PERMANENT RULES
Effective Date of Rule: Thirty-one days after filing.
Purpose: Guidelines for implementation of three federal bond programs: Qualified energy conservation bonds, recovery zone economic development bonds, and recovery zone facility bonds. To establish definitions, procedures and standards for state and local government planning and compliance with the new bonding programs and new provisions of existing programs.
Citation of Existing Rules Affected by this Order: Amending chapter 365-135 WAC.
Statutory Authority for Adoption: Chapter 39.86 RCW and Executive Order 09-06.
Other Authority: Federal American Recovery and Reinvestment Act of 2009 and Section 301(a) of Tax Extenders and Alternative Minimum Tax Relief Act of 2008, Division C of Pub. L. 110-343.
Adopted under notice filed as WSR 09-23-120 on November 18, 2009.
Changes Other than Editing from Proposed to Adopted Version:
• In amended WAC 365-135-035(3) language is added to clarify processes for providing documentation to commerce if an originally awarded locality designates all or a portion of the award to another issuing locality.
• In amended WAC 365-135-035 (3)(d) language is added to allow acceptance of equivalent intent forms at the discretion of the bond cap manager.
• In amended WAC 365-135-035 (4)(d) language is added
to allow acceptance of equivalent intent forms at
the discretion of the bond cap manager.
Number of Sections Adopted in Order to Comply with Federal Statute: New 3, Amended 6, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 3, Amended 6, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 3, Amended 6, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 3, Amended 6, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: March 23, 2010.
Rogers Weed
Agency Director
OTS-2802.4
AMENDATORY SECTION(Amending WSR 97-02-093, filed 1/2/97,
effective 2/2/97)
WAC 365-135-010
Purpose.
The federal Tax Reform Act of
1986 imposes an annual ceiling on each state limiting the
dollar volume of certain private activity bonds that can be
issued. In addition, Congress from time-to-time enacts volume
ceilings on other types of bonds. To allocate ((this)) the
bond volume ceilings among eligible issuers in Washington
state, chapter 297, Laws of 1987 as amended has been enacted. In accordance with the statute, the department of ((community,
trade, and economic development)) commerce will allocate the
state's ((private activity)) bond ceilings and establish by
rule a fee schedule. The department will carry out such
functions through the bond cap allocation program (BCAP).
[Statutory Authority: Chapter 39.86 RCW and RCW 43.330.040 (2)(g). 97-02-093, § 365-135-010, filed 1/2/97, effective 2/2/97. Statutory Authority: 1987 c 297. 87-19-082 (Order 87-18), § 365-135-010, filed 9/16/87.]
Allocation fee: The total fee paid by the issuer to the
department for receiving allocation from the BCAP. It is
assessed by the department based on multiplying the requested
allocation amount by ((the following figures:
| (( |
|
| .000277(( |
Department: The Washington state department of
((community, trade, and economic development)) commerce.
Extension fee: The fee the department may assess when an issuer requests and is granted an extension for issuing the allocation or carryforward of the allocation. The amount of the fee will not exceed two hundred fifty dollars and is nonrefundable.
Filing fee: The nonrefundable five hundred dollar portion of the allocation fee.
Original allocation: The amount of qualified energy conservation bond, recovery zone economic development bond or recovery zone facility bond issuing authority awarded to an originally awarded locality by a formula in federal law.
Originally awarded locality: A city or county that has been allocated qualified energy conservation bond, recovery zone economic development bond or recovery zone facility bond authority by a formula contained in federal law.
Reallocation: The assignment of an unused portion of the state ceiling from one bond use category or issuer to another or the provision of a certificate of approval to any issuer for an allocation amount which previously had been returned to the department.
Statute: Chapter 39.86 RCW.
[Statutory Authority: Chapter 39.86 RCW. 00-02-061, § 365-135-020, filed 1/3/00, effective 2/3/00. Statutory Authority: Chapter 39.86 RCW and RCW 43.330.040 (2)(g). 97-02-093, § 365-135-020, filed 1/2/97, effective 2/2/97. Statutory Authority: Chapter 39.86 RCW. 93-13-012 (Order 93-05), § 365-135-020, filed 6/7/93, effective 1/1/94. Statutory Authority: 1987 c 297. 87-19-082 (Order 87-18), § 365-135-020, filed 9/16/87.]
