THE SENATE	S.B. NO.	2866
TWENTY-FIFTH LEGISLATURE, 2010		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO SPECIAL PURPOSE REVENUE BONDS.

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

     SECTION 1.  Chapter 39A, part II, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-34(b), based on the application materials submitted by the project party under section 39A-32(1), and shall issue the pre-authorization certification to the project party."

     SECTION 2.  Chapter 39A, part III, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-74(b), based on the application materials submitted by the project party under section 39A-72(1), and shall issue the pre-authorization certification to the project party."

     SECTION 3.  Chapter 39A, part IV, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-114(b), based on the application materials submitted by the project party under section 39A-112(1), and shall issue the pre-authorization certification to the project party."

     SECTION 4.  Chapter 39A, part V, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-154(b), based on the application materials submitted by the project party under section 39A-152(1), and shall issue the pre-authorization certification to the project party."

     SECTION 5.  Chapter 39A, part VI, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-194(b), based on the application materials submitted by the project party under section 39A-192(1), and shall issue the pre-authorization certification to the project party."

     SECTION 6.  Chapter 39A, part VII, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-224(b), based on the application materials submitted by the project party under section 39A-222(1), and shall issue the pre-authorization certification to the project party."

     SECTION 7.  Chapter 39A, part VIII, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-254(b), based on the application materials submitted by the project party under section 39A-252(1), and shall issue the pre-authorization certification to the project party."

     SECTION 8.  Chapter 39A, part IX, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-284(b), based on the application materials submitted by the project party under section 39A-282(1), and shall issue the pre-authorization certification to the project party."

     SECTION 9.  Chapter 39A, part X, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§39A-  Pre-authorization certification. No later than three months prior to the beginning of the legislative session during which a project party intends to seek a special purpose revenue bond authorization from the legislature, the project party shall seek a pre-authorization certification from the department.  Upon completion of the application for the pre-authorization certification by the project party, the department shall determine whether the applicant qualifies as a responsible party, pursuant to section 39A-314(b), based on the application materials submitted by the project party under section 39A-312(1), and shall issue the pre-authorization certification to the project party."

     SECTION 10.  Section 39A-32, Hawaii Revised Statutes, is amended to read as follows:

"§39A‑32  Department powers as to health care facilities.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-34(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-34(b); and

(B) Submit an application to the department that describes the health care facility to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Indicates whether the state health planning and development agency has issued a final decision awarding a certificate of need or an exemption therefrom to the applicant for the health care facility proposed;

(iii) Includes the licensing and accreditation procedures to which the project party is subject;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or refinancing of outstanding obligations related to a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for this project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

When the department finances or refinances a project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire a project or any part thereof for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 11.  Section 39A-72, Hawaii Revised Statutes, is amended to read as follows:

"§39A‑72  Department powers as to manufacturing enterprises.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-74(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-74(b); and

(B) Submit an application to the department that describes the manufacturing enterprise to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Includes a study prepared by a third party, or a letter from the department of business, economic development, and tourism, regarding feasibility of the manufacturing facility proposed;

(iii) Includes the licensing and accreditation procedures to which the project party is subject;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or maintenance of a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for a project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part."

     SECTION 12.  Section 39A-112, Hawaii Revised Statutes, is amended to read as follows:

"§39A‑112  Department powers as to processing enterprises.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-114(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-114(b); and

(B) Submit an application to the department that describes the processing enterprise to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Includes a study prepared by a third party, or a letter from the department of business, economic development, and tourism, regarding the feasibility of the processing enterprise proposed;

(iii) Includes the licensing and accreditation procedures to which the project party is subject;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or maintenance of a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for a project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part."

     SECTION 13.  Section 39A-152, Hawaii Revised Statutes, is amended to read as follows:

"§39A‑152  Department powers as to industrial enterprises.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-154(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-154(b); and

(B) Submit an application to the department that describes the industrial enterprise to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Includes a study prepared by a third party, or a letter from the department of business, economic development, and tourism, regarding the feasibility of the industrial enterprise proposed;

(iii) Includes the licensing or accreditation procedures to which the project party or the project is subject;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or maintenance of a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for a project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part."

     SECTION 14.  Section 39A-192, Hawaii Revised Statutes, is amended to read as follows:

"§39A-192  Department powers as to energy projects.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-194(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-194(b); and

(B) Submit an application to the department that describes the energy project to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Indicates whether the project has been certified by the public utilities commission as being from the local furnishing of electric energy or gas within the meaning of that phase as defined in section 39A-191, or any relevant correspondence with the public utilities commission regarding this issue;

(iii) Includes a certified statement from the project party that the project qualifies as an energy project, as defined in section 39A-191;

(iv) Includes a study prepared by a third party, or a letter from the department of business, economic development, and tourism, regarding the feasibility of the energy project proposed;

(v) Includes the licensing and accreditation procedures to which the project party is subject;

(vi) Includes audited financial statements for the project party for the most recent three years; and

(vii) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for an energy project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of an energy project;

    [(4)] (5)  As security for the payment of the principal of and interest on the special purpose revenue bonds issued for an energy project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the energy project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the energy project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

When the department finances an energy project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire an energy project or any part thereof for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 15.  Section 39A-222, Hawaii Revised Statutes, is amended to read as follows:

"§39A‑222  Department powers as to early childhood education and care facilities.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-224(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-224(b); and

(B) Submit an application to the department that describes the early childhood education and care facility to be financed or refinanced, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date, if the facility is new construction, or a financial statement describing the obligations to be refinanced, if the bond will refinance outstanding obligations of an existing facility;

(ii) A general description of the early childhood education and care facility, including the types of services provided or to be provided and the number of children to be served;

