HB 614-FN – AS INTRODUCED
2013 SESSION
05/03
HOUSE BILL 614-FN
AN ACT limiting the authorization for new annual general fund-supported debt.
SPONSORS: Rep. Kurk, Hills 2; Rep. Leishman, Hills 24; Rep. Weyler, Rock 13; Rep. Chandler, Carr 1
This bill limits the authorization for new annual general fund-supported debt.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
13-0709
05/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Thirteen
AN ACT limiting the authorization for new annual general fund-supported debt.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Budget and Appropriations; Limitation on General Fund-Supported Debt. Amend RSA 9 by inserting after section 9-c the following new section:
9:9-d Limitation on General Fund-Supported Debt. In any biennial budget, new general fund-supported debt shall not exceed 90 percent of general fund-supported debt retired or expected to be retired in the prior biennium, as determined by the state treasurer.
2 Effective Date. This act shall take effect July 1, 2013.
LBAO
13-0709 01/15/13
HB 614-FN – FISCAL NOTE
AN ACT limiting the authorization for new annual general fund-supported debt.
FISCAL IMPACT:
The Treasury Department states this bill, as introduced, will decrease state expenditures by approximately $112,500 in FY 2014, $601,000 in FY 2015, and have an indeterminable impact on state expenditures in FY 2016 and each year thereafter. This bill will have no impact on state, county, and local revenue, or county and local expenditures.
METHODOLOGY:
The Treasury Department states this bill would limit the annual general fund supported debt issued by the state. The Department estimates approximately $140 million in “net” general fund-supported debt will be retired during the FY 2012-2013 biennium. The Department distinguishes between “net” general fund-supported debt, where debt service is paid directly from unrestricted revenues, from “all” general fund-supported debt, where debt service is paid from both unrestricted revenues and restricted revenues.
IN THOUSANDS
“Net” General Fund-Supported Debt FY 2012 FY 2013
A) Debt Retired $67,368.2 $72,628.6
Treasury Debt Affordability Study FY 2014 FY 2015
Debt $67,500.0 $67,500.0
B) Associated Debt Service $1,687.5 $9,011.3
90% Cap on Debt retired 2012/2013
Debt Cap (A x 90%) $62,998.6 $62,998.6
C) Associated Debt Service $1,575.0 $8,410.3
Net Expenditure Decrease (B-C) $112.5 $601.0
The Department has accounted for “net” general fund-supported debt only because sufficient restricted revenue streams would be earmarked to cover debt service for such designated capital projects. Other key assumptions in the Department’s estimates are: 1) a traditional amortization schedule is used so that 60% of all bonding is paid off in the first 10 years and the remaining 40% is amortized over the remaining 10 years; 2) five percent fixed interest coupon; and 3) the first principal payment for new debt is paid in the fiscal year following its issuance.
The Department states it cannot estimate the fiscal impact beyond FY 2015 because the amount of new issue bonding and the resulting debt service for those years has not been determined.