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SJR105.....................................................by STATE AFFAIRS
BOND BANK AUTHORITY - Proposes an amendment to the Constitution of the
State of Idaho to authorize the Legislature to enact laws authorizing the
state to establish a bond bank authority to purchase the bonds, notes or
other obligations of a municipality issued or undertaken for any purpose
authorized by law and to lend money to a municipality with such loans to be
secured by bonds, notes or other obligations of the municipality issued or
undertaken for any purpose authorized by law.
03/07 Senate intro - 1st rdg - to printing
03/08 Rpt prt - to St Aff
SJR105
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE JOINT RESOLUTION NO. 105
BY STATE AFFAIRS COMMITTEE
1 A JOINT RESOLUTION
2 PROPOSING AN AMENDMENT TO ARTICLE VIII, OF THE CONSTITUTION OF THE STATE OF
3 IDAHO, RELATING TO PUBLIC INDEBTEDNESS AND SUBSIDIES BY THE ADDITION OF A
4 NEW SECTION 2A, ARTICLE VIII, TO AUTHORIZE THE LEGISLATURE TO ENACT LAWS
5 AUTHORIZING THE STATE TO ESTABLISH A BOND BANK AUTHORITY TO PURCHASE THE
6 BONDS, NOTES OR OTHER OBLIGATIONS OF A MUNICIPALITY ISSUED OR UNDERTAKEN
7 FOR ANY PURPOSE AUTHORIZED BY LAW AND TO LEND MONEY TO A MUNICIPALITY WITH
8 SUCH LOANS TO BE SECURED BY BONDS, NOTES OR OTHER OBLIGATIONS OF THE
9 MUNICIPALITY ISSUED OR UNDERTAKEN FOR ANY PURPOSE AUTHORIZED BY LAW, TO
10 AUTHORIZE THE AUTHORITY TO OBTAIN FUNDS TO PURCHASE MUNICIPAL BONDS, NOTES
11 OR OTHER OBLIGATIONS OR TO MAKE LOANS TO MUNICIPALITIES BY ISSUING REVENUE
12 BONDS, NOTES OR OTHER OBLIGATIONS PAYABLE FROM OR SECURED BY MUNICIPAL
13 BONDS, NOTES OR OTHER OBLIGATIONS, GUARANTEEING THE FULL FAITH AND CREDIT
14 OF THE STATE, SUBJECT TO ANY MAXIMUM AMOUNT OF GUARANTY ESTABLISHED BY
15 LAW, FOR THE PAYMENT OF PRINCIPAL AND INTEREST ON REVENUE BONDS, NOTES OR
16 OTHER OBLIGATIONS ISSUED BY THE AUTHORITY, ISSUING GENERAL OBLIGATION
17 BONDS SECURED BY THE FULL FAITH AND CREDIT OF THE STATE, SUBJECT TO ANY
18 MAXIMUM AMOUNT OF GENERAL OBLIGATION BONDS AT ANY TIME OUTSTANDING AS
19 ESTABLISHED BY LAW, PLEDGING SPECIFIC FUNDS OR STATE REVENUES AS A SOURCE
20 OF PAYMENT OR SECURITY FOR BONDS, NOTES OR OTHER OBLIGATIONS ISSUED BY THE
21 AUTHORITY, ESTABLISHING DEBT SERVICE RESERVE OR OTHER RESERVE FUNDS,
22 ESTABLISHING A MORAL OBLIGATION OF THE STATE TO REPLENISH WITHDRAWALS FROM
23 RESERVE FUNDS TO PAY DEBT SERVICE ON BONDS, NOTES OR OTHER OBLIGATIONS
24 ISSUED BY THE AUTHORITY WITHOUT OBLIGATION OF THE STATE TO APPROPRIATE
25 FUNDS FOR SUCH REPLENISHMENT, ESTABLISHING A REVOLVING LOAN PROGRAM TO
26 PURCHASE MUNICIPAL BONDS, NOTES OR OTHER OBLIGATIONS OR TO LEND MONEY TO
27 MUNICIPALITIES, OBTAINING PRIVATE CREDIT ENHANCEMENT FOR BONDS, NOTES OR
28 OTHER OBLIGATIONS ISSUED BY THE AUTHORITY, INVESTING MONEYS HELD BY THE
29 AUTHORITY IN SUCH SECURITIES OR OBLIGATIONS AS ARE DESCRIBED IN THE INDEN-
30 TURE, TRUST AGREEMENT OR OTHER INSTRUMENT PROVIDING FOR THE AUTHORITY'S
31 ISSUANCE OF BONDS, NOTES OR OTHER OBLIGATIONS, INVESTING ANY OTHER MONEYS
