans, or any other state moneys including any local sales and use taxes credited against the state sales and use taxes imposed under chapter 82.08 or 82.12 RCW.
(23) "Revitalization area" means the geographic area adopted by a sponsoring local government and approved by the approving agency, from which local sales and use tax increments are estimated and property tax allocation revenues are derived for local revitalization financing.
(24) "Sponsoring local government" means a city, town, county, or any combination thereof, that adopts a revitalization area.
(25) "State contribution" means the lesser of:
(a) Five hundred thousand dollars;
(b) The project award amount approved by the approving agency as provided in RCW 39.104.100 or 82.14.505; or
(c) The total amount of revenues from local public sources dedicated in the preceding calendar year to the payment of principal and interest on bonds issued under RCW 39.104.110 and public improvement costs within the revitalization area on a pay-as-you-go basis. Revenues from local public sources dedicated in the preceding calendar year that are in excess of the project award may be carried forward and used in later years for the purpose of this subsection (25)(c).
(26) "State property tax increment" means the estimated amount of annual tax revenues estimated to be received by the state from the imposition of property taxes levied by the state for the support of common schools under RCW 84.52.065 on the property tax allocation revenue value, as determined by the sponsoring local government in an application under RCW 39.104.100 and updated periodically as required in RCW 82.32.765.
(27) "State sales and use tax increment" means the estimated amount of annual increase in state sales and use taxes to be received by the state from taxable activity within the revitalization area in the years following the approval of the revitalization area as determined by the sponsoring local government in an application under RCW 39.104.100 and updated periodically as required in RCW 82.32.765.
(28) "State sales and use taxes" means state retail sales and use taxes under RCW 82.08.020(1) and 82.12.020 at the rate provided in RCW 82.08.020(1), less the amount of tax distributions from all local retail sales and use taxes, other than the local sales and use taxes authorized by RCW 82.14.510 for the applicable revitalization area, imposed on the same taxable events that are credited against the state retail sales and use taxes under RCW 82.08.020(1) and 82.12.020.
(29) "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 revitalization area.
[ 2020 c 280 s 3; 2016 c 207 s 1; 2010 c 164 s 1; 2009 c 270 s 102. ]
NOTES:
Reviser's note: The definitions in this section have been alphabetized pursuant to RCW 1.08.015(2)(k).
A local government may finance public improvements using local revitalization financing subject to the following conditions:
(1) The local government has adopted an ordinance designating a revitalization area within its boundaries and specified the public improvements proposed to be financed in whole or in part with the use of local revitalization financing;
(2) The public improvements proposed to be financed in whole or in part using local revitalization financing are expected to encourage private development within the revitalization area and to increase the fair market value of real property within the revitalization area;
(3) The local government has entered into a contract with a private developer relating to the development of private improvements within the revitalization area or has received a letter of intent from a private developer relating to the developer's plans for the development of private improvements within the revitalization area;
(4) Private development that is anticipated to occur within the revitalization 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 local government's comprehensive plan and development regulations adopted under chapter 36.70A RCW;
(5) The local government may not use local revitalization financing to finance the costs associated with the financing, design, acquisition, construction, equipping, operating, maintaining, remodeling, repairing, and reequipping of public facilities funded with taxes collected under RCW 82.14.048 or 82.14.390;
(6) The governing body of the local government must make a finding that local revitalization financing:
(a) Will not be used for the purpose of relocating a business from outside the revitalization area, but within this state, into the revitalization area unless convincing evidence is provided that the firm being relocated would otherwise leave the state;
(b) Will improve the viability of existing business entities within the revitalization area; and
(c) Will be used exclusively in areas within the jurisdiction of the local government deemed in need of either economic development or redevelopment, or both, and absent the financing available under this chapter and RCW 82.14.510 and 82.14.515 the proposed economic development or redevelopment would more than likely not occur; and
(7) The governing body of the local government finds that the public improvements proposed to be financed in whole or in part using local revitalization financing are reasonably likely to:
(a) Increase private investment within the revitalization area;
(b) Increase employment within the revitalization area; and
(c) Generate, over the period of time that the local sales and use tax will be imposed under RCW 82.14.510, increases in state and local property, sales, and use tax revenues that are equal to or greater than the respective state and local contributions made under this chapter.
[ 2009 c 270 s 103. ]
(1) Before adopting an ordinance creating the revitalization area, a sponsoring local government must:
(a) Provide notice to all taxing districts that levy or have levied for it regular property taxes and local governments with geographic boundaries within the proposed revitalization area of the sponsoring local government's intent to create a revitalization area. Notice must be provided in writing to the governing body of the taxing districts and local governments at least sixty days in advance of the public hearing as required by (b) of this subsection. The notice must include at least the following information:
(i) The name of the proposed revitalization area;
(ii) The date for the public hearing as required by (b) of this subsection;
(iii) The earliest anticipated date when the sponsoring local government will take action to adopt the proposed revitalization area; and
(iv) The name of a contact person with phone number of the sponsoring local government and mailing address where a copy of an ordinance adopted under RCW 39.104.050 and 39.104.060 may be sent; and
(b) Hold a public hearing on the proposed financing of the public improvements in whole or in part with local revitalization financing. Notice of the public hearing must be published in a legal newspaper of general circulation within the proposed revitalization area at least ten days before the public hearing and posted in at least six conspicuous public places located in the proposed revitalization 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 local revitalization financing, describe any other sources of revenue to finance the public improvements, describe the boundaries of the proposed revitalization area, and estimate the period during which local revitalization financing is contemplated to be used. The public hearing may be held by either the governing body of the sponsoring local government, or a committee of the governing body that includes at least a majority of the whole governing body.
(2) To create a revitalization area, a sponsoring local government must adopt an ordinance establishing the revitalization area that:
(a) Describes the public improvements proposed to be made in the revitalization area;
(b) Describes the boundaries of the revitalization area, subject to the limitations in RCW 39.104.050;
(c) Estimates the cost of the proposed public improvements and the portion of these costs to be financed by local revitalization financing;
(d) Estimates the time during which local property tax allocation revenues, and other revenues from local public sources, such as amounts of local sales and use taxes from participating local governments, are to be used for local revitalization financing;
(e) Provides the date when the use of local property tax allocation revenues will commence and a list of the participating taxing districts and the regular property taxes that must be used to calculate property tax allocation revenues;
(f) Finds that all of the requirements in RCW 39.104.030 are met;
(g) Provides the anticipated rate of sales and use tax under RCW 82.14.510 that the local government will impose if awarded a state contribution under RCW 39.104.100;
(h) Provides the anticipated date when the criteria for the sales and use tax in RCW 82.14.510 will be met and the anticipated date when the sales and use tax in RCW 82.14.510 will be imposed.
(3) The sponsoring local government must deliver a certified copy of the adopted ordinance to the county treasurer, county assessor, the governing body of each participating taxing authority and participating taxing district within which the revitalization area is located, and the department.
[ 2010 c 164 s 2; 2009 c 270 s 104. ]
The designation of a revitalization area is subject to the following limitations:
(1)(a) Except as provided in (b) of this subsection, no revitalization area may have within its geographic boundaries any part of a hospital benefit zone under chapter 39.100 RCW, any part of a revenue development area created under chapter 39.102 RCW, any part of an increment area under chapter 39.89 RCW, or any part of another revitalization area under this chapter;
(b) A revitalization area's boundaries may include all or a portion of an existing increment area if:
(i) The state of Washington has loaned money for environmental cleanup on such area in order to stimulate redevelopment of brownfields;
(ii) The environmental cleanup, for which the state's loans were intended, has been completed; and
(iii) The sponsoring local government determines the creation of the revitalization area is necessary for redevelopment and protecting the state's investment by increasing property tax revenue;
(2) A revitalization area is limited to contiguous tracts, lots, pieces, or parcels of land without the creation of islands of property not included in the revitalization area;
(3) The boundaries may not be drawn to purposely exclude parcels where economic growth is unlikely to occur;
(4) The public improvements financed through bonds issued under RCW 39.104.110 must be located in the revitalization area;
(5) A revitalization 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 sponsoring local government at the time the revitalization area is created;
(6) The boundaries of the revitalization area may not be changed for the time period that local property tax allocation revenues, local sales and use taxes of participating local governments, and the local sales and use tax under RCW 82.14.510 are used to pay bonds issued under RCW 39.104.110 and public improvement costs within the revitalization area on a pay-as-you-go basis, as provided under this chapter; and
(7) A revitalization area must be geographically restricted to the location of the public improvement and adjacent locations that the sponsoring local government finds to have a high likelihood of receiving direct positive business and economic impacts due to the public improvement, such as a neighborhood or a block.
[ 2010 c 164 s 3; 2009 c 270 s 105. ]
(1) Participating taxing districts must allow the use of all of their local property tax allocation revenues for local revitalization financing.
(2)(a) If a taxing district does not want to allow the use of its property tax revenues for the local revitalization financing of public improvements in a revitalization area, its governing body must adopt an ordinance to remove itself as a participating taxing district and must notify the sponsoring local government.
(b) The taxing district must provide a copy of the adopted ordinance and notice to the sponsoring local government creating the revitalization area before the anticipated date that the sponsoring local government proposes to adopt the ordinance creating the revitalization area as provided in the notice required by RCW 39.104.040(1)(a).
(3) If a taxing district wants to become a participating taxing district by allowing one or more but not all of its regular property tax levies to be used for the calculation of local property tax allocation revenues, it may do so through an interlocal agreement specifying the regular property taxes that will be used for calculating its local property tax allocation revenues. This subsection does not authorize a taxing district to allow the use of only part of one or more of its regular property tax levies by the sponsoring local government.
(4) If a taxing district wants to participate on a partial basis by providing a specified amount of money to a sponsoring local government to be used for local revitalization financing for a specified amount of time, it may do so through an interlocal agreement. However, the taxing district must adopt an ordinance as described in subsection (2) of this section to remove itself as a participating taxing district for purposes of calculating property tax allocation revenues and instead partially participate through an interlocal agreement outlining the specifics of its participation.
