REPORT TITLE:
DOA; Emergency Approp.

DESCRIPTION:
Provides statutory authorization and an emergency appropriation
($500,000) for the relocation of the Measurement Standards
Program, and the construction of a new building to accommodate
said program and the Commodities programs due to the
redevelopment of Kakaako.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2748
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

MAKING AN EMERGENCY APPROPRIATION FOR THE DEPARTMENT OF
   AGRICULTURE.
 


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

 1      SECTION 1.  This Act is recommended by the governor for
 
 2 immediate passage in accordance with article VII, section 9 of
 
 3 the constitution of the State of Hawaii.
 
 4      SECTION 2.  The Hawaii community development authority in
 
 5 its redevelopment of Kakaako will be displacing the measurement
 
 6 standards and plant quarantine programs of the department of
 
 7 agriculture.  The measurements standards program of the quality
 
 8 assurance division will be the first program displaced to
 
 9 accommodate the widening of Ilalo Street from Ward Avenue to
 
10 South and Punchbowl streets.  The widening project includes
 
11 improvements to the roadway, drainage, sewer, water, electrical,
 
12 telephone, and cable systems and is part of the overall plan to
 
13 create a waterfront that stimulates economic and educational
 
14 uses.
 
15      The purpose of this Act is to provide the necessary
 
16 statutory authorization and appropriations to relocate the
 
17 measurement standards program and to construct a new building to
 
18 accommodate both the measurement standards and commodities
 
19 programs of the quality assurance division.
 

 
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 1      SECTION 3.  There is appropriated out of the general
 
 2 revenues of the State of Hawaii the sum of $500,000 or so much
 
 3 thereof as may be necessary for fiscal year 2000-2001 to cover
 
 4 all expenses related to temporarily relocating the measurement
 
 5 standards program and its personnel.
 
 6      SECTION 4.  The director of finance is authorized to issue
 
 7 general obligation bonds in the sum of $3,800,000, or so much
 
 8 thereof as may be necessary.  There is appropriated the sum of
 
 9 $3,800,000 in general obligation bond funds, or so much thereof
 
10 as may be necessary for fiscal year 1999-2000 to finance the cost
 
11 of planning, design, construction, and equipping a new building
 
12 for the measurement standards and commodities programs on Oahu.
 
13      SECTION 5.  The sums appropriated shall be expended by the
 
14 department of agriculture for the purposes of this Act. 
 
15      Any unexpended or unencumbered balance of any appropriation
 
16 made by this Act as of the close of business on June 30, 2002,
 
17 shall lapse.
 
18      SECTION 6.  With approval of the governor, the designated
 
19 expending agencies for capital improvement projects authorized in
 
20 this Act may delegate to another state agency the implementation
 
21 of such projects when it is determined by all involved agencies
 
22 and parties that it is advantageous to do so.
 

 
 
 
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 1      SECTION 7.  Any law to the contrary notwithstanding, the
 
 2 appropriation under Act 328, Session Laws of Hawaii 1997, section
 
 3 140A, as amended by Act 116, Session Laws of Hawaii 1998, section
 
 4 5, in the amount indicated or balance thereof, unallotted,
 
 5 allotted, encumbered, and unrequired is hereby lapsed:
 
 6      Item No.                  Amount(MOF)
 
 7      H-17                      $280,000 C
 
 8      SECTION 8.  Declaration of findings with respect to the
 
 9 general obligation bonds authorized by this Act.  Pursuant to the
 
10 clause in article VII, section 13 of the state constitution which
 
11 states:  "Effective July 1, 1980, the legislature shall include a
 
12 declaration of findings in every general law authorizing the
 
13 issuance of general obligation bonds that the total amount of
 
14 principal and interest, estimated for such bonds and for all
 
15 bonds authorized and unissued and calculated for all bonds issued
 
16 and outstanding, will not cause the debt limit to be exceeded at
 
17 the time of issuance", the legislature finds and declares as
 
18 follows:
 
19      (1)  Limitation on general obligation debt.  The debt limit
 
20           of the state is set forth in article VII, section 13 of
 
21           the state constitution, which states in part:  "General
 
22           obligation bonds may be issued by the State; provided
 
23           that such bonds at the time of issuance would not cause
 

 
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 1           the total amount of principal and interest payable in
 
