2443
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HIGH TECHNOLOGY DEVELOPMENT CORPORATION.



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

 1      SECTION 1.  Chapter 206M, Hawaii Revised Statutes, is
 
 2 amended by adding to Part I a new section to be appropriately
 
 3 designed and to read as follows:
 
 4      " 206M Federal tax-exempt status.  Special purpose revenue
 
 5 bonds issued pursuant to this chapter, to the extent practicable,
 
 6 shall be issued to comply with requirements imposed by applicable
 
 7 federal law providing that the interest on the special purpose
 
 8 revenue bonds shall be excluded from gross income for federal
 
 9 income tax purposes (except as certain minimum taxes, or
 
10 environmental taxes or other federal taxes or tax consequences
 
11 may apply).  The development corporation may enter into
 
12 agreements, establish funds or accounts, and take any action
 
13 required to comply with applicable federal law.  Nothing in this
 
14 chapter shall be deemed to prohibit the issuance of special
 
15 purpose revenue bonds, the interest on which may be included in
 
16 gross income for federal income tax purposes."
 
17      SECTION 2.  Chapter 206M, Hawaii Revised Statutes is amended
 
18 by adding a new part II to be entitled Special Facility Revenue
 
19 bonds and to consist of five new sections to be appropriately
 

 
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 1 designated and to read as follows:
 
 2             PART II.  SPECIAL FACILITY REVENUE BONDS
 
 3       206M  Definitions.  As used in this part, unless the
 
 4 context clearly requires otherwise:
 
 5      "Special facility revenue bonds" means all bonds, notes, and
 
 6 other instruments of indebtedness of the State issued pursuant to
 
 7 this part and part III of chapter 39.
 
 8      "Special facility" means one or more buildings, structures,
 
 9 or facilities and the land thereof located in an industrial park
 
10 for the high technology industry, including, without limitation,
 
11 facilities for technology research, development, support,
 
12 processing, and manufacturing, which are the subject of a special
 
13 facility lease.
 
14      "Special facility lease" includes a contract, lease or other
 
15 agreement, or any combination thereof the subject matter of which
 
16 is the same special facility.
 
17       206M  Powers.  In addition to any other powers granted to
 
18 the development corporation by law, the development corporation
 
19 may:
 
20 (1)  With the approval of the governor, and without public
 
21      bidding, enter into a special facility lease or an amendment
 
22      or supplement thereto whereby the development corporation
 
23      agrees to acquire, construct, improve, install, equip, and
 

 
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 1      develop a special facility solely for the use by another
 
 2      party to a special facility lease;
 
 3 (2)  With the approval of the governor, issue special facility
 
 4      revenue bonds in the principal amounts that may be necessary
 
 5      to yield the amount of the cost of any acquisition,
 
 6      construction, improvement, installation, equipping, and
 
 7      development of any special facility, including, subject to
 
 8      paragraph (6) the costs of acquisition of the site thereof;
 
 9      provided that the total principal amount of the special
 
10      facility revenue bonds which may be issued pursuant to the
 
11      authorization of this subsection shall not exceed
 
12      $100,000,000;
 
13 (3)  With the approval of the governor, issue refunding special
 
14      facility revenue bonds with which to provide for the payment
 
15      of outstanding special facility revenue bonds (including any
 
16      special facility revenue bonds theretofore issued for this
 
17      refunding purpose) or any part thereof; provided any
 
18      issuance of refunding special facility revenue bonds shall
 
19      not reduce the principal amount of the bonds which may be
 
20      issued as provided in paragraph (2);
 
21 (4)  Perform and carry out the terms and provisions of any
 
22      special facility lease;
 
23 (5)  Notwithstanding section 103-7 or any other law to the
 

 
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 1      contrary, acquire, construct, improve, install, equip or
 
 2      develop any special facility, or accept the assignment of
 
 3      any contract therefor entered into by the other person to
 
 4      the special facility lease;
 
 5 (6)  Construct any special facility on land owned by the State;
 
 6      provided that no funds derived herein will be expended for
 
 7      land acquisition; and
 
 8 (7)  Agree with the other party to the special facility lease
 
 9      whereby any acquisition, construction, improvement,
 
10      installation, equipping, or development of the special
 
11      facility and the expenditure of moneys therefor shall be
 
12      undertaken or supervised by another person.  Neither the
 
13      undertaking by the other person nor the acceptance by the
 
14      development corporation of a contract theretofore entered
 
15      into by the other person therefor, shall be subject to
 
16      chapter 103D.
 
17       206M  Findings and determination for special facility
 
18 leases.  The development corporation shall not enter into any
 
19 special facility lease unless the development corporation at or
 
20 prior to the entering into of such special facility lease shall
 
21 find and determine:
 
22 (1)  That the building, structure, or facility which is to be the
 
23      subject of such special facility lease will not be used to
 

 
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 1      provide services, commodities, supplies or facilities which
 
 2      are then adequately being made available otherwise in the
 
 3      State;
 
 4 (2)  That the result of the use or occupancy of such building,
 
 5      structure, or facility under such special facility lease
 
 6      would not result in the reduction of the revenues derived
 
 7      from the industrial parks or other properties of the
 
 8      development corporation to an amount below the amount
 
 9      required to be derived therefrom by section 39-61; and
 
10 (3)  That the entering into of such special facility lease would
 
11      not be in violation of or result in a breach of any covenant
 
12      contained in any resolution or certificate authorizing any
 
13      bonds of the State then outstanding.
 
14       206M  Special Facility Lease.  (a) In addition to the
 
15 conditions and terms set forth in this part, any special facility
 
16 lease entered into by the development corporation shall at least
 
17 contain provisions obligating the other person to the special
 
18 facility lease:
 
19 (1)  To pay to the development corporation during the initial
 
20      term of the special facility lease, whether the special
 
21      facility is capable of being used or occupied or is being
 
22      used or occupied by the other person, a rental or rentals at
 
23      the time or times and in the amount or amounts that will be
 

 
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 1      sufficient:  to pay the principal and interest on all
 
 2      special facility revenue bonds issued for the special
 
 3      facility, to establish or maintain any reserves for these
 
 4      payments, and to pay all fees and expenses of the trustees,
 
 5      paying agents, transfer agents, and other fiscal agents for
 
 6      the special facility revenue bonds issued for the special
 
 7      facility;
 
 8 (2)  To pay to the development corporation:
 
