Report Title:

Hawaii Energy Loan Program

 

Description:

Establishes the Hawaii energy loan program to provide low-interest loans for energy programs that promote energy conservation and renewable energy resource development.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2101

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to the hawaii energy loan program.

 

 

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

 


     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Hawaii energy loan program

     §   -1  Definitions.  As used in this chapter, unless the context requires otherwise:

     "Alternative fuel project" means:

     (1)  A fleet of vehicles that are modified or acquired directly from a factory that:

         (A)  Uses an alternative fuel including electricity, ethanol, gasohol with at least ten per cent denatured alcohol content, hydrogen, hythane, methane, methanol, natural gas, propane, or any other fuel approved by the coordinator; and

         (B)  Produces lower or equivalent exhaust emissions or are more energy efficient than vehicles fueled by gasoline; and

     (2)  A facility, including a fueling station, necessary to operate an alternative fuel vehicle fleet.

     "Applicant" means an applicant for a Hawaii energy loan program loan.

     "Committee" means the Hawaii energy loan program advisory committee.

     "Coordinator" means the energy resources coordinator as provided by section 196-3.

     "Department" means the department of business, economic development, and tourism.

     "Director" means the director of business, economic development, and tourism.

     "Eligible federal agency" means a federal agency or public corporation created by the federal government that proposes to use a loan for an energy loan program project.  "Eligible federal agency" does not include a federal agency or public corporation created by the federal government that proposes to use a loan for an energy loan program project to generate electricity for sale.

     "Eligible state agency" means a state officer, board, commission, department, or agency of the State that receives funds held in the state general fund to pay for all or part of its costs.

     "Energy project" means:

     (1)  A system, mechanism, or series of mechanisms located primarily in the State that directly or indirectly uses or enables the use of, by the applicant or another person, renewable resources including solar, wind, wave, geothermal, biomass, waste heat or water resources to produce energy, including heat, electricity, and substitute fuels to meet an energy need in the State;

     (2)  A system, mechanism, or series of mechanisms located primarily in the State or providing substantial benefits to the State that directly or indirectly conserves energy or enables the conservation of energy by the applicant or another person, including energy used in transportation;

     (3)  A recycling project;

     (4)  An alternative fuel project;

     (5)  An improvement that increases the production or efficiency, or extends the operating life, of a system, mechanism, series of mechanisms, or project, including the restarting of a dormant project;

     (6)  A system, mechanism, or series of mechanisms installed in a facility or portions of a facility that directly or indirectly reduces the amount of energy needed for the construction and operation of the facility and that meets applicable sustainability building requirements;

     (7)  A project described in paragraphs (1) through (6), whether or not the existing project was originally financed under this chapter, together with any refinancing necessary to remove prior liens or encumbrances against the existing project; or

     (8)  A project described in paragraphs (1) through (7) that conserves energy or produces energy by generation or by processing or collection of a renewable resource.

     "Hawaii business" means a sole proprietorship, partnership, company, cooperative, corporation, or other business entity organized or authorized to do business in the State for profit.

     "Loan" includes the purchase or other acquisition of evidence of indebtedness and money used for the purchase or other acquisition of evidence of indebtedness.

     "Loan contract" means the evidence of indebtedness and all instruments used in the purchase or acquisition of the evidence of indebtedness.  For eligible federal or state agencies or tax exempt county agencies, a loan contract may include a lease purchase agreement with respect to personal property.

     "Loan fund" means the Hawaii energy loan program fund established in section    -10.

     "Recycling project" means a facility or equipment that converts waste into a new and usable product.

     "Sinking fund" means the Hawaii energy loan program administration and bond sinking fund established in section    -28.

