S-691                 _______________________________________________

                                                   SENATE BILL NO. 5219

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Senators Saling, Bauer, Bailey, West, Rasmussen and Rinehart

Read first time 1/18/89 and referred to Committee on Higher Education.

AN ACT Relating to college savings bonds; and amending RCW 28B.106.020.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 10, chapter 125, Laws of 1988 and RCW 28B.106.020 are each amended to read as follows:

          For the purpose of providing funds for the acquisition, construction, remodeling, furnishing, and equipping of state buildings and facilities for the state institutions of higher education, including facilities for the state community college system, and to provide for the administrative costs of such projects, including costs of bond issuance and retirement, salaries and related costs of officials and employees of the state, costs of credit enhancement agreements, and other expenses incidental to the administration of capital projects, the state finance committee is authorized to issue college savings bonds of the state of Washington in the sum of nine hundred fifty  million dollars, or so much thereof as may be required, to finance these projects and all costs incidental thereto.

          Bonds authorized in this section shall be sold in such a manner, at such time or times, in such amounts, and at such price as the state finance committee shall determine.  The bonds shall not be offered for sale without prior legislative appropriation of the net proceeds of the sale of the bonds.  The state finance committee may obtain insurance or letters of credit and may authorize the execution and delivery of agreements, promissory notes, and other obligations for the purpose of insuring the payment or enhancing the marketability of college savings bonds authorized in this section.  Promissory notes or other obligations issued pursuant to this section shall not constitute a debt or the contracting of indebtedness under any constitutional or statutory indebtedness limitation if their payment is conditioned upon the failure of the state to pay the principal of or interest on the bonds with respect to which the same relate.

          If, and to the extent that the state finance committee determines it is economically feasible and in the best interest of the state, the bonds shall be sold at a deep discount from their par value.

          College savings bonds authorized under this section shall be sold in accordance with chapter 39.42 RCW.