32 HELD BY THE AUTHORITY IN SECURITIES OR OTHER OBLIGATIONS IN WHICH A
33 TRUSTEE MAY INVEST AS PROVIDED BY LAW, TAKING SUCH OTHER ACTIONS AND
34 ENTERING INTO SUCH CONTRACTS AND AGREEMENTS DETERMINED TO BE NECESSARY OR
35 APPROPRIATE TO ACCOMPLISH THE PURPOSE OF A BOND BANK AUTHORITY OR THE SEC-
36 TION, TO AUTHORIZE THE LEGISLATURE TO ENACT LAWS AUTHORIZING MUNICIPALI-
37 TIES, WITHOUT REGARD TO RESTRICTIONS OR OTHER LIMITATIONS IMPOSED BY STATE
38 LAW BUT SUBJECT TO CONSTITUTIONAL LIMITATIONS IMPOSED ON MUNICIPALITIES,
39 TO ISSUE BONDS, NOTES OR OTHER OBLIGATIONS FOR SALE TO OR AS SECURITY FOR
40 LOANS RECEIVED FROM THE AUTHORITY, TO LEVY AND COLLECT PROPERTY TAXES,
41 FEES, RATES, CHARGES AND OTHER ASSESSMENTS TO PAY OR SECURE THE BONDS,
42 NOTES OR OTHER OBLIGATIONS ISSUED BY THE MUNICIPALITY FOR SALE TO OR AS
43 SECURITY FOR LOANS RECEIVED FROM THE AUTHORITY, TO PLEDGE AND ASSIGN TO
44 THE AUTHORITY OR ITS DESIGNEE SUCH PROPERTY TAXES, FEES, RATES, CHARGES
45 AND OTHER ASSESSMENTS ALONG WITH THE RIGHTS TO ENFORCE THE COLLECTION AND
46 APPLICATION THEREOF, AS SECURITY FOR THE BONDS, NOTES OR OTHER OBLIGATIONS
2
1 ISSUED BY THE MUNICIPALITY FOR SALE TO OR AS SECURITY FOR LOANS RECEIVED
2 FROM THE AUTHORITY, TO TAKE SUCH OTHER ACTIONS AND ENTER INTO SUCH CON-
3 TRACTS AND AGREEMENTS AS IT MAY DETERMINE WITH THE AUTHORITY TO BE NECES-
4 SARY OR CONVENIENT TO ACCOMPLISH THE PURPOSE OF A BOND BANK AUTHORITY AND
5 THIS SECTION, TO PROVIDE THAT SECTION 1 AND SUBSECTION (1) OF SECTION 2 OF
6 ARTICLE VIII SHALL NOT BE A LIMITATION UPON THE AUTHORITY GRANTED BY THE
7 SECTION AND THAT ANY DEBT OR LIABILITY OF THE STATE ARISING FROM THE EXER-
8 CISE OF POWERS AUTHORIZED BY THE SECTION SHALL NOT BE DEEMED A DEBT OF THE
9 STATE, TO PROVIDE THAT THE PROVISIONS OF THE SECTION SHALL NOT BE CON-
10 STRUED TO REPEAL OR LIMIT ANY AUTHORITY OF A MUNICIPALITY UNDER SECTION 3
11 OR 4 OF ARTICLE VIII, OR OTHER AUTHORITY EXERCISABLE BY A MUNICIPALITY
12 UNDER THE CONSTITUTION AND LAWS OF IDAHO, INCLUDING ANY AUTHORITY TO ISSUE
13 GENERAL OBLIGATION BONDS, REVENUE BONDS OR TAX ANTICIPATION NOTES OR
14 UNDERTAKE OTHER FINANCIAL OBLIGATIONS AND TO DEFINE "MUNICIPALITY"; STAT-
15 ING THE QUESTION TO BE SUBMITTED TO THE ELECTORATE; DIRECTING THE LEGISLA-
16 TIVE COUNCIL TO PREPARE THE STATEMENTS REQUIRED BY LAW; AND DIRECTING THE
17 SECRETARY OF STATE TO PUBLISH THE AMENDMENT AND ARGUMENTS AS REQUIRED BY
18 LAW.
19 Be It Resolved by the Legislature of the State of Idaho:
20 SECTION 1. That Article VIII of the Constitution of the State of Idaho be
21 amended by the addition thereto of a NEW SECTION, to be known and designated
22 as Section 2A, Article VIII of the Constitution of the State of Idaho and to
23 read as follows:
24 SECTION 2A. MUNICIPAL BOND BANK AUTHORITY ESTABLISHED. (1) Not-
25 withstanding the provisions of subsection (1) of Section 2 of Article
26 VIII, the legislature may enact laws authorizing the state to estab-
27 lish a bond bank authority to purchase the bonds, notes or other
28 obligations of a municipality issued or undertaken for any purpose
29 authorized by law and to lend money to a municipality with such loans
