§ 1001. Capital Debt Affordability Advisory Committee

(a) Committee established. A Capital Debt Affordability Advisory Committee is hereby created with the duties and composition provided by this section.

(b) Committee duties.

(1) The Committee shall review annually the size and affordability of the net State tax-supported indebtedness and submit to the Governor and to the General Assembly an estimate of the maximum amount of new long-term net State tax-supported debt that prudently may be authorized for the next fiscal year. The estimate of the Committee shall be advisory and in no way bind the Governor or the General Assembly.

(2) The Committee shall conduct ongoing reviews of the amount and condition of bonds, notes, and other obligations of instrumentalities of the State for which the State has a contingent or limited liability or for which the State Legislature is permitted to replenish reserve funds, and, when deemed appropriate, recommend limits on the occurrence of such additional obligations to the Governor and to the General Assembly.

(3) The Committee shall conduct ongoing reviews of the amount and condition of the Transportation Infrastructure Bond Fund established in 19 V.S.A. § 11f and of bonds and notes issued against the fund for which the state has a contingent or limited liability.

(c) Committee estimate of a prudent amount of net State tax-supported debt; affordability considerations. On or before September 30 of each year, the Committee shall submit to the Governor and the General Assembly the Committee's estimate of net State tax-supported debt which prudently may be authorized for the next fiscal year, together with a report explaining the basis for the estimate. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. In developing its annual estimate, and in preparing its annual report, the Committee shall consider:

(1) The amount of net State tax-supported indebtedness that, during the next fiscal year, and annually for the following nine fiscal years:

(A) will be outstanding; and

(B) has been authorized but not yet issued.

(2) A projected schedule of affordable net State tax-supported bond authorizations, for the next fiscal year and annually for the following nine fiscal years. The assessment of the affordability of the projected authorizations shall be based on all of the remaining considerations specified in this section.

(3) Projected debt service requirements during the next fiscal year, and annually for the following nine fiscal years, based upon:

(A) existing outstanding debt;

(B) previously authorized but unissued debt; and

(C) projected bond authorizations.

(4) The criteria that recognized bond rating agencies use to judge the quality of issues of State bonds, including:

(A) existing and projected total debt service on net tax-supported debt as a percentage of combined General and Transportation Fund revenues, excluding surpluses in these revenues which may occur in an individual fiscal year; and

(B) existing and projected total net tax-supported debt outstanding as a percentage of total state personal income.

(5) The principal amounts currently outstanding, and balances for the next fiscal year, and annually for the following nine fiscal years, of existing:

(A) obligations of instrumentalities of the State for which the State has a contingent or limited liability;

(B) any other long-term debt of instrumentalities of the State not secured by the full faith and credit of the State, or for which the State Legislature is permitted to replenish reserve funds; and

(C) to the maximum extent obtainable, all long-term debt of municipal governments in Vermont which is secured by general tax or user fee revenues.

(6) The impact of capital spending upon the economic conditions and outlook for the State.

(7) The cost-benefit of various levels of debt financing, types of debt, and maturity schedules.

(8) Any projections of capital needs authorized or prepared by the Agency of Transportation, the Joint Fiscal Office, or other agencies or departments.

(9) Any other factor that is relevant to:

(A) the ability of the State to meet its projected debt service requirements for the next five fiscal years; or

(B) the interest rate to be borne by, the credit rating on, or other factors affecting the marketability of State bonds.

(10) The effect of authorizations of new State debt on each of the considerations of this section.

(d) Committee composition.

(1) Committee membership shall consist of:

(A) As ex officio members:

(i) the State Treasurer;

(ii) the Secretary of Administration; and

(iii) a representative of the Vermont Municipal Bond Bank chosen by the directors of the Bank.

(B) Two individuals with experience in accounting or finance, who are not officials or employees of State government appointed by the Governor for six-year terms.

(C) The Auditor of Accounts who shall be a nonvoting ex officio member.

(D) One person who is not an official or employee of State government with experience in accounting or finance appointed by the State Treasurer for a six-year term.

(E) The Legislative Economist or other designee of the Joint Fiscal Office, who shall be a nonvoting ex officio member.

(2) The State Treasurer shall be the Chair of the Committee.

(e) Other attendants of committee meetings. Staff of the Legislative Council and the Joint Fiscal Committee shall be invited to attend Committee meetings for the purpose of fostering a mutual understanding between the Executive and Legislative Branches on the appropriate statistics to be used in committee reviews, debt affordability considerations, and recommendations.

(f) Information. All public entities whose liabilities are to be considered by the Committee shall annually provide the State Treasurer with the information the Committee deems necessary for it to carry out the requirements of this subchapter. (Added 1989, No. 258 (Adj. Sess.), § 1; amended 2007, No. 121 (Adj. Sess.), § 28; 2007, No. 200 (Adj. Sess.), § 25, eff. June 9, 2008; 2009, No. 50, § 31; 2013, No. 142 (Adj. Sess.), § 65; 2019, No. 42, § 26a, eff. May 30, 2019.)