 9           A)  A ground rental, equal to the fair market rental of
 
10      the land, if the land on which the special facility is
 
11      located was not acquired from the proceeds of the special
 
12      facility revenue bonds; or
 
13           (B)  A properly allocable share of the administrative
 
14      costs of the development corporation in carrying out the
 
15      special facility lease and administering the special
 
16      facility revenue bonds issued for the special facility, if
 
17      the land was acquired from the proceeds of the special
 
18      facility revenue bonds;
 
19 (3)  To either operate, maintain, and repair the special facility
 
20      and pay the costs thereof or to pay to the development
 
21      corporation all costs of operation, maintenance, and repair
 
22      of the special facility;
 
23 (4)  To:
 

 
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 1           (A)  Insure, or cause to be insured, the special
 
 2      facility under builder's risk insurance (or similar
 
 3      insurance) in the amount of the cost of construction of the
 
 4      special facility to be financed from the proceeds of the
 
 5      special facility revenue bonds;
 
 6           (B)  Procure and maintain, or cause to be procured or
 
 7      maintained, to the extent commercially available, a
 
 8      comprehensive insurance policy providing protection and
 
 9      insuring the development corporation and its officers,
 
10      agents, servants, and employees (and so long as special
 
11      facility revenue bonds are outstanding, the trustee) against
 
12      all direct or contingent loss or liability for damages for
 
13      personal injury or death or damage to property, including
 
14      loss of use thereof, occurring on or in any way related to
 
15      the special facility or occasioned by reason of occupancy by
 
16      and the operations of the other person upon, in and around
 
17      the special facility;
 
18           (C)  Provide all risk casualty insurance, including
 
19      insurance against loss or damage by fire, lightning, flood,
 
20      earthquake, typhoon, or hurricane, with standard extended
 
21      coverage and standard vandalism and other malicious mischief
 
22      endorsements; and
 
23           (D)  Provide insurance for workers' compensation and
 

 
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 1      employer's liability for personal injury or death or damage
 
 2      to property (the other party may self-insure for workers'
 
 3      compensation if permitted by law); provided that all
 
 4      policies with respect to loss or damage of property
 
 5      including fire or other casualty and extended coverage and
 
 6      builder's risk shall provide for payments of the losses to
 
 7      the development corporation, the other person or the trustee
 
 8      for the special facility revenue bonds as their respective
 
 9      interests may appear; and provided further that the
 
10      insurance may be procured and maintained as part of or in
 
11      conjunction with other policies carried by the other person;
 
12      and provided further that the insurance shall name the
 
13      development corporation, and so long as any special facility
 
14      revenue bonds are outstanding, the trustee, as additional
 
15      insured; and
 
16 (5)  to indemnify, save, and hold the development corporation,
 
17      the trustee and their respective agents, officers, members,
 
18      and employees harmless from and against all claims and
 
19      actions and all costs and expenses incidental to the
 
20      investigation and defense thereof, by or on behalf of any
 
21      person, firm, or corporation, based upon or arising out of
 
22      the special facility or the other person's use and occupancy
 
23      thereof, including, without limitation, from and against all
 

 
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 1      claims and actions based upon and arising from any:
 
 2           (A)  Condition of the special facility;
 
 3           (B)  Breach or default on the part of the other person
 
 4      in the performance of any of the person's obligations under
 
 5      the special facility lease;
 
 6           (C)  Fault or act of negligence of the other person or
 
 7      the person's agents, contractors, servants, employees, or
 
 8      licensees; or
 
 9           (D)  Accident to or injury or death of any person or
 
10      loss of or damage to any property occurring in or about the
 
11      special facility, including any claims or actions based upon
 
12      or arising by reason of the negligence or any act of the
 
13      other person.
 
14      Any moneys received by the development corporation pursuant
 
15 to paragraphs (2) and (3) shall be paid into the high technology
 
16 special fund and shall not be nor be deemed to be revenues of the
 
17 special facility.
 
18      (b)  The term and all renewals and extensions of the term of
 
19 any special facility lease (including any amendments or
 
20 supplements thereto) shall not extend beyond the lesser of the
 
21 reasonable life of the special facility which is the subject of
 
22 the special facility lease, as estimated by the development
 
23 corporation at the time of the entering into thereof, or thirty
 

 
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 1 years.
 
 2      (c)  Any special facility lease entered into by the
 
 3 development corporation shall be subject to chapter 171 and shall
 
 4 contain any other terms and conditions that the development
 
 5 corporation deems advisable to effectuate the purposes of this
 
 6 part.
 
 7       206M Special facility revenue bonds.  All special facility
 
 8 revenue bonds authorized to be issued under this part shall be
 
 9 issued pursuant to part III of chapter 39, except as follows:
 
10      (1)  No revenue bonds shall be issued unless at the time of
 
11           issuance the development corporation has entered into a
 
12           special facility lease with respect to the special
 
13           facility for which the revenue bonds are to be issued;
 
14      (2)  The revenue bonds shall be issued in the name of the
 
15           development corporation, and not in the name of the
 
16           State;
 
17      (3)  No further authorization of the legislature shall be
 
18           required for the issuance of the special facility
 
19           revenue bonds, but the approval of the governor shall
 
20           be required for the issuance;
 
21      (4)  The revenue bonds shall be payable solely from and
 
22           secured solely by the revenues derived by the
 
23           development corporation from the special facility for
 

 
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 1           which they are issued;
 
 2      (5)  The final maturity date of the revenue bonds shall not
 
 3           be later than either the estimated life of the special
 
 4           facility for which they are issued or the initial term
 
 5           of the special facility lease;
 
 6      (6)  If deemed necessary or advisable by the development
 
 7           corporation, or to permit the obligations of the other
 
 8           person to the special facility lease to be registered
 
 9           under the U.S. Securities Act of 1933, the development
 
10           corporation with the approval of the director of
 
11           finance may appoint a national or state bank within or
 
12           without the State to serve as trustee for the holders
 
13           of the revenue bonds and may enter into a trust
 
14           indenture or trust agreement with the trustee.  The
 
15           trustee may be authorized by the development
 
16           corporation to collect, hold, and administer the
 
17           revenues derived from the special facility for which
 
18           the revenue bonds are issued and to apply the revenues
 
19           to the payment of the principal and interest on the
 
20           revenue bonds.  In the event that any trustee shall be
 
21           appointed, any trust indenture or trust agreement
 
22           entered into by the development corporation with the
 
23           trustee may contain the covenants and provisions
 

 
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 1           authorized by part III of chapter 39 to be inserted in
 
