SENATE BILL REPORT

SB 5219

BYSenators Saling, Bauer, Bailey, West, Rasmussen and Rinehart

Regarding college savings bonds.

Senate Committee on Higher Education

Senate Hearing Date(s):February 2, 1989

Senate Staff:Shawn Newman (786-7784)

AS OF JANUARY 30, 1989

BACKGROUND:

Current law authorizes the State Finance Committee to issue general obligation college savings bonds (zero coupon bonds) in the sum of $50 million to finance various capital improvement projects for the state institutions of higher education.  The finance committee authorized the sale of these bonds on August 4, 1988.  The entire authorization sold out by October of 1988.  It is necessary to increase the State Finance Committee's original bond authorization in order to continue the college savings bond program.

SUMMARY:

The State Finance Committee's bond authorization is increased from $50 million to $950 million.  This reauthorization does not affect the state's debt ceiling or obligate the state to spend any money since the bonds cannot be offered for sale without prior legislative appropriation of the net proceeds of the bond sales.  It is intended that this reauthorization will avoid the need to amend the statute each biennium.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 27, 1989