REPORT TITLE:
High Technology; HTDC


DESCRIPTION:
Allows the High Technology Development Corporation to issue
special purpose revenue bonds and special facility revenue bonds
for the development of high-technology projects.  (HB2443 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2443
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HIGH TECHNOLOGY DEVELOPMENT CORPORATION.



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

 1      SECTION 1.  Chapter 206M, Hawaii Revised Statutes, is
 
 2 amended by adding a new part to be appropriately designated and
 
 3 to read as follows:
 
 4             "PART II.  SPECIAL FACILITY REVENUE BONDS
 
 5      206M-  Definitions.  As used in this part, unless the
 
 6 context clearly requires otherwise:
 
 7      "Special facility" means one or more buildings, structures,
 
 8 or facilities and the land thereof located in an industrial park
 
 9 for the high technology industry, including, without limitation,
 
10 facilities for technology research, development, support,
 
11 processing, and manufacturing, which are the subject of a special
 
12 facility lease.
 
13      "Special facility lease" includes a contract, lease, or
 
14 other agreement, or any combination thereof, the subject matter
 
15 of which is the same special facility.
 
16      "Special facility revenue bonds" means all bonds, notes, and
 
17 other instruments of indebtedness of the State issued pursuant to
 
18 this part and part III of chapter 39.
 

 
Page 2                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      206M-  Powers.  In addition to any other powers granted to
 
 2 the development corporation by law, the development corporation
 
 3 may:
 
 4      (1)  With the approval of the governor, and without public
 
 5           bidding, enter into a special facility lease or an
 
 6           amendment or supplement thereto whereby the development
 
 7           corporation agrees to acquire, construct, improve,
 
 8           install, equip, and develop a special facility solely
 
 9           for the use by another party to a special facility
 
10           lease;
 
11      (2)  With the approval of the governor, issue special
 
12           facility revenue bonds in principal amounts that may be
 
13           necessary to yield the amount of the cost of any
 
14           acquisition, construction, improvement, installation,
 
15           equipping, and development of any special facility,
 
16           including, subject to paragraph (6) the costs of
 
17           acquisition of the site thereof; provided that the
 
18           total principal amount of the special facility revenue
 
19           bonds which may be issued pursuant to the authorization
 
20           of this section shall not exceed $100,000,000;
 
21      (3)  With the approval of the governor, issue refunding
 
22           special facility revenue bonds with which to provide
 
23           for the payment of outstanding special facility revenue
 

 
Page 3                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           bonds (including any special facility revenue bonds
 
 2           theretofore issued for this refunding purpose) or any
 
 3           part thereof; provided any issuance of refunding
 
 4           special facility revenue bonds shall not reduce the
 
 5           principal amount of the bonds that may be issued as
 
 6           provided in paragraph (2);
 
 7      (4)  Perform and carry out the terms and provisions of any
 
 8           special facility lease;
 
 9      (5)  Notwithstanding section 103-7 or any other law to the
 
10           contrary, acquire, construct, improve, install, equip
 
11           or develop any special facility, or accept the
 
12           assignment of any contract therefor entered into by the
 
13           other party to the special facility lease;
 
14      (6)  Construct any special facility on land owned by the
 
15           State; provided that no funds derived herein shall be
 
16           expended for land acquisition; and
 
17      (7)  Agree with the other party to the special facility
 
18           lease whereby any acquisition, construction,
 
19           improvement, installation, equipping, or development of
 
20           the special facility and the expenditure of moneys
 
21           therefor shall be undertaken or supervised by another
 
22           person.  Neither the undertaking by the other person
 
23           nor the acceptance by the development corporation of a
 

 
Page 4                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           contract theretofore entered into by the other person
 
 2           therefor, shall be subject to chapter 103D.
 
 3      206M-  Findings and determinations for special facility
 
 4 leases.  The development corporation shall not enter into any
 
 5 special facility lease unless the development corporation, at or
 
 6 prior to the entering into of the special facility lease, shall
 
 7 find and determine:
 
 8      (1)  That the building, structure, or facility that is to be
 
 9           the subject of the special facility lease shall not be
 
10           used to provide services, commodities, supplies or
 
11           facilities that are then adequately being made
 
12           available otherwise in the State;
 
13      (2)  That the use or occupancy of the building, structure,
 
14           or facility under the special facility lease would not
 
15           result in the reduction of the revenues derived from
 
16           the industrial parks or other properties of the
 
17           development corporation to an amount below the amount
 
18           required to be derived therefrom by section 39-61; and
 
19      (3)  That the entering into of the special facility lease
 
20           would not be in violation of or result in a breach of
 
21           any covenant contained in any resolution or certificate
 
22           authorizing any bonds of the State then outstanding.
 

 
 
 
Page 5                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      206M-  Special facility lease.(a) In addition to the
 
 2 conditions and terms set forth in this part, any special facility
 
 3 lease entered into by the development corporation shall at least
 
 4 contain provisions obligating the other party to the special
 
 5 facility lease:
 
 6      (1)  To pay to the development corporation during the
 
 7           initial term of the special facility lease, whether the
 
 8           special facility is capable of being used or occupied
 
 9           or is being used or occupied by the other party, a
 
10           rental or rentals at the time or times and in the
 
11           amount or amounts that will be sufficient to:
 
12           (A)  Pay the principal and interest on all special
 
13                facility revenue bonds issued for the special
 
14                facility;
 
15           (B)  Establish or maintain any reserves for these
 
16                payments; and
 
17           (C)  Pay all fees and expenses of the trustees, paying
 
18                agents, transfer agents, and other fiscal agents
 
19                for the special facility revenue bonds issued for
 
20                the special facility;
 
21      (2)  To pay to the development corporation:
 
22           (A)  A ground rental, equal to the fair market rental
 
23                of the land, if the land on which the special
 

 
Page 6                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1                facility is located was not acquired from the
 
 2                proceeds of the special facility revenue bonds; or
 
 3           (B)  A properly allocable share of the administrative
 
 4                costs of the development corporation in carrying
 
 5                out the special facility lease and administering
 
 6                the special facility revenue bonds issued for the
 
 7                special facility if the land was acquired from the
 
 8                proceeds of the special facility revenue bonds;
 
 9      (3)  To either operate, maintain, and repair the special
 
10           facility and pay the costs thereof or to pay to the
 
11           development corporation all costs of operation,
 
12           maintenance, and repair of the special facility;
 
13      (4)  To:
 
14           (A)  Insure, or cause to be insured, the special
 
15                facility under builder's risk insurance (or
 
16                similar insurance) in the amount of the cost of
 
17                construction of the special facility to be
 
18                financed from the proceeds of the special facility
 
19                revenue bonds;
 
20           (B)  Procure and maintain, or cause to be procured or
 
21                maintained, to the extent commercially available,
 
22                a comprehensive insurance policy providing
 
23                protection and insuring the development
 

 
Page 7                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1                corporation and its officers, agents, servants,
 
 2                and employees (and so long as special facility
 
 3                revenue bonds are outstanding, the trustee)
 
 4                against all direct or contingent loss or liability
 
 5                for damages for personal injury or death or damage
 
 6                to property, including loss of use thereof,
 
 7                occurring on or in any way related to the special
 
 8                facility or occasioned by reason of occupancy by
 
 9                and the operations of the other person upon, in
 
10                and around the special facility;
 
11           (C)  Provide all risk casualty insurance, including
 
12                insurance against loss or damage by fire,
 
13                lightning, flood, earthquake, typhoon, or
 
14                hurricane, with standard extended coverage and
 
15                standard vandalism and other malicious mischief
 
16                endorsements; and
 
17           (D)  Provide insurance for workers' compensation and
 
18                employers' liability for personal injury or death
 
19                or damage to property (the other party may self-
 
20                insure for workers' compensation if permitted by
 
21                law); provided that all policies with respect to
 
22                loss or damage of property including fire or other
 
23                casualty and extended coverage and builder's risk
 

 
Page 8                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1                shall provide for payments of the losses to the
 
 2                development corporation, the other party or the
 
 3                trustee for the special facility revenue bonds as
 
 4                their respective interests may appear; and
 
 5                provided further that the insurance may be
 
 6                procured and maintained as part of or in
 
 7                conjunction with other policies carried by the
 
 8                other party; and provided further that the
 
 9                insurance shall name the development corporation,
 
10                and so long as any special facility revenue bonds
 
11                are outstanding, the trustee, as additional
 
12                insured; and
 
13      (5)  Indemnify, save, and hold the development corporation,
 
14           the trustee, and their respective agents, officers,
 
15           members, and employees harmless from and against all
 
16           claims and actions and all costs and expenses
 
17           incidental to the investigation and defense thereof, by
 
18           or on behalf of any person, firm, or corporation, based
 
19           upon or arising out of the special facility or the
 
20           other party's use and occupancy thereof, including,
 
21           without limitation, from and against all claims and
 
22           actions based upon and arising from any:
 

 
 
 
Page 9                                                     2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           (A)  Condition of the special facility;
 
 2           (B)  Breach or default on the part of the other party
 
 3                in the performance of any of the party's
 
 4                obligations under the special facility lease;
 
 5           (C)  Fault or act of negligence of the other party or
 
 6                the party's agents, contractors, servants,
 
 7                employees, or licensees; or
 
 8           (D)  Accident to or injury or death of any person or
 
 9                loss of or damage to any property occurring in or
 
10                about the special facility, including any claims
 
11                or actions based upon or arising by reason of the
 
12                negligence or any act of the other party.
 
