6505 AMS .... S4048.1

6505 AMS .... S4048.1

SB 6505 - S AMD 572

By Senator Gardner

ADOPTED 02/16/02

Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 35.45.030 and 1983 c 167 s 41 are each amended to read as follows:

(1) Local improvement bonds shall be in such denominations as may be provided in the ordinance authorizing their issue and shall be numbered from one upwards consecutively. Each bond shall (a) be signed by the mayor and attested by the clerk, (b) have the seal of the city or town affixed thereto, (c) refer to the improvement to pay for which it is issued and the ordinance ordering it, (d) provide that the principal sum therein named and the interest thereon shall be payable out of the local improvement fund created for the cost and expense of the improvement((~~, or~~)) and out of the local improvement guaranty fund, unless the ordinance under which it was issued provides that the bonds shall not be secured by the local improvement guaranty fund; and out of a reserve fund, if one is established for such bonds pursuant to RCW 35.51.040; or, with respect to interest only, shall be payable out of the general revenues of the city or town, but only if pledged to the payment of such interest pursuant to RCW 35.45.065, and not otherwise, (e) provide that the bond owners' remedy in case of nonpayment shall be confined to the enforcement of the special assessments made for the improvement and to the guaranty fund and reserve fund, as applicable, and (f) be in any form, including bearer bonds or registered bonds as provided in RCW 39.46.030.

Any interest coupons may be signed by the mayor and attested by the clerk, or in lieu thereof, may have printed thereon a facsimile of their signatures.

(2) Notwithstanding subsection (1) of this section, but subject to RCW 35.45.010, such bonds may be issued and sold in accordance with chapter 39.46 RCW.

Sec. 2. RCW 35.45.070 and 1965 c 7 s 35.45.070 are each amended to read as follows:

(1)(a) Neither the holder nor owner of any bond, interest coupon, ((or)) warrant, or other short-term obligation issued against a local improvement fund shall have any claim therefor against the city or town by which it is issued, except for payment from the special assessments made for the improvement for which the bond or warrant was issued and except also for payment from the local improvement guaranty fund of the city or town as to bonds issued after the creation of a local improvement guaranty fund of that city or town. The city or town shall not be liable to the holder or owner of any bond, interest coupon, ((or)) warrant, or other short-term obligation for any loss to the local improvement guaranty fund occurring in the lawful operation thereof.

(b) A copy of the foregoing ((~~part~~)) in (a) of this ((~~section~~)) subsection shall be plainly written, printed, or engraved on each bond, interest coupon, warrant, or other short-term obligation.

(2) Notwithstanding the provisions of subsection (1) of this section, with respect to bonds, interest coupons, warrants, or other short-term obligations issued under an ordinance providing that the obligations are not secured by the local improvement guaranty fund:

(a) Neither the holder nor owner of any obligation issued against a local improvement fund shall have any claim against the city or town by which it is issued, except for payment from the special assessments made for the improvement for which the obligation was issued.

(b) A copy of the foregoing in (a) of this subsection shall be plainly written, printed, or engraved on each bond, interest coupon, warrant, or other short-term obligation.

Sec. 3. RCW 35.45.080 and 1965 c 7 s 35.45.080 are each amended to read as follows:

If a city or town fails to pay any bonds or to promptly collect any local improvement assessments when due, the owner of the bonds may proceed in his own name to collect the assessment and foreclose the lien thereof in any court of competent jurisdiction and shall recover in addition to the amount of the bond and interest thereon, five percent, together with the cost of suit. Any number of holders of bonds for any single improvement may join as plaintiffs and any number of owners of property upon which the assessments are liens may be joined as defendants in the same suit.

The owners of local improvement bonds issued by a city or town after the creation of a local improvement guaranty fund therein, shall also have recourse against the local improvement guaranty fund of such city or town unless the ordinance under which the bonds were issued provides that the bonds are not secured by the local improvement guaranty fund.

Sec. 4. RCW 35.54.010 and 1971 ex.s. c 116 s 7 are each amended to read as follows:

(1) There is established in every city and town a fund to be designated the "local improvement guaranty fund" for the purpose of guaranteeing, to the extent of the fund, the payment of its local improvement bonds and warrants or other short-term obligations issued to pay for any local improvement ordered in the city or town or in any area wholly or partly outside its corporate boundaries: ((~~(1)~~)) (a) In any city of the first class having a population of more than three hundred thousand, subsequent to June 8, 1927; ((~~(2)~~)) (b) in any city or town having created and maintained a guaranty fund under chapter 141, Laws of 1923, subsequent to the date of establishment of such fund; and ((~~(3)~~)) (c) in any other city or town subsequent to April 7, 1926: PROVIDED, That this shall not apply to any city of the first class which maintains a local improvement guaranty fund under chapter 138, Laws of 1917, but any such city maintaining a guaranty fund under chapter 138, Laws of 1917 may by ordinance elect to operate under the provisions of this chapter and may transfer to the guaranty fund created hereunder all the assets of the former fund and, upon such election and transfer, all bonds guaranteed under the former fund shall be guaranteed under the provisions of this chapter.

(2) The local improvement guaranty fund established under subsection (1) of this section shall not be subject to any claim by the owner or holder of any local improvement bond, warrant, or other short-term obligation issued under an ordinance that provides that such obligations shall not be secured by the local improvement guaranty fund."

SB 6505 - S AMD 572

By Senator Gardner

ADOPTED 02/16/02

On page 1, line 1 of the title, after "districts;" strike the remainder of the title and insert "and amending RCW 35.45.030, 35.45.070, 35.45.080, and 35.54.010."