AN ACT Relating to export development; reenacting and amending RCW 42.17.310; and adding a new chapter to Title 43 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds and declares that:

(1) The economy of the state of Washington and opportunities for employment within the state are increasingly dependent upon the international exports of goods and services manufactured in Washington and the growth of international export markets for those manufactured goods and services;

(2) Other states have utilized, or are preparing to utilize, the resources of their state governments to stimulate, facilitate, and promote international exports;

(3) The position of Washington as an exporting state is threatened by aggressive government-supported export development policies of foreign countries;

(4) Competition among businesses and countries will endure and intensify as more countries seek to expand their international export capacities;

(5) Financial assistance offered by the federal government to small and medium-sized exporters is insufficient to meet the competition offered by foreign countries;

(6) Washington exporters find it increasingly difficult to compete with foreign exporters which benefit from their governmentally supported financing programs;

(7) Small and medium-sized companies seeking to enter foreign markets face severe problems financing and insuring their transactions;

(8) Expanding international export markets is essential in order to maintain a vigorous and growing economy and to provide adequate job opportunities for Washington citizens;

(9) Washington has a responsibility to create employment opportunities by encouraging and stimulating the development of international export sales and markets by Washington companies; and

(10) Increased export sales may best be stimulated by making financial assistance available to Washington businesses to develop and expand international export markets and to ensure the competitiveness of Washington products and services in foreign markets, thereby increasing employment opportunities available to the citizens of the state.

It is hereby declared to be the policy of the state, in the interest of promoting the general welfare of all of the people of the state, to increase job opportunities through stimulating the expansion of international export markets for Washington products and services, especially those of small and medium-sized businesses, by providing financial assistance through the authority hereinafter created for that purpose.

NEW SECTION. Sec. 2. There is hereby created within the Washington department of trade and economic development the Washington export development authority, a body politic and corporate, hereinafter referred to as the "authority."

The purpose of this authority shall be:

(1) To assist, promote, encourage, develop, and advance economic prosperity and employment throughout the state by fostering the expansion of exports of manufactured goods and services to foreign purchasers;

(2) To cooperate and act in conjunction with other organizations, public and private, the objects of which are the promotion and advancement of export trade activities in the state;

(3) To establish a source of funding credit guarantees and insurance to support export development not otherwise available, particularly to small and medium-sized businesses; and

(4) To provide financial counseling to potential and existing exporters.

NEW SECTION. Sec. 3. (1) The governing and administrative powers of the authority shall be vested in a board of directors consisting of nine members, all of whom shall be residents of the state, who shall be appointed by the governor with the advice and consent of the senate. The directors shall annually elect one of their members as chairman and one as secretary. The board may elect such other officers as it deems proper.

(2) Each member of the board shall be a person of recognized ability and experience in one of the following areas: Finance, international trade, business management, or economics.

(3) The governor shall appoint with the advice and consent of the senate three members of the board whose terms shall expire on June 30, 1989; three members of the board whose terms shall expire on June 30, 1990; and three members of the board whose terms shall expire on June 30, 1991. Their respective successors shall be appointed for terms of three years from June thirtieth of the year of appointment. Each member shall serve until his or her successor is appointed and qualified.

In case of vacancies in the office, when the senate is not in session, the governor may make temporary appointments until the next meeting of the senate when the governor shall nominate such persons to fill such office; and the persons so nominated, when confirmed by the senate, shall hold office during the remainder of the term and until their successors shall be appointed and qualified. If the senate is not in session at the time this chapter takes effect, the governor shall make temporary appointments as in the case of vacancies.

(4) Members of the board shall not be entitled to compensation for their services as members, but shall be reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

(5) Five members of the board shall constitute a quorum, and the affirmative vote of the majority of members present at a meeting of the board shall be necessary and sufficient for any action taken by the board, except that the affirmative vote of at least five members shall be required for the approval of any resolution authorizing the issuance of any bonds and of any guaranteed funding pursuant to this chapter.

(6) No vacancy in the membership of the board shall impair the right of a quorum to exercise all rights and perform all the duties of the board. Any action taken by the board may be authorized by resolution at any regular or special meeting and shall take effect immediately unless otherwise provided in the resolution.

(7) The board may delegate to one or more of its members or to its officials, agents, or employees such powers and duties as it may deem proper.

