DEBORAH JOHNSTON

SENIOR LEGISLATIVE

RESEARCH ANALYST

APPROPRIATIONS COMMITTEE

Telephone: (602) 542-3171

Facsimile: (602) 542-7833

TO: MEMBERS OF THE SENATE

APPROPRIATIONS COMMITTEE

DATE: January 18, 2002

SUBJECT: Strike everything amendment to S.B. 1079

Purpose

An emergency measure, expressing legislative intent to appropriate $4 million from the state general fund for FY 2002-2003 to the Arizona Board of Regents (ABOR) in the FY 2002-2003 general appropriations act to fund debt service on bonds issued on behalf of Northern Arizona University (NAU).

Background

Statute authorizes the ABOR to issue revenue bonds, subject to legislative approval, for capital projects on behalf of a state university. The Legislature approved the issuance of up to $245.4 million in revenue bonds for the three state universities in 1996 (Laws 1996, Chapter 334). Of this amount, NAU was allocated $54.8 million. The Joint Committee on Capital Review (JCCR) gave the multiyear bonding plan a favorable review in May 1997. Laws 2001, Chapter 233 authorized additional bonding authority of $39.1 million for NAU, bringing NAU’s total bonding authority to $93.9 million. Approximately $63 million of the total amount allocated to NAU remains unused. Law requires JCCR to again review the multiyear plan, which was done at the October 4, 2001 meeting. The plan received a favorable review, but the bonds have not yet been issued.

During the 2001 regular session, NAU was appropriated $4 million for FY 2002-2003 in the general appropriations act as part of a $16 million biennial general fund university funding package (Laws 2001, Chapter 236). (NAU did not receive any monies from the funding package for FY 2001-2002.) The university proposed using the $4 million to offset tuition collections that would be used to pay the debt service on the proposed $63 million bond issuance. However, the appropriation was repealed during the 2001 budget special session along with other FY 2002-2003 general fund appropriations.

The strike everything amendment expresses legislative intent to “reappropriate” the $4 million that was repealed during the second special session. Should the funding be approved in the FY 2002-2003 general appropriations act, there will be a $4 million impact to the state general fund.

Provisions

1. Expresses legislative intent that $4 million be appropriated from the state general fund for FY 2002-2003 to ABOR in the FY 2002-2003 general appropriations act to offset tuition collections used to fund debt service on bonds issued on behalf of NAU.

2. Requires the appropriation to be added to NAU’s base budget.

3. Requires an estimate of the impact of the bond issuance authorized in the 2001 regular session to be included in NAU’s multiyear bonding plan reviewed by JCCR.

4. Becomes effective upon signature of the Governor.

DJ/ac