HOUSE OF REPRESENTATIVES

H.B. NO.

1244

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM.

 

 

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

 


     SECTION 1.  The legislature finds that among the many special and revolving funds currently administered by the department of business, economic development, and tourism, thirteen funds have become either dormant or unnecessary.  The legislature further finds that the remaining balances in these funds would be more effectively used if transferred to the high technology loan revolving fund.

     The purpose of this Act is to repeal the following funds and transfer the unencumbered balances into the high technology loan revolving fund:

     (1)  Housing finance revolving fund;

     (2)  Brownfields cleanup revolving loan fund;

     (3)  Tourism emergency trust fund;

     (4)  Hawaii community development revolving fund;

     (5)  Kalaeloa community development revolving fund;

     (6)  Heeia community development revolving fund;

     (7)  High technology special fund;

     (8)  State disaster revolving loan fund;

     (9)  Hawaii community-based economic development revolving fund;

    (10)  Foreign-trade zones special fund;

    (11)  Hydrogen investment capital special fund;

    (12)  Natural energy laboratory of Hawaii authority special fund; and

    (13)  Fee simple residential revolving fund.

     SECTION 2.  Section 201H-80, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§201H-80[]]  [Housing finance revolving fund; bond] Housing bond special funds.  [(a)  There is created a housing finance revolving fund to be administered by the corporation.  Notwithstanding sections 36-21 and 201H-191, the proceeds in the fund shall be used for long-term and other special financings of the corporation and for the necessary expenses in administering this part.

     (b)  All moneys received and collected by the corporation, not otherwise pledged or obligated nor required by law to be placed in any other special fund, shall be deposited in the housing finance revolving fund.

     (c)] (a)  A separate special fund shall be established for each housing project or system of housing projects or loan program financed from the proceeds of bonds secured under the same trust indenture.  Each fund shall be designated "housing project bond special fund" or "housing loan program revenue bond special fund", as appropriate, and shall bear any additional designation as the corporation deems appropriate to properly identify the fund.

     [(d)] (b)  Notwithstanding any other law to the contrary, all revenues, income, and receipts derived from a housing project or system of projects or loan program financed from the proceeds of bonds or pledged to the payment of the principal of and interest and premium on bonds, shall be paid into the housing project bond special fund or housing loan program revenue bond special fund established for the housing project or system of projects or loan program and applied as provided in the proceedings authorizing the issuance of the bonds."

     SECTION 3.  Section 201H-86, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The corporation shall impose conditions or restrictions on the low-income housing tax credit loan, including:

     (1)  A requirement providing for acceleration and repayment on any no-interest loan under this section to assure that the building with respect to which the loan is made remains a qualified low-income building under section 42 of the Internal Revenue Code or section 1602 of the American Recovery and Reinvestment Act of 2009, Public Law 111-5.  Any such repayment shall be payable to the [housing finance revolving]             fund and may be enforced by means of liens or other methods as the corporation deems appropriate;

     (2)  The same limitations on rent, income, and use restrictions as applied under an allocation of a housing credit dollar amount allocated under section 42 of the Internal Revenue Code; and

     (3)  The payment of reasonable fees for the corporation to perform or cause to be performed asset management functions to ensure compliance with section 42 of the Internal Revenue Code and the long-term viability of buildings funded by any no-interest loan under this section."

     SECTION 4.  Section 201H-211, Hawaii Revised Statutes, is amended to read as follows:

     "§201H-211  Expenditures of revolving funds under the corporation exempt from appropriation and allotment.  Except as to administrative expenditures, and except as otherwise provided by law, expenditures from the revolving funds administered by the corporation under subparts I and J of part III, relating to financing programs, or [sections 201H‑80,] section 201H-123[, or 516‑44] may be made by the corporation without appropriation or allotment by the legislature; provided that no expenditure shall be made from and no obligation shall be incurred against any revolving fund in excess of the amount standing to the credit of the fund or for any purpose for which the fund may not lawfully be expended.  Nothing in sections 37-31 to 37-41 shall require the proceeds of the revolving funds identified in subparts I and J of part III, or [sections 201H‑80,] section 201H-123[, or 516‑44] to be reappropriated annually."

     SECTION 5.  Section 206E-6, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

     "(g)  All sums collected under this section shall be deposited in the [Hawaii community development revolving fund established by section 206E-16;]            fund; except that notwithstanding section 206E-16, all moneys collected on account of assessments and interest thereon for any specific public facilities financed by the issuance of bonds shall be set apart in a separate special fund and applied solely to the payment of the principal and interest on these bonds, the cost of administering, operating, and maintaining the program, the establishment of reserves, and other purposes as may be authorized in the proceedings providing for the issuance of the bonds.  If any surplus remains in any special fund after the payment of the bonds chargeable against such fund, it shall be credited to and become a part of the [Hawaii community development revolving]            fund.  Moneys in the [Hawaii community development revolving]            fund may be used to make up any deficiencies in the special fund."

     SECTION 6.  Section 206E-157, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Notwithstanding any other law to the contrary, [including particularly section 206E-16,] all revenues, income, and receipts derived from the public facility for which the revenue bonds are issued shall be paid into the public facility revenue bond fund established for that public facility and applied as provided in the proceedings authorizing the issuance of the revenue bonds."

