HOUSE OF REPRESENTATIVES

H.B. NO.

1829

THIRTY-FIRST LEGISLATURE, 2022

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to bonds.

 

 

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

 

     SECTION 1.  The legislature finds that the Internal Revenue Code of 1986 provides for a formula for the allocation of the State's annual ceiling among governmental units authorized to issue private activity bonds.  The legislature further finds that title 26 United States Code section 146(e) also allows a state to establish a different formula for allocating the state ceiling among its governmental units by state law.  That authority was exercised in the enactment of Act 62, Session Laws of Hawaii 1987, which established a different ceiling allocation for the counties to provide more flexibility and to better serve the needs of the counties and other issuers of private activity bonds within the State.

     The purpose of this Act is to:

     (1)  Specify that for five years, the entire allocation of the state bond ceiling shall be allocated to the State to be used entirely for housing related projects;

     (2)  Remove the authorization for counties or issuers to request additional allocations of the state bond ceiling;

     (3)  Require counties or issuers that retain their allocation to submit quarterly reports on the status or use of any allocation;

     (4)  Require a project to first apply to the county in which the project is located, if the county has a private activity bond issuance program, before applying to the State; and

     (5)  For five years, change the dates for reverted or remaining allocations and require certain reverted or remaining allocations to be used for housing related projects.

     SECTION 2.  Section 39B-2, Hawaii Revised Statutes, is amended to read as follows:

     "§39B-2  Allocation of annual state ceiling.  (a)  [The] One hundred per cent of the annual state ceiling shall be allocated for each calendar year [in the following proportions:

     (1)  An amount equal to fifty per cent of the annual state ceiling] to the State[;] and shall be used entirely for housing related projects.

    [(2)  An amount equal to 37.55 per cent of the annual state ceiling to the city and county of Honolulu;

     (3)  An amount equal to 5.03 per cent of the annual state ceiling to the county of Hawaii;

     (4)  An amount equal to 2.41 per cent of the annual state ceiling to the county of Kauai; and

     (5)  An amount equal to 5.01 per cent of the annual state ceiling to the county of Maui.]

     (b)  The department, with the approval of the governor, may assign all or any part of the allocation of the State to any issuer or any county for a specific calendar year or years.  At the request of the department, any issuer or county to which any part of the State's allocation has been assigned shall return all or part of the assignment, in which case the department may provide for its reassignment.

     [(c)  The department may request return of all or any part of the allocations of one or more counties made pursuant to subsection (a), and may assign and reassign the allocation to any other county or issuer for a specified calendar year or years.

     (d)] (c)  A county, by resolution of its governing body, or any issuer, by written certificate of such issuer, may [request additional allocations of the annual state ceiling from, or] assign all or any part of its portion of the allocation of the annual state ceiling pursuant to subsection (b) to[,] the State for a specified calendar year or years.

     (d)  A county or any issuer that does not assign all or any part of its portion of the allocation of the annual state ceiling to the State pursuant to subsection (c) during a calendar year shall submit a quarterly report to the department on the status or use of that portion of the allocation.

     (e)  Any project subject to the annual state ceiling shall first apply to the county in which the project is located, if the county has a private activity bond issuance program, before applying to the State for the state allocation.

     (f)  After            of each calendar year, any unused annual state ceiling allocation shall be used for housing related purposes."

     SECTION 3.  Section 39B-4, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§39B-4[]]  Report of unused allocation; reversion to State.  The director of finance of each county shall report to the department in writing by [December 15] September 30 of each year as to the amount of allocation to such county which has not been applied to private activity bonds in such year or assigned pursuant to this chapter.

     In preparing such report, the director of finance of the county shall deduct any allocation which is unused or unassigned as of [December 15] September 30 but will be applied to private activity bonds on or prior to [December 31] November 1 of such year.

     Unless the director of finance of the county or any issuer, by written certificate, indicates to the department prior to [December 15] September 30 of each year that it intends to carry forward all or any portion of its allocation which has not been applied to private activity bonds in such year or assigned pursuant to this chapter, such unused or unassigned allocation shall revert to the State on [December 31] November 1 and the State shall be entitled to carry forward such unused or unassigned allocation as permitted by federal law[.]; provided that the State shall use any reverted allocation for housing related projects, and the amount of reverted allocation carried forward and used for housing related projects in subsequent years shall be in addition to, and shall not supplant, any other portions of the annual state ceiling required by this chapter to be used for housing related projects."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2022; provided that on December 31, 2027, this Act shall be repealed and sections 39B-2 and 39B-4, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day prior to the effective date of this Act.

 

INTRODUCED BY:

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Report Title:

State Bonds; Annual Ceiling; Private Activity Bonds

 

Description:

Specifies that the entire allocation of the state bond ceiling shall go to the State to be used for housing related projects.  Removes the authorization for counties or issuers to request additional allocations of the state bond ceiling.  Requires counties or issuers that retain their allocation to submit quarterly reports on the status or use of any allocation.  Requires a project to first apply to the county in which the project is located, if the county has a private activity bond issuance program, before applying to the State.  Changes the dates for reverted or remaining allocations and requires certain reverted or remaining allocations to be used for housing related projects.  Sunsets on 12/31/2027.

 

 

 

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