Bill Text: HI SB3008 | 2024 | Regular Session | Amended
Bill Title: Proposing Amendments To Article Vii, Sections 12 And 13, Of The Hawaii Constitution To Expressly Provide That The Legislature May Authorize The Counties To Issue Tax Increment Bonds And To Exclude Tax Increment Bonds From Determinations Of The Funded Debt Of The Counties.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Enrolled) 2024-03-20 - Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with Representative(s) Garcia voting aye with reservations; Representative(s) Pierick voting no (1) and Representative(s) Holt, Kitagawa, Lamosao, Lowen, Nakashima excused (5). [SB3008 Detail]
Download: Hawaii-2024-SB3008-Amended.html
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THE SENATE |
S.B. NO. |
3008 |
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THIRTY-SECOND LEGISLATURE, 2024 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
PROPOSING AMENDMENTS TO ARTICLE VII, SECTIONS 12 AND 13, OF THE HAWAII CONSTITUTION TO EXPRESSLY PROVIDE THAT THE LEGISLATURE MAY AUTHORIZE THE COUNTIES TO ISSUE TAX INCREMENT BONDS AND TO EXCLUDE TAX INCREMENT BONDS FROM DETERMINATIONS OF THE FUNDED DEBT OF THE COUNTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
(1) Expressly provide that the legislature may authorize political subdivisions, such as the counties, to issue tax increment bonds; and
(2) Exclude tax increment bonds from determinations of the funded debt of the political subdivisions.
SECTION 2. Article VII, section 12, of the Constitution of the State of Hawaii is amended to read as follows:
"DEFINITIONS; ISSUANCE OF
INDEBTEDNESS
Section 12. For the purposes of this article:
1. The term "bonds" shall include bonds, notes and other instruments of indebtedness.
2. The term "dam and reservoir owner"
means any person who has a right to, title to or an interest in a dam, a
reservoir or the property upon which a dam, a reservoir or appurtenant work is
located or proposed to be located.
[2.]
3. The term "general
obligation bonds" means all bonds for the payment of the principal and
interest of which the full faith and credit of the State or a political
subdivision are pledged and, unless otherwise indicated, includes reimbursable
general obligation bonds.
[3.]
4. The term "net
revenues" or "net user tax receipts" means the revenues or
receipts derived from:
a. A public undertaking, improvement or system remaining after the costs of operation, maintenance and repair of the public undertaking, improvement or system, and the required payments of the principal of and interest on all revenue bonds issued therefor, have been made; or
b. Any payments or return on security under a loan program or a loan thereunder, after the costs of operation and administration of the loan program, and the required payments of the principal of and interest on all revenue bonds issued therefor, have been made.
[4. The term "dam and reservoir owner"
means any person who has a right to, title to, or an interest in, a dam, a
reservoir, or the property upon which a dam, a reservoir, or appurtenant work
is located or proposed to be located.]
5. The term "person" means an individual, firm, partnership, corporation, association, cooperative or other legal entity, governmental body or agency, board, bureau or other instrumentality thereof, or any combination of the foregoing.
6. The term "rates, rentals and charges" means all revenues and other moneys derived from the operation or lease of a public undertaking, improvement or system, or derived from any payments or return on security under a loan program or a loan thereunder; provided that insurance premium payments, assessments and surcharges, shall constitute rates, rentals and charges of a state property insurance program.
7. The term "reimbursable general obligation bonds" means general obligation bonds issued for a public undertaking, improvement or system from which revenues, or user taxes, or a combination of both, may be derived for the payment of the principal and interest as reimbursement to the general fund and for which reimbursement is required by law, and, in the case of general obligation bonds issued by the State for a political subdivision, general obligation bonds for which the payment of the principal and interest as reimbursement to the general fund is required by law to be made from the revenue of the political subdivision.
8. The term "revenue bonds" means all bonds payable from the revenues, or user taxes, or any combination of both, of a public undertaking, improvement, system or loan program and any loan made thereunder and secured as may be provided by law, including a loan program to provide loans to a state property insurance program providing hurricane insurance coverage to the general public.
9. The term "special purpose revenue bonds" means all bonds payable from rental or other payments made to an issuer by a person pursuant to contract and secured as may be provided by law.
10.
The term "tax increment bonds" means all bonds, the principal
of and interest on which are in fact payable from and secured by the amount of
real property taxes levied and collected by a political subdivision, such as a
county, on the difference between the assessed value of the taxable real
property located within the boundaries of a tax increment district established
by a political subdivision in a given year and the assessed value of the
taxable real property in the tax increment district in the fiscal year before
the creation of that tax increment district.
[10.]
11. The term "user tax"
means a tax on goods or services or on the consumption thereof, the receipts of
which are substantially derived from the consumption, use or sale of goods and
services in the utilization of the functions or services furnished by a public
undertaking, improvement or system; provided that mortgage recording taxes
shall constitute user taxes of a state property insurance program.
