HOUSE BILL REPORT

HB 1556

BYRepresentatives Brekke, Fuhrman, Holland, Silver, B. Williams, Brough, Moyer, May, D. Sommers and Butterfield

Requiring certain information in state budget documents.

House Committe on Ways & Means/Appropriations

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (19)

      Signed by Representatives Locke, Chair; Braddock, Bristow, Brough, Butterfield, Ebersole, Fuhrman, Grant, Grimm, Hine, McLean, Nealey, Sayan, Silver, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

House Staff:Bill Robinson (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

FEBRUARY 6, 1988

BACKGROUND:

The 1986 legislature, in the supplemental budget, directed the Legislative Budget Committee to study the state's debt issuance practices. The main objective of the study was to seek means of reducing the cost of capital projects by either, (1) reducing the bond issuance cost, or (2) using "pay as you go" financing rather than debt financing.

The Legislative Budget Committee completed its study in September 1987 and forwarded its recommendations to full legislature. Three of the recommendations from the committee involved transferring certain types of expenditures between the capital budget and the operating budget. The committee recommended that routine maintenance expenses be reported in the operating budget, debt financed pass through money to local governments be reported in the capital budget, and state debt service expenses be clearly identified in the Governor's operating budget document.

SUMMARY:

SUBSTITUTE BILL: HB 1556 adds four new provisions to the State Budget and Accounting Act. (1) Requires annual routine or ongoing maintenance costs be programmed in the state operating budget rather than the capital budget; (2) Requires all debt financed pass through money to local governments to be programmed in the state capital budget; (3) Directs the Office of Financial Management to establish standards for space, construction costs, architectural, structural, mechanical, and electrical systems for capital construction projects. Compliance shall be a condition for inclusion in the state facilities and capital plan; (4) The Governor's budget document shall include a table showing the amount of anticipated general fund revenues to be used for debt service requirements.

SUBSTITUTE BILL COMPARED TO ORIGINAL: Removes the requirement that OFM establish building standards for all capital projects included in the state facilities plan and directs OFM to develop standards to the extent possible for projects in the governor's capital budget.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Frank Hensley, Legislative Budget Committee.

House Committee - Testified Against:      Victor Moore, Office of Financial Management.

House Committee - Testimony For:    Establishes construction standards to avoid agency capital budget requests that are costly and unnecessary.  It also establishes a consistent policy for reporting certain capital expenditures.

House Committee - Testimony Against:      OFM agrees with all parts of the bill except for the requirement that OFM develop a standard for certain building costs.  Given the variety of types of state buildings, it is impractical to develop such a standard.