Special Improvement Districts

Allows counties to enact ordinances to create special improvement
districts to provide and finance supplemental maintenance and
security services and such other improvements, services, and
facilities within those districts as the county council finds
will promote business activity and make and finance improvements.

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

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 46, Hawaii Revised Statutes, is amended
 2 by adding a new section to be appropriately designated and to
 3 read as follows:
 4      "46-    Special improvement district.  (a)  In addition and
 5 supplemental to the authority vested in the counties by sections
 6 46-80 and 46-80.1, any county having a charter may enact an
 7 ordinance, and may amend the same from time to time, authorizing
 8 the creation of special improvement districts for the purpose of
 9 providing and financing supplemental maintenance and security
10 services and such other improvements, services, and facilities
11 within the special improvement district as the council of the
12 county determines will restore or promote business activity in
13 the special improvement district and making and financing
14 improvements therein.  Each separate special improvement district
15 shall be established by a separate ordinance enacted as provided
16 in the ordinance authorizing the creation of special improvement
17 districts.  The ordinance authorizing the creation of special
18 improvement districts may permit the county to provide for a
19 board or association, established pursuant to chapter 415B, to

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 1 provide management of the special improvement district and to
 2 carry out such activities as may be prescribed by the ordinance
 3 authorizing the creation of special improvement districts and the
 4 ordinance establishing the special improvement district as
 5 permitted thereby.
 6      (b)  The county may levy and assess a special assessment on
 7 property located within a special improvement district to finance
 8 the maintenance and operation of a special improvement district
 9 and to pay the debt service on any bonds issued to finance
10 improvements within the special improvement district.
11 Notwithstanding any law to the contrary, in assessing property
12 for a special assessment the county may implement such
13 methodology as the council of the county deems appropriate.  The
14 special assessment may be fixed in an amount or appropriated on
15 such basis as the council of the county deems appropriate and it
16 shall not be essential that the property subject to the special
17 assessment be improved or benefitted by the operation and
18 maintenance of the special improvement district or any activity
19 or improvement undertaken for, and financed by, the special
20 improvement district.
21      (c)  The county may issue and sell bonds to finance
22 improvements within the special improvement district and the
23 ordinance authorizing the creation of special improvement

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 1 districts may provide the method, procedure, and types or types
 2 of security for those bonds.  Each issue or series of bonds shall
 3 be authorized by ordinance separate from the ordinance
 4 establishing the special improvement district.  The bonds shall
 5 be in such amounts, in such denomination or denominations, in
 6 such form or forms, executed in such manner, payable in such
 7 place or places and at such time or times, bear interest at such
 8 rate or rates (either fixed or variable), mature on such date or
 9 dates and provide such terms and conditions of redemption,
10 provide such security (including the pledge of proceeds of such
11 bonds, special assessments, and the lien therefor), provide for
12 credit enhancement, if any, administration, terms of investment
13 of proceeds of such bonds and special assessment receipts,
14 provide such terms of default and remedy, and such other terms
15 and conditions, as the council of the county deems necessary or
16 proper.  The bonds may be sold in such manner and at such price
17 or prices as the council of the county shall determine.  Bonds
18 issued pursuant to this section and the interest thereon and
19 other income therefrom shall be exempt from any and all taxation
20 by the State or any county or other political subdivision
21 thereof, except inheritance, transfer, and estate taxes.
22      (d)  Notwithstanding any other law, no action or proceeding
23 to question the validity of or enjoining any ordinance, action or

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 1 proceeding permitted by this section (including the determination
 2 of the amount of any special assessment levied or the imposition
 3 thereof), or any bonds issued or to be issued pursuant to an
 4 ordinance enacted as permitted by this section, shall be
 5 maintained unless begun within thirty days of the enactment of
 6 the ordinance, determination, or other act, as the case may be,
 7 and, in the case of the assessment, whether the determination or
 8 levy thereof, within thirty days after adoption of the ordinance
 9 authorizing or amending the assessment formula, and, in the case
10 of bonds, within thirty days after enactment of the ordinance
11 authorizing the issuance of the bonds.
12      (e)  Exemptions.
13      (1)  Property owned by the state, federal, or county
14           governments or entities thereof, shall be exempt from
15           the assessment except as provided in paragraph (2);
16      (2)  If a public body owning property, including property
17           held in trust for any beneficiary, which is exempt from
18           an assessment pursuant to paragraph (1), grants a
19           leasehold or other possessory interest in the property
20           to a nonexempt person or entity, the assessment,
21           notwithstanding paragraph (1), shall be levied on the
22           leasehold or possessory interest and shall be payable
23           by the lessee; and

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 1      (3)  No other properties or owners shall be exempt from the
 2           assessment unless the properties or owners are
 3           expressly exempted in the ordinance establishing a
 4           district adopted pursuant to this section or amending
 5           the rate or method of assessment of an existing
 6           district.
 7      (f)  The assessments levied pursuant to the ordinance
 8 authorizing the creation of special improvement districts, the
 9 ordinance establishing a district, and this section shall be a
10 lien upon the property assessed.  The lien shall have priority
11 over all other liens except the lien of general real property
12 taxes and shall be on a parity with the lien of assessments
13 levied under sections 46-80 and 46-80.1.
14      (g)  Any board or association established for the purposes
15 of carrying out the activities described in this section shall
16 not be deemed a governmental body under chapter 103D.  The board
17 and association shall neither be deemed to be a government
18 department, agency, or a county nor to be performing services on
19 behalf of a government department, agency, or county.  Services
20 performed by or contracted for by such a board or association and
21 the positions of individuals performing those services, shall be
22 exempt from chapter 76, sections 46-33 and 46-34, and any other
23 applicable civil service laws; chapter 77; chapter 89; and

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                                     H.B. NO.           

 1 sections 9 and 11 of Act 230, Session Laws of Hawaii 1998."
 2      SECTION 2.  New statutory material is underscored.
 3      SECTION 3.  This Act shall take effect upon its approval.
 5                              INTRODUCED BY:______________________