13      Any moneys received by the development corporation pursuant
 
14 to paragraphs (2) and (3) shall be paid into the high technology
 
15 special fund and shall not be nor be deemed to be revenues of the
 
16 special facility.
 
17      (b)  The term and all renewals and extensions of the term of
 
18 any special facility lease (including any amendments or
 
19 supplements thereto) shall not extend beyond the lesser of the
 
20 reasonable life of the special facility that is the subject of
 
21 the special facility lease, as estimated by the development
 
22 corporation at the time of the entering into thereof, or thirty
 
23 years.
 

 
Page 10                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (c)  Any special facility lease entered into by the
 
 2 development corporation shall be subject to chapter 171 and shall
 
 3 contain other terms and conditions that the development
 
 4 corporation deems advisable to effectuate the purposes of this
 
 5 part.
 
 6      206M-  Special facility revenue bonds.  All special
 
 7 facility revenue bonds authorized to be issued under this part
 
 8 shall be issued pursuant to part III of chapter 39, except as
 
 9 follows:
 
10      (1)  No revenue bonds shall be issued unless at the time of
 
11           issuance, the development corporation has entered into
 
12           a special facility lease with respect to the special
 
13           facility for which the revenue bonds are to be issued;
 
14      (2)  The revenue bonds shall be issued in the name of the
 
15           development corporation and not in the name of the
 
16           State;
 
17      (3)  No further authorization of the legislature shall be
 
18           required for the issuance of the special facility
 
19           revenue bonds, but the approval of the governor shall
 
20           be required for the issuance;
 
21      (4)  The revenue bonds shall be payable solely from and
 
22           secured solely by the revenues derived by the
 

 
 
 
Page 11                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           development corporation from the special facility for
 
 2           which they are issued;
 
 3      (5)  The final maturity date of the revenue bonds shall not
 
 4           be later than either the estimated life of the special
 
 5           facility for which the revenue bonds are issued or the
 
 6           expiration of the initial term of the special facility
 
 7           lease;
 
 8      (6)  If deemed necessary or advisable by the development
 
 9           corporation, or to permit the obligations of the other
 
10           party to the special facility lease to be registered
 
11           under the U.S. Securities Act of 1933, the development
 
12           corporation, with the approval of the director of
 
13           finance, may appoint a national or state bank within or
 
14           without the State to serve as trustee for the holders
 
15           of the revenue bonds and may enter into a trust
 
16           indenture or trust agreement with the trustee.  The
 
17           trustee may be authorized by the development
 
18           corporation to collect, hold, and administer the
 
19           revenues derived from the special facility for which
 
20           the revenue bonds are issued and to apply the revenues
 
21           to the payment of the principal and interest on the
 
22           revenue bonds.  In the event that any trustee shall be
 
23           appointed, any trust indenture or trust agreement
 

 
Page 12                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           entered into by the development corporation with the
 
 2           trustee may contain the covenants and provisions
 
 3           authorized by part III of chapter 39 to be inserted in
 
 4           a resolution adopted or certificate issued, as though
 
 5           the words "resolution" or "certificate" as used in that
 
 6           part read "trust indenture or trust agreement".  
 
 7                The covenants and provisions shall not be required
 
 8           to be included in the resolution or certificate
 
 9           authorizing the issuance of the revenue bonds if
 
10           included in the trust indenture or trust agreement.
 
11           Any resolution or certificate, trust indenture, or
 
12           trust agreement adopted, issued, or entered into by the
 
13           development corporation pursuant to this part may also
 
14           contain any provisions required for the qualification
 
15           thereof under the U.S. Trust Indenture Act of 1939.
 
16           The development corporation may pledge and assign to
 
17           the trustee the special facility lease and the rights
 
18           of the development corporation including the revenues
 
19           thereunder;
 
20      (7)  If the development corporation, with the approval of
 
21           the director of finance, shall have appointed or shall
 
22           appoint a trustee for the holders of the revenue bonds,
 
23           then notwithstanding the provisions of section 39-68,
 

 
Page 13                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           the director of finance may elect not to serve as
 
 2           fiscal agent for the payment of the principal and
 
 3           interest, and for the purchase, registration, transfer,
 
 4           exchange, and redemption of the revenue bonds, or may
 
 5           elect to limit the functions the director of finance
 
 6           shall perform as the fiscal agent.  The development
 
 7           corporation, with the approval of the director of
 
 8           finance, may appoint the trustee to serve as the fiscal
 
 9           agent, and may authorize and empower the trustee to
 
10           perform the functions with respect to payment,
 
11           purchase, registration, transfer, exchange, and
 
12           redemption, that the development corporation may deem
 
13           necessary, advisable, or expedient, including, without
 
14           limitation, the holding of the revenue bonds and
 
15           coupons, if any, that have been paid and the
 
16           supervising and conducting of the destruction thereof
 
17           in accordance with sections 40-10 and 40-11.  Nothing
 
18           in this paragraph shall be a limitation upon or
 
19           construed as a limitation upon the powers granted in
 
20           paragraph (6) to the development corporation with the
 
21           approval of the director of finance to appoint the
 
22           trustee, or granted in sections 36-3, 39-13, and 39-68
 
23           to the director of finance to appoint the trustee or
 

 
Page 14                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           others, as fiscal agents, paying agents, and registrars
 
 2           for the revenue bonds or to authorize and empower the
 
 3           fiscal agents, paying agents, and registrars to perform
 
 4           the functions referred to in paragraph (6) and sections
 
 5           36-3, 39-13, and 39-68, it being the intent of this
 
 6           paragraph to confirm that the director of finance may
 
 7           elect not to serve as fiscal agent for the revenue
 
 8           bonds or may elect to limit the functions the director
 
 9           of finance shall perform as the fiscal agent, that the
 
10           director of finance may deem necessary, advisable, or
 
11           expedient;
 
12      (8)  The development corporation may sell the revenue bonds
 
13           either at public or private sale;
 
14      (9)  If no trustee is appointed to collect, hold, and
 
15           administer the revenues derived from the special
 
16           facility for which the revenue bonds are issued, the
 
17           revenues shall be held in a separate account in the
 
18           treasury of the State, separate and apart from the high
 
19           technology special fund, to be applied solely to the
 
20           carrying out of the resolution, certificate, trust
 
21           indenture, or trust agreement authorizing or securing
 
22           the revenue bonds;
 

 
 
 
Page 15                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1     (10)  If the resolution, certificate, trust indenture, or
 
 2           trust agreement provides that no revenue bonds issued
 
 3           thereunder shall be valid or obligatory for any purpose
 
 4           unless certified or authenticated by the trustee for
 
 5           the holders of the revenue bonds, the signatures of the
 
 6           officers of the State upon the bonds required by
 
 7           section 39-56 may be facsimiles of their signatures;
 
 8     (11)  Proceeds of the revenue bonds may be used and applied
 
 9           by the development corporation to reimburse the other
 
10           party to the special facility lease for all preliminary
 
11           costs and expenses, including architectural and legal
 
12           costs; and
 
13     (12)  If the special facility lease requires the other party
 
14           to operate, maintain, and repair the special facility
 
15           that is the subject of the lease, at the other party's
 
16           expense, the requirement shall constitute compliance by
 
17           the development corporation with section 39-61(a)(2),
 
18           and none of the revenues derived by the development
 
19           corporation from the special facility shall be required
 
20           to be applied to the purposes of section 39-62(2).
 
21           Sections 39-62(4), 39-62(5), and 39-62(6) shall not
 
22           apply to the revenues derived from a special facility
 
23           lease."
 

 
Page 16                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      SECTION 2.  Chapter 206M, Hawaii Revised Statutes, is
 
 2 amended by adding a new section to part I to be appropriately
 
 3 designed and to read as follows:
 
 4      "206M-      Federal tax-exempt status.  Special purpose
 
 5 revenue bonds issued pursuant to this chapter, to the extent
 
 6 practicable, shall be issued to comply with requirements imposed
 
 7 by applicable federal law providing that the interest on the
 
 8 special purpose revenue bonds shall be excluded from gross income
 
 9 for federal income tax purposes (except as certain minimum taxes,
 
10 environmental taxes, or other federal taxes or tax consequences
 
11 may apply).  The development corporation may enter into
 
12 agreements, establish funds or accounts, and take any action
 
13 required to comply with applicable federal law.  Nothing in this
 
14 chapter shall be deemed to prohibit the issuance of special
 
15 purpose revenue bonds, the interest on which may be included in
 
16 gross income for federal income tax purposes."
 
17      SECTION 3.  Chapter 206M, Hawaii Revised Statutes, is
 
18 amending by amending the title in part II to read as follows:
 
19     "[[PART II.]]  PART III.  HAWAII SOFTWARE SERVICE CENTER"
 
20      SECTION 4.  Section 206M-1, Hawaii Revised Statutes, is
 
21 amended as follows:
 
22      1.  By amending the definition of "bonds" to read:
 
23      ""Bonds" [means special purpose revenue bonds issued under
 

 
Page 17                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 this chapter and shall include] or "special purpose revenue
 
 2 bonds" mean bonds, notes, and other instruments of indebtedness[,
 
 3 and refunding bonds.] of the State issued pursuant to this part."
 
