CONFERENCE COMMITTEE ON HB 4073B

Fifth Special Session of 71st Legislative Assembly

 

September 17, 2002   Hearing Room 50

9:55 PM Tape 1

 

MEMBERS PRESENT:            Rep. Ben Westlund, Chair

Rep. Alan Bates

Rep. Betsy Johnson

Rep. Susan Morgan

Rep. Lane Shetterly

Sen. Roger Beyer

Sen. Bev Clarno

Sen. Ryan Deckert

 

STAFF PRESENT:                  Richard Yates, Legislative Revenue Office

Patsy Wood, Committee Assistant

 

MEASURE/ISSUES HEARD:            HB 4073B  Work Session

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 1, A

004

Chair Westlund

Calls the conference committee to order at 9:57 p.m. and opens a work session on HB 4073B.

HB 4073B WORK SESSION

010

Richard Yates

Legislative Revenue Office.  Explains HB 4073B sells a portion of the payment stream that comes from the Master Settlement Agreement (MSA) to a separate corporation which in turn will issue bonds with the net proceeds of those bonds going into the state school fund.  States that the House-passed version of this bill directs $400 million be issued with a maturity not to exceed 14 years; the Senate version directs $150 million be issued with maturity not to exceed 8 years.  Submits the B13 amendments which delete $150 million in the Senate version and increase that to $200 million (EXHIBIT A). 

029

Rep. Shetterly

MOTION:  Moves to ADOPT HB 4073B-13 amendments dated 09/15/02.

036

Kate Richardson

State Treasurer’s Office.  States that she would prefer to testify after the committee has decided upon a final amount and length of time.

042

Rep. Bates

Discusses the compromises that have occurred this special session and stresses the importance of the $50 million being restored in the bill.

069

Rep. Shetterly

Contends the $50 million is more of a bicameral issue than an R & D (Republican and Democrat) issue.  Says that even though he made the motion as a courtesy to the Chair, he is inclined to defer to the Senate at this time, and revisit the issue of additional school funding in January. 

088

Chair Westlund

Appreciates the courtesy motion, but says that $200 million is more appropriate at this time.

100

Sen. Deckert

Indicates that after polling the floor of the Senate, there seems to be majority support from both floors to pass this legislation with the additional $50 million and sine die.

114

Sen. Clarno

Notes her objections to this motion. 

127

Rep. Shetterly

Amends his previous comments and says he will support the motion.

132

Chair Westlund

VOTE:         Notes that with Sen. Beyer and Sen. Clarno voting “no”, and a majority needed from both houses, the motion to adopt the B13 amendments fails.

 

141

Rep. Shetterly

MOTION:  Moves HB 4073B to the floor with the recommendation that the House CONCUR in Senate amendments dated 9/15/02 and REPASS the Measure.

148

Rep. Morgan

Regrets $50 million not being restored to K-12, but says there will be options in January for the Legislature.  Regretfully supports the motion.

161

Rep. Bates

Notes his objection to the motion without the $50 million for K-12.

166

Rep. Shetterly

States his desire to revisit additional school funding next session, but says he will be a courtesy “yes” vote to get this out of committee.

180

Chair Westlund

Understands concerns but notes how much this $50 million has been previously debated.

187

 

VOTE:  5-3

AYE:            5 - Rep. Morgan, Rep. Shetterly, Sen. Beyer, Sen. Clarno, Chair Westlund

NAY:            3 - Rep. Bates, Rep. Johnson, Sen. Deckert

191

Chair Westlund

The motion Carries.

REP. WESTLUND will lead discussion on the HOUSE floor.

 

199

Kate Richardson

State Treasurer’s Office.  Asks for guidance from the committee on how to structure the payoff.

209

Chair Westlund

Asks about the difference in percentage of available MSA stream over a “short” or “long” payment period.

213

Richardson

Notes that the interest cost difference is under 4% for both.

221

Yates

Points out that the State Treasurer has latitude in which to structure this deal and submits figures with a four-year payoff (EXHIBITS B & C). 

247

Rep. Shetterly

Talks about obligating the largest share of the stream to keep the total cost of funds as low as possible.

261

Rep. Morgan

Wants to explore the timeline for issuance; wonders if there is time to revisit this when they return for the next regular session.

269

Richardson

Notes that the first issuance would be March or April so the next legislature could revisit this statute.  Says that the State Treasurer’s office would need a 30-day lead time to restructure the deal.

277

Rep. Shetterly

Asks if these bonds could be looked at for revision if it is necessary to look at additional school funding if another deficit occurs in the December forecast.

282

Richardson

Replies affirmatively.

284

Rep. Bates

Wonders how long it would take to start this bonding process over if the $150 million failed tonight.

291

Richardson

Says it would take 90 days because it would be a new project.

296

Chair Westlund

Points out that waiting until January to start this process would be about the same time for issuance as this bonding proposal tonight.

303

Richardson

Asks for clarification that this proposal should be structured in the shortest timeframe as possible.

306

Chair Westlund

Says that he does not want to utilize all the Master Settlement Agreement dollars.

314

Richardson

Responds that the Treasurer’s office is just looking for direction from committee.

318

Chair Westlund

Notes the importance of leaving some flexibility for next session.

332

Richardson

Replies that the committee would be achieving their purpose by giving the State Treasurer direction as if nothing changes, but they would also retain the flexibility to revisit the issue if circumstances do change.

337

Rep. Shetterly

Talks about coming back in January and revisiting the issue for more money, but for the $150 million in question tonight, use the shortest duration.

350

Rep. Morgan

Suggests going ahead with the proposal tonight, but wants to protect their options if another special session is called before the next regular session in January.

362

Chair Westlund

Acknowledges that there is some flexibility with this bonding issue.  Adjourns the conference committee at 10:17 p.m.

 

Submitted By,                        Reviewed By,

 

 

 

Patsy Wood,                        Marjorie Taylor,

Committee Assistant                        Committee Administrator

 

EXHIBIT SUMMARY

 

A – HB 4073B, B13 amendments dated 9/15/02, submitted by staff, 1 pg.

B – Model Bonding of MSA Payment Stream with proceeds at $150 million, dated 9/17/02, submitted by staff, 1 pg.

C – Model Bonding of MSA Payment Stream with proceeds at $200 million, dated 9/17/02, submitted by staff, 1 pg.