     "Small business" means:

     (1)  A Hawaii business that is:

         (A)  A retail or service business employing not more than fifty persons at the time the loan is made; or

         (B)  An industrial or manufacturing business employing not more than two hundred persons at the time the loan is made; or

     (2)  A Hawaii subsidiary of a sole proprietorship, partnership, company, cooperative, corporation, or other business entity that employs in the subsidiary and the parent entity at the time the loan is made:

         (A)  Not more than fifty persons if the subsidiary is a retail or service business; or

         (B)  Not more than two hundred persons if the subsidiary is an industrial or manufacturing business.

     §   -2  Application for loan funds; content; fee.  (a)  Any resident of the State, Hawaii business, nonprofit corporation, eligible federal agency, eligible state agency, public corporation created by the State, intergovernmental entity created pursuant to an intergovernmental agreement under    -15, or county may file with the department an application to obtain loan funds for an energy project.

     (b)  Applications for loan funds shall be in writing on a form prescribed by the department and shall:

     (1)  Describe the nature and purpose of the proposed energy project;

     (2)  State whether any purposes other than energy production, but consistent with energy production, will be served by the proposed energy project, and the nature of the other purposes;

     (3)  Include an evaluation of the potential of the energy project to meet energy needs;

     (4)  State whether any moneys other than loan fund moneys are proposed to be used for the development of the energy project and whether any other moneys are available or have been sought for the project; and

     (5)  Describe the source of funds for repayment of the loan applied for.

     (c)  A fee of one-tenth of one per cent of the amount of the loan applied for or $2,500, whichever is less, shall be submitted with each application.  The applicant may be required to pay for costs incurred with the application that exceed the application fee that the coordinator determines are incurred solely in connection with processing the application.  The applicant shall be advised of any additional costs payable by the applicant before the costs are incurred.

     §   -3  Confidentiality.  (a)  The following records, communications, and information furnished by or on behalf of an applicant shall be confidential if requested in writing by the person providing the information:

     (1)  Personal financial statements;

     (2)  Financial statements of applicants;

     (3)  Customer lists;

     (4)  Information of an applicant pertaining to litigation to which the applicant is a party if the complaint has been filed, or, if the complaint has not been filed, if the applicant shows that litigation is reasonably likely to occur;

     (5)  Production, sales, and cost data; and

     (6)  Technical information or data related to an applicant's proposed energy project, including any description, analysis, evaluation, or projection regarding the project or a component of the project.

     (b)  Confidentiality established by this section does not apply to concluded litigation and does not limit any right granted by discovery statutes to a party to litigation or potential litigation.

     §   -4  Hawaii energy loan program advisory committee.  (a)  The coordinator shall appoint a Hawaii energy loan program advisory committee to review applications made pursuant to this chapter and to make recommendations to the coordinator.

     (b)  The advisory committee shall consist of seven members who shall serve a term of two years, commencing on the date of appointment until a successor is appointed.

     (c)  Members shall represent the interest of the residents of the State and shall include members knowledgeable in the areas of energy technology, natural resource development, environmental protection, finance, agriculture, state or county government operations, or utility operations.

     (d)  The committee shall elect its presiding officer, adopt rules for procedures, and meet on the call of the presiding officer or a majority of members.

     (e)  The department shall provide administrative facilities and services for the committee.

     (f)  Members shall not be compensated but shall be reimbursed for necessary expenses, including travel.

     §   -5  Standards for energy projects; review of applications; referral to committee; committee criteria.  (a)  After consultation with the Hawaii energy loan program advisory committee, the coordinator shall establish by rule standards and criteria for energy projects to be funded under this chapter.  The standards and criteria shall operate to encourage diversity in projects funded, give preference to the maximum extent practical to projects proposed by individuals and small businesses, ensure acceptability of environmental impacts, and shall require consideration of the potential contribution of a project if developed at other suitable locations to meeting the energy needs of this State.  The standards and criteria shall give the least preference to projects proposed by an eligible federal agency.

     (b)  All applications shall be reviewed by the department.  The department may require the applicant to submit additional information or revise the application.  The department shall:

     (1)  Determine whether the application meets the standards and criteria adopted under subsection (a); and

     (2)  Recommend approval or denial of the loan application, and, if approval is recommended, in what amount the loan should be made.

