STAND. COM. REP. NO.3187

Honolulu, Hawaii

, 2002

RE: H.B. No. 2166

H.D. 1

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2166, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO EDUCATION,"

begs leave to report as follows:

The purpose of this measure is to authorize the issuance of special purpose revenue bonds to assist not-for-profit private nonsectarian and sectarian elementary schools, secondary schools, colleges, and universities that serve the general public.

Specifically, this measure:

(1) Proposes amendments to article VII, section 12 and article X, section 1 of the state constitution to authorize the issuance of special purpose revenue bonds to assist these project parties; and

(2) Adds a new part to chapter 39A, Hawaii Revised Statutes (special purpose revenue bonds), to provide for the issuance of special purpose revenue bonds to assist these project parties.

Because the interest on special purpose revenue bonds is exempt under applicable federal and state income tax laws, your Committee finds that investors are willing to loan money at lower than usual interest rates. Issuers can obtain loans that are up to two percentage points—or twenty-five per cent—below commercial (interest) rates because of these income tax exemptions. A lower interest rate results in lower costs to the private business on whose behalf special purpose revenue bonds have been issued.

Your Committee has amended this measure by:

(1) Deleting the proposed amendments to article VII, section 12 and article X, section 1 of the state constitution;

(2) Correcting an invalid cross-reference to section 39A-227, Hawaii Revised Statutes (at page 20, line 14), which is in part VII of chapter 39A, Hawaii Revised Statutes; and

(3) Making the new part being added to chapter 39A, Hawaii Revised Statutes, effective upon ratification of constitutional amendments authorizing the issuance of special purpose revenue bonds to assist these project parties.

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. 2166, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2166, H.D. 1, S.D. 2.

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

____________________________

BRIAN T. TANIGUCHI, Chair