BILL REQ. #:  Z-0549.1 

Read first time 02/01/11.   Referred to Committee on Financial Institutions, Housing & Insurance.

     AN ACT Relating to limiting private activity bond issues by out-of-state issuers; amending RCW 39.46.020 and 39.86.140; and adding a new section to chapter 39.46 RCW.

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

Sec. 1   RCW 39.46.020 and 2001 c 299 s 15 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Bond" means any agreement which may or may not be represented by a physical instrument, including notes, warrants, or certificates of indebtedness, that evidences an indebtedness of the state or a local government or a fund thereof, where the state or local government agrees to pay a specified amount of money, with or without interest, at a designated time or times to either registered owners or bearers, including debt issued under chapter 39.50 RCW.
     (2) "Host approval" means an approval of an issue of bonds by an applicable elected representative of the state or local government, having jurisdiction, for purposes of section 147(f)(2)(A)(ii) of the internal revenue code, over the area in which a facility is located that is to be financed with bonds issued by an issuer that is not the state or a local government.
     (3) "Local government" means any county, city, town, special purpose district, political subdivision, municipal corporation, or quasi municipal corporation, including any public corporation created by such an entity.
     (((3))) (4) "Obligation" means an agreement that evidences an indebtedness of the state or a local government, other than a bond, and includes, but is not limited to, conditional sales contracts, lease obligations, and promissory notes.
     (((4))) (5) "State" includes the state, agencies of the state, and public corporations created by the state or agencies of the state.
     (((5))) (6) "Treasurer" means the state treasurer, county treasurer, city treasurer, or treasurer of any other municipal corporation.

NEW SECTION.  Sec. 2   A new section is added to chapter 39.46 RCW to read as follows:
     (1) It is the policy of this state that in order to maintain an effective system of monitoring the use of federal subsidies within the state, facilities within the state proposed to be financed with bonds issued by an issuer that does not have jurisdiction over the location of those facilities must receive prior approval from the statewide issuer authorized by the laws of Washington to issue bonds for the proposed project in accordance with this section.
     (2)(a) At least one hundred twenty days prior to the public hearing for the proposed issuance of bonds for a project located in this state by an issuer formed or organized under the laws of another state, the issuer must notify the statewide issuer authorized under the laws of Washington to issue bonds for the proposed project and provide the information required under (b) of this subsection.
     (b) The following items and information must be received by the statewide issuer authorized under the laws of Washington to issue bonds for the proposed project:
     (i) A copy of the proposed notice of public hearing pertaining to the facilities, providing the date and location of the proposed hearing;
     (ii) The maximum stated principal amount of the bonds;
     (iii) A description of the facility, including its location;
     (iv) A description of the plan of finance;
     (v) The name of the issuer of the bonds;
     (vi) The name of the initial owner or principal user of the facility;
     (vii) A description of how the project will meet the public policy requirements and objectives of this state including the policies of the statewide issuer under Washington law; and
     (viii) A check in the amount established by the statewide issuer under Washington law to perform the review.
     (c) If the statewide issuer authorized to issue the bonds under Washington law determines that the facility and the items and information submitted under (b) of this subsection are consistent with the laws and public policy of the state and are in the best interest of the state, then the statewide issuer shall issue a written approval under this section authorizing the governmental unit to grant its host approval of the public hearing in its discretion.
     (d) If the statewide issuer authorized to issue the bonds under Washington law determines that the facility and the items and information submitted under (b) of this subsection are not consistent with the laws and public policy of the state and are not in the best interest of the state, then the public hearing may not proceed and the bonds may not be issued by an issuer formed or organized under the laws of another state.

Sec. 3   RCW 39.86.140 and 2010 1st sp.s. c 6 s 8 are each amended to read as follows:
     (1) No issuer may receive an allocation of the state ceiling without a certificate of approval from the agency. The agency may not make an allocation of the state ceiling to an issuer formed or organized under the laws of another state.
     (2) For each state ceiling allocation request, an issuer shall submit to the agency, no sooner than ninety days prior to the beginning of a calendar year for which an allocation of the state ceiling is being requested, a form identifying:
     (a) The amount of the allocation sought;
     (b) The bond use category from which the allocation sought would be made;
     (c) The project or program for which the allocation is requested;
     (d) The financing schedule for which the allocation is needed; and
     (e) Any other such information required by the agency, including information which corresponds to the allocation criteria of RCW 39.86.130.
     (3) The agency may approve or deny an allocation for all or a portion of the issuer's request. Any denied request, however, shall remain on file with the agency for the remainder of the calendar year and shall be considered for receiving any allocation, reallocation, or carryforward of unused portions of the state ceiling during that period.
     (4) After receiving an allocation request, the agency shall mail to the requesting issuer a written certificate of approval or notice of denial for an allocation amount, by a date no later than the latest of the following:
     (a) February 1st of the calendar year for which the request is made;
     (b) Fifteen days from the date the agency receives an allocation request; or
     (c) Fifteen days from the date the agency receives a recommendation by the board with regard to a small issue allocation request, should the board choose to review individual requests.
     (5)(a) For requests of the state ceiling of any calendar year, the following applies to all bond use categories except housing and student loans:
     (i) Except for housing and student loans, any allocations granted prior to April 1st, for which bonds have not been issued by July 1st of the same calendar year, shall revert to the agency on July 1st of the same calendar year for reallocation unless an extension or carryforward is granted;
     (ii) Except for housing and student loans, any allocations granted on or after April 1st, for which bonds have not been issued by October 15th of the same calendar year, shall revert to the agency on October 15th of the same calendar year for reallocation unless an extension or carryforward is granted.
     (b) For each calendar year, any housing or student loan allocations, for which bonds have not been issued by December 15th of the same calendar year, shall revert to the agency on December 15th of the same calendar year for reallocation unless an extension or carryforward is granted.
     (6) An extension of the deadlines provided by subsection (5) of this section may be granted by the agency for the approved allocation amount or a portion thereof, based on:
     (a) Firm and convincing evidence that the bonds will be issued before the end of the calendar year if the extension is granted; and
     (b) Any other criteria the agency deems appropriate.
     (7) If an issuer determines that bonds subject to the state ceiling will not be issued for the project or program for which an allocation was granted, the issuer shall promptly notify the agency in writing so that the allocation may be canceled and the amount may be available for reallocation.
     (8) Bonds subject to the state ceiling may be issued only to finance the project or program for which a certificate of approval is granted.
     (9) Within three business days of the date that bonds for which an allocation of the state ceiling is granted have been delivered to the original purchasers, the issuer shall mail to the agency a written notification of the bond issuance. In accordance with chapter 39.44 RCW, the issuer shall also complete bond issuance information on the form provided by the agency.
     (10) If the total amount of bonds issued under the authority of a state ceiling for a project or program is less than the amount allocated, the remaining portion of the allocation shall revert to the agency for reallocation in accordance with the criteria in RCW 39.86.130. If the amount of bonds actually issued under the authority of a state ceiling is greater than the amount allocated, the entire allocation shall be disallowed.