REPORT TITLE:
Education


DESCRIPTION:
Proposes constitutional amendments to allow the issuance of
special purpose revenue bonds for private primary or secondary
educational institutions.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1242        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT
PROPOSING AN AMENDMENT TO ARTICLE VII, SECTION 12, AND ARTICLE X,
   SECTION 1, OF THE HAWAII CONSTITUTION, TO AUTHORIZE THE
   ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO PRIVATE PRIMARY
   OR SECONDARY EDUCATIONAL INSTITUTIONS.



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

 1      SECTION 1.  The purpose of this Act is to propose an
 
 2 amendment to article VII, section 12, and article X, section 1,
 
 3 of the Constitution of the State of Hawaii to authorize the
 
 4 issuance of special purpose revenue bonds to private primary or
 
 5 secondary educational institutions.
 
 6      SECTION 2.  Article VII, section 12, of the Constitution of
 
 7 the State of Hawaii is amended to read as follows:
 
 8              "DEFINITIONS; ISSUANCE OF INDEBTEDNESS
 
 9      Section 12.  For the purposes of this article: 
 
10      1.  The term "bonds" shall include bonds, notes and other
 
11 instruments of indebtedness.
 
12      2.  The term "general obligation bonds" means all bonds for
 
13 the payment of the principal and interest of which the full faith
 
14 and credit of the State or a political subdivision are pledged
 
15 and, unless otherwise indicated, includes reimbursable general
 
16 obligation bonds.
 
17      3.  The term "net revenues" or "net user tax receipts" means
 
18 the revenues or receipts derived from:
 

 
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 1      a.   A public undertaking, improvement or system remaining
 
 2           after the costs of operation, maintenance and repair of
 
 3           the public undertaking, improvement or system, and the
 
 4           required payments of the principal of and interest on
 
 5           all revenue bonds issued therefor, have been made; or
 
 6      b.   Any payments or return on security under a loan program
 
 7           or a loan thereunder, after the costs of operation and
 
 8           administration of the loan program, and the required
 
 9           payments of the principal of and interest on all
 
10           revenue bonds issued therefor, have been made.
 
11      4.  The term "person" means an individual, firm,
 
12 partnership, corporation, association, cooperative or other legal
 
13 entity, governmental body or agency, board, bureau or other
 
14 instrumentality thereof, or any combination of the foregoing.
 
15      5.  The term "rates, rentals and charges" means all revenues
 
16 and other moneys derived from the operation or lease of a public
 
17 undertaking, improvement or system, or derived from any payments
 
18 or return on security under a loan program or a loan thereunder;
 
19 provided that insurance premium payments, assessments and
 
20 surcharges, shall constitute rates, rentals and charges of a
 
21 state property insurance program.
 
22      6.  The term "reimbursable general obligation bonds" means
 
23 general obligation bonds issued for a public undertaking,
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 improvement or system from which revenues, or user taxes, or a
 
 2 combination of both, may be derived for the payment of the
 
 3 principal and interest as reimbursement to the general fund and
 
 4 for which reimbursement is required by law, and, in the case of
 
 5 general obligation bonds issued by the State for a political
 
 6 subdivision, general obligation bonds for which the payment of
 
 7 the principal and interest as reimbursement to the general fund
 
 8 is required by law to be made from the revenue of the political
 
 9 subdivision.
 
10      7.  The term "revenue bonds" means all bonds payable from
 
11 the revenues, or user taxes, or any combination of both, of a
 
12 public undertaking, improvement, system or loan program and any
 
13 loan made thereunder and secured as may be provided by law,
 
14 including a loan program to provide loans to a state property
 
15 insurance program providing hurricane insurance coverage to the
 
16 general public.
 
17      8.  The term "special purpose revenue bonds" means all bonds
 
18 payable from rental or other payments made to an issuer by a
 
19 person pursuant to contract and secured as may be provided by
 
20 law.
 
21      9.  The term "user tax" means a tax on goods or services or
 
22 on the consumption thereof, the receipts of which are
 

 
 
 
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 1 substantially derived from the consumption, use or sale of goods
 
 2 and services in the utilization of the functions or services
 
 3 furnished by a public undertaking, improvement or system;
 
 4 provided that mortgage recording taxes shall constitute user
 
 5 taxes of a state property insurance program.
 
