BILL REQ. #:  H-1970.5 

READ FIRST TIME 02/28/07.   

     AN ACT Relating to the health care facilities authority; amending RCW 70.37.090; reenacting and amending RCW 70.37.050; adding new sections to chapter 70.37 RCW; and creating a new section.

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

Sec. 1   RCW 70.37.050 and 1983 c 210 s 2 and 1983 c 167 s 171 are each reenacted and amended to read as follows:
     (1) The authority shall establish rules concerning its exercise of the powers authorized by this chapter.
     (2) The authority shall receive from applicants requests for the providing of bonds for financing of health care facilities ((and)). An applicant must furnish at least the following information, where applicable, with its request for financial assistance:
     (a) Identification of the applicant;
     (b) A description of the applicant's legal structure. If a private nonprofit corporation, the applicant must describe how the assets are held and by whom, and provide copies of its articles of incorporation or similar documentation;
     (c) If the applicant is a private nonprofit entity or corporation, the applicant must provide a copy of the internal revenue service determination of section 501(c)(3) status;
     (d) A description of the project for which financial assistance is sought, including:
     (i) Amount of requested borrowing;
     (ii) A general description of the project to be accomplished with authority financial assistance;
     (iii) The current status of planning for the project and dates proposed for: (A) Completion of drawings for the project, if necessary; (B) filing of environmental impact statement, if necessary; (C) entry into construction contract; and (D) completion or occupancy;
     (iv) The current status of certificate of need for the project;
     (v) The cost of the project;
     (vi) Other funds to be used for the project, if any;
     (vii) The amount of projected revenues to be derived from the project, the sources of such revenues, when revenues are expected to begin, and a three-year revenue projection;
     (viii) Feasibility studies on the project, if any; and
     (ix) Proposed security for authority-issued bonds;
     (e) Debt to be refinanced with authority assistance:
     (i) Amount, date, maturity or maturities, interest rate or rates, prepayment penalties, if any, debt service, and form of applicant's existing debt to be refinanced;
     (ii) Source of revenue for payment of existing debt, security for debt to be refinanced, and rating, if any, assigned to debt to be refinanced;
     (iii) Holder of debt;
     (iv) Proposed security for new authority-issued debt; and
     (v) Proposed date schedule for accomplishing debt refinancing;
     (f) Finances of applicant:
     (i) Audited, if audited, financial statements for past three years;
     (ii) Latest current financial statement;
     (iii) Current year's budget of revenues, expenses, and capital expenditures;
     (iv) As applicable to the project, sources of revenues and approximate dollar volumes for each source in the last three years, and projection of revenues, expenses, and capital expenditures for next three to five years, including revenues and expenses of proposed project; and
     (v) If not otherwise described in financial statements, a description of long-term debts of applicant, including date incurred, by whom held, debt service schedule, interest rate, form of debt, source of revenues for repayment, and security for repayment;
     (g) A description of pending or threatened litigation or administrative actions with potential for a material adverse effect on the applicant's ability to repay the financial assistance provided by the authority;
     (h) A brief description of existing medical facilities, including number of beds, number of medical and other staff, categories of medical services offered, and laboratory and research facilities, if any;
     (i) A brief description of hospital expansion plans, if any, in the next ten years;
     (j) A brief summary of statistics for the past three years, if available, on percentage of bed occupancy and types and numbers of patients cared for; and
     (k)(i) An estimate of aggregate savings over the life of the proposed financing to be realized by the applicant through authority financing by tax-exempt bonds as compared to financing through taxable obligations, including interest assumptions on which savings calculations are based; and
     (ii) A description of the means the applicant proposes to use to ensure that savings from tax-exempt financing are passed on to the public.
     (3)(a) The authority shall investigate and determine the need and the feasibility of providing such bonds. As part of its review, the authority must consider:
     (i) Whether an applicant complied with the requirements under past agreements with the authority to pass on aggregate savings from the financing to the public; and
     (ii) Public comments received by the authority, whether oral or in writing, on the application.
     (b) The authority may approve an application and adopt a resolution authorizing the issuance of bonds for the requested financing if it determines at least the following:
     (i) The proposed project is necessary or advisable for the benefit of the public health;
     (ii) The applicant can reasonably be expected to achieve successful completion of the health care facilities to be financed;
     (iii) The proposed project and the issuance of bonds for the project are economically feasible;
     (iv) The proposed project will carry out the purposes of this chapter;
     (v) The applicant will provide the sworn public benefit certifications required under section 2 of this act; and
     (vi) The applicant has reasonably satisfied the requirements of this chapter, and rules adopted under this chapter.
     (4)(a) Whenever the authority deems it necessary or advisable for the benefit of the public health to provide financing for a health care facility, it shall adopt a financing plan therefor and shall declare the estimated cost thereof, as near as may be, including as part of such cost funds necessary for the expenses incurred in the financing as well as in the construction or purchase or other acquisition or in connection with the rental or other payment for the use thereof, interest during construction, reserve funds and any funds necessary for initial start-up costs, and shall issue and sell its bonds for the purposes of carrying out the proposed financing plan((: PROVIDED, That)). However, if a certificate of need is required for the proposed project, no such financing plan shall be adopted until such certificate has been issued pursuant to chapter 70.38 RCW ((by the secretary of the department of social and health services)).
     (b) The authority shall have power as a part of ((such)) a plan adopted under this subsection to create a special fund or funds for the purpose of defraying the cost of such project and for other projects of the same participant subsequently or at the same time approved by it and for their maintenance, improvement, reconstruction, remodeling and rehabilitation, into which special fund or funds it shall obligate and bind the participant to set aside and pay from the gross revenues of the project or from other sources an amount sufficient to pay the principal and interest of the bonds being issued, reserves and other requirements of the special fund and to issue and sell bonds payable as to both principal and interest out of such fund or funds relating to the project or projects of such participant.
     ((Such)) (c) Bonds issued under this subsection shall bear such date or dates, mature at such time or times, be in such denominations, be in such form, either coupon or registered, or both, as provided in RCW 39.46.030, carry such registration privileges, be made transferable, exchangeable, and interchangeable, be payable in such medium of payment, at such place or places, be subject to such terms of redemption, bear such fixed or variable rate or rates of interest, and be sold in such manner, at such price, as the authority shall determine. Such bonds shall be executed by the ((chairman)) chair, by either its duly elected secretary or its executive director, and by the trustee if the authority determines to utilize a trustee for the bonds. Execution of the bonds may be by manual or facsimile signature: PROVIDED, That at least one signature placed thereon shall be manually subscribed. Any interest coupons appurtenant to the bonds shall be executed by facsimile or manual signature or signatures, as the authority shall determine.

