AN
ACT Relating to financing contracts; amending RCW 39.94.010, 39.94.020,
39.94.030, and 39.94.040; adding a new section to chapter 39.94 RCW; and
creating a new section.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. A
new section is added to chapter 39.94 RCW to read as follows:
(1)
It is the intent of the legislature that the financing program authorized by
this chapter be self-supporting.
(2)
The state treasurer is authorized to levy fees and apply specified investment
earnings from time to time in amounts not to exceed sums sufficient to pay
program expenses including, but not limited to, costs of issuance, and to
create reserves to assure timely payment of financing contracts. The
investment earnings available for this purpose represent the earnings on
payments received from state and other agencies.
Sec.
2. RCW
39.94.010 and 1989 c 356 s 1 are each amended to read as follows:
The
purposes of this chapter are to confirm the authority of the state, its
agencies, departments, and instrumentalities, the state board for community ((college
education)) and technical colleges, and the state institutions of
higher education to enter into contracts for the acquisition of real and
personal property which provide for payments over a term of more than one year
and to exclude such contracts from the computation of indebtedness under RCW
39.42.060 and Article VIII, section 1 of the state Constitution. It is further
the purpose of this chapter to permit the state, its agencies, departments, and
instrumentalities, the state board for community ((college education)) and
technical colleges, and the state institutions of higher education to enter
into financing contracts which make provision for the issuance of certificates
of participation and other financing structures. Financing contracts of the
state, whether or not entered into under this chapter, shall be subject to
approval by the state finance committee except as provided in this chapter.
This
chapter shall be liberally construed to effect its purposes.
Sec.
3. RCW
39.94.020 and 1990 c 47 s 3 are each amended to read as follows:
Unless
the context clearly requires otherwise, the definitions in this section apply
throughout this chapter.
(1)
"Credit enhancement" includes insurance, letters of credit, lines of
credit, or other similar agreements which enhance the security for the payment
of the state's or an other agency's obligations under financing
contracts.
(2)
"Financing contract" means any contract entered into by the state for
itself or on behalf of an other agency which provides for the use and
purchase of real or personal property by the state and provides for payment by
the state over a term of more than one year, and which provides that title to
the subject property ((shall)) may secure performance of the
state or transfer to the state or an other agency by the end of the
term, upon exercise of an option, for a nominal amount or for a price
determined without reference to fair market value. Financing contracts shall
include, but not be limited to, conditional sales contracts, financing leases,
lease purchase contracts, or refinancing contracts, but shall not include
operating or true leases. For purposes of this chapter, the term
"financing contract" shall not include any nonrecourse financing
contract or other obligation payable only from money or other property received
from private sources and not payable from any public money or property. The
term "financing contract" shall include a "master financing
contract."
(3)
"Master financing contract" means a financing contract which provides
for the use and purchase of property by the state, and which may include more
than one financing contract and appropriation.
(4)
"Other agency" means any commission established under Title 15
RCW, a library or regional library, an educational service district, the
superintendent of public instruction, the school directors' association, a
health district, or any county, city, town, school district, or other municipal
corporation or quasi municipal corporation described as such by statute.
(5)
"State" means the state, agency, department, or instrumentality of
the state, the state board for community ((college education)) and
technical colleges, and any state institution of higher education.
(((5)))
(6) "State finance committee" means the state finance
committee under chapter 43.33 RCW.
(((6)))
(7) "Trustee" means a bank or trust company, within or without
the state, authorized by law to exercise trust powers.
Sec.
4. RCW
39.94.030 and 1989 c 356 s 3 are each amended to read as follows:
(1)
The state may enter into financing contracts for itself or on behalf of an
other agency for the use and acquisition for public purposes of real and
personal property. Payments under financing contracts of the state
shall be made by the state from currently appropriated funds or funds not
constituting "general state revenues" as defined in Article VIII,
section 1 of the state Constitution. Except as provided in subsection
(4)(b) of this section, payments under financing contracts of the state on
behalf of any other agency shall be made solely from the sources identified in
the financing contract, which may not obligate general state revenues as
defined in Article VII, section I, of the state Constitution. The treasurer of
an other agency shall remit payments under financing contracts to the office of
the state treasurer or to the state treasurer's designee. In the event of any
deficiency of payments by an other agency under a financing contract, the
treasurer of the other agency shall transfer any legally available funds of the
other agency in satisfaction of the other agency's obligations under the
financing contract if such funds have been obligated by the other agency under
the financing contract and, if such deficiency is not thereby cured, the office
of the state treasurer is directed to withdraw from that agency's share of
state revenues for distribution or other money an amount sufficient to fulfill
the terms and conditions of the financing contract. The term of any financing
contract shall not exceed thirty years or the remaining useful life of the
property, whichever is shorter. Financing contracts may include other terms
and conditions agreed upon by the parties.
(2)
The state for itself or on behalf of an other agency may enter into
contracts for credit enhancement, which shall limit the recourse of the
provider of credit enhancement solely to the security provided under the
financing contract secured by the credit enhancement.
(3)
The state or an other agency may grant a security interest in real or
personal property acquired under financing contracts. The security interest
may be perfected as provided by the uniform commercial code - secured
transactions, or otherwise as provided by law for perfecting liens on real estate.
Other terms and conditions may be included as agreed upon by the parties.
(4)(a)
Except under (b) of this subsection, financing contracts and contracts for
credit enhancement entered into under the limitations set forth in this chapter
shall not constitute a debt or the contracting of indebtedness under RCW
39.42.060 or any other law limiting debt of the state. It is the intent of the
legislature that such contracts also shall not constitute a debt or the
contracting of indebtedness under Article VIII, section 1 of the state
Constitution. Certificates of participation in payments to be made under
financing contracts also shall not constitute a debt or the contracting of an
indebtedness under RCW 39.42.060 if payment is conditioned upon payment by the
state under the financing contract with respect to which the same relates. It
is the intent of the legislature that such certificates also shall not
constitute a debt or the contracting of indebtedness under Article VIII,
section 1 of the state Constitution if payment of the certificates is
conditioned upon payment by the state under the financing contract with respect
to which those certificates relate.
(b)
A financing contract made by the state on behalf of an other agency may be
secured by the pledge of revenues of the other agency or other agency's full
faith and credit or may, at the option of the state finance committee, include
a contingent obligation by the state for payment under such financing contract.
Sec.
5. 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 for itself 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; or to be acquired by an other agency;
(b)
Approve programs providing for the issuance of certificates of participation in
master financing contracts for the state or for other agencies;
(c)
Enter into agreements with trustees relating to master financing contracts; and
(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 of the
state without prior approval of the legislature.
(5)
The state may not enter into any financing contract on behalf of an other
agency without the approval of such a financing contract by the governing body
of the other agency.
NEW SECTION. Sec. 6.
Chapter . . ., Laws of 1998 (this act) is applicable to an other
agency, as defined in RCW 39.94.020, for the financing of equipment on
September 1, 1998, and for the financing of real estate on July 1, 2000.
