HOUSE OF REPRESENTATIVES

H.B. NO.

1588

TWENTY-NINTH LEGISLATURE, 2017

H.D. 1

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO GENERAL OBLIGATION BONDS.

 

 

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

 


SECTION 1. The purpose of this Act is to promote fiscally responsible funding of repair and maintenance projects in the State by:

(1) Prohibiting the issuance of general obligation bonds to finance the repair and maintenance of a capital asset with a depreciable life of less than ten years from the date the asset was first placed into service; and

(2) Requiring the state director of finance to set a maturity date of not more than ten years when issuing general obligation bonds to finance the repair and maintenance of a capital asset with a depreciable life of ten years or more from the date the asset was first placed into service.

SECTION 2. Section 37-67, Hawaii Revised Statutes, is amended to read as follows:

"[[]37-67[]] Responsibilities of the department of budget and finance. The director of finance shall assist the governor in the preparation, explanation and administration of the state long-range plans, the proposed six-year program and financial plan and the state budget. To this end, subject to this part, the director shall:

(1) With the approval of the governor, develop procedures and prescribe rules and regulations to guide such state agencies as may be assigned by the director the task of formulating and preparing the initial proposals with respect to long-range plans, program and financial plans, program budget requests and program performance reports and to assure the availability of information needed for effective policy decision-making[.]; provided that the director shall specify in the procedures, rules, and regulations that general obligation bonds shall not be issued for the purpose of financing the repair and maintenance of a capital asset with a depreciable life of less than ten years from the date the asset was first placed into service.

(2) Assist such state agencies in the formulation of program objectives, preparation of program plans and program budget requests, and reporting of program performance.

(3) Coordinate, analyze and revise as necessary the program objectives, long-range plans, program and financial plans, program budget requests and program performance reports initially proposed or prepared by such state agencies and develop the state comprehensive program and financial plan, budget and program performance report.

(4) Administer its responsibilities under the program execution provisions of this part so that the policy decisions and budget determinations of the governor and the legislature are implemented to the fullest extent possible within the concepts of proper management.

(5) Investigate continuously the administration of the various agencies for the purpose of advising the governor and recommending to the governor, the legislature and the committees of the legislature concerning the duties of the various positions in these agencies, the methods of the agency, the standards of efficiency therein, and changes which in the director's judgment will produce greater effectiveness of programs and economy in the conduct of government programs and assist in the preparation of program and financial plans, budget requests and program performance reports.

(6) Provide the legislature and any member or committee of either house of the legislature with such documents and information as may be requested concerning the programs, budget, and fiscal and management operations of the State."

SECTION 3. Section 39-4, Hawaii Revised Statutes, is amended to read as follows:

"39-4 Details of bonds[.]; restrictions. (a) All bonds issued pursuant to this part shall bear interest at such rate or rates, payable at such time or times as determined in accordance with this part; shall mature and be payable at such time or times from the date of the issue thereof as will comply with the provisions of the Constitution of the State; may be made payable as to both principal and interest at a place or places within or without the State; may be issued in coupon form without privilege of registration or registrable as to principal only or as to both principal and interest or in fully registrable form without coupons; may be made registrable at a place or places within or without the State; may be subject to redemption, to tenders for purchase or to purchase prior to their stated maturity at the option of the State, or the holder, or both[.]; provided that no bond issued pursuant to this part shall be for the purpose of financing the repair and maintenance of a capital asset with a depreciable life of less than ten years from the date the asset was first placed into service.

(b) The director of finance shall determine the date, denomination or denominations, interest payment dates, maturity date or dates, place or places and manner of payment, registration privileges and place or places of registration, redemption price or prices and time or times and terms and conditions and method of redemption, the right of the holder to tender for purchase and the price or prices and time or times and terms and conditions upon which the right might be exercised, the right to purchase and the price or prices and the time or times and terms and conditions upon which the right may be exercised and the purchase may be made, and all other details of bonds issued under this part[.]; provided that the director of finance shall set a maturity date or dates of not more than ten years when issuing a bond pursuant to this part to finance the repair and maintenance of a capital asset with a depreciable life of ten years or more from the date the asset was first placed into service.

The principal of and interest and premium, if any, on all bonds issued under this part shall be payable in any coin or currency of the United States of America, which at the time of payment is legal tender for public and private debts."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.



 

Report Title:

General Obligation Bonds; Repair and Maintenance; Restrictions

 

Description:

Prohibits the issuance of GO bonds to finance the repair and maintenance of a capital asset with a depreciable life of less than 10 years from the date the asset was first placed into service. Requires the Director of Finance to set a maturity date of not more than 10 years when issuing GO bonds to finance the repair and maintenance of a capital asset with a depreciable life of 10 years or more from the date the asset was first placed into service. (SD1)

 

 

 

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