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H0350......................................................by STATE AFFAIRS SCHOOL DISTRICT BONDS - Amends existing law to revise procedures for advance refunding of school district bonds; to provide refunding bonds shall be authorized by a resolution of the board of trustees of a school district fixing the date, denominations, rate of interest, the maturity dates, the last of which shall not exceed the term of the outstanding bonds to be refunded. 03/15 House intro - 1st rdg - to printing 03/16 Rpt prt - to St Aff 03/17 Rpt out - rec d/p - to 2nd rdg 03/18 2nd rdg - to 3rd rdg 03/21 3rd rdg - PASSED - 67-0-3 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bedke, Bell, Bilbao, Block, Boe, Bolz, Bradford, Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson(Barker), Ellsworth, Field(18), Field(23), Garrett, Hart, Henbest, Henderson, Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- None Absent and excused -- Black, Eskridge, Harwood Floor Sponsor - Snodgrass Title apvd - to Senate 03/22 Senate intro - 1st rdg - to St Aff 03/30 Rpt out - rec d/p - to 2nd rdg Rls susp - PASSED - 35-0-0 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- None Floor Sponsor - Bunderson Title apvd - to House 03/31 To enrol - Rpt enrol - Sp signed 04/01 Pres signed 04/04 To Governor 04/14 Governor signed Session Law Chapter 392 Effective: 04/14/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 350 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO SCHOOL BONDS; AMENDING SECTION 33-1121, IDAHO CODE, TO PROVIDE A 3 TECHNICAL CORRECTION AND TO REVISE PROCEDURES FOR ADVANCE REFUNDING OF 4 SCHOOL DISTRICT BONDS; AMENDING SECTION 33-1123, IDAHO CODE, TO PROVIDE 5 THAT REFUNDING BONDS SHALL BE AUTHORIZED BY A RESOLUTION OF THE BOARD OF 6 TRUSTEES OF A SCHOOL DISTRICT FIXING THE DATE, DENOMINATIONS, RATE OF 7 INTEREST, THE MATURITY DATES, THE LAST OF WHICH SHALL NOT EXCEED THE TERM 8 OF THE OUTSTANDING BONDS TO BE REFUNDED; AND DECLARING AN EMERGENCY. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 33-1121, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 33-1121. ADVANCE REFUNDING BONDS. Whenever any school district has out- 13 standing bonds which may be called and redeemed prior to their maturities, the 14 board of trustees of any such district may issue refunding bonds in advance of 15 the date of calling and redeeming such outstanding bonds for the purpose of 16 redeeming the same, without submitting the question of issuing refunding bonds 17 to the electors of the district, when the net interest cost of the refunding 18 bonds shall not exceed the net interest cost of the bonds to be refunded. 19 "Net interest cost" of a proposed issue of refunding bonds is defined as 20 the total amount of interest to accrue on said refunding bonds from their date 21 to their respective maturities, plus the total amount of premiums payable to 22 the holders of said outstanding bonds as a condition to their redemption, less 23 the amount of any premium above their par value at which said refunding bonds 24 are being or have been sold. "Net interest cost" of an outstanding issue, or 25 issues, to be refunded is defined as the total amount of interest which would 26 accrue on said outstanding bonds from the date of the proposed refunding bonds 27 to the respective maturity dates of said outstanding bonds to be refunded. In 28 all cases the net interest cost shall be computed without regard to any option 29 of redemption prior to the designated maturities. 30 Two (2) or more issues of outstanding bonds may be refunded by a single 31 issue of refunding bonds only if the taxable property, upon which taxes are 32 levied to pay the interest and principal payments of the outstanding bonds, is 33 identical as to each issue proposed to be refunded by a single issue of 34 refunding bonds. 35 Refunding bonds shall be issued in a total amount equal to, or less than,36 the total amount of the outstanding bonds to be refunded, provided, that all37 of the outstanding bonds of any issue, or issues, are or will thereby be38 refunded.39 In all other respects, the issuance of advance refunding bonds shall be 40 governed by and subject to the limitations described in section 57-504, Idaho 41 Code. 2 1 SECTION 2. That Section 33-1123, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 33-1123. AUTHORIZATION. Refunding bonds shall be authorized by a resolu- 4 tion of the board of trustees fixing the date, denominations, rate of inter- 5 est, the maturity dates, the last of which shall not be more than fifteen6 years from the date of said refunding bondsexceed the term of the outstanding 7 bonds to be refunded, and place or places of payment, within or without the 8 state of Idaho. The resolution shall also provide for an annual levy, upon all 9 the property which could be levied upon to retire the outstanding bonds to be 10 refunded, of a tax sufficient to pay the interest and principal payments 11 according to the plan of amortization, and shall further provide for notice, 12 or notices, of redemption of the outstanding bonds at the time and in the man- 13 ner and form prescribed by law. 14 SECTION 3. An emergency existing therefor, which emergency is hereby 15 declared to exist, this act shall be in full force and effect on and after its 16 passage and approval.
STATEMENT OF PURPOSE RS 15156 This legislation corrects an inconsistency between Section 33-1121, Idaho Code, and Section 57-504, Idaho Code, and makes it clear that school districts can refund all or any portion of an outstanding issue of bonds. Additionally, the legislation corrects an inconsistency between Section 33-1107, Idaho Code, and Section 33-1123, Idaho Code, and clarifies that school districts can issue refunding bonds for a term equal to the term of the outstanding bonds to be refunded. Currently, several school districts have bonds that were issued in 2001 that could be refunded at a savings. If the districts must wait until 2006 to comply with Section 33-1123 as it now reads, and interest rates go up dramatically, the opportunity for savings will be lost. FISCAL NOTE There is no fiscal impact to the State general fund or any other state funds. RS 15156 provides school districts with more flexibility to refinance outstanding debt to achieve savings. Contact Name: Representative Mark Snodgrass Phone: 208-332-1000 STATEMENT OF PURPOSE/FISCAL NOTE H 350