 2           a resolution adopted or certificate issued, as though
 
 3           the words "resolution" or "certificate" as used in that
 
 4           part read "trust indenture or agreement." The covenants
 
 5           and provisions shall not be required to be included in
 
 6           the resolution or certificate authorizing the issuance
 
 7           of the revenue bonds if included in the trust agreement
 
 8           or indenture.  Any resolution or certificate, trust
 
 9           indenture, or trust agreement adopted, issued, or
 
10           entered into by the development corporation pursuant to
 
11           this part may also contain any provisions required for
 
12           the qualification thereof under the U.S. Trust
 
13           Indenture Act of 1939.  The development corporation may
 
14           pledge and assign to the trustee the special facility
 
15           lease and the rights of the development corporation
 
16           including the revenues thereunder;
 
17      (7)  If the development corporation with the approval of the
 
18           director of finance shall have appointed or shall
 
19           appoint a trustee for the holders of the revenue bonds,
 
20           then notwithstanding the provisions of the second
 
21           sentence of section 39-68, the director of finance may
 
22           elect not to serve as fiscal agent for the payment of
 
23           the principal and interest, and for the purchase,
 

 
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 1           registration, transfer, exchange, and redemption of the
 
 2           revenue bonds, or may elect to limit the functions the
 
 3           director of finance shall perform as the fiscal agent.
 
 4           The development corporation with the approval of the
 
 5           director of finance may appoint the trustee to serve as
 
 6           the fiscal agent, and may authorize and empower the
 
 7           trustee to perform the functions with respect to
 
 8           payment, purchase, registration, transfer, exchange,
 
 9           and redemption, that the development corporation may
 
10           deem necessary, advisable, or expedient, including,
 
11           without limitation, the holding of the revenue bonds
 
12           and coupons, if any, which have been paid and the
 
13           supervision and conduction of the destruction thereof
 
14           in accordance with sections 40-10 and 40-11.  Nothing
 
15           in this paragraph shall be a limitation upon or
 
16           construed as a limitation upon the powers granted in
 
17           the preceding paragraph to the development corporation
 
18           with the approval of the director of finance to appoint
 
19           the trustee, or granted in sections 36-3 and 39-13 and
 
20           the third sentence of section 39-68 to the director of
 
21           finance to appoint the trustee or others, as fiscal
 
22           agents, paying agents and registrars for the revenue
 
23           bonds or to authorize and empower the fiscal agents,
 

 
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 1           paying agents, and registrars to perform the functions
 
 2           referred to in that paragraph and sections, it being
 
 3           the intent of this paragraph to confirm that the
 
 4           director of finance may elect not to serve as fiscal
 
 5           agent for the revenue bonds or may elect to limit the
 
 6           functions the director of finance shall perform as the
 
 7           fiscal agent, that the director of finance may deem
 
 8           necessary, advisable or expedient;
 
 9 (8)  The development corporation may sell the revenue bonds
 
10      either at public or private sale;
 
11 (9)  If no trustee shall be appointed to collect, hold, and
 
12      administer the revenues derived from the special facility
 
13      for which the revenue bonds are issued, the revenues shall
 
14      be held in a separate account in the treasury of the State,
 
15      separate and apart from the high technology special fund, to
 
16      be applied solely to the carrying out of the resolution,
 
17      certificate, trust indenture, or trust agreement authorizing
 
18      or securing the revenue bonds;
 
19 (10) If the resolution, certificate, trust indenture, or trust
 
20      agreement shall provide that no revenue bonds issued
 
21      thereunder shall be valid or obligatory for any purpose
 
22      unless certified or authenticated by the trustee for the
 
23      holders of the revenue bonds, signatures of the officers of
 

 
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 1      the State upon the bonds required by section 39-56 may be
 
 2      facsimiles of their signatures;
 
 3 (11) Proceeds of the revenue bonds may be used and applied by the
 
 4      development corporation to reimburse the other person to the
 
 5      special facility lease for all preliminary costs and
 
 6      expenses, including architectural and legal costs; and
 
 7 (12) If the special facility lease requires the other person to
 
 8      operate, maintain, and repair the special facility which is
 
 9      the subject of the lease, at the other person's expense, the
 
10      requirement shall constitute compliance by the development
 
11      corporation with section 39-61(a)(2), and none of the
 
12      revenues derived by the development corporation from the
 
13      special facility shall be required to be applied to the
 
14      purposes of section 39-62(2).  Sections 39-62(4), 39-62(5),
 
15      and 39-62(6) shall not be applicable to the revenues derived
 
16      from a special facility lease."
 
17      SECTION 3.  Section 206M-1, Hawaii Revised Statutes, is
 
18 amended as follows:
 
19 (1)  By amending the definition of "bonds" to read as follows:
 
20      "Bonds" or "special purpose revenue bonds" means [special
 
21 purpose revenue bonds issued under this chapter and shall include
 
22 notes, other instruments of indebtedness, and refunding bonds.]
 
23 bonds, notes and other instruments of indebtedness of the State
 

 
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 1 issued pursuant to this part."
 
 2 (2)  By amending the definition of "high technology" to read as
 
 3      follows:
 
 4      "High technology" means [emerging] industries which are
 
 5 technology-intensive, including, but not limited to, electronics
 
 6 [and] biotechnology, software, computers, telecommunications, and
 
 7 other computer-related technologies."
 
 8 (3)  By amending the definition of "industrial park" to read as
 
 9      follows:
 
10      "Industrial park" means a tract of real property determined
 
11 by the board as being suitable for use as building sites for
 
12 projects by [a group of enterprises engaged in] one or more
 
13 industrial, processing or manufacturing enterprises [for] engaged
 
14 in high technology, including research, training, technical
 
15 analyses, software development, and pilot plant or prototype
 
16 product development, and may include the installation of
 
17 improvements to such tract incidental to the use of real property
 
18 as an industrial park, such as water, sewer, sewage and waste
 
19 disposal, and drainage facilities, sufficient to adequately
 
20 service projects in the industrial park, and provision of
 
21 incidental transportation facilities, power distribution
 
22 facilities, and communication facilities.  Industrial parks shall
 
23 not include any buildings or structures of any kind except for
 

 
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 1 buildings or structures incidental to improvements to the
 
 2 industrial park."
 