[Statutory Authority: 1987 c 297. 87-19-082 (Order 87-18), § 365-135-030, filed 9/16/87.]
(2) Bond cap will consider other categories of applications including industrial development bonds, exempt facilities, public utility districts, and student loans for allocation from the remaining bond cap available after September 1.
(a) The program will consider and then evaluate and balance the public benefits listed in statute and in rule in making allocation decisions. Allocations will be based upon the likelihood of a project achieving the highest overall public purposes and the degree to which a project:
(i) Provides an economic boost to an economically distressed community (based on the three-year unemployment figures from employment security);
(ii) Creates or retains jobs that pay higher than the median wage for the county in which it is located, in sustainable industries, particularly for lower-income persons;
(iii) Retains or expands the local tax base;
(iv) Encourages and facilitates the provision of student loans for institutions of higher education;
(v) Reduces environmental pollution;
(vi) Facilitates investments in new manufacturing technologies enabling Washington industries to stay competitive;
(vii) Diverts solid waste from disposal and manufactures it into value-added products;
(viii) Encourages the environmentally sound handling of solid waste using best management's practices; or
(ix) Produces competitively priced energy for use in the state.
(b) The criteria in this section and other applicable criteria otherwise established in statute and rule shall not be considered as ranked in any particular order but shall be weighed and balanced for each application and among applications in making allocation decisions.
(3) For the purposes of qualified energy conservation bonds, the federal code and U.S. Department of Treasury guidance contained in IRS Notice 2009-29 allow formula allocations to be reallocated to the state and passed on by the state to other issuers. An originally awarded locality may designate other issuing localities within the jurisdiction of the originally awarded locality to use all or a portion of its original allocation by any procedure mutually acceptable to both parties, on condition that the originally awarded locality provides documentation of the designation to the department within thirty days of making the designation and ensures that all other department requests for documentation are met. The following procedures will apply to qualified energy conservation bond reallocations:
(a) An originally awarded locality that intends to use its original allocation or intends to designate another issuer within the jurisdiction of the originally awarded locality to use the original allocation must file a Notice of Intent form with the department by January 1, 2010.
(b) An originally awarded locality that has chosen to decline its original allocation may affirmatively reallocate to the state by submitting an appropriately marked Notice of Intent form.
(i) The form must be signed by the official(s) of the jurisdiction authorized to execute the form pursuant to a resolution declining the allocation adopted by the jurisdiction's governing body; and
(ii) The form and the resolution declining the allocation must be delivered to the department by January 1, 2010.
(c) An originally awarded locality that has used the Notice of Intent form to express its intent to use its original allocation may amend the Notice of Intent at a later time if it is determined that the locality is unable to use the allocation and has decided to reallocate to the state.
(d) An originally awarded locality intending to use its original allocation must provide the department with project information and supporting documents by February 1, 2010. Supporting documents include Bond Counsel and Underwriter Statement of Intent forms, or equivalent, at the discretion of the bond cap manager, and a certified copy of an inducement resolution by the governing board. A locality may request an extension if filed by February 1, 2010.
(e) If an originally awarded locality has not provided the department with the documents required by subsections (1), (2) or (4) of this section or has not issued bonds or requested an extension by June 1, 2010, the department may issue a Notice of Intent to Reallocate, informing the locality of the intent to reallocate the original allocation to another locality.
(f) An originally awarded locality will have fifteen days from receipt of a Notice of Intent to Reallocate to respond to the department with the required documentation or to ask the department to reconsider the reallocation determination.
(g) The department will respond to a request to reconsider a reallocation determination within ten business days with a decision by the assistant director of the local government division or designee to grant an extended time in which the issuing jurisdiction must demonstrate progress toward a qualified energy conservation bond issuance, or a decision to go forward with reallocation of the authority. The length of the time extension shall be determined at the discretion of the assistant director.
