HOUSE BILL REPORT

HB 1355

BYRepresentatives Bristow, McLean, Grimm, Holland, May, Betrozoff and Brough; by request of Governor Gardner

Revising general obligation bond issues.

House Committe on Ways & Means

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (20)

      Signed by Representatives Grimm, Chair; Bristow, Vice Chair; Appelwick, Basich, Belcher, Braddock, Brekke, Ebersole, Grant, Hine, Locke, Peery, Rust, Sayan, H. Sommers, Spanel, Sprenkle, Valle, Wang and Winsley.

Minority Report:  Do not pass.  (3)

      Signed by Representatives McLean, Nealey and Silver.

House Staff:Bill Robinson (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS FEBRUARY 26, 1988

BACKGROUND:

The State of Washington periodically issues general obligation bonds to finance capital construction projects throughout the state.  The specific legislative approval of a capital project is contained in the capital appropriations act. Those capital appropriations in the capital budget requiring state bonding must have separate legislation authorizing the sale of state bonds.  Bond issuance legislation is required by the constitution to have a 60 percent majority vote of the legislature.

SUMMARY:

SUBSTITUTE BILL:  House Bill 1355 makes technical amendments to the 1985 bond bill by rounding the amounts of the bond issue to the nearest five thousand dollars and reducing the bond authorization for the Department of Fisheries to equal appropriation levels.  The 1987 bond bill is amended to change the bond authorization level for the Department of Fisheries and Washington State University to equal the capital appropriation.

Authorizes the sale of $110 million of revenue bonds for the completion of the East Capitol Campus Development project.  The bonds are to be financed by parking revenues, rent payments from agencies leasing the new state-owned office buildings, and the capitol building construction account.  The bill identifies the schedule for the transfer of the revenue sources for the payment of the bonds and amends other statutes to allow the transfer of capitol vehicle parking account revenues to pay the debt service on the bonds.

A college savings bond program is established to encourage savings for college and enrollment in higher education institutions in the state.  The state finance committee is authorized to issue $50 million in general obligation bonds for capital improvements at the state higher education institutions.

The state finance committee is given discretion to determine the manner of sale and issuance of the college savings bonds.  However, if the committee determines it is economically feasible and in the best interest of the state, the committee shall sell the bonds at a "deep discount" (meaning the total amount of principal and interest would be payable at maturity).  In marketing the bonds, the committee shall consider methods for encouraging purchase of the bonds as a means of college savings.  The Higher Education Coordinating Board (HECB) is directed to develop and implement an educational program and marketing strategies to inform parents about the options available for financing a college education, including college savings bonds.  By December, 1991, the state finance committee and the HECB shall evaluate the effectiveness of the college savings bond program and report to the Legislature and the governor on the program and any recommended changes.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Added the $110 million bond issues for the East capital campus development project and the college savings bond program.

Fiscal Note:      Available.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.