AN
ACT Relating to extending provisions on interest rates on government bonds;
amending RCW 39.96.010, 39.96.030, 39.96.070, 36.61.020, and 36.61.260; adding
a new section to chapter 36.61 RCW; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
39.96.010 and 1995 c 192 s 1 are each amended to read as follows:
The
legislature finds and declares that the issuance by state and local governments
of bonds and other obligations((, and the investment of moneys in connection
with these obligations,)) involves exposure to changes in interest
rates; that a number of financial instruments are available to lower the net
cost of these borrowings, ((to increase the net return on these investments,))
or to reduce the exposure of state and local governments to changes in interest
rates; that these reduced costs ((and increased returns)) 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, and be granted for a period
of ((seven)) twelve years.
Sec.
2. RCW
39.96.030 and 1993 c 273 s 3 are each amended to read as follows:
(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((, or a
higher net rate of return on investments made in connection with, or incidental
to, the issuance, incurring, or carrying of those 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.
Sec.
3. RCW
39.96.070 and 1998 c 245 s 35 are each amended to read as follows:
(1)
Except as provided in subsection (3) of this section, no governmental entity
may enter a payment agreement under RCW 39.96.030 after June 30, ((2000))
2005.
(2)
The termination of authority to enter payment agreements after June 30, ((2000))
2005, shall not affect the validity of any payment agreements or other
contracts entered into under RCW 39.96.030 on or before that date.
(3)
A governmental entity may enter into a payment agreement under and in
accordance with this chapter after June 30, ((2000)) 2005, to
replace a payment agreement that relates to specified obligations issued on or
before that date and that has terminated before the final term of those
obligations.
NEW
SECTION. Sec. 4. A
new section is added to chapter 36.61 RCW to read as follows:
To
improve the ability of counties to finance long-term lake management
objectives, lake management districts may be created for any needed period of
time.
Sec.
5. RCW
36.61.020 and 1987 c 432 s 2 are each amended to read as follows:
Any
county may create lake management districts to finance the improvement and
maintenance of lakes located within or partially within the boundaries of the
county. All or a portion of a lake and the adjacent land areas may be included
within one or more lake management districts. More than one lake, or portions
of lakes, and the adjacent land areas may be included in a single lake
management district. ((A lake management district may be created for a
period of up to ten years.))
Special
assessments or rates and charges may be imposed on the property included within
a lake management district to finance lake improvement and maintenance
activities, including: (1) The control or removal of aquatic plants and
vegetation; (2) water quality; (3) the control of water levels; (4) storm water
diversion and treatment; (5) agricultural waste control; (6) studying lake
water quality problems and solutions; (7) cleaning and maintaining ditches and
streams entering or leaving the lake; and (8) the related administrative,
engineering, legal, and operational costs, including the costs of creating the
lake management district.
Special
assessments or rates and charges may be imposed annually on all the land in a
lake management district for the duration of the lake management district
without a related issuance of lake management district bonds or revenue bonds.
Special assessments also may be imposed in the manner of special assessments in
a local improvement district with each landowner being given the choice of
paying the entire special assessment in one payment, or to paying installments,
with lake management district bonds being issued to obtain moneys not derived
by the initial full payment of the special assessments, and the installments
covering all of the costs related to issuing, selling, and redeeming the lake
management district bonds.
Sec.
6. RCW
36.61.260 and 1985 c 398 s 26 are each amended to read as follows:
(1)
Counties may issue lake management district bonds in accordance with this
section. Lake management district bonds may be issued to obtain money
sufficient to cover that portion of the special assessments that are not paid
within the thirty-day period provided in RCW 36.61.190. ((The maximum term
of lake management district bonds shall be ten years.))
Whenever
lake management district bonds are proposed to be issued, the county
legislative authority shall create a special fund or funds for the lake
management district from which all or a portion of the costs of the lake
improvement and maintenance activities shall be paid. Lake management district
bonds shall not be issued in excess of the costs and expenses of the lake
improvement and maintenance activities and shall not be issued prior to twenty
days after the thirty days allowed for the payment of special assessments
without interest or penalties.
Lake
management district bonds shall be exclusively payable from the special fund or
funds and from a guaranty fund that the county may have created out of a portion
of proceeds from the sale of the lake management district bonds.
(2)
Lake management district bonds shall not constitute a general indebtedness of
the county issuing the bond nor an obligation, general or special, of the
state. The owner of any lake management district bond shall not have any claim
for the payment thereof against the county that issues the bonds except for
payment from the special assessments made for the lake improvement or
maintenance activities for which the lake management district bond was issued
and from a lake management district guaranty fund that may have been created.
The county shall not be liable to the owner of any lake management district
bond for any loss to the lake management district guaranty fund occurring in
the lawful operation of the fund. The owner of a lake management district bond
shall not have any claim against the state arising from the lake management
district bond, special assessments, or guaranty fund. Tax revenues shall not
be used to secure or guarantee the payment of the principal of or interest on
lake management district bonds.
The
substance of the limitations included in this subsection shall be plainly
printed, written, engraved, or reproduced on: (a) Each lake management
district bond that is a physical instrument; (b) the official notice of sale;
and (c) each official statement associated with the lake management district
bonds.
(3)
If the county fails to make any principal or interest payments on any lake
management district bond or to promptly collect any special assessment securing
the bonds when due, the owner of the lake management district bond may obtain a
writ of mandamus from any court of competent jurisdiction requiring the county
to collect the special assessments, foreclose on the related lien, and make
payments out of the special fund or guaranty fund if one exists. Any number of
owners of lake management districts may join as plaintiffs.
(4)
A county may create a lake management district bond guaranty fund for each
issue of lake management district bonds. The guaranty fund shall only exist
for the life of the lake management district bonds with which it is
associated. A portion of the bond proceeds may be placed into a guaranty
fund. Unused moneys remaining in the guaranty fund during the last two years
of the installments shall be used to proportionally reduce the required level
of installments and shall be transferred into the special fund into which
installment payments are placed.
(5)
Lake management district bonds shall be issued and sold in accordance with
chapter 39.46 RCW. The authority to create a special fund or funds shall
include the authority to create accounts within a fund.
NEW SECTION. Sec. 7. This
act takes effect July 1, 2000.
