Public Works Assistance Account.
The Public Works Assistance Account (PWAA) was established to encourage local government self-reliance in meeting public works needs and to assist in financing critical infrastructure projects. Funds in the PWAA are used to make loans and grants, and to serve as state match for federal dollars. Local governments and special purpose districts, except port and school districts, are eligible to apply for assistance from the PWAA.
Public Works Board.
The Public Works Board is staffed by the Department of Commerce and includes 13 voting members. The Board may make low-interest or interest-free loans and grants from the PWAA to finance the acquisition, construction, repair, replacement, or improvement of multiple types of local public works, including streets and roads, water systems, storm and sanitary sewage systems, and solid waste facilities. Much of the work supported by the Public Works Board is funded through the state capital budget through the PWAA.
General Obligation Bonds.
Bonds are "general obligations of the state" when the full faith, credit, and taxing power of the state is pledged irrevocably to the payment of debt service on the bonds. The ability of the state to make this pledge is provided in the Washington Constitution. These general obligation bonds have the strongest security pledge the state can make and they carry the highest credit ratings of all the state's obligations. The total amount of bonds the state may issue is governed by the state's overall debt limit, which is established in Article VIII, Section 1 of the Washington Constitution.
State Programs Authorized to Issue Non-General Obligation Bonds.
Multiple entities exist within the state of Washington to issue non-general obligation bonds for the purpose of financing programs and activities within the state. These include the Housing Finance Commission, the Health Care Facilities Authority, the Washington Economic Development Finance Authority, and the Washington Higher Education Facilities Authority. Although these organizations vary in their individual missions and particular governance structures, they are alike in that they all were created by the Legislature and are all authorized to issue their own bonds, separate from the issuance of the state's general obligation bonds, to finance the work they have been directed by the Legislature to perform. Such bonds do not count against the state's debt limit.
State Finance Committee.
The State Finance Committee, composed of the Governor, the Lieutenant Governor, and the State Treasurer, is responsible for supervising and controlling the issuance of all state bonds. The State Finance Committee periodically issues general obligation bonds to finance projects authorized in the capital budget. No bonds may be authorized for sale without prior legislative appropriation of the net proceeds.
Public Works Board—Statement of Intent.
The intent is stated to authorize the Public Works Board (Board), without using public funds or lending the credit of the state or local governments, to issue nonrecourse revenue bonds and to participate in federal, state, and local public works infrastructure programs in order to make additional funds available at affordable rates to help provide public works infrastructure improvements throughout the state.
Public Works Board—Expansion of Authority.
The authority of the Board is expanded in several ways. This includes, among other things, the authority to:
Public Works Board—Restriction on Authority.
Multiple proscriptions are placed on the authority of the Board. Among other things, the Board may not:
Public Works Board—Total Indebtedness.
The total amount of outstanding indebtedness of the Board may not exceed $4 billion at any time.
Public Works Board—General Plan of Public Works Infrastructure Objectives.
The Board must adopt a general plan of public works infrastructure objectives to be implemented by the Board during the period of the plan. The plan must include an estimate of the amount of bonds the Board will issue during the term of the plan and how bond proceeds will be expended. The plan must be adopted by resolution of the Board following at least one public hearing. The Board must adopt rules designed to result in the use of bond proceeds in a manner consistent with the plan.
Public Works Board—Issuance of Bonds.
The Board is authorized to establish multiple parameters concerning the bonds it issues, including dates of maturity, denominations, transferability, and manner of sale. The bonds of the Board are subject to the terms, conditions, covenants, and protective provisions that the Board chooses to adopt.
Bonds issued by the Board must be issued in the name of the Board. The bonds are not obligations of the State of Washington and instead are obligations only of the Board, payable from the special fund or funds created by the Board for their payment. These funds are not public moneys or funds of the State of Washington but instead must be kept segregated and set apart from other funds.
The chair of the State Finance Committee or the chair's designee must be notified in advance of the issuance of bonds by the Board in order to promote the orderly offering of obligations in the financial markets.
Public Works Board—Proceeds from the Sale of Bonds.
Proceeds from the sale of all bonds issued by the Board must be deposited by the Board in any trust company, savings bank, savings and loan association, or bank having the powers of a trust company within or without the state, or in a special fund or funds established for the particular purposes for which the bonds were issued and sold. Such funds are not funds of the State of Washington. Proceeds received from the sale of the bonds may also be used to defray the expenses of the Board in connection with and incidental to the issuance and sale of bonds.
Enforcement of Rights.
Any owner of bonds issued by the Board may bring a legal action to protect and enforce any of their rights with respect to the bonds.
Definitions.
"Bonds" are defined to mean any bonds, notes, debentures, interim certificates, conditional sales or lease financing agreements, lines of credit, forward purchase agreements, investment agreements, and other banking or financial arrangements, guaranties, or other obligations issued by or entered into by the Public Works Board. Such bonds may be issued on either a tax-exempt or taxable basis.
Public Works Board—Authority to Obligate Funds.
The requirement that the Board may not sign contracts or otherwise obligate funds from the PWAA before the Legislature has appropriated funds to the Board for the purpose of funding public works projects is removed.
Public Works Board—Bond Counsel and Underwriters.
The Board must adopt written policies to provide for the selection of bond counsel and underwriters. The Board must submit its initial policies for selecting bond counsel and underwriters to the Chief Clerk of the House of Representatives and the Secretary of the Senate for transmittal to and review by the appropriate standing committees and the Joint Administrative Rules Review Committee.
Compliance with Internal Revenue Code.
For purposes of the Internal Revenue Code: