REPORT TITLE:
SPRB; Gas Utility


DESCRIPTION:
Authorizes special purpose revenue bonds not to exceed
$19,600,000 to assist the gas utility in providing gas services
and making capital improvements.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1287
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO
   ASSIST THE GAS UTILITY SERVING THE GENERAL PUBLIC.
 


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

 1      SECTION 1.  The legislature finds and declares that the
 
 2 issuance of special purpose revenue bonds and refunding special
 
 3 purpose revenue bonds under this Act will assist the gas utility
 
 4 in providing utility gas services to the general public and in
 
 5 obtaining lower interest rate bond financing for capital
 
 6 improvement projects through the use of tax exempt special
 
 7 purpose revenue bonds and refunding bonds.  Ratepayers pay for
 
 8 capital costs, including the cost of financing, as part of the
 
 9 rates set by the public utilities commission.  The savings in
 
10 interest cost would be reflected in the gas rates established by
 
11 the public utilities commission in subsequent rate case
 
12 proceedings.  Therefore, the resulting reduction in capital costs
 
13 will benefit the gas utility ratepayers.  Furthermore, these
 
14 bonds cannot be secured directly or indirectly by the general
 
15 credit of the counties or the revenues or taxes of the State but
 
16 rather solely by the gas utility.  Thus, the cost of financing
 
17 necessary capital improvements can be decreased with no cost or
 
18 risk to the State.  For the foregoing reasons, the legislature
 
19 finds and declares that the issuance under this Act of special
 

 
Page 2                                                     1287
                                     H.B. NO.           H.D. 1
                                                        
                                                        


 1 purpose revenue bonds and refunding special purpose revenue bonds
 
 2 is in the public interest and for the public health, safety, and
 
 3 general welfare.  The legislature further finds that The Gas
 
 4 Company, a division of Citizens Utilities Company, is the gas
 
 5 utility serving the general public that qualifies for special
 
 6 purpose revenue bonds pursuant to chapter 39A, part VI, Hawaii
 
 7 Revised Statutes.
 
 8      SECTION 2.  The department of budget and finance, with
 
 9 approval of the governor, is authorized to issue special purpose
 
10 revenue bonds in one or more series in a total amount not to
 
11 exceed $19,600,000 for the following capital improvement programs
 
12 for the local furnishing of utility gas by The Gas Company,
 
13 division of Citizens Utilities Company, the gas utility serving
 
14 the general public:  multi-purpose capital improvement program,
 
15 transmission and distribution lines, and other gas utility
 
16 facilities and equipment or any combination thereof.  The
 
17 legislature finds that the activities and facilities of The Gas
 
18 Company constitute a project, and that the financing thereof is
 
19 assistance to a utility serving the general public in providing
 
20 gas.  The special purpose revenue bonds will be issued during the
 
21 period from July 1, 1999, through December 31, 2002; provided
 
22 that approval by the public utilities commission shall be
 
23 required for any project financed by the issuance of special
 

 
Page 3                                                     1287
                                     H.B. NO.           H.D. 1
                                                        
                                                        


 1 purpose revenue bonds under this Act.
 
 2      SECTION 3.  The public utilities commission shall report
 
 3 annually to the legislature as to the progress under this Act in
 
 4 reducing financing costs of the gas utility including the cost of
 
 5 the bonds at the time of issue as compared to the cost to the
 
 6 utility if the issue was made on other than the issuance of
 
 7 revenue bonds, the estimated benefits derived from the use of the
 
 8 special purpose revenue bonds, and a listing of the projects to
 
 9 be funded by the special purpose revenue bonds.
 
10      SECTION 4.  The department of budget and finance is
 
11 authorized, from time to time, including times subsequent to
 
12 December 31, 2002, to issue special purpose revenue bonds in
 
13 whatever principal amounts the department shall determine to be
 
14 necessary to refund the special purpose revenue bonds authorized
 
15 in section 2 and any refunding of special purpose revenue bonds
 
16 authorized in this section, regardless of whether the outstanding
 
17 special purpose revenue bonds or refunding special purpose
 
18 revenue bonds have matured or are the subject of redemption or
 
19 whether the refunding special purpose revenue bonds shall be
 
20 bonds for the multi-project programs described in section 2.  In
 
21 making this determination, the department shall comply with
 
22 federal law relating to the exemption from federal income
 
23 taxation of the interest on bonds of the nature authorized by
 

 
Page 4                                                     1287
                                     H.B. NO.           H.D. 1
                                                        
                                                        


 1 this section.
 
 2      SECTION 5.  The special purpose revenue bonds and the
 
 3 refunding special purpose revenue bonds issued under this Act
 
 4 shall be issued pursuant to chapter 39A, part VI, Hawaii Revised
 
 5 Statutes, relating to the power to issue special purpose revenue
 
 6 bonds and refunding special purpose revenue bonds to assist
 
 7 utilities serving the general public in providing utility gas.
 
 8      SECTION 6.  The authorization to issue special purpose
 
 9 revenue bonds under this Act shall lapse on December 31, 2002.
 
10      SECTION 7.  This Act shall take effect upon its approval.
 
11 
 
12                           INTRODUCED BY:  _______________________