STATE BUILDING AUTHORITY RESOLUTIONS H.C.R. 23 & 24: COMMITTEE SUMMARY






House Concurrent Resolutions 23 and 24 (as adopted by the House)
Sponsor: Representative Morris Hood, III
House Committee: Appropriations
Senate Committee: Appropriations


Date Completed: 5-25-07

CONTENT
House Concurrent Resolutions 23 and 24 would approve the conveyance of property and approve leases between the State and the State Building Authority (SBA) for construction projects that have been previously approved for planning and construction by the Legislature (in Public Act 10 of 2005). Approval of the resolutions would enable the SBA to issue bonds to finance the State's share of construction costs.


The projects have met all of the planning approval requirements of the Joint Capitol Outlay Subcommittee and the Management and Budget Act. Approval of the resolutions would create a contractual obligation between the State and the SBA, requiring the State to make annual rental payments to the SBA. The SBA uses the rental payments to pay off the bonds sold to finance construction. Once the debt obligations are satisfied, the SBA will transfer title back to the institutions, or in the case of State facility projects, the State.

FISCAL IMPACT
The projects represent new bond debt obligations of $21.4 million. Annual rental payments to the SBA are estimated at $1.7 million to $2.1 million until the bonds are retired (approximately 15 to 17 years). Annual rental (debt service) payments to the SBA appropriated in the FY 2006-07 General Government appropriation bill total $222.1 million.



HCR		  
Project		  
Total Cost		 State
Share		 Institution Share Rental Range
23 State Facility Preservation Projects, Group B, General Office Building Renovations $10,950,000 $10,950,000 N/A $850,000 to $1,077,000
24 State Facility Preservation Projects, Group C, Grand Rapids State Office Building Renovations 10,500,000 10,500,000 N/A $815,000 to $1,032,000
  TOTALS: $21,450,000 $21,450,000 N/A $1,665,000 to $2,109,000
Fiscal Analyst: Bill Bowerman

Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. HCR 23 & 24/0708