OFFICES AND OFFICERS ‑- STATE ‑- FINANCE COMMITTEE ‑- ISSUANCE OF CERTIFICATES OF INDEBTEDNESS

OFFICES AND OFFICERS ‑- STATE ‑- FINANCE COMMITTEE ‑- ISSUANCE OF CERTIFICATES OF INDEBTEDNESS

Certificates of indebtedness, as that term is used in Article VIII, § 1 (j) of the Washington State Constitution, as amended by H.J.R. No. 52, may be issued pursuant to the authority granted the state finance committee in chapter 184, Laws of 1971, 1st Ex. Sess., without the enactment of additional legislation.

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                                                                 February 1, 1973

Mr. John Hitchman, Executive Secretary
State Finance Committee
Room 314, Insurance Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1973 No. 18

Dear Sir:

            You have recently requested an opinion of this office on a question which we paraphrase as follows:

            May certificates of indebtedness, as that term is used in Article VIII, § 1 (j) of the Washington State Constitution, as amended by H.J.R. 52, be issued pursuant to the authority granted the state finance committee in chapter 184, Laws of 1971, 1st Ex. Sess., without the enactment of additional legislation?

            We answer this question in the affirmative for the reasons set forth below.

                                                                     ANALYSIS

            House Joint Resolution No. 52 (H.J.R. 52), as approved by the people at the November 7, 1972, general election, establishes a new formula for the computation of this state's debt limitation.  See, our previous opinion to you of December 22, 1972 [[an Informal Opinion to John Hitchman, Executive Secretary, State Finance Committee]], in which the thrust of this amendment was explained in some detail.

            The basic limitation established by this constitutional amendment is set forth in § 1 (b) thereof as follows:

            "The aggregate debt contracted by the state shall not exceed that amount for which payments of principal and interest in any fiscal year would require the state to expend more than nine percent of the arithmetic mean of its general state revenues for the  [[Orig. Op. Page 2]] three immediately preceding fiscal years as certified by the treasurer.  The term 'fiscal year' means that period of time commencing July 1 of any year and ending on June 30 of the following year."

            However, in subsection (j) of this section of the amendment it is provided that:

            "Notwithstanding the limitations contained in subsection (b) of this section, the state may issue certificates of indebtedness in such sum or sums as may be necessary to meet temporary deficiencies of the treasury, to preserve the best interests of the state in the conduct of the various state institutions, departments, bureaus, and agencies during each fiscal year; such certificates may be issued only to provide for appropriations already made by the legislature and such certificates must be retired and the debt discharged other than by refunding within twelve months after the date of incurrence."

            Of course, this subsection, standing alone, would not grant to the state finance committee the authority to issue such certificates of indebtedness as are described therein.  All that this section of the constitutional amendment does is to except such certificates of indebtedness (for the purposes specified) from the general limitation on state debt established by subsection (b),supra.

            However, in anticipation of voter approval of this constitutional amendment the 1971 legislature, by § 9, chapter 184, Laws of 1971, 1st Ex. Sess., provided that:

            "The state finance committee may issue certificates of indebtedness in such sum or sums that may be necessary to meet temporary deficiencies of the treasury; such certificates may be issued only to provide for the appropriations already made by the legislature and such certificates must be retired and the debt discharged other than by refunding within twelve months after the date of issuance."

             [[Orig. Op. Page 3]]

            The effectiveness of this section, together with the remainder of chapter 184,supra, was expressly made contingent upon voter approval of H.J.R. No. 52 ‑ and so this statute, like the constitutional amendment upon which it is based, became effective on December 7, 1972, when the governor's proclamation attesting as to passage of the constitutional amendment was issued.

            We believe that § 9,supra, must be read as providing the requisite statutory authorization to the finance committee to issue such certificates of indebtedness as are now constitutionally permissible under the new language contained in Article VIII, § 1 (j), supra.  Accordingly, in our opinion, no additional legislation is needed.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

WAYNE L. WILLIAMS
Assistant Attorney General