 2           the current or any future fiscal year, whichever is
 
 3           higher, on such bonds and on all outstanding general
 
 4           obligation bonds to exceed: a sum equal to twenty
 
 5           percent of the average of the general fund revenues of
 
 6           the State in the three fiscal years immediately
 
 7           preceding such issuance until June 30, 1982; and
 
 8           thereafter, a sum equal to eighteen and one-half
 
 9           percent of the average of the general fund revenues of
 
10           the State in the three fiscal years immediately
 
11           preceding such issuance."  Article VII, section 13,
 
12           also provides that in determining the power of the
 
13           State to issue general obligation bonds, certain bonds
 
14           are excludable, including "reimbursable general
 
15           obligation bonds issued for a public undertaking,
 
16           improvement or system but only to the extent that
 
17           reimbursements to the general fund are in fact made
 
18           from the net revenue, or net user tax receipts, or
 
19           combination of both, as determined for the immediately
 
20           preceding fiscal year" and bonds constituting
 
21           instruments of indebtedness under which the State
 
22           incurs a contingent liability as a guarantor, but only
 
23           to the extent the principal amount of such bonds does
 

 
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 1           not exceed seven per cent of the principal amount of
 
 2           outstanding general obligation bonds not otherwise
 
 3           excluded under article VII, section 13.
 
 4      (2)  Actual and estimated debt limits.  The limit on
 
 5           principal and interest of general obligation bonds
 
 6           issued by the State, actual for fiscal year 1999-2000
 
 7           and estimated for each fiscal year from 2000-2001 to
 
 8           2002-2003, is as follows:
 
 9           Fiscal            Net General
 
10           Year              Fund Revenues             Debt Limit
 
11           1996-1997         3,115,264,737
 
12           1997-1998         3,195,967,036
 
13           1998-1999         3,254,256,686
 
14           1999-2000         3,109,421,000            $589,871,788
 
15           2000-2001         3,154,165,000            $589,511,425
 
16           2001-2002         3,233,534,000            $586,933,632
 
17           2002-2003         (Not Applicable)         $585,655,733
 
18           For fiscal years 1999-2000, 2000-2001, 2001-2002, and
 
19           2002-2003, respectively, the debt limit is derived by
 
20           multiplying the average of the net general fund
 
21           revenues for the three preceding fiscal years by
 
22           eighteen and one-half per cent. The net general fund
 
23           revenues for fiscal years 1996-1997, 1997-1998, and
 

 
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 1           1998-1999 are actual, as certified by the director of
 
 2           finance in the Statement of the Debt Limit of the State
 
 3           of Hawaii as of July 1, 1999, dated November 24, 1999.
 
 4           The net general fund revenues for fiscal years 1999-
 
 5           2000 to 2001-2002 are estimates, based on general fund
 
 6           revenue estimates made December 20, 1999, by the
 
 7           council on revenues, the body assigned by article VII,
 
 8           section 7 of the state constitution to make such
 
 9           estimates, and based on estimates made by the
 
10           department of budget and finance of those receipts
 
11           which cannot be included as general fund revenues for
 
12           the purpose of calculating the debt limit, all of which
 
13           estimates the legislature finds to be reasonable.
 
14      (3)  Principal and interest on outstanding bonds applicable
 
15           to the debt limit.
 
16           (A)  According to the department of budget and finance,
 
17                the total amount of principal and interest on
 
18                outstanding general obligation bonds, after the
 
19                exclusions permitted by article VII, section 13 of
 
20                the state constitution, for determining the power
 
21                of the State to issue general obligation bonds
 
22                within the debt limit as of December 1, 1999, is
 
23                as follows for fiscal year 2000-2001 to fiscal
 
24                year 2006-2007:
 

 
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 1                 Fiscal                          Principal
 
 2                  Year                          and Interest
 
 3                2000-2001                       $352,508,780
 
 4                2001-2002                       $367,994,493
 
 5                2002-2003                       $411,701,970
 
 6                2003-2004                       $378,223,219
 
 7                2004-2005                       $373,053,164
 
 8                2005-2006                       $347,383,328
 
 9                2006-2007                       $344,154,560
 
10                The department of budget and finance further
 
11                reports that the amount of principal and interest
 
12                on outstanding bonds applicable to the debt limit
 
13                generally continues to decline each year from
 
14                fiscal year 2007-2008 to fiscal year 2019-2020
 
15                when the final installment of $27,612,984 shall be
 
16                due and payable.
 
17           (B)  The department of budget and finance further
 
18                reports that the outstanding principal amount of
 
19                bonds constituting instruments of indebtedness
 
20                under which the State may incur a contingent
 
21                liability as a guarantor is $191,000,000, all or
 
22                part of which is excludable in determining the
 
23                power of the State to issue general obligation
 

 
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 1                bonds, pursuant to article VII, section 13 of the
 
 2                state constitution.
 
