SENATE BILL REPORT

SB 5437

BYSenators McDermott, Bluechel, Rinehart and McDonald

Authorizing the University of Washington to use revenue bonds to fund capital projects.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 4, 1987

Majority Report:  Do pass.

      Signed by Senators McDermott, Chairman; Bauer, Bluechel, Cantu, Hayner, Kreidler, McDonald, Owen, Rasmussen, Rinehart, Talmadge, Williams, Wojahn.

Senate Staff:Fred Romero (786-7715)

                  February 27, 1987

AS PASSED SENATE, FEBRUARY 27, 1987

BACKGROUND:

Due to the state's debt limit and constructional needs of the K-12 system, the likelihood of additional capital projects for the University of Washington beyond the present 1987-1993 plan, is doubtful.

Presently there is an increased need for support space, research laboratories and training facilities in the University of Washington's Health Sciences complex.  This proposed expansion would allow the institution's faculty to conduct research in rapidly evolving areas, enabling the school to maintain its leadership role.

The University of Washington's Metropolitan Tract provides a cash income of $4-5 million per biennium.  In 1986 about $1.7 million was transferred to the University's local building fund, in accordance with lease requirements.

With legislative authority, the University of Washington proposes to use a part of the Metropolitan Tract cash revenue to pay debt service on bonds which would support needed new construction on campus.

SUMMARY:

The Board of Regents of the University of Washington, who are already authorized to borrow for capital purposes on the downtown university tract, are permitted to issue revenue bonds for capital projects on the University of Washington's campus.

The issuance of revenue bonds is to take place in the same manner and subject to the same terms as those under which local governments operate.

Revenue:    Metropolitan Tract cash return available to the University of Washington is estimated at $4 million for the 1987-89 biennium and a minimum of $5 million per biennium for the next 24 years (the duration of the lease agreement).

Fiscal Note:      none requested

Senate Committee - Testified: Bob Edie, University of Washington; George Beckmann, University of Washington; Tallman Trask, University of Washington