REPORT TITLE:
HCDA; Bonds


DESCRIPTION:
Authorizes the Hawaii community development authority to issue
bonds not to exceed $250,000,000.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.718        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.



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

 1      SECTION 1.  Chapter 206E, Hawaii Revised Statutes, is
 
 2 amended by adding a new part to be appropriately designated and
 
 3 to read as follows:
 
 4                         "PART   . BONDS
 
 5      206E-   Definition.  As used in this part, "bonds" mean
 
 6 revenue bonds, special facilities revenue bonds, notes, or other
 
 7 instruments of indebtedness of the authority issued under this
 
 8 part and shall include refunding bonds.
 
 9      206E-   Bonds; bond anticipation notes.(a)  The
 
10 authority, with the approval of the governor, may issue bonds in
 
11 such amounts as authorized from time to time by law and as deemed
 
12 advisable for any of the purposes of this chapter.  The principal
 
13 of, premium, if any, and interest on such bonds shall be payable
 
14 from the moneys derived from rates, rentals, fees, and charges
 
15 imposed under this chapter, generally, and any other revenues
 
16 derived by the authority from whatever source.
 
17      All revenue bonds authorized by this part shall be issued
 
18 pursuant to part III of chapter 39, except as provided in this
 
19 part.  The bonds shall be secured by a pledge of such moneys and
 

 
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 1 may be additionally secured by a mortgage of any project or other
 
 2 property of the authority to the extent of its interest therein.
 
 3 Neither the authority members nor any person executing the bonds
 
 4 shall be liable personally on the bonds by reason of the issuance
 
 5 thereof.
 
 6      (b)  Bonds issued pursuant to this part may be in one or
 
 7 more issues and in one or more series within an issue and shall
 
 8 be authorized pursuant to resolution of the authority.  The bonds
 
 9 shall be dated, may bear interest at such rate or rates payable
 
10 at such time or times as the authority may determine with the
 
11 approval of the governor, except for deeply discounted bonds
 
12 which are subject to redemption or retirement at the accreted
 
13 value thereof; provided that the discounted value of such bonds
 
14 shall not exceed ten per cent of issue and no such bond shall be
 
15 issued without prior approval of the director of finance and the
 
16 governor, shall mature at such time or times not exceeding forty
 
17 years from their date or dates, shall have such rank or priority,
 
18 and may be made redeemable before maturity at the option of the
 
19 authority, the holders, or either, at such price or prices and
 
20 under such terms and conditions, all as may be determined by the
 
21 authority.  The authority shall determine the form of the bonds,
 
22 including any interest coupons to be attached thereto, and the
 
23 manner of execution of the bonds, and shall fix the denomination
 

 
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 1 or denominations of the bonds and, subject to the approval of the
 
 2 director of finance, the place or places of payment of principal
 
 3 and interest, which may be at any bank or trust company approved
 
 4 by the director of finance within or without the State.  The
 
 5 bonds may be issued in coupon or in registered form, or both, as
 
 6 the authority may determine, and provisions may be made for the
 
 7 registration of any coupon bonds as to principal alone and also
 
 8 as to both principal and interest, and for the reconversion into
 
 9 coupon bonds of any bonds registered as to both principal and
 
10 interest.  The authority may sell bonds in such manner, either at
 
11 public or private sale, and for such price as it may determine.
 
12      (c)  Prior to the preparation of definitive bonds, the
 
13 authority may issue interim receipts or temporary bonds, with or
 
14 without coupons, exchangeable for definitive bonds when such
 
15 bonds have been executed and are available for delivery.
 
16      (d)  Should any bond issued under this part or any coupon
 
17 appertaining thereto become mutilated or lost, stolen, or
 
18 destroyed, the authority may cause a new bond or coupon of like
 
19 date, number, and tenor to be executed and delivered in exchange
 
20 and substitution for, and upon the cancellation of such mutilated
 
21 bond or coupon, or in lieu of and in substitution for, such lost,
 
22 stolen, or destroyed bond or coupon.  Such new bond or coupon
 
23 shall not be executed or delivered until the holder of the
 

 
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 1 mutilated, lost, stolen, or destroyed bond or coupon (1) has paid
 
 2 the reasonable expense and charges in connection therewith, (2)
 
 3 in the case of a lost, stolen, or destroyed bond or coupon, has
 
 4 filed with the authority or its fiduciary evidence satisfactory
 
 5 to the authority or its fiduciary that such bond or coupon was
 
 6 lost, stolen, or destroyed and that the holder was the owner
 
 7 thereof, and (3) has furnished indemnity satisfactory to the
 
 8 authority.
 
 9      (e)  The authority in its discretion may provide that CUSIP
 
10 identification numbers shall be printed on such bonds. In the
 
11 event such numbers are imprinted on any such bonds:
 
12      (1)  No such number shall constitute a part of the contract
 
13           evidenced by the particular bond upon which it is
 
14           imprinted; and
 
15      (2)  No liability shall attach to the authority or any
 
16           officer or agent thereof, including any fiscal agent,
 
17           paying agent, or registrar for such bonds by reason of
 
18           such numbers or any use made thereof, including any use
 
19           thereof made by the authority, any such officer, or any
 
20           such agent, or by reason of any inaccuracy, error, or
 
21           omission with respect thereto or in such use.  The
 
22           authority in its discretion may require that all costs
 
23           of obtaining and imprinting such numbers shall be paid
 
24           by the purchaser of such bonds.
 

 
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 1      For the purposes of this subsection, the term "CUSIP
 
 2 identification numbers" means the numbering system adopted by the
 
 3 Committee for Uniform Security Identification Procedures formed
 
 4 by the Securities Industry Association.
 
 5      (f)  Whenever the authority has authorized the issuance of
 
 6 bonds under this part, bond anticipation notes of the authority
 
 7 may be issued in anticipation of the issuance of such bonds and
 
 8 of the receipt of the proceeds of sale thereof, for the purposes
 
 9 for which such bonds have been authorized.  All bond anticipation
 
10 notes shall be authorized by the authority, and the maximum
 
11 principal amount of such notes shall not exceed the authorized
 
12 principal amount of such bonds.  The notes shall be payable
 
13 solely from and secured solely by the proceeds of sale of the
 
14 bonds in anticipation of which the notes are issued and the
 
15 moneys derived from rates, rents, fees, and charges, and other
 
16 revenues from which would be payable and by which would be
 
17 secured by such bonds; provided that to the extent that the
 
18 principal of the notes shall be paid from moneys other than the
 
19 proceeds of sale of such bonds, the maximum amount of bonds that
 
20 has been authorized in anticipation of which the notes are issued
 
21 shall be reduced by the amount of notes paid in such manner.  The
 
22 authorization, issuance, and the details of such notes shall be
 
23 governed by this part with respect to bonds insofar as the same
 

 
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 1 may be applicable; provided that each note, together with all
 
 2 renewals and extensions thereof, or refundings thereof by other
 
 3 notes issued under this subsection shall mature within five years
 
 4 from the date of the original note.
 
 5      (g)  In order to secure the payment of any of the bonds
 
 6 issued pursuant to this part, and interest thereon, or in
 
 7 connection with such bonds, the authority shall have the power as
 
 8 to such bonds:
 
 9      (1)  To pledge all or any part of the moneys derived from
 
10           rates, rents, fees, and charges, and other revenues
 
11           derived by the authority as provided in this part to
 
12           the punctual payment of bonds and interest thereon, and
 
13           to covenant against thereafter pledging any such moneys
 
14           and other revenues to any other bonds or any other
 
15           obligations of the authority for any other purpose,
 
16           except as otherwise stated in the proceedings providing
 
17           for the issuance of bonds permitting the issuance of
 
18           additional bonds to be equally and ratably secured by a
 
19           lien upon such moneys and other revenues.
 
20      (2)  To pledge and assign the interest of the authority
 
21           under any lease and other agreements related to a
 
22           project and the rights, duties, and obligations of the
 
23           authority thereunder, including the right to receive
 
24           payments thereunder.
 

 
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 1      (3)  To covenant as to the use and disposition of the
 
 2           proceeds from the sale of such bonds.
 
 3      (4)  To covenant to set aside or pay over reserves and
 
 4           sinking funds for such bonds and as to the disposition
 
 5           thereof.
 
 6      (5)  To covenant and prescribe as to what happenings or
 
 7           occurrences shall constitute "events of default", the
 
 8           terms and conditions upon which any or all of such
 
 9           bonds shall become or may be declared due before
 
10           maturity, and as to the terms and conditions upon which
 
11           such declaration and its consequences may be waived.
 
12      (6)  To covenant as to the rights, liabilities, powers, and
 
13           duties arising upon the breach by it of any covenant,
 
14           condition, or obligation.
 
15      (7)  Subject to the approval of the director of finance, to
 
16           designate a national or state bank or trust company
 
17           within or without the State, incorporated in the United
 
18           States, to serve as trustee for the holders of the
 
19           bonds and to enter into a trust indenture, trust
 
20           agreement, or indenture of mortgage with such trustee.
 
21           The trustee may be authorized by the authority to
 
22           receive and receipt for, hold, and administer the
 
23           proceeds of such bonds and to apply the same to the
 

 
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 1           purposes for which such bonds are issued, or to receive
 
 2           and receipt for, hold, and administer the moneys
 
 3           derived from rates, rents, fees, and charges, and other
 
 4           revenues derived by the authority under a lease or
 
 5           other agreement related to a project and to apply such
 
 6           moneys and other revenues to the payment of the
 
 7           principal of and interest on such bonds, or both, and
 
 8           any excess moneys and other revenues to the payment of
 
 9           expenses incurred by the authority in administering
 
10           such bonds or in carrying out such lease or other
 
11           agreement.  In the event that such trustee shall be
 
12           appointed, any trust indenture, trust agreement, or
 
13           indenture of mortgage entered into by the authority
 
14           with the trustee may contain whatever covenants and
 
15           provisions as may be necessary, convenient, or
 
16           desirable in order to secure such bonds.  The authority
 
17           may pledge and assign to the trustee the interest of
 
18           the authority under a lease and other agreements
 
19           related to a project and the rights, duties, and
 
20           obligations of the authority thereunder, including the
 
21           right to receive revenues thereunder.  The authority
 
22           may appoint the trustee to serve as fiscal agent for
 
23           the payment of the principal and interest and for the
 

 
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 1           purchase, registration, transfer, exchange, and
 
 2           redemption of the bonds, and may authorize and empower
 
 3           the trustee to perform such functions with respect to
 
 4           such payment purchase, registration, transfer,
 
 5           exchange, and redemption, as the authority may deem
 
 6           necessary, advisable, or expedient, including without
 
 7           limitation the authentication of bonds and the holding
 
 8           of the bonds and coupons which have been paid and the
 
 9           supervision of the destruction thereof in accordance
 
10           with law.
 
11      (8)  To execute all instruments necessary or convenient in
 
12           the exercise of the powers herein granted or in the
 
13           performance of its covenants and duties.
 
14      (9)  To make such covenants and do any and all acts and
 
15           things as may be necessary, convenient, or desirable in
 
16           order to secure such bonds, notwithstanding that such
 
17           covenants, acts, or things may not be enumerated in
 
18           this part.
 
19      No holder or holders of any bonds issued under this part
 
20 shall ever have the right to compel any exercise of taxing power
 
21 of the State to pay such bonds or the interest thereon and no
 
22 moneys other than the revenues pledged to such bonds shall be
 
23 applied to the payment thereof.
 

 
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 1      (h)  Bonds bearing the signature or facsimile signature of
 
 2 officers in office on the date of the signing thereof shall be
 
 3 valid and sufficient for all purposes, notwithstanding that
 
 4 before the delivery thereof and payment therefor any or all
 
 5 persons whose signatures appear thereon shall have ceased to be
 
 6 officers of the authority.  The bonds shall contain a recital
 
 7 that they are issued pursuant to this part which recital shall be
 
 8 conclusive evidence of their validity and of the regularity of
 
 9 their issuance.
 
10      (i)  The authority may issue bonds for the purpose of
 
11 refunding any bonds then outstanding and issued under this part
 
12 whether or not such outstanding bonds have matured or are then
 
13 subject to redemption.  The authority may issue bonds for the
 
14 combined purposes of:
 
15      (1)  Financing or refinancing the cost of a project,
 
16           improvement, or expansion thereof; and
 
17      (2)  Refunding bonds which shall theretofore have been
 
18           issued under this part and shall then be outstanding,
 
19           whether or not such outstanding bonds have matured or
 
20           are then subject to redemption.
 
21      Nothing in this subsection shall require or be deemed to
 
22 require the authority to elect to redeem or prepay bonds being
 
23 refunded, or to redeem or prepay bonds being refunded which were
 

 
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 1 issued, in the form customarily known as term bonds in accordance
 
 2 with any sinking fund installment schedule specified in any
 
 3 proceedings authorizing the issuance thereof, or, in the event
 
 4 the authority elects to redeem or prepay any such bonds, to
 
 5 redeem or prepay as of any particular date or dates.  The
 
 6 issuance of such bonds, the maturities and other details thereof,
 
 7 the rights and remedies of the holders thereof, and the rights,
 
 8 powers, privileges, duties, and obligations of the authority with
 
 9 respect to the bonds, shall be governed by the foregoing
 
10 provisions of this part insofar as the same may be applicable.
 
11      206E-   State and political subdivisions not liable on
 
12 bonds.  The bonds and other obligations of the authority pursuant
 
13 to this part (and such bonds and obligations shall so state on
 
14 their face) shall not be a debt of the State or of any political
 
15 subdivision; neither the State nor any political subdivision
 
16 shall be liable thereon, nor in any event shall they be payable
 
17 solely out of funds or properties other than those of the
 
18 authority pledged thereto.
 
19      206E-   Bonds exempt from taxation.  Bonds and the income
 
20 therefrom issued pursuant to this part shall be exempt from all
 
21 state and county taxation except estate and transfer taxes.
 
