BILL REQ. #:  S-0844.1 

Read first time 01/20/09.   Referred to Committee on Natural Resources, Ocean & Recreation.

     AN ACT Relating to state and municipal borrowing; creating new sections; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that state and local responsibility for environmental and natural resources protection, cleanup and restoration, the selection of means of generating electric current, the selection of transportation modes and plans, water conservation, and storm water and sewerage treatment, often transcend local government boundaries and cover large regions of or even the entire state. The benefits of expenditures for such purposes also accrue across numerous governmental jurisdictions, yet too often it is only the state or one or a few local jurisdictions undertaking responsibility to finance these expenditures.
     The legislature further finds that this burden on the responsible jurisdiction constitutes an inequitable financial disincentive, thus discouraging or delaying needed undertakings, or resulting in suboptimal expenditures of financial and natural resource capital, in each case to the detriment of the health and welfare of the people and the natural resources of the state. This disparity between burdens and benefits can render socially, ecologically, and economically desirable projects financially unfeasible.
     The legislature further finds that a new concept of public financing, referred to as interjurisdictional financing, would address this lack of connection between financing burdens and expenditure benefits, and bypass institutional barriers to the financing of integrated and beneficial projects. Unlike the traditional municipal bond finance model in which the repayment of bonds is anticipated solely from increased utility or tax revenues of the bond issuer, interjurisdictional bonds would be repaid by allocating shared responsibility, without diminution of the issuing entity's obligations to bondholders, among some or all of the jurisdictions that would be benefited from the expenditure by reduced expenses or increased revenues based upon the projected cost or tax savings or increased utility revenues forecast to accrue to each, using methods of calculation including life cycle assessment protocols adapted to subject matter and locale. By this means, socially, ecologically, and economically desirable projects not otherwise financially feasible, may acquire feasibility.

NEW SECTION.  Sec. 2   (1) On or before December 31, 2009, the state treasurer shall provide a report to the fiscal and natural resources policy committees of the senate and house of representatives that analyzes the feasibility of financing state and local environmental protection, cleanup and restoration, the means of generating electric current, transportation modes and plans, water conservation and storm water and sewerage treatment, through the issuance of interjurisdictional financing as described in section 1 of this act.
     (2) The report shall include:
     (a) A review of this financing mechanism as proposed, as well as examples where states or local jurisdictions have implemented similar mechanisms among municipal corporations;
     (b) An identification of potential overall benefits to state and local jurisdictions to the economy, to the health and welfare of the people, and to the natural resources of the state, in using this mechanism over existing finance mechanisms;
     (c) An analysis of the methodologies for assessing individual jurisdiction benefits and for allocating responsibility among all the benefited jurisdictions for repayment of the bond obligations;
     (d) An analysis of necessary enabling legislation to implement this method, and responsibilities of the state treasurer, the state finance committee, and other agencies; and
     (e) An assessment of the potential for credit markets to accept this financing mechanism.

NEW SECTION.  Sec. 3   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.