HOUSE BILL REPORT
HB 1202
As Reported by House Committee On:
Capital Budget
Title: An act relating to state general obligation bonds and related accounts.
Brief Description: Concerning state general obligation bonds and related accounts.
Sponsors: Representatives Tharinger, Callan and Wylie; by request of Office of Financial Management.
Brief History:
Committee Activity:
Capital Budget: 1/16/25, 4/1/25, 4/4/25 [DPS].
Brief Summary of Substitute Bill
  • Authorizes the State Finance Committee to issue up to $4.9 billion in general obligation bonds to finance capital projects in the 2023-25 and 2025-27 biennia and in future biennia.
HOUSE COMMITTEE ON CAPITAL BUDGET
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass.Signed by 18 members:Representatives Tharinger, Chair; Callan, Vice Chair; Steele, Ranking Minority Member; Abbarno, Assistant Ranking Minority Member; McClintock, Assistant Ranking Minority Member; Barnard, Davis, Dye, Eslick, Fosse, Hill, Leavitt, Morgan, Rule, Salahuddin, Stearns, Walsh and Zahn.
Staff: John Wilson-Tepeli (786-7115).
Background:

The State Finance Committee (SFC), composed of the Governor, the Lieutenant Governor, and the State Treasurer, is responsible for supervising and controlling the issuance of all state bonds.  The SFC 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 accounts.

A bond bill authorizes the SFC 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 the 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 State Finance Committee (SFC) is authorized to issue up to $4.9 billion in state general obligation bonds to finance projects in the 2023-25 and 2025-27 Capital Budgets, as well as future 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 (Treasurer) is authorized to transfer bond proceeds into the State Taxable Construction Account and to other accounts in order to support authorized expenditures from those accounts.  The 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 substitute bill updates the bond authorization to reflect the Treasurer's March 2025 debt model, which calculates available bond capacity for the 2025-27 biennium at $4.5 billion.  However, the bond authorization in the substitute bill also relies on revisions to the March 2025 debt model to include general state revenues assumed under House Bill 2045 (business and occupation tax) and House Bill 2049 (kindergarten through grade 12 education funding).  Inclusion of the estimated revenues from these bills in the model yields an additional $359 million in debt capacity, for a total of $4.9 billion in available bond capacity for the 2025-27 biennium.
Appropriation: None.
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.

 

(Opposed) None.
Persons Testifying: None.
Persons Signed In To Testify But Not Testifying: None.