     SECTION 7.  Section 206E-184, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  In addition to the conditions and terms set forth in this part, any special facility lease entered into by the authority shall at least contain provisions obligating the other person to the special facility lease:

     (1)  To pay to the authority during the initial term of the special facility lease, whether the special facility is capable of being used or occupied or is being used or occupied by the other person, a rental or rentals at the time or times and in the amount or amounts that will be sufficient:

         (A)  To pay the principal and interest on all special facility revenue bonds issued for the special facility;

         (B)  To establish or maintain any reserves for these payments; and

         (C)  To pay all fees and expenses of the trustees, paying agents, transfer agents, and other fiscal agents for the special facility revenue bonds issued for the special facility;

     (2)  To pay to the authority:

         (A)  A ground rental, as determined by the authority, if the land on which the special facility is located was not acquired from the proceeds of the special facility revenue bonds; or

         (B)  A properly allocable share of the administrative costs of the authority in carrying out the special facility lease and administering the special facility revenue bonds issued for the special facility, if the land was acquired from the proceeds of the special facility revenue bonds;

     (3)  To either operate, maintain, and repair the special facility and pay the costs thereof or to pay to the authority all costs of operation, maintenance, and repair of the special facility;

     (4)  To:

         (A)  Insure, or cause to be insured, the special facility under builder's risk insurance (or similar insurance) in the amount of the cost of construction of the special facility to be financed from the proceeds of the special facility revenue bonds;

         (B)  Procure and maintain, or cause to be procured or maintained, to the extent commercially available, a comprehensive insurance policy providing protection and insuring the authority and its officers, agents, servants, and employees (and so long as special facility revenue bonds are outstanding, the trustee) against all direct or contingent loss or liability for damages for personal injury or death or damage to property, including loss of use thereof, occurring on or in any way related to the special facility or occasioned by reason of occupancy by and the operations of the other person upon, in, and around the special facility;

         (C)  Provide all risk casualty insurance, including insurance against loss or damage by fire, lightning, flood, earthquake, typhoon, or hurricane, with standard extended coverage and standard vandalism and other malicious mischief endorsements; and

         (D)  Provide insurance for workers' compensation and employer's liability for personal injury or death or damage to property (the other party may self-insure for workers' compensation if permitted by law);

          provided that all policies with respect to loss or damage of property including fire or other casualty and extended coverage and builder's risk shall provide for payments of the losses to the authority, the other person, or the trustee as their respective interests may appear; and provided further that the insurance may be procured and maintained as part of or in conjunction with other policies carried by the other person; and provided further that the insurance shall name the authority, and so long as any special facility revenue bonds are outstanding, the trustee, as additional insured; and

     (5)  To indemnify, save, and hold the authority, the trustee and their respective agents, officers, members, and employees harmless from and against all claims and actions and all costs and expenses incidental to the investigation and defense thereof, by or on behalf of any person, firm, or corporation, based upon or arising out of the special facility or the other person's use and occupancy thereof, including, without limitation, from and against all claims and actions based upon and arising from any:

         (A)  Condition of the special facility;

         (B)  Breach or default on the part of the other person in the performance of any of the person's obligations under the special facility lease;

         (C)  Fault or act of negligence of the other person or the person's agents, contractors, servants, employees, or licensees; or

         (D)  Accident to, or injury or death of, any person or loss of, or damage to any property occurring in or about the special facility, including any claims or actions based upon or arising by reason of the negligence or any act of the other person.

     Any moneys received by the authority pursuant to paragraphs (2) and (3) shall be paid into the [Hawaii community development revolving]            fund and shall not be nor be deemed to be revenues of the special facility.

     SECTION 8.  Section 206E-185, Hawaii Revised Statutes, is amended to read as follows:

     "§206E-185  Special facility revenue bonds.  All special facility revenue bonds authorized to be issued in principal amounts not to exceed the total amount of bonds authorized by the legislature shall be issued pursuant to part III of chapter 39, except as follows:

     (1)  No revenue bonds shall be issued unless at the time of issuance the authority shall have entered into a special facility lease with respect to the special facility for which the revenue bonds are to be issued;

     (2)  The revenue bonds shall be issued in the name of the authority, and not in the name of the State;

     (3)  The revenue bonds shall be payable solely from and secured solely by the revenues derived by the authority from the special facility for which they are issued;

     (4)  The final maturity date of the revenue bonds shall not be later than either the estimated life of the special facility for which they are issued or the initial term of the special facility lease;

     (5)  If deemed necessary or advisable by the authority, or to permit the obligations of the other person to the special facility lease to be registered under the U.S. Securities Act of 1933, the authority, with the approval of the director of finance, may appoint a national or state bank within or without the State to serve as trustee for the holders of the revenue bonds and may enter into a trust indenture or trust agreement with the trustee.  The trustee may be authorized by the authority to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued and to apply the revenues to the payment of the principal and interest on the revenue bonds.  If any trustee shall be appointed, any trust indenture or agreement entered into by the authority with the trustee may contain the covenants and provisions authorized by part III of chapter 39 to be inserted in a resolution adopted or certificate issued, as though the words "resolution" or "certificate" as used in that part read "trust indenture or agreement".  The covenants and provisions shall not be required to be included in the resolution or certificate authorizing the issuance of the revenue bonds if included in the trust agreement or indenture.  Any resolution or certificate, trust indenture, or trust agreement adopted, issued, or entered into by the authority pursuant to this part may also contain any provisions required for the qualification thereof under the U.S. Trust Indenture Act of 1939.  The authority may pledge and assign to the trustee the special facility lease and the rights of the authority including the revenues thereunder;