     (c)  After concluding its review, unless the application meets the criteria established by the committee, the department shall refer the application and its findings and recommendation to the committee for its review.  The department shall notify the applicant of the date, time, and place of any oral presentation to the committee on the application.  The committee shall review the application and the findings and recommendations of the department and advise the coordinator whether the proposed energy project meets the criteria established under subsection (a), whether the project should be financed with moneys from the loan fund, and in what amount the loan should be made if approved.

     (d)  The committee may provide for direct referral of an application by the department to the coordinator if the application meets the criteria established by the committee.

     §   -6  Approval or rejection of project financing by coordinator; certification of amount of loan; findings; notice.  (a)  After consideration of the recommendation of the Hawaii energy loan program advisory committee or the department, or both, the coordinator may approve or reject the financing of an energy project described in an application filed pursuant to this chapter, using moneys in the Hawaii energy program loan fund.  Approval of a loan by the coordinator shall include a certification of the amount of the loan.

     (b)  The coordinator's approval of a loan for an energy project shall be based on a finding that:

     (1)  The proposed energy project meets standards and criteria established pursuant to this chapter;

     (2)  The proposed project is consistent with the preservation and enhancement of environmental quality;

     (3)  The proposed project is feasible and a reasonable risk from practical and economic standpoints;

     (4)  The plan for development of the project is satisfactory;

     (5)  The applicant is qualified, creditworthy, and responsible and is willing and able to enter into a contract with the director for development and repayment as provided in section    -14;

     (6)  There is a need for the proposed energy project and the applicant's financial resources are adequate to provide the working capital to maintain the project after completion;

     (7)  Moneys in the loan fund are or will be available for the development of the proposed energy project;

     (8)  The loan does not finance any project for which the projected economic value of the energy savings of the project during the first year the project is implemented is equal to or greater than the cost of the project; and

     (9)  The loan will not preclude individuals and small businesses from access to loan funds.

     (c)  The coordinator shall notify the applicant and the presiding officer of the committee of the coordinator's action and of the reasons for that action.  The coordinator shall inform the applicant of the review procedure established in this chapter.

     §   -7  Committee review of rejection or approval in different amount; committee appeal to governor; finality of governor's action.  (a)  If the coordinator rejects a loan application or approves a loan amount different than that requested by the applicant, an applicant may request the Hawaii energy loan program advisory committee to review the coordinator's action.

     (b)  The committee may review the coordinator's action on its own motion or at the request of the applicant.  A majority of the members of the committee may authorize the presiding officer of the committee to appeal the coordinator's action to the governor.

     (c)  An appeal of the coordinator's action may be initiated by the presiding officer of the committee no later than forty-five days after the date the applicant receives notice of the coordinator's action.

     (d)  A decision of the governor shall be final.  If the governor fails to act within thirty days after receiving an appeal, the appeal shall be considered to be denied.

     (e)  A decision of the coordinator or the governor on an application for loan funds under this chapter is not subject to judicial review.

     §   -8  Gifts credited to loan fund.  The coordinator may accept gifts of money or other property from any source, given for the purposes of the Hawaii energy loan program.  Money so received shall be paid into the loan fund.  Money or other property received shall be used for the purposes for which it was received.

     §   -9  Limit on loan to amount not funded by other sources.  If an applicant receives from any source other than the loan fund any funds to assist in the development of the proposed energy project, the amount of the loan to the applicant shall be limited to that amount necessary for the development of those portions of the project not funded by other sources.

     §   -10  Hawaii energy loan program fund.  (a)  There is created the Hawaii energy loan program fund, from which moneys shall be loaned by the department to provide financing for the development of energy projects as provided in this chapter and into which may be deposited:

     (1)  All moneys received as repayment for loans provided by this chapter;

     (2)  Interest and fees collected by the department under this chapter;

     (3)  Proceeds of bonds pursuant to section    -24; and

     (4)  Gifts received pursuant to section    -8.