30 to be secured by bonds, notes or other obligations of the municipal-
31 ity issued or undertaken as authorized by law. To obtain funds to
32 enable the authority to purchase municipal bonds, notes or other
33 obligations or to lend money to municipalities, the legislature may
34 authorize the authority to:
35 (a) Issue revenue bonds, notes or other obligations payable
36 from or secured by bonds, notes or other obligations of one or
37 more municipalities;
38 (b) Guaranty, for and in the name and on behalf of the state as
39 its agent and instrumentality, payment of principal and interest
40 on revenue bonds, notes or other obligations issued by the
41 authority, which guaranty shall be a full faith and credit obli-
42 gation of the state, subject to a maximum amount of guaranty at
43 any time in effect as established by law;
44 (c) Issue general obligation bonds, for and in the name and on
45 behalf of the state as its agent and instrumentality, which
46 bonds shall be secured by the full faith and credit of the
47 state, subject to any maximum amount of such general obligation
48 bonds at any time outstanding as established by law;
49 (d) Pledge or otherwise obligate, for and in the name and on
50 behalf of the state as its agent and instrumentality, specific
51 funds or revenues of the state, as a source of payment or secu-
52 rity for bonds, notes or other obligations issued by the author-
3
1 ity, with such priority over other uses of such funds or reve-
2 nues as the authority shall determine, in accordance with law,
3 to be necessary or appropriate, subject to any maximum amount of
4 such funds or revenues that may be pledged or obligated at any
5 time as established by law;
6 (e) Establish debt service reserve funds or other reserve
7 funds;
8 (f) Establish a moral obligation of the state to replenish any
9 withdrawals from reserve funds to pay debt service on bonds,
10 notes or other obligations issued by the authority, provided
11 that the legislature shall have no legal obligation to appropri-
12 ate funds for such replenishment;
13 (g) Establish a revolving loan program to purchase municipal
14 bonds, notes or other obligations or to lend money to municipal-
15 ities;
16 (h) Obtain private credit enhancement for bonds, notes or other
17 obligations issued by the authority;
18 (i) Invest moneys held by the authority, as proceeds or to pay
19 or secure bonds, notes or other obligations issued by the
20 authority, in such securities or obligations as are described in
21 the indenture, trust agreement or other instrument providing for
22 the issuance of the bonds, notes or other obligations;
23 (j) Invest any moneys held by the authority, in excess of funds
24 described in paragraph (i) of this subsection, in any securities
25 or other obligations in which a trustee may invest as provided
26 by law;
27 (k) Take any other actions and enter into such other contracts
28 and agreements as it may determine to be necessary or appropri-
29 ate to accomplish the purposes of a bond bank authority or this
30 section.
