Virginia Law

Article 5. Debt Capacity Advisory Committee.

A. The Debt Capacity Advisory Committee (the Committee) is established as an advisory committee, within the meaning of § 2.2-2100, in the executive branch of state government.

B. The Committee shall consist of the Secretary of Finance; the State Treasurer; the Director of the Department of Planning and Budget; State Comptroller; the Auditor of Public Accounts; the Director of the Joint Legislative Audit and Review Commission; the Staff Director of the House Committee on Appropriations; the Staff Director of the Senate Committee on Finance and Appropriations; and two citizen members who have expertise in financial matters to be appointed by the Governor.

C. Of the citizen members appointed for terms beginning July 1, 1994, one shall be appointed for an initial term of three years and the other for an initial term of five years. Successors shall be appointed to serve for terms of four years each. Vacancies occurring other than by expiration of term shall be filled by appointment of the Governor for the remainder of the unexpired term. All appointments shall be subject to confirmation by the General Assembly. Members shall continue to hold office until their successors have been appointed and qualified.

D. The Secretary of Finance shall be the chairperson of the Committee.

E. All members of the Committee shall serve without compensation but shall receive reasonable and necessary expenses incurred in the discharge of their duties as provided in § 2.2-2825.

F. The Department of the Treasury shall serve as staff to the Committee.

1994, c. 43, § 2.1-304.2; 2001, c. 844; 2010, c. 32.

The Committee shall have the power and duty to:

1. Annually review the size and condition of the Commonwealth's tax-supported debt and submit to the Governor and to the General Assembly an estimate of the maximum amount of new tax-supported debt that prudently may be authorized for the next biennium. The estimate shall be advisory and in no way bind the Governor or the General Assembly;

2. Annually review the amount and condition of bonds, notes, and other security obligations of the Commonwealth's agencies, institutions, boards, and authorities, for which the (i) Commonwealth has a contingent or limited liability or (ii) General Assembly is permitted to replenish reserve funds if deficiencies occur, and submit to the Governor and the General Assembly an annual report with the Committee's recommendation to ensure the prudent use of such obligations. Such review shall be submitted on or before January 1 of each year; and

3. Conduct ongoing reviews of the amount and condition of bonds, notes, and other security obligations of the Commonwealth's agencies, institutions, boards, and authorities not secured by the full faith and credit of the Commonwealth or for which the General Assembly is not permitted to replenish reserve funds, and when appropriate, shall recommend limits on such additional obligations to the Governor and to the General Assembly.

1994, c. 43, § 2.1-304.3; 1997, c. 187; 2001, c. 844.

Before January 1 of each year, the Committee shall submit to the Governor and to the General Assembly the Committee's estimate of tax-supported debt that prudently may be authorized for the next fiscal year, together with a report explaining the basis for the estimate. In developing its annual estimate and in preparing its annual report, the Committee shall, at a minimum, consider:

1. The amount of tax-supported debt that, during the next fiscal year and annually for the following nine fiscal years (i) will be outstanding and (ii) has been authorized but not yet issued;

2. A projected schedule of affordable, state tax-supported debt authorizations for the next biennium. The assessment of the affordability of the projected authorizations shall include but not be limited to the 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 (i) existing outstanding debt, (ii) previously authorized but unissued debt, and (iii) projected bond authorizations;

4. The criteria that recognized bond rating agencies use to judge the quality of issues of Commonwealth bonds;

5. Any other factor that is relevant to (i) the ability of the Commonwealth to meet its projected debt service requirements for the next two fiscal years; (ii) the ability of the Commonwealth to support additional debt service in the upcoming biennium; (iii) the requirements of the statewide capital plan; and (iv) the interest rate to be borne by, the credit rating on, or any other factor affecting the marketability of such bonds; and

6. The effect of authorizations of new tax-supported debt on each of the considerations of this section.

1994, c. 43, § 2.1-304.4; 1997, c. 187; 2001, c. 844.