NEW SECTION.  Sec. 2   A new section is added to chapter 70.37 RCW to read as follows:
     (1) To further the public policy set forth in RCW 70.37.010, the authority shall require participants to provide sworn public benefit certifications as required by the authority. The authority must establish the form, content, and submission intervals of the sworn public benefit certifications. The sworn public benefit certifications must:
     (a) Describe the means by which the participant has passed on to the public the benefits resulting from financing its project with authority bonds through: (i) Foregone increases in rates and charges or decreases in rates and charges resulting from the interest cost avoided as compared to taxable financing; (ii) the provision of services to underserved populations; (iii) the provision of charity care in excess of any applicable legal requirements; or (iv) other reasonable means allowed by the authority by rule; and
     (b) Identify improvements in the quality of health care resulting from the project.
     (2) The sworn public benefit certifications are public records subject to inspection and copying under chapter 42.56 RCW.

NEW SECTION.  Sec. 3   A new section is added to chapter 70.37 RCW to read as follows:
     (1) The authority shall encourage and provide for public participation in authority meetings and its project application review under rules that establish reasonable time during each meeting for public testimony, reasonable notice requirements to the authority from those persons wishing to provide testimony, and reasonable deadlines for submitting written testimony. This section does not limit the authority chair's discretion to place reasonable time limits on public testimony or to recognize persons to testify who have not given notice of their testimony.
     (2) All public comments, whether oral or in writing, related to a specific application received by the authority by the deadlines specified in rules must be transcribed and posted on the authority's web site at least ten days before the meeting of the authority during which the authority board will act on the resolution.

Sec. 4   RCW 70.37.090 and 1974 ex.s. c 147 s 9 are each amended to read as follows:
     The authority shall have power to:
     (1) Require persons applying for its assistance in connection with the investigation and financing of projects to pay fees and charges to provide the authority with funds for investigation, financial feasibility studies, evaluation and verification of sworn public benefit certifications and related requirements, expenses of issuance and sale of bonds, and other charges for services provided by the authority in connection with such projects. All other expenses of the authority including compensation of its employees and consultants, expenses of administration and conduct of its work and business and other expenses shall be paid out of such fees and charges, out of contributions and grants to it, out of the proceeds of bonds issued for projects of participants or out of revenues of such projects; none by the state of Washington. ((The authority shall have power to))
     (2) Establish special funds into which such money shall be received and out of which it may be disbursed by the persons and with the procedure and in the manner established by the authority.

NEW SECTION.  Sec. 5   A new section is added to chapter 70.37 RCW to read as follows:
     The total amount of outstanding indebtedness of the authority may not exceed five billion five hundred million dollars at any time. The calculation of outstanding indebtedness must include the initial principal amount of an issue and may not include interest that is either currently payable or that accrues as a part of the face amount of an issue payable at maturity or earlier redemption. Outstanding indebtedness does not include notes or bonds as to which the obligation of the authority has been satisfied and discharged by refunding or for which payment has been provided by reserves or otherwise.

NEW SECTION.  Sec. 6   This act applies retroactively to applications for financing filed under chapter 70.37 RCW for which financing has not been awarded as of the effective date of this section.