REPORT TITLE:
Special Improvement Districts


DESCRIPTION:
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.
(HB753 SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        753
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE ESTABLISHMENT OF SPECIAL IMPROVEMENT DISTRICTS.



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

 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
 

 
Page 2                                                     753
                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1 provide management of the special improvement district, and to
 
 2 carry out 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 the special improvement district to
 
 8 finance the maintenance and operation of the special improvement
 
 9 district and to pay the debt service on any bonds issued to
 
10 finance 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 a methodology
 
13 as the council of the county deems appropriate.  The special
 
14 assessment may be fixed in an amount or appropriated on a basis
 
15 as the council of the county deems appropriate, and it shall not
 
16 be essential that the property subject to the special assessment
 
17 be improved or benefitted by the operation and maintenance of the
 
18 special improvement district or any activity or improvement
 
19 undertaken for, and financed by, the special improvement
 
20 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
 

 
Page 3                                                     753
                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

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

 
Page 4                                                     753
                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1 section (including the liability for or the determination of the
 
 2 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, 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 or county governments or
 
14           entities, may be exempt from the assessment except as
 
15           provided in paragraph (3);
 
16      (2)  Property owned by the federal government or entities,
 
17           shall be exempt from the assessment except as provided
 
18           in paragraph (3);
 
19      (3)  If a public body owning property, including property
 
20           held in trust for any beneficiary, which is exempt from
 
21           an assessment pursuant to paragraphs (1) and (2),
 
22           grants a leasehold or other possessory interest in the
 
23           property to a nonexempt person or entity, the
 

 
Page 5                                                     753
                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1           assessment, notwithstanding paragraphs (1) and (2),
 
 2           shall be levied on the leasehold or possessory interest
 
 3           and shall be payable by the lessee; and
 
 4      (4)  No other properties or owners shall be exempt from the
 
 5           assessment unless the properties or owners are
 
 6           expressly exempted in the ordinance establishing a
 
 7           district adopted pursuant to this section or amending
 
 8           the rate or method of assessment of an existing
 
 9           district.
 
10      (f)  The assessments levied pursuant to the ordinance
 
11 authorizing the creation of special improvement districts, the
 
12 ordinance establishing a district, and this section shall be a
 
13 lien upon the property assessed.  The lien shall have priority
 
14 over all other liens except the lien of general real property
 
15 taxes and shall be on a parity with the lien of assessments
 
16 levied under sections 46-80 and 46-80.1.
 
17      (g)  Any board or association established for the purposes
 
18 of carrying out the activities described in this section shall
 
19 not be deemed a governmental body.  The board and association
 
20 shall neither be deemed to be a government department, agency, or
 
21 a county nor to be performing services on behalf of a government
 
22 department, agency, or county."
 
23      SECTION 2.  New statutory material is underscored.
 

 
Page 6                                                     753
                                     H.B. NO.           H.D. 2
                                                        S.D. 2
                                                        

 
 1      SECTION 3.  This Act shall take effect on July 1, 1999.