NEW SECTION. Sec. 4. The authority shall possess all the powers of a body politic and corporate necessary and convenient to accomplish the purposes of this chapter, including, without any intended limitation upon the other powers hereby conferred, the following:

(1) To borrow money and otherwise incur indebtedness for any of its purposes; to issue bonds, debentures, notes or other evidences of indebtedness, whether secured or unsecured;

(2) To purchase, discount, sell, and negotiate with or without guaranty notes, other evidences of indebtedness, and to sell and guarantee securities;

(3) To procure insurance to guarantee, insure, coinsure, and reinsure against political and credit risk of loss;

(4) To provide financial counseling services to Washington businesses;

(5) To procure insurance to secure the payment of principal and interest on any bonds, notes, or other obligations of the authority;

(6) To accept gifts, grants, or loans from and enter into contracts or other transactions with any federal or state agency, any municipality, any private organization, or any other source;

(7) To adopt, and from time to time amend or rescind, such bylaws, rules, and regulations as may be necessary or convenient for the performance of its functions, powers, and duties under this chapter;

(8) To sue and be sued;

(9) To purchase, receive, take by grant, gift, devise, bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal in and with, real or personal property, or any interest therein, wherever situated;

(10) To sell, convey, lease, exchange, transfer, or otherwise dispose of, all or any of its property or any interest therein, wherever situated;

(11) To adopt and use a seal;

(12) To exercise all other powers and functions necessary or appropriate to carry out the duties and purposes set forth in this chapter.

NEW SECTION. Sec. 5. (1) The authority is empowered to provide guaranteed funding, as defined in subsection (3) of this section for any eligible export transaction, as defined in subsection (2) of this section, through a participating banking organization, as defined in subsection (4) of this section.

(2) An eligible export transaction shall consist of a loan to any participating banking organization located within the state to finance an international pre-export or export from the state of Washington which, in the judgment of the authority: (a) Will create or maintain employment in Washington, and (b) shall contain in at least twenty-five percent of its value manufactured goods or services whose final manufacturing process occurs in Washington. Guaranteed funding may include a pool of individual export transactions, all of which, in the judgment of the authority, meet the foregoing conditions.

(3) Guaranteed funding shall consist of a guarantee against political or commercial loss in whole or in part of principal and interest on an eligible export transaction. Such a guarantee may include, without limitation, insurance against loss up to a stated amount. The maximum amount payable under any guarantee, which is referred to as the "guarantee amount," shall be specifically set forth in writing, executed by the chairman and secretary of the board, at the time any such guarantee is entered into by the authority. Any guarantee entered into by the authority hereunder shall not constitute a general obligation of the state of Washington. Any guarantee made by the authority hereunder shall not be terminated, cancelled, or otherwise revoked except in accordance with the terms thereof; shall be conclusive evidence that such guarantee complies fully with the provisions of this chapter; and shall be valid and incontestable in the hands of a holder in due course of a guaranteed eligible export transaction.

(4) A participating banking organization shall be any organization subject to regulation by the state supervisor of banking, any national bank, federal savings and loan association, and federal credit union located within this state which has been approved by the board of directors of the authority to participate in guaranteed funding for any eligible export transaction within the purposes of this chapter. The authority may charge reasonable fees for providing guaranteed funding pursuant to this section to a participating banking organization.

(5) Prior to providing guaranteed funding hereunder, the participating banking organization shall make an investigation of a line of credit to the exporter in order to determine its viability, the economic benefits to be derived therefrom, the prospects for repayment, and such other facts as it deems necessary in order to determine that such guaranteed funding is consistent with the purposes of this chapter. The authority shall provide guaranteed funding only if, and to the extent that, it determines, in its sole discretion, that:

(a) Such guaranteed funding is reasonably necessary in order to stimulate or facilitate the making of the eligible export transaction including, without limitation, the making of the eligible export transaction upon terms which will enable the transaction to be reasonably competitive with transactions in other states or in foreign countries; or

(b) Such guaranteed funding is reasonably necessary in order to stimulate or facilitate the resale of such eligible export transaction to a holder in due course which would not otherwise purchase such eligible export transaction.

The authority may condition the provision of guaranteed funding hereunder upon such other terms and conditions as it may deem desirable to carry out the purposes of this chapter.

NEW SECTION. Sec. 6. On the first day of January of each year, the authority shall report on its operations for the preceding fiscal year to the governor and to the legislature. Such report shall include:

(1) A complete operating and financial statement;

(2) The number of businesses assisted;

(3) The types and amounts of assistance; and

(4) The number of jobs created and retained through the assistance provided.

!ixThese reporting requirements shall be segregated by county, standard industrial classification, and size of firm. The authority shall be subject to examination by the state treasurer. The accounts of the authority shall be subject to annual audits by the state auditor.

NEW SECTION. Sec. 7. The powers enumerated in this chapter shall be interpreted broadly to effectuate the purposes thereof and shall not be construed as a limitation of powers.

NEW SECTION. Sec. 8. The authority shall be and hereby is exempt from all franchise, corporate, business, and other taxes levied by the state, provided that nothing herein shall be construed to exempt from any such taxes any person receiving guaranteed funding with the authority as provided in this chapter.