     (6)  If the authority, with the approval of the director of finance, shall have appointed or shall appoint a trustee for the holders of the revenue bonds, then notwithstanding the provisions of the second sentence of section 39-68, the director of finance may elect not to serve as fiscal agent for the payment of the principal and interest, and for the purchase, registration, transfer, exchange, and redemption, of the revenue bonds, or may elect to limit the functions the director of finance shall perform as the fiscal agent.  The authority, with the approval of the director of finance, may appoint the trustee to serve as the fiscal agent, and may authorize and empower the trustee to perform the functions with respect to payment, purchase, registration, transfer, exchange, and redemption, that the authority may deem necessary, advisable, or expedient, including, without limitation, the holding of the revenue bonds and coupons which have been paid and the supervision and conduction of the destruction thereof in accordance with sections 40-10 and 40-11.  Nothing in this paragraph shall be a limitation upon or construed as a limitation upon the powers granted in the preceding paragraph to the authority, with the approval of the director of finance, to appoint the trustee, or granted in sections 36-3 and 39-13 and the third sentence of section 39-68 to the director of finance to appoint the trustee or others, as fiscal agents, paying agents, and registrars for the revenue bonds or to authorize and empower the fiscal agents, paying agents, and registrars to perform the functions referred to in that paragraph and sections, it being the intent of this paragraph to confirm that the director of finance as aforesaid may elect not to serve as fiscal agent for the revenue bonds or may elect to limit the functions the director of finance shall perform as the fiscal agent, that the director of finance may deem necessary, advisable, or expedient;

     (7)  The authority may sell the revenue bonds either at public or private sale;

     (8)  If no trustee shall be appointed to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued, the revenues shall be held in a separate account in the treasury of the State, [separate and apart from the Hawaii community development revolving fund,] to be applied solely to the carrying out of the resolution, certificate, trust indenture, or trust agreement authorizing or securing the revenue bonds;

     (9)  If the resolution, certificate, trust indenture, or trust agreement shall provide that no revenue bonds issued thereunder shall be valid or obligatory for any purpose unless certified or authenticated by the trustee for the holders of the revenue bonds, signatures of the officers of the State upon the bonds required by section 39-56 may be facsimiles of their signatures;

    (10)  Proceeds of the revenue bonds may be used and applied by the authority to reimburse the other person to the special facility lease for all preliminary costs and expenses, including architectural and legal costs; and

    (11)  If the special facility lease shall require the other person to operate, maintain, and repair the special facility which is the subject of the lease, at the other person's expense, the requirement shall constitute compliance by the authority with section 39‑61(a)(2), and none of the revenues derived by the authority from the special facility shall be required to be applied to the purposes of section 39‑62(2).  Sections 39-62(4), 39-62(5), and 39-62(6) shall not apply to the revenues derived from a special facility lease."

     SECTION 9.  Section 206E-186, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Notwithstanding any other law to the contrary, [including particularly section 206E-16,] all revenues, income, and receipts derived from the special facility for which the revenue bonds are issued shall be paid into the special facility revenue bond fund established for that special facility and applied as provided in the proceedings authorizing the issuance of the revenue bonds."

     SECTION 10.  Section 206E-201, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-201[]]  Definitions.  As used in this part:

     "District" means the Heeia community development district.

     ["Fund" means the Heeia community development revolving fund.]"

     SECTION 11.  Section 206M-8, Hawaii Revised Statutes, is amended by amending subsection (j) to read as follows:

     "(j)  Moneys received by the development corporation pursuant to subsection (a)(1)(D) shall not be, nor be deemed to be, revenues or receipts derived under the project agreement which may be pledged as security for special purpose revenue bonds and shall be paid into the [high technology special]            fund.

     A qualified person may comply with the unconditional obligation to make payments required by subsection (a), if the obligations are unconditionally guaranteed or insured by, or the performance thereof assigned to, or guaranteed or insured by, a person or persons other than the qualified person who is satisfactory to the development corporation."

     SECTION 12.  Section 206M-17, Hawaii Revised Statutes, is amended to read as follows:

     "§206M-17  Revenue bond fund accounts.  The development corporation shall establish separate special funds in accordance with section 39-62 for the deposit of the proceeds of special purpose revenue bonds and special facility revenue bonds authorized under this part and [[]part III[]] respectively.  The development corporation shall have the right to appropriate, apply, or expend the revenues derived with respect to the project agreement for a project for the following purposes:

     (1)  To pay when due all special purpose revenue bonds and special facility revenue bonds, premiums, if any, and interest thereon, for the payment of which the revenues are or have been pledged, charged, or otherwise encumbered, including reserves therefor; and

     (2)  To the extent not paid by the qualified person to provide for all expenses of administration, operation, and maintenance of the project, including reserves therefor.

