SENATE BILL REPORT

SSB 6023

BYSenate Committee on Agriculture (originally sponsored by Senators Hansen, Barr, Fleming and Newhouse)

Authorizing port districts to mortgage industrial development facilities, including agricultural facilities.

Senate Committee on Agriculture

Senate Hearing Date(s):March 3, 1987

Majority Report:  That Substitute Senate Bill No. 6023 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Hansen, Chairman; Bauer, Vice Chairman; Anderson, Bailey, Barr, Gaspard.

Senate Staff:Tom McDonald (786-7404)

                  April 10, 1987

House Committe on Trade & Economic Development

AS PASSED SENATE, MARCH 11, 1987

BACKGROUND:

Port districts, under statutory authority, may be established in various counties for the purpose of construction and maintenance of commercial facilities and industrial improvements.  Within a port district, the port commissioner may establish an industrial development district.  Through specific or general statutory authority under the Industrial Development Revenue Bonds Act, port districts may contract debt and issue bonds to finance industrial development.  The port districts have previously utilized the Industrial Development Revenue Bonds Act because a provision of the Act allows the districts to mortgage or encumber facilities to secure payment of the revenue bonds.

Revenue bonds sold through the Industrial Development Revenue Bonds Act must be tax exempt.  Because of the 1986 federal tax law, the revenue bonds issued for the purposes of the port districts will no longer be tax exempt.  Therefore, the port districts can no longer use the Industrial Development Revenue Bonds Act to sell revenue bonds.  Although the districts can still sell revenue bonds through specific statutory authority, the benefit of encumbering their facilities to secure payment of the bonds has been lost.

SUMMARY:

A port district has the power with respect to industrial development facilities to mortgage or otherwise encumber its facilities to secure payment of its bonds.

The port property and facilities which the port districts can finance through authorizing revenue bonds specifically include those facilities for freezing or processing agricultural products.

Fiscal Note:      none requested

Senate Committee - Testified: Darrell Russell, Washington Public Ports Association

HOUSE AMENDMENT:

The amendment clarifies that revenue bonds may be secured by a mortgage or encumbrance only on the facility that was financed by the sale of those particular revenue bonds.