NEW SECTION. Sec. 9. (1) No director or any person acting on behalf of the authority executing any contracts, commitments, or agreements issued pursuant to this chapter shall be liable personally upon such contracts, commitments, or agreements or be subject to any personal liability or accountability by reason of those agreements.

(2) No director or any person acting on behalf of the authority shall be personally liable for damage or injury resulting from the performance of his or her duties pursuant to this chapter.

NEW SECTION. Sec. 10. (1) The authority is hereby authorized to issue, sell, and provide for the retirement of bonds in the amount of one hundred thousand dollars to provide funds for the creation and operation of the authority. Such bonds shall be limited obligations of the authority, the principal of and interest on which shall be payable solely out of the revenues derived by the authority. Bonds issued under authority of this chapter shall never constitute an indebtedness of the state of Washington or the authority within the meaning of any state constitutional provision or statutory limitation, but such bonds shall be indebtedness payable solely from a revenue-producing source or from a special source, which source does not include revenues from any tax or license and shall never constitute nor give rise to a pecuniary liability of the state of Washington or the authority or a charge against the general credit of the authority or the state or taxing powers of the state, and such fact shall be plainly stated on the face of each bond. Such bonds may be executed and delivered at any time as a single issue or from time to time as several issues, may be in such form and denominations, may be of such tenor, shall be in coupon or registered form, may be payable in such installments and at such time or times not exceeding five years from their date, may be subject to such terms of redemption, may be payable at such place or places, may bear interest at such rate or rates payable at such place or places and evidence in such manner, and may contain such provisions not inconsistent with the provisions of this chapter, all of which shall be provided in the resolution of the authority authorizing the bonds. Any bonds issued under the authority of this section may be sold at public or private sale at such price and in such manner and from time to time as may be determined by the authority to be most advantageous. The authority may pay all expenses, premiums, insurance premiums, and commissions which the authority may deem necessary or advantageous in connection with the authorization, sale, and issuance thereof from proceeds of the bonds.

(2) The resolution under which such bonds are authorized to be issued or any security agreement, including an indenture or trust indenture to be entered into in connection with the issuance of bonds may contain any agreements and provisions customarily contained in instruments securing bonds, including without limiting the generality of the foregoing, provisions respecting the fixing and collection of obligations, the creation and maintenance of special funds, and the rights and remedies available, in the event of default, to the bondholders or to the trustee under such security agreement, all as the authority shall deem advisable and as shall not be in conflict with the provisions of this chapter: PROVIDED, HOWEVER, That in making any such agreements or provisions the authority shall not have the power to obligate itself except with respect to eligible export transactions and shall not have the power to incur a pecuniary liability or a charge upon the general credit of the authority or of the state or against the taxing powers of the state. The resolution of the authority authorizing any bonds hereunder and any security agreement securing such bonds may provide that, in the event of default in payment of the principal of or the interest on such bonds or in the performance of any agreement contained in such proceedings or security agreement, such payment and performance may be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect any obligations and to apply any revenues pledged in accordance with such proceedings or the provisions of such security agreement. Any such security agreement may provide also that in the event of default in payment or the violation of any agreement contained in the security agreement, it may be foreclosed by proceedings at law or in equity, and may provide that any trustee under the security agreement or the holder of any of the bonds secured thereby may become the purchaser at any foreclosure sale, if he or she is the highest bidder. No breach of any such agreement shall impose any pecuniary liability upon the state of Washington or the authority or any charge upon the general credit of the authority or of the state or against the taxing power of the state.

The trustee or trustees under any security agreement, or any depository specified by such security agreement, may be such persons or corporations as the authority shall designate, notwithstanding that they may be a nonresident of Washington or incorporated under the laws of the United States or of any state.

(3) Any bonds issued pursuant to this chapter and at any time outstanding may at any time and from time to time be refunded by the authority, by the issuance of its refunding bonds in such amount as the authority may deem necessary but not exceeding an amount sufficient to refund the principal of the bonds to be refunded, together with any unpaid interest on those bonds and any premiums, expenses, and commissions necessary to be paid in connection with those bonds. Any such refunding may be effected whether the bonds to be refunded have matured or shall thereafter mature, either by sale of the refunding bonds to be refunded, or by exchange of the refunding bonds for the bonds to be refunded thereby. The holders of any bonds to be refunded shall not be compelled without their consent to surrender their bonds for payment or exchange prior to the date on which they are payable, or, if they are called for redemption, prior to the date on which they are by their terms subject to redemption. All refunding bonds issued under the authority of this section shall be payable in the same manner and under the same terms and conditions as are herein provided for the issuance of bonds.

(4) The proceeds from the sale of any bonds issued under authority of this section shall be applied only for the purpose for which the bonds were issued, except that any premium and secured interest received in any such sale shall be applied to the payment of the principal of or the interest on the bonds sold. If for any reason any portion of the proceeds shall not be needed for the purpose for which the bonds were issued, such unneeded portion of the proceeds shall be applied to the payment of the principal of or the interest on the bonds.

