Brief Summary of Substitute Bill

Increases the number of health sciences and services authorities that may be created from one to two, and requires them to be located east of the Cascade Mountains.
Allows only a Health Sciences and Services Authority (Authority) created before January 1, 2010, to impose the sales and use tax that is credited against the state portion of the sales tax.
Allows an Authority, when authorized by the local jurisdiction, to borrow money and incur debt.
Amends the Open Public Meetings Act to allow, under certain circumstances, an Authority to conduct closed executive sessions when considering the substance of grant applications or awards.

Background:

Health Sciences and Services Authorities.

A city or county may establish a Health Sciences and Services Authority (Authority) to promote bioscience-based economic development and advance new therapies and procedures to combat disease and promote public health.

Applications to establish an Authority were due by December 31, 2007. By statute, only one authority was to be authorized, and it was required to be located in a county with a population under one million persons.

A local jurisdiction that creates an Authority may:

until January 1, 2023, impose a sales and use tax that is credited against the state portion of the tax paid over to the Department of Revenue; and
incur general indebtedness and issue general obligation bonds to finance grants and other programs and to retire the indebtedness. The bonds issued by a local government do not constitute an obligation of Washington, either general or special.

An Authority is overseen by a board of up to 14 members, and has all the general powers necessary to carry out its purposes, including hiring staff and contracting with technical experts, leveraging the Authority's public funds with moneys received from other public and private sources, and making grants to entities to promote bioscience-based economic development. The 2009-2011 state operating budget limited the use of Authority funds for staffing, technical experts, and administrative costs to no more than 10 percent of the funds received from sales and use taxes during the 2009-2011 fiscal biennium.

Financial, commercial, operations, and technical and research information and data submitted to or obtained by an Authority for grant making purposes is exempt from public disclosure under the Public Records Act to the extent that such information, if revealed, would reasonably be expected to result in private loss to the providers of the information.

The Higher Education Coordinating Board (HEC Board) is responsible for approving or rejecting applications submitted by local governments for an area's designation as an Authority. The HEC Board also must develop Authority evaluation and performance measures and report, on a biennial basis, to the Legislature, beginning December 1, 2009.

The HEC Board approved the Health Sciences and Services Authority of Spokane County (Spokane County HSSA) in 2008. The Spokane County HSSA awarded its first grants in 2009, a total of $900,000 to two organizations, and is developing two additional grant competitions. The tax distributions collected for the Spokane HSSA was $1,450,057 through September 2009.

Open Public Meetings Act.

The Open Public Meetings Act (OPMA) requires meetings of the governing body of a public agency be open to the public. For the purposes of the OPMA, a public agency is defined broadly and includes state boards and agencies, local governments, and special purpose districts.

During a regular or special meeting, a governing body may meet in a executive session that is closed to the public to discuss certain issues specified in statute.

Summary of Bill:

The number of health sciences and services authorities that may be created is increased from one to two. Authorities must be located east of the Cascade Mountains.

Only an Authority created before January 1, 2010, is authorized to impose the sales and use tax that is credited against the state portion of the sales tax.

When authorized by an ordinance or resolution of the local jurisdiction that created the Authority, the Authority may borrow money and incur debt. Moneys borrowed by an Authority must be secured by gifts or grants from public or private sources. The Authority may not incur an expense or liability that is the obligation of the state or local government. All Authority obligations must be paid with Authority funds.

The 10 percent limitation, imposed during the 2009-2011 fiscal biennium in the state operating budget, on use of authority funds for staffing, technical experts, and administrative costs is made permanent.

The Open Public Meetings Act is amended to allow an Authority to conduct closed executive sessions when considering the substance of grant applications or awards if public knowledge of the discussion would reasonably be expected to result in private loss to the providers of the information.