| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Capital Budget Committee | |
HB 2649
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.
Brief Description: Authorizing state general obligation bonds for the state's share of the Centralia-Chehalis flood control project.
Sponsors: Representatives Alexander, Chase, Moeller, Green, McIntire, Kenney and Ross; by request of Governor Gregoire.
Brief Summary of Bill |
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Hearing Date: 2/21/08
Staff: Susan Howson (786-7142).
Background:
Washington periodically issues general obligation bonds to finance projects authorized in the
capital and transportation budgets. General obligation bonds pledge the full faith and credit and
taxing power of the state towards payment of debt service. Legislation authorizing the issuance
of bonds requires a 60 percent majority vote in both the House of Representatives and the Senate.
The State Finance Committee, composed of the Governor, the Lieutenant Governor, and the
State Treasurer, is responsible for supervising and controlling the issuance of all state bonds.
Bond authorization legislation generally specifies the account or accounts into which bond sale
proceeds are deposited, as well as the source of debt service payments. When debt service
payments are due, the State Treasurer withdraws the amounts necessary to make the payments
from the State General Fund and deposits them into the bond retirement funds.
Washington's indebtedness is limited by both a statutory and a constitutional debt limit. The
State Treasurer may not issue any bonds that would cause the debt service on the new, plus
existing bonds, to exceed 7 percent of general state revenues averaged over three years in the
case of the statutory limit, and 9 percent under the constitutional limit. For purposes of the debt
limit, "general state revenues" is defined in the State Constitution and by statute.
In December 2007 a series of storms caused flood damage in southwest Washington. On
December 8, the President declared a major disaster in the counties of Grays Harbor, Kitsap,
Lewis, Mason, Pacific and Thurston. Federal funding assistance was made available following
this declaration.
Summary of Bill:
The State Finance Committee is authorized to issue $50 million in state general obligation bonds
to finance the state's share of the Centralia-Chehalis flood control project.
The State Treasurer is required to withdraw from state general revenues the amounts necessary to
make the principal and interest payments on the bonds and to deposit these amounts into the
Bond Retirement Account.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill contains an emergency clause and takes effect immediately.