[ 2010 c 164 s 4; 2009 c 270 s 106. ]
(1) A participating local government must enter into an interlocal agreement as provided in chapter 39.34 RCW to participate in local revitalization financing with the sponsoring local government.
(2)(a) If a local government that imposes a sales and use tax under RCW 82.14.030 does not want to participate in the local revitalization financing of public improvements in a revitalization area, its governing body must adopt an ordinance and notify the sponsoring local government that the taxing authority will not be a participating local government.
(b) The local government must provide a copy of the adopted ordinance and the notice to the sponsoring local government creating the revitalization area before the anticipated date that the sponsoring local government proposes to adopt an ordinance creating the revitalization area as provided in the notice required by RCW 39.104.040(1)(a).
[ 2009 c 270 s 107. ]
(1) Commencing in the second calendar year following the creation of a revitalization area by a sponsoring local government, the county treasurer must distribute receipts from regular taxes imposed on real property located in the revitalization area as follows:
(a) Each participating taxing district and the sponsoring local government 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 revitalization financing project in the taxing district; and
(b) The sponsoring local government 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 revitalization area. However, if there is no property tax allocation revenue value, the sponsoring local government may not receive any additional regular property taxes under this subsection (1)(b). The sponsoring local government 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 shall be allocated to the participating taxing districts that levied regular property taxes, or have regular property taxes levied for them, in the revitalization area for collection that year in proportion to their regular tax levy rates for collection that year. The sponsoring local government 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 finance public improvement costs associated with the public improvements financed in whole or in part by local revitalization financing.
(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) The distribution of local property tax allocation revenue to the sponsoring local government must cease when local property tax allocation revenues are no longer obligated to pay the costs of the public improvements. 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 revitalization area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
(4) The allocation to the revitalization area of that portion of the sponsoring local government's and each participating taxing district's regular property taxes levied upon the property tax allocation revenue value within that revitalization area is declared to be a public purpose of and benefit to the sponsoring local government and each participating taxing district.
(5) 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.
(6) This section does not apply to a revitalization area that has boundaries that include all or a portion of the boundaries of an increment area created under chapter 39.89 RCW.
[ 2010 c 164 s 5; 2009 c 270 s 201. ]
(1) A sponsoring local government may use annually local sales and use tax amounts equal to some or all of its local sales and use tax increments to finance public improvements in the revitalization area. The amounts of local sales and use tax dedicated by a participating local government must begin and cease on the dates specified in an interlocal agreement authorized in chapter 39.34 RCW. Sponsoring local governments and participating local governments are authorized to allocate some or all of their local sales and use tax increment to the sponsoring local government as provided by RCW 39.104.070(1).
(2) The department, upon request, must assist sponsoring local governments in estimating sales and use tax revenues from estimated taxable activity in the proposed or adopted revitalization area. The sponsoring local government must provide the department with accurate information describing the geographical boundaries of the revitalization area in an electronic format or in a manner as otherwise prescribed by the department.
[ 2009 c 270 s 301. ]
(1) Prior to applying to receive a state contribution, a sponsoring local government must adopt a revitalization area within the limitations in RCW 39.104.050 and in accordance with RCW 39.104.040.
(2)(a) As a condition to imposing a sales and use tax under RCW 82.14.510, a sponsoring local government must apply and be approved for a project award amount. The application must be in a form and manner prescribed by the approving agency and include, but not be limited to:
(i) Information establishing that over the period of time that the local sales and use tax will be imposed under RCW 82.14.510, increases in state and local property, sales, and use tax revenues as a result of public improvements in the revitalization area will be equal to or greater than the respective state and local contributions made under this chapter;
(ii) Information demonstrating that the sponsoring local government will meet the requirements necessary to receive the full amount of state contribution it is requesting on an annual basis;
(iii) The amount of state contribution it is requesting;
(iv) The anticipated effective date for imposing the tax under RCW 82.14.510;
(v) The estimated number of years that the tax will be imposed;
(vi) The anticipated rate of tax to be imposed under RCW 82.14.510, subject to the rate-setting conditions in RCW 82.14.510(3), should the sponsoring local government be approved for a project award; and
(vii) The anticipated date when bonds under RCW 39.104.110 will be issued.
(b) The approving agency must make available electronic forms to be used for this purpose. As part of the application, each applicant must provide to the department a copy of the adopted ordinance creating the revitalization area as required in RCW 39.104.040, copies of any adopted interlocal agreements from participating local governments, and any notices from taxing districts that elect not to be a participating taxing district.
(3)(a) Project awards must be determined on:
(i) The availability of a state contribution;
(ii) Whether the sponsoring local government would be able to generate enough tax revenue under RCW 82.14.510 to generate the amount of project award requested;
(iii) The number of jobs created;
(iv) The fit of the expected business creation or expansion within the region's preferred economic growth strategy;
(v) The speed with which the project can begin construction; and
(vi) The extent to which the project leverages nonstate funds.
(b) The total of all project awards may not exceed the annual state contribution limit.
(c) If the level of available state contribution is less than the amount requested by the next available applicant, the applicant must be given the first opportunity to accept the lesser amount of state contribution but only if the applicant produces a new application within sixty days of being notified by the approving agency and the application describes the impact on the proposed project as a result of the lesser award in addition to new application information outlined in subsection (2) of this section.
(d) Applications that are not approved for a project award due to lack of available state contribution must be retained on file by the approving agency.
(e)(i) Except as provided in (e)(ii) of this subsection, once total project awards reach the amount of annual state contribution limit, no more applications will be accepted.
(ii) Any city or county that has been approved for a project award by the department prior to January 1, 2011, and has not imposed a sales and use tax under RCW 82.14.510 by December 31, 2016, must forfeit their project award. However, amounts will not be forfeited if a city or county has sent the department a letter indicating its intent to impose the sales and use tax by July 1, 2022, before July 1, 2016. Amounts forfeited under this section must be made available for new applications under subsection (5) of this section.
(f) If the annual contribution limit is increased by making additional funds available for applicants or if funds become available from project awards forfeited under (e)(ii) of this subsection, applications will be accepted again as described in subsection (5) of this section.
(4) The approving agency must notify the sponsoring local government of approval or denial of a project award within sixty days of the approving agency's receipt of the sponsoring local government's application. Determination of a project award by the approving agency is final. Notification must include the earliest date when the tax authorized under RCW 82.14.510 may be imposed, subject to conditions in chapter 82.14 RCW. The project award notification must specify the rate requested in the application and any adjustments to the rate that would need to be made based on the project award and rate restrictions in RCW 82.14.510. The department of commerce must consult with the department of revenue in determining the amount of a project award.
(5) The department of commerce must begin accepting applications and approving project awards under this section on and after June 9, 2016. The department of commerce must notify the department of all approved project awards under this section. The department of commerce must also provide to the department any information necessary to implement the tax authorized under RCW 82.14.510.
[ 2016 c 207 s 2; 2010 c 164 s 6; 2009 c 270 s 401. ]
(1) A sponsoring local government creating a revitalization area and authorizing the use of local revitalization 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 local revitalization financing it receives, subject to the following requirements:
(a)(i) The ordinance adopted by the sponsoring local government creating the revitalization area and authorizing the use of local revitalization financing indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated; and
(ii) The sponsoring local government includes this statement of intent in all notices required by RCW 39.104.040; or
(b) The sponsoring local government adopts a resolution, after opportunity for public comment, that indicates an intent to incur this indebtedness and the maximum amount of this indebtedness that is contemplated.
(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 sponsoring local government, and nontax income, revenues, fees, and rents from the public improvements, as well as contributions, grants, and nontax money available to the local government 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 sponsoring local government creating a revitalization area and authorizing the use of local revitalization financing may require any nonpublic participants to provide adequate security to protect the public investment in the public improvement within the revitalization area.
(4) Bonds issued under this section must be authorized by ordinance of the sponsoring local government and may be issued in one or more series and must bear a date or dates, be payable upon demand or mature at a time or times, bear interest at a rate or rates, be in a denomination or denominations, be in a form either coupon or registered as provided in RCW 39.46.030, carry conversion or registration privileges, have a rank or priority, be executed in a manner, be payable in a medium of payment, at a place or places, and be subject to terms of redemption with or without premium, be secured in a manner, and have other characteristics, as may be provided by an ordinance or trust indenture or mortgage issued pursuant thereto.
(5) The sponsoring local government may:
(a) Annually pay into a special fund to be established for the benefit of bonds issued under this section a fixed proportion or a fixed amount of any local property tax allocation revenues derived from property within the revitalization area containing the public improvements funded by the bonds, the payment to continue until all bonds payable from the fund are paid in full;
(b) Annually pay into the special fund established pursuant to this section a fixed proportion or a fixed amount of any revenues derived from taxes imposed under RCW 82.14.510, such payment to continue until all bonds payable from the fund are paid in full. Revenues derived from taxes imposed under RCW 82.14.510 are subject to the use restriction in RCW 82.14.515; and
(c) Issue revenue bonds payable from any or all revenues deposited in the special fund established pursuant to this section.
(6) In case any of the public officials of the sponsoring local government whose signatures appear on any bonds or any coupons issued under this chapter cease to be the officials before the delivery of the bonds, the signatures must, nevertheless, be valid and sufficient for all purposes, the same as if the officials had remained in office until the delivery. Any provision of any law to the contrary notwithstanding, any bonds issued under this chapter are fully negotiable.
(7) Notwithstanding subsections (4) through (6) of this section, bonds issued under this section may be issued and sold in accordance with chapter 39.46 RCW.
[ 2010 c 164 s 7; 2009 c 270 s 701. ]
A sponsoring local government that issues bonds under RCW 39.104.110 to finance public improvements may pledge for the payment of such bonds all or part of any local property tax allocation revenues derived from the public improvements. The sponsoring local government may also pledge all or part of any revenues derived from taxes imposed under RCW 82.14.510 and held in connection with the public improvements. All of such tax revenues are subject to the use restriction in RCW 82.14.515.