 3 (4)  By amending the definition of "project" to read as follows:
 
 4      "Project" means [any combination of land and buildings and
 
 5 other improvements thereon for use in industrial, processing, or
 
 6 manufacturing enterprises for high technology which are located
 
 7 in an industrial park and acquired, constructed, reconstructed,
 
 8 rehabilitated, improved, altered, or repaired by or on behalf of
 
 9 the development corporation.] the acquisition, construction,
 
10 improvement, installation, equipping and development of any
 
11 combination of land, buildings, and other improvements thereon,
 
12 including, without limitation, parking facilities for use of for,
 
13 or to assist a high technology industrial, manufacturing, or
 
14 processing enterprise located within or without an industrial
 
15 park, including, without limiting the generality of the
 
16 foregoing, machinery, equipment, furnishings, and apparatus which
 
17 shall be deemed necessary, suitable, or useful to such
 
18 enterprise."
 
19 (4)  By amending the definition of "project agreement" to read as
 
20 follows:
 
21      "Project agreement" means [any lease, sublease, loan
 
22 agreement, conditional sale agreement, or other similar financing
 
23 contract or agreement, or any combination thereof entered into
 

 
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 1 under this chapter by the development corporation, including the
 
 2 financing from the proceeds of bonds of a project or an
 
 3 industrial park.] any agreement entered into under this chapter
 
 4 by the development corporation with a qualified person to
 
 5 finance, construct, operate, or maintain a project or an
 
 6 industrial park from the proceeds of special purpose revenue
 
 7 bonds, or to lend the proceeds of special purpose revenue bonds
 
 8 to assist a high technology industrial, manufacturing, or
 
 9 processing enterprise, including, without limitation, any lease,
 
10 sublease, loan agreement, conditional sale agreement, or other
 
11 similar financing contract or agreement, or any combination
 
12 thereof."
 
13 (6)  By amending the definition of "qualitifed person" to read as
 
14      follows:
 
15      "Qualified person" means any individual, firm, partnership,
 
16 corporation, association, cooperative, or other legal entity,
 
17 governmental body or public agency or any combination [or
 
18 association] of the foregoing, possessing the competence,
 
19 expertise, experience, and resources, including financial,
 
20 personnel, and tangible resources, required for the purposes of a
 
21 project and such other qualifications as may be deemed desirable
 
22 by the development corporation in administering this chapter and
 
23 which enters into a project agreement with the development
 

 
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 1 corporation."
 
 2      SECTION 4.  Section 206M-2, Hawaii Revised Statutes, is
 
 3 amended by amending subsection (9) to read as follows:
 
 4      "(a) There is established the high technology development
 
 5 corporation, which shall be a public body corporate and politic
 
 6 and an instrumentality and agency of the State.  The development
 
 7 corporation shall be placed within the department of business,
 
 8 economic development, and tourism for administrative purposes,
 
 9 pursuant to section 26-35.  The purpose of the development
 
10 corporation shall be to facilitate the growth and development of
 
11 the commercial high technology industry in Hawaii.  Its duties
 
12 shall include, but not be limited to:
 
13 (1)  [developing] Developing industrial parks as high technology
 
14      innovation centers and the developing or assisting with the
 
15      development of projects within or outside of industrial
 
16      parks;
 
17 (2)  [providing] Providing financial and other support and
 
18      services to Hawaii-based high technology companies;
 
19 (3)  [collecting] Collecting and analyzing information on the
 
20      state of commercial high technology activity in Hawaii;
 
21 (4)  [promoting] Promoting and marketing Hawaii as a site for
 
22      commercial high technology activity; and
 
23 (5)  [providing] Providing advice on policy and planning for
 

 
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 1      technology-based economic development."
 
 2      SECTION 5.  Section 206M-2, Hawaii Revised Statutes, is
 
 3 amended by amending subsection (3) to read as follows:
 
 4      (e)  The board shall appoint a management advisory committee
 
 5 for each industrial park and related project or projects governed
 
 6 by the board.  Each committee shall have five members, who shall
 
 7 serve without compensation but may be reimbursed for expenses
 
 8 incurred in the performance of their duties.  The members shall
 
 9 be drawn from fields of activity related to each [project or
 
10 park.] industrial park and related project or projects."
 
11      SECTION 6.  Section 206M-3, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "206M-3  Powers, generally.  The development corporation
 
14 shall have all the powers necessary to carry out its purposes,
 
15 including the following powers:
 
16 (1)  To sue and be sued;
 
17 (2)  To have a seal and alter the same at its pleasure;
 
18 (3)  To make and execute, enter into, amend, supplement, and
 
19      carry out contracts and all other instruments necessary or
 
20      convenient for the exercise of its powers and functions
 
21      under this chapter, including, [subject to] with the
 
22      approval of the governor, a project agreement, or an
 
23      amendment or supplement to an existing project agreement,
 

 
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 1      with a qualified person, and [any other] to enter into and
 
 2      carry out any agreement whereby the obligations of a
 
 3      qualified person under a project agreement shall be
 
 4      unconditionally guaranteed or insured by, or the performance
 
 5      thereof assigned to, or guaranteed or insured by, a person
 
 6      or persons other than the qualified person; and to[grant
 
 7      options or renew any project agreement entered into by it in
 
 8      connection with any project or industrial park, on terms and
 
 9      conditions as it deems advisable;]; extend or renew any
 
10      project agreement or any other agreement related thereto;
 
11      provided that any such renewal or extension shall be subject
 
12      to the approval of the governor unless made in accordance
 
13      with provisions for such extension or renewal contained in a
 
14      project agreement or related agreement theretofore approved
 
15      by the governor;
 
16 (4)  To make and alter bylaws for its organization and internal
 
17      management;
 
18 (5)  To adopt rules under chapter 91 necessary to effectuate this
 
19      chapter in connection with industrial parks, projects,
 
20      multi-project programs, and the operations, properties, and
 
21      facilities of the development corporation;
 
22 (6)  Through its chief executive officer, to appoint officers,
 
23      agents, and employees, prescribe their duties and
 

 
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 1      qualifications, and fix their salaries, without regard to
 
 2      chapters 76 and 77;
 
 3 (7)  To prepare or cause to be prepared development plans for
 
 4      industrial parks;
 
 5 (8)  To acquire, own, lease, hold, clear, improve, and
 
 6      rehabilitate real, personal, or mixed property and to
 
 7      assign, exchange, transfer, convey, lease, sublease, or
 
 8      encumber any project, including by way of easements;
 
 9 (9)  To [construct, reconstruct, rehabilitate, improve, alter or
 
10      repair,] acquire, construct, improve, install, equip, or
 
11      develop or provide for the [construction, reconstruction,
 
12      rehabilitation, improvement, alteration, or repair]
 