     Unless and until adequate provision has been made for the foregoing purposes, the development corporation shall not transfer the revenues derived from the project agreement to the [high technology special]            fund of the State."

     SECTION 13.  Section 206M-44, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  In addition to the conditions and terms set forth in this part, any special facility lease entered into by the development corporation shall at least contain provisions obligating the other party to the special facility lease:

     (1)  To pay to the development corporation during the initial term of the special facility lease, whether the special facility is capable of being used or occupied or is being used or occupied by the other party, a rental or rentals at the time or times and in the amount or amounts that will be sufficient to:

         (A)  Pay the principal and interest on all special facility revenue bonds issued for the special facility;

         (B)  Establish or maintain any reserves for these payments; and

         (C)  Pay all fees and expenses of the trustees, paying agents, transfer agents, and other fiscal agents for the special facility revenue bonds issued for the special facility;

     (2)  To pay to the development corporation:

         (A)  A ground rental, equal to the fair market rental of the land, if the land on which the special facility is located was not acquired from the proceeds of the special facility revenue bonds; or

         (B)  A properly allocable share of the administrative costs of the development corporation in carrying out the special facility lease and administering the special facility revenue bonds issued for the special facility if the land was acquired from the proceeds of the special facility revenue bonds;

     (3)  To either operate, maintain, and repair the special facility and pay the costs thereof or to pay to the development corporation all costs of operation, maintenance, and repair of the special facility;

     (4)  To:

         (A)  Insure, or cause to be insured, the special facility under builder's risk insurance (or similar insurance) in the amount of the cost of construction of the special facility to be financed from the proceeds of the special facility revenue bonds;

         (B)  Procure and maintain, or cause to be procured or maintained, to the extent commercially available, a comprehensive insurance policy providing protection and insuring the development corporation and its officers, agents, servants, and employees (and so long as special facility revenue bonds are outstanding, the trustee) against all direct or contingent loss or liability for damages for personal injury or death or damage to property, including loss of use thereof, occurring on or in any way related to the special facility or occasioned by reason of occupancy by and the operations of the other person upon, in and around the special facility;

         (C)  Provide all risk casualty insurance, including insurance against loss or damage by fire, lightning, flood, earthquake, typhoon, or hurricane, with standard extended coverage and standard vandalism and other malicious mischief endorsements; and

         (D)  Provide insurance for workers' compensation and employers' liability for personal injury or death or damage to property (the other party may self-insure for workers' compensation if permitted by law); provided that all policies with respect to loss or damage of property including fire or other casualty and extended coverage and builder's risk shall provide for payments of the losses to the development corporation, the other party or the trustee for the special facility revenue bonds as their respective interests may appear; and provided further that the insurance may be procured and maintained as part of or in conjunction with other policies carried by the other party; and provided further that the insurance shall name the development corporation, and so long as any special facility revenue bonds are outstanding, the trustee, as additional insured; and

     (5)  Indemnify, save, and hold the development corporation, the trustee, and their respective agents, officers, members, and employees harmless from and against all claims and actions and all costs and expenses incidental to the investigation and defense thereof, by or on behalf of any person, firm, or corporation, based upon or arising out of the special facility or the other party's use and occupancy thereof, including, without limitation, from and against all claims and actions based upon and arising from any:

         (A)  Condition of the special facility;

         (B)  Breach or default on the part of the other party in the performance of any of the party's obligations under the special facility lease;

         (C)  Fault or act of negligence of the other party or the party's agents, contractors, servants, employees, or licensees; or

         (D)  Accident to or injury or death of any person or loss of or damage to any property occurring in or about the special facility, including any claims or actions based upon or arising by reason of the negligence or any act of the other party.

     Any moneys received by the development corporation pursuant to paragraphs (2) and (3) shall be paid into the [high technology special]               fund and shall not be nor be deemed to be revenues of the special facility."

     SECTION 14.  Section 206M-45, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206M-45[]]  Special facility revenue bonds.  All special facility revenue bonds authorized to be issued under this part shall be issued pursuant to part III of chapter 39, except as follows:

     (1)  No revenue bonds shall be issued unless at the time of issuance, the development corporation has entered into a special facility lease with respect to the special facility for which the revenue bonds are to be issued;

     (2)  The revenue bonds shall be issued in the name of the development corporation and not in the name of the State;

     (3)  No further authorization of the legislature shall be required for the issuance of the special facility revenue bonds, but the approval of the governor shall be required for the issuance;

     (4)  The revenue bonds shall be payable solely from and secured solely by the revenues derived by the development corporation from the special facility for which they are issued;

     (5)  The final maturity date of the revenue bonds shall not be later than either the estimated life of the special facility for which the revenue bonds are issued or the expiration of the initial term of the special facility lease;

     (6)  If deemed necessary or advisable by the development corporation, or to permit the obligations of the other party to the special facility lease to be registered under the U.S. Securities Act of 1933, the development corporation, with the approval of the director of finance, may appoint a national or state bank within or without the State to serve as trustee for the holders of the revenue bonds and may enter into a trust indenture or trust agreement with the trustee.  The trustee may be authorized by the development corporation to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued and to apply the revenues to the payment of the principal and interest on the revenue bonds.  In the event that any trustee shall be appointed, any trust indenture or trust agreement entered into by the development corporation with the trustee may contain the covenants and provisions authorized by part III of chapter 39 to be inserted in a resolution adopted or certificate issued, as though the words "resolution" or "certificate" as used in that part read "trust indenture or trust agreement".