[ 2009 c 270 s 702. ]
The bonds issued by a local government under RCW 39.104.110 to finance public improvements do not constitute an obligation of the state of Washington, either general or special.
[ 2009 c 270 s 703. ]
Nothing in this act may be construed to give port districts the authority to impose a sales or use tax under chapter 82.14 RCW.
[ 2009 c 270 s 803. ]
The department of revenue and the department of commerce may adopt any rules under chapter 34.05 RCW that the departments consider necessary for the administration of this chapter.
[ 2016 c 207 s 3; 2009 c 270 s 804. ]
(1) Chapter 258, Laws of 2011 shall be known as the joint municipal utility services act.
(2) It is the purpose of chapter 258, Laws of 2011 to improve the ability of local government utilities to plan, finance, construct, acquire, maintain, operate, and provide facilities and utility services to the public, and to reduce costs and improve the benefits, efficiency, and quality of utility services.
(3) Chapter 258, Laws of 2011 is intended to facilitate joint municipal utility services and is not intended to expand the types of services provided by local governments or their utilities. Further, nothing in chapter 258, Laws of 2011 is intended to alter the regulatory powers of cities, counties, or other local governments or state agencies that exercise such powers. Further, nothing in chapter 258, Laws of 2011 may be construed to alter the underlying authority of the units of local government that enter into agreements under chapter 258, Laws of 2011 or to diminish in any way the authority of local governments to enter into agreements under chapter 39.34 RCW or other applicable law.
[ 2011 c 258 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Agreement" means a joint municipal utility services agreement, among members, that forms an authority, as more fully described in this chapter.
(2) "Authority" means a joint municipal utility services authority formed under this chapter.
(3) "Board of directors" or "board" means the board of directors of an authority.
(4) "Member" means a city, town, county, water-sewer district, public utility district, other special purpose district, municipal corporation, or other unit of local government of this or another state that provides utility services, and any Indian tribe recognized as such by the United States government, that is a party to an agreement forming an authority.
(5) "Utility services," for purposes of this chapter, means any or all of the following functions: The provision of retail or wholesale water supply and water conservation services; the provision of wastewater, sewage, or septage collection, handling, treatment, transmission, or disposal services; the provision of point and nonpoint water pollution monitoring programs; the provision for the generation, production, storage, distribution, use, or management of reclaimed water; and the management and handling of stormwater, surface water, drainage, and flood waters.
[ 2011 c 258 s 2. ]
(1) An authority may be formed by two or more members pursuant to this chapter by execution of a joint municipal utility services agreement that materially complies with the requirements of RCW 39.106.050. Except as otherwise provided in RCW 39.106.080, at the time of execution of an agreement each member must be providing the type of utility service or services that will be provided by the authority. The agreement must be approved by the legislative authority of each of the members. The agreement must be filed with the Washington state secretary of state, who must provide a certificate of filing with respect to any authority. An authority shall be deemed to have been formed as of the date of that filing. The formation and activities of an authority, and the admission or withdrawal of members, are not subject to review by any boundary review board. Any amendments to an agreement must be filed with the Washington state secretary of state, and will become effective on the date of filing.
(2) An authority is a municipal corporation. Subject to RCW 39.106.040(3), the provisions of a joint municipal utility services agreement, and any limitations imposed pursuant to RCW 39.106.050: (a) An authority may perform or provide any or all of the utility service or services that all of its members, other than tribal government members, perform or provide under applicable law; and (b) in performing or providing those utility services, an authority may exercise any or all of the powers described in RCW 39.106.040(1).
(3) An authority shall be entitled to all the immunities and exemptions that are available to local governmental entities under applicable law, including without limitation the provisions of chapter 4.96 RCW. Notwithstanding this subsection (3), if all of an authority's members are the same type of Washington local government entity, then the immunities and exemptions available to that type of entity shall govern.
(4) Nothing in this chapter shall diminish a member's powers in connection with its provision or management of utility services, or its taxing power with respect to those services, nor does this chapter diminish in any way the authority of local governments to enter into agreements under chapter 39.34 RCW or other applicable law.
(5) Nothing in this chapter shall impair or diminish a valid water right, including rights established under state law and rights established under federal law.
[ 2011 c 258 s 3. ]
(1) For the purpose of performing or providing utility services, and subject to subsection (3) of this section and RCW 39.106.050, an authority has and is entitled to exercise the following powers:
(a) To sue and be sued, complain and defend, in its corporate name;
(b) To have a corporate seal which may be altered at pleasure, and to use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced;
(c) To purchase, take, receive, take by lease, condemn, receive by grant, or otherwise acquire, and to own, hold, improve, use, operate, maintain, add to, extend, and fully control the use of and otherwise deal in and with, real or personal property or property rights, including without limitation water and water rights, or other assets, or any interest therein, wherever situated;
(d) To sell, convey, lease out, exchange, transfer, surplus, and otherwise dispose of all or any part of its property and assets;
(e) To incur liabilities for any of its utility services purposes, to borrow money at such rates of interest as the authority may determine, to issue its bonds, notes, and other obligations, and to pledge any or all of its revenues to the repayment of bonds, notes, and other obligations;
(f) To enter into contracts for any of its utility services purposes with any individual or entity, both public and private, and to enter into intergovernmental agreements with its members and with other public agencies;
(g) To be eligible to apply for and to receive state, federal, and private grants, loans, and assistance that any of its members are eligible to receive in connection with the development, design, acquisition, construction, maintenance, and/or operation of facilities and programs for utility services;
(h) To adopt and alter rules, policies, and guidelines, not inconsistent with this chapter or with other laws of this state, for the administration and regulation of the affairs and assets of the authority;
(i) To obtain insurance, to self-insure, and to participate in pool insurance programs;
(j) To indemnify any officer, director, employee, volunteer, or former officer, employee, or volunteer, or any member, for acts, errors, or omissions performed in the exercise of their duties in the manner approved by the board;
(k) To employ such persons, as public employees, that the board determines are needed to carry out the authority's purposes and to fix wages, salaries, and benefits, and to establish any bond requirements for those employees;
(l) To provide for and pay pensions and participate in pension plans and other benefit plans for any or all of its officers or employees, as public employees;
(m) To determine and impose fees, rates, and charges for its utility services;
(n) Subject to RCW 39.106.050(20), to have a lien for delinquent and unpaid rates and charges for retail connections and retail utility service to the public, together with recording fees and penalties (not exceeding eight percent) determined by the board, including interest (at a rate determined by the board) on such rates, charges, fees, and penalties, against the premises to which such service has been furnished or is available, which lien shall be superior to all other liens and encumbrances except general taxes and local and special assessments;
(o) To make expenditures to promote and advertise its programs, educate its members, customers, and the general public, and provide and support conservation and other practices in connection with providing utility services;
(p) With the consent of the member within whose geographic boundaries an authority is so acting, to compel all property owners within an area served by a wastewater collection system owned or operated by an authority to connect their private drain and sewer systems with that system, or to participate in and follow the requirements of an inspection and maintenance program for on-site systems, and to pay associated rates and charges, under such terms and conditions, and such penalties, as the board shall prescribe by resolution;
(q) With the consent of the member within whose geographic or service area boundaries an authority is so acting, to create local improvement districts or utility local improvement districts, to impose and collect assessments and to issue bonds and notes, all consistent with the statutes governing local improvement districts or utility local improvement districts applicable to the member that has provided such consent. Notwithstanding this subsection (1)(q), the guaranty fund provisions of chapter 35.54 RCW shall not apply to a local improvement district created by an authority;
(r) To receive contributions or other transfers of real and personal property and property rights, money, other assets, and franchise rights, wherever situated, from its members or from any other person;
(s) To prepare and submit plans relating to utility services on behalf of itself or its members;
(t) To terminate its operations, wind up its affairs, dissolve, and provide for the handling and distribution of its assets and liabilities in a manner consistent with the applicable agreement;
(u) To transfer its assets, rights, obligations, and liabilities to a successor entity, including without limitation a successor authority or municipal corporation;
(v) Subject to subsection (3) of this section, RCW 39.106.050, and applicable law, to have and exercise any other corporate powers capable of being exercised by any of its members in providing utility services.
(2) An authority, as a municipal corporation, is subject to the public records act (chapter 42.56 RCW), the open public meetings act (chapter 42.30 RCW), and the code of ethics for municipal officers (chapter 42.23 RCW), and an authority is subject to audit by the state auditor under chapter 43.09 RCW.
(3) In the exercise of its powers in connection with performing or providing utility services, an authority is subject to the following:
(a) An authority has no power to levy taxes.
(b) An authority has the power of eminent domain as necessary to perform or provide utility services, but only if all of its members, other than tribal government members, have powers of eminent domain. Further, an authority may exercise the power of eminent domain only pursuant to the provisions of Washington law, in the manner and subject to the statutory limitations applicable to one or more of its Washington local government members. If all of its members are the same type of Washington governmental entity, then the statute governing the exercise of eminent domain by that type of entity shall govern. An authority may not exercise the power of eminent domain with respect to property owned by a city, town, county, special purpose district, authority, or other unit of local government, but may acquire or use such property under mutually agreed upon terms and conditions.
(c) An authority may pledge its revenues in connection with its obligations, and may acquire property or property rights through and subject to the terms of a conditional sales contract, a real estate contract, or a financing contract under chapter 39.94 RCW, or other federal or state financing program. However, an authority must not in any other manner mortgage or provide security interests in its real or personal property or property rights. As a local governmental entity without taxing power, an authority may not issue general obligation bonds. However, an authority may pledge its full faith and credit to the payment of amounts due pursuant to a financing contract under chapter 39.94 RCW or other federal or state financing program.