The
legislature, by a majority vote of the members to which each house is entitled,
shall authorize the issuance of all general obligation bonds, bonds issued
under special improvement statutes and revenue bonds issued by or on behalf of
the State and shall prescribe by general law the manner and procedure for such
issuance. The legislature by general law
shall authorize political subdivisions to issue general obligation bonds, bonds
issued under special improvement statutes [and], revenue bonds and
tax increment bonds and shall prescribe the manner and procedure for such
issuance. All such bonds issued by or on
behalf of a political subdivision shall be authorized by the governing body of
such political subdivision.
Special purpose revenue bonds shall only be authorized or issued to finance facilities of or for, or to loan the proceeds of such bonds to assist:
1. Manufacturing, processing or industrial enterprises;
2. Utilities serving the general public;
3. Health care facilities provided to the general public by not-for-profit corporations;
4. Early childhood education and care facilities provided to the general public by not-for-profit corporations;
5. Low and moderate income government housing programs;
6. Not-for-profit private nonsectarian
and sectarian elementary schools, secondary schools, colleges and universities;
7. Agricultural enterprises; or
8. Dam and reservoir owners; provided that the bonds are issued for and the proceeds are used to offer loans to assist dam and reservoir owners to improve their facilities to protect public safety and provide significant benefits to the general public as important water sources,
each of which is hereinafter referred to in this paragraph as a special purpose entity.
The
legislature, by a two-thirds vote of the members to which each house is
entitled, may enact enabling legislation for the issuance of special purpose
revenue bonds separately for each special purpose entity, and, by a two-thirds
vote of the members to which each house is entitled and by separate legislative
bill, may authorize the State to issue special purpose revenue bonds for each
single project or multi-project program of each special purpose entity;
provided that the issuance of such special purpose revenue bonds is found to be
in the public interest by the legislature; [and] provided further that
the State may combine into a single issue of special purpose revenue bonds two
or more proposed issues of special purpose revenue bonds to assist:
(1) Not-for-profit private nonsectarian and
sectarian elementary schools, secondary schools, colleges[,] and
universities;
(2) Dam and reservoir owners; or
(3) Agricultural enterprises,
separately authorized as aforesaid, in the total amount not exceeding the aggregate of the proposed separate issues of special purpose revenue bonds. The legislature may enact enabling legislation to authorize political subdivisions to issue special purpose revenue bonds. If so authorized, a political subdivision by a two-thirds vote of the members to which its governing body is entitled and by separate ordinance may authorize the issuance of special purpose revenue bonds for each single project or multi-project program of each special purpose entity; provided that the issuance of such special purpose revenue bonds is found to be in the public interest by the governing body of the political subdivision. No special purpose revenue bonds shall be secured directly or indirectly by the general credit of the issuer or by any revenues or taxes of the issuer other than receipts derived from payments by a person or persons under contract or from any security for such contract or contracts or special purpose revenue bonds and no moneys other than such receipts shall be applied to the payment thereof. The governor shall provide the legislature in November of each year with a report on the cumulative amount of all special purpose revenue bonds authorized and issued, and such other information as may be necessary."
SECTION 3. Article VII, section 13, of the Constitution of the State of Hawaii is amended to read as follows:
"DEBT
LIMIT; EXCLUSIONS
Section
13. General obligation bonds may be
issued by the State; provided that such bonds at the time of issuance would not
cause the total amount of principal and interest payable in the current or any
future fiscal year, whichever is higher, on such bonds and on all outstanding
general obligation bonds to exceed: a
sum equal to twenty percent of the average of the general fund revenues of the
State in the three fiscal years immediately preceding such issuance until
June 30, 1982; and thereafter, a sum equal to eighteen and one-half
percent of the average of the general fund revenues of the State in the three
fiscal years immediately preceding such issuance. Effective July 1, 1980, the legislature
shall include a declaration of findings in every general law authorizing the
issuance of general obligation bonds that the total amount of principal and
interest, estimated for such bonds and for all bonds authorized and unissued
and calculated for all bonds issued and outstanding, will not cause the debt
limit to be exceeded at the time of issuance.
Any bond issue by or on behalf of the State may exceed the debt limit if
an emergency condition is declared to exist by the governor and concurred to by
a two-thirds vote of the members to which each house of the legislature is
entitled. For the purpose of this
paragraph, general fund revenues of the State shall not include moneys received
as grants from the federal government and receipts in reimbursement of any
reimbursable general obligation bonds [which] that are excluded
as permitted by this section.
A sum equal to fifteen percent of the total of the assessed values for tax rate purposes of real property in each political subdivision, as determined by the last tax assessment rolls pursuant to law, is established as the limit of the funded debt of such political subdivision that is outstanding and unpaid at any time.
All general obligation bonds for a term
exceeding two years shall be in serial form maturing in substantially equal
installments of principal, or maturing in substantially equal installments of
both principal and interest. The first
installment of principal of general obligation bonds and of reimbursable
general obligation bonds shall mature [not] no later than five
years from the date of issue of such series.