13      acquisition, construction, improvement, installation,
 
14      equipping, or development of any project and to designate a
 
15      qualified person as its agent for such purpose, and to own,
 
16      hold, assign, transfer, convey, exchange, lease, sublease,
 
17      or encumber any project;
 
18 (10) To arrange or initiate appropriate action for the planning,
 
19      replanning, opening, grading, or closing of streets, roads,
 
20      roadways, alleys, easements, or other places, the furnishing
 
21      of improvements, the acquisition of property or property
 
22      rights, or the furnishing of property or services in
 
23      connection with an industrial park; or project;
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 (11) To prepare or cause to be prepared plans, specifications,
 
 2      designs, and estimates of cost for the acquisition,
 
 3      construction, reconstruction, [rehabilitation,] improvement,
 
 4      [alteration, or repair] installation, equipping,
 
 5      development, or maintenance of any project or industrial
 
 6      park, and from time to time to modify such plans,
 
 7      specifications, designs, or estimates;
 
 8 (12) To engage the services of consultants on a contractual basis
 
 9      for rendering professional and technical assistance and
 
10      advice;
 
11 (13) To procure insurance against any loss in connection with its
 
12      property and other assets and operations in such amounts and
 
13      from such insurers as it deems desirable;
 
14 14)  To accept and expend gifts or grants in any form from any
 
15      public agency or from any other source;
 
16 (15) To issue special purpose revenue bonds and refunding special
 
17      purpose revenue bonds pursuant to and in accordance with
 
18      this chapter in such principal amounts as may be authorized
 
19      from time to time by law to finance or refinance the cost of
 
20      a project, singly or as part of a multi-project program, or
 
21      an industrial park as authorized by law and to provide for
 
22      the security thereof as permitted by this chapter;
 
23 (16) To lend or otherwise apply the proceeds of the bonds issued
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      for a project or an industrial park either directly or
 
 2      through a trustee [or] to a qualified person for use and
 
 3      application by the qualified person in the acquisition,
 
 4      construction, improvement, installation, [or modification]
 
 5      equipping, or development of a project or industrial park,
 
 6      or agree with the qualified person whereby any of these
 
 7      activities shall be undertaken or supervised by that
 
 8      qualified person or by a person designated by the qualified
 
 9      person;
 
10 (17) As security for the payment of the principal of, premium, if
 
11      any, and interest of the special purpose revenue bonds
 
12      issued for a project, to pledge, assign, hypothecate, or
 
13      otherwise encumber all or any part of the revenues and
 
14      receipts derived or to be derived by the development
 
15      corporation under the project agreement for the project for
 
16      which such bonds are issued; to pledge and assign the
 
17      interest and rights of the development corporation under the
 
18      project agreement or other agreement with respect to such
 
19      project or such special purpose revenue bonds; and to pledge
 
20      and assign any bond, debenture, note, or other evidence of
 
21      indebtedness received by the development corporation with
 
22      respect to such project; or any combination of the
 
23      foregoing;
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 (18) [(17)] With or without terminating a project agreement, to
 
 2      exercise any and all rights provided by law for entry and
 
 3      re-entry upon or take possession of a project at any time or
 
 4      from time to time upon breach or default by a qualified
 
 5      person under a project agreement, including any action at
 
 6      law or in equity for the purpose of effecting its rights of
 
 7      entry or re-entry or obtaining possession of the project or
 
 8      for the payments of rentals, user taxes, or charges, or any
 
 9      other sum due and payable by the qualified person to the
 
10      development corporation pursuant to the project agreement;
 
11 (19) [(18)] To enter into arrangements with qualified county
 
12      development entities whereby the board would provide
 
13      financial support to qualified projects proposed;
 
14 (20) [(19)] To create an environment in which to support high
 
15      technology economic development, including, but not limited
 
16      to: supporting all aspects of technology-based economic
 
17      development; developing instructive programs, identifying
 
18      issues and impediments to the growth of high technology
 
19      industry in Hawaii; and providing policy analysis and
 
20      information important to the development of high technology
 
21      industries in Hawaii;
 
22 (21) [20] To develop programs that support start-up and existing
 
23      high technology companies in Hawaii and to attract new
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      companies to relocate to or establish operations in Hawaii
 
 2      by assessing the needs of these companies and providing the
 
 3      physical and technical infrastructure to support their
 
 4      operations;
 
 5 (22) [21] To coordinate its efforts with other public and private
 
 6      agencies involved in stimulating technology-based economic
 
 7      development in Hawaii, including, but not limited to: the
 
 8      department of business, economic development, and tourism;
 
 9      the Pacific international center for high technology
 
10      research; and the office of technology transfer and economic
 
11      development of the University of Hawaii;
 
12 (23) [22] To promote and market Hawaii as a site for commercial
 
13      high technology activity;
 
14 (24) [23] To provide advice on policy and planning for
 
15      technology-based economic development; and
 
16 (25) [24] To do any and all things necessary or convenient
 
17      [proper] to carry out [the] its purposes [of] and exercise
 
18      the powers given and granted in this chapter."
 
19      SECTION 7. Section 206M-4, Hawaii Revised Statutes is
 
20 amended to read as follows:
 
21      [[]2-6M-4 []]Compliance with state and local law.  The
 
22 issuance of special purpose revenue bonds with respect to any
 
23 project or industrial park under this chapter shall not relieve
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 any qualified person or other user of such project or industrial
 
 2 park from the laws, ordinances, and rules of the State or any
 
 3 political subdivision thereof, or any department or board thereof
 
 4 with respect to the construction, operation, and maintenance of
 
 5 any project or industrial park, or zoning laws or regulations,
 
 6 obtaining of building permits, compliance with building and
 
 7 health codes and other laws, ordinances, or rules and regulations
 
 8 of similar nature pertaining to the project or industrial park,
 
 9 and such laws shall be applicable to such qualified person or
 
10 such other user to the same extent they would be if the costs of
 
11 the project or industrial park were directly financed by the
 
12 qualified person."
 
13      SECTION 8. Section 206M-5, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "206M-5  Development Rules.  Whenever the proceeds of
 
16 special purpose revenue bonds are used to finance the cost of [a
 
17 project,] an industrial park, the board shall adopt rules under
 
18 chapter 91 to be followed during the course of the development of
 
19 any industrial park, which are to be known as development rules
 
20 in connection with health, safety, building, planning, zoning,
 
21 and land use.  The rules, upon final adoption of a development
 
22 plan for an industrial park, shall supersede all other
 
23 inconsistent ordinances and rules relating to the use, zoning,
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 planning, and development of land and construction thereon within
 
 2 the industrial park.  Rules adopted under this section shall
 
 3 follow existing law, rules, ordinances, and regulations as
 
 4 closely as is consistent with standards meeting minimum
 
 5 requirements of good design, pleasant amenities, health, safety,
 
 6 and coordinated development.  The corporation shall establish
 
 7 policies and procedures for monitoring and ensuring that the
 
 8 operation of the industrial park complies with these development
 
 9 rules and may establish fines and penalties or take any other
 
10 means available under the law to eliminate any noncomplying
 
11 action."
 
