BILL REQ. #:  H-1299.1 

Read first time 01/30/2007.   Referred to Committee on Health Care & Wellness.

     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 project for which financial assistance is sought, including the status and result of reviews of the facility or proposed project by other state or local regulatory agencies. If the project, in whole or in part, is subject to certificate of need review under chapter 70.38 RCW, the participant must include a detailed description of that part subject to certificate of need review and provide evidence that the required certificate of need has been issued;
     (c) Debt to be refinanced with authority assistance;
     (d) Finances of the applicant; and
     (e) An estimate of the 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 and a description of the applicant's plan to ensure that these savings are returned to patients as required under section 2 of this act.
     (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 financing agreements to return aggregate savings from the financing to patients, and whether the applicant's plan developed under section 2 of this act for returning savings is effective and verifiable; 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 demonstrates that it can meet the requirements of section 2 of this act; and
     (vi) The applicant has reasonably satisfied the requirements of this chapter, and rules adopted under this chapter, and other criteria that the authority has determined are appropriate factors in its decision-making process.
     (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) Each participant awarded financing under this chapter must agree to a savings covenant under which the participant must develop and implement a plan to return the anticipated savings described in RCW 70.37.050(2)(e) to patients of the participant in the form of lower rates or avoidance of rate increases. Such a plan may not use charity care and bad debt cost to satisfy the obligation to return its savings to patients.
     (2)(a) Except as provided in (b) of this subsection, the authority must annually verify and certify that each participant awarded financing under this chapter has used the savings realized to date from authority financing to reduce costs to patients as required by this chapter. The authority may issue a conditional certification if a participant failed to use all the savings realized to date to reduce costs to patients if the participant agrees to return the shortfall in reduced costs by the next annual report.
     (b) For loan agreements in which the total projected or actual savings realized through authority financing is five million dollars or less, the participant is deemed to have met its obligation to return savings to patients, and annual certification by the authority is not required.
     (3) If the authority does not certify that a participant has met its obligation to return savings to patients as required by this chapter, the participant is in default of its loan agreement with the authority, and the entire amount of the loan is immediately due and payable.

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 regular scheduled 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 regularly scheduled meeting of the authority during which the authority board will act on the application.

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 enforcement of savings covenants 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 four billion 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.