(b)  All payments received on account of principal shall be credited to the Hawaii energy loan program fund.

(c)  All moneys in the fund shall be used for the purposes provided in this chapter.

     §   -11  Administration of Hawaii energy loan program funds and accounts.  The duties of the director of finance to establish, maintain and keep accounts of, and make disbursements or transfers out of, the funds and accounts that relate to the Hawaii energy loan program established by this chapter are transferred to the director of business, economic development, and tourism.  Notwithstanding the transfer of these fiscal functions to the department of business, economic development, and tourism, the department's performance of these fiscal functions shall remain subject to the control of the department of budget and finance.

     §   -12  Rulemaking authority; biennial report.  (a)  In accordance with chapter 91, the coordinator may adopt rules necessary to carry out the purposes of this chapter.

     (b)  The coordinator shall submit to the legislature and the governor a biennial report of the transactions of the loan fund and the sinking fund in sufficient detail to accurately indicate the condition of the funds.  The report shall be submitted to the legislature no later than twenty days prior to the convening of the regular session of odd-numbered years.

     §   -13  Department to develop marketing plan.  The department shall develop, implement, and periodically update a marketing plan to inform potential applicants of the availability of energy project loans.  The priority of the marketing plan shall be to inform individuals and small businesses that energy project loans are available.

     §   -14  Loan contract; security; content.  Except as otherwise provided, if the coordinator approves the financing of an energy project, the coordinator, on behalf of the State, and the applicant may enter into a loan contract, secured by a first lien or by other good and sufficient collateral.  For purposes of this section, the interest of the department under a lease purchase contract entered into with an eligible federal or state agency or a county may constitute good and sufficient collateral.  The loan contract:

     (1)  May provide that the coordinator, on behalf of the State, is required to approve the arrangements made by the applicant for the development, operation, and maintenance of the energy project, using moneys in the loan fund for the project development;

     (2)  Shall provide a plan for repayment by the applicant to the sinking fund of moneys borrowed from the loan fund used for the development of the energy project and interest on those moneys used at a rate of interest that the director determines is necessary to provide adequate funds to recover the administrative expenses incurred under this chapter.  The director shall set the interest rate at an incremental rate above the interest rate on the underlying bonds.  The incremental rate for projects proposed by an eligible federal agency shall be greater than the incremental rate charged to any other governmental borrower.  The repayment plan, among other matters:

         (A)  Shall provide for commencement of repayment by the applicant of moneys used for project development and interest thereon not later than two years after the date of the loan contract or at any other time as the director may provide.  In addition to any other prepayment option provided in a borrower's loan agreement, the department shall provide a borrower the opportunity to prepay the borrower's loan, without any additional premium, by defeasing the loan to the call date of the bond or bonds funding the applicable loan, or any refunding bonds linked to the loan, but defeasance shall occur only if the coordinator finds that after the defeasance, the sinking fund will have sufficient funds to make payments required under section    -28;

         (B)  May provide for reasonable extension of the time for making any repayment in emergency or hardship circumstances, if approved by the coordinator;

         (C)  Shall provide for evidence of debt assurance of and security for repayment by the applicant considered necessary or proper by the coordinator;

         (D)  Shall set forth the period of loan that shall not exceed the usable life of the completed project, or thirty years from the date of the loan contract, whichever is less; and

         (E)  May set forth a procedure for formal declaration of default of payment by the coordinator, including formal notification of all relevant federal, state, and county agencies; and further, a procedure for notification of all relevant federal, state, and county agencies that declaration of default has been rescinded when appropriate.

     (3)  May include provisions satisfactory to the coordinator for field inspection, the coordinator to be the final judge of completion of the project;

     (4)  May provide that the liability of the State under the loan contract is contingent upon the availability of moneys in the loan fund for use in the planning and development of the project;

     (5)  May include further provisions that the coordinator considers necessary to ensure expenditure of the funds for the purposes set forth in the approved application; and

     (6)  May provide that the coordinator may institute an appropriate action or suit to prevent use of the project financed by the loan fund by any person who is delinquent in the repayment of any moneys due the sinking fund.

