WSR 10-09-082




[ Filed April 20, 2010, 12:41 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 10-05-002.

Title of Rule and Other Identifying Information: Amending chapter 253-02 WAC, Organizations, operations and procedures and chapter 253-16 WAC, Procedures and fees for preparation and processing of applications for authority assistance.

Hearing Location(s): Washington Higher Education Facilities Authority, Conference Room, 1000 Second Avenue, Suite 2700, Seattle, WA 98104, on June 1, 2010, at 10:00 a.m.

Date of Intended Adoption: June 15, 2010.

Submit Written Comments to: Mr. Paul R. Edwards, Deputy Director, Washington Higher Education Facilities Authority, 1000 Second Avenue, Suite 2700, Seattle, WA 98104-1046, e-mail, fax (206) 587-5113, by May 28, 2010.

Assistance for Persons with Disabilities: Contact Cody Field by May 24, 2010, at (206) 254-5363.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Chapter 253-02 WAC the authority is proposing amendments to WAC 253-02-010 to reflect the recodification of chapter 34.04 RCW and WAC 253-02-050 to update the technology available for authority meetings and to clarify the requirements for quorum and authority action.

Chapter 253-16 WAC, the amendments to WAC 253-16-010 clarify the purpose of the chapter and require the authority to adopt guidance policies. Amendments to WAC 253-16-040 clarify the annual fees for applicants and eliminate references to specific fees. The amendments to WAC 253-16-050 and the repeal of WAC 253-16-060 and 253-16-070 streamline the application review and acceptance process. The amendments to WAC 253-16-090 streamline the selection process of underwriters for authority bonds.

Reasons Supporting Proposal: The authority is proposing the rules in order to ensure its operations and procedures for conducting meetings reflect current technology and revisions to the RCW, to streamline the application process and underwriter selection process and to clarify application fees.

Statutory Authority for Adoption: RCW 28B.07.040(1).

Statute Being Implemented: RCW 28B.07.040(1).

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Washington higher education facilities authority, governmental.

Name of Agency Personnel Responsible for Drafting: Carol Johnson, 1000 Second Avenue, Suite 2700, Seattle, WA 98104-1046, (206) 287-4403; Implementation and Enforcement: Paul R. Edwards, 1000 Second Avenue, Suite 2700, Seattle, WA 98104-1046, (206) 287-4462.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rule changes are not subject to chapter 19.85 RCW pursuant to RCW 19.85.025(3) because the rules are of the type described in RCW 34.05.310 (4)(c), (d), and (g)(i).

A cost-benefit analysis is not required under RCW 34.05.328. The authority is not subject to RCW 34.05.328 per RCW 34.05.328 (5)(a)(i), nor has the authority voluntarily made the rules subject to RCW 34.05.328 per RCW 34.05.328 (5)(a)(ii).

April 19, 2010

Paul R. Edwards

Deputy Director


AMENDATORY SECTION(Amending Order 3, filed 11/27/84)

WAC 253-02-010   Purpose.   The purpose of this chapter shall be to ensure compliance by the Washington higher education facilities authority with the provisions of chapter 42.17 RCW (Initiative 276), and chapter ((34.04)) 34.05 RCW.

[Statutory Authority: RCW 28B.07.040. 84-24-012 (Order 3), 253-02-010, filed 11/27/84.]

AMENDATORY SECTION(Amending WSR 95-19-025, filed 9/11/95, effective 10/12/95)

WAC 253-02-050   Operations and procedures.   (1) Uniform procedure rules: Practice and procedure in and before the authority are governed by the uniform procedural rules codified in the Washington Administrative Code, WAC 1-08-005 through 1-08-590, as now or hereafter amended, which rules the authority adopts as its own, subject to any additional rules the authority may add from time to time. The authority reserves the right to make whatever determination is fair and equitable should any question not covered by its rules come before the authority, said determination to be in accordance with the spirit and intent of the law.

(2) Authority meetings: The meetings of the authority shall all be "regular" or "special meetings" as those designations are applied in chapter 42.30 RCW. They may be called at any time and place by the chairman or a majority of the members of the authority. Notice of all special meetings shall be given by delivering personally, or by mail, fax or electronic mail, to each member a written notice specifying the time and place of the meeting and a copy of the agenda prepared by the executive director in consultation with the chairman, and by giving such notice to the public as may be required by law. If an emergency is deemed to exist, the chairman may shorten the notice period to not less than twenty-four hours. An executive session may be called by the chairman or by a majority of all members of the authority to consider the appointment, employment or dismissal of an officer or employee, and such other matters as are permitted by RCW 42.30.110.

(3) Quorum: Four members shall constitute a quorum, and the act of a majority of the members present at any meeting, if there is a quorum, shall be deemed the act of the authority except as specified hereafter in subsection (7) of this section. Members participating in a meeting through the use of any means of communication by which all members participating can hear each other during the meeting shall be deemed to be present in person at the meeting for all purposes.

