HOUSE BILL REPORT

HB 2726

BYRepresentatives Schoon, Cantwell, Brumsickle, Moyer, Raiter, H. Myers, Hargrove, Smith, Nealey, Peery and Cooper

Raising the debt funding limitation for certain port districts.

House Committe on Trade & Economic Development

Majority Report:  Do pass as amended.  (9)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member; Kirby, Moyer, Raiter, Rasmussen, Schoon and Tate.

House Staff:Charlie Gavigan (786-7340)

Rereferred House Committee on Capital Facilities & Financing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (11)

      Signed by Representatives H. Sommers, Chair; Rasmussen, Vice Chair; Schoon, Ranking Republican Member; Beck, Betrozoff, Bowman, Jacobsen, Peery, Rector, Wang and Winsley.

Minority Report:  Do not pass.  (1)

      Signed by Representative Heavey.

AS REPORTED BY COMMITTEE ON CAPITAL FACILITIES & FINANCING

FEBRUARY 6, 1990

BACKGROUND:

The Legislature authorized port districts in 1911.  These port districts are referred to as "special purpose districts" and are governed by elected port commissioners.  Port districts are authorized to develop a variety of facilities and services, primarily related to transportation and economic development.  Examples of transportation facilities developed by port districts include marine terminals, storage facilities, airports, and railroad facilities.  Examples of economic development activities undertaken by ports include industrial development sites, trade centers, and export trading companies.

Port district activities are financed through fees for services, fees for the use of port land and facilities, property tax levies, receipts from the issuance of a variety of municipal bonds, and grants and gifts.  Ports can also issue Industrial Revenue Bonds.

One type of bond a port district is allowed to issue is a general obligation bond.  The port can issue non-voter approved general obligation bonds not to exceed an amount, together with similar outstanding bonds, equal to one-fourth of one percent of the value of the taxable property of the port district.  With the approval of three-fifths of the voters voting, a port district can issue general obligation bonds until the total general indebtedness of the port district reaches three-fourths of one percent of the taxable value of port district property.

A port district that operates a municipal airport and has less than $200 million in value of taxable property may issue additional non-voter approved general obligation bonds up to three-eighths of one percent of the property tax value; with approval of three-fifths of voters voting, additional general obligation bonds up to one and one-fourth percent of the tax value of the port district property may be issued.

SUMMARY:

BILL AS AMENDED:  The threshold for port districts to issue voter-approved general obligation bonds is changed from three-fifths of the voters voting to a simple majority of voters voting.

Port districts with a property tax value of less than $800 million may issue, together with existing obligations not authorized by the voters, general obligation bonds up to one-half of one percent of the port district property tax value.

Debt secured by a mortgage on district property that is leased to the federal government is not considered port indebtedness.

AMENDED BILL COMPARED TO ORIGINAL:  The property tax value threshold to allow smaller ports to issue more non-voter approved general obligation bonds is changed to $800 million rather than $250 million.  Port debt does not include mortgages on property leased to the federal government.

CHANGES PROPOSED BY COMMITTEE ON CAPITAL FACILITIES & FINANCING (SUBSTITUTE BILL):  The change in the voter requirement from three-fifths to a simple majority vote on port bonding authority is deleted.  The threshold for small ports to issue non-voter approved debt is not increased from $250 million to $800 million.  Only county-wide port districts with a population of fewer than 2,500 people may exclude debt on property leased to the federal government from the debt limit.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    (Trade & Economic Development)  Dave Rogers, Port of Garfield County; and Art Lehman, Port of Centralia.

(Capital Facilities & Financing)  Dave Rogers, Port of Garfield County.

House Committee - Testified Against:      (Trade & Economic Development)  No one.

(Capital Facilities & Financing)  No one.

House Committee - Testimony For:    (Trade & Economic Development)  Ports need more authority to issue general obligation bonds for economic development without having to get approval from voters.  The Port of Centralia has a mortgage on property that is leased to the federal government that should not be considered port debt.

(Capital Facilities & Financing)  The substitute bill resolves the Port of Garfield's problem of using all of its debt capacity on property leased to the federal government.

House Committee - Testimony Against:      (Trade & Economic Development)  None.

(Capital Facilities & Financing)  None.