THE SENATE

S.B. NO.

2366

TWENTY-SIXTH LEGISLATURE, 2012

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to community planning.

 

 

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

 


SECTION 1. Section 171C-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Development district" means a land area designated by the corporation in accordance with section 171C-4(a)(21):

(1) Where one or more community financed development projects are situated; or

(2) That is suitable for development by community financed projects."

SECTION 2. Section 171C-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Except as otherwise limited by this chapter, the corporation may:

(1) Sue and be sued;

(2) Have a seal and alter the same at its pleasure;

(3) Make and alter bylaws for its organization and internal management;

(4) Adopt rules under chapter 91 necessary to effectuate this chapter in connection with its projects, operations, and properties;

(5) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;

(6) Carry out surveys, research, and investigations into technological, business, financial, consumer trends, and other aspects of leisure or recreational land uses in the national and international community;

(7) Acquire or contract to acquire by grant or purchase:

(A) All privately owned real property or any interest therein and the improvements thereon, if any, that are determined by the corporation to be necessary or appropriate for its purposes under this chapter, including real property together with improvements, if any, in excess of that needed for such use in cases where small remnants would otherwise be left or where other justifiable cause necessitates the acquisition to protect and preserve the contemplated improvements, or public policy demands the acquisition in connection with such improvements; and

(B) Encumbrances, in the form of leases, licenses, or otherwise, needed by the corporation or any state department or agency for public purposes, the disposition of subdivided lots, houselots, apartments or other economic units, or economic development;

(8) Own, hold, improve, and rehabilitate any real, personal, or mixed property acquired; and sell, assign, exchange, transfer, convey, lease, or otherwise dispose of, or encumber the same;

(9) By itself, or in partnership with qualified persons or other governmental agencies, acquire, construct, reconstruct, rehabilitate, improve, alter, or repair any infrastructure or accessory facilities in connection with any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of, or encumber any project; and develop or manage, by itself, or in partnership with qualified persons or other governmental agencies, any project that meets the purposes of this chapter;

(10) In cooperation with any governmental agency, or otherwise through direct investment or coventure with a professional investor or enterprise or any other person, or otherwise, acquire, construct, operate, and maintain public land facilities, including but not limited to leisure, recreational, commercial, residential, time share, hotel, office space, and business facilities, at rates or charges determined by the corporation;

(11) Assist developmental, recreational, and visitor-industry related enterprises, or projects developed or managed by the corporation, by conducting detailed marketing analysis and developing marketing and promotional strategies to strengthen the position of those enterprises and to better exploit local, national, and international markets;

(12) Receive, examine, and determine the acceptability of applications of qualified persons for allowances or grants for the development of new recreation and visitor-industry related products, the expansion of established recreation and visitor-industry or land development enterprises, and the altering of existing recreational, visitor-industry related, or land development enterprises;

(13) Coordinate its activities with any federal or state programs;

(14) Grant options to purchase any project or to renew any lease entered into by the corporation in connection with any of its projects, on the terms and conditions it deems advisable;

(15) Provide advisory, consultative, training, and educational services and technical assistance to any person, partnership, or corporation, either public or private, to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(16) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;

(17) Accept gifts or grants in any form from any public agency or any other source;

(18) Issue bonds to finance the cost of a project and to provide for the security thereof, in the manner and pursuant to the procedure prescribed in this chapter;

(19) Subject to approval by the department, assume management responsibilities for small boat harbors in accordance with chapter 200 and any rules adopted pursuant thereto for periods not to exceed one year;

(20) Recommend to the board of land and natural resources the purchase of any privately owned properties that may be appropriate for development; [and]

(21) Designate development districts; and

[(21)] (22) Do all things necessary or proper to carry out the purposes of this chapter."