 4      2.  By amending the definition of "high technology" to read:
 
 5      ""High technology" means [emerging] industries [which] that
 
 6 are technology-intensive, including but not limited to
 
 7 electronics [and], biotechnology[.], software, computers,
 
 8 telecommunications, and other computer-related technologies."
 
 9      3.  By amending the definition of "industrial park" to read:
 
10      ""Industrial park" means a tract of real property determined
 
11 by the board as being suitable for use as building sites for
 
12 projects by [a group of enterprises engaged in] one or more
 
13 industrial, processing, or manufacturing enterprises [for]
 
14 engaged in high technology, including research, training,
 
15 technical analyses, software development, and pilot plant or
 
16 prototype product development, and may include the installation
 
17 of improvements to [such] the tract incidental to the use of real
 
18 property as an industrial park, such as water, sewer, sewage and
 
19 waste disposal, and drainage facilities, sufficient to adequately
 
20 service projects in the industrial park, and provision of
 
21 incidental transportation facilities, power distribution
 
22 facilities, and communication facilities.  Industrial parks shall
 
23 not include any buildings or structures of any kind except for
 

 
Page 18                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 buildings or structures incidental to improvements to the
 
 2 industrial park."
 
 3      4.  By amending the definition of "project" to read:
 
 4      ""Project" means [any combination of land and buildings and
 
 5 other improvements thereon for use in industrial, processing, or
 
 6 manufacturing enterprises for high technology which are located
 
 7 in an industrial park and acquired, constructed, reconstructed,
 
 8 rehabilitated, improved, altered, or repaired by or on behalf of
 
 9 the development corporation.] the acquisition, construction,
 
10 improvement, installation, equipping, and development of any
 
11 combination of land, buildings, and other improvements thereon,
 
12 including, without limitation, parking facilities for use of, or
 
13 to assist a high technology industrial, manufacturing, or
 
14 processing enterprise located within or without an industrial
 
15 park, including, without limiting the generality of the
 
16 foregoing, machinery, equipment, furnishings, and apparatus that
 
17 shall be deemed necessary, suitable, or useful to the
 
18 enterprise."
 
19      5.  By amending the definition of "project agreement" to
 
20 read:
 
21      ""Project agreement" means [any lease, sublease, loan
 
22 agreement, conditional sale agreement, or other similar financing
 
23 contract or agreement, or any combination thereof entered into
 

 
Page 19                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 under this chapter by the development corporation, including the
 
 2 financing from the proceeds of bonds of a project or an
 
 3 industrial park.] any agreement entered into under this chapter
 
 4 by the development corporation with a qualified person to
 
 5 finance, construct, operate, or maintain a project or an
 
 6 industrial park from the proceeds of special purpose revenue
 
 7 bonds, or to lend the proceeds of special purpose revenue bonds
 
 8 to assist a high technology industrial, manufacturing, or
 
 9 processing enterprise, including, without limitation, any lease,
 
10 sublease, loan agreement, conditional sale agreement, or other
 
11 similar financing contract or agreement, or any combination
 
12 thereof."
 
13      6.  By amending the definition of "qualified person" to
 
14 read:
 
15      ""Qualified person" means any individual, firm, partnership,
 
16 corporation, association, cooperative, or other legal entity,
 
17 governmental body or public agency, or any combination [or
 
18 association] of the foregoing, possessing the competence,
 
19 expertise, experience, and resources, including financial,
 
20 personnel, and tangible resources, required for the purposes of a
 
21 project and [such] other qualifications as may be deemed
 
22 desirable by the development corporation in administering this
 

 
 
 
Page 20                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 chapter and which enters into a project agreement with the
 
 2 development corporation."
 
 3      SECTION 5.  Section 206M-2, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (a) to read as follows:
 
 5      "(a) There is established the high technology development
 
 6 corporation, which shall be a public body corporate and politic
 
 7 and an instrumentality and agency of the State.  The development
 
 8 corporation shall be placed within the department of business,
 
 9 economic development, and tourism for administrative purposes,
 
10 pursuant to section 26-35.  The purpose of the development
 
11 corporation shall be to facilitate the growth and development of
 
12 the commercial high technology industry in Hawaii.  Its duties
 
13 shall include, but not be limited to:
 
14      (1)  Developing [developing] industrial parks as high
 
15           technology innovation centers and [the] developing or
 
16           assisting with the development of projects within or
 
17           outside of industrial parks; [providing]
 
18      (2)  Providing financial and other support and services to
 
19           Hawaii-based high technology companies; [collecting]
 
20      (3)  Collecting and analyzing information on the state of
 
21           commercial high technology activity in Hawaii;
 
22           [promoting]
 

 
 
 
Page 21                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (4)  Promoting and marketing Hawaii as a site for commercial
 
 2           high technology activity; and [providing]
 
 3      (5)  Providing advice on policy and planning for technology-
 
 4           based economic development."
 
 5      SECTION 6.  Section 206M-2, Hawaii Revised Statutes, is
 
 6 amended by amending subsection (e) to read as follows:
 
 7      "(e)  The board shall appoint a management advisory
 
 8 committee for each industrial park and related project or
 
 9 projects governed by the board.  Each committee shall have five
 
10 members, who shall serve without compensation but may be
 
11 reimbursed for expenses incurred in the performance of their
 
12 duties.  The members shall be drawn from fields of activity
 
13 related to each [project or park.] industrial park and related
 
14 project or projects."
 
15      SECTION 7.  Section 206M-3, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "206M-3  Powers, generally.  The development corporation
 
18 shall have all the powers necessary to carry out its purposes,
 
19 including the following powers:
 
20      (1)  To sue and be sued;
 
21      (2)  To have a seal and alter the same at its pleasure;
 
22      (3)  To make and execute, enter into, amend, supplement, and
 
23           carry out contracts and all other instruments necessary
 

 
Page 22                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           or convenient for the exercise of its powers and
 
 2           functions under this chapter, including, [subject to]
 
 3           with the approval of the governor, a project agreement,
 
 4           or an amendment or supplement to an existing project
 
 5           agreement, with a qualified person, and [any other] to
 
 6           enter into and carry out any agreement whereby the
 
 7           obligations of a qualified person under a project
 
 8           agreement shall be unconditionally guaranteed or
 
 9           insured by, or the performance thereof assigned to, or
 
10           guaranteed or insured by, a person or persons other
 
11           than the qualified person; and to [grant options or
 
12           renew any project agreement entered into by it in
 
13           connection with any project or industrial park, on
 
14           terms and conditions as it deems advisable;] extend or
 
15           renew any project agreement or any other agreement
 
16           related thereto; provided that any such renewal or
 
17           extension shall be subject to the approval of the
 
18           governor unless made in accordance with provisions for
 
19           the extension or renewal contained in a project
 
20           agreement or related agreement theretofore approved by
 
21           the governor;
 
22      (4)  To make and alter bylaws for its organization and
 
23           internal management;
 

 
Page 23                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (5)  To adopt rules under chapter 91 necessary to effectuate
 
 2           this chapter in connection with industrial parks,
 
 3           projects, multi-project programs, and the operations,
 
 4           properties, and facilities of the development
 
 5           corporation;
 
 6      (6)  Through its chief executive officer, to appoint
 
 7           officers, agents, and employees, prescribe their duties
 
 8           and qualifications, and fix their salaries, without
 
 9           regard to chapters 76 and 77;
 
10      (7)  To prepare or cause to be prepared development plans
 
11           for industrial parks;
 
12      (8)  To acquire, own, lease, hold, clear, improve, and
 
13           rehabilitate real, personal, or mixed property and to
 
14           assign, exchange, transfer, convey, lease, sublease, or
 
15           encumber any project, including by way of easements;
 
16      (9)  To [construct, reconstruct, rehabilitate, improve,
 
17           alter, or repair,] acquire, construct, improve,
 
18           install, equip, or develop or provide for the
 
19           [construction, reconstruction, rehabilitation,
 
20           improvement, alteration, or repair] acquisition,
 
21           construction, improvement, installation, equipping, or
 
22           development of any project and to designate a qualified
 
23           person as its agent for such purpose, and to own, hold,
 

 
Page 24                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           assign, transfer, convey, exchange, lease, sublease, or
 
 2           encumber any project;
 
 3     (10)  To arrange or initiate appropriate action for the
 
 4           planning, replanning, opening, grading, or closing of
 
 5           streets, roads, roadways, alleys, easements, or other
 
 6           places, the furnishing of improvements, the acquisition
 
 7           of property or property rights, or the furnishing of
 
 8           property or services in connection with an industrial
 
 9           park[;] or project;
 
10     (11)  To prepare or cause to be prepared plans,
 
11           specifications, designs, and estimates of cost for the
 
12           acquisition, construction, reconstruction,
 
13           [rehabilitation,] improvement, [alteration, or repair]
 
14           installation, equipping, development, or maintenance of
 
15           any project or industrial park, and from time to time
 
16           to modify [such] the plans, specifications, designs, or
 
17           estimates;
 
18     (12)  To engage the services of consultants on a contractual
 
19           basis for rendering professional and technical
 
20           assistance and advice;
 
21     (13)  To procure insurance against any loss in connection
 
22           with its property and other assets and operations in
 

 
 
