HOUSE BILL REPORT

                  HB 1555

             As Reported By House Committee On:

                      Local Government

Title:  An act relating to the use of administrative funds of a public corporation formed by a municipality.

Brief Description:  Concerning the use of funds by a public corporation formed by a municipality.

Sponsors:  Representatives Springer, Riley, Edmondson, Zellinsky, Horn, Sheldon, Kremen, Bray, Ludwig and Quall.

Brief History:

  Reported by House Committee on:

Local Government, February 19, 1993, DPS.

HOUSE COMMITTEE ON LOCAL GOVERNMENT

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  Signed by 12 members:  Representatives H. Myers, Chair; Bray, Vice Chair; Edmondson, Ranking Minority Member; Reams, Assistant Ranking Minority Member; Dunshee; R. Fisher; Horn; Rayburn; Romero; Springer; Van Luven; and Zellinsky.

Staff:  Bill Lynch (786-7092).

Background:  A city, town, county, or port district may create a public corporation to help finance the project costs of industrial development facilities.  These public corporations may issue industrial development revenue bonds; construct, hold, lease, or sell industrial development facilities; and make loans for the purpose of providing financing for the project costs of an industrial development facility. 

A public corporation is prohibited from commingling funds derived from the sale of revenue bonds, revenue derived from industrial development facilities, or interest on moneys received with funds of the municipality.  It is suggested that funds that are not needed by the public corporation for bond debt or for administrative costs should be transferable to the municipality that created it for growth management, planning, or other economic development purposes.

Summary of Substitute Bill:  A public corporation that is created by a municipality to help finance the cost of industrial development facilities, may transfer funds to the municipality that are not encumbered for bond payments or anticipated for administrative expenses.  Funds transferred to the municipality may be used for growth management, planning, or other economic development purposes.

Substitute Bill Compared to Original Bill:  The substitute clarifies that bond proceeds cannot be transferred to the creating municipality.

Fiscal Note:  Not requested.

Effective Date of Substitute Bill:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  Public corporations have some excess money as a result of their success.  This money can have a significant positive impact on the municipality's ability to achieve other economic development goals.

Testimony Against:  None.

Witnesses:  Kenneth O'Hollaren, Executive Director, Port of Longview (pro).