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| SPONSOR: | Nava | DATE TYPED: | 02/28/01 | HB | |||
| SHORT TITLE: | GO Bonds Secured by Corpus of Permanent Funds | SB | 606 | ||||
| ANALYST: | Eaton | ||||||
| Recurring
or Non-Rec |
Fund
Affected | ||||
| FY01 | FY02 | FY01 | FY02 | ||
| $ 50.0 | Non-Recurring | General Fund | |||
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
SUMMARY
Synopsis of Bill
This bill makes an appropriation from the general fund to the State Investment Council for expenditure in FY02 for the purpose of obtaining a ruling from the IRS as to whether the corpus of the permanent funds can be used to guarantee GO bonds issued and not affect the tax-exempt status of these bonds.
Significant Issues
The IRS ruling, if favorable, may provide for higher ratings on some school districts GO bonds, lowering the costs of financing some school capital projects. Statewide, it is estimated that the program would save school districts $900,000 annual in interest expense.
FISCAL IMPLICATIONS
This is a one-time expenditure of $50.0 thousand from the general fund in FY02. Unexpended or unencumbered balances remaining at the end of FY02 would revert to the general fund.
ADMINISTRATIVE IMPLICATIONS
Minimal.
JBE/ar