     §   -15  Loan contract in form of intergovernmental agreement; provisions.  A loan contract with an eligible state agency for an energy project may be made in the form of an intergovernmental agreement.  The agreement shall specify that:

     (1)  The energy project shall be security for the loan;

     (2)  The applicant pledges to request each biennium during the term of the loan, spending authorization or appropriation of funds from the legislature or pledges to otherwise provide funds sufficient to pay the loan payments due that biennium; and

     (3)  If applicable, the pledge of the applicant to repay the loan shall be contingent upon the continued spending authorization or appropriation by the legislature of funds sufficient to pay the loan.

     §   -16  Payment from loan fund.  If the coordinator approves a loan for an energy project, the director shall pay moneys for the project from the loan fund in accordance with the terms of the loan contract, as prescribed by the coordinator.

     §   -17  Security for loan.  (a)  When a loan is made under this chapter to an applicant other than a county, the loan shall be secured pursuant to a mortgage, trust deed, security agreement, pledge, assignment, or similar instrument, by a security interest or lien on real or personal property in the full amount of the loan or as the coordinator shall require for adequate security, including but not limited to long-term leasehold interests or equitable interests in real property or personal property.  In lieu of, or in addition to, any of the collateral otherwise described in this subsection, the applicant may secure the loan by providing credit enhancement, including but not limited to a letter of credit or payment bond, or a guaranty acceptable to the coordinator.

     (b)  When a loan is made to a county for the development of an energy project under this chapter, the loan shall be secured as the coordinator shall require for adequate security.  The security may be in the form of a lien, mortgage, interest under a lease-purchase contract, or other form of security acceptable to the coordinator and the county.

     (c)  When a loan made under this chapter is secured by a lien on the real property of the applicant, the coordinator shall perfect the lien by recording as provided by law.

     (d)  Upon payment of all amounts loaned to an applicant pursuant to this chapter, the coordinator shall file a satisfaction or release notice that indicates repayment of the loan.

     (e)  The coordinator may cause to be instituted appropriate proceedings to foreclose liens for delinquent loan payments, and shall pay the proceeds of any such foreclosure, less the coordinator's expenses incurred in foreclosing, into the sinking fund.  In a foreclosure proceeding, the coordinator may bid on property offered for sale in the proceedings and may acquire title to the property on behalf of the State.

     (f)  The coordinator may take any action, make any disbursement, hold any funds, or institute any action or proceeding necessary to protect the State's interest.

     (g)  The coordinator may settle, compromise, or release, for reasons other than uncollectibility, all or part of any loan obligation so long as the coordinator's action is consistent with the purposes of this chapter and does not impair the ability to pay the administrative expenses of the department or the obligations of any bonds then outstanding.

     §   -18  Withholding of state funds due to county that defaults on loan.  In addition to any other remedy available to the department, if a county entitled by law to share in the apportionment of any state revenues or funds defaults on any payments due to the State under a loan contract entered into under this chapter, the department may certify that fact to the department of budget and finance and the department of budget and finance shall withhold payment of any revenues or funds in the state treasury to which the county is entitled, in an amount not to exceed the balance owing on the loan, until the department certifies that the default has been remedied.

     §   -19  Remedies.  If an applicant fails to comply with a contract entered into with the coordinator for development and repayment, the coordinator, in addition to remedies provided in this chapter, may seek other appropriate legal remedies to secure the loan and may contract with any other person for continuance of development and for repayment of moneys from the loan fund used therefore and interest thereon.

     §   -20  Refinancing of project; use of funds.  If any energy project is refinanced or an additional grant or loan intended to finance the project development is obtained from other sources after the execution of the loan from the State, all such funds shall be used to repay the State unless the coordinator finds that repayment of the State from the additional grant or loan would be contrary to public interest.