(iii) Includes a certified statement from the project party that the facility meets the definition of the early childhood education and care facility, as defined in section 39A-221;

(iv) Includes a study prepared by a third party, or a letter from the department of human services, regarding the feasibility of the early childhood education and care facility;

(v) Includes the licensing and accreditation procedures to which the project party is subject;

(vi) Includes audited financial statements for the project party for the most recent three years; and

(vii) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or refinancing of outstanding obligations related to a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for [this] a project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

When the department finances or refinances a project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire a project or any part thereof for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 16.  Section 39A-252, Hawaii Revised Statutes, is amended to read as follows:

"§39A-252  Department powers as to private nonsectarian and sectarian elementary schools, secondary schools, colleges, and universities.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-254(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-254(b); and

(B) Submit an application to the department that describes the proposed elementary school, secondary school, college, or university facility to be financed or refinanced, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date, if the facility is new construction, or a financial statement describing the obligations to be refinanced, if the bond will refinance outstanding obligations of an existing statement;

(ii) Includes a study prepared by a third party, or a letter from the department of education, regarding the feasibility of the elementary school, secondary school, college, or university facility;

(iii) Includes the licensing and accreditation procedures to which the project party is subject, together with the latest reports, if any, regarding the facility's licensing and accreditation;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103-7 and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement or an amendment or supplement to an existing project agreement with a project party; and

         (B)  Enter into and carry out any agreement, whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, or refinancing of outstanding obligations related to a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for this project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the special purpose revenue bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related to the project agreement; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

When the department finances or refinances a project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire a project or any part of the project for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 17.  Section 39A-282, Hawaii Revised Statutes, is amended to read as follows:

"[[]§39A-282[]]  Department powers in the development of low- and moderate-income housing.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-284(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-284(b); and

(B) Submit an application to the department that describes the low- and moderate-income housing project to be financed or refinanced, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date, if the facility is new construction, or a financial statement describing the obligations to be refinanced, if the bond will refinance outstanding obligations of an existing facility;

(ii) Includes a certified statement by the project party describing how the project has met or will meet the definition of "low- and moderate-income housing project", as defined in section 39A-281;

(iii) Includes a feasibility study of the project prepared by an independent third party, and, if a new project, a statement estimating the number of persons or families who meet the income-qualifying criteria that are likely to purchase or rent the units in the project;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103‑7[,] and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for this project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

          (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related to the project agreement; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

When the department finances or refinances a project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire a project or any part of the project for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 18.  Section 39A-312, Hawaii Revised Statutes, is amended to read as follows:

"[[]§39A‑312[]]  Department powers as to agricultural enterprises serving important agricultural lands.  In addition to the powers [that it may now have,] presently authorized to the department by law, the department shall have all powers necessary or convenient to accomplish the purposes of this part.  The powers of the department include but are not limited to the following:

(1) To accept and evaluate materials pertaining to whether the project party is a responsible party, as described in section 39A-314(b), and to issue a pre-authorization certification to the project party.  To qualify for a pre-authorization certification, a project party shall:

(A) Meet the definition of a responsible party in section 39A-314(b); and

(B) Submit an application to the department that describes the agricultural enterprise serving important agricultural lands to be financed, which:

(i) Summarizes the proposed method of financing, construction cost estimates, and estimated construction completion date;

(ii) Indicates whether lands underlying the facility have been designated as important agricultural lands, or are capable of being designated as important agricultural lands and the steps being taken by the project party to have the lands designated;

(iii) Includes a study prepared by a third party, or a letter from the department of agriculture, regarding the feasibility of the facility;

(iv) Includes audited financial statements for the project party for the most recent three years; and

(v) Includes any other information required by the department in order to determine whether the project party is a responsible party;

    [(1)] (2)  Notwithstanding and without compliance with section 103-7[,] and chapter 103D, but with the approval of the governor, to:

         (A)  Enter into and carry out a project agreement, or an amendment or supplement to an existing project agreement, with a project party; and

         (B)  Enter into and carry out any agreement whereby the obligation of a project party under a project agreement will be unconditionally guaranteed by a person other than a project party;

    [(2)] (3)  To issue special purpose revenue bonds pursuant to and in accordance with this part;

    [(3)] (4)  To lend the proceeds of the special purpose revenue bonds issued for a project to the project party for use and application by the project party for the acquisition, purchase, construction, reconstruction, improvement, betterment, extension, maintenance of a project, or refinancing of outstanding obligations related to a project;

    [(4)] (5)  As security for the payment of the principal, premium, if any, and interest of the special purpose revenue bonds issued for a project, to:

         (A)  Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the department under the project agreement for the project for which the bonds are issued;

         (B)  Pledge and assign the interest and rights of the department under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;

         (C)  Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the department with respect to the project; or

         (D)  Any combination of the foregoing;

    [(5)] (6)  To extend or renew any project agreement or any other agreement related thereto; provided that any renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement previously approved by the governor; and

    [(6)] (7)  To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this part.

     When the department finances or refinances a project by the issuance of special purpose revenue bonds as contemplated by this part, the State shall not exercise the power of eminent domain to acquire a project or any part thereof for lease or transfer to a project party, nor shall the State operate a project on behalf of a project party."

     SECTION 19.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 20.  This Act shall take effect upon its approval.

Report Title:

Special Purpose Revenue Bonds; Pre-Authorization Certification

Description:

Requires an applicant for a special purpose revenue bond to apply for pre-authorization certification from the department of budget and finance 3 months prior to the legislative session in which the applicant seeks the bond authorization.  Sets out requirements for the pre-authorization certification for each type of bond.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.