              The covenants and provisions shall not be required to be included in the resolution or certificate authorizing the issuance of the revenue bonds if included in the trust indenture or trust agreement.  Any resolution or certificate, trust indenture, or trust agreement adopted, issued, or entered into by the development corporation pursuant to this part may also contain any provisions required for the qualification thereof under the U.S. Trust Indenture Act of 1939. The development corporation may pledge and assign to the trustee the special facility lease and the rights of the development corporation including the revenues thereunder;

     (7)  If the development corporation, with the approval of the director of finance, shall have appointed or shall appoint a trustee for the holders of the revenue bonds, then notwithstanding the provisions of section 39-68, the director of finance may elect not to serve as fiscal agent for the payment of the principal and interest, and for the purchase, registration, transfer, exchange, and redemption of the revenue bonds, or may elect to limit the functions the director of finance shall perform as the fiscal agent.  The development corporation, with the approval of the director of finance, may appoint the trustee to serve as the fiscal agent, and may authorize and empower the trustee to perform the functions with respect to payment, purchase, registration, transfer, exchange, and redemption, that the development corporation may deem necessary, advisable, or expedient, including, without limitation, the holding of the revenue bonds and coupons, if any, that have been paid and the supervising and conducting of the destruction thereof in accordance with sections 40-10 and 40-11.  Nothing in this paragraph shall be a limitation upon or construed as a limitation upon the powers granted in paragraph (6) to the development corporation with the approval of the director of finance to appoint the trustee, or granted in sections 36-3, 39-13, and 39-68 to the director of finance to appoint the trustee or others, as fiscal agents, paying agents, and registrars for the revenue bonds or to authorize and empower the fiscal agents, paying agents, and registrars to perform the functions referred to in paragraph (6) and sections 36-3, 39-13, and 39-68, it being the intent of this paragraph to confirm that the director of finance may elect not to serve as fiscal agent for the revenue bonds or may elect to limit the functions the director of finance shall perform as the fiscal agent, that the director of finance may deem necessary, advisable, or expedient;

     (8)  The development corporation may sell the revenue bonds either at public or private sale;

     (9)  If no trustee is appointed to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued, the revenues shall be held in a separate account in the treasury of the State, [separate and apart from the high technology special fund,] to be applied solely to the carrying out of the resolution, certificate, trust indenture, or trust agreement authorizing or securing the revenue bonds;

    (10)  If the resolution, certificate, trust indenture, or trust agreement provides that no revenue bonds issued thereunder shall be valid or obligatory for any purpose unless certified or authenticated by the trustee for the holders of the revenue bonds, the signatures of the officers of the State upon the bonds required by section 39-56 may be facsimiles of their signatures;

    (11)  Proceeds of the revenue bonds may be used and applied by the development corporation to reimburse the other party to the special facility lease for all preliminary costs and expenses, including architectural and legal costs; and

    (12)  If the special facility lease requires the other party to operate, maintain, and repair the special facility that is the subject of the lease, at the other party's expense, the requirement shall constitute compliance by the development corporation with section 39-61(a)(2), and none of the revenues derived by the development corporation from the special facility shall be required to be applied to the purposes of section 39-62(2). Sections 39-62(4), 39-62(5), and 39-62(6) shall not apply to the revenues derived from a special facility lease."

     SECTION 15.  Section 210D-8, Hawaii Revised Statutes, is amended to read as follows:

     "§210D-8  Powers and duties.  The department shall have the necessary powers to carry out the purposes of this chapter, including the following:

     (1)  With advice from the council, prescribe the qualifications for eligibility of applicants for loans and grants;

     (2)  With advice from the council, establish preferences and priorities in determining eligibility for financial assistance;

     (3)  Establish the conditions, consistent with the purpose of this chapter, for the awarding of financial assistance;

     (4)  Provide for inspection at reasonable hours of facilities, books, and records of a community-based organization that has applied for or has been awarded financial assistance and require the submission of progress and final reports;

     (5)  Provide loans and grants for community-based economic development activities and community-based enterprises for purposes consistent with this chapter;

     (6)  Determine the necessity for and the extent of security required in a loan;

     (7)  Prescribe and provide appropriate management counseling and monitoring of business activities;

    [(8)  Administer the Hawaii community-based economic development revolving fund;

     (9)] (8)  Include in its budget for subsequent fiscal periods amounts necessary to effectuate the purposes of this chapter;

   [(10)] (9)  Participate in loans made to qualified persons by private lenders;

   [(11)] (10)  Establish interest rates chargeable by the State for direct and participation loans; and

   [(12)] (11)  Adopt rules pursuant to chapter 91 to implement this chapter."