31 (2) To provide for the sale of municipal bonds, notes or other
32 obligations to the authority and for the issuance of municipal bonds,
33 notes or other obligations for purchase by the authority or as secu-
34 rity for loans from the authority, the legislature may enact laws
35 authorizing municipalities, in addition to any other powers munici-
36 palities may have, and without regard to the restrictions or require-
37 ments that might otherwise apply under the laws of this state, but
38 subject to the requirements of Section 3 of Article VIII, and any
39 other limitations imposed upon municipalities by the Constitution of
40 the state of Idaho, to:
41 (a) Issue bonds, notes or other obligations for sale to or as
42 security for loans received from the authority, with such inter-
43 est rate, maturity, redemption, security, remedies and other
44 terms as the municipality may agree with the authority;
45 (b) Levy and collect property taxes, fees, rates, charges and
46 other assessments to pay or secure the bonds, notes or other
47 obligations issued by the municipality for sale to or as secu-
48 rity for loans received from the authority;
49 (c) Pledge and assign to the authority or its designee such
50 property taxes, fees, rates, charges and other assessments, and
51 rights to enforce the collection and application thereof, to pay
52 or secure the bonds, notes or other obligations issued by the
53 municipality for sale to or as security for loans received from
54 the authority;
55 (d) Take any other actions and enter into such other contracts
4
1 and agreements as it may determine with the authority to be nec-
2 essary or convenient to accomplish the purpose of a bond bank
3 authority and this section.
4 (3) The provisions of Section 1 and subsection (1) of Section 2
5 of Article VIII shall not be construed as a limitation upon the
6 authority granted by this section and any debt or liability of the
7 state arising as a result of the exercise of powers authorized by
8 this section shall not be deemed a debt of the state for purposes of
9 Section 1 of Article VIII. The provisions of this section are supple-
10 mental to and shall not be construed as a repeal of or limitation
11 upon any authority of a municipality under Section 3 or 4 of Article
12 VIII, or any other authority lawfully exercisable by a municipality
13 under the Constitution and laws of this state, including, among
14 others, any authority to issue general obligation bonds, revenue
15 bonds or tax anticipation notes or to enter into contracts for or
16 undertake other financial obligations.
17 (4) For purposes of this section, "municipality" shall include
18 any county, city, municipal corporation, school district, irrigation
19 district, sewer district, water district, highway district or other
20 special purpose district or political subdivision of the state estab-
21 lished by law.
22 SECTION 2. The question to be submitted to the electors of the State of
23 Idaho at the next general election shall be as follows:
24 "Shall Article VIII, of the Constitution of the State of Idaho be amended
25 by the addition thereto of a new Section 2A, Article VIII, to provide as
26 follows:
27 (1) Notwithstanding the provisions of subsection (1) of Section 2 of
28 Article VIII, the Legislature may enact laws authorizing the state to estab-
29 lish a bond bank authority to purchase the bonds, notes or other obligations
30 of a municipality issued or undertaken for any purpose authorized by law and
31 to lend money to a municipality with such loans to be secured by bonds, notes
32 or other obligations of the municipality issued or undertaken as authorized by
33 law. To obtain funds to enable the authority to purchase municipal bonds,
34 notes or other obligations or to lend money to municipalities, the Legislature
35 may authorize the authority to:
36 (a) Issue revenue bonds, notes or other obligations payable from or
37 secured by bonds, notes or other obligations of one or more municipali-
38 ties;
39 (b) Guaranty, for and in the name and on behalf of the state as its agent
40 and instrumentality, payment of principal and interest on revenue bonds,
41 notes or other obligations issued by the authority, which guaranty shall
42 be a full faith and credit obligation of the state, subject to a maximum
43 amount of guaranty at any time in effect as established by law;
44 (c) Issue general obligation bonds, for and in the name and on behalf of
45 the state as its agent and instrumentality, which bonds shall be secured
46 by the full faith and credit of the state, subject to any maximum amount
47 of such general obligation bonds at any time outstanding as established by
48 law;
49 (d) Pledge or otherwise obligate, for and in the name and on behalf of
50 the state as its agent and instrumentality, specific funds or revenues of
51 the state, as a source of payment or security for bonds, notes or other
52 obligations issued by the authority, with such priority over other uses of
53 such funds or revenues as the authority shall determine, in accordance
54 with law, to be necessary or appropriate, subject to any maximum amount of
5
1 such funds or revenues that may be pledged or obligated at any time as
2 established by law;
3 (e) Establish debt service reserve funds or other reserve funds;
4 (f) Establish a moral obligation of the state to replenish any with-
5 drawals from reserve funds to pay debt service on bonds, notes or other
6 obligations issued by the authority, provided that the Legislature shall
7 have no legal obligation to appropriate funds for such replenishment;
8 (g) Establish a revolving loan program to purchase municipal bonds, notes
9 or other obligations or to lend money to municipalities;
10 (h) Obtain private credit enhancement for bonds, notes or other obliga-
11 tions issued by the authority;
12 (i) Invest moneys held by the authority, as proceeds or to pay or secure
13 bonds, notes or other obligations issued by the authority, in such securi-
14 ties or obligations as are described in the indenture, trust agreement or
15 other instrument providing for the issuance of the bonds, notes or other
16 obligations;
17 (j) Invest any moneys held by the authority, in excess of funds described
18 in paragraph (i) of this subsection, in any securities or other obliga-
19 tions in which a trustee may invest as provided by law;
20 (k) Take any other actions and enter into such other contracts and agree-
21 ments as it may determine to be necessary or appropriate to accomplish the
22 purposes of a bond bank authority or this section.
