TRANSPORTATION FUND BONDS - S.B. 1301: COMMITTEE SUMMARY
Senate Bill 1301 (as introduced 5-7-02)
Sponsor: Senator Joanne G. Emmons
Committee: Finance
Date Completed: 5-7-02
CONTENT
The bill would amend Section 18b of the Michigan Transportation Fund law, which allows the State Transportation Commission to issue notes and bonds for purposes specified in that section, to provide that the Commission could authorize by resolution the execution and delivery of agreements providing for interest rate exchanges or swaps, hedges, or similar agreements, in connection with outstanding bonds, notes, or other obligations issued under the law or in connection with the issuance or proposed issuance of bonds, notes, or other indebtedness.
MCL 247.668b - Legislative Analyst: George Towne
FISCAL IMPACT
The bill would result in increased costs associated with fees/charges assessed by financial institutions to effect interest rate exchanges or swaps, hedges, or similar agreements. These costs, however, could be offset in the long run as a result of lower interest rates on outstanding bonds, notes, or other obligations. Presumably, the State Transportation Commission would enter into such agreements when debt service savings could be realized. The amount of savings would be contingent on existing interest rates, terms of indebtedness, and future interest rates.
- Fiscal Analyst: Craig ThielS0102\s1301sa
This 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.