     SECTION 16.  Section 227D-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established the natural energy laboratory of Hawaii authority, which shall be a body corporate and politic and an instrumentality and agency of the State.  The authority shall be placed within the department of business, economic development, and tourism for administrative purposes, pursuant to section 26-35.  The purpose of the natural energy laboratory of Hawaii authority shall be to facilitate research, development, and commercialization of natural energy resources and ocean-related research, technology, and industry in Hawaii and to engage in retail, commercial, or tourism activities that will financially support that research, development, and commercialization at a research and technology park in Hawaii.  Its duties shall include:

     (1)  Establishing, managing, and operating facilities that provide sites for:

         (A)  Research and development;

         (B)  Commercial projects and businesses utilizing natural resources, such as ocean water or geothermal energy;

         (C)  Compatible businesses engaged in scientific and technological investigations, or retail, commercial, and tourism activities; and

         (D)  Businesses or educational facilities that support the primary projects and activities;

     (2)  Providing support, utilities, and other services to facility tenants and government agencies;

     (3)  Maintaining the physical structure of the facilities;

     (4)  Promoting and marketing these facilities;

     (5)  Promoting and marketing the reasonable utilization of available natural resources;

     (6)  Supporting ocean research and technology development projects that support national and state interests, use facilities and infrastructure in Hawaii, and foster potential commercial development; and

     (7)  Engaging in retail, commercial, and tourism activities that are not related to facilitating research, development, and commercialization of natural energy resources in Hawaii; provided that all income derived from these activities shall be deposited in the [natural energy laboratory of Hawaii authority special]            fund."

     SECTION 17.  Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Revenues collected under this chapter shall be distributed as follows, with the excess revenues to be deposited into the general fund:

     (1)  $26,500,000 shall be allocated to the convention center enterprise special fund established under section 201B-8;

     (2)  $82,000,000 shall be allocated to the tourism special fund established under section 201B-11; provided that:

         (A)  Beginning on July 1, 2012, and ending on June 30, 2015, $2,000,000 shall be expended from the tourism special fund for development and implementation of initiatives to take advantage of expanded visa programs and increased travel opportunities for international visitors to Hawaii; and

         (B)  Of the $82,000,000 allocated:

              (i)  $1,000,000 shall be allocated for the operation of a Hawaiian center and the museum of Hawaiian music and dance at the Hawaii convention center; and

             (ii)  0.5 per cent of the $82,000,000 shall be transferred to a sub-account in the tourism special fund to provide funding for a safety and security budget, in accordance with the Hawaii tourism strategic plan 2005-2015; [and

         (C)  Of the revenues remaining in the tourism special fund after revenues have been deposited as provided in this paragraph and except for any sum authorized by the legislature for expenditure from revenues subject to this paragraph, beginning July 1, 2007, funds shall be deposited into the tourism emergency trust fund, established in section 201B-10, in a manner sufficient to maintain a fund balance of $5,000,000 in the tourism emergency trust fund;]

     (3)  $103,000,000 for fiscal year 2014-2015, $103,000,000 for fiscal year 2015-2016, and $93,000,000 for each fiscal year thereafter shall be allocated as follows:  Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22.8 per cent; provided that commencing with fiscal year 2018-2019, a sum that represents the difference between a county public employer's annual required contribution for the separate trust fund established under section 87A-42 and the amount of the county public employer's contributions into that trust fund shall be retained by the state director of finance and deposited to the credit of the county public employer's annual required contribution into that trust fund in each fiscal year, as provided in section 87A-42, if the respective county fails to remit the total amount of the county's required annual contributions, as required under section 87A-43;

     (4)  $3,000,000 shall be allocated to the Turtle Bay conservation easement special fund established under section 201B-8.6 for the payment of debt service on revenue bonds, the proceeds of which were used to acquire the conservation easement in Turtle Bay, Oahu, until the bonds are fully amortized; and

     (5)  Of the excess revenues deposited into the general fund pursuant to this subsection, $3,000,000 shall be allocated subject to the mutual agreement of the board of land and natural resources and the board of directors of the Hawaii tourism authority in accordance with the Hawaii tourism authority strategic plan for:

         (A)  The protection, preservation, and enhancement of natural resources important to the visitor industry;

         (B)  Planning, construction, and repair of facilities; and

         (C)  Operation and maintenance costs of public lands connected with enhancing the visitor experience.

     All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.

     As used in this subsection, "fiscal year" means the twelve-month period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year."

     SECTION 18.  Section 516-5, Hawaii Revised Statutes, is amended to read as follows:

     "§516-5  Penalty.  Any person who violates this chapter shall be fined not more than $5,000 nor less than $1,000 or imprisoned not more than one year, or both.  All fines collected shall be deposited in the [fee simple [residential] revolving]            fund [created by this chapter]."

     SECTION 19.  Section 201-18, Hawaii Revised Statutes, is repealed.

     ["[§201-18]  Brownfields cleanup revolving loan fund.  (a)  There is established in the state treasury the brownfields cleanup revolving loan fund, into which shall be deposited:

     (1)  Funds from federal or private funding sources;

     (2)  Moneys received as repayment of loans and interest payments; and

     (3)  Any fees collected by the department under this section.

