(a) On and after July 1, 1991, the secretary of transportation is hereby authorized and empowered to issue bonds of the state of Kansas, payable solely from revenues accruing to the state highway fund and transferred to the highway bond debt service fund and pledged to their payment, for the purpose of providing funds to pay costs relating to construction, reconstruction, maintenance or improvement of highways in this state and to pay all expenses incidental thereto and to the bonds. The secretary is hereby authorized to issue bonds the total principal amount of which shall not exceed $890,000,000.

(b) In addition to the provisions of subsection (a), on and after July 1, 1999, the secretary of transportation is hereby authorized and empowered to issue bonds of the state of Kansas, payable solely from revenues accruing to the state highway fund and transferred to the highway bond debt service fund and pledged to their payment, for the purpose of providing funds to pay costs relating to construction, reconstruction, maintenance or improvement of highways in this state and to pay all expenses incidental thereto and to the bonds. The secretary is hereby authorized to issue bonds the total principal amount of which shall not exceed $1,272,000,000.

(c) (1) In addition to the provisions of subsections (a) and (b), on and after July 1, 2010, the secretary of transportation is hereby authorized and empowered to issue additional bonds of the state of Kansas, payable solely from revenues accruing to the state highway fund and transferred to the highway bond debt service fund and pledged to their payment, for the purpose of providing funds to pay costs relating to construction, reconstruction, maintenance or improvement of highways in this state and to pay all expenses incidental thereto and to the bonds. On and after the effective date of this act, except as provided further, no bonds shall be issued by the secretary pursuant to this subsection unless the secretary certifies that, as of the date of issuance of any such series of additional bonds, the maximum annual debt service on all outstanding bonds issued pursuant to this section and Kan. Stat. Ann. § 68-2328, and amendments thereto, including the bonds to be issued on such date, will not exceed 18% of projected state highway fund revenues for the current or any future fiscal year. During the fiscal year ending June 30, 2018, and the fiscal year ending June 30, 2019, the limitation on the amount of the maximum total amount of principal on all outstanding bonds issued pursuant to this subsection and Kan. Stat. Ann. § 68-2328, and amendments thereto, for the purpose of issuing any such series of additional bonds authorized by the secretary shall be $1,700,000,000 of the total principal for the transportation works for Kansas program authorized under Kan. Stat. Ann. § 68-2314b et seq., and amendments thereto. The provisions of this section relating to limitations of bonded indebtedness shall not in any way impair the rights and remedies of the holders of any bonds issued prior to the effective date of this act.

(2) As used in this subsection:

(A) “Maximum annual debt service” means the maximum amount of debt service requirements on all outstanding bonds for the current or any future fiscal year;

(B) “debt service requirements” means, for each fiscal year, the aggregate principal and interest payments required to be made during such fiscal year on all outstanding bonds, including the additional bonds to be issued, less any interest subsidy payments expected to be received from the federal government, less any principal and interest payments irrevocably provided for from a dedicated escrow of United States government securities;

(C) “projected state highway fund revenues” means all revenues projected by the secretary of transportation to accrue to the state highway fund for the current or any future fiscal year; and

(D) “fiscal year” means the fiscal year of the state.

(3) Debt service requirements for variable rate bonds outstanding or proposed to be issued for the current or any future fiscal year for which the actual interest rate cannot be determined on the date of calculation shall be deemed to bear interest at an assumed rate equal to the average of the SIFMA swap index, or any successor variable rate index, for the immediately preceding five calendar years plus 1% and an amount determined by the secretary that represents the then current reasonable annual ancillary costs associated with variable rate debt, including credit enhancement, liquidity and remarketing costs; except that, debt service requirements for variable rate bonds that are hedged pursuant to an interest rate exchange or similar agreement that results in synthetic fixed rate debt shall be deemed to bear interest at the synthetic fixed rate plus .5% and an amount determined by the secretary that represents the then current reasonable annual ancillary costs associated with variable rate debt, including credit enhancement, liquidity and remarketing costs.

(4) Projected state highway fund revenues for the current or any future fiscal year for which the actual revenues cannot be determined on the date of calculation shall be deemed to be the actual revenues for the most recently completed fiscal year, adjusted to take into account any increases or decreases in the statutory rates of any taxes or other charges that comprise a portion of the revenues.

(d) In accordance with procurement statutes, the secretary may contract with financial advisors, attorneys and such other professional services as the secretary deems necessary to carry out the provisions of this act, and to do all things necessary or convenient to carry out the powers expressly granted in this act.