STAND. COM. REP. NO. 1196

Honolulu, Hawaii

, 2005

RE: H.B. No. 19

H.D. 2

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Higher Education, to which was referred H.B. No. 19, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO UNIVERSITY PROJECTS AND AUTHORIZING THE ISSUANCE OF REVENUE BONDS FOR HOUSING UNITS,"

begs leave to report as follows:

The purpose of this measure is to clarify:

(1) That the Board of Regents may contract for the marketing of revenue bonds to the greatest advantage;

(2) The definitions of "board" and "revenue of the university";

(3) The law on the issuance of revenue bonds by the Board of Regents;

(4) The law on university revenue-undertakings fund; and

(5) The law on exemptions of property and revenue of any university project or university system from taxation and assessments.

This measure also authorizes the issuance of revenue bonds in the amount of $250,000,000 to finance the cost of construction and maintenance of student housing units.

Your Committee received testimony in support of this measure from the University of Hawaii (UH) and the Associated Students of the UH.

The thrust of this measure is to facilitate the development of student housing by the issuance of revenue bonds by the Board of Regents. This measure would enhance the ability of the UH to address critical housing needs of students in a tight rental housing market. Student housing is a critical component of the campus infrastructure. Currently available student housing space is insufficient to meet increasing demands at the UH. In addition, substantial renovation and reconstruction of housing facilities are essential due to the age and current physical state of the buildings. A new dorm building at the UH has not been built since 1978.

Unfortunately, in the Fall of 2004, at least 700 students who were assured housing became homeless at the beginning of the semester due to past failure by the UH to upkeep the maintenance and repairs. Approximately $33,814,016 in deferred maintenance has accumulated at the UH at Manoa.

Additionally, there was a shortage of almost 1,400 dorm spaces last summer for incoming fall students, aggravated by the shutdown of 214 rooms in Gateway House last January to replace the 40-year-old building's aging transformer and by the power failures caused by the October 30, 2004 flooding from Manoa Stream.

This measure would allow the UH to pledge revenue sources other than those generated through the UH bond system. The ability to pledge other sources of revenue, excluding general funds, has the potential to increase the UH's debt capacity for financing projects such as student housing.

Your Committee has amended this measure by adding "special and revolving funds" to the definition of "revenue of the university".

As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 19, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 19, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Higher Education,

____________________________

CLAYTON HEE, Chair