 
Page 25                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           [such] amounts and from [such] insurers as it deems
 
 2           desirable;
 
 3     (14)  To accept and expend gifts or grants in any form from
 
 4           any public agency or from any other source;
 
 5     (15)  To issue special purpose revenue bonds and refunding
 
 6           special purpose revenue bonds pursuant to and in
 
 7           accordance with this chapter in [such] principal
 
 8           amounts as may be authorized from time to time by law
 
 9           to finance or refinance the cost of a project, singly
 
10           or as part of a multi-project program, or an industrial
 
11           park as authorized by law and to provide for the
 
12           security thereof as permitted by this chapter;
 
13     (16)  To lend or otherwise apply the proceeds of the bonds
 
14           issued for a project or an industrial park either
 
15           directly or through a trustee [or] to a qualified
 
16           person for use and application by the qualified person
 
17           in the acquisition, construction, improvement,
 
18           installation, [or modification] equipping, or
 
19           development of a project or industrial park, or agree
 
20           with the qualified person whereby any of these
 
21           activities shall be undertaken or supervised by that
 
22           qualified person or by a person designated by the
 
23           qualified person;
 

 
Page 26                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1     (17)  As security for the payment of the principal of,
 
 2           premium, if any, and interest of the special purpose
 
 3           revenue bonds issued for a project to: 
 
 4                (A)  Pledge, assign, hypothecate, or otherwise
 
 5                     encumber all or any part of the revenues and
 
 6                     receipts derived or to be derived by the
 
 7                     development corporation under the project
 
 8                     agreement for the project for which the bonds
 
 9                     are issued; 
 
10                (B)  Pledge and assign the interest and rights of
 
11                     the development corporation under the project
 
12                     agreement or other agreement with respect to
 
13                     the project or the special purpose revenue
 
14                     bonds;
 
15                (C)  Pledge and assign any bond, debenture, note,
 
16                     or other evidence of indebtedness received by
 
17                     the development corporation with respect to
 
18                     the project; or 
 
19                (D)  Any combination of the foregoing;
 
20    [(17)] (18)  With or without terminating a project agreement,
 
21           to exercise any and all rights provided by law for
 
22           entry and re-entry upon or take possession of a project
 
23           at any time or from time to time upon breach or default
 

 
Page 27                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           by a qualified person under a project agreement,
 
 2           including any action at law or in equity for the
 
 3           purpose of effecting its rights of entry or re-entry or
 
 4           obtaining possession of the project or for the payments
 
 5           of rentals, user taxes, or charges, or any other sum
 
 6           due and payable by the qualified person to the
 
 7           development corporation pursuant to the project
 
 8           agreement;
 
 9    [(18)] (19)  To enter into arrangements with qualified county
 
10           development entities whereby the board would provide
 
11           financial support to qualified projects proposed;
 
12    [(19)] (20)  To create an environment in which to support high
 
13           technology economic development, including but not
 
14           limited to: [supporting] 
 
15                (A)  Supporting all aspects of technology-based
 
16                     economic development; [developing]
 
17                (B)  Developing instructive programs, identifying
 
18                     issues and impediments to the growth of high
 
19                     technology industry in Hawaii; and
 
20                     [providing]
 
21                (C)  Providing policy analysis and information
 
22                     important to the development of high
 
23                     technology industries in Hawaii;
 

 
Page 28                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1    [(20)] (21)  To develop programs that support start-up and
 
 2           existing high technology companies in Hawaii and to
 
 3           attract new companies to relocate to or establish
 
 4           operations in Hawaii by assessing the needs of these
 
 5           companies and providing the physical and technical
 
 6           infrastructure to support their operations;
 
 7    [(21)] (22)  To coordinate its efforts with other public and
 
 8           private agencies involved in stimulating technology-
 
 9           based economic development in Hawaii, including but not
 
10           limited to: [the] 
 
11                (A)  The department of business, economic
 
12                     development, and tourism; [the]
 
13                (B)  The Pacific international center for high
 
14                     technology research; and [the]
 
15                (C)  The office of technology transfer and
 
16                     economic development of the University of
 
17                     Hawaii;
 
18    [(22)] (23)  To promote and market Hawaii as a site for
 
19           commercial high technology activity;
 
20    [(23)] (24)  To provide advice on policy and planning for
 
21           technology-based economic development; and
 

 
 
 
 
 
Page 29                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1    [(24)] (25)  To do any and all things necessary or [proper]
 
 2           convenient to carry out [the] its purposes [of] and
 
 3           exercise the powers given and granted in this chapter."
 
 4      SECTION 8. Section 206M-4, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "[[]206M-4[]]  Compliance with state and local law.  The
 
 7 issuance of special purpose revenue bonds with respect to any
 
 8 project or industrial park under this chapter shall not relieve
 
 9 any qualified person or other user of [such] the project or
 
10 industrial park from the laws, ordinances, and rules of the State
 
11 or any political subdivision thereof, or any department or board
 
12 thereof with respect to the construction, operation, and
 
13 maintenance of any project or industrial park, or zoning laws or
 
14 regulations, obtaining of building permits, compliance with
 
15 building and health codes and other laws, ordinances, or rules
 
16 and regulations of similar nature pertaining to the project or
 
17 industrial park, and [such] the laws shall be applicable to
 
18 [such] the qualified person or [such] the other user to the same
 
19 extent they would be if the costs of the project or industrial
 
20 park were directly financed by the qualified person."
 
21      SECTION 9.  Section 206M-5, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
 
 
Page 30                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "206M-5  Development rules.  Whenever the proceeds of
 
 2 special purpose revenue bonds are used to finance the cost of [a
 
 3 project,] an industrial park, the board shall adopt rules under
 
 4 chapter 91 to be followed during the course of the development of
 
 5 any industrial park, which are to be known as development rules
 
 6 in connection with health, safety, building, planning, zoning,
 
 7 and land use.  The rules, upon final adoption of a development
 
 8 plan for an industrial park, shall supersede all other
 
 9 inconsistent ordinances and rules relating to the use, zoning,
 
10 planning, and development of land and construction thereon within
 
11 the industrial park.  Rules adopted under this section shall
 
12 follow existing law, rules, ordinances, and regulations as
 
13 closely as is consistent with standards meeting minimum
 
14 requirements of good design, pleasant amenities, health, safety,
 
15 and coordinated development.  The corporation shall establish
 
16 policies and procedures for monitoring and ensuring that the
 
17 operation of the industrial park complies with these development
 
18 rules and may establish fines and penalties or take any other
 
19 means available under the law to eliminate any noncomplying
 
20 action."
 
21      SECTION 10.  Section 206M-6, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
 
 
Page 31                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      "[[]206M-6[]] Use of public lands.  The governor may set
 
 2 aside available public lands to the development corporation for
 
 3 the purposes specified in this chapter; provided that [such] the
 
 4 setting aside would not impair any covenant between the State or
 
 5 any department or board thereof and holders of [revenue] any
 
 6 bonds issued by the State or such department or board thereof.
 
 7 The development corporation also may lease available state lands
 
 8 from the department of land and natural resources."
 
 9      SECTION 11.  Section 206M-7, Hawaii Revised Statutes, is
 
10 amended by amending subsection (b) to read as follows:
 
11      "(b)  The development corporation shall not enter into any
 
12 project agreement with respect to any project or industrial park
 
13 unless the legislature shall have first authorized the issuance
 
14 of special purpose revenue bonds to finance [such project or
 
15 industrial park] a project or projects, an industrial park or
 
16 industrial parks, or a multi-project program pursuant to section
 
17 206M-9, and the development corporation has thereafter found and
 
18 determined either that:
 
19      (1)  The qualified person is a responsible party, whether by
 
20           reason of economic assets or experience in the type of
 
21           enterprise to be undertaken through [such] the project,
 
22           or otherwise; or
 

 
 
 
Page 32                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  The obligations of the qualified person under the
 
 2           project agreement will be unconditionally guaranteed by
 
 3           a person who is a responsible party, whether by reason
 
 4           of economic assets or experience in the type of
 
 5           enterprise to be undertaken through [such] the project
 
 6           or otherwise."
 