(d) In order for an authority to provide a particular utility service in a geographical area, one or more of its members must have authority, under applicable law, to provide that utility service in that geographical area.
(e) As a separate municipal corporation, an authority's obligations and liabilities are its own and are not obligations or liabilities of its members except to the extent and in the manner established under the provisions of an agreement or otherwise expressly provided by contract.
(f) Upon its dissolution, after provision is made for an authority's liabilities, remaining assets must be distributed to a successor entity, or to one or more of the members, or to another public body of this state.
[ 2011 c 258 s 4. ]
A joint municipal utility services agreement that forms and governs an authority must include the elements described in this section, together with such other provisions an authority's members deem appropriate. However, the failure of an agreement to include each and every one of the elements described in this section shall not render the agreement invalid. An agreement must:
(1) Identify the members, together with conditions upon which additional members that are providing utility services may join the authority, the conditions upon which members may or must withdraw, including provisions for handling of relevant assets and liabilities upon a withdrawal, and the effect of boundary adjustments of the authority and boundary adjustments between or among members;
(2) State the name of the authority;
(3) Describe the utility services that the authority will provide;
(4) Specify how the number of directors of the authority's board will be determined, and how those directors will be appointed. Each director on the board of an authority must be an elected official of a member. Except as limited by an agreement, an authority's board may exercise the authority's powers;
(5) Describe how votes of the members represented on the authority's board are to be weighted, and set forth any limitations on the exercise of powers of the authority's board, which may include, by way of example, requirements that certain decisions be made by a supermajority of members represented on an authority's board, based on the number of members and/or some other factor or factors, and that certain decisions be ratified by the legislative authorities of the members;
(6) Describe how the agreement is to be amended;
(7) Describe how the authority's rules may be adopted and amended;
(8) Specify the circumstances under which the authority may be dissolved, and how it may terminate its operations, wind up its affairs, and provide for the handling, assumption, and/or distribution of its assets and liabilities;
(9) List any legally authorized substantive or corporate powers that the authority will not exercise;
(10) Specify under which personnel laws the authority will operate, which may be the personnel laws applicable to any one of its Washington local government members;
(11) Specify under which public works and procurement laws the authority will operate, which may be the public works and procurement laws applicable to any one of its Washington local government members;
(12) Consistent with RCW 39.106.040(3)(b), specify under which Washington eminent domain laws any condemnations by the authority will be subject;
(13) Specify how the treasurer of the authority will be appointed, which may be an officer or employee of the authority, the treasurer or chief finance officer of any Washington local government member, or the treasurer of any Washington county in which any member of the authority is located. However, if the total number of utility customers of all of the members of an authority does not exceed two thousand five hundred, the treasurer of an authority must be either the treasurer of any member or the treasurer of a county in which any member of the authority is located;
(14) Specify under which Washington state statute or statutes surplus property of the authority will be disposed;
(15) Describe how the authority's budgets will be prepared and adopted;
(16) Describe how any assets of members that are transferred to or managed by the authority will be accounted for;
(17) Generally describe the financial obligations of members to the authority;
(18) Describe how rates and charges imposed by the authority, if any, will be determined. An agreement may specify a specific Washington state statute applicable to one or all of its members for the purpose of governing rate-setting criteria applicable to retail customers, if any;
(19) Specify the Washington state statute or statutes under which bonds, notes, and other obligations of the authority will be issued for the purpose of performing or providing utility services, which must be a bond issuance statute applicable to one or more of its members other than a tribal member. If all of its members are the same type of Washington governmental entity, then a Washington state statute or statutes governing the issuance of bonds, notes, and other obligations issued by that type of entity shall govern;
(20) Specify under which Washington state statute or statutes any liens of an authority shall be exercised, which must be statutes applicable to the type or types of utility service for which the lien shall apply. Further, if all of its members are the same type of Washington governmental entity, then the statute or statutes governing that type of entity shall govern;
(21) Include any other provisions deemed necessary and appropriate by the members.
[ 2011 c 258 s 5. ]
For the purpose of assisting the authority in providing utility services, the members of an authority are authorized, with or without payment or other consideration and without submitting the matter to the electors of those members, to lease, convey, transfer, assign, or otherwise make available to an authority any money, real or personal property or property rights, other assets including licenses, water rights (subject to applicable law), other property (whether held by a member's utility or by a member's general government), or franchises or rights thereunder.
[ 2011 c 258 s 6. ]
(1) As a municipal corporation, the property of an authority is exempt from taxation.
(2) An authority is entitled to all of the exemptions from or preferences with respect to taxes that are available to any or all of its members, other than a tribal member, in connection with the provision or management of utility services.
[ 2011 c 258 s 7. ]
(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. ]
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. ]
(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.]
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.
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.
(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.
(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.
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.
(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.
(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.
(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.
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.
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.
(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.
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.
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.
(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.
(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. ]
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. ]
(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. ]
(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. ]
(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. ]
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. ]
(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. ]
(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. ]
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. ]
(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. ]
(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. ]
(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. ]
(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. ]
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. ]
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. ]
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. ]
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. ]
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. ]
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. ]
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. ]
(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. ]
(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. ]
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. ]
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. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Assessed value of real property" means the valuation of taxable real property as placed on the last completed assessment roll prepared pursuant to Title 84 RCW.
(2) "Consumer price index" means the consumer price index for all urban consumers in the west region as most recently published by the United States bureau of labor statistics.
(3) "Increment area" means the geographic area within which regular property tax revenues are to be apportioned to pay public improvement costs, as authorized under this chapter.
(4) "Increment value" means 100 percent of any increase in the true and fair value of real property in an increment area that is placed on the tax rolls after the increment area takes effect. The increment value shall not be less than zero.
(5) "Local government" means any city, town, county, port district, or any combination thereof.
(6) "Ordinance" means any appropriate method of taking legislative action by a local government, including a resolution adopted by a port district organized under Title 53 RCW.
(7) "Public improvement costs" means the costs of:
(a) Design, planning, acquisition, required permitting, required environmental studies and mitigation, seismic studies or surveys, archaeological studies or surveys, land surveying, site acquisition, including appurtenant rights and site preparation, construction, reconstruction, rehabilitation, improvement, expansion, and installation of public improvements, and other directly related costs;
(b) Relocating, maintaining, and operating property pending construction of public improvements;
(c) Relocating utilities as a result of public improvements;
(d) Financing public improvements, including capitalized interest for up to six months following completion of construction, legal and other professional services, taxes, insurance, principal and interest costs on general indebtedness issued to finance public improvements, and any necessary debt service reserves;
(e) Expenses incurred in revaluing real property for the purpose of determining the tax allocation base value by a county assessor under chapter 84.41 RCW and expenses incurred by a county treasurer under chapter 84.56 RCW in apportioning the taxes and complying with this chapter and other applicable law. For purposes of this subsection (7)(e), "expenses incurred" means actual staff and software costs directly related to the implementation and ongoing administration of increment areas under this chapter;
(f) Administrative expenses and feasibility studies reasonably necessary, including related costs that may have been incurred before adoption of the ordinance authorizing the public improvements and the use of tax increment financing to fund the costs of the public improvements; and
(g) Funding for interlocal agreements, revenue sharing agreements, and mitigation to impacted taxing districts as allowed in RCW 39.114.020.
(8) "Public improvements" means:
(a) Infrastructure improvements owned by a state or local government within or outside of and serving the increment area and real property owned or acquired by a local government within the increment area including:
(i) Street and road construction;
(ii) Water and sewer system construction, expansion, and improvements;
(iii) Sidewalks and other nonmotorized transportation improvements and streetlights;
(iv) Parking, terminal, and dock facilities;
(v) Park and ride facilities or other transit facilities;
(vi) Park and community facilities and recreational areas;
(vii) Stormwater and drainage management systems;
(viii) Electric, broadband, or rail service;
(ix) Mitigation of brownfields;
(x) Fire, life, and public safety facilities and equipment; and
(b) Expenditures for any of the following purposes:
(i) Purchasing, rehabilitating, retrofitting for energy efficiency, and constructing housing for the purpose of creating or preserving long-term affordable housing;
(ii) Purchasing, rehabilitating, retrofitting for energy efficiency, and constructing child care facilities serving children and youth that are low-income, homeless, or in foster care;
(iii) Providing maintenance and security for the public improvements;
(iv) Historic preservation activities authorized under RCW 35.21.395; or
(v) Relocation, renovation, or construction of a government-owned facility.
(9) "Real property" means:
(a) Real property as defined in RCW 84.04.090; and
(b) Privately owned or used improvements located on publicly owned land that are subject to property taxation or leasehold excise tax.
(10) "Regular property taxes" means regular property taxes as defined in RCW 84.04.140, except: (a) Regular property taxes levied by port districts or public utility districts to the extent necessary for the payments of principal and interest on general obligation debt; and (b) 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. "Regular property taxes" does not include excess property taxes levied by local school districts or emergency medical care and service taxes levied under RCW 84.52.069.
(11) "Tax allocation base value" means the assessed value of real property located within an increment area for taxes imposed in the year in which the increment area takes effect.
(12) "Tax allocation revenues" means those revenues derived from the imposition of regular property taxes on the increment value.
(13) "Taxing district" means a governmental entity that levies or has levied for it regular property taxes upon real property located within a proposed or approved increment area.
[ 2026 c 141 s 1; 2024 c 236 s 1; 2023 c 354 s 1; 2021 c 207 s 1. ]
NOTES:
Modification—Impact—2026 c 141: "The provisions of this act do not modify or otherwise impact increment areas in place prior to June 2, 2026." [ 2026 c 141 s 8.]
Effective date—2026 c 141: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect June 2, 2026." [ 2026 c 141 s 9.]
Effective date—2023 c 354: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 9, 2023]." [ 2023 c 354 s 7.]
