PUBLIC RECORDS ‑- COUNTIES ‑- MUNICIPAL CORPORATIONS ‑- MUNICIPAL BONDS

PUBLIC RECORDS ‑- COUNTIES ‑- MUNICIPAL CORPORATIONS ‑- MUNICIPAL BONDS 

Where a county sells municipal bonds to an underwriter to finance a public works project, and subsequent sales of the bonds are made with the identities of the bondholders known only to a registrar appointed pursuant to RCW 43.80.125(1), and the registrar is not a public agency but a bank or trust company as required by statute, and the county has never prepared, possessed, used, or retained any list of bondholders, the records identifying such bondholders are not obtainable from the county through a public records request made pursuant to chapter 42.17 RCW.

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                                                                   May 25, 1989 

Honorable Michael E. Rickert
Skagit County Prosecuting Attorney
Courthouse Annex
Mount Vernon, WA 98273-4299

Cite as:  AGO 1989 No. 11                                                                                                                

 Dear Mr. Rickert:

             By letter previously acknowledged, you requested our opinion on the following question:

             Where a county sells all of the municipal bonds to finance a public works project by negotiated sale to an underwriter, and subsequent sales of those bonds are made with the identities of such subsequent bondholders being known only to the registrar appointed pursuant to RCW 43.80.125(1), are the identities of such subsequent bondholders subject to disclosure from the county indirectly upon request pursuant to the public records statute, chapter 42.17 RCW?

             We answer this question in the negative for the reasons set forth in our analysis.

              [[Orig. Op. Page 2]]

                                                                      ANALYSIS

             We start by noting that you provided us with certain additional information upon which we have relied in our analysis.  For example, you indicated that the question arises out of the sale by Skagit County of $7,500,000 in general obligation bonds to finance a solid waste disposal/resource recovery facility.  You also provided us with a copy of the county resolution that authorizes the issuance and sale of these bonds.  The resolution provides for a system of bond registration approved by the State Finance Committee; designates the fiscal agencies of the State of Washington in Seattle and New York City as bond registrars; provides that the bonds may be transferred only on the bond register maintained by the bond registrar for that purpose; and provides that the bond registrar shall keep, or cause to be kept, at its principal trust offices, sufficient records for the registration and transfer of the bonds, "which shall at all times be open to inspection by the County."  You also expressed concern that release of the identities of subsequent purchasers of these bonds might inhibit the future sale of similar bonds because "such purchasers may have had an expectation that their identities as purchasers would be kept confidential."  With this additional information in mind, we turn to our analysis.

             The public disclosure act, chapter 42.17 RCW, establishes a three‑part test for determining whether a particular document is a "public record".1/

              RCW 42.17.020(26) provides:

                         "Public record" includes [1] any writing [2] containing information relating to the conduct of government or the performance of any governmental or proprietary function [3] prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.

             The first part of the test is whether the record is a "writing".  "Writing" is defined in RCW 42.17.020(28):

                         "Writing" means handwriting, typewriting, printing, photostating, photographing, and every other  [[Orig. Op. Page 3]] means of recording any form of communication or representation, including letters, words, pictures,  . . . and all papers  . . . and other documents.

 The records to which you refer clearly are "writings" as defined by RCW 42.17.020(28).

             The second part of the "public record" test is whether the writing contains "information relating to the conduct of government or the performance of any governmental or proprietary function".  The records at issue, which include the bond register, contain information relating to the ownership of the bonds.  One needs to know who owns the bond to be able to pay the interest, to determine ownership if bonds are lost or stolen, and to effectuate transfers, all of which contribute to an effective and efficient bond sale and subsequent bond market.  One could say, therefore, and we will assume for purposes of this opinion, that the registration and transfer records contain information that is, or may be, relevant to the performance of a governmental function:  the selling of bonds by Skagit County to raise revenue.

             This brings us to the third part of the "public record" test, which is the critical part for purposes of this opinion.  The third part of the test is whether the writing has been "prepared, owned, used, or retained by any state or local agency  . . ."  "State agency" and "local agency" are defined in RCW 42.17.020(1):

             "State agency" includes every state office, department, division, bureau, board, commission, or other state agency.  "Local agency" includes every county, city, town, municipal corporation, or special purpose district, or any office, department, division, bureau, board, commission, or agency thereof, or other local public agency.

             Bond registrars are limited by statute to "responsible banks or trust companies" meeting certain criteria and designated as such by the State Finance Committee.  RCW 43.80.120, .125 [43.80.125].  Skagit County's bond registrar, therefore, is not a "state or local agency" within the meaning of [RCW] 42.17.020(1).  Skagit County, on the other hand, is a "local agency".  The issue with respect to the third part of the "public records" test, therefore, is whether the registration and transfer records are or have been "prepared, owned, used, or retained" by Skagit County.

             The County's resolution provides that the bonds may be transmitted only on the bond register "maintained" by the bond registrar for that purpose and provides that the bond registrar shall keep, or cause to be kept, at its principal office,  [[Orig. Op. Page 4]] sufficient records for the registration and transfer of the bonds.  Skagit County Resolution 11217, §§ 3, 11 (May 21, 1987).

             Based on these provisions of the resolution, and on our general knowledge of the function of stock and bond registrars, it seems to us, at least with respect to this bond issue, that Skagit County did not "prepare" or "retain" the transfer and registration records.  "Ownership" is somewhat more difficult to determine, but in this case, where the bond registrar is an independent bank or trust company, where the registrar prepares, maintains, and retains the records, and where the county has only a right of inspection, we cannot say that the county "owns" the records in any meaningful sense.

             The only issue remaining under the third part of the "public record" test is whether the record is "used" by a state or local agency.  While you did not address the point specifically, we infer from the facts you gave us that the county has not "used" the bond registration records, as by obtaining them from the registrar and applying them to some county purpose.  On the assumption that these records have not been "used" by the county, we conclude that the records in question are not "public records" and thus are not available for public inspection and copying.2/

              Thus, we do not reach the question whether the records would be "public records" if a public agency were to "use" them without preparing, owning, or retaining them.3/

              [[Orig. Op. Page 5]]

             We trust the foregoing will be of assistance to you.

 Very truly yours,
KENNETH O. EIKENBERRY
Attorney General

MARK S. GREEN
Assistant Attorney General