REPORT TITLE:



DESCRIPTION:


 
a                                                      UOH-5(99)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1219
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MANAGEMENT OF FINANCING AGREEMENTS FOR THE UNIVERSITY
   OF HAWAII.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 37D-2, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "37D-2 Financing agreements.  Only with the approval of the
 
 4 director, and the approval by the attorney general of form and
 
 5 legality, may the agency enter into a financing agreement in
 
 6 accordance with this chapter[.], except that the board of regents
 
 7 of the University of Hawaii may enter into a financing agreement
 
 8 in accordance with this chapter without the approval of the
 
 9 director and of the attorney general as to form and legality if
 
10 the principal amount of the financing agreement does not exceed
 
11 $3,000,000.  A financing agreement may be entered into at the
 
12 time (before or after commencement or completion of any
 
13 improvement to be financed) and shall be upon terms the agency
 
14 finds to be advantageous.  Any financing agreement entered into
 
15 by the agency without the approvals required by this section
 
16 shall be void and of no effect.  Financing agreements shall be
 
17 subject to the following limitations:
 
18      (1)  Amounts payable by the agency under a financing
 
19           agreement shall be limited to available funds.  In no
 

 
a                                                      UOH-5(99)
Page 2                                                     1219
                                     H.B. NO.           
                                                        
                                                        

 
 1           circumstance shall the agency be obligated to pay
 
 2           amounts due under a financing agreement from any source
 
 3           other than available funds.  If, by reason of
 
 4           insufficient available funds or other reason, amounts
 
 5           due under a financing agreement are not paid when due,
 
 6           the lender may exercise any property right that the
 
 7           agency has granted to it in the financing agreement,
 
 8           against the property that was purchased with the
 
 9           proceeds of the financing agreement, and apply the
 
10           amounts so received toward payments scheduled to be
 
11           made by the agency under the financing agreement;
 
12      (2)  No property rights may be granted in property unless
 
13           the property is being acquired, is to be substantially
 
14           improved, is to be refinanced with the proceeds of a
 
15           financing agreement, or is land on which the property
 
16           is located;
 
17      (3)  [The] Except as otherwise provided in this section with
 
18           respect to the University of Hawaii, the agency shall
 
19           not enter into financing agreements under any provision
 
20           of law other than this chapter if the principal amount
 
21           of the financing agreement, together with the principal
 
22           amount of any financing agreement previously issued by
 
23           the agency for the same project, exceeds $100,000; and
 

 
a                                                      UOH-5(99)
Page 3                                                     1219
                                     H.B. NO.           
                                                        
                                                        

 
 1      (4)  The sale, assignment, or other disposition of any
 
 2           financing agreements, including certificates of
 
 3           participation, shall require the approval of the
 
 4           director."
 
 5      SECTION 2.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 3.  This Act shall take effect upon its approval. 
 
 8 
 
 9                           INTRODUCED BY:  _______________________
 

 
a                                                      UOH-5(99)