12      SECTION 9.  Section 206M-6, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "[[]206M-6. Use of public lands.  The governor may set
 
15 aside available public lands to the development corporation for
 
16 the purposes specified in this chapter; provided that such
 
17 setting aside would not impair any covenant between the State or
 
18 any department or board thereof and holders of [revenue] any
 
19 bonds issued by the State or such department or board thereof.
 
20 The development corporation also may lease available state lands
 
21 from the department of land and natural resources."
 
22      SECTION 10.  Section 206M-7, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      "[[]206M-7 []]  Conditions precedent to negotiating and
 
 2 entering into a project agreement.
 
 3      (a)  The development corporation prior to entering into
 
 4 negotiations with respect to a project agreement or at any time
 
 5 during such negotiations shall require that as a condition to
 
 6 such negotiations or the continuation thereof the State shall be
 
 7 reimbursed for any and all costs and expenses incurred by it even
 
 8 though a project agreement may not be entered into and may
 
 9 further require the deposit of moneys with the development
 
10 corporation as security for such reimbursement.  Any amount of
 
11 such deposit in excess of the amount required to reimburse the
 
12 State shall be returned by the development corporation to the
 
13 party which has made such deposit.
 
14      (b)  The development corporation shall not enter into any
 
15 project agreement with respect to any project or industrial park
 
16 unless the legislature shall have first authorized the issuance
 
17 of special purpose revenue bonds to finance [such project or
 
18 industrial park] a project or projects, an industrial park or
 
19 industrial parks or a multi-project program pursuant to section
 
20 206M-9, and the development corporation has thereafter found and
 
21 determined either that:
 
22      (1)  The qualified person is a responsible party, whether by
 
23           reason of economic assets or experience in the type of
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           enterprise to be undertaken through such project, or
 
 2           otherwise; or
 
 3      (2)  The obligations of the qualified person under the
 
 4           project agreement will be unconditionally guaranteed by
 
 5           a person who is a responsible party, whether by reason
 
 6           of economic assets or experience in the type of
 
 7           enterprise to be undertaken through such project or
 
 8           otherwise."
 
 9      SECTION 11. Section 206M-8, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "[[]206M-8 []] Project agreement. (a)  No special purpose
 
12 revenue bonds shall be issued unless at the time of issuance the
 
13 development corporation shall have entered into a project
 
14 agreement with respect to the project or industrial park for the
 
15 financing of which such special purpose revenue bonds are to be
 
16 issued.  Any project agreement entered into by the development
 
17 corporation with a qualified person shall contain provisions
 
18 unconditionally obligating such qualified person [to]:
 
19      (1)  To pay the development corporation during the period or
 
20           term of the project agreement, exclusive of any renewal
 
21           or extension thereof and whether or not the project or
 
22           industrial park to which such project agreement relates
 
23           is used or occupied by the qualified person, at such
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           time or times and in such amount or amounts that will
 
 2           be at least sufficient:
 
 3      [(1)](A)  To pay the principal of, and premium, if any, and
 
 4 interest on all special purpose revenue bonds issued to finance
 
 5 the cost of the project, or an allocable portion of the special
 
 6 purpose revenue bonds issued to finance the industrial park, as
 
 7 the case may be, as and when the special purpose revenue bonds
 
 8 become due, including upon any required redemption thereof;
 
 9      [2] (B)  To establish or maintain such reserves, if any, as
 
10 may be required by the instrument authorizing or securing the
 
11 special purpose revenue bonds, or an allocable portion of such
 
12 reserves, if less than all of the proceeds of the special purpose
 
13 revenue bonds are utilized for such qualified person;
 
14      [3] (C)  To pay the fees and expenses of the paying agents
 
15 and trustees for the special purpose revenue bonds, or an
 
16 allocable portion of such fees and expenses, if less than all of
 
17 the proceeds of the special purpose revenue bonds are utilized
 
18 for such qualified person; and
 
19      [4] (D)  To pay the expenses incurred by the development
 
20 corporation in administering the special purpose revenue bonds or
 
21 in carrying out the project agreement, or an allocable portion of
 
22 such expenses, if less than all of the proceeds of such special
 
23 purpose revenue bonds are utilized for such qualified person.
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      (2)  To operate, maintain, and repair the project as long as
 
 2           the same is used as provided in the project agreement
 
 3           and to pay all costs of such operation, maintenance and
 
 4           repair.
 
 5      (b)  The development corporation in determining the cost of
 
 6 any project, may also include the following:
 
 7      (1)  Financing charges, fees, and expenses of any trustee
 
 8           and paying agents or special purpose revenue bonds
 
 9           issued to pay the cost of such project;
 
10      (2)  Interest on such bonds and the expenses of the State in
 
11           connection with such bonds and the project to be
 
12           financed from the proceeds of such bonds accruing or
 
13           incurred prior to and during the estimated period of
 
14           construction and for not exceeding twelve months
 
15           thereafter;
 
16      (3)  Amounts necessary to establish or increase reserves for
 
17           the special purpose revenue bonds;
 
18      (4)  The cost of plans, specifications, studies, surveys,
 
19           and estimates of costs and of revenues;
 
20      (5)  Other expenses incidentals to determining the
 
21           feasibility or practicability of the project;
 
22      (6)  Administration expenses;
 
23      (7)  Legal, accounting, consulting, and other special
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           service fees;
 
 2      (8)  Interest cost incurred by the project party with
 
 3           respect to the project prior to the issuance of the
 
 4           special purpose revenue bonds; and
 
 5      (9)  Such other costs, commissions, and expenses incidental
 
 6           to the acquisition, construction, improvement,
 
 7           installation, equipping, or development of the project,
 
 8           the financing, placing of same in operation, and the
 
 9           issuance of the special purpose revenue bonds, whether
 
10           incurred prior to or after the issuance of such bonds.
 
11      [(b)](c)  Any project agreement entered into by the
 
12 development corporation may contain such provisions as the
 
13 development corporation deems necessary or desirable to obtain or
 
14 permit the participation of the state and federal government in
 
15 the project or industrial park or in the financing of the cost
 
16 thereof.
 
