HOUSE OF REPRESENTATIVES             H.C.R. NO.173         
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE CONCURRENT
                        RESOLUTION
REQUESTING A STUDY OF THE FEASIBILITY OF THE STATE ENTERING INTO
   BUILD-OPERATE-TRANSFER AGREEMENTS WITH PRIVATE ENTITIES TO
   BUILD PUBLIC INFRASTRUCTURE PROJECTS.



 1       WHEREAS, fiscal pressures in recent years have forced
 2   governments at all levels to focus more on efficiency,
 3   innovation, and modernization; and
 4   
 5       WHEREAS, in Hawaii, the economy has remained stubbornly
 6   unresponsive over the past several years; and 
 7   
 8       WHEREAS, even optimistic forecasts call for only moderate
 9   growth in the near future; and
10   
11       WHEREAS, as a result of the State's sluggish economy,
12   essential government services, such as education, public
13   health, and social services, must compete with infrastructure
14   facilities and projects for limited state resource dollars; and
15   
16       WHEREAS, the State desires to build public infrastructure
17   projects without incurring debt to fund such projects; and
18   
19       WHEREAS, to this end, the State wishes to jointly develop
20   and build private infrastructure projects with the private
21   sector; and
22   
23       WHEREAS, there may be an opportunity to develop and build
24   public infrastructure projects by using the "Build-Operate-
25   Transfer" (BOT) concept, where a private entity is responsible
26   for a project's financing, construction, and initial operation,
27   yet the government maintains control over every step of the
28   project's development, as an effective way to attract private
29   sector investment, promote rapid capital formation, implement
30   operating efficiencies, produce cost savings, improve
31   competition, and otherwise stimulate Hawaii's economy; and
32   
33       WHEREAS, the BOT concept has been successfully implemented
34   in some form in parts of Asia, most notably the Philippines;
35   and
36   

 
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 1       WHEREAS, the State is willing to work with private entities
 2   that are willing to finance and construct public infrastructure
 3   projects under a BOT concept; and
 4   
 5       WHEREAS, a private entity would only be selected to work
 6   with the State in the development and building of a public
 7   infrastructure project under the BOT concept based on an
 8   entity's overall qualifications, technical merit, financial
 9   ability, and the willingness to use local companies and
10   personnel; now, therefore,
11   
12       BE IT RESOLVED by the House of Representatives of the
13   Twentieth Legislature of the State of Hawaii, Regular Session
14   of 1999, the Senate concurring, that the Department of Budget
15   and Finance is requested to study the feasibility of the State
16   entering into BOT agreements with private entities to build
17   public infrastructure projects; and 
18   
19       BE IT FURTHER RESOLVED that the study include an
20   examination of the following issues:
21   
22       (1)  Whether a certain form of BOT concept is more feasible
23            than others, and whether the particular experiences of
24            other U.S. or non-U.S. jurisdictions offer guidance or
25            are otherwise applicable;
26   
27       (2)  Whether there are any legal impediments to building
28            public infrastructure projects under a BOT concept;
29   
30       (3)  Whether the development, building, and operation of
31            public infrastructure projects by a private entity
32            would result in less beneficial regulation of safety,
33            environmental, and consumer concerns, and less
34            sensitivity to community and cultural needs; and
35   
36       (4)  Whether the economic benefits to the State would
37            outweigh the costs of financing public infrastructure
38            projects through BOT agreements, including those
39            directly or indirectly resulting from the displacement
40            of public employees, and additions to unemployment and
41            welfare rolls;
42   
43   and 
44   

 
 
 
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 1       BE IT FURTHER RESOLVED that the Department of Budget and
 2   Finance is requested to report its findings and recommendations
 3   to the Legislature no later than twenty days before the
 4   convening of the Regular Session of 2000; and
 5   
 6       BE IT FURTHER RESOLVED that certified copies of this
 7   Concurrent Resolution be transmitted to the Director of Finance
 8   and the Governor.
 9 
10 
11 
12                         OFFERED BY:  ____________________________