Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1248, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the issuance of general obligation bonds to assist qualifying schools under the federal Qualified Zone Academy Bond program.

Qualified zone academy bonds bear no interest and provide bondholders with a federal income tax credit. At least ninety-five per cent of bond proceeds must be used for the repair, renovation, or restoration of school projects, acquiring equipment, developing school curriculum, or providing teacher training.

As of 2005, Hawaii's total allocation of qualified zone academy bonds is $4,327,000, which includes Hawaii's allocations for 2003 and 2004. All of Hawaii's allocations authorized prior to 2002 have lapsed and the federal reauthorization for the bonds will sunset on December 31, 2005.

Your Committee finds that it is imperative that the State act quickly to take full advantage of this program, especially in light of the State's fiscal requirements and the budgetary needs of public education. Your Committee has left the bond issuance amount unspecified for purposes of discussion.

Your Committee has amended the bill by making technical amendments that have no substantive effect.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1248, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1248, S.D. 2.