FINAL BILL REPORT

HB 1332

                                  C 102 L 88

BYRepresentatives Silver and H. Sommers 

Removing requirement that state bond certificates be printed by the public printer.

House Committe on State Government

Senate Committee on Governmental Operations

SYNOPSIS AS ENACTED

BACKGROUND:

In 1987 the Legislative Budget Committee (LBC) completed a debt issuance study dealing with general obligation bonds issued by the State Finance Committee.  One purpose of the study was to reduce the cost of capital projects by reducing debt issuance costs and to improve bond issuance operations.  As part of a series of recommendations the LBC suggested that the State Finance Committee be authorized to arrange for the printing of bond certificates without using or involving the Department of Printing.

The printing of bond certificates is a highly specialized and tightly controlled process.  A limited number of bank note companies in the United States engrave and distribute bond certificates according to industry standards.  The Department of Printing does not print bond certificates.  The staff in the State Treasurer's office who provide support services to the State Finance Committee serve as the primary contact point with bond certificate printers throughout the bidding, contracting and printing process.

Under state law the Department of Printing is responsible for printing state documents.  In regard to bond certificates the State Treasurer's office deals directly with bond certificate printers.  However, the Department of Printing takes the position that it must complete the necessary paperwork in order to meet its responsibility under state law.  When dealing with the necessary paperwork the department charges the State Treasurer state sales tax plus an additional departmental service charge of 5 percent, thus increasing bond certificate printing costs.

SUMMARY:

The printing of state bond certificates or bond offering disclosure documents is exempted from the law that requires that printing of state documents be done by the public printer.

VOTES ON FINAL PASSAGE:

      House 95   0

      Senate    43     0(Senate amended)

      House 93   0(House concurred)

EFFECTIVE:June 9, 1988