     §   -21  County may enter into loan contract; purchase of county's general or revenue obligation.  (a)  Notwithstanding any other provision of law, a county may enter into a loan contract with the department to finance an energy project.

     (b)  In order to finance an energy project, the coordinator, on behalf of the State and in lieu of entering into a loan contract under subsection (a) of this section, may purchase or otherwise acquire a county's general obligations or revenue obligations, including but not limited to bonds, notes, certificates of participation, warrants, or lease purchase agreements.

     §   -22  Issuance of bonds.  To provide loans for energy projects and the purposes of this chapter, bonds may be issued as provided in this chapter.

     §   -23  Procedure for bond issuance and sale.  Bonds shall be issued in accordance with the applicable provisions of state law.  The bonds may be sold at a public sale or at a private, negotiated sale.

     §   -24  Bond proceeds credited to loan fund; use of funds.  Except as otherwise provided, all moneys obtained from the sale of bonds under this chapter shall be credited to the loan fund.  Those moneys shall be used only for the purposes of this chapter, including payment of the costs of issuing the bonds and of obtaining credit enhancement for the bonds, and making payments of interest on bonds if there are insufficient funds in the sinking fund to make the payments referred to in section    -26.  Moneys loaned to counties but withheld by the department for security or to pay for future project costs may remain in the loan fund.  Pending the use of the moneys in the loan fund for proper purposes, the moneys may be invested in the manner provided by law.

     §   -25  Bonds as general obligation bonds.  All bonds issued under this chapter shall contain a direct promise of the State to pay the principal amount of the bonds, plus any accrued interest and any redemption premium.  The principal of and the interest and redemption premium, if any, upon the bonds, when due, shall be paid at the department of budget and finance.  The charges imposed by the department of budget and finance for its services shall be paid, upon approval by the director of finance, from the sinking fund.

     §   -26  Refunding bonds.  (a)  After consultation with the director of finance, the coordinator may issue refunding bonds for the purpose of refunding outstanding bonds issued under this chapter.  The refunding bonds may be sold in the same manner as other bonds are sold under this chapter.  All moneys obtained from the sale of refunding bonds shall be credited to the sinking fund.  The issuance of the refunding bonds, the maturity date, and other details thereof, the rights of the holders thereof, and the duties of the governor and the director of finance with respect thereto, shall be governed by state law.  The refunding bonds may be issued to refund bonds previously issued for refunding purposes.  Pending the use of moneys obtained from the sale of refunding bonds for proper purposes, the moneys may be invested in the manner provided by law.

     (b)  Notwithstanding any provision to the contrary, if the department issues taxable refunding bonds at a lower interest rate to refund outstanding general obligation bonds, and is unable to allow loan recipients to receive a portion of the interest savings, the coordinator shall allow the loan recipient to prepay the outstanding loan balance upon the request of the recipient.  The coordinator shall respond to a request within thirty days after receiving the request by specifying the outstanding principal balance after applying reserves held by the State for the borrower and the prepayment premium as listed in the bond document, loan document, or bond purchase agreement.

     (c)  The department shall pursue opportunities for refunding bonds to reduce interest sums payable by the department.  When the department refunds a bond with tax-exempt bonds, the department shall share, on an equitable basis, the savings from any refunding with the borrowers whose loans were made with the proceeds of the refunded bonds in an amount consistent with a finding by the director that the sinking fund has, and will continue to have, sufficient funds to make payments required under section    -29.  The department may not refund tax-exempt bonds with taxable bonds, unless the department is able to share the savings associated with such a refunding with the borrowers whose loans are linked to such bonds.  At least one hundred twenty days before the date on which the department intends to issue refunding bonds, the coordinator shall notify each borrower whose loan was made from the proceeds of the bonds being refunded and shall offer the borrower the opportunity to prepay the borrower's loan.  A borrower shall respond within sixty days of the date of the notice described in this subsection if the borrower intends to prepay the borrower's loan.