17      [(c)](d)  A project agreement also shall provide that the
 
18 development corporation shall have all rights and remedies
 
19 generally available at law or in equity to re-enter and take
 
20 possession of a project upon the breach or default by a qualified
 
21 person of any term, condition, or provision of a project
 
22 agreement.
 
23      (e)  Each qualified person with a project agreement with the
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 development corporation shall allow the development corporation
 
 2 full access to the qualified person's financial records.  Upon
 
 3 the request of the development corporation for the examination of
 
 4 any such financial records, the qualified person shall allow the
 
 5 development corporation to examine the requested records within a
 
 6 reasonably prompt time from the date of the request.  If the
 
 7 development corporation requests copies of the records, the
 
 8 qualified person shall provide the copies.
 
 9           (f)  To provide the public with full knowledge of the
 
10      use of the proceeds and benefits derived from special
 
11      purpose revenue bonds issued under this chapter, the
 
12      development corporation shall require each qualified person
 
13      with a project agreement with the development corporation to
 
14      make available to the public all relevant financial records
 
15      which pertain to the use of or savings resulting from the
 
16      use of special purpose revenue bonds.
 
17           (g)  Each qualified person with a project agreement
 
18      with the development corporation shall estimate the benefits
 
19      derived from the use of the proceeds of special purpose
 
20      revenue bonds.  The benefits estimated shall be based on the
 
21      creation of new jobs and potential effect on tax receipts.
 
22      The format of and method for determining the estimates shall
 
23      be established by the development corporation and shall be
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      uniform for each qualified person.
 
 2      (h)  To promote public understanding of the role played by
 
 3 special purpose revenue bonds in providing benefits to the
 
 4 general public, the development corporation shall take
 
 5 appropriate steps to ensure public access to and scrutiny of the
 
 6 estimates determined under subsection (g).
 
 7      (i)  The development corporation shall adopt rules under
 
 8 chapter 91 for the purposes of this section.
 
 9      (j) Moneys received by the development corporation pursuant
 
10 to subsection [(a)(4)] (a)(1)(D) shall not be, nor be deemed to
 
11 be, revenues or receipts derived under the project agreement
 
12 which may be pledged as security for special purpose revenue
 
13 bonds and shall be paid [to the development corporation free and
 
14 clear of any lien.]into the high technology special fund.  A
 
15 qualified person may comply with the unconditional obligation to
 
16 make payments required by subsection (a), if such obligations are
 
17 unconditionally guaranteed or insured by, or the performance
 
18 thereof assigned to, or guaranteed or insured by, a person or
 
19 persons other than the qualified person which is satisfactory to
 
20 the development corporation.
 
21      SECTION 12.  Section 206M-9, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "[[]206M-9  []Bonds;] Issuance of special purpose revenue
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 bonds; bond anticipation notes [.]; refunding bonds. (a) In
 
 2 addition to the other powers which it may have, the development
 
 3 corporation may issue special purpose revenue bonds to finance,
 
 4 in whole or in part, the costs of projects of, for, or to loan
 
 5 the proceeds of such bonds to assist qualified persons.  All
 
 6 revenue bonds issued under this chapter are special purpose
 
 7 revenue bonds and the provisions of part III of chapter 39 shall
 
 8 not apply thereto.  All special purpose revenue bonds shall be
 
 9 issued in the name of the development corporation and not in the
 
10 name of the State.
 
11      The legislature finds and determines that the exercise of
 
12 the powers vested in the development corporation by this chapter
 
13 constitutes assistance to a high technology industrial,
 
14 manufacturing, or processing enterprise and that the issuance of
 
15 special purpose revenue bonds to finance facilities of, for, or
 
16 to loan the proceeds of such bonds to assist qualified persons,
 
17 is in the public interest.
 
18      [(a)](b)  The development corporation, with the approval of
 
19 the governor, may issue special purpose revenue bonds for each
 
20 single project or industrial park or multi-project program which
 
21 has been authorized by the legislature by an affirmative vote of
 
22 two-thirds of the members to which each house is entitled;
 
23 provided that the legislature shall find that the issuance of
 
24 such special purpose revenue bonds is in the public interest.
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 [Bonds] Special purpose revenue bonds shall be issued in such
 
 2 principal amounts as may be authorized from time to time by law
 
 3 and at such time or times as the development corporation deems
 
 4 necessary and advisable to finance the cost of a project [or],
 
 5 industrial park, or multi-project program as authorized by law.
 
 6 With respect to the financing of a multi-project program with the
 
 7 proceeds of special purpose revenue bonds, the legislature may so
 
 8 authorize the issuance from time to time in one or more series by
 
 9 the development corporation, in each case with the approval of
 
10 the governor, of special purpose revenue bonds in such aggregate
 
11 principal amount and during such period as the legislature shall
 
12 provide.  The principal of, premium, if any, and interest on such
 
13 special purpose revenue bonds shall be payable:
 
14      (1)  Exclusively from the revenues and receipts derived or
 
15           to be derived by the development corporation under
 
16           project agreements or from such revenues and receipts
 
17           together with any grant from the government in aid of
 
18           the project or industrial park financed from the
 
19           proceeds of such bonds;
 
20      (2)  Exclusively from the revenues and receipts derived or
 
21           to be derived by the development corporation from a
 
22           particular project agreement, whether or not the
 
23           project or industrial park to which it relates is
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           financed in whole or in part with the proceeds of the
 
 2           special purpose revenue bonds; or
 
 3      (3)  From revenues and receipts derived or to be derived by
 
 4           the development corporation generally.
 
 5      Neither the board members nor any person executing the
 
 6 special purpose revenue bonds shall be liable personally on the
 
 7 bonds by reason of the issuance thereof.
 
 8      All special purpose revenue bonds of the same issue (or, in
 
 9 the case of an authorized issue for a multi-project program,
 
10 series), subject to the prior and superior rights of outstanding
 
11 bonds, claims, obligations, or mechanic's and materialman's
 
12 liens, shall have a prior and paramount lien on the revenues
 
13 derived from the project agreement with respect to the project
 
14 for which such bonds have been issued, over and ahead of all
 
15 special purpose revenue bonds of such issue (or series) payable
 
16 from the revenues which may be subsequently issued and over and
 
17 ahead of any claims or obligations of any nature against the
 
18 revenues subsequently arising or subsequently incurred; provided
 
19 that the development corporation may reserve the right and
 
20 privilege to subsequently issue additional series of special
 
21 purpose revenue bonds, from time to time, payable from the
 
22 revenues derived from such project agreement on a parity with the
 
23 issue or series of special purpose revenue bonds theretofore
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 issued, and the subsequently issued series of special purpose
 
 2 revenue bonds may be secured, without priority by reason of date
 
 3 of sale, date of execution, or date of delivery, by a lien on the
 
 4 revenues in accordance with law, including this chapter.
 