23 (2) To provide for the sale of municipal bonds, notes or other obliga-
24 tions to the authority and for the issuance of municipal bonds, notes or other
25 obligations for purchase by the authority or as security for loans from the
26 authority, the Legislature may enact laws authorizing municipalities, in addi-
27 tion to any other powers municipalities may have, and without regard to the
28 restrictions or requirements that might otherwise apply under the laws of this
29 state, but subject to the requirements of Section 3 of Article VIII, and any
30 other limitations imposed upon municipalities by the Constitution of the state
31 of Idaho, to:
32 (a) Issue bonds, notes or other obligations for sale to or as security
33 for loans received from the authority, with such interest rate, maturity,
34 redemption, security, remedies and other terms as the municipality may
35 agree with the authority;
36 (b) Levy and collect property taxes, fees, rates, charges and other
37 assessments to pay or secure the bonds, notes or other obligations issued
38 by the municipality for sale to or as security for loans received from the
39 authority;
40 (c) Pledge and assign to the authority or its designee such property
41 taxes, fees, rates, charges and other assessments, and rights to enforce
42 the collection and application thereof, to pay or secure the bonds, notes
43 or other obligations issued by the municipality for sale to or as security
44 for loans received from the authority;
45 (d) Take any other actions and enter into such other contracts and agree-
46 ments as it may determine with the authority to be necessary or convenient
47 to accomplish the purpose of a bond bank authority and this section.
48 (3) The provisions of Section 1 and subsection (1) of Section 2 of Arti-
49 cle VIII shall not be construed as a limitation upon the authority granted by
50 this section and any debt or liability of the state arising as a result of the
51 exercise of powers authorized by this section shall not be deemed a debt of
52 the state for purposes of Section 1 of Article VIII. The provisions of this
53 section are supplemental to and shall not be construed as a repeal of or limi-
54 tation upon any authority of a municipality under Section 3 or 4 of Article
55 VIII, or any other authority lawfully exercisable by a municipality under the
6
1 Constitution and laws of this state, including, among others, any authority to
2 issue general obligation bonds, revenue bonds or tax anticipation notes or to
3 enter into contracts for or undertake other financial obligations.
4 (4) For purposes of this section, "municipality" shall include any
5 county, city, municipal corporation, school district, irrigation district,
6 sewer district, water district, highway district or other special purpose dis-
7 trict or political subdivision of the state established by law?".
8 SECTION 3. The Legislative Council is directed to prepare the statements
9 required by Section 67-453, Idaho Code, and file the same.
10 SECTION 4. The Secretary of State is hereby directed to publish this pro-
11 posed constitutional amendment and arguments as required by law.
STATEMENT OF PURPOSE
RS 10257
This joint resolution proposes an amendment to Article VIII of the
constitution of the State of Idaho by allowing the creation of a State of Idaho
Bond Bank Authority. This will allow for municipalities through normal bonding
practices to achieve economics of scale which will reduce costs to those paying
the principal interest and other costs associated with payment of said bonds.
Municipalities shall include any county, city, municipal corporation, school
district, irrigation district, sewer district, water district, highway district or other
special purpose district or political subdivision of the state established by law.
FISCAL IMPACT
No fiscal impact is anticipated at this time.
Contact
Name: John Sandy
Phone: (208) 332-1305
STATEMENT OF PURPOSE/FISCAL NOTE SJR 105