Introduced
by
To establish state regulations on the use by local governments, schools, or governmental authorities of certain so-called “derivative” financial instruments, specifically interest rate agreements entered into in connection with the issuance or proposed issuance of debt. The bill would require that the interest stated for municipal bonds include the amount needed to pay the net interest obligation under an interest rate exchange or swap, hedge, or other agreement. It would establish that such interest rate agreements would constitute a limited or unlimited “full faith and credit” pledge by the local government, depending on the whether the underlying debt had been approved by the voters. This would require the municipality to levy the full amount of taxes required to pay principal and interest on the municipality's net interest obligation under the interest rate exchange, swap, hedge, or similar agreement.
Referred to the Committee on Finance
Passed in the Senate 36 to 0 (details)
Substitute offered
by
To replace the previous version of the bill with a version recommended by the committee which reported it. The substitute incorporates technical changes resulting from committee testimony and deliberation. These changes do not affect the substance of the bill as previously described.
The substitute passed by voice vote
Passed in the House 99 to 0 (details)
To establish state regulations on the use by local governments, schools, or governmental authorities of certain so-called “derivative” financial instruments, specifically interest rate agreements entered into in connection with the issuance or proposed issuance of debt. The bill would require that the interest stated for municipal bonds include the amount needed to pay the net interest obligation under an interest rate exchange or swap, hedge, or other agreement. It would establish that such interest rate agreements would constitute a limited or unlimited “full faith and credit” pledge by the local government, depending on the whether the underlying debt had been approved by the voters. This would require the municipality to levy the full amount of taxes required to pay principal and interest on the municipality's net interest obligation under the interest rate exchange, swap, hedge, or similar agreement.
Passed in the Senate 37 to 0 (details)
To concur with the House-passed version of the bill.