(1) A local government may designate an increment area under this chapter and use the tax allocation revenues to pay public improvement costs, subject to the following conditions:
(a) The local government must adopt an ordinance designating an increment area within its boundaries and describing the public improvements proposed to be paid for, or financed with, tax allocation revenues;
(b) The local government may not designate increment area boundaries such that the entirety of its territory falls within an increment area;
(c)(i) Except as provided in (c)(ii) of this subsection, the increment area may not have an assessed valuation of more than $200,000,000 as adjusted annually by the consumer price index, beginning on June 1, 2027, or more than 20 percent of the sponsoring jurisdiction's total assessed valuation, whichever is less, when the ordinance is passed. If a sponsoring jurisdiction creates two increment areas, the total combined assessed valuation in both of the two increment areas may not equal more than $200,000,000 as adjusted annually by the consumer price index, beginning on June 1, 2027, or more than 20 percent of the sponsoring jurisdiction's total assessed valuation, whichever is less, when the ordinances are passed creating the increment areas.
(ii) During the 2026 fiscal year, a sponsoring jurisdiction may enact a tax increment area or areas with a combined assessed valuation greater than $200,000,000 but no more than $500,000,000 if:
(A) The sponsoring jurisdiction is a city with a population over 150,000 but less than 170,000 and is located in a county with a population of over 1,500,000;
(B) The tax increment area is connected to Interstate 405 and the transportation-related public improvements that will be funded enhance the integration and connection of neighborhoods within and adjacent to the increment area;
(C) The sponsoring jurisdiction enacted an ordinance designating the increment area no later than June 30, 2026; and
(D) A governing body of any taxing district within the increment area approves by a majority vote, and according to the governing body's ordinance and publication procedures, the taxing district's partial or full participation in the tax increment project. If the governing body does not approve its participation, the taxing district's property taxes are not subject to apportionment under this chapter and the taxing district is excluded from the provisions of this section;
(d) Except as otherwise provided in (c)(ii) of this subsection, a local government can create no more than two active increment areas at any given time. Active increment areas may not physically overlap by including the same land in more than one increment area created by any local government at any time;
(e) The ordinance must set a sunset date for the increment area, which must be the earlier of no more than 25 years after the first year in which tax allocation revenues are collected from the increment area or the date on which the obligations issued in reliance on the tax allocation revenues to finance the public improvements are no longer outstanding;
(f) The ordinance must identify the public improvements to be financed and indicate whether the local government intends to issue bonds or other obligations, payable in whole or in part, from tax allocation revenues to finance the public improvement costs, and must estimate the maximum amount of obligations contemplated;
(g) The ordinance must provide that the increment area takes effect on June 1st following the adoption of the ordinance in (a) of this subsection;
(h) The sponsoring jurisdiction may not add additional public improvements to the project after adoption of the ordinance creating the increment area or change the boundaries of the increment area. The sponsoring jurisdiction may expand, alter, or add to the original public improvements when doing so is necessary to assure the originally approved improvements can be constructed or operated;
(i) The ordinance must impose a deadline by which commencement of construction of the public improvements shall begin, which deadline must be no more than five years into the future and for which extensions not to exceed two years shall be made available for good cause;
(j) The local government must make a finding that:
(i) The public improvements proposed to be paid or financed with tax allocation revenues are necessary to encourage private development within the increment area and to increase the assessed value of real property within the increment area;
(ii) Private development that is anticipated to occur within the increment area as a result of the proposed public improvements will be permitted consistent with the permitting jurisdiction's applicable zoning and development standards;
(iii) The private development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the proposed public improvements; and
(iv) The increased assessed value within the increment area that could reasonably be expected to occur without the proposed public improvements would be less than the increase in the assessed value estimated to result from the proposed development with the proposed public improvements; and
(k) The ordinance may not include areas within an increment area that already have the necessary public improvements that are required for the private development expected to be made possible by the adoption of the increment area and may not include areas within an increment area where a private building or structure is under construction, has an active application for construction, has a valid permit for construction, or is undergoing a project-level environmental review process under chapter 43.21C RCW, unless the sponsoring jurisdiction can demonstrate that the public improvements developed in the increment area are necessary for the private development of projects that are seeking permit applications or under construction at the time the increment area is approved.
(2) In considering whether to designate an increment area, the legislative body of the local government must prepare a project analysis that shall include, but need not be limited to, the following:
(a) A statement of objectives of the local government for the designated increment area;
(b) A statement as to the property within the increment area, if any, that the local government may intend to acquire;
(c) The duration of the increment area;
(d) Identification of all parcels to be included in the area;
(e) A description of the expected private development within the increment area, including a comparison of scenarios with the proposed public improvements and without the proposed public improvements;
(f) A list of the public improvements, including individual improvements in priority order with each improvement's nexus to encouraging private development, estimated completion date, estimated public improvement costs, proposed funding sources, and the estimated amount of bonds or other obligations expected to be issued to finance the public improvement costs and repaid with tax allocation revenues that can reasonably be expected to be completed within the first seven years of the project. The list should reflect the capital plans of the sponsoring jurisdiction and the reliance of those plans on investments by partners. When capital plans change, the sponsoring jurisdiction may reprioritize the list of public improvements. When the list is not reflected in the capital plans of the sponsoring jurisdiction, those public improvements shall be allowable only if the governing body makes a finding that the public improvements serve the goals and objectives of the capital plans;
(g) The assessed value of real property listed on the tax roll as certified by the county assessor under RCW 84.52.080 from within the increment area and an estimate of the increment value and tax allocation revenues expected to be generated;
(h) An estimate of the job creation reasonably expected to result from the public improvements and the private development expected to occur in the increment area;
(i) An assessment of any impacts on the following:
(i) Affordable and low-income housing;
(ii) The local business community;
(iii) The local school districts; and
(iv) The taxing districts; and
(j) The assessment of impacts under (i) of this subsection (2) must be done in consultation with any impacted taxing district consistent with RCW 39.114.040 and include:
(i) An estimate of the revenue impacts to each taxing district in the area, including tax allocation revenues, levy rate adjustments, and other revenues including, but not limited to, impact fees, fire benefit charges, sales tax, and utility tax, over the term of the increment area; and
(ii) Any necessary mitigation to the taxing districts.
(3) The local government may charge a private developer, who agrees to participate in creating the increment area, a fee sufficient to cover the cost of the project analysis and establishing the increment area, including staff time, professionals and consultants, and other administrative costs related to establishing the increment area.
(4) Nothing in this section prohibits a local government from entering into an agreement under chapter 39.34 RCW with another local government for the administration or other activities related to tax increment financing authorized under this section.
(5)(a) If the project analysis indicates that an increment area will impact at least 20 percent of the assessed value in a public hospital district, fire protection district, or regional fire protection service authority, or if the public hospital district's or the fire service agency's annual report, or other governing board-adopted capital facilities plan, demonstrates an increase in the level of service directly related to the increased development in the increment area, the local government must enter into negotiations for a mitigation plan with the impacted public hospital district, fire protection district, or regional fire protection service authority to address level of service issues in the increment area.
(b) If the parties cannot agree pursuant to (a) of this subsection (5), the parties must proceed to arbitration to determine the appropriate mitigation plan. The board of arbitrators must consist of three persons: One appointed by the local government seeking to designate the increment area and one appointed by the junior taxing district, both of whom must be appointed within 60 days of the date when arbitration is requested, and a third arbitrator who must be appointed by agreement of the other two arbitrators within 90 days of the date when arbitration is requested. If the two are unable to agree on the appointment of the third arbitrator within this 90-day period, then the third arbitrator must be appointed by a judge in the superior court of the county within which the largest portion of the increment area is located. The determination by the board of arbitrators is binding on both the local government seeking to impose the increment area and the junior taxing district.
(6)(a) For increment areas that take effect after June 1, 2026, the local government designating the increment area and any impacted taxing district must begin negotiations to develop an agreement if such impacted taxing district, within 30 days of receiving the project analysis as required in subsection (8) of this section, indicates to the local government designating the increment area any of the following conditions:
(i) The increment area will create an increase in residential development of at least 50 units or impact at least 10 percent of the assessed value in the impacted taxing district;
(ii) The impacted taxing district can demonstrate or has forecasted an increase in the service demands directly related to the increased development in the increment area;
(iii) The project analysis forecasts a loss of property tax revenue over the term of the increment area; or
(iv) A taxing district is subject to more than one tax increment area and the proposed increment area will result in more than 20 percent of the taxing district's assessed value being subject to tax increment areas.
(b) If voters in the impacted taxing district elect to authorize an increase in regular property tax levies under RCW 84.55.050, the impacted taxing district and the local government designating an increment area must review the agreement and address impacts related to the levy lid lift. Either party may initiate a review of any agreement no more frequently than every five years. Subsequent revisions of an agreement are not subject to arbitration.
(c) If the parties cannot agree to a final agreement pursuant to (a) of this subsection (6), the parties must proceed to mediation within 30 days of the end of the notice and consultation period in RCW 39.114.040 to further attempt to reach an agreement.
(d) If, after 30 days, the parties cannot agree in mediation, the parties must proceed to arbitration within 90 days of the end of the notice and consultation period in RCW 39.114.040 to determine the appropriate mitigation plan. The board of arbitrators must consist of three persons: One appointed by the local government seeking to designate the increment area and one appointed by the impacted taxing district, both of whom must be appointed within 30 days of the date when arbitration is requested, and a third arbitrator who must be appointed by agreement of the other two arbitrators within 30 days of the date when arbitration is requested. If the two are unable to agree on the appointment of the third arbitrator within this 60-day period, then the third arbitrator must be appointed by a judge in the superior court of the county within which the largest portion of the increment area is located. The determination by the board of arbitrators is binding on both the local government seeking to impose the increment area and the impacted taxing district. In making a determination, the board of arbitrators must consider:
(i) Whether new service demands will be created directly by the new development in the increment area that are not funded by the corresponding revenue generated by the new development;
(ii) Whether the impacted taxing district will experience a loss of property tax revenue beyond the base level and has taken steps to address impacts to property tax revenues as allowed under RCW 84.55.010;
(iii) How the increment area may impact taxpayers outside of the increment area;
(iv) Other revenues generated for the impacted taxing district in the increment area; and
(v) The overall 25-year impact of the increment area on the impacted taxing district, including the broader economic impacts of the development.