(4) For the purposes of recovery zone economic development bond and recovery zone facility bond allocations, an originally awarded locality may designate other issuing localities within the jurisdiction of the originally awarded locality to use all or a portion of its original allocation by any procedure mutually acceptable to both parties, on condition that the originally awarded locality provides documentation of the designation to the department within thirty days of making the designation and ensures that all other department requests for documentation are met.
If an originally awarded locality is not able to or chooses not to use its original allocation or to offer it to another issuer within the jurisdiction of the originally awarded locality, the authority may be waived. Waived recovery zone economic development bond or recovery zone facility bond authority may be reallocated by the department to other issuing localities. In addition, if an originally awarded locality does not respond to the department's requests for information regarding its intent to use its original allocation or progress in moving toward issuance by the federal deadline, the department may deem the allocation to have been waived.
In such cases, federal code provisions and U.S. Department of Treasury guidance in IRS Notice 2009-50 allow original allocations to be waived then reallocated by the state to other issuing localities. The following procedures will apply to any reallocations of waived recovery zone economic development bond or recovery zone facility bond authority:
(a) An originally awarded locality that intends to use its original allocation or intends to designate another issuer within the jurisdiction of the originally awarded locality to use the original allocation must file a Notice of Intent form with the department by January 1, 2010.
(b) An originally awarded locality that has chosen to decline its original allocation may affirmatively waive the allocation for reallocation by the state by submitting an appropriately marked Notice of Intent form.
(i) The form must be signed by the official(s) of the jurisdiction authorized to execute the form pursuant to a resolution declining the allocation adopted by the jurisdiction's governing body; and
(ii) The form and the resolution declining the allocation must be delivered to the department by January 1, 2010.
(c) An originally awarded locality that has used the Notice of Intent form to express its intent to use its original allocation may amend the Notice of Intent at a later time if it is determined that the locality is unable to use its original allocation and has decided to waive the allocation for reallocation by the state.
(d) An originally awarded locality intending to use its original allocation must provide the department with project information and supporting documents by February 1, 2010. Supporting documents include Bond Counsel and Underwriter Statement of Intent forms, or equivalent, at the discretion of the bond cap manager, and a certified copy of an inducement resolution by the governing board. A locality may request an extension if filed by February 1, 2010.
(e) If an originally awarded locality has not provided the department with the documents required by subsections (1), (2) or (4) of this section or has not issued bonds or requested an extension by June 1, 2010, the department may issue a Notice of Intent to Reallocate, informing the locality of the intent to deem the original allocation to have been waived and to reallocate it to another locality.
(f) An originally awarded locality will have fifteen days from receipt of a Notice of Intent to Reallocate to respond to the department with the required documentation or to ask the department to reconsider its waiver and reallocation determination.
(g) The department will respond to the request to reconsider its waiver and reallocation determination within ten business days with a decision by the assistant director of the local government division to grant an extended time in which the issuing jurisdiction must demonstrate progress toward a recovery zone economic development bond or recovery zone facility bond issuance, or a decision to go forward with waiver and reallocation of the authority. The length of the time extension shall be determined at the discretion of the assistant director.
(h) All recovery zone bonds must be issued by the deadlines established in the code.
[Statutory Authority: Chapter 39.86 RCW and RCW 43.330.040 (2)(g). 97-02-093, § 365-135-035, filed 1/2/97, effective 2/2/97.]
Issuers may apply for a certificate of approval by submitting a completed allocation request form to the department and paying an allocation fee. An allocation request form will be available from the department.
The department will respond to any such completed request
in accordance with the statute. If an issuer does not issue
((private activity)) bonds or mortgage credit certificates in
the amount and by the date for which it has received a
certificate of approval, the unused amount shall revert to the
department for reallocation, unless an extension or
carryforward is granted.
An issuer may apply for an extension or carryforward of its allocation by submitting its request to the department and supplying any additional information required by the department. The department will promptly notify the issuer if any fees are due and respond to the request for extension or carryforward in a timely manner.
