STAND. COM. REP. NO. 1300

Honolulu, Hawaii

RE:    H.B. No. 1588

       H.D. 1

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 1588, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO GENERAL OBLIGATION BONDS,"

begs leave to report as follows:

     The purpose and intent of this measure is to promote the prudent use of the State's bond financing authority.

     Specifically, the measure:

(1)  Prohibits the issuance of general obligation bonds to finance the repair and maintenance of a capital asset with a depreciable life of less than ten years from the date the asset was first placed into service;

(2)  Authorizes only cash appropriations or the issuance of bonds other than general obligation bonds to finance the repair and maintenance of a capital asset with a depreciable life of less than ten years from the date the asset was first placed into service; and

(3)  Requires the Director of Finance to set a maturity date of not more than ten years when issuing general obligation bonds to finance the repair and maintenance of a capital asset with a depreciable life of ten years or more from the date the asset was first placed into service.

     Your Committee received comments on this measure from the Department of Budget and Finance and the Department of the Attorney General.

     Your Committee finds that passage of this measure will promote fiscally responsible funding of repair and maintenance projects in the State.

     Your Committee has amended this measure by:

(1)  Deleting language restricting the Legislature's ability to authorize the issuance of general obligation bonds and requiring the use of cash appropriations or bonds other than general obligation bonds, with respect to financing the repair and maintenance of capital assets with a depreciable life of less than ten years from the date the asset was first placed into service; and

(2)  Changing the effective date from July 1, 2030, to upon approval.

     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 H.B. No. 1588, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1588, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

JILL N. TOKUDA, Chair