 3      (4)  Amount of authorized and unissued general obligation
 
 4           bonds and guaranties and proposed bonds and guaranties
 
 5           (A)  As calculated from the state comptroller's bond
 
 6                fund report as of October 31, 1999, adjusted for:
 
 7                 (i) Appropriations to be funded with general
 
 8                     obligation bonds and reimbursable general
 
 9                     obligation bonds as provided in Act 99,
 
10                     Session Laws of Hawaii 1999 (General
 
11                     Appropriations Act of 1999), to be expended
 
12                     in the fiscal year 2000-2001;
 
13                (ii) Appropriations to be funded by reimbursable
 
14                     general obligation bonds as provided in Act
 
15                     151, Session Laws of Hawaii 1999 (Relating to
 
16                     Hawaii Hurricane Relief Fund Bonds) to be
 
17                     expended in the fiscal year 2000-2001;
 
18               (iii) Act 156, Session Laws of Hawaii 1999, (the
 
19                     Judiciary Appropriations Act of 1999) to be
 
20                     expended in the fiscal year 2000-2001; and
 
21                (iv) Lapses totaling $280,000 proposed in this
 
22                     Act, the total amount of authorized but
 
23                     unissued general obligation bonds, is
 
24                     $1,396,114,543.  
 

 
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 1                The total amount of general obligation bonds
 
 2                authorized in this Act is $3,800,000.  The total
 
 3                amount of general obligation bonds previously
 
 4                authorized and unissued and the general obligation
 
 5                bonds authorized in this Act is $1,399,914,543.
 
 6           (B)  As reported by the department of budget and
 
 7                finance, the outstanding principal amount of bonds
 
 8                constituting instruments of indebtedness under
 
 9                which the State may incur a contingent liability
 
10                as a guarantor is $191,000,000, all or part of
 
11                which is excludable in determining the power of
 
12                the State to issue general obligation bonds,
 
13                pursuant to article VII, section 13 of the state
 
14                constitution.  The total amount of guaranties
 
15                authorized by     Bill No.     (Relating to Hawaii
 
16                Health Systems Corporation) is $47,500,000 and are
 
17                herein validated.  The total amount of guaranties
 
18                previously authorized and validated by this Act is
 
19                $238,500,000.
 
20      (5)  Proposed general obligation bond issuance.  As reported
 
21           therein for fiscal years 1998-1999, 1999-2000, 2000-
 
22           2001, 2001-2002, and 2002-2003, the State proposes to
 
23           issue $200,000,000 during the remainder of fiscal year
 

 
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 1           1999-2000, $350,000,000 during the first half of fiscal
 
 2           year 2000-2001, $150,000,000 during the second half of
 
 3           fiscal year 2000-2001, $150,000,000 during the first
 
 4           half of fiscal year 2001-2002, $150,000,000 during the
 
 5           second half of fiscal year 2001-2002, $100,000,000
 
 6           during the first half of fiscal year 2002-2003, and
 
 7           $300,000,000 during the second half of fiscal year
 
 8           2002-2003.  It has been the practice of the State to
 
 9           issue twenty-year serial bonds with principal
 
10           repayments beginning the third year, the bonds payable
 
11           in substantially equal annual installments of principal
 
12           and interest payment with interest payments commencing
 
13           six months from the date of issuance and being paid
 
14           semiannually thereafter.  It is assumed that this
 
15           practice will be applied to the bonds which are
 
16           proposed to be issued except that principal repayments
 
17           will begin in the fourth year.
 
18      (6)  Sufficiency of proposed general obligation bond
 
19           issuance to meet the requirements of authorized and
 
20           unissued bonds, as adjusted, and bonds authorized by
 
21           this Act.  From the schedule reported in paragraph (5),
 
22           the total amount of general obligation bonds which the
 
23           State proposes to issue during the fiscal years 1999-
 

 
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 1           2000 to 2002-2003 is $1,000,000,000.  An additional
 