 7      SECTION 12. Section 206M-8, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]206M-8[]] Project agreement. (a)  No special purpose
 
10 revenue bonds shall be issued unless at the time of issuance the
 
11 development corporation shall have entered into a project
 
12 agreement with respect to the project or industrial park for the
 
13 financing of which [such] the special purpose revenue bonds are
 
14 to be issued.  Any project agreement entered into by the
 
15 development corporation with a qualified person shall contain
 
16 provisions unconditionally obligating [such] the qualified person
 
17 [to]:
 
18      (1)  To pay the development corporation during the period or
 
19           term of the project agreement, exclusive of any renewal
 
20           or extension thereof and whether or not the project or
 
21           industrial park to which [such] the project agreement
 
22           relates is used or occupied by the qualified person, at
 

 
 
 
Page 33                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           [such] the time or times and in [such] the amount or
 
 2           amounts that will be at least sufficient:
 
 3     [(1)] (A)  To pay the principal of, and premium, if any, and
 
 4           interest on all special purpose revenue bonds issued to
 
 5           finance the cost of the project, or an allocable
 
 6           portion of the special purpose revenue bonds issued to
 
 7           finance the industrial park, as the case may be, as and
 
 8           when the special purpose revenue bonds become due,
 
 9           including upon any required redemption thereof;
 
10     [(2)] (B)  To establish or maintain [such] the reserves, if
 
11           any, as may be required by the instrument authorizing
 
12           or securing the special purpose revenue bonds, or an
 
13           allocable portion of [such] the reserves, if less than
 
14           all of the proceeds of the special purpose revenue
 
15           bonds are utilized for [such] the qualified person;
 
16     [(3)] (C)  To pay the fees and expenses of the paying agents
 
17           and trustees for the special purpose revenue bonds, or
 
18           an allocable portion of [such] the fees and expenses,
 
19           if less than all of the proceeds of the special purpose
 
20           revenue bonds are utilized for [such] the qualified
 
21           person; and
 
22     [(4)] (D)  To pay the expenses incurred by the development
 
23           corporation in administering the special purpose
 

 
Page 34                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           revenue bonds or in carrying out the project agreement,
 
 2           or an allocable portion of [such] the expenses, if less
 
 3           than all of the proceeds of [such] the special purpose
 
 4           revenue bonds are utilized for [such] the qualified
 
 5           person[.]; and
 
 6     (2)   To operate, maintain, and repair the project as long as
 
 7           the project is used as provided in the project
 
 8           agreement and to pay all costs of the operation,
 
 9           maintenance, and repair.
 
10      (b)  The development corporation in determining the cost of
 
11 any project, may also include the following:
 
12      (1)  Financing charges, fees, and expenses of any trustee
 
13           and paying agents or special purpose revenue bonds
 
14           issued to pay the cost of the project;
 
15      (2)  Interest on the bonds and the expenses of the State in
 
16           connection with the bonds and the project to be
 
17           financed from the proceeds of the bonds accruing or
 
18           incurred prior to and during the estimated period of
 
19           construction and for not exceeding twelve months
 
20           thereafter;
 
21      (3)  Amounts necessary to establish or increase reserves for
 
22           the special purpose revenue bonds;
 

 
 
 
Page 35                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (4)  The cost of plans, specifications, studies, surveys,
 
 2           and estimates of costs and of revenues;
 
 3      (5)  Other expenses incidental to determining the
 
 4           feasibility or practicability of the project;
 
 5      (6)  Administration expenses;
 
 6      (7)  Legal, accounting, consulting, and other special
 
 7           service fees;
 
 8      (8)  Interest cost incurred by the project party with
 
 9           respect to the project prior to the issuance of the
 
10           special purpose revenue bonds; and
 
11      (9)  Other costs, commissions, and expenses incidental to
 
12           the acquisition, construction, improvement,
 
13           installation, equipping, or development of the project,
 
14           the financing, placing of same in operation, and the
 
15           issuance of the special purpose revenue bonds, whether
 
16           incurred prior to or after the issuance of the bonds.
 
17      [(b)](c)  Any project agreement entered into by the
 
18 development corporation may contain [such] provisions as the
 
19 development corporation deems necessary or desirable to obtain or
 
20 permit the participation of the state and federal government in
 
21 the project or industrial park or in the financing of the cost
 
22 thereof.
 

 
 
 
Page 36                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      [(c)](d)  A project agreement also shall provide that the
 
 2 development corporation shall have all rights and remedies
 
 3 generally available at law or in equity to re-enter and take
 
 4 possession of a project upon the breach or default by a qualified
 
 5 person of any term, condition, or provision of a project
 
 6 agreement.
 
 7      (e)  Each qualified person with a project agreement with the
 
 8 development corporation shall allow the development corporation
 
 9 full access to the qualified person's financial records.  Upon
 
10 the request of the development corporation for the examination of
 
11 any financial records, the qualified person shall allow the
 
12 development corporation to examine the requested records within a
 
13 reasonably prompt time from the date of the request.  If the
 
14 development corporation requests copies of the records, the
 
15 qualified person shall provide the copies.
 
16      (f)  To provide the public with full knowledge of the use of
 
17 the proceeds and benefits derived from special purpose revenue
 
18 bonds issued under this chapter, the development corporation
 
19 shall require each qualified person with a project agreement with
 
20 the development corporation to make available to the public all
 
21 relevant financial records that pertain to the use of or savings
 
22 resulting from the use of special purpose revenue bonds.
 

 
 
 
Page 37                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (g)  Each qualified person with a project agreement with the
 
 2 development corporation shall estimate the benefits derived from
 
 3 the use of the proceeds of special purpose revenue bonds.  The
 
 4 benefits estimated shall be based on the creation of new jobs and
 
 5 potential effect on tax receipts.  The format of and method for
 
 6 determining the estimates shall be established by the development
 
 7 corporation and shall be uniform for each qualified person.
 
 8      (h)  To promote public understanding of the role played by
 
 9 special purpose revenue bonds in providing benefits to the
 
10 general public, the development corporation shall take
 
11 appropriate steps to ensure public access to and scrutiny of the
 
12 estimates determined under subsection (g).
 
13      (i)  The development corporation shall adopt rules under
 
14 chapter 91 for the purposes of this section.
 
15      (j) Moneys received by the development corporation pursuant
 
16 to subsection [(a)(4)] (a)(1)(D) shall not be, nor be deemed to
 
17 be, revenues or receipts derived under the project agreement
 
18 which may be pledged as security for special purpose revenue
 
19 bonds and shall be paid [to the development corporation free and
 
20 clear of any lien.] into the high technology special fund.
 
21      A qualified person may comply with the unconditional
 
22 obligation to make payments required by subsection (a), if [such]
 
23 the obligations are unconditionally guaranteed or insured by, or
 

 
Page 38                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 the performance thereof assigned to, or guaranteed or insured by,
 
 2 a person or persons other than the qualified person [which] who
 
 3 is satisfactory to the development corporation.
 
 4      SECTION 13.  Section 206M-9, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "[[]206M-9[] Bonds;] Issuance of special purpose revenue
 
 7 bonds; bond anticipation notes[.]; refunding bonds.  (a) In
 
 8 addition to the other powers that it may have, the development
 
 9 corporation may issue special purpose revenue bonds to finance,
 
10 in whole or in part, the costs of projects of, for, or to loan
 
11 the proceeds of the bonds to assist qualified persons.  All
 
12 revenue bonds issued under this chapter are special purpose
 
13 revenue bonds and part III of chapter 39 shall not apply thereto.
 
14 All special purpose revenue bonds shall be issued in the name of
 
15 the development corporation and not in the name of the State.
 
16      The legislature finds and determines that the exercise of
 
17 the powers vested in the development corporation by this chapter
 
18 constitutes assistance to a high technology industrial,
 
19 manufacturing, or processing enterprise and that the issuance of
 
20 special purpose revenue bonds to finance facilities of, for, or
 
21 to loan the proceeds of the bonds to assist qualified persons, is
 
22 in the public interest.
 

 
 
 
Page 39                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      [(a)](b)  The development corporation, with the approval of
 
 2 the governor, may issue special purpose revenue bonds for each
 
 3 single project or industrial park or multi-project program
 
 4 [which] that has been authorized by the legislature by an
 
 5 affirmative vote of two-thirds of the members to which each house
 
 6 is entitled; provided that the legislature shall find that the
 
 7 issuance of [such] the special purpose revenue bonds is in the
 
 8 public interest.  [Bonds] Special purpose revenue bonds shall be
 
 9 issued in [such] principal amounts as may be authorized from time
 
10 to time by law and at [such] the time or times as the development
 
11 corporation deems necessary and advisable to finance the cost of
 
12 a project [or], industrial park, or multi-project program as
 
13 authorized by law.  With respect to the financing of a multi-
 
14 project program with the proceeds of special purpose revenue
 
15 bonds, the legislature may authorize the issuance from time to
 
16 time in one or more series by the development corporation, in
 
17 each case with the approval of the governor, of special purpose
 
18 revenue bonds in the aggregate principal amount and during the
 
19 period as the legislature shall provide.  The principal of,
 
20 premium, if any, and interest on [such] the special purpose
 
21 revenue bonds shall be payable:
 
22      (1)  Exclusively from the revenues and receipts derived or
 
23           to be derived by the development corporation under
 

 
Page 40                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           project agreements or from [such] the revenues and
 
 2           receipts together with any grant from the government in
 
 3           aid of the project or industrial park financed from the
 
 4           proceeds of [such] the bonds;
 
 5      (2)  Exclusively from the revenues and receipts derived or
 
 6           to be derived by the development corporation from a
 
 7           particular project agreement, whether or not the
 
 8           project or industrial park to which it relates is
 
 9           financed in whole or in part with the proceeds of the
 
10           special purpose revenue bonds; or
 
11      (3)  From revenues and receipts derived or to be derived by
 
12           the development corporation generally.
 
13      Neither the board members nor any person executing the
 
14 special purpose revenue bonds shall be liable personally on the
 
15 bonds by reason of the issuance thereof.
 
