REPORT TITLE:
Education Bond


DESCRIPTION:
Authorizes Department of Education to establish from the existing
school entity, Molokai High and Intermediate School, two separate
and distinct school entities, Molokai Middle School and Molokai
High School, encompassing grades 7 to 8, and 9 to 12,
respectively, under the federal Taxpayer Relief Act of 1997 as
amended.
(HB3019 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3019
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO EDUCATION. 


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

 1      SECTION 1.  The legislature finds that Congress passed the
 
 2 Taxpayer Relief Act of 1997 to allow state government agencies to
 
 3 issue Qualified Zone Academy Bonds in those areas designated as
 
 4 empowerment zones or enterprise communities.  In 1999, Congress
 
 5 extended this program to be available in 2000 and 2001.  The
 
 6 program is a tremendous opportunity for the state to take
 
 7 advantage of a federal tax credit law that allows Hawaii an
 
 8 interest-free loan.  Under this program, the federal government
 
 9 subsidizes fifteen year bonds by providing tax credits to bond
 
10 holders that are approximately equal to the interest that Hawaii
 
11 would ordinarily pay the holders of taxable bonds.  Eligible
 
12 purchasers receive an annual federal income tax credit in lieu of
 
13 periodic interest payments during the life of the bond.
 
14      This federal program was created to help educators and
 
15 employers work together to ensure that students in economically
 
16 depressed areas will have the education and skills to be prepared
 
17 to work in today's competitive global economy.
 

 
 
 
Page 2                                                     3019
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      The purpose of this Act is to enable the community of
 
 2 Molokai to take advantage of its federal designation as an
 
 3 enterprise community by authorizing the issuance of bonds
 
 4 pursuant to 26 U.S.C. section 1397E.
 
 5      Currently, the Molokai high and intermediate school is one
 
 6 school entity encompassing grade levels seven through twelve.
 
 7 This bond will allow the department of education to renovate
 
 8 existing structures to create two separate and distinct school
 
 9 entities called Molokai middle school and Molokai high school.
 
10      SECTION 2.  Pursuant to Article VII sections 12 and 13 of
 
11 the Hawaii State Constitution and 26 U.S.C. section 1397E, the
 
12 director of finance is authorized to issue a bond in the sum of
 
13 $4,615,000 or so much thereof as may be necessary and the same
 
14 sum or so much thereof as may be necessary is appropriated for
 
15 fiscal year 2000-2001.
 
16      SECTION 3.  There is hereby appropriated under the general
 
17 obligation bond fund of the State, $4,615,000 for Molokai high
 
18 and intermediate school improvements, pursuant to federal law 26
 
19 U.S.C. section 1397E. 
 
20      SECTION 4.  The appropriations shall not lapse at the end of
 
21 the fiscal year for which the appropriations are made; provided
 
22 that all moneys that are unencumbered as of June 30, 2002, shall
 
23 lapse as of that date.
 

 
Page 3                                                     3019
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 5.  The sum appropriated shall be expended by the
 
 2 department of accounting and general services for the purpose of
 
 3 this Act.  The Department of Education shall fulfill the
 
 4 requirements pursuant to the Federal Taxpayer Relief Act of 1997,
 
 5 as amended.
 
 6      SECTION 6.  This Act shall take effect upon its approval.