(e) Mitigation may include reductions or suspensions in the percentage or term of tax allocation revenues transferred to the local government designating the increment area, the use of tax allocation revenues to fund public improvements to serve the projected development in the increment area, and other provisions designed to mitigate the impacts on taxing districts. Mitigation may not include allowing a taxing district to opt out or be removed from participation in the tax allocation and increment area. Any decision must be consistent with the uniformity requirement of Article VII, section 1 of the state Constitution.
(7) The local government must reimburse the assessor and treasurer for their costs as provided in RCW 39.114.010(7)(e).
(8) Prior to the adoption of an ordinance authorizing creation of an increment area, the local government must:
(a) Hold at least two public hearings for the community solely on the tax increment project that include the description of the increment area, the public improvements proposed to be financed with the tax allocation revenues, and a detailed estimate of tax revenues for the participating local governments and taxing districts, including the amounts allocated to the public improvements. The hearings must be announced at least two weeks prior to the date being held, including publishing in a legal newspaper of general circulation and posting information on the local government website and all local government social media sites, and must occur no earlier than 90 days after submitting the project analysis to the office of the state treasurer and all local governments and taxing districts impacted by the increment area;
(b) Submit the project analysis to all local governments and taxing districts impacted by the increment [area] at the same time as submitting the analysis to the office of the treasurer; and
(c) Submit the project analysis to the office of the treasurer for review and consider any comments that the treasurer may provide upon completion of their review of the project analysis as provided under this subsection. The treasurer must complete the review within 90 days of receipt of the project analysis, may receive comments from taxing districts, and may consult with other agencies and outside experts as necessary. Upon completing their review, the treasurer must promptly provide to the local government, and any taxing district that submitted comments, any comments regarding suggested revisions or enhancements to the project analysis that the treasurer deems appropriate based on the requirements in subsection (2) of this section.
[ 2026 c 141 s 2; 2025 c 417 s 1310; 2024 c 236 s 2; 2023 c 354 s 2; 2021 c 207 s 2. ]
NOTES:
Modification—Impact—Effective date—2026 c 141: See notes following RCW 39.114.010.
Findings—Intent—2025 c 417: See note following RCW 82.38.030.
Effective date—2023 c 354: See note following RCW 39.114.010.
(1) Public improvements that are financed under this chapter may be undertaken and coordinated with other programs or efforts undertaken by the local government and other taxing districts and may be funded in part from revenue sources other than tax allocation revenues.
(2) Public improvements that are constructed by a private developer must meet all applicable state and local laws.
(3) A private developer may construct public improvements and receive payment from tax allocation revenues received by the local government as part of a reimbursement agreement between the parties. Any reimbursement paid to the developer may be secured by tax allocation revenues received by the local government.
[ 2026 c 141 s 3; 2021 c 207 s 3. ]
NOTES:
Modification—Impact—Effective date—2026 c 141: See notes following RCW 39.114.010.
The local government designating the increment area must:
(1) Provide written notice to the governing body of each taxing district within which the increment area is located a minimum of 180 days before submitting the project analysis to the office of the state treasurer as required in RCW 39.114.020(8)(c) and offer to consult with the affected taxing district within 30 days for the purpose of discussing the proposed increment area and the development of the project analysis, including revenue and mitigation impacts;
(2) Publish notice in a legal newspaper of general circulation within the jurisdiction of the local government at least two weeks before the date on which the ordinance authorizing creation of an increment area is adopted that describes the public improvements, describes the boundaries of the increment area, and identifies the location and times where the ordinance and other public information concerning the public improvement may be inspected;
(3) Deliver a certified copy of the adopted ordinance to the county treasurer, the county assessor, and the governing body of each taxing district within which the increment area is located at the respective addresses specified pursuant to RCW 42.56.040 within 10 days of the date on which the ordinance was adopted; and
(4)(a) Prepare and make available to the residents of all impacted taxing jurisdictions an annual report on the status of the increment area, including:
(i) Progress on construction of public improvements funded by the increment value;
(ii) The economic benefits created in the increment area;
(iii) The status of mitigation to impacted taxing districts;
(iv) How the increment area has impacted tax revenues and rates in the impacted taxing districts; and
(b) Request and include in its annual report any statements provided by impacted taxing districts.
[ 2026 c 141 s 4; 2024 c 236 s 3; 2023 c 354 s 3; 2021 c 207 s 4. ]
NOTES:
Modification—Impact—Effective date—2026 c 141: See notes following RCW 39.114.010.
Effective date—2023 c 354: See note following RCW 39.114.010.
Apportionment of taxes shall be as follows:
(1) Commencing in the calendar year immediately following the calendar year in which the increment area takes effect in accordance with RCW 39.114.020, the county treasurer shall distribute receipts from regular property taxes imposed on real property located in the increment area as follows:
(a) Each taxing district shall receive that portion of its regular property taxes produced by the rate of tax levied by or for the taxing district on the tax allocation base value for that increment area;
(i) This apportionment does not interfere with the calculation and implementation of a taxing district's highest allowable levy per RCW 84.55.010 subject to action by its governing body;
(ii) If the voters of a taxing district subsequently approve an increase in regular property tax levies under RCW 84.55.050, the tax allocation base value used to calculate the apportionment applicable to that taxing district must be increased in the year following the voter approval by an amount equal to (A) the incremental increase in the levy rate approved by the voters, multiplied by (B) the total assessed value within the district for that year. For this purpose, the incremental increase in the levy rate means the difference between the maximum voter-approved levy rates set forth in the ballot measure and the maximum levy rate that would have been available for that year but for the voter approval of the ballot measure;
(iii) The amount of the increased tax allocation base value calculated in (a)(ii) of this subsection shall remain fixed at that increased level for so long as the voter authorization for the increased levy remains in effect, in accordance with the ballot proposition. Upon expiration of the voter authorization, the tax allocation base value for that district must be recalculated as if the ballot proposition had not been approved;
(b) The local government that designated the increment area shall be entitled to receive an additional amount equal to the amount derived from the regular property taxes levied by or for each taxing district upon the increment value within the increment area. The local government that designated the increment area shall receive no more than is needed to pay or repay costs directly associated with the public improvements identified in the approved ordinance and may agree to receive less than the full amount of this portion, as long as bond debt service, reserve, and other bond covenant requirements are satisfied, in which case the balance of these tax receipts shall be allocated to the taxing districts that imposed regular property taxes, or have regular property taxes imposed for them, in the increment area for collection that year in proportion to their regular tax levy rates for collection that year. The local government 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 local government or its agent under this subsection (1)(b) may only be expended to finance public improvement costs associated with the public improvements financed in whole or in part by tax increment financing; and
(c) This section shall not apply to any receipts from the regular property taxes levied by:
(i) The state for the support of the common schools under RCW 84.52.065;
(ii) Local school district excess levies and emergency medical care and service levies under RCW 84.52.069; and
(iii) Port districts or public utility districts specifically for the purpose of making required payments of principal and interest or general indebtedness.
(2) The apportionment of tax allocation revenues must cease when the taxing district certifies to the county assessor in writing that tax allocation revenues are no longer necessary or obligated to pay public improvement costs, but in no event shall the apportionment of tax allocation revenues continue beyond the sunset date established pursuant to RCW 39.114.020(1)(e). Any excess tax allocation revenues and earnings on the tax allocation revenues remaining at the time the apportionment of tax receipts terminates must be returned to the county treasurer and distributed to the taxing districts that imposed regular property taxes, or had regular property taxes imposed for it, in the increment area for collection that year, in proportion to the rates of their regular property tax levies for collection that year.
(3) The apportionment and distribution of portions of the regular property taxes levied by or for each taxing district upon the increment value within the increment area pursuant to and subject to the requirements of this chapter is declared to be a public purpose of and benefit each such taxing district.
(4) The apportionment and distribution of portions of the regular property taxes levied by or for each taxing district upon the increment value within the increment area pursuant to this section shall not affect or be deemed to affect the rate of taxes levied by or within any such taxing district or the consistency of any such levies with the uniformity requirement of Article VII, section 1 of the state Constitution.
(5)(a) For a local government having a designated increment area under this chapter as of May 9, 2023, the county assessor must adjust the tax allocation base value for that increment area to include the assessed value of any privately owned improvements located on publicly owned land for taxes imposed in the year in which the increment area was first designated. However, no adjustment is required if the increment area does not include any privately owned improvements located on publicly owned land subject to property taxation as of the date the increment area became effective.
(b) The adjusted tax allocation base value under this subsection (5) does not impact any apportionment and distribution under this section occurring in calendar years before calendar year 2024.
[ 2026 c 141 s 5; 2023 c 354 s 4; 2021 c 207 s 5. ]
NOTES:
Modification—Impact—Effective date—2026 c 141: See notes following RCW 39.114.010.
Effective date—2023 c 354: See note following RCW 39.114.010.
(1) A local government designating an increment area may incur general indebtedness, and issue general obligation bonds or notes to finance the public improvements and retire the indebtedness, in whole or in part, from tax allocation revenues it receives.
(2) The general indebtedness incurred under subsection (1) of this section may be payable from tax allocation revenues and any other sources available to the local government for payment of the public improvement costs, including without limitation: Other tax revenues; the full faith and credit of the local government; nontax income, revenues, fees, and rents from the public improvements; and contributions, grants, and nontax resources.
(3) In addition to the requirements in subsection (1) of this section, a local government designating an increment area and authorizing the use of tax increment financing may require the nonpublic participant to provide adequate security to protect the public investment in the public improvement within the increment area.