16      All special purpose revenue bonds of the same issue (or, in
 
17 the case of an authorized issue for a multi-project program,
 
18 series), subject to the prior and superior rights of outstanding
 
19 bonds, claims, obligations, or mechanic's and materialman's
 
20 liens, shall have a prior and paramount lien on the revenues
 
21 derived from the project agreement with respect to the project
 
22 for which the bonds have been issued, over and ahead of all
 
23 special purpose revenue bonds of the issue (or series) payable
 

 
Page 41                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 from the revenues which may be subsequently issued and over and
 
 2 ahead of any claims or obligations of any nature against the
 
 3 revenues subsequently arising or subsequently incurred; provided
 
 4 that the development corporation may reserve the right and
 
 5 privilege to subsequently issue additional series of special
 
 6 purpose revenue bonds, from time to time, payable from the
 
 7 revenues derived from the project agreement on a parity with the
 
 8 issue or series of special purpose revenue bonds theretofore
 
 9 issued, and the subsequently issued series of special purpose
 
10 revenue bonds may be secured, without priority by reason of date
 
11 of sale, date of execution, or date of delivery, by a lien on the
 
12 revenues in accordance with law, including this chapter.
 
13      [(b) Bonds] (c)  Special purpose revenue bonds issued
 
14 pursuant to this chapter may be in one or more issues and in one
 
15 or more series within an issue and shall be further authorized
 
16 pursuant to resolution of the board.  The special purpose revenue
 
17 bonds shall be dated, shall bear interest at [such] the rate or
 
18 rates, shall mature at [such] the time or times not exceeding
 
19 forty years from their date or dates, shall have [such] the rank
 
20 or priority, and may be made redeemable before maturity at the
 
21 option of the development corporation, at [such] the price or
 
22 prices and under [such] the terms and conditions, all as may be
 
23 determined by the development corporation.  
 

 
Page 42                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      The development corporation shall determine the form of the
 
 2 special purpose revenue bonds, including interest coupons, if
 
 3 any, to be attached thereto, and the manner of execution of the
 
 4 special purpose revenue bonds, and shall fix the denomination or
 
 5 denominations of the special purpose revenue bonds and, subject
 
 6 to the approval of the [state] director of finance, the place or
 
 7 places of payment of principal and interest, which may be at any
 
 8 bank or trust company approved by the [state] director of finance
 
 9 within or without the State.
 
10      The special purpose revenue bonds may be issued in coupon or
 
11 in registered form, or both, as the development corporation may
 
12 determine, and provisions may be made for the registration of
 
13 coupon bonds as to principal alone and also as to both principal
 
14 and interest, and for the reconversion into coupon bonds of
 
15 special purpose revenue bonds registered as to both principal and
 
16 interest.  Subject to the approval of the [state] director of
 
17 finance, the development corporation may sell special purpose
 
18 revenue bonds in such manner, either at public or private sale,
 
19 and for such price as it may determine.
 
20      [(c)](d)  Prior to the preparation of definitive special
 
21 purpose revenue bonds, the development corporation may issue
 
22 interim receipts or temporary bonds, with or without coupons,
 

 
 
 
Page 43                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 exchangeable for definitive bonds when [such] the bonds have been
 
 2 executed and are available for delivery.
 
 3      [(d)](e)  Should any special purpose revenue bond issued
 
 4 under this chapter or any coupon appertaining thereto become
 
 5 mutilated, lost, stolen, or destroyed, the development
 
 6 corporation may cause a new bond or coupon of like date, number,
 
 7 and tenor to be executed and delivered in exchange and
 
 8 substitution for, and upon the cancellation of [such] the
 
 9 mutilated bond or coupon, or in lieu of and in substitution for
 
10 [such] the lost, stolen, or destroyed bond or coupon.  [Such] The
 
11 new bond or coupon shall not be executed or delivered until the
 
12 holder of the mutilated, lost, stolen, or destroyed bond or
 
13 coupon:
 
14      (1)  [has] Has paid the reasonable expenses and charges in
 
15           connection therewith[,];
 
16      (2)  [in] In the case of a lost, stolen, or destroyed bond
 
17           or coupon, has filed with the development corporation
 
18           or its fiduciary evidence satisfactory to the
 
19           development corporation or its fiduciary that [such]
 
20           the bond or coupon was lost, stolen, or destroyed and
 
21           that the holder was the owner thereof[,]; and
 
22      (3)  [has] Has furnished indemnity satisfactory to the
 
23           development corporation.
 

 
Page 44                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      [(e)](f)  The development corporation in its discretion may
 
 2 provide that CUSIP identification numbers shall be printed on
 
 3 [such] the special purpose revenue bonds.  If [such] the numbers
 
 4 are imprinted on [such] the bonds:
 
 5      (1)  [no] No such number shall constitute a part of the
 
 6           contract evidenced by the particular bond upon which it
 
 7           is imprinted[,]; and
 
 8      (2)  [no] No liability shall attach to the development
 
 9           corporation or any officer or agent thereof, including
 
10           any fiscal agent, paying agent, or registrar for [such]
 
11           the bonds by reason of [such] the numbers or any use
 
12           made thereof, including any use thereof made by the
 
13           development corporation, any such officer, or any such
 
14           agent, or by reason of any inaccuracy, error, or
 
15           omission with respect thereto or in such use.  The
 
16           development corporation in its discretion may require
 
17           that all costs of obtaining and imprinting [such] the
 
18           numbers shall be paid by the purchaser of [such] the
 
19           bonds.  For the purposes of this subsection, the term
 
20           "CUSIP identification numbers" means the numbering
 
21           system adopted by the Committee for Uniform Security
 
22           Identification Procedures formed by the Securities
 
23           Industry Association.
 

 
Page 45                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      [(f)](g)  Whenever the development corporation has
 
 2 authorized the issuance of special purpose revenue bonds under
 
 3 this chapter, special purpose revenue bond anticipation notes of
 
 4 the development corporation may be issued in anticipation of the
 
 5 issuance of [such] the bonds and of the receipt of the proceeds
 
 6 of sale thereof, for the purposes for which [such] the bonds have
 
 7 been authorized.  All special purpose revenue bond anticipation
 
 8 notes shall be authorized by the development corporation, and the
 
 9 maximum principal amount of [such] the notes shall not exceed the
 
10 authorized principal amount of [such] the bonds.  The notes shall
 
11 be payable solely from and secured solely by the proceeds of sale
 
12 of the special purpose revenue bonds in anticipation of which the
 
13 notes are issued and the moneys, rates, charges, and other
 
14 revenues from which would be payable and by which would be
 
15 secured [such] the bonds; provided that to the extent that the
 
16 principal of the notes shall be paid from moneys other than the
 
17 proceeds of sale of [such] the bonds, the maximum amount of bonds
 
18 that has been authorized in anticipation of which the notes are
 
19 issued shall be reduced by the amount of notes paid in [such]
 
20 this manner.  The authorization, issuance, and the details of
 
21 [such] the notes shall be governed by this chapter with respect
 
22 to special purpose revenue bonds insofar as the same may be
 
23 applicable; provided that each note, together with all renewals
 

 
Page 46                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 and extensions thereof, or refundings thereof by other notes
 
 2 issued under this subsection, shall mature within five years from
 
 3 the date of the original note.
 
 4      [(g)  In order to] (h)  To secure the payment of any of the
 
 5 special purpose revenue bonds issued pursuant to this chapter,
 
 6 and interest thereon, or in connection with [such] the bonds, the
 
 7 development corporation shall have the power as to [such] the
 
 8 bonds:
 
 9      (1)  To pledge all or any part of the revenues and receipts
 
10           derived or to be derived by the development corporation
 
11           as provided in this chapter to the punctual payment of
 
12           special purpose revenue bonds issued with respect to
 
13           the project or industrial park financed from the
 
14           proceeds thereof, and interest thereon, and to covenant
 
15           against thereafter pledging any such revenues and
 
16           receipts to any other bonds or any other obligations of
 
17           the development corporation for any other purpose,
 
18           except as otherwise stated in the proceedings providing
 
19           for the issuance of special purpose revenue bonds
 
20           permitting the issuance of additional special purpose
 
21           revenue bonds to be equally and ratably secured by a
 
22           lien upon such [moneys, rates, charges, and other]
 
23           revenues[.] and receipts;
 

 
Page 47                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  To pledge and assign the interest and right of the
 
 2           development corporation under any project agreement and
 
 3           other agreements related to a project or industrial
 
 4           park, and the rights, duties, and obligations of the
 
 5           development corporation thereunder, including the right
 
 6           to receive revenues and receipts thereunder[.];
 
 7      (3)  To pledge or assign all or any part of the proceeds
 
 8           derived by the development corporation from proceeds of
 
 9           insurance or condemnation awards[.];
 
10      (4)  To covenant as to the use and disposition of the
 
11           proceeds from the sale of [such] the special purpose
 
12           revenue bonds[.];
 
13      (5)  To covenant to set aside or pay over reserves and
 
14           sinking funds for [such] the special purpose revenue
 
15           bonds and as to the disposition thereof[.];
 
16      (6)  To covenant and prescribe as to what happenings or
 
17           occurrences shall constitute "events of default", the
 
18           terms and conditions upon which any or all of [such]
 
19           the bonds shall become or may be declared due before
 
20           maturity, and as to the terms and conditions upon which
 
21           [such] the declaration and its consequences may be
 
22           waived[.];
 

 
 
 
Page 48                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (7)  To covenant as to the rights, liabilities, powers, and
 
 2           duties arising upon the breach by [it] the development
 
 3           corporation of any covenant, condition, or
 
 4           obligation[.];
 
