Brief ⁽¹⁾

SB 634 would direct the Pooled Money Investment Board to loan to the Director of the Kansas Water Office sufficient funds to reimburse the Water Marketing Fund for increases in water rates, fees, or charges imposed by the federal government. The loan would allow the Kansas Water Office to spread the increase to consumers over an extended period of time. These loans would have to be approved by the Director of the Budget. The loans would bear interest at a rate equal to the interest rate being paid on state inactive account moneys at the time of the loan. The total outstanding loan balance could not exceed $1 million.

Background

This bill was introduced by the Senate Ways and Means Committee. At the hearing before the Senate Energy and Natural Resources Committee, the only conferee was a spokesperson from the Kansas Water Office. The Committee was told that the reason for the bill was that the Senate Ways and Means Committee has recommended that there be a transfer out of the Water Marketing Fund to the State General Fund of approximately $633,000. The spokesperson informed the members of the Committee that this money is currently kept in a reserve account, as required by KSA 82a-1315c, to reduce the effect of any dramatic water rate increases on water customers. A dramatic water rate increase could be caused by costs imposed by the federal government for water storage space and its maintenance. It was explained that the bill would allow the Kansas Water Office to defer any dramatic price increases by allowing the Kansas Water Office to obtain a long-term loan from the Pooled Money Investment Board.

The Ways and Means Committee also recommended that the Water Office be permitted to obtain a short-term loan from the Pooled Money Investment Board to meet cashflow purposes of the Water Marketing Program. This authority would be granted through a proviso in the FY 2001 appropriation bill, SB 639.

The Senate Committee on Energy and Natural Resources amended the bill to limit the outstanding balance of these long-term loans to $1 million.

The fiscal note on the original bill indicates that the fiscal impact would depend on how much interest would be paid on the loans. The Kansas Water Office indicated that any interest paid would be passed to its water marketing customers.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html