     (b)  Moneys in the brownfields cleanup revolving loan fund shall be used to provide low interest loans or other authorized financial assistance to eligible public, private, and nonprofit borrowers for cleanup activities of contaminated sites, and site monitoring activities necessary to determine the effectiveness of a cleanup.  All environmental response activities receiving funding shall be in accordance with the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, P.L. 96-510 (42 U.S.C. §§9601-9675), as amended, and shall be consistent with the National Oil and Hazardous Substances Pollution Contingency Plan at 40 Code of Federal Regulations part 300.  Moneys from the fund may be used to cover administrative and legal costs of fund management and site management associated with individual loans, to include personnel, services, materials, equipment, and travel for the purposes of this section; provided that the moneys used for these purposes shall not exceed the amounts allowed by the United States Environmental Protection Agency's Brownfields Cleanup Revolving Loan Fund Pilot Program.

     (c)  The fund shall be administered by the department of business, economic development, and tourism.  Appropriations or authorizations from the fund shall be expended by the department.  The department may contract with other public or private entities for the provision of all or a portion of the services necessary for the administration and implementation of the loan fund program.  The department may set fees or charges for fund management and technical site assistance provided under this section.  The department may adopt rules pursuant to chapter 91 to carry out the purposes of this section.

     (d)  All interest earned on the deposit or investment of the moneys in the fund shall become a part of the fund.

     (e)  The department shall provide an annual report to the governor and the legislature describing all transactions and activities involved in the administration of the brownfields cleanup revolving loan fund."]

     SECTION 20.  Section 201B-10, Hawaii Revised Statutes, is repealed.

     ["[§201B-10]  Tourism emergency trust fund.  (a)  There is established outside the state treasury a tourism emergency trust fund to be administered by the board as trustee, into which shall be deposited the revenues prescribed by section 237D‑6.5(b).  All investment earnings from moneys in the trust fund shall be credited to the tourism special fund.

     (b)  Moneys in the trust fund shall be used exclusively to provide for the development and implementation of emergency measures to respond to any tourism emergency pursuant to section 201B-9, including providing emergency assistance to tourists during the tourism emergency.

     (c)  Use of the trust fund, consistent with subsection (b), shall be provided for in articles, bylaws, resolutions, or other instruments executed by the board as trustee for the trust fund."]

     SECTION 21.  Section 206E-16, Hawaii Revised Statutes, is repealed.

     ["[§206E-16]  Hawaii community development revolving fund.  There is created the Hawaii community development revolving fund into which all receipts and revenues of the authority shall be deposited.  Proceeds from the fund shall be used for the purposes of this chapter."]

     SECTION 22.  Section 206E-195, Hawaii Revised Statutes, is repealed.

     ["[§206E-195]  Kalaeloa community development revolving fund.  (a)  There is established in the state treasury the Kalaeloa community development revolving fund, into which shall be deposited:

     (1)  All revenues, income, and receipts of the authority for the Kalaeloa community development district, notwithstanding any other law to the contrary, including section 206E-16;

     (2)  Moneys directed, allocated, or disbursed to the Kalaeloa community development district from government agencies or private individuals or organizations, including grants, gifts, awards, donations, and assessments of landowners for costs to administer and operate the Kalaeloa community development district; and

     (3)  Moneys appropriated to the fund by the legislature.

     (b)  Moneys in the Kalaeloa community development revolving fund shall be used for the purposes of this part.

     (c)  Investment earnings credited to the assets of the fund shall become part of the assets of the fund."]

     SECTION 23.  Section 206E-204, Hawaii Revised Statutes, is repealed.

     ["[§206E-204]  Heeia community development revolving fund.  (a)  There is established in the state treasury the Heeia community development revolving fund, into which shall be deposited:

     (1)  All revenues, income, and receipts of the authority for the district, notwithstanding any other law to the contrary, including section 206E-16;

     (2)  Moneys directed, allocated, or disbursed to the district from government agencies or private individuals or organizations, including grants, gifts, awards, donations, and assessments of landowners for costs to administer and operate the district; and

     (3)  Moneys appropriated to the fund by the legislature.

     (b)  Moneys in the fund shall be used only for the purposes of this part.

     (c)  Investment earnings credited to the assets of the fund shall become part of the fund."]

     SECTION 24.  Section 206M-15.5, Hawaii Revised Statutes, is repealed.

     ["§206M-15.5  High technology special fund.  There is established in the state treasury a fund to be known as the high technology special fund, into which shall be deposited, except as otherwise provided by section 206M-17, all moneys, fees, and equity from tenants, qualified persons, or other users of the development corporation's industrial parks, projects, other leased facilities, and other services and publications; provided that the total amount of moneys in the fund shall not exceed $3,000,000 at the end of any fiscal year.  All moneys in the fund are appropriated for the purposes of and shall be expended by the development corporation for the operation, maintenance, and management of its industrial parks, projects, facilities, services, and publications, and to pay the expenses in administering the special purpose revenue bonds of the development corporation or in carrying out its project agreements."]

     SECTION 25.  Section 209-34, Hawaii Revised Statutes, is repealed.

     ["§209-34  State disaster revolving loan fund.  (a)  There is established the state disaster revolving loan fund into which shall be deposited all moneys appropriated by the legislature to the fund, contributed or transferred to the fund, and received as repayment of loans and interest payments as provided in this part, and from which the director of business, economic development, and tourism may make loans in accordance with this part.

