TITLE: CONCERNING THE ENHANCEMENT OF THE CREDIT STRENGTH OF AUXILIARY FACILITY ENTERPRISE FINANCING BY STATE INSTITUTIONS OF HIGHER EDUCATION.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues General Fund
State Expenditures General Fund	Potential Decrease of Financing Debt
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: None
Effective Date: 90 days after adjournment unless a referendum petition is filed.
Appropriation Summary for FY 1999-2000: None
Local Government Impact: None

This bill permits the governing board of an institution of higher education to pledge excess revenues generated by one auxiliary facility to bonds or other obligations issued with respect to another auxiliary facility, so long as the pledge of excess revenues authorized to finance a specific facility terminates upon full repayment of all bonds or other debt obligations, including refunding bonds or obligations, and all fees and costs related to such bonds or other debt obligations incurred with respect to that specific facility. The bill also:

• requires that user fees associated with using auxiliary facilities and general student fees assessed for the repayment of bonds or other debt obligations shall only be reduced after all bonds or other debt obligations issued, secured, or incurred are fully repaid;

• clarifies that fees related to bonds issued on behalf of auxiliary facilities prior to July 1, 1997, were not issued for specific projects;

• clarifies that the pledging of revenues between the Research Building Revolving Fund and other designated enterprise auxiliary facilities is authorized;

• authorizes the repayment of anticipation warrants from revenues and net income of designated enterprise auxiliary facilities; and

• specifies that bonds are payable from and secured by a pledge of the Research Building Revolving Fund or the revenues and net income of any other designated enterprise auxiliary facilities, or both.

The bill is designed to enhance the credit strength of auxiliary facility enterprise financing by Colorado institutions of higher education. These modifications may have a positive impact on future bond ratings, and could therefore have a favorable impact on the interest rate assigned on those bonds. Actual interest rate savings cannot be determined at this time. On this basis, the bill is assessed as having a conditional fiscal impact for institutions of higher education.

The fiscal note implies that no new spending authority or appropriations are required to implement the provisions of the bill.