     §   -27  Bond repayment from sinking fund.  (a)  The director of finance shall make payment of the principal of and the interest and redemption premium, if any, on any bond issued under this chapter from the sinking fund.

     (b)  The director of finance shall compute and determine in January of each year, after the sale of bonds under this chapter, the amount of principal, interest and redemption premiums that will fall due during the year on bonds then outstanding and unpaid and shall maintain or hold in the sinking fund sufficient moneys to pay such maturing obligations.

     §   -28  Bond indebtedness limited to constitutional limit.  No bonds shall be issued or sold under this chapter nor indebtedness incurred thereunder, which singly, or in the aggregate with previous debts or liabilities incurred for energy projects, shall exceed any limitation provided in the state constitution at the date of the issuance and sale of such bonds.  If the maximum aggregate principal sum of bonds authorized to be issued exceeds any limitation provided in the state constitution, bonds shall be issued in the aggregate principal sum of not to exceed that authorized under the limitation provided in the state constitution.

     §   -29  Hawaii energy program administration and bond sinking fund; uses; sources.  (a)  There is created the Hawaii energy program administration and bond sinking fund, separate and distinct from the general fund, to provide for payment of:

     (1)  Administrative expenses of the department and the coordinator in processing applications, investigating potential energy projects and proposed loans and servicing and collecting outstanding loans made under this chapter, if the expense is not paid directly by the applicant;

     (2)  Administrative expenses of carrying out the duties, functions, and powers imposed upon the director of finance by this chapter;

     (3)  Principal, interest, and redemption premium, if any, of all bonds issued pursuant to the provisions of this chapter;

     (4)  Net investment earnings on any funds loaned to counties but withheld as provided in this chapter; and

     (5)  Costs of issuing the bonds and of obtaining credit enhancement for the bonds.

     (b)  The fund created by subsection (a) may consist of:

     (1)  Application fees, unless the department requires the applicant to pay the fee directly for a cost incurred in connection with the application;

     (2)  Repayment of moneys loaned to applicants from the loan fund, including interest on the moneys;

     (3)  Any moneys appropriated to the fund by the legislature;

     (4)  Moneys obtained from the sale of refunding bonds and any accrued interest on the bonds;

     (5)  Interest earned on cash balances invested by the director of finance; and

     (6)  Moneys transferred from the Hawaii energy program loan fund.

     (c)  The coordinator, with the approval of the director of finance, may transfer moneys from the sinking fund to the loan fund if:

     (1)  A cash flow projection shows that, for the term of the bonds outstanding at the time the coordinator transfers the moneys, remaining moneys in the sinking fund, together with expected loan contract payments and fund earnings, will improve the financial basis of the program and will continue to be adequate to pay bond principal, interest, redemption premiums, if any, and administration costs; and

     (2)  The transfer will not create the need for issuance of any bonds.

     (d)  The coordinator, with the approval of the director of finance, may establish separate and distinct accounts within the sinking fund to accomplish the purpose of this section.

     §   -30  Procedure if sinking fund inadequate.  (a)  If there are insufficient funds in the sinking fund to make the payments referred to in section       , the coordinator may request an appropriation of the funds necessary for such payments from the legislature.

     (b)  When the coordinator determines that moneys in sufficient amount are available in the sinking fund, the director of finance shall reimburse the general fund without interest, in an amount equal to the amount allocated by the legislature pursuant to subsection (a) of this section.  The moneys used to reimburse the general fund under this subsection shall not be considered a budget item on which a limitation is otherwise fixed by law, but shall be in addition to any specific appropriations or amounts authorized to be expended from continually appropriated moneys."

     SECTION 2.  In codifying the new chapter added by section 1 of this Act, the revisor of statutes shall insert appropriate section numbers in designating the new sections in this Act.

     SECTION 3.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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