HOUSE BILL REPORT
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.
As Reported by House Committee On:
Title: An act relating to state general obligation bonds and related accounts.
Brief Description: Concerning state general obligation bonds and related accounts.
Sponsors: Representative Tharinger; by request of Office of Financial Management.
Capital Budget: 1/17/19, 3/29/19 [DPS].
HOUSE COMMITTEE ON CAPITAL BUDGET
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 20 members: Representatives Tharinger, Chair; Peterson, Vice Chair; DeBolt, Ranking Minority Member; Smith, Assistant Ranking Minority Member; Steele, Assistant Ranking Minority Member; Callan, Corry, Davis, Dye, Eslick, Gildon, Irwin, Jenkin, Leavitt, Morgan, Riccelli, Santos, Sells, Stonier and Walsh.
Staff: Melissa Palmer (786-7388).
The State Finance Committee (Committee), composed of the Governor, the Lieutenant Governor, and the State Treasurer, is responsible for supervising and controlling the issuance of all state bonds. The Committee periodically issues general obligation bonds to finance projects authorized in the capital budget. No bonds may be authorized for sale without prior legislative appropriation of the net proceeds.
General obligation bonds pledge the full faith, credit, and taxing power of the state towards payment of debt service. Funding to pay for principal and interest on those bonds is appropriated from the State General Fund in the operating budget. When debt service payments are due, the State Treasurer withdraws the amounts necessary to make the payments and deposits them into bond retirement funds.
A bond bill authorizes the Committee to issue general obligation bonds up to a specific amount to finance many of the projects in the capital budget. It specifies the amount of bonds to be issued, the account or accounts into which bond sale proceeds are to be deposited, and identifies sources and timing of debt service payments. Legislation authorizing the issuance of bonds requires a 60 percent majority vote in both the House of Representatives and the Senate.
Summary of Substitute Bill:
The Committee is authorized to issue up to $3.207 billion in state general obligation bonds to finance projects in the 2017–2019 and 2019–2021 fiscal biennia and to pay expenses incurred in the issuance and sale of the bonds. Proceeds from the sale of the bonds must be deposited into the State Building Construction Account. The State Treasurer is required to withdraw from general state revenues the amounts necessary to make the principal and interest payments on the bonds and must deposit these amounts into the Debt Limit General Fund Bond Retirement Account.
Substitute Bill Compared to Original Bill:
The amount of the general obligation bonds the Committee is authorized to issue is changed from $3.474 billion to $3.207 billion.
Fiscal Note: Not requested.
Effective Date of Substitute Bill: The bill contains an emergency clause and takes effect immediately.
Staff Summary of Public Testimony:
(In support) None.
Persons Testifying: None.
Persons Signed In To Testify But Not Testifying: None.