 2           $400,000,000 is proposed to be issued in fiscal year
 
 3           2002-2003.  The total amount of $1,000,000,000, which
 
 4           is proposed to be issued through fiscal year 2001-2002
 
 5           is sufficient to meet the requirements of the
 
 6           authorized and unissued bonds, as adjusted, and the
 
 7           bonds authorized by this Act, the total amount of which
 
 8           is $1,399,914,543, as reported in paragraph (4), except
 
 9           for $399,914,543.  It is assumed that the
 
10           appropriations to which an additional $399,914,543 in
 
11           bond issuance needs to be applied will have been
 
12           encumbered as of June 30, 2002.  The $400,000,000 which
 
13           is proposed to be issued in fiscal year 2002-2003 will
 
14           be sufficient to meet the requirements of the June 30,
 
15           2002, encumbrances in the amount of $399,914,543.  The
 
16           amount of assumed encumbrances as of June 30, 2002, is
 
17           reasonable and conservative, based upon an inspection
 
18           of June 30 encumbrances of the general obligation bond
 
19           fund as reported by the state comptroller.  Thus,
 
20           taking into account the amount of previously authorized
 
21           and unissued bonds and bonds proposed in this Act
 
22           versus the amount of bonds which is proposed to be
 
23           issued by June 30, 2002, and the amount of June 30,
 

 
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 1           2002 encumbrances versus the amount of bonds which is
 
 2           proposed to be issued in fiscal year 2002-2003, the
 
 3           legislature finds that in the aggregate, the amount of
 
 4           bonds which is proposed to be issued is sufficient to
 
 5           meet the requirements of all authorized and unissued
 
 6           bonds and the bonds authorized by this Act.
 
 7      (7)  Bonds excludable in determining the power of the State
 
 8           to issue bonds.  As noted in paragraph (1), certain
 
 9           bonds are excludable in determining the power of the
 
10           State to issue general obligation bonds.
 
11           (A)  General obligation reimbursable bonds can be
 
12                excluded under certain conditions.  It is not
 
13                possible to make a conclusive determination as to
 
14                the amount of reimbursable bonds which are
 
15                excludable from the amount of each proposed bond
 
16                issued because:
 
17                 (i) It is not known exactly when projects for
 
18                     which reimbursable bonds have been authorized
 
19                     in prior acts and in this Act will be
 
20                     implemented and will require the application
 
21                     of proceeds from a particular bond issue; and
 
22                (ii) Not all reimbursable general obligation bonds
 
23                     may qualify for exclusion.
 

 
Page 13                                                    2748
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 1                However, the legislature notes that with respect
 
 2                to the principal and interest on outstanding
 
 3                general obligation bonds, according to the
 
 4                department of budget and finance, the average
 
 5                proportion of principal and interest which is
 
 6                excludable each year from calculation against the
 
 7                debt limit is 6.97 per cent for the ten years from
 
 8                fiscal year 2000-2001 to fiscal year 2009-2010.
 
 9                For the purpose of this declaration, the
 
10                assumption is made that five per cent of each bond
 
11                issue will be excludable from the debt limit, an
 
12                assumption which the legislature finds to be
 
13                reasonable and conservative.
 
14           (B)  Bonds constituting instruments of indebtedness
 
15                under which the State incurs a contingent
 
16                liability as a guarantor can be excluded but only
 
17                to the extent the principal amount of such
 
18                guaranties does not exceed seven percent of the
 
19                principal amount of outstanding general obligation
 
20                bonds not otherwise excluded under subparagraph
 
21                (A) of paragraph (7) and provided that the State
 
22                shall establish and maintain a reserve in an
 
23                amount in reasonable proportion to the outstanding
 

 
Page 14                                                    2748
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 1                loans guaranteed by the State as provided by law.
 
 2                According to the department of budget and finance
 
 3                and the assumptions presented herein, the total
 
 4                principal amount of outstanding general obligation
 
 5                bonds and general obligation bonds proposed to be
 
 6                issued, which are not otherwise excluded under
 
 7                article VII, section 13 of the state constitution
 
 8                for the fiscal years 1999-2000, 2000-2001, 2001-
 
 9                2002, and 2002-2003 are as follows:
 
10                                            Total amount of
 
11                                       General Obligation Bonds
 
12                                       not otherwise excluded by
 
13                                       article VII, section 13
 
14                Fiscal year           of the state constitution
 
15                1999-2000                 $3,309,433,537
 
16                2000-2001                 $3,600,550,972
 
17                2001-2002                 $3,677,655,955
 
18                2002-2003                 $3,843,443,582
 
19           Based on the foregoing and based on the assumption that
 
20           the full amount of a guaranty is immediately due and
 
21           payable when such guaranty changes from a contingent
 
22           liability to an actual liability, the aggregate
 
23           principal amount of the portion of the outstanding
 

 
Page 15                                                    2748
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 1           guaranties and the guaranties proposed to be incurred,
 
 2           which does not exceed seven per cent of the average
 
 3           amount set forth in the last column of the above table
 
 4           and for which reserve funds have been or will have been
 
 5           established as heretofore provided, can be excluded in
 
 6           determining the power of the State to issue general
 
 7           obligation bonds.  As it is not possible to predict
 
 8           with a reasonable degree of certainty when a guaranty
 
 9           will change from a contingent liability to an actual
 
10           liability, it is assumed in conformity with fiscal
 
11           conservatism and prudence, that all guaranties not
 
12           otherwise excluded pursuant to article VII, section 13
 
13           of the state constitution will become due and payable
 
14           in the same fiscal year in which the greatest amount of
 
15           principal and interest on general obligation bonds,
 
16           after exclusions, occurs.  Thus, based on such
 
17           assumptions and on the determination in paragraph (8),
 
18           all of the outstanding guaranties can be excluded.
 
