UH; financing agreements

Allows the Board of Regents to approve its own financing
agreements where the principal amount does not exceed $3,000,000.

a                                                      UOH-5(99)
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 37D-2, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "37D-2 Financing agreements.  Only with the approval of the
 4 director, and the approval by the attorney general of form and
 5 legality, may the agency enter into a financing agreement in
 6 accordance with this chapter[.], except that the board of regents
 7 of the University of Hawaii may enter into a financing agreement
 8 in accordance with this chapter without the approval of the
 9 director and of the attorney general as to form and legality if
10 the principal amount of the financing agreement does not exceed
11 $3,000,000.  A financing agreement may be entered into at the
12 time (before or after commencement or completion of any
13 improvement to be financed) and shall be upon terms the agency
14 finds to be advantageous.  Any financing agreement entered into
15 by the agency without the approvals required by this section
16 shall be void and of no effect.  Financing agreements shall be
17 subject to the following limitations:
18      (1)  Amounts payable by the agency under a financing
19           agreement shall be limited to available funds.  In no

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                                     S.B. NO.           

 1           circumstance shall the agency be obligated to pay
 2           amounts due under a financing agreement from any source
 3           other than available funds.  If, by reason of
 4           insufficient available funds or other reason, amounts
 5           due under a financing agreement are not paid when due,
 6           the lender may exercise any property right that the
 7           agency has granted to it in the financing agreement,
 8           against the property that was purchased with the
 9           proceeds of the financing agreement, and apply the
10           amounts so received toward payments scheduled to be
11           made by the agency under the financing agreement;
12      (2)  No property rights may be granted in property unless
13           the property is being acquired, is to be substantially
14           improved, is to be refinanced with the proceeds of a
15           financing agreement, or is land on which the property
16           is located;
17      (3)  [The] Except as otherwise provided in this section with
18           respect to the University of Hawaii, the agency shall
19           not enter into financing agreements under any provision
20           of law other than this chapter if the principal amount
21           of the financing agreement, together with the principal
22           amount of any financing agreement previously issued by
23           the agency for the same project, exceeds $100,000; and

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                                     S.B. NO.           

 1      (4)  The sale, assignment, or other disposition of any
 2           financing agreements, including certificates of
 3           participation, shall require the approval of the
 4           director."
 5      SECTION 2.  Statutory material to be repealed is bracketed.
 6 New statutory material is underscored.
 7      SECTION 3.  This Act shall take effect upon its approval. 
 9                           INTRODUCED BY:  _______________________

a                                                      UOH-5(99)