[ 2021 c 207 s 6. ]
A direct or collateral attack on the designation of the increment area or the allocation of regular property tax revenues in conformance with applicable legal requirements, including this chapter, may not be commenced more than 30 days after adoption of the ordinance as required by RCW 39.114.020.
[ 2021 c 207 s 7. ]
(1) A local government may issue revenue bonds to fund revenue-generating public improvements, or portions of public improvements, that are located within an increment area and that it is authorized to provide or operate. Whenever revenue bonds are to be issued, the legislative authority of the local government shall create or have created a special fund or funds from which, along with any reserves created pursuant to RCW 39.44.140, the principal and interest on these revenue bonds shall exclusively be payable. The legislative authority of the local government may obligate the local government to set aside and pay into the special fund or funds a fixed proportion or a fixed amount of the revenues from the public improvements that are funded by the revenue bonds. This amount or proportion is a lien and charge against these revenues, subject only to operating and maintenance expenses. The local government shall have due regard for the cost of operation and maintenance of the public improvements that are funded by the revenue bonds, and shall not set aside into the special fund or funds a greater amount or proportion of the revenues that in its judgment will be available over and above the cost of maintenance and operation and the amount or proportion, if any, of the revenue previously pledged. The local government may also provide that revenue bonds payable out of the same source or sources of revenue may later be issued on a parity with any revenue bonds being issued and sold.
(2) Revenue bonds issued under this section are not an indebtedness of the local government issuing the bonds, and the interest and principal on the bonds shall only be payable from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The owner or bearer of a revenue bond or any interest coupon issued under this section shall not have any claim against the local government arising from the bond or coupon except for payment from the revenues lawfully pledged to meet the principal and interest requirements and any reserves created pursuant to RCW 39.44.140. The substance of the limitations included in this subsection shall be plainly printed, written, or engraved on each bond issued under this section.
(3) Revenue bonds with a maturity in excess of 25 years shall not be issued under this section.
(4) The legislative authority of the local government shall by resolution determine for each revenue bond issue the amount, date, form, terms, conditions, denominations, maximum fixed or variable interest rate or rates, maturity or maturities, redemption rights, registration privileges, manner of execution, manner of sale, callable provisions, if any, and covenants including the refunding of existing revenue bonds. Facsimile signatures may be used on the bonds and any coupons. Refunding revenue bonds may be issued in the same manner as revenue bonds are issued.
(5) The authority to issue revenue bonds under this section is supplementary and in addition to any authority otherwise existing. Nothing in this section limits a local government in the issuance of revenue bonds that are otherwise authorized by law for the construction of additions, betterments, or extensions of utilities within the increment area.
(6) Notwithstanding anything to the contrary in this section, revenue bonds issued to finance public improvements may be issued in accordance with chapter 39.46 RCW.
[ 2021 c 207 s 8. ]
This chapter supplements and neither restricts nor limits any powers that the state or any local government might otherwise have under any laws of this state.
[ 2021 c 207 s 9. ]
The legislature finds and declares that:
(1) Washington state, through its extensive purchasing power, can reduce embodied carbon in the built environment, improve human and environmental health, grow economic competitiveness, and promote high labor standards in manufacturing by incorporating climate and other types of pollution impacts and the quality of working conditions into the procurement process.
(2) Washington state is home to multiple world-class manufacturers that are investing heavily in reducing the carbon intensity of their products and that provide family-wage jobs that are the foundation for a fair and robust economy. Washington's procurement practices should encourage manufacturers and others to meet high environmental and labor standards and reduce their environmental footprint.
(3) The private sector is increasingly demanding low carbon building materials that support good jobs in manufacturing. This market demand has rapidly accelerated innovation and led to increased production of low carbon building materials. As one of the largest consumers of building materials, Washington state has an opportunity to leverage its purchasing power to do even more to send a clear signal to the market of the growing demand for low carbon building materials.
(4) With its low carbon electric grid and highly skilled workforce, Washington state is well-positioned to capture the growing demand for low carbon building materials and create and sustain a new generation of good, high-wage clean manufacturing jobs.
(5) Washington has demonstrated a deep commitment to ensuring that the transition to a low carbon economy is fair and creates family-wage jobs. Both the clean energy transformation act and the climate commitment act tie public investments in infrastructure to reducing greenhouse gas emissions and to high road construction labor standards. Integrating manufacturing working conditions into the procurement process reaffirms and is consistent with the state's commitment to a fair transition.
(6) A robust state and domestic supply of low carbon materials is critical for building a fair economy and meeting the needs of the low carbon transition, including securing the clean energy supply chain.
(7) Environmental product declarations are the best available tool for reporting product-specific environmental impacts using a life-cycle assessment and informing the procurement of low carbon building materials. Environmental product declarations cannot be used to compare products across different product categories or different functional units.
(8) The buy clean and buy fair policies established in chapter 344, Laws of 2024 are critical to reduce embodied carbon in the built environment, a goal identified by the Washington state 2021 energy strategy to meet the state's greenhouse gas emission limits, governor Inslee's Executive Order 20-01 on state efficiency and environmental performance, and the Pacific coast collaborative's pathbreaking low carbon construction task force.
(9) Reducing embodied carbon in the built environment requires a holistic, comprehensive approach that includes designing buildings with a lower-embodied carbon footprint and making lower carbon products. Policies like the buy clean and buy fair policies established in chapter 344, Laws of 2024 are an important tool for increasing the manufacture of lower carbon products.
(10) The 2021-2023 biennium budgets made critical progress on the buy clean and buy fair policies in chapter 344, Laws of 2024 by funding the creation of a publicly accessible database to facilitate reporting and promote transparency on building materials purchased for state-funded infrastructure projects and two large buy clean and buy fair pilot projects. This ongoing work to create a database to facilitate reporting of environmental impacts and labor conditions from pilot projects has provided a strong foundation to inform future work on buy clean and buy fair policies.
(11) Providing financial assistance to small manufacturers to support the production of environmental product declarations will help small manufacturers offset costs they might incur when pursuing state contracting as a result of the requirements of chapter 344, Laws of 2024.
[ 2024 c 344 s 1. ]
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Actual production facilities" means the final manufacturing facility and the facilities at which production processes occur that contribute to 70 percent or more of the product's cradle-to-gate global warming potential, as reflected in the environmental product declaration.
(2) "Awarding authority" means:
(a) Institutions of higher education as defined in RCW 28B.92.030;
(b) The department of enterprise services, the department of natural resources, the state parks and recreation commission, the department of fish and wildlife, and the department of transportation; and
(c) Any other state government agency that receives funding from the omnibus capital appropriations act for a public works project contracted directly by the state agency.
(3) "Covered product" includes:
(a) Structural concrete products, including ready mix, shotcrete, precast, and concrete masonry units;
(b) Reinforcing steel products, specifically rebar and posttensioning tendons;
(c) Structural steel products, specifically hot rolled sections, hollow sections, metal deck, and plate; and
(d)(i) Engineered wood products, such as cross-laminated timber per ANSI form no. PRG 320, glulam beams, laminated veneer lumber, parallel strand lumber, dowel laminated timber, nail laminated timber, glulam laminated timber, prefabricated wood joists per ASTM D5055, wood structural panel per product standard 1 or product standard 2, solid sawn lumber per product standard 20, structural composite lumber per ASTM D5456, and structural sawn lumber.
(ii) For the purposes of this subsection (3)(d):
(A) "ANSI" means the American national standards institute.
(B) "ASTM" means the American society for testing and materials.
(C) "Product standard" means a voluntary product standard published by the United States department of commerce national institute of standards and technology.
(4) "Covered project" means:
(a) A construction project larger than 50,000 gross square feet as defined in the Washington state building code, chapter 51-50 WAC; or
(b) A building renovation project where the cost is greater than 50 percent of the assessed value and the project is larger than 50,000 gross square feet of occupied or conditioned space as defined in the Washington state building code, chapter 51-50 WAC.
(5) "Department" means the department of commerce.
(6) "Employee" means any individual who is in an employment relationship with the organization.
(7)(a) "Environmental product declaration" means a type III environmental product declaration, as defined by the international organization for standardization standard 14025 or similarly robust life-cycle assessment methods that have uniform standards in data collection consistent with the international organization for standardization standard 14025, industry acceptance, and integrity. When available, the environmental product declaration must be supply chain specific.
(b) For the purposes of this subsection, "supply chain specific" means an environmental product declaration that includes supply chain specific data for production processes that contribute 70 percent or more of a product's cradle-to-gate global warming potential, as defined in international organization for standardization standard 21930, and reports the overall percentage of supply chain specific data included.
(8) "Full time" means an employee in a position that:
(a) The employer intends to be filled for at least 52 consecutive weeks or 12 consecutive months, excluding any leaves of absence; and
(b) Requires the employee to work, excluding overtime hours, 35 hours per week for 52 consecutive weeks, 455 hours a quarter, or 1,820 hours during a period of 12 consecutive months.
(9) "Health product declaration" means a supply chain specific health product declaration, as defined by the health product declaration open standard maintained by the health product declaration collaborative, that has robust methods for product manufacturers and their ingredient suppliers to uniformly report and disclose information about product contents and associated health information.
(10) "Part time" means an employee in a position that:
(a) The employer intends to be filled for at least 52 consecutive weeks or 12 consecutive months, excluding any leaves of absence; and
(b) Working hours are less than those required for a full-time employee, as defined in this section.
(11) "Product and facility specific report" means an environmental product declaration whereby the environmental impacts can be attributed to a single manufacturer and a specific manufacturing or production facility.
(12)(a) "Scope 2 greenhouse gas emissions" are indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat, or cooling.
(b) For purposes of this section, "greenhouse gas" has the same meaning as in RCW 70A.45.010.
(13) "Supplier code of conduct" means a policy created by a manufacturer that outlines steps taken to ensure that its suppliers adhere to ethical practices, such as compliance with child and forced labor laws, antidiscrimination practices, freedom of association, and safe workplace conditions.
