SB2433.DOC

SECTION 1. Section 46-80.1, Hawaii Revised Statutes, is amended by amending its title and subsections (a) to (c) to read as follows:

"[[]§46-80.1[]] Community facilities and educational services district. (a) Any county having a charter may enact an ordinance, and may amend the same from time to time, providing for the creation of community facilities and educational services districts to finance special improvements [~~in the county.~~], or educational services through the provision of supplemental revenues to the department of education that may be used for operation and maintenance services, including teacher salaries, for schools in the county that directly benefit and are located within or adjacent to the boundaries of an educational services district. Educational services shall mean education costs of public elementary, intermediate, and high schools. The special improvements or educational services may be provided and financed under the ordinance. The county shall have the power to levy and assess a special tax on property located in a district to finance the special improvements or services and to pay the debt service on any bonds issued to finance the special improvements. The county may issue and sell bonds to provide funds for the special improvements. Bonds issued to provide funds for the special improvements may be either: bonds secured only by the properties included in the district and/or the special taxes thereon, or bonds payable from general taxes and/or secured by the general taxing power of the county. If the bonds are secured only by the properties included in the district and/or the special taxes thereon, the bonds shall be issued according and subject to the provisions of the ordinance. If the bonds are payable from general taxes or secured by the general taxing power, the bonds shall be issued according and subject to chapter 47. Educational services shall be financed and payable only by a levy of special taxes on properties included in the district. The county council shall appoint a five member citizens oversight committee for each educational services district successfully formed from property owners within each educational service district to certify to the county and the department of education that the special taxes supplement, and do not replace, existing revenues available for the those schools located within or adjacent to the boundaries of an educational services district. The citizens oversight committee shall also make annual recommendations specific to each school in the educational services district to the county and the department of education.

(b) There is no requirement that the special tax imposed by ordinance pursuant to this section be fixed in an amount or apportioned on the basis of special benefit to be conveyed on property by the special improvement[,] or educational services, or that the special improvement or educational services convey a special benefit on any property in the district. It shall be sufficient that the governing body of the county determines that the property to be subject to the special tax is improved or benefited by the special improvement or educational services in a general manner or in any other manner. The special improvement or educational services may also benefit property outside the district. The special taxes assessed pursuant to this section shall be a lien upon the property assessed. The lien shall have priority over all other liens except the lien of general real property taxes and the lien of assessments levied under section 46-80. The lien of special taxes assessed pursuant to this section shall be on a parity with the lien of general real property taxes and the lien of assessments levied under section 46-80, except to the extent the law or assessment ordinance provides that the lien of assessments levied under section 46-80 shall be subordinate to the lien of general real property taxes.

(c) The ordinance shall describe the types of special improvements or educational services that may be undertaken and financed. In addition, the ordinance shall include, but not be limited to, procedures for:

(1) Creating community facilities and educational services districts (and zones therein), including specific time spans for the existence of each district;

(2) Apportioning special taxes on real properties within a community facilities and educational services district;

(3) Providing notice to and opportunity to be heard by owners of property proposed to be subject to the special tax (the affected owners), subject to waiver by one hundred per cent of the affected owners, including termination of proceedings if the affected owners of more than fifty-five per cent of the property, or if more than fifty-five per cent of the affected owners of the property, in the community facilities and educational services district proposed to be subject to the special tax protest in writing at the hearing. The ordinance shall also provide that if a lease requires the lessee to pay the proposed special tax, the ordinance shall state that the affected owner may waive this requirement in writing and that the affected owner refrain from imposing upon any successor lessee the obligation to pay the special tax. The ordinance shall also provide that if the affected owner fails to waive the requirement that the lessee pay the proposed tax, then all the rights for notice, hearing, and protest contained in this paragraph shall inure to the benefit of the original lessee or any subsequent lessee;

(4) Provide notice to buyers or lessees of the property who would be required to pay the special tax;

(5) Fixing, levying, collecting, and enforcing the special taxes against the properties affected thereby (including penalties for delinquent payment and sales for default);

(6) Making changes in the community facilities and educational services district, in the special taxes, or in the special improvements or educational services to be financed or provided;

(7) The acquisition or construction of the special improvements[;] or the provision of educational services;

(8) The issuance of bonds to pay all or part of the cost of the special improvements (including costs of issuance, reserves, capitalized interest, credit enhancement, and any other related expenses);

(9) Refunding bonds previously issued;

(10) The establishment and handling of a separate special fund or funds to pay or secure such bonds, or to pay for acquisition or construction of special improvements or the provision of educational services or any other related expenses; and

(11) Other matters as the council shall determine to be necessary or proper.

The amount of special taxes may include amounts determined by the council to be necessary or reasonable to cover administration and collection of the assessments, administration of the bonds or of the program authorized by this section, replenishment of reserves, arbitrage rebate, and a reasonable financing fee."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2433
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII