Bill Text: DE HB195 | 2013-2014 | 147th General Assembly | Draft
Bill Title: An Act To Amend Title 29 Of The Delaware Code Relating To Bonds And Notes Of The State.
Spectrum: Strong Partisan Bill (Democrat 13-1)
Status: (Introduced - Dead) 2014-04-03 - Assigned to Appropriations Committee in House [HB195 Detail]
Download: Delaware-2013-HB195-Draft.html
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SPONSOR: |
Rep. D.E. Williams & Sen. McDowell |
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Reps. Baumbach, Bolden, Brady, Gray, Heffernan, Mulrooney, Osienski, Paradee, Potter, Scott; Sen. Sokola |
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HOUSE OF REPRESENTATIVES 147th GENERAL ASSEMBLY |
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HOUSE BILL NO. 195 |
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AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO BONDS AND NOTES OF THE STATE. |
Section 1.Amend §7422(b), Title 29 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
(b)
The aggregate principal amount of tax supported obligations of the State which
may be authorized by the State in any 1 fiscal year may not exceed 5% the
following graduated borrowing schedule formulated by using as a basis the
Municipal Market Data interest rate for Delaware Municipal Bond announced as of
March 31 of the year prior to the fiscal year at issue:
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Delaware Municipal Bond Interest Rate |
Borrowing Limit as a % of General Fund Revenue |
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Less than 2.5% |
9.5% |
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2.5% to <3.0% |
9.0% |
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3.0% to <3.5% |
8.5% |
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3.5% to <4.0% |
8.0% |
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4.0% to <4.5% |
7.5% |
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4.5% to <5.0% |
7.0% |
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5.0% to <5.5% |
6.5% |
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5.5% to <6.0% |
6.0% |
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6.0% to <6.5% |
5.5% |
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Above 6.5% |
5.0% |
The graduated borrowing limit percentages indicated in the above schedule shall represent the percentage of the estimated net General Fund revenue for that fiscal year from all sources (not including unencumbered funds remaining at the end of the previous fiscal year) as determined by the joint resolution approved by a majority of the members elected to each House of the General Assembly and signed by the Governor in connection with the adoption of the annual budget appropriation bill for that fiscal year. Any amount of tax supported obligations which are duly authorized in any fiscal year within the limits of this subsection, and then are later deauthorized, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Any amount of tax supported obligations which were duly authorized before July 1, 1991, and which are duly deauthorized after June 30, 1991, may subsequently be reauthorized without regard to the authorization limit otherwise provided by this subsection. Obligations authorized to refund other obligations of the State shall not be subject to the limits of this subsection (b).
(c) No tax supported obligation of the State and no Transportation Trust
Fund debt obligation of the Delaware Transportation Authority may be incurred
if the aggregate maximum annual payments on all such outstanding obligations
(plus certain lease obligations described below) will exceed 15% 12.5%
of the estimated aggregate General Fund revenue from all sources (not including
unencumbered funds remaining at the end of the previous fiscal year), plus
estimated Transportation Trust Fund revenue, in both cases for the fiscal year
following the fiscal year in which such obligation is incurred, such estimated
revenue as determined by the most recent projections made by the Delaware
Economic and Financial Advisory Council and adjusted, if appropriate, by the
fiscal impact of subsequently enacted legislation as certified by the Secretary
of Finance. The lease obligations referred to in the preceding sentence shall
mean: (i) All obligations of the State or any agency or authority thereof which
are payable from taxes, fees, permits, licenses and fines imposed or approved
by the General Assembly; and (ii) all obligations of the Delaware
Transportation Authority which are payable from the Transportation Trust Fund,
which in either case extend beyond one year and are with respect to the lease,
occupancy or use of property provided that such lease obligations shall not
include any obligations, the lease payments with respect to which are
reasonably expected to be offset (as determined by the Secretary of Finance) by
lease payments, user fees, federal grants or other payments from some nonstate
source. For the purposes of this subsection, the maximum annual payments on the
above-described lease obligations shall be as of the most recent date available
as certified by the Secretary of Finance.
SYNOPSIS
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This bill institutes a graduated schedule for Delaware General Obligation Bonds using a as a basis the interest rate announced by Municipal Market Data on March 31 of the year prior tothe fiscal year in which the borrowing is undertaken.This graduated schedule modernizesthe borrowing limit calculation for general obligation bonds to reflect interest rates.This also lowers the total debt service authorized from 15% to 12.5%. |
