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H0668......................................................by STATE AFFAIRS
SCHOOL BOND GUARANTY ACT - Amends existing law to provide that the amount
of debt guaranteed by the credit enhancement program will not be greater
than two times the amount made available by the fund.
02/22 House intro - 1st rdg - to printing
02/25 Rpt prt - to St Aff
02/27 Rpt out - rec d/p - to 2nd rdg
02/28 2nd rdg - to 3rd rdg
03/04 3rd rdg - PASSED - 63-0-7
AYES -- Aikele, Barraclough, Barrett, Bedke, Bell, Bieter, Black,
Block, Boe, Bolz, Bradford, Bruneel, Callister, Campbell, Clark,
Collins, Crow, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge,
Field(13), Field(20), Gould, Hadley, Hammond, Harwood, Henbest,
Higgins, Hornbeck, Jaquet, Jones, Kellogg(Duncan), Kendell, Kunz,
Lake, Langford, Martinez, McKague, Meyer, Mortensen, Pearce,
Pischner, Pomeroy, Raybould, Ridinger, Robison, Sali, Schaefer,
Sellman, Shepherd, Smith(33), Smylie, Stevenson, Stone, Tilman,
Trail, Wheeler, Wood, Young, Mr. Speaker
NAYS -- None
Absent and excused -- Gagner, Loertscher, Mader, Montgomery, Moyle,
Roberts, Smith(23)
Floor Sponsor - Deal
Title apvd - to Senate
03/05 Senate intro - 1st rdg - to St Aff
03/11 Rpt out - rec d/p - to 2nd rdg
03/12 2nd rdg - to 3rd rdg
03/15 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch Brandt, Bunderson, Burtenshaw,
Cameron, Darrington, Davis, Deide, Dunklin, Frasure, Geddes, Goedde,
Hawkins, Hill, Ingram, Ipsen, Keough, King-Barrutia, Little, Lodge,
Marley, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Sandy
Title apvd - to House
03/15 To enrol
Rpt enrol - Sp signed - Pres signed
03/18 To Governor
03/20 Governor signed
Session Law Chapter 147
Effective: 03/20/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 668
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO SCHOOL BOND GUARANTY ACT; AMENDING SECTION 57-728, IDAHO
3 CODE, TO PROVIDE THAT THE AMOUNT OF DEBT GUARANTEED BY THE CREDIT ENHANCE-
4 MENT PROGRAM WILL NOT BE GREATER THAN TWO TIMES THE AMOUNT MADE AVAILABLE
5 BY THE FUND; AND DECLARING AN EMERGENCY.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 57-728, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 57-728. CREDIT ENHANCEMENT PROGRAM FOR SCHOOL DISTRICT BONDS. (1) The
10 endowment fund investment board shall administer a school district bond credit
11 enhancement program in accordance with this section and in conjunction with
12 chapter 53, title 33, Idaho Code, and may promulgate rules to implement it.
13 This program applies to voter approved bonds issued by school districts. The
14 program is intended to benefit school districts by purchasing notes issued by
15 the state of Idaho, whereby the state may guarantee payment of school district
16 bonded indebtedness in order to avoid an imminent default, providing lower
17 interest rates at which the bonds may be issued.
18 (2) A school district that seeks the guarantee of bonds under this pro-
19 gram shall apply to the state treasurer pursuant to section 33-5304, Idaho
20 Code. The state treasurer shall transmit all approved applications to the
21 board. The board may challenge an approved application within three (3) busi-
22 ness days of their receipt of the same. If no challenge is issued within three
23 (3) business days the application shall be deemed approved by the board. In
24 the event of a challenge in writing to the state treasurer, the treasurer and
25 the board shall have ten (10) business days to mutually approve the applica-
26 tion. If after a challenge by the board, the application is not mutually
27 approved within the ten (10) business days, the application shall be deemed
28 rejected. Nothing contained herein shall prohibit a school district from
29 reapplying following a rejected application.
30 (3) Upon approval of the credit enhancement program under this section,
31 the following shall be in effect in the event moneys from the sales tax
32 account or from the provisions of section 33-5309, Idaho Code, are insuffi-
33 cient to pay the principal of and interest on the notes issued by the state
34 pursuant to section 33-5308, Idaho Code, the endowment fund shall purchase new
35 notes from the state, in accordance with section 33-5308, Idaho Code, the pro-
36 ceeds of which shall be sufficient to pay the principal of and the interest on
37 the original notes as they become due pursuant to section 33-5308, Idaho Code.
38 The new notes shall be subject to the following terms and conditions:
39 (a) The notes shall bear interest at a rate equal to an annual rate ten
40 percent (10%) higher than the average interest earned on the investments
41 of the public school permanent endowment fund in the four (4) calendar
42 quarters preceding the quarter in which the loan occurred and if this fig-
43 ure is not equal to the percentage return of the fund's highest category
2
1 of investments in its portfolio, then the interest rate shall equal that
2 percentage return on investment, plus all additional administrative costs
3 related to these investments;
4 (b) The notes, including principal and interest, shall be repaid from the
5 district's next payments pursuant to chapter 8, title 33, Idaho Code, as
6 collected by the state treasurer;
7 (c) The state may make additional payments on the note;
8 (d) The endowment fund investment board may require the state treasurer
9 to compel the school district to modify its fiscal practices and its gen-
10 eral operations if the board determines that there is a substantial like-
11 lihood that the district will not be able to make future payments required
12 under this section.
13 (4) The provisions of this section shall not be deemed to interfere with
14 the state treasurer's ability in chapter 53, title 33, Idaho Code, to obtain
15 repayment of a delinquent obligation.
16 (5) For purposes of administering the provisions of this section, the
17 board shall make available the sum of at least one hundred million dollars
18 ($100,000,000) from the public school permanent endowment fund, for purposes
19 of purchasing notes as authorized by this section. The amount of debt guaran-
20 teed by the credit enhancement program shall not be greater than two (2) times
21 the amount made available by the public school permanent endowment fund.
22 SECTION 2. An emergency existing therefor, which emergency is hereby
23 declared to exist, this act shall be in full force and effect on and after its
24 passage and approval.
STATEMENT OF PURPOSE
RS 12040C2
To clarify limits used in guaranteeing local bond ratings and to
give bond rating agencies clarification as to the State of
Idaho's intent.
FISCAL IMPACT
None
Contact
Name: Rep. Bill Deal
Phone: 208/332-1000
Rep. John Sandy
Phone: 208 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 668