The housing category will be given priority for carryforward allocations of the annual tax exempt private activity bond ceiling.
[Statutory Authority: Chapter 39.86 RCW and RCW 43.330.040 (2)(g). 97-02-093, § 365-135-040, filed 1/2/97, effective 2/2/97. Statutory Authority: Chapter 39.86 RCW. 93-13-012 (Order 93-05), § 365-135-040, filed 6/7/93, effective 1/1/94. Statutory Authority: 1987 c 297. 87-19-082 (Order 87-18), § 365-135-040, filed 9/16/87.]
(a) An allocation or reallocation fee, due at the time a
request is filed with the department of ((community, trade,
and economic development)) commerce; and
(b) In certain cases, an extension or carryforward fee.
If an issuer's allocation or reallocation request is denied, the allocation fee, less the five hundred dollar filing fee, will be refunded.
Annually, the department will determine if an adjustment of the fees is warranted by reviewing the account of BCAP revenues and expenses for the preceding fiscal year and by considering BCAP budget projections for the following fiscal year.
(2) Payment of the fees will occur as indicated by the schedule below.
(a) Filing. Upon filing an allocation request, the issuer must submit the total allocation fee, of which the five hundred dollar filing fee is nonrefundable.
(b) Extensions and carryforwards. The department may assess an extension fee, not to exceed two hundred fifty dollars, upon any request for extension or carryforward. The extension fee must be paid prior to the extension being granted. However, if the BCAP administrator determines that an issuer's allocation fee included a sufficient amount to pay for the additional administrative expenses associated with granting or denying such a request, the additional fee shall be waived.
(c) Refunds. If a requesting issuer pays any fee greater than the amount assessed by the department, that amount shall be refunded by the department.
If the allocation request is denied or a partial allocation is approved, the issuer will receive either a full or partial refund of the allocation fee, less the five hundred dollar filing fee. Once the allocation amount is approved, the allocation fee is not refundable, even if the issuer does not issue all or any of the approved allocation.
[Statutory Authority: Chapter 39.86 RCW and RCW 43.330.040 (2)(g). 97-02-093, § 365-135-050, filed 1/2/97, effective 2/2/97. Statutory Authority: Chapter 39.86 RCW. 93-13-012 (Order 93-05), § 365-135-050, filed 6/7/93, effective 1/1/94. Statutory Authority: 1987 c 297. 87-19-082 (Order 87-18), § 365-135-050, filed 9/16/87.]
(1) The extent to which the project demonstrates the potential to directly conserve energy.
(2) The extent to which the project supports the development or implementation of innovative energy conservation technology.
(3) The extent to which the project uses renewable resources to produce energy.
(4) The number of citizens benefiting from the project.
(5) The number of jobs created or retained by the project and the amount of qualified energy conservation bond authority per job created or retained.
(6) The readiness of the project to proceed.
(7) The likelihood that the issuer will use the allocation within the timelines.
(8) The amount of other public and private funding leveraged by the qualified energy conservation bond allocation.
(9) The amount of local community support for the project.
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(1) The relative level of economic distress in the local community.
(2) The number of citizens benefiting from the project.
(3) The estimated positive economic impact of the project on the state or the local community.
(4) The number of jobs created or retained by the project and the amount of recovery zone economic development bond authority per job created or retained.
(5) The readiness of the project to proceed.
(6) The likelihood that the issuer will use the allocation within the timelines.
(7) The amount of other public and private funding leveraged by the recovery zone economic development bond allocation.
(8) The amount of local community support for the project.
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(1) The relative level of economic distress in the local community.
(2) The number of citizens benefiting from the project.
(3) The estimated positive economic impact of the project on the state or the local community.
(4) The number of jobs created or retained by the project and the amount of recovery zone facility bond authority per job created or retained.
(5) The readiness of the project to proceed.
(6) The likelihood that the issuer will use the allocation within the timelines.
(7) The amount of other public and private funding leveraged by the recovery zone facility bond allocation.
(8) The amount of local community support for the project.
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