SECTION 3. Section 171C-10, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The revenue bonds shall be payable from and secured by the improvements to real properties specially benefited or improved and the assessments thereon, or by [the]:

(1) The revenues derived from the project facility for which the revenue bonds were issued, including revenue derived from insurance proceeds and reserve accounts, and earnings thereon[.]; or

(2) General excise tax revenues allocated to the corporation pursuant to section 237-31; provided that payment is made in accordance with section 171C-17(c)."

SECTION 4. Section 171C-17, Hawaii Revised Statutes, is amended to read as follows:

"[[]171C-17[]] Hawaii public land development revolving fund; established; use of corporation funds. (a) There is established the Hawaii public land development revolving fund, to which shall be credited any state appropriations to the fund, any sums collected as a result of bonds issued pursuant to this chapter, any revenues generated from the facilities, general excise tax revenues allocated to the corporation under section 237-31, or other moneys made available to the fund, to be expended as directed by the corporation.

(b) Notwithstanding any provision of this chapter to the contrary, revenues, income, and receipts derived from the project facilities shall be set apart in a separate subaccount and applied solely for the following purposes:

(1) The principal and interest on the bonds;

(2) The cost of administering, operating, and maintaining the project not to exceed fifteen per cent of the sums collected, net of principal and interest payments, on account of assessments and interest for any specific project facility;

(3) The establishment of program reserves not to exceed eighty-five per cent of the sums collected, net of principal and interest payments, on account of assessments and interest for any specific project facility; provided that accumulated reserves shall be credited to and become a part of the special land and development fund, established under section 171-19, except in the case of a specific project facility that is situated in part or wholly within a small boat harbor, in which case those accumulated reserves attributable to the portions of the facility situated in the small boat harbor shall be credited to and become a part of the boating special fund, established under section 248-8; and

(4) Other purposes as may be authorized in the proceedings providing for the issuance of the bonds.

If any surplus remains in any subaccount after the payment of the bonds chargeable against that subaccount, the surplus shall be credited to and become a part of the Hawaii public land development revolving fund, except as provided in paragraph (3). Notwithstanding any other law to the contrary, moneys in the fund may be used to make up any deficiencies in the subaccount.

(c) A separate subaccount shall be established for each development district designated by the corporation. Each subaccount shall be designated "development district subaccount" and shall bear additional designations as the corporation deems appropriate to properly identify the fund.

Notwithstanding any provision of this chapter to the contrary, general excise tax revenues allocated to the corporation under section 237-31 shall be set apart in the subaccount established for the development district where the revenue was collected and applied solely for the payment of principal and interest on bonds associated with projects located in the respective development district.

If any surplus remains in any subaccount after the payment of the bonds chargeable against that subaccount, the surplus shall be credited to and become a part of the Hawaii public land development revolving fund.

[(c)] (d) The corporation shall hold the fund in an account or accounts separate from other funds. Except as otherwise provided in [subsection] subsections (b)[,] and (c), the corporation shall invest and reinvest the fund and the income thereof to:

(1) Purchase qualified securities issued by enterprises for the purpose of raising seed capital; provided that the investment shall comply with the requirements of this chapter;

(2) Make grants, loans, and provide other monetary forms of assistance necessary to carry out the purposes of this chapter; and

(3) Purchase securities as may be lawful investments for fiduciaries in the State.

All appropriations, grants, contractual reimbursements, and other funds not designated for this purpose may be used to pay for the proper general expenses and to carry out the purposes of the corporation.