(4) Chairperson's or secretary's voting rights: The chairperson or the chairperson's designee and the secretary shall have the right to vote on all matters before the authority, just as any other authority member.

(5) Minutes of meetings: Minutes shall be kept of the proceedings of the authority.

(6) Rules of order: The authority shall generally follow Robert's Rules of Order, newly revised, in conducting its business meetings.

(7) Form of authority action: The authority may act on the basis of a motion except when authorizing issuance of bonds pursuant to WAC 253-16-070 and when otherwise taking official and formal action with respect to the creation of special funds and the issuance and sale of bonds for a project of a participant, in which case the authority shall act by resolution. Such resolutions shall be adopted upon the affirmative vote of ((a majority of the)) four or more members of the authority and shall be signed by a majority of the members of the authority. Motions shall be adopted upon the affirmative vote of a majority of a quorum of members present at any meeting. All bonds and coupons shall bear either the manual or the facsimile signatures of the governor and executive director.

(8) Public participation. The presiding officer may grant permission to any person or organization to make a presentation at any of the authority's public meetings. The presiding officer may limit any remarks addressed to the authority.

[Statutory Authority: RCW 28B.07.040. 95-19-025, 253-02-050, filed 9/11/95, effective 10/12/95; 84-24-012 (Order 3), 253-02-050, filed 11/27/84.]


AMENDATORY SECTION(Amending WSR 95-19-025, filed 9/11/95, effective 10/12/95)

WAC 253-16-010   Purpose.   The purpose of this chapter shall be ((to establish fees for the authority's operations and)) to set forth ((procedures relating to)) the principles governing the authority's financing process and the designation of underwriters and bond counsel. In addition, the authority shall adopt policies to provide guidance to applicants, authority staff and finance team.

[Statutory Authority: RCW 28B.07.040. 95-19-025, 253-16-010, filed 9/11/95, effective 10/12/95; 84-24-012 (Order 3), 253-16-010, filed 11/27/84.]

AMENDATORY SECTION(Amending Order 3, filed 11/27/84)

WAC 253-16-040   Fees.   (1) ((Authorization to charge fees:)) The authority, pursuant to chapter 28B.07 RCW, shall require applicants to pay fees and charges to the authority to provide it with funds for expenses of issuance and sale of bonds, and other charges for services provided by the authority in connection with projects undertaken, as well as the operating and administrative expenses of the authority. ((In accordance with this authorization, an applicant shall pay to the authority such fees and charges as are necessary to meet any and all expenses incurred by the authority in connection with the processing of the application of the applicant, together with an annual service fee to defray expenses of the authority in administering and servicing the financing provided to the applicant and other allocable expenses of the authority.)) The ((authority shall assess an)) annual service fee ((of one-tenth of one percent of)) shall be based on the outstanding and unredeemed bonds of each applicant. The initial annual fee shall be paid to the authority on the date of closing of each tax exempt note or bond issue and ((in every anniversary date)) annually thereafter((: Provided, however, That)). The authority ((by an adopted motion may)) shall set ((a different)) fee schedules and may waive or credit all or any part of the annual or application fee((.

(2) Fee obligations of the applicants: An applicant shall submit with its application an initial remittance of: (a) A three thousand seven hundred fifty dollar fee which shall accompany each application for a bond anticipation note; or (b) a seven thousand five hundred dollar fee which shall accompany all other applications for assistance. The authority shall, in its discretion make the final determination whether any application is for a bond anticipation note. The applicant shall pay such fees and charges as they are billed to it from time to time by the authority. These expenses may be reimbursed to the applicants from the bond proceeds if financing is consummated. In addition, the application shall contain an appropriate legal commitment to indemnify the authority against any expenses or costs incurred by it in connection with the processing of the applicant's application and the completion of any project or plan and system subsequently approved and undertaken by the authority, as well as to pay the authority an annual service fee to defray expenses of the authority in administering and servicing the financing provided to the applicant and other allocable expenses of the authority, which annual fee shall be imposed so long as financing is being provided by the authority to the applicant.

(3) Refund of excess fees: The authority may from time to time, at its discretion refund any surplus fees paid or deposited by an applicant or participant which the authority believes exceeds the actual application-processing expenses and authority-determined pro rata administrative and operating costs of the authority.

(4))) by motion. Authority fee schedules shall be contained in the authority's policies.

(2) All the costs and expenses of the authority shall be paid from fees assessed pursuant to this section. No moneys of the state of Washington shall be expended for such purposes.

[Statutory Authority: RCW 28B.07.040. 84-24-012 (Order 3), 253-16-040, filed 11/27/84.]

