Senate counsel briefs panel on appropriation bonds and certificates of participation

Senate counsel provided the committee a high-level primer on appropriation bonds, certificates of participation and how those instruments differ from general obligation bonds.

“Appropriation bonds are debt instruments just like general obligation bonds in that respect, but they are payable contingent on the legislature appropriating money to pay the debt service on them,” the counsel said in a written memo and verbal briefing to the committee.

The counsel explained that general obligation (G.O.) bonds are backed by the state’s constitutional pledge to levy taxes as necessary and typically require a three-fifths vote in the legislature; by contrast, appropriation bonds are payable from statutory appropriations and generally require only a…