     (b)  The director may transfer moneys from the state disaster revolving loan fund established by this section to either the Hawaii capital loan revolving fund established by section 210-3 or the Hawaii innovation development fund established by section 211E-2.  Moneys from the Hawaii capital loan revolving fund established by section 210-3, the Hawaii innovation development loan revolving fund established by section 211E-2, and the state disaster revolving loan fund shall be disbursed by the department or the director pursuant to chapters 209, 210, and 211E, respectively.  The department or the director may transfer moneys from the Hawaii capital loan revolving fund and the Hawaii innovation development fund to the state disaster revolving loan fund for disbursement pursuant to this chapter.

     (c)  The total amount of moneys transferred to the state disaster revolving loan fund, the Hawaii capital loan revolving fund, or the Hawaii innovation development fund shall not exceed $1,000,000 for each respective fund within the calendar year.

     (d)  Notwithstanding subsection (c) to the contrary, the total amount of moneys transferred between the state disaster revolving loan fund and the Hawaii capital loan revolving fund or the Hawaii innovation development fund shall not exceed $1,000,000 within the calendar year if the governor proclaims a state disaster pursuant to section 209-2.

     (e)  The director shall report any transfer of funds made under this section to the legislature within ten days of the transfer.

     (f)  All unexpended and unencumbered moneys remaining in the state disaster revolving loan fund at the close of each fiscal year, which are deemed by the director of finance to be in excess of the moneys necessary to carry out the purposes of this section over the next following fiscal year, shall lapse to the credit of the general fund."]

     SECTION 26.  Section 210D-4, Hawaii Revised Statutes, is repealed.

     ["§210D-4  Hawaii community-based economic development revolving fund; established.  There is established a revolving fund to be known as the Hawaii community-based economic development revolving fund from which moneys shall be loaned or granted by the department under this chapter.  All moneys appropriated to the fund by the legislature, received as repayments of loans, payments of interest or fees, and all other moneys received by the fund from any other source shall be deposited into the revolving fund and used for the purposes of this chapter.  The department may use all appropriations and other moneys in the revolving fund not appropriated for a designated purpose to make grants or loans."]

     SECTION 27.  Section 212-9, Hawaii Revised Statutes, is repealed.

     ["§212-9  Special fund.  There is established in the state treasury a fund to be known as the foreign-trade zones special fund.  All fees or other moneys collected under this chapter shall be deposited in this fund.  All moneys in the fund are hereby appropriated for the purposes of and shall be expended by the public corporation for the operation, capital improvement, and maintenance of the zone."]

     SECTION 28.  Section 211F-5.7, Hawaii Revised Statutes, is repealed.

     ["§211F-5.7  Hydrogen investment capital special fund.  (a)  There shall be established the hydrogen investment capital special fund, into which shall be deposited:

     (1)  Appropriations made by the legislature to the fund;

     (2)  All contributions from public or private partners;

     (3)  All interest earned on or accrued to moneys deposited in the special fund; and

     (4)  Any other moneys made available to the special fund from other sources.

     (b)  Moneys in the fund shall be expended by the corporation to:

     (1)  Provide seed capital for and venture capital investments in private sector and federal projects for research, development, testing, and implementation of the Hawaii renewable hydrogen program, as set forth in section 196-10; and

     (2)  For any other purpose deemed necessary to carry out the purposes of section 196‑10."]

     SECTION 29.  Section 227D-5, Hawaii Revised Statutes, is repealed.

     ["§227D-5  Special fund.  There is established in the state treasury a fund to be known as the natural energy laboratory of Hawaii authority special fund, into which shall be deposited all moneys and fees from tenants or other users of the authority's parks, projects, other leased facilities, and other services and publications as well as any grants or gifts received by the authority.  All moneys in the fund are appropriated for the purposes of and shall be expended by the authority for the operation, maintenance, and management of its parks, projects, facilities, services, and publications, and for the design and construction of new facilities and the renovation of or addition to existing facilities."]

     SECTION 30.  Section 516-44, Hawaii Revised Statutes, is repealed.

     ["§516-44  Fee simple residential revolving fund.  A fee simple residential revolving fund is created.  The funds appropriated for the purposes of this chapter and chapter 519 and all moneys received or collected by the Hawaii housing finance and development corporation under this chapter and chapter 519 shall be deposited in the revolving fund.  Moneys collected to reimburse the corporation from the lessees for their pro rata share of the direct costs incurred by the corporation under this chapter shall be deposited into the revolving fund.  The proceeds in the funds shall first be used to pay the principal and interest on bonds or other indebtedness issued by the corporation, or by the State, and then for necessary expenses, including indirect costs of the corporation in administering chapters 516 and 519.

     Moneys in the fund shall be used to pay all costs of chapters 516 and 519 including administration."]

     SECTION 31.  On June 30, 2015, all unencumbered balances remaining in the funds repealed by this Act shall be transferred by the director of finance into the high technology loan revolving fund.

     SECTION 32.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 33.  This Act shall take effect on July 1, 2015.

 

INTRODUCED BY:

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Report Title:

Special Funds; Revolving Funds; Department of Business, Economic Development, and Tourism; High Technology Loan Revolving Fund

 

Description:

Repeals particular special and revolving funds that have become dormant or unnecessary and transfers the unencumbered balances in those funds into the high technology loan revolving fund.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.