 5      (8)  Subject to the approval of the [state] director of
 
 6           finance, to designate a national or state bank or trust
 
 7           company within or without the State, incorporated in
 
 8           the United States, to serve as trustee for the holders
 
 9           of the special purpose revenue bonds and to enter into
 
10           a trust indenture, trust agreement, or indenture of
 
11           mortgage with [such] the trustee.  The trustee may be
 
12           authorized by the development corporation to receive
 
13           and receipt for, hold, and administer the proceeds of
 
14           [such] the special purpose revenue bonds and to apply
 
15           the proceeds to the purposes for which [such] the
 
16           special purpose revenue bonds are issued, or to receive
 
17           and receipt for, hold, and administer the revenues and
 
18           receipts derived or to be derived by the development
 
19           corporation under a project agreement or other
 
20           agreement related to a project or industrial park, and
 
21           to apply such revenues and receipts to the payment of
 
22           the principal of and interest on [such] the special
 
23           purpose revenue bonds, or both, and any excess revenues
 

 
Page 49                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           and receipts to the payment of expenses incurred by the
 
 2           development corporation in administering [such] the
 
 3           special purpose revenue bonds or in carrying out [such]
 
 4           the project agreement or other agreement.  If the
 
 5           trustee shall be appointed, any trust indenture, trust
 
 6           agreement, or indenture of mortgage entered into by the
 
 7           development corporation with the trustee may contain
 
 8           whatever covenants and provisions as may be necessary,
 
 9           convenient, or desirable in order to secure [such] the
 
10           special purpose revenue bonds.  The development
 
11           corporation may pledge and assign to the trustee the
 
12           interest of the development corporation under a project
 
13           agreement and other agreements related thereto and the
 
14           rights, duties, and obligations of the development
 
15           corporation thereunder, including the right to receive
 
16           revenues and receipts thereunder.  The development
 
17           corporation may appoint the trustee to serve as fiscal
 
18           agent for the payment of the principal and interest,
 
19           and for the purchase, registration, transfer, exchange,
 
20           and redemption of the special purpose revenue bonds,
 
21           and may authorize and empower the trustee to perform
 
22           [such] the functions with respect to [such] the
 
23           payment, purchase, registration, transfer, exchange,
 

 
Page 50                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           and redemption, as the development corporation may deem
 
 2           necessary, advisable, or expedient, including, without
 
 3           limitation, the holding of the special purpose revenue
 
 4           bonds and coupons [which] that have been paid and the
 
 5           supervision of the destruction thereof in accordance
 
 6           with law[.];
 
 7      (9)  To execute all instruments necessary or convenient in
 
 8           the exercise of the powers herein granted or in the
 
 9           performance of its covenants and duties[.];
 
10     (10)  To invest or provide for the investment of the proceeds
 
11           of special purpose revenue bonds and revenues and
 
12           receipts derived by the development corporation in
 
13           [such] the securities and in such manner as it deems
 
14           proper[.]; and
 
15     (11)  To make such covenants and do any and all acts and
 
16           things as may be necessary, convenient, or desirable in
 
17           order to secure [such] the special purpose revenue
 
18           bonds, notwithstanding that [such] the covenants, acts,
 
19           or things may not be enumerated in this chapter.
 
20     No holder or holders of special purpose revenue bonds issued
 
21 under this chapter shall ever have the right to compel any
 
22 exercise of the taxing power of the State or any political
 
23 subdivision of the State to pay [such] the special purpose
 

 
Page 51                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 revenue bonds or the interest thereon and no moneys other than
 
 2 the revenues pledged to [such] the special purpose revenue bonds
 
 3 shall be applied to the payment thereof.
 
 4     [(h)  Bonds] (i)  Special purpose revenue bonds bearing the
 
 5 signature or facsimile signature of officers in office on the
 
 6 date of the signing thereof shall be valid and sufficient for all
 
 7 purposes, notwithstanding that before the delivery thereof and
 
 8 payment therefor any or all of the persons whose signatures
 
 9 appear thereon shall have ceased to be officers of the
 
10 development corporation.  The special purpose revenue bonds shall
 
11 contain a recital that they are issued pursuant to this chapter
 
12 which recital shall be conclusive evidence of their validity and
 
13 of the regularity of their issuance.
 
14     [(i)](j)  Subject to authorization by an act enacted by the
 
15 legislature by an affirmative vote of two-thirds of the members
 
16 to which each house is entitled, the development corporation may
 
17 issue special purpose revenue bonds for the purpose of refunding
 
18 special purpose revenue bonds then outstanding and issued under
 
19 this chapter whether or not [such] the outstanding special
 
20 purpose revenue bonds have matured or are then subject to
 
21 redemption.  The development corporation may issue special
 
22 purpose revenue bonds for the combined purposes of:
 

 
 
 
Page 52                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (1)  [financing] Financing or refinancing the cost of a
 
 2           project or industrial park, or the improvement or
 
 3           expansion thereof[,]; and
 
 4      (2)  [refunding] Refunding special purpose revenue bonds
 
 5           [which] that shall theretofore have been issued under
 
 6           this chapter and then shall be outstanding, whether or
 
 7           not [such] the outstanding bonds have matured or then
 
 8           are subject to redemption.
 
 9      Nothing in this subsection shall require or be deemed to
 
10 require the development corporation to elect to redeem or prepay
 
11 special purpose revenue bonds being refunded, or to redeem or
 
12 prepay special purpose revenue bonds being refunded [which] that
 
13 were issued, in the form customarily known as term bonds in
 
14 accordance with any sinking fund installment schedule specified
 
15 in any proceeding authorizing the issuance thereof, or, if the
 
16 development corporation elects to redeem or prepay any such
 
17 bonds, to redeem or prepay as of any particular date or dates.
 
18 The issuance of [such] the special purpose revenue bonds, the
 
19 maturities and other details thereof, the rights and remedies of
 
20 the holders thereof, and the rights, powers, privileges, duties,
 
21 and obligations of the development corporation with respect to
 
22 the bonds, shall be governed by the foregoing provisions of this
 
23 chapter insofar as the same may be applicable.
 

 
Page 53                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (k)  If special purpose revenue bonds issued pursuant to
 
 2 this chapter are issued bearing interest at a rate or rates which
 
 3 vary from time to time and with a right of holders to tender the
 
 4 bonds for purchase, the development corporation may contract for
 
 5 such support facility or facilities and remarketing arrangements
 
 6 as are required to market the special purpose revenue bonds to
 
 7 the greatest advantage of the development corporation upon such
 
 8 terms and conditions as the development corporation deems
 
 9 necessary and proper.
 
10      The development corporation may enter into contracts or
 
11 agreements with the entity or entities providing a support
 
12 facility; provided that any contract or agreement shall provide,
 
13 in essence, that any amount due and owing by the development
 
14 corporation under the contract or agreement on an annual basis
 
15 shall be payable solely from the revenue and receipts of the
 
16 project agreement and any obligation issued or arising pursuant
 
17 to the terms of the contract or agreement in the form of special
 
18 purpose revenue bonds, notes, or other evidences of indebtedness
 
19 shall only arise at such time as either:
 
20      (1)  Moneys or securities have been irrevocably set aside
 
21           for the full payment of a like principal amount of
 
22           special purpose revenue bonds issued pursuant to this
 
23           chapter; or
 

 
Page 54                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  A like principal amount of the issue or series of
 
 2           special purpose revenue bonds to which the support
 
 3           facility relates are held in escrow by the entity or
 
 4           entities providing the support facility."
 
 5      SECTION 14.  Section 206M-10, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "206M-10  Authorization for loans; loan terms and
 
 8 conditions; loan procedure. (a) Notwithstanding any law to the
 
 9 contrary, the [state] director of finance is authorized, with the
 
10 approval of the governor, to make loans up to the aggregate sum
 
11 of $1,000,000, or so much thereof as may be necessary, to the
 
12 development corporation.  The loans shall be made from the state
 
13 general fund moneys which are in excess of the amounts necessary
 
14 for immediate state requirements, and shall be used for the
 
15 purpose of paying administrative and other costs associated with
 
16 the development of industrial parks and other projects and
 
17 activities that encourage the growth of the high technology
 
18 industry in Hawaii.
 
19      (b)  The development corporation, to the extent moneys
 
20 become available from bond proceeds or otherwise, shall repay the
 
21 general fund the principal amount of any loan made by the [state]
 
22 director of finance.  No interest shall be required for any such
 
23 loan.
 

 
Page 55                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (c)  Loans authorized by this section shall be drawn upon by
 
 2 the development corporation from time to time upon at least five
 
 3 days notice to the [state] director of finance and upon the
 
 4 filing with the [state] director of finance of a certificate of
 
 5 the chairperson of the board setting forth the amount being
 
 6 borrowed, the names of the persons, firms, or corporations to
 
 7 which moneys will be paid from the proceeds of such borrowing and
 
 8 the amount to be paid to each.  In addition, the chairperson of
 
 9 the board shall file with the [state] director of finance a copy
 
10 of the resolution or resolutions of the board approving contracts
 
11 for services which will be paid from the proceeds of the
 
12 borrowing." 
 
