Washington Administrative Code Title 253 - Higher Education Facilities Authority
Washington Administrative Code Title 253 — Higher Education Facilities Authority
Overview
WAC Title 253 relates to the Higher Education Facilities Authority (HEFA), a state-created public authority responsible for facilitating the financing of capital projects for public and private higher education institutions in Washington State.
Purpose and Function of HEFA
The HEFA was established to help colleges, universities, and related nonprofit educational institutions access financing for building and improving facilities such as:
Classrooms, laboratories, and dormitories.
Athletic and recreational facilities.
Research centers.
Other capital improvements necessary for educational purposes.
The authority issues tax-exempt revenue bonds and other financial instruments on behalf of eligible institutions. These bonds help reduce the cost of borrowing for higher education projects by leveraging the state’s credit standing without creating state debt or liability.
Key Provisions of WAC Title 253
WAC Title 253 contains administrative rules implementing the statutory powers granted under RCW Chapter 39.96, which created the Higher Education Facilities Authority. These rules govern:
1. Bond Issuance Process
Procedures for issuing revenue bonds, including application requirements by educational institutions.
Compliance with state and federal securities laws.
Requirements for public notice, hearings, and reporting.
2. Eligibility Criteria
Defines which institutions qualify for HEFA assistance (public universities, private nonprofits with educational missions).
Criteria include financial stability, accreditation, and project eligibility.
3. Loan and Financing Terms
Terms and conditions under which bonds are issued and repaid.
Restrictions to ensure bonds are used solely for approved projects.
Oversight mechanisms to monitor bond usage and repayment.
4. Governance of HEFA
Composition and appointment of board members.
Duties and powers of the board.
Conflict of interest policies and transparency requirements.
Legal and Policy Context
HEFA operates as a public body corporate and politic, which means it has some governmental powers but acts primarily to facilitate financing, not to fund projects directly from the state treasury.
By issuing revenue bonds, the HEFA enables institutions to finance projects at lower interest rates due to the tax-exempt nature of the bonds. However, these bonds are not backed by the state’s general obligation or taxing power—they are paid back from the revenues of the issuing institution.
Relevant Case Law and Legal Principles
There isn’t a large body of case law specifically addressing WAC Title 253 or the HEFA in Washington, but several legal principles are applicable, drawn from cases involving public authorities, bond issuance, and administrative law.
1. Distinction Between State Debt and Revenue Bonds
In King County v. Seattle-First National Bank, 122 Wn.2d 103 (1993), the Washington Supreme Court discussed the distinction between general obligation bonds (backed by state or local taxes) and revenue bonds (paid from specific revenue sources).
Key point:
HEFA’s bonds are revenue bonds, meaning they do not constitute a general obligation of the state, limiting the state's liability and protecting taxpayers from direct financial risk.
2. Authority of Public Corporations to Issue Bonds
In Citizens for Mt. Vernon v. Mt. Vernon School District, 102 Wn.2d 116 (1984), the court upheld the authority of public corporations (like HEFA) to issue bonds for public projects within statutory limits.
Relevance:
This affirms HEFA’s authority under RCW and WAC Title 253 to issue bonds for educational facilities.
3. Compliance with Administrative Procedures
In Shannon & Wilson, Inc. v. Department of Ecology, 102 Wn.2d 604 (1984), the court emphasized that administrative bodies must follow required procedural steps in rulemaking and decision-making.
Relevance:
HEFA’s issuance of bonds and related decisions must comply with procedural requirements in WAC 253, including notices, hearings, and reporting.
4. Limitation on Liability
In Marsh v. State, 142 Wn.2d 1 (2000), the court recognized limits on state liability for public corporation activities when bonds or other obligations are not backed by the state treasury.
Application:
Bondholders and investors in HEFA bonds understand that repayment depends on institutional revenues, not state taxes, limiting the state’s exposure.
Summary
WAC Title 253 governs the administrative rules for the Higher Education Facilities Authority in Washington.
HEFA helps public and private nonprofit educational institutions finance capital projects through revenue bonds.
These bonds are tax-exempt and reduce borrowing costs but do not constitute state debt or liability.
The authority operates under strict procedural and eligibility requirements to protect the public interest.
Washington courts have supported the authority’s power to issue bonds and emphasized the distinction between revenue bonds and state-backed general obligation bonds.
Procedural fairness and administrative compliance are required when HEFA issues bonds or makes decisions.
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