AMENDATORY SECTION(Amending Order 3, filed 11/27/84)

WAC 253-16-050   Processing of application.   An application will be reviewed and accepted by the executive director and such authority staff as he or she determines. ((Upon completion of authority staff analysis and recommendations, such staff analysis and recommendations and the application shall be presented to the authority for appropriate action.)) Such review will be based upon the stated legislative intent to enable the building, providing, and utilization of modern, well-equipped, efficient and reasonably priced higher educational facilities, as well as the improvement, expansion, and modernization of such facilities, in a manner that will minimize the capital cost of construction, financing and use of such facilities. Proposed facilities should improve and ensure the quality and range of educational services available to the citizens of this state. The authority will adopt policies to implement this intent and will review applications based on such policies.

[Statutory Authority: RCW 28B.07.040. 84-24-012 (Order 3), 253-16-050, filed 11/27/84.]

AMENDATORY SECTION(Amending WSR 95-19-025, filed 9/11/95, effective 10/12/95)

WAC 253-16-090   Selection of investment banking firms as underwriters.   (1) The authority shall create and maintain a roster of underwriters who the authority believes possess the requisite special expertise and professional standing to provide bond marketing services which would be accepted by bondholders and other members of the financial community, and which would be in furtherance of the public interest in marketing the authority's bonds at the lowest possible costs in Washington state as well as nationally.

(2) Any underwriter may apply to have its name placed on the roster. Each underwriter placed on the roster must be able to demonstrate current competence and experience in the structuring and sale of higher educational facility bond financing((. In addition the underwriter must meet the following minimum standards:

(a) The firm must have a minimum equity capital of five million dollars; and

(b) The firm must currently possess the competence and ability to underwrite a higher education facility bond issue)) by demonstrating, among other things((, that)):

(a) The firm or ((it's)) its key underwriting personnel have either managed or comanaged two higher educational facility bond issues within the last three calendar years; ((or

(c) The firm has served as a credit facility for a higher education facility within the past three years; or)) and

(((d))) (b) The firm meets other criteria as the authority may adopt from time to time which establish a firms ability to prepare for issuance, underwrite and market bonds to be issued by the authority.

(3)(a) As permitted by RCW 28B.07.130(2), the authority may adopt rules permitting applicants to select an underwriter in lieu of the authority. Whenever the ((authority)) applicant decides that it needs the services of an underwriter, it shall provide all underwriters on the roster with a notice of its intentions and shall invite each of them to submit to the ((authority)) applicant an itemization of its fees and other charges for providing underwriting services on the issue. The ((authority)) applicant shall have wide discretion in selecting the underwriter it considers to be most appropriate to provide the services, but in the exercise of this discretion the ((authority)) applicant shall consider the underwriter's fees and other charges and the public interest in achieving issuance of bonds on terms most favorable to the authority and the applicant.

(((b) The applicant may, at its option, exercise the notice and selection procedures regarding underwriters set forth in (a) of this subsection. In such circumstances)) The applicant shall supply the authority with written verification that it has complied with the provisions of (((a) of)) this subsection and the applicant shall obtain the authority's prior approval of the actual selection of the underwriter.

(((4)(a) To provide balanced management knowledge and sale distribution and to assure the most realistic bond terms and interest, the authority reserves the right to name investment banking firms as comanagers of any authority bond issue(s)in the same manner that a senior manager is selected.

(5) For private placements)) (b) Whenever an applicant intends to select an underwriter pursuant to competitive bidding, the applicant, with the consent of the executive director, shall solicit bids notifying each underwriter on the roster of underwriters.

(4) Whenever an applicant intends to privately place bonds, the applicant((s)) may select a firm as placement agent for its proposed financing, subject to review and approval by the executive director of the authority. ((In every instance,)) The placement agent selected must be able to demonstrate a familiarity with, and competence and experience in, the structuring and sale of higher education facility bonds. ((The applicant shall notify the authority in writing of its proposed placement agent selection fifteen days prior to the date it intends to enter into a formal contractual agreement. The authority will notify the applicant of its acceptance or rejection of the applicant's placement agent selection no later than ten days after receipt of the applicant's notification. If rejected, the authority will set forth the reasons for rejection, and the applicant will then propose another placement agent subject to authority approval in the same manner. The authority shall, in its discretion, make the final determination whether an issue is a private placement.))

[Statutory Authority: RCW 28B.07.040. 95-19-025, 253-16-090, filed 9/11/95, effective 10/12/95. Statutory Authority: Chapter 28B.07 RCW. 95-01-007, 253-16-090, filed 12/8/94, effective 1/8/95. Statutory Authority: RCW 28B.07.040. 87-01-035 (Order 1), 253-16-090, filed 12/12/86; 84-24-012 (Order 3), 253-16-090, filed 11/27/84.]


     The following sections of the Washington Administrative Code are repealed:
WAC 253-16-060 Priorities regarding applicant funding.
WAC 253-16-070 Authority action on applications.

Washington State Code Reviser's Office