2436-S.E [atlas:bill]

AN ACT Relating to financing contracts; amending RCW 39.94.040; adding a new section to chapter 39.94 RCW; creating new sections; providing an effective date; and providing an expiration date.

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

Sec. 1. RCW 39.94.040 and 1989 c 356 s 4 are each amended to read as follows:

(1) Except as provided in RCW 28B.10.022, the state may not enter into any financing contract 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 ((~~college education~~)) and technical colleges, or a state institution of higher learning;

(b) Approve programs providing for the issuance of certificates of participation in master financing contracts;

(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 the department of information services.

(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) The state may not enter into any financing contract for real property without prior approval of the legislature.

(5) The state may not enter into a financing contract for real property except under section 2 of this act.

NEW SECTION. Sec. 2. A new section is added to chapter 39.94 RCW to read as follows:

(1) All financing contracts for real property are subject to the following conditions:

(a) All financing contracts for real property proposed by the governor shall be submitted separate from all other legislation, including the capital budget;

(b) All financing contracts for real property authorized by the legislature shall be enacted separate from all other legislation, whether codified or uncodified, including the capital budget;

(c) Prior to state finance committee approval, an entity in RCW 39.94.040(1)(a) shall provide justification for the proposed financing contract for real property to the office of financial management for approval. Specific criteria and a process for this justification shall be developed jointly by the office of financial management, the state treasurer's office, and the legislature, and be included in the authorizing legislation when appropriate. The criteria shall include, but not be limited to: (i) Demonstrating present value savings, including the market value of the asset being acquired, greater than the existing pattern of expenditures for the same purpose; (ii) demonstrating that revenues generated by the project will be sufficient to meet debt-service requirements; or (iii) demonstrating that a dedicated source of revenues, other than specific state appropriations for the same purpose, will be sufficient to meet the debt-service requirements;

(d) All financing contracts for real property proposed by the governor shall include the total cost of the project, the amount of the project being financed by the contract, future capital and operating costs, and the source of revenues to meet the debt-service requirements and future capital and operating costs; and

(e) The approval to enter into financing contracts will terminate four years after the effective date of the legislation approving such financing contracts. The termination shall not be construed as affecting any contract entered into prior to the termination date.

(2) The state treasurer's office shall report annually to the legislature on the use of financing contracts for real property.

NEW SECTION. Sec. 3. Section 802, chapter 16, Laws of 1995 2nd sp. sess. (uncodified), and as amended expires June 30, 2001.

NEW SECTION. Sec. 4. This act shall not be construed as affecting any completed project, exempt project authorized before the effective date of this section, existing right acquired, or existing liability or obligation incurred under the sections amended or created in this act or under any rule or order adopted under those sections, nor as affecting any proceeding instituted under those sections.

NEW SECTION. Sec. 5. Section 3 of this act takes effect June 30, 1997.