 6      The legislature, by a majority vote of the members to which
 
 7 each house is entitled, shall authorize the issuance of all
 
 8 general obligation bonds, bonds issued under special improvement
 
 9 statutes and revenue bonds issued by or on behalf of the State
 
10 and shall prescribe by general law the manner and procedure for
 
11 such issuance.  The legislature by general law shall authorize
 
12 political subdivisions to issue general obligation bonds, bonds
 
13 issued under special improvement statutes and revenue bonds and
 
14 shall prescribe the manner and procedure for such issuance.  All
 
15 such bonds issued by or on behalf of a political subdivision
 
16 shall be authorized by the governing body of such political
 
17 subdivision.
 
18      Special purpose revenue bonds shall only be authorized or
 
19 issued to finance facilities of or for, or to loan the proceeds
 
20 of such bonds to assist:
 
21      1.   Manufacturing, processing or industrial enterprises;
 
22      2.   Utilities serving the general public;
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      3.   Health care facilities provided to the general public
 
 2           by not-for-profit corporations;
 
 3      4.   Early childhood education and care facilities provided
 
 4           to the general public by not-for-profit corporations;
 
 5           [or]
 
 6      5.   Low and moderate income government housing programs,
 
 7           each of which is hereinafter referred to in this
 
 8           paragraph as a special purpose entity[.]; or
 
 9      6.   Private primary or secondary educational institutions.
 
10      The legislature, by a two-thirds vote of the members to
 
11 which each house is entitled, may enact enabling legislation for
 
12 the issuance of special purpose revenue bonds separately for each
 
13 special purpose entity, and, by a two-thirds vote of the members
 
14 to which each house is entitled and by separate legislative bill,
 
15 may authorize the State to issue special purpose revenue bonds
 
16 for each single project or multi-project program of each special
 
17 purpose entity; provided that the issuance of such special
 
18 purpose revenue bonds is found to be in the public interest by
 
19 the legislature.  The legislature may enact enabling legislation
 
20 to authorize political subdivisions to issue special purpose
 
21 revenue bonds.  If so authorized, a political subdivision by a
 
22 two-thirds vote of the members to which its governing body is
 

 
 
 
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 1 entitled and by separate ordinance may authorize the issuance of
 
 2 special purpose revenue bonds for each single project or multi-
 
 3 project program of each special purpose entity; provided that the
 
 4 issuance of such special purpose revenue bonds is found to be in
 
 5 the public interest by the governing body of the political
 
 6 subdivision.  No special purpose revenue bonds shall be secured
 
 7 directly or indirectly by the general credit of the issuer or by
 
 8 any revenues or taxes of the issuer other than receipts derived
 
 9 from payments by a person under contract or from any security for
 
10 such contract or special purpose revenue bonds and no moneys
 
11 other than such receipts shall be applied to the payment thereof.
 
12 The governor shall provide the legislature in November of each
 
13 year with a report on the cumulative amount of all special
 
14 purpose revenue bonds authorized and issued, and such other
 
15 information as may be necessary."
 
16      SECTION 3.  Article X, section 1, of the Constitution of the
 
17 State of Hawaii is amended to read as follows:
 
18                         "PUBLIC EDUCATION
 
19      Section 1.  The State shall provide for the establishment,
 
20 support and control of a statewide system of public schools free
 
21 from sectarian control, a state university, public libraries and
 
22 such other educational institutions as may be deemed desirable,
 

 
 
 
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 1 including physical facilities therefor.  There shall be no
 
 2 discrimination in public educational institutions because of
 
 3 race, religion, sex or ancestry; nor shall public funds be
 
 4 appropriated for the support or benefit of any sectarian or
 
 5 private educational institution, except that proceeds of special
 
 6 purpose revenue bonds authorized or issued under section 12 of
 
 7 Article VII may be appropriated to finance or assist not-for-
 
 8 profit corporations that provide early childhood education and
 
 9 care facilities serving the general public[.] and private primary
 
10 or secondary educational institutions."
 
11      SECTION 4.  The question to be printed on the ballot shall
 
12 be as follows:
 
13      "Shall the State authorize the issuance of special purpose
 
14      revenue bonds to benefit private primary or secondary
 
15      educational institutions?"
 
16      SECTION 5.  Constitutional material to be repealed is
 
17 bracketed.  New constitutional material is underscored.
 
18      SECTION 6.  This amendment shall take effect upon compliance
 
19 with article XVII, section 3, of the Constitution of the State of
 
20 Hawaii.
 
21 
 
22                           INTRODUCED BY:  _______________________