THE SENATE

S.B. NO.

725

TWENTY-NINTH LEGISLATURE, 2017

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO BONDS.

 

 

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

 


     SECTION 1.  The purpose of this Act is to restrict the use of general obligation or revenue bond proceeds to pay for the unfunded pension or healthcare long-term liabilities incurred for state employees and retirees, by requiring a two-thirds majority vote of each house of the legislature to enact legislation that authorizes the use of bond proceeds for such purposes.

     The department of budget and finance prepared the "State of Hawaii Debt Management Policy" pursuant to Act 149, Session Laws of Hawaii 2015.  The policy lists "[u]nfunded pension or healthcare long-term liabilities" among the general purposes for which debt may be issued.

     However, the legislature finds that utilizing general obligation or revenue bond proceeds to pay for unfunded pension or other post-employment benefits liabilities is contrary to good public policy and responsible long-term fiscal policy.

     Therefore, while the State has not used bond proceeds to pay such liabilities, the legislature finds that the authority to do so in the future should be restricted.

     SECTION 2.  Chapter 39, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:

     "§39-     Restriction on use of bonds for unfunded pension or other post-employment benefit liabilities.  The proceeds of general obligation or revenue bonds shall not be used to pay for the unfunded pension or other post-employment benefit liabilities accrued for state employees and retirees, except by a bill approved on final reading by a two-thirds majority vote of the members to which each house of the legislature is entitled."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on August 30, 2050.


 


 

Report Title:

Bonds; Restriction for Pension and OPEB Liabilities

 

Description:

Restricts the use of general obligation or revenue bond proceeds to pay for the unfunded pension or other post-employment benefit liabilities accrued for state employees or retirees, by requiring a two-thirds majority vote of each house of the legislature to enact legislation that authorizes the use of bond proceeds for such purposes.  Effective August 30, 2050.  (SD1)

 

 

 

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