13      SECTION 15.  Section 206M-11, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]206M-11[] Bonds]  Special purpose revenue bonds not a
 
16 general or moral obligation of State.  No holder or holders of
 
17 special purpose revenue bonds issued under this chapter shall
 
18 ever have the right to compel any exercise of the taxing power of
 
19 the State to pay [such] the bonds or the interest thereon and no
 
20 moneys other than the revenues pledged to [such] the bonds shall
 
21 be applied to the payment thereof.  Each special purpose revenue
 
22 bond issued under this chapter shall recite in substance that
 
23 [such] the bond, including interest thereon, is not a general or
 

 
Page 56                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 moral obligation of the State and is payable solely from the
 
 2 revenues pledged to the payment thereof, and that [such] the bond
 
 3 is not secured, directly or indirectly, by the full faith and
 
 4 credit or the general credit of the State or by revenues or taxes
 
 5 of the State other than the revenues specifically pledged
 
 6 thereto."
 
 7      SECTION 16. Section 206M-12, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]206M-12[] Bonds]  Special purpose revenue bonds exempt
 
10 from taxation. [Bonds] Special purpose revenue bonds and the
 
11 income therefrom issued pursuant to this chapter shall be exempt
 
12 from all state taxation, except inheritance, transfer, and estate
 
13 taxes."
 
14      SECTION 17.  Section 206M-13, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "[[]206M-13[] Bonds]  Special purpose revenue bonds as
 
17 legal investments and lawful security.  [Bonds] The special
 
18 purpose revenue bonds issued pursuant to this chapter shall be
 
19 and are declared to be legal and authorized investments for
 
20 banks, savings banks, trust companies, savings and loan
 
21 associations, insurance companies, credit unions, fiduciaries,
 
22 trustees, guardians, and for all public funds of the State or
 
23 other political corporations or subdivisions of the State.
 

 
Page 57                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 [Such] The special purpose revenue bonds shall be eligible to
 
 2 secure the deposit of any and all public funds of the State [or]
 
 3 and any and all public funds of counties or other political
 
 4 corporations or subdivisions of the State, and [such] the bonds
 
 5 shall be lawful and sufficient security for [such] the deposits
 
 6 to the extent of their value when accompanied by all unmatured
 
 7 coupons, if any, appertaining thereto."
 
 8      SECTION 18.  Section 206M-14, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "[[]206M-14[]]  Status of special purpose revenue bonds
 
11 under the Uniform Commercial Code.  Notwithstanding any of the
 
12 provisions of this chapter or any recital in any special purpose
 
13 revenue bond issued under this chapter, all such special purpose
 
14 revenue bonds shall be deemed to be investment securities under
 
15 the Uniform Commercial Code, chapter 490, subject only to the
 
16 provisions of the special purpose revenue bonds pertaining to
 
17 registration."
 
18      SECTION 19.  Section 206M-15, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "[[]206M-15[]]  High technology research and development
 
21 loans and grants.  (a) All moneys necessary to carry out the
 
22 purposes of this section shall be allocated by the legislature
 
23 through appropriations out of the state general fund.  The
 

 
Page 58                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 development corporation shall include in its budgetary request
 
 2 for the upcoming fiscal period, the amounts necessary to
 
 3 effectuate the purposes of this section.  All moneys, interest
 
 4 charges, and other fees collected by the development corporation
 
 5 under this section shall be deposited to the credit of the state
 
 6 general fund.  In making any expenditure under this section, the
 
 7 development corporation shall analyze each funding request to
 
 8 determine whether the project to be undertaken will be
 
 9 economically viable and beneficial to the State.
 
10      (b)  The development corporation may provide grants [of up
 
11 to fifty] not exceeding the lesser of:
 
12      (1)  Fifty per cent of the federal [grant up to] small
 
13           business innovation research phase I award or contract;
 
14           or
 
15      (2)  $25,000 to each business in Hawaii that receives a
 
16           federal small business innovation research phase I
 
17           award or contract from any participating federal
 
18           agency,
 
19  subject to the availability of funds.
 
20      (c)  The development corporation shall adopt rules pursuant
 
21 to chapter 91 that:
 
22      (1)  Specify the qualifications for eligibility of grant
 
23           applicants;
 

 
Page 59                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  Establish priorities in determining eligibility in the
 
 2           event that insufficient funds are available to fund
 
 3           otherwise qualified applicants; and
 
 4      (3)  Give preference to all qualified businesses receiving
 
 5           their first award in one fiscal year over multiple
 
 6           award grantees.
 
 7 The development corporation may adopt any other rules pursuant to
 
 8 chapter 91 necessary for the purposes of this section.
 
 9      (d)  If funds appropriated for the purpose of making grants
 
10 under this section are inadequate to satisfy all qualified
 
11 requests, the development corporation shall apply for funds to be
 
12 transferred from the Hawaii capital loan revolving fund to
 
13 provide the grants in accordance with subsection (b).  The amount
 
14 of any single transfer of funds shall not exceed $100,000, and
 
15 the development corporation shall transfer the entire amount back
 
16 to the Hawaii capital loan revolving fund within twelve months of
 
17 receiving the funds.  No more than one fund transfer shall be
 
18 outstanding at any one time.  The director of business, economic
 
19 development, and tourism may transfer funds from the Hawaii
 
20 capital loan revolving fund to the [high technology research and]
 
21 development corporation upon request to carry out the purposes of
 
22 this section.  Transfers of funds shall be made without any
 
23 charges or fees."
 

 
Page 60                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      SECTION 20.  Section 206M-15.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]206M-15.5[]]  High technology special fund.  There is
 
 4 established in the state treasury a fund to be known as the high
 
 5 technology special fund, into which shall be deposited, except as
 
 6 otherwise provided by section 206M-17, all moneys and fees from
 
 7 tenants, qualified persons, or other users of the development
 
 8 corporation's industrial parks, projects, other leased
 
 9 facilities, and other services and publications.  All moneys in
 
10 the fund are [hereby] appropriated for the purposes of and shall
 
11 be expended by the development corporation for the operation,
 
12 maintenance, and management of its industrial parks, projects,
 
13 facilities, services, and publications[.], and to pay the
 
14 expenses in administering the special purpose revenue bonds of
 
15 the development corporation or in carrying out its project
 
16 agreements."
 
17      SECTION 21.  Section 206M-16, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "206M-16  Exemption of development corporation from
 
20 taxation and competitive bidding.(a) All revenues and receipts
 
21 derived by the development corporation from any project or
 
22 industrial park or under a project agreement or other agreement
 
23 pertaining thereto shall be exempt from all state and county
 

 
Page 61                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 taxation.  Any right, title, and interest of the development
 
 2 corporation in any project or industrial park shall also be
 
 3 exempt from all state and county taxation.  Except as otherwise
 
 4 provided by law, the interest of a qualified person or other user
 
 5 of a project or industrial park under a project agreement or
 
 6 other agreements related to a project or industrial park shall
 
 7 not be exempt from taxation to a greater extent than it would be
 
 8 if the costs of the project or industrial park were directly
 
 9 financed by the qualified person or user.
 
10      (b)  The development corporation shall not be subject to any
 
11 requirement of law for competitive bidding for project
 
12 agreements, construction contracts, lease and sublease
 
13 agreements, or other contracts unless a project agreement with
 
14 respect to a project or industrial park [otherwise] shall so
 
15 require."
 
16      SECTION 22.  Section 206M-17, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "206M-17  Revenue bond fund accounts.  The development
 
19 corporation shall establish separate special funds in accordance
 
20 with section 39-62 for the deposit of the proceeds of special
 
21 purpose revenue bonds and special facility revenue bonds
 
22 authorized under this [chapter.] part and part II respectively.
 
23 The development corporation shall have the right to appropriate,
 

 
Page 62                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 apply, or expend the revenues derived with respect to the project
 
 2 agreement for a project for the following purposes:
 
 3      (1)  To pay when due all special purpose revenue bonds and
 
 4           special facility revenue bonds, premiums, if any, and
 
 5           interest thereon, for the payment of which the revenues
 
 6           are or have been pledged, charged, or otherwise
 
 7           encumbered, including reserves therefor; and
 
 8      (2)  To the extent not paid by the qualified person to
 
 9           provide for all expenses of administration, operation,
 
10           and maintenance of the project, including reserves
 
11           therefor.
 
12      Unless and until adequate provision has been made for the
 
13 foregoing purposes, the development corporation shall not
 
14 transfer the revenues derived from the project agreement to the
 
15 high technology special fund of the State."
 
16      SECTION 23.  Section 206M-34, Hawaii Revised Statutes, is
 
17 amended by amending subsection (a) to read as follows:
 
18      "(a)  The development corporation shall have the authority
 
19 to copyright software applications and programs developed for
 
20 state use with public funds and to license their subsequent sale
 
21 and distribution; provided that this authority shall be subject
 
22 to the terms and conditions of a contract to license between the
 
23 development corporation and the affected state departments or
 

 
Page 63                                                    2443
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 agencies that developed the software applications or programs
 
 2 [.]; and provided further that the authority shall not apply to
 
 3 software applications and programs developed by or on behalf of
 
 4 private sector qualified persons for which the development
 
 5 corporation has issued special purpose revenue bonds under this
 
 6 chapter or otherwise provided financing.  Any copyright arising
 
 7 from center activities shall belong to the State and any revenues
 
 8 generated by licenses and subsequent sale and distribution of
 
 9 copyrighted software shall be deposited into the general fund
 
10 unless otherwise stipulated in a licensing agreement."
 
11      SECTION 24.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 25.  This Act shall take effect upon its approval.