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H0322......................................................by STATE AFFAIRS
PUBLIC SCHOOL PERMANENT ENDOWMENT FUND - Amends existing law to increase
the amount of money the Endowment Fund Investment Board shall make
available from the Public School Permanent Endowment Fund for purposes of
purchasing notes; and to provide that the amount of debt guaranteed by the
credit enhancement program shall not be greater than three times the amount
made available by the Public School Permanent Endowment Fund.
03/04 House intro - 1st rdg - to printing
03/05 Rpt prt - to Educ
03/07 Ref'd to St Aff
03/12 Rpt out - rec d/p - to 2nd rdg
03/13 2nd rdg - to 3rd rdg
03/17 3rd rdg - PASSED - 69-1-0
AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest,
Jaquet, Jones, Kellogg, Kulczyk, Langford, Langhorst, Martinez,
McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato,
Nielsen, Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch,
Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30),
Smith(24), Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Wood,
Mr. Speaker
NAYS -- Lake
Absent and excused -- None
Floor Sponsor - Deal
Title apvd - to Senate
03/19 Senate intro - 1st rdg - to St Aff
03/25 Rpt out - rec d/p - to 2nd rdg
03/26 2nd rdg - to 3rd rdg
04/01 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Roberts),
Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Stegner
Title apvd - to House
04/02 To enrol
04/03 Rpt enrol - Sp signed
04/04 Pres signed
04/07 To Governor
04/08 Governor signed
Session Law Chapter 269
Effective: 04/08/03
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 322
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE CREDIT ENHANCEMENT PROGRAM FOR SCHOOL DISTRICT BONDS; AMENDING
3 SECTION 57-728, IDAHO CODE, TO INCREASE THE AMOUNT OF MONEY THE ENDOWMENT
4 FUND INVESTMENT BOARD SHALL MAKE AVAILABLE FROM THE PUBLIC SCHOOL PERMA-
5 NENT ENDOWMENT FUND FOR PURPOSES OF PURCHASING NOTES AND TO PROVIDE THAT
6 THE AMOUNT OF DEBT GUARANTEED BY THE CREDIT ENHANCEMENT PROGRAM SHALL NOT
7 BE GREATER THAN THREE TIMES THE AMOUNT MADE AVAILABLE BY THE PUBLIC SCHOOL
8 PERMANENT ENDOWMENT FUND; AND DECLARING AN EMERGENCY.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 57-728, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 57-728. CREDIT ENHANCEMENT PROGRAM FOR SCHOOL DISTRICT BONDS. (1) The
13 endowment fund investment board shall administer a school district bond credit
14 enhancement program in accordance with this section and in conjunction with
15 chapter 53, title 33, Idaho Code, and may promulgate rules to implement it.
16 This program applies to voter approved bonds issued by school districts. The
17 program is intended to benefit school districts by purchasing notes issued by
18 the state of Idaho, whereby the state may guarantee payment of school district
19 bonded indebtedness in order to avoid an imminent default, providing lower
20 interest rates at which the bonds may be issued.
21 (2) A school district that seeks the guarantee of bonds under this pro-
22 gram shall apply to the state treasurer pursuant to section 33-5304, Idaho
23 Code. The state treasurer shall transmit all approved applications to the
24 board. The board may challenge an approved application within three (3) busi-
25 ness days of their receipt of the same. If no challenge is issued within three
26 (3) business days the application shall be deemed approved by the board. In
27 the event of a challenge in writing to the state treasurer, the treasurer and
28 the board shall have ten (10) business days to mutually approve the applica-
29 tion. If after a challenge by the board, the application is not mutually
30 approved within the ten (10) business days, the application shall be deemed
31 rejected. Nothing contained herein shall prohibit a school district from
32 reapplying following a rejected application.
33 (3) Upon approval of the credit enhancement program under this section,
34 the following shall be in effect in the event moneys from the sales tax
35 account or from the provisions of section 33-5309, Idaho Code, are insuffi-
36 cient to pay the principal of and interest on the notes issued by the state
37 pursuant to section 33-5308, Idaho Code, the endowment fund shall purchase new
38 notes from the state, in accordance with section 33-5308, Idaho Code, the pro-
39 ceeds of which shall be sufficient to pay the principal of and the interest on
40 the original notes as they become due pursuant to section 33-5308, Idaho Code.
41 The new notes shall be subject to the following terms and conditions:
42 (a) The notes shall bear interest at a rate equal to an annual rate ten
43 percent (10%) higher than the average interest earned on the investments
2
1 of the public school permanent endowment fund in the four (4) calendar
2 quarters preceding the quarter in which the loan occurred and if this fig-
3 ure is not equal to the percentage return of the fund's highest category
4 of investments in its portfolio, then the interest rate shall equal that
5 percentage return on investment, plus all additional administrative costs
6 related to these investments;
7 (b) The notes, including principal and interest, shall be repaid from the
8 district's next payments pursuant to chapter 8, title 33, Idaho Code, as
9 collected by the state treasurer;
10 (c) The state may make additional payments on the note;
11 (d) The endowment fund investment board may require the state treasurer
12 to compel the school district to modify its fiscal practices and its gen-
13 eral operations if the board determines that there is a substantial like-
14 lihood that the district will not be able to make future payments required
15 under this section.
16 (4) The provisions of this section shall not be deemed to interfere with
17 the state treasurer's ability in chapter 53, title 33, Idaho Code, to obtain
18 repayment of a delinquent obligation.
19 (5) For purposes of administering the provisions of this section, the
20 board shall make available the sum of at least one two hundred million dollars
21 ($1200,000,000) from the public school permanent endowment fund, for purposes
22 of purchasing notes as authorized by this section. The amount of debt guaran-
23 teed by the credit enhancement program shall not be greater than two three
24 (23) times the amount made available by the public school permanent endowment
25 fund.
26 SECTION 2. An emergency existing therefor, which emergency is hereby
27 declared to exist, this act shall be in full force and effect on and after its
28 passage and approval.
STATEMENT OF PURPOSE
RS 13027C1
The purpose of this legislation is to increase the guarantee
amount on the Idaho Bond Guaranty Program from $200,000,000 to
$600,000,000. This proposed change would make available
$200,000,000 from the public school permanent endowment fund and
increase the amount of debt guaranteed by the credit enhancement
program to no more than three times the amount made available by
the public school permanent endowment fund.
FISCAL IMPACT
This legislation will allow school districts to continue to
benefit from the credit enhancement of the program and is
estimated to further decrease the school districts annual cost of
debt financing by $816,000.
Contact
Name: Liza Carberry - State Treasurer's Office
Phone: 208/332-2997
STATEMENT OF PURPOSE/FISCAL NOTE H 322