[(d)] (e) The corporation shall purchase qualified securities issued by an enterprise only after:

(1) Receiving:

(A) An application from the enterprise containing a business plan, which is consistent with the business and public land development plan, including a description of the enterprise and its management, product, and market;

(B) A statement of the amount, timing, and projected use of the capital required;

(C) A statement of the potential economic impact of the enterprise, including the number, location, and types of jobs expected to be created; and

(D) Any other information as the corporation shall require;

(2) Determining, based upon the application submitted, that:

(A) The proceeds of the investment will be used only to cover the seed capital needs of the enterprise, except as authorized in this section;

(B) The enterprise has a reasonable chance of success;

(C) The enterprise has the reasonable potential to create employment within the State and offers employment opportunities to residents;

(D) The coordinating entrepreneur and other founders of the enterprise have already made or are prepared to make a substantial financial and time commitment to the enterprise;

(E) The securities to be purchased are qualified securities;

(F) There is a reasonable possibility that the corporation will recoup at least its initial investment; and

(G) Binding commitments have been made to the corporation by the enterprise for adequate reporting of financial data to the corporation, which shall include a requirement for an annual or other periodic audit of the books of the enterprise, and for control by the corporation that it considers prudent over the management of the enterprise, in order to protect the investment of the corporation, including membership on the board of directors of the enterprise, ownership of voting stock, input in management decisions, and the right of access to the financial and other records of the enterprise; and

(3) Entering into a binding agreement with the enterprise concerning the manner of payback by the enterprise of the funds advanced, granted, loaned, or received from the corporation. The manner of payback may include the payment of dividends, returns from the public sale of corporate securities or products, royalties, and other methods of payback acceptable to the corporation. In determining the manner of payback the corporation shall establish a rate of return or rate of interest to be paid on any investment, loan, or grant of corporation funds under this section.

[(e)] (f) If the corporation makes a direct investment, it shall also find that a reasonable effort has been made to find a professional investor to make an investment in the enterprise as a coventure, and that the effort was unsuccessful. The findings, when made by the corporation, shall be conclusive.

[(f)] (g) The corporation shall make investments in qualified securities issued by an enterprise in accordance with the following limits:

(1) Not more than $500,000 shall be invested in the securities of any one enterprise, except that more than a total of $500,000 may be invested in the securities of any one enterprise if the corporation finds, after its initial investment, that additional investments in that enterprise are required to protect the initial investment of the corporation, and the other findings set forth in subsection (d) and this subsection are made as to the additional investment;

(2) The corporation shall not own securities representing more than forty-nine per cent of the voting stock of any one enterprise at the time of purchase by the corporation after giving effect to the conversion of all outstanding convertible securities of the enterprise, except that if a severe financial difficulty of the enterprise occurs, threatening the investment of the corporation in the enterprise, a greater percentage of those securities may be owned by the corporation; and

(3) Not more than fifty per cent of the assets of the corporation shall be invested in direct investments at any time.

[(g)] (h) No investment, loan, grant, or use of corporate funds for the purposes of this chapter shall be subject to chapter 42F."

SECTION 5. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) The sum from all general excise tax revenues realized by the State that represents the difference between $45,000,000 and the proceeds from the sale of any general obligation bonds authorized for that fiscal year for the purposes of the state educational facilities improvement special fund shall be deposited in the state treasury in each fiscal year to the credit of the state educational facilities improvement special fund;

(2) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund; [and]

(3) A sum from all general excise tax revenues realized by the State that is equal to one-half of the total amount of funds appropriated or transferred out of the hurricane reserve trust fund under sections 4 and 5 of Act 62, Session Laws of Hawaii 2011, shall be deposited into the hurricane reserve trust fund in fiscal year 2013-2014 and in fiscal year 2014-2015; provided that the deposit required in each fiscal year shall be made by October 1 of that fiscal year[.]; and

(4) per cent of all general excise tax revenues realized by the State from a development district designated by the public land development corporation pursuant to section 171C-4(a)(21) shall be deposited into the subaccount of the Hawaii public land development revolving fund established for the development district under section 171C-17(c)."

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2011.

 

INTRODUCED BY:

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Report Title:

Public Land Development Corporation; Development Districts; General Excise Tax

 

Description:

Authorizes the public land development corporation to designate development districts. Allocates a percentage of general excise tax revenues collected in a development district to be used by the public land development corporation to pay principal and interest on bonds associated with projects located in the development district.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.