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SUBSTITUTE SENATE BILL NO. 4923
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C 247 L 86
State of Washington 49th Legislature 1986 Regular Session
By Senate Committee on Commerce & Labor (originally sponsored by Senators Warnke, Zimmerman and Thompson)
Read first time 2/5/86.
AN ACT Relating to the allocation of the state ceiling on the issuance of certain tax exempt bonds under federal tax law; adding a new section to chapter 39.86 RCW; creating new sections; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. Sections 701 through 703 of the proposed "Tax Reform Act of 1985" (H.R. 3838), which has been adopted by the United States House of Representatives, would, if enacted, change federal tax law regarding the allocation of the maximum amount of certain tax exempt bonds that may be issued in the state, effective retroactively to January 1, 1986, or such other effective date as may be adopted. Existing Washington law enacted as part of chapter 446, Laws of 1985 (chapter 39.86 RCW) sets forth a method for allocating the state ceiling for certain tax exempt bonds under existing federal law. The allocation formula contained in chapter 39.86 RCW would become ineffective for federal tax law purposes from the effective date of H.R. 3838 if H.R. 3838 were enacted. So long as H.R. 3838 is pending with such a retroactive effective date, tax exempt bonds cannot be adequately allocated in an orderly manner under existing state law. It is the intent of the legislature to authorize the governor to promulgate an interim, alternative allocation mechanism to insure the orderly issuance of tax exempt bonds until the legislature can review federal tax law changes, if and when finally enacted, and consider a revised allocation mechanism.
NEW SECTION. Sec. 2. A new section is added to chapter 39.86 RCW to read as follows:
The governor is authorized to establish by executive order an alternative system for the allocation of tax exempt bonds under any new unified volume limitation provided by section 701(b) of H.R. 3838 or other federal legislation, including housing-related bonds. The allocation of the state ceiling on the issuance of certain tax exempt bonds under federal tax law may be determined under RCW 39.86.010 through 39.86.060, under this section, or under both RCW 39.86.010 through 39.86.060 and this section to the extent necessary for federal tax law purposes. The authority delegated to the governor under this section shall constitute a "different formula for allocating the state ceiling" as that term is used in section 701(b) of H.R. 3838. The governor may from time to time allocate or reallocate some or all of the state ceiling on tax exempt bonds under any new unified volume limitation. 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, the projected needs of issues of tax exempt bonds in the state and historic patterns of bond issuance. If any issuer of tax exempt bonds to which allocations of the state ceiling have been made, finds that it is reasonably likely that a portion of the state ceiling allocated to it would not be consumed, it shall promptly so notify the governor, and the governor may by executive order, following no less than thirty days notice to issuers that have requested additional allocations, provide for the reallocation of the excess to one or more issuers.
This section shall expire July 1, 1987.
NEW SECTION. Sec. 3. No later than December 1, 1986, the department of community development shall submit to the governor and legislature an interim study regarding:
(1) Status of federal tax law relating to the allocations of the state ceiling;
(2) Usage of allocations under previous and existing state ceilings;
(3) Projections of future demand for allocations of the state ceiling; and
(4) Recommendations regarding allocations of the state ceiling among issuers and types of bonds.
NEW SECTION. Sec. 4. 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 immediately.