The last installment on general obligation bonds shall mature not later
than twenty-five years from the date of such issue and the last installment on
general obligation bonds sold to the federal government, on reimbursable
general obligation bonds and on bonds constituting instruments of indebtedness
under which the State or a political subdivision incurs a contingent liability
as a guarantor shall mature [not] no later than thirty-five years
from the date of such issue. The
interest and principal payments of general obligation bonds shall be a first
charge on the general fund of the State or political subdivision, as the case
may be.
In determining the power of the State to issue general obligation bonds or the funded debt of any political subdivision under section 12, the following shall be excluded:
1. Bonds that have matured, or that mature in the then current fiscal year, or that have been irrevocably called for redemption and the redemption date has occurred or will occur in the then fiscal year, or for the full payment of which moneys or securities have been irrevocably set aside.
2. Revenue bonds, if the issuer thereof is obligated by law to impose rates, rentals and charges for the use and services of the public undertaking, improvement or system or the benefits of a loan program or a loan thereunder or to impose a user tax, or to impose a combination of rates, rentals and charges and user tax, as the case may be, sufficient to pay the cost of operation, maintenance and repair, if any, of the public undertaking, improvement or system or the cost of maintaining a loan program or a loan thereunder and the required payments of the principal of and interest on all revenue bonds issued for the public undertaking, improvement or system or loan program, and if the issuer is obligated to deposit such revenues or tax or a combination of both into a special fund and to apply the same to such payments in the amount necessary therefor.
3. Special purpose revenue bonds, if the issuer thereof is required by law to contract with a person obligating such person to make rental or other payments to the issuer in an amount at least sufficient to make the required payment of the principal of and interest on such special purpose revenue bonds.
4. Bonds issued under special improvement statutes when the only security for such bonds is the properties benefited or improved or the assessments thereon.
5. General obligation bonds issued for assessable improvements, but only to the extent that reimbursements to the general fund for the principal and interest on such bonds are in fact made from assessment collections available therefor.
6. Reimbursable general obligation bonds issued for a public undertaking, improvement or system but only to the extent that reimbursements to the general fund are in fact made from the net revenue, or net user tax receipts, or combination of both, as determined for the immediately preceding fiscal year.
7.
Reimbursable general obligation bonds issued by the State for any
political subdivision, whether issued before or after the effective date of
this section, but only for as long as reimbursement by the political
subdivision to the State for the payment of principal and interest on such
bonds is required by law; provided that in the case of bonds issued after the
effective date of this section, the consent of the governing body of the
political subdivision has first been obtained; [and] provided further
that during the period that such bonds are excluded by the State, the principal
amount then outstanding shall be included within the funded debt of such
political subdivision.
8. Bonds constituting instruments of indebtedness under which the State or any political subdivision incurs a contingent liability as a guarantor, but only to the extent the principal amount of such bonds does not exceed seven percent of the principal amount of outstanding general obligation bonds not otherwise excluded under this section; provided that the State or political subdivision shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State or political subdivision as provided by law.
9. Bonds issued by or on behalf of the State or by any political subdivision to meet appropriations for any fiscal period in anticipation of the collection of revenues for such period or to meet casual deficits or failures of revenue, if required to be paid within one year, and bonds issued by or on behalf of the State to suppress insurrection, to repel invasion, to defend the State in war or to meet emergencies caused by disaster or act of God.
10.
Tax increment bonds, but only to the extent that the principal of and
interest on the bonds are in fact paid from and secured by the amount of real
property taxes levied and collected by a political subdivision, such as a
county, on the difference between the assessed value of the taxable real
property located within the boundaries of a tax increment district established
by a political subdivision in a given year and the assessed value of the
taxable real property in the tax increment district in the fiscal year before
the creation of that tax increment district.
The total outstanding indebtedness of the State or funded debt of any political subdivision and the exclusions therefrom permitted by this section shall be made annually and certified by law or as provided by law. For the purposes of section 12 and this section, amounts received from on-street parking may be considered and treated as revenues of a parking undertaking.
Nothing in section 12 or in this section shall prevent the refunding of any bond at any time."
SECTION 4. The question to be printed on the ballot shall be as follows:
"Shall the Constitution of the State of Hawaii be amended to:
(1) Expressly provide that the Legislature may authorize political subdivisions, such as the counties, to issue tax increment bonds to pay for specified public works, public improvements or other actions by the political subdivision within a tax increment district established by the political subdivision; and
(2) Exclude tax increment bonds in determining the funded debt of the political subdivisions, such as the counties?"
SECTION 5.
Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.
SECTION 6. This Act shall take effect on July 1, 3000; provided that this amendment shall take effect upon compliance with article XVII, section 3, of the Constitution of the State of Hawaii.
Report Title:
Constitutional Amendment; Tax Increment Bonds; Debt Limit; Counties
Description:
Proposes amendments to the Constitution of the State of Hawaii to expressly provide that the Legislature may authorize political subdivisions, such as counties, to issue tax increment bonds, and to exclude tax increment bonds in calculating the debt limit of the political subdivisions. Effective 7/1/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
