GO Bonds; Undergrnd Util Lines

Allows state agencies with responsibility for approving the
construction of utility lines in sensitive areas to apply to the
legislature for the issuance of general obligation bonds to cover
the increase in cost of constructing such lines underground
rather than overhead.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that utility lines provide
 2 services essential to modern life including electricity,
 3 telecommunications, street lighting, and cable television.  In
 4 recent years, there has been increased public interest in
 5 installing utility lines underground, primarily to achieve
 6 aesthetic benefits.  Due to the significantly higher cost to
 7 place utility lines underground, Hawaii's utility rates
 8 traditionally have been based on a less expensive overhead
 9 standard.  The legislature recognizes that installing utility
10 lines underground is an expensive process, most often beyond the
11 means of those surrounding and adjacent property owners who
12 desire and benefit most from underground utility lines in their
13 neighborhood.
14      Installing utility lines underground has a potentially large
15 impact on utility rates, making it difficult for some residents
16 to continue to subscribe to services.  Increases in utility rates
17 for commercial customers will likely result in increased costs
18 and a reduction in quality and efficient delivery of goods and
19 services to consumers.  There is also a question of fairness of

Page 2                                                     1937
                                     H.B. NO.           

 1 requiring all utility customers, including those who have already
 2 paid to developers the added cost in the price of their homes to
 3 have utility lines within their community placed underground, to
 4 fund the underground installation of existing overhead lines in
 5 other neighborhoods through increased utility rates for all.
 6      The legislature also finds that including the cost of
 7 installing utility lines underground in utility rates can harm
 8 customers, particularly those less well off who pay a higher
 9 proportion of their incomes for utility services.  Nevertheless,
10 the legislature finds that installing utility lines underground
11 is desirable and that the cost of this public policy benefit is
12 more appropriately spread across the entire tax base than
13 including it in utility rates.
14      The legislature finds that state agencies and county
15 governments responsible for authorizing land use and other
16 permits and approvals necessary for utility line construction
17 should be empowered to seek authorization for the use of general
18 obligation bonds to cover the cost of underground installation
19 when it is in the public interest and that they should be
20 authorized to request utility lines to be placed underground.
21      SECTION 2.  Chapter 269, Hawaii Revised Statutes, is amended
22 by adding a new section to be appropriately designated and to
23 read as follows:

Page 3                                                     1937
                                     H.B. NO.           

 1      "269-    Authorization to request issuance of general
 2 obligation bonds to underground utility lines.  Notwithstanding
 3 any other law or ordinance to the contrary, whenever any state
 4 agency, except the public utilities commission, or any county or
 5 its agencies responsible for authorizing land use and other
 6 permits and approvals necessary for utility line construction in,
 7 on, above, along, and under public rights of way, determine that
 8 it is in the public interest to request the installation of the
 9 utility lines underground, the requesting agency or the county
10 shall seek the issuance of general obligation bonds by the
11 legislature pursuant to chapter 39 in the amount required to
12 install the lines underground; provided that this section shall
13 not apply to utility line construction, removal, relocation,
14 replacement, or reconstruction on state or county federal-aid
15 highway projects proceeding under sections 264-33 and 264-33.5.
16 The issuance of general obligation bonds shall be for the cost of
17 the underground installation that is in excess of an equivalent
18 overhead construction and the utilities, where allowed by
19 applicable laws, rules, tariffs, and provisions of its franchise
20 or charter, shall contribute an amount equal to the cost of
21 constructing the facilities overhead.  Where general obligation
22 bonds are not authorized in the next regular session of the
23 legislature the utility shall be allowed to construct its

Page 4                                                     1937
                                     H.B. NO.           

 1 facilities overhead in accordance with the regular approval
 2 process and the prevailing utility tariffs."
 3      SECTION 3.  New statutory material is underscored.
 4      SECTION 4.  This Act shall take effect upon its approval.
 6                           INTRODUCED BY:  _______________________