Purpose

Removes the requirement that the Legislature authorize the level of bonds the Arizona Board of Regents (ABOR) can issue and instead stipulates that ABOR is authorized to issue bonds if it does not spend more than eight percent of its total projected expenditures and mandatory transfers and the ABOR issued bonds are reviewed by the Joint Legislative Committee on Capital Review (JCCR).

Background

Statute authorizes JCCR to develop and approve formulas for computing annual building renewal funding, approve building systems for capital improvement plans and review current capital improvement plans. Additionally, JCCR is required to report to the Legislature concerning funding for land acquisition, capital projects and building renewal and must review the scope, purpose and estimated costs when projects are estimated over $250,000.

ABOR has the authority to issue bonds to acquire projects for university institutions if approved by the Legislature. ABOR also has the power to refund bonds issued to acquire projects and refund any such refunding bonds. The interest rate and form of the bond, dates of issue and other matters relating to bond issuance are determined by ABOR. However, statute specifies that bonds must mature within 40 years of the initial date of issue.

S.B. 1257 replaces legislative approval for ABOR issued bonds with a review by JCCR. This bill also prohibits ABOR from spending beyond a cap of eight percent of its total projected expenditures and mandatory transfers.

Provisions

1. Replaces legislative authorization for ABOR issued bonds and mandatory transfers with JCCR review and prohibits ABOR from spending beyond a cap of eight percent of ABOR’s total expenditures and mandatory transfers.

2. Provides for a general effective date.

Amendments Adopted by Committee of the Whole

· Lowers the cap from ten to eight percent that ABOR may spend of its annual expenditures for capital debt as one of the conditions of issuing bonds.

Amendments Adopted by House of Representatives

1. Requires JCCR to review, rather than approve, projects to be acquired using bond proceeds.

2. Prohibits bonds, certificates or participation and projected debt service on bonds from exceeding eight percent of the institution’s total projected expenditures and mandatory transfers in any fiscal year of the institution’s capital improvement plan.

3. Requires the applicable calculation to be included in the Board adopted capital improvement plan for the institution.

Senate Action House Action

ED 3/14/02 DP 5-0-3-0 ED 4/15/02 DPA 8-0-0-2

FIN 3/25/02 DP 4-3-1-0 APPROP 4/23/02 DP 13-0-0-3

3^rd Read 4/4/02 19-6-5-0 3^rd Read 4/29/02 52-4-4-0

Final Read 5/7/02 27-1-2-0

Signed by Governor 5/9/02

Chapter 202

Prepared by Senate Staff

June 4, 2002

Assigned to FIN & ED AS ENACTED

Purpose