(14) "Temporary" means an employee in a position that is intended to be filled for a period of less than 52 consecutive weeks or 12 consecutive months. Positions in seasonal employment are temporary positions.
(15) "Total case incident rate" means the number of work-related injuries per 100 full-time equivalent workers during a one-year period, as defined by the occupational safety and health administration. Total case incident rate is calculated by multiplying the number of occupational safety and health administration recordable injuries and illnesses by 200,000 and dividing by number of hours worked by all employees.
(16) "Working conditions" means the average number of employees by employment type: Full time, part time, and temporary.
[ 2024 c 344 s 2. ]
(1)(a) Beginning July 1, 2025, an awarding authority must require in all newly executed construction contracts that the selected firm for a construction contract for a covered project larger than 100,000 gross square feet submit the following data for each covered product used before substantial completion, including at a minimum:
(i) Product quantity;
(ii) A current environmental product declaration;
(iii) Health product declaration, if any, completed for the product;
(iv) Manufacturer name and location, including state or province and country;
(v) Supplier code of conduct, if any; and
(vi) Office of minority and women-owned business enterprises certification, if any.
(b) Beginning July 1, 2027, an awarding authority must require in all newly executed construction contracts that the selected firm for a construction contract for a covered project submit the data required by (a) of this subsection for each covered product used before substantial completion.
(c) The selected firm for a contract for a covered project shall provide the data required by this subsection for at least 90 percent of the cost of each of the covered products used in the project.
(2) The selected firm for a contract for a covered project is required to collect and submit from product suppliers the information required in subsection (1)(a)(ii) through (vi) of this section. The selected firm is not required to verify the information received from product suppliers.
(3)(a) Beginning July 1, 2025, an awarding authority must require in all newly executed construction contracts that the selected firm for a construction contract for a covered project larger than 100,000 gross square feet to ask their suppliers to report for each covered product used before substantial completion, including at a minimum:
(i) Names and locations, including state or province and country, of the actual production facilities; and
(ii) Working conditions at the actual production facilities for all employees, full-time employees, part-time employees, and temporary employees. In cases in which the supplier does not have this information, the selected firm for a contract for a covered project must ask suppliers to provide a report on steps taken to reasonably obtain the data and provide suppliers' self-reports to the awarding authority.
(b) Beginning July 1, 2027, an awarding authority must require in all newly executed construction contracts that the successful bidder for a construction contract for a covered project to meet the requirements of (a) of this subsection for each covered product used before substantial completion.
(c) The selected firm is not required to verify the information reported by product suppliers pursuant to this subsection.
(d) The selected firm for a contract for a covered project shall meet the requirement in (a) of this subsection for at least 90 percent of the cost of each of the covered products used in the project.
(4) If a supply chain specific environmental product declaration is not available, a product and facility specific report may be submitted.
(5) This section does not apply to a covered product for a particular covered project if the awarding authority determines, upon written justification provided to the department, that the requirements in this section would cause a significant delay in completion, significant increase in overall project cost, or result in only one product supplier being able to provide the covered product.
(6) An awarding authority must include the information and reporting requirements in this section in a specification for bids for a covered project.
(7) Subject to funds appropriated for this specific purpose, the department may provide financial assistance to small businesses, as defined in RCW 19.85.020, to help offset the costs to the small business of producing an environmental product declaration required under this section. Such financial assistance supports the production of environmental product declarations and achievement of reductions of embodied carbon in the built environment while ensuring that small manufacturers are not put at a competitive disadvantage in state contracting as a result of the requirements of this chapter.
(8) Compliance with the requirements in this section may not be used as a basis for a waiver from apprenticeship utilization requirements in any other statute, rule, regulation, or law.
[ 2024 c 344 s 3. ]
By July 1, 2025, and to the extent practicable, specifications for a bid or proposal for a project contract by an awarding authority may only include performance-based specifications for concrete used as a structural material. Awarding authorities may continue to use prescriptive specifications on structural elements to support special designs and emerging technology implementation.
[ 2024 c 344 s 4. ]
(1) The department must continue to develop, maintain, and refine the publicly accessible database funded by the 2021-2023 omnibus operating appropriations act and created by the department in conjunction with the University of Washington college of built environments for selected firms for contracts for covered projects to submit the data required in RCW 39.116.020 to the department and to promote transparency. The department may consult with the University of Washington college of built environments.
(2) The database maintained pursuant to subsection (1) of this section must publish global warming potential as reported in the environmental product declarations.
(3) By July 1, 2025, the department must:
(a) Further elaborate covered product definitions using applicable material industry standards;
(b) Develop measurement and reporting standards to ensure that data is consistent and comparable, including standards for reporting product quantities;
(c) Create model language for specifications, bid documents, and contracts to support the implementation of RCW 39.116.020; and
(d) Produce an educational brief that:
(i) Provides an overview of embodied carbon;
(ii) Describes the appropriate use of environmental product declarations, including the necessary preconditions for environmental product declarations to be comparable;
(iii) Outlines reporting standards, including covered product definitions, standards for reporting product quantities, and working conditions;
(iv) Describes the data collection and reporting process for all information required in RCW 39.116.020 (1)(a) and (3)(a);
(v) Provides instructions for the use of the database; and
(vi) Lists applicable product category rules for covered products.
(4) The department may contract for the use of nationally or internationally recognized databases of environmental product declarations for purposes of implementing this section.
[ 2024 c 344 s 5. ]
(1) By December 1, 2024, the department must convene a technical work group that includes the following representatives:
(a) One industry professional in design, one industry professional in structural design, one industry professional in specification, and one industry professional in construction who are recommended by leading associations of Washington business;
(b) Two representatives each from Washington manufacturers of:
(i) Steel;
(ii) Wood; and
(iii) Concrete;
(c) A representative from the department of enterprise services;
(d) A representative from the department of transportation;
(e) A representative from the department of ecology;
(f) One representative each from three environmental groups that focus on embodied carbon and climate change;
(g) Three representatives from labor unions, including two from unions that represent manufacturing workers and one representative from the building and construction trades;
(h) A representative from the minority and women-owned business community;
(i) A representative from the University of Washington college of built environments; and
(j) Representatives of other agencies and independent experts as necessary to meet the objectives of the technical work group as described in this section.
(2) The department intends formation of subgroups with members who have subject matter expertise or industry experience to develop technical information, recommendations, and analysis specific to individual material types, and the feasibility of supply chain specific environmental product declarations. The recommendations must, where possible, align with state and national principles and laws for environmental product declaration development.
(3) The department may contract with the University of Washington college of built environments in convening the technical work group.
(4) The purpose of the technical work group is to identify opportunities for and barriers to growth of the use and production of low carbon materials, promote high labor standards in manufacturing, and preserve and expand low carbon materials manufacturing in Washington.
(5) By September 1, 2025, the technical work group must submit a report to the legislature and the governor that includes:
(a) A low carbon materials manufacturing plan that recommends policies to preserve and grow the in-state manufacturing of low carbon materials and accelerate industrial decarbonization. For this plan, the technical work group must:
(i) Examine barriers and opportunities to maintain and grow a robust in-state supply of low carbon building materials including, but not limited to, state and domestic supply of raw materials and other supply chain challenges, regulatory barriers, competitiveness of local and domestic manufacturers, cost, and data availability from local, state, national, and foreign product suppliers; and
(ii) Identify opportunities to encourage the continued conversion to lower carbon cements, including the use of performance-based specifications and allowing Type 1-L cement in specifications for public projects;
(b) Recommendations for consistent treatment in the reporting for covered products; and
(c) Consideration of how additional information relevant to reducing embodied carbon through strategies including, but not limited to, product life-cycle assessments could be incorporated into future reporting.
(6)(a) By September 1, 2026, the technical work group must submit a report on policy recommendations, including any statutory changes needed, to the legislature and the governor. The report must consider policies to expand the use and production of low carbon materials, preserve and expand low carbon materials manufacturing in Washington, including opportunities to encourage continued conversion to lower carbon blended cements in public projects, and support living wage manufacturing jobs.
(b) For this report, the technical work group must:
(i) Summarize data collected pursuant to RCW 39.116.020, the case study analysis funded by the 2021-2023 omnibus operating appropriations act, and the pilot projects funded by the 2021-2023 omnibus capital appropriations act. The summary must include product quantities, global warming potential, health product declarations, supplier codes of conduct, and any obstacles to the implementation of this chapter;
(ii) Evaluate options for collecting reported working condition information from product suppliers, including hourly wages, employee benefits, and total case incident rates, and for aligning these reporting requirements with existing reporting requirements for preferential tax rates, credits, exemptions, and deferrals;
(iii) Make recommendations for improving environmental production declaration data quality including, but not limited to, integrating reporting on variability in facility, product, and upstream data for key processes;
(iv) Make recommendations for consideration of scope 2 greenhouse gas emissions mitigation through green power purchases, such as energy attribute certificates and power purchase agreements;
(v) Make recommendations, if any, for changing or clarifying the definition of "actual production facilities" in RCW 39.116.010 to better define and refine reporting and compliance obligations under chapter 39.116 RCW;
(vi) Identify barriers and opportunities to the effective use of the database maintained under RCW 39.116.040 and the data collected pursuant to this chapter;
(vii) Identify emerging and foreseeable trends in local, state, federal, and private policy on embodied carbon and the procurement and use of low carbon materials and opportunities to promote consistency across public and private embodied carbon and low carbon materials policies, rules, and regulations; and
(viii) Recommend approaches to designing lower embodied carbon state building projects.
(7)(a) The department may update reporting standards and requirements based on input from the technical work group.
(b) The department must provide updated guidance on reporting standards by January 1, 2027.
(8) This section expires January 1, 2028.
[ 2024 c 344 s 6. ]
Chapter 344, Laws of 2024 may be known and cited as the buy clean and buy fair Washington act.
[ 2024 c 344 s 8. ]
Connect Omnilex to search the legal corpus from your AI assistant.