22      206E-   Bonds as legal investments and lawful security.
 
23 Bonds issued pursuant to this part shall be and are declared to
 

 
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 1 be legal and authorized investments for banks, savings banks,
 
 2 trust companies, savings and loan associations, insurance
 
 3 companies, fiduciaries, trustees, guardians, and for all public
 
 4 funds of the State or other political corporations or
 
 5 subdivisions of the State.  Such bonds shall be eligible to
 
 6 secure the deposit of any and all public funds of the State and
 
 7 any and all public funds of counties or other political
 
 8 corporations or subdivisions of the State, and such bonds shall
 
 9 be lawful and sufficient security for such deposits to the extent
 
10 of their value when accompanied by all unmatured coupons
 
11 appertaining thereto."
 
12      SECTION 2.  Section 206E-6, Hawaii Revised Statutes, is
 
13 amended by amending subsections (b) and (c) to read as follows:
 
14      "(b)  Whenever the authority shall determine to undertake,
 
15 or cause to be undertaken, any public facility as part of the
 
16 district-wide improvement program, the cost of providing the
 
17 public facilities shall be assessed against the real property in
 
18 the community development district specially benefiting from such
 
19 public facilities.  The authority shall determine the areas of
 
20 the community development district which will benefit from the
 
21 public facilities to be undertaken and, if less than the entire
 
22 community development district benefits, the authority may
 
23 establish assessment areas within the community development
 

 
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 1 district.  [The authority may issue and sell bonds in such
 
 2 amounts as may be authorized by the legislature to provide funds
 
 3 to finance such public facilities.]  The authority shall fix the
 
 4 assessments against real property specially benefited.  All
 
 5 assessments made pursuant to this section shall be a statutory
 
 6 lien against each lot or parcel of land assessed from the date of
 
 7 the notice declaring the assessment until paid and such lien
 
 8 shall have priority over all other liens except the lien of
 
 9 property taxes.  As between liens of assessments, the earlier
 
10 lien shall be superior to the later lien.
 
11      (c)  Bonds issued to provide funds to finance public
 
12 facilities shall be secured solely by the real properties
 
13 benefited or improved, the assessments thereon, or by the
 
14 revenues derived from the program for which the bonds are issued,
 
15 including reserve accounts and earnings thereon, insurance
 
16 proceeds; and other revenues, or any combination thereof.  The
 
17 bonds may be additionally secured by the pledge or assignment of
 
18 loans and other agreements or any note or other undertaking,
 
19 obligation, or property held by the authority.  [Bonds issued
 
20 pursuant to this section and the income therefrom shall be exempt
 
21 from all state and county taxation, except transfer and estate
 
22 taxes.]  The bonds shall be issued according and subject to the
 
23 provisions of the rules adopted pursuant to this section."
 

 
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                                     H.B. NO.718        
                                                        
                                                        

 
 1      SECTION 3.  Chapter 206E, part III, Hawaii Revised Statutes,
 
 2 is repealed.
 
 3      SECTION 4.  Chapter 206E, part IV, Hawaii Revised Statutes,
 
 4 is repealed.
 
 5      SECTION 5.  Bonds may be issued by the Hawaii community
 
 6 development authority pursuant to part III, chapter 39, Hawaii
 
 7 Revised Statutes, and section 1 of this Act, in an aggregate
 
 8 principal amount not to exceed $250,000,000 at such times and in
 
 9 such amounts as it deems advisable for any of the purposes of
 
10 chapter 206E, Hawaii Revised Statutes.
 
11      SECTION 6. The Hawaii community development authority, with
 
12 the approval of the governor, is authorized to issue revenue
 
13 bonds in the sum of $          or so much thereof as may be
 
14 necessary and the same sum or so much thereof as may be necessary
 
15 is appropriated for fiscal year 1999-2000 for plans, design,
 
16 construction, and equipment to assist the Food Distribution
 
17 Center in its relocation from the Kakaako community development
 
18 district, Honolulu, Oahu.  The aforementioned revenue bonds shall
 
19 be issued pursuant to part    , chapter 206E, Hawaii Revised
 
20 Statutes.
 
21      SECTION 7.  The authorization to issue revenue bonds under
 
22 this Act shall lapse on June 30, 2002.
 

 
 
 
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 1      SECTION 8.  The sum appropriated shall be expended by the
 
 2 Hawaii community development authority for the purposes of this
 
 3 Act.
 
 4      SECTION 9.  Statutory material to be repealed is bracketed.   
 
 5      SECTION 10.  This Act shall take effect upon its approval,
 
 6 except that section 6 shall take effect on July 1, 1999.
 
 7 
 
 8                         INTRODUCED BY:___________________________