(5) The proceeds of the export development bonds shall be kept in a separate fund to be known as the "export development bond fund," which separate fund is hereby created in the office of the state treasurer. All other moneys received by the authority shall also be deposited in the fund. The state treasurer may, with the approval of the board of directors of the authority, invest and reinvest all moneys in such fund from time to time in such obligations of the United States government or such other governmental or corporate issuers as the treasurer, with the approval of the board of directors of the authority, deems appropriate. All earnings upon such investments shall be added to the export development bond fund.

NEW SECTION. Sec. 11. The authority is authorized to create an insurance fund consisting solely of funds from the export development bond fund, which shall be held in the custody of one or more banks or trust companies having a principal place of business in this state. The insurance fund shall be held as security for the holders of bonds issued under this chapter. It shall be governed by a trust agreement entered into by the authority with the trustees. The trust agreement may contain such provisions and limitations regarding the investment and disbursement of moneys in the insurance fund; the payment of expenses of the insurance fund; the appointment, resignation, and discharge of trustees; the delegation of enforcement and collection powers under the insurance agreements to the trustee; the duties of the trustees; amendments of the trust agreement; and such other lawful provisions and limitation as may be deemed appropriate by the authority. The trust agreement may pledge premiums and other moneys which may be deposited in the insurance fund. Such pledge shall be valid and binding from the time the pledge is made. The premiums and other moneys so pledged and thereafter received by the insurance fund or by the trustees in its behalf shall immediately be subject to the lien of such pledge and shall be valid and binding as against all parties having claims of any kind against the insurance fund, irrespective of whether such parties have notice of the claims.

The authority may also use export development bond funds to purchase insurance which shall be pledged for the security of the holders of any bonds issued under this chapter. In any case in which insurance is pledged as security, whether obtained through the insurance funds authorized to be created under this section or purchased with export development bond funds, any description of such insurance shall expressly indicate the limitation of the liability of the authority and that neither the credit nor the taxing power of the state or any political subdivision of the state shall be available to satisfy any obligations with respect thereto.

NEW SECTION. Sec. 12. The bonds, debentures, notes, or other evidences of indebtedness of the authority are hereby made securities in which all public officers and bodies of the state and all municipalities and municipal subdivisions; all insurance companies, associations, and other persons carrying on an insurance business; all financial institutions, banks, bankers, trust companies, savings banks, savings and loan associations, credit unions, investment companies, and other persons carrying on a banking business; all administrators, guardians, executors, trustees, and other fiduciaries; and all other persons whatsoever who are now or who may hereafter be authorized to invest in bonds or other obligations of the state, may properly and legally invest funds including capital in their control or belonging to them. The bonds, debentures, notes, or other evidences of indebtedness of the authority are hereby made securities which may be deposited with and may be received by all public officers and bodies of this state and all municipalities and municipal subdivisions for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized.

NEW SECTION. Sec. 13. Nothing in this chapter shall be construed as a restriction or limitation upon any powers which the authority might otherwise have under the laws of this state, but shall be construed as cumulative.

Sec. 14. Section 2, chapter 107, Laws of 1987, section 1, chapter 337, Laws of 1987, section 16, chapter 370, Laws of 1987, section 1, chapter 404, Laws of 1987, section 10, chapter 411, Laws of 1987 and RCW 42.17.310 are each reenacted and amended to read as follows:

(1) The following are exempt from public inspection and copying:

(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, welfare recipients, prisoners, probationers, or parolees.

(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

(e) Information revealing the identity of persons who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property: PROVIDED, That if at the time the complaint is filed the complainant indicates a desire for disclosure or nondisclosure, such desire shall govern: PROVIDED, FURTHER, That all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (a) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (b) highway construction or improvement as required by RCW 47.28.070.

(n) Railroad company contracts filed with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 53.31 RCW.

(p) Financial disclosures filed by private vocational schools under chapter 28C.10 RCW.

(q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

(r) Financial and commercial information and records supplied by businesses during application for loans or program services provided by chapters 43.31, 43.63A, and 43.168 RCW.

(s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

(t) Except as provided under section 2 of this 1987 act [1987 c 404 § 2], all applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

(u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

(v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

(w) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

(x) Information submitted to or compiled by the Washington export development authority pursuant to sections 2 through 13 of this 1988 act in connection with the authority's responsibilities and which involves the identity, background, finance, marketing plans, trade secrets, or any other commercially sensitive information concerning persons, firms, associations, partnerships, agencies, corporations, or other entities, unless the person or entity which provided such information consents to disclosure.

(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.

NEW SECTION. Sec. 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.

NEW SECTION. Sec. 16. Sections 1 through 13 of this act shall constitute a new chapter in Title 43 RCW.