BILL REQ. #:  S-3365.1 

Read first time 12/08/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to local government financial soundness; adding a new section to chapter 35.57 RCW; adding a new section to chapter 36.100 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 35.57 RCW to read as follows:
     (1) An independent financial feasibility review under this section is required to be performed prior to any of the following events:
     (a) The formation of a public facilities district under this chapter;
     (b) The issuance of any indebtedness by a public facilities district under this chapter; or
     (c) The long-term lease, purchase, or development of a facility under RCW 35.57.020.
     (2) The independent financial feasibility review required by this section must be conducted by the department of commerce through the municipal research and services center under RCW 43.110.030 or under a contract with another entity under the authority of RCW 43.110.080. The review must examine the potential costs to be incurred by the public facility district and the adequacy of revenues to meet those costs. The cost of the independent financial feasibility review must be borne by the public facility district or the local government proposing to form a public facility district.
     (3) The independent financial feasibility review, upon completion, must be a public document and must be submitted to the governor, the state treasurer, the state auditor, the public facility district and participating local political subdivisions, and appropriate committees of the legislature.

NEW SECTION.  Sec. 2   A new section is added to chapter 36.100 RCW to read as follows:
     (1) An independent financial feasibility review under this section is required to be performed prior to any of the following events:
     (a) The formation of a public facilities district under this chapter;
     (b) The issuance of any indebtedness by a public facilities district under this chapter; or
     (c) The long-term lease, purchase, or development of a facility under this chapter.
     (2) The independent financial feasibility review required by this section must be conducted by the department of commerce through the municipal research and services center under RCW 43.110.030 or under a contract with another entity under the authority of RCW 43.110.080. The review must examine the potential costs to be incurred by the public facility district and the adequacy of revenues to meet those costs. The cost of the independent financial feasibility review must be borne by the public facility district or the local government proposing to form a public facility district.
     (3) The independent financial feasibility review, upon completion, must be a public document and must be submitted to the governor, the state treasurer, the state auditor, the public facility district and participating local political subdivisions, and appropriate committees of the legislature.

NEW SECTION.  Sec. 3   (1) The Washington state treasurer and Washington state auditor must examine the financial condition of the state's two thousand four hundred local governmental entities to identify those in which there may be indications of financial distress.
     (a) The state treasurer and state auditor must consult with local government associations, the municipal research services center, the local government advisory committee established to advise the state auditor's office in prescribing local government budgeting, accounting, and reporting systems, and other interested parties at the discretion of the state treasurer and state auditor to assist in the examination of the financial conditions of the local governments.
     (b) The state treasurer and state auditor must report on their initial findings under this section to the governor and the appropriate committees of the legislature by January 10, 2012.
     (2) By January 10, 2012, the state treasurer must recommend legislation to establish a forward-looking capacity to protect the state and its local governmental entities from negative effects in the unlikely event of another impending default on debts owed by a local governmental entity.

NEW SECTION.  Sec. 4   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 5   Section 3 of 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.