19      (8)  Determination whether the debt limit will be exceeded
 
20           at the time of issuance.  From the foregoing and on the
 
21           assumption that all of the bonds identified in
 
22           paragraph (5) will be issued at an interest rate of six
 
23           per cent, it can be determined from the following
 

 
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 1           schedule that the bonds which are proposed to be
 
 2           issued, which include all authorized and unissued bonds
 
 3           previously authorized, as adjusted, general obligation
 
 4           bonds and instruments of indebtedness under which the
 
 5           State incurs a contingent liability as a guarantor
 
 6           authorized in this Act, will not cause the debt limit
 
 7           to be exceeded at the time of such issuance:
 
 8                                        Greatest Amount
 
 9 Time of Issuance                       and Year of
 
10 and Amount to be         Debt Limit    Highest Principal
 
11 Counted Against          at Time of    and Interest on
 
12   Debt Limit             Issuance      Bonds and Guaranties
 
13 Remainder FY 1999-2000
 
14 $190,000,000             589,871,788   423,100,970 (2002-2003)
 
15 1st half FY 2000-2001
 
16 $332,500,000             589,511,425   443,051,970 (2002-2003)
 
17 2nd half FY 2000-2001
 
18 $142,500,000             589,511,425   451,601,970 (2002-2003)
 
19 1st half FY 2001-2002
 
20 $142,500,000             586,933,632   455,876,970 (2002-2003)
 
21 2nd half FY 2001-2002
 
22 $142,500,000             586,933,632   464,426,970 (2002-2003)
 

 
 
 
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 1 1st half FY 2002-2003
 
 2 $95,000,000              585,655,733   549,374,614 (2004-2005)
 
 3 2nd half FY 2002-2003
 
 4 $285,000,000             585,655,733   479,324,614 (2004-2005)
 
 5      (9)  Overall and concluding finding.  From the facts,
 
 6           estimates, and assumptions stated in this declaration
 
 7           of findings, the conclusion is reached that the total
 
 8           amount of principal and interest estimated for the
 
 9           general obligation bonds authorized in this Act, and
 
10           for all bonds authorized and unissued, and calculated
 
11           for all bonds issued and outstanding, and all
 
12           guaranties, will not cause the debt limit to be
 
13           exceeded at the time of issuance.
 
14      SECTION 9.  The legislature finds the bases for the
 
15 declaration of findings set forth in this Act reasonable.  The
 
16 assumptions set forth in this Act with respect to the principal
 
17 amount of general obligation bonds which will be issued, the
 
18 amount of principal and interest on reimbursable general
 
19 obligation bonds which are assumed to be excludable, and the
 
20 assumed maturity structure shall not be deemed to be binding, it
 
21 being the understanding of the legislature that such matters must
 
22 remain subject to substantial flexibility.
 
23      SECTION 10.  Authorization for issuance of general
 
24 obligation bonds.  General obligation bonds may be issued as
 

 
Page 18                                                    2748
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 1 provided by law in an amount that may be necessary to finance the
 
 2 project authorized in this Act provided that the sum total of
 
 3 general obligation bonds issued shall not exceed $3,800,000.
 
 4      Any law to the contrary notwithstanding, general obligation
 
 5 bonds may be issued from time to time in accordance with section
 
 6 39-16, Hawaii Revised Statutes, in such principal amount as may
 
 7 be required to refund any general obligation bonds of the State
 
 8 of Hawaii heretofore or hereafter issued pursuant to law.
 
 9      SECTION 11.  The provisions of this Act are declared to be
 
10 severable and if any portion thereof is held to be invalid for
 
11 any reason, the validity of the remainder of this Act shall not
 
12 be affected.
 
13      SECTION 12.  In printing this Act, the revisor of statutes
 
14 shall substitute in section 8 the corresponding act numbers for
 
15 bills identified therein.
 
16      SECTION 13.  This Act shall take effect upon its approval.