The Legislature decided to borrow $1.5 billion last year through bonds for transportation projects and the new state prison. Now the Senate has approved a bill that may raise that borrowing by an additional $10.5 million.

Senators passed SB110 by a 26-0 vote and sent it to the House.

The bill would clarify that all of the $1 billion in borrowing that was authorized last year to speed highway projects will go to roads, and an additional $570 million in bonds OK’d for the new state prison will go exclusively to that project.

Sen. Wayne Harper, R-Taylorsville, said questions had arisen about whether the costs of issuing the bonds — such as hiring bond counsel and use of rating agencies — would come out of the authorized amount, or on top of it.

Harper said earlier in a committee hearing that he did not know how much the issuance costs of the bonds would be.

But a fiscal note to the bill now attached by legislative analysts estimates that at $10.5 million, “assuming cost of issuance equals 1 percent of the bond amount.”

The bill says those extra costs will be included in the bonds.

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Clarifies that all of the $1 billion in borrowing that was authorized last year to speed highway projects will go to roads, and an additional $570 million in bonds OK’d for the new state prison will go exclusively to that project. - Read full text

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Filed Law Introduced in Senate Senate Committee Senate passage House Committee House passage Governor's OK

Jan. 29: Lawmakers tweak already approved $1.5 billion in bonds for prison, highways

Lawmakers took steps Monday to ensure that all of the $1 billion in borrowing they authorized last year to speed highway projects will go to roads, and an additional $570 million in bonds OK’d for the new state prison will go exclusively to that project.

Sen. Wayne Harper, R-Taylorsville, said questions had arisen about whether the costs of issuing the bonds — such as hiring bond counsel and use of rating agencies — would come out of the authorized amount, or on top of it.

His SB110 clarifies that “the issuing costs are in addition to the bond amount,” he said.

The Senate Transportation Committee voted unanimously to endorse that bill on Monday and sent it to the full Senate.

Harper said he did not have a firm estimate on those issuance costs, but would obtain those figures as the bill proceeds through the Legislature. He said he has been told it would be less than $100,000.

That comes as the estimated cost of the controversial prison relocation has taken another jump.

The public and rank-and-file lawmakers were originally told it would be around $550 million. It rose to $650 million when a site near the Salt Lake City International Airport was chosen. The former lake bed, which is far from existing roads and utilities and has unstable soils, requires a good deal of preparation work.

(Bonding for $570 million plus additional cash approved earlier by the Legislature would cover the currently estimated $650 million price tag.)

But state officials reported last week it would be impossible to meet that $650 million estimated cost and have revised it to $692 million. They also revealed that an original estimate for the prison was $850 million. That was never shared with the public nor, apparently, most lawmakers.

Sen. Jerry Stevenson, R-Layton, co-chairman of the Prison Relocation Committee, and House Speaker Greg Hughes, R-Draper, confirmed the original estimate was for $850 million, but said it was quickly pared down.