 5      [(b) Bonds] (c)    Special purpose revenue bonds issued
 
 6 pursuant to this chapter may be in one or more issues and in one
 
 7 or more series within an issue and shall be further authorized
 
 8 pursuant to resolution of the board.  The special purpose revenue
 
 9 bonds shall be dated, shall bear interest at such rate or rates,
 
10 shall mature at such time or times not exceeding forty years from
 
11 their date or dates, shall have such rank or priority, and may be
 
12 made redeemable before maturity at the option of the development
 
13 corporation, at such price or prices and under such terms and
 
14 conditions, all as may be determined by the development
 
15 corporation.  The development corporation shall determine the
 
16 form of the special purpose revenue bonds, including interest
 
17 coupons, if any, to be attached thereto, and the manner of
 
18 execution of the special purpose revenue bonds, and shall fix the
 
19 denomination or denominations of the special purpose revenue
 
20 bonds and, subject to the approval of the [state] director of
 
21 finance, the place or places of payment of principal and
 
22 interest, which may be at any bank or trust company approved by
 
23 the [state] director of finance within or without the State.
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1      The special purpose revenue bonds may be issued in coupon or
 
 2 in registered form, or both, as the development corporation may
 
 3 determine, and provisions may be made for the registration of
 
 4 coupon bonds as to principal alone and also as to both principal
 
 5 and interest, and for the reconversion into coupon bonds of
 
 6 special purpose revenue bonds registered as to both principal and
 
 7 interest.  Subject to the approval of the [state] director of
 
 8 finance, the development corporation may sell special purpose
 
 9 revenue bonds in such manner, either at public or private sale,
 
10 and for such price as it may determine.
 
11      [(c)] (d) Prior to the preparation of definitive special
 
12 purpose revenue bonds, the development corporation may issue
 
13 interim receipts or temporary bonds, with or without coupons,
 
14 exchangeable for definitive bonds when such bonds have been
 
15 executed and are available for delivery.
 
16      [(d)] (e) Should any special purpose revenue bond issued
 
17 under this chapter or any coupon appertaining thereto become
 
18 mutilated, lost, stolen, or destroyed, the development
 
19 corporation may cause a new bond or coupon of like date, number,
 
20 and tenor to be executed and delivered in exchange and
 
21 substitution for, and upon the cancellation of such mutilated
 
22 bond or coupon, or in lieu of and in substitution for such lost,
 
23 stolen or destroyed bond or coupon.  Such new bond or coupon
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 shall not be executed or delivered until the holder of the
 
 2 mutilated, lost, stolen, or destroyed bond or coupon (1) has paid
 
 3 the reasonable expenses and charges in connection therewith, (2)
 
 4 in the case of a lost, stolen, or destroyed bond or coupon, has
 
 5 filed with the development corporation or its fiduciary evidence
 
 6 satisfactory to the development corporation or its fiduciary that
 
 7 such bond or coupon was lost, stolen, or destroyed and that the
 
 8 holder was the owner thereof, and (3) has furnished indemnity
 
 9 satisfactory to the development corporation.
 
10      [(e)] (f) The development corporation in its discretion may
 
11 provide that CUSIP identification numbers shall be printed on
 
12 such special purpose revenue bonds.  If such numbers are
 
13 imprinted on such bonds (1) no such number shall constitute a
 
14 part of the contract evidenced by the particular bond upon which
 
15 it is imprinted, and (2) no liability shall attach to the
 
16 development corporation or any officer or agent thereof,
 
17 including any fiscal agent, paying, agent or registrar for such
 
18 bonds by reason of such numbers or any use made thereof,
 
19 including any use thereof made by the development corporation,
 
20 any such officer, or any such agent, or by reason of any
 
21 inaccuracy, error, or omission with respect thereto or in such
 
22 use.  The development corporation in its discretion may require
 
23 that all costs of obtaining and imprinting such numbers shall be
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 paid by the purchaser of such bonds.  For the purposes of this
 
 2 subsection, the term "CUSIP identification numbers" means the
 
 3 numbering system adopted by the Committee for Uniform Security
 
 4 Identification Procedures formed by the Securities Industry
 
 5 Association.
 
 6      [(f)] (g) Whenever the development corporation has
 
 7 authorized the issuance of special purpose revenue bonds under
 
 8 this chapter, special purpose revenue bond anticipation notes of
 
 9 the development corporation may be issued in anticipation of the
 
10 issuance of such bonds and of the receipt of the proceeds of sale
 
11 thereof, for the purposes for which such bonds have been
 
12 authorized.  All special purpose revenue bond anticipation notes
 
13 shall be authorized by the development corporation, and the
 
14 maximum principal amount of such notes shall not exceed the
 
15 authorized principal amount of such bonds.  The notes shall be
 
16 payable solely from and secured solely by the proceeds of sale of
 
17 the special purpose revenue bonds in anticipation of which the
 
18 notes are issued and the moneys, rates, charges, and other
 
19 revenues from which would be payable and by which would be
 
20 secured such bonds; provided that to the extent that the
 
21 principal of the notes shall be paid from moneys other than the
 
22 proceeds of sale of such bonds, the maximum amount of bonds that
 
23 has been authorized in anticipation of which the notes are issued
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1 shall be reduced by the amount of notes paid in such manner.  The
 
 2 authorization, issuance, and the details of such notes shall be
 
 3 governed by this chapter with respect to special purpose revenue
 
 4 bonds insofar as the same may be applicable; provided that each
 
 5 note, together with all renewals and extensions thereof, or
 
 6 refundings thereof by other notes issued under this subsection,
 
 7 shall mature within five years from the date of the original
 
 8 note.
 
 9      [(g)](h)  In order to secure the payment of any of the
 
10 special purpose revenue bonds issued pursuant to this chapter,
 
11 and interest thereon, or in connection with such bonds, the
 
12 development corporation shall have the power as to such bonds:
 
13      (1)  To pledge all or any part of the revenues and receipts
 
14           derived or to be derived by the development corporation
 
15           as provided in this chapter to the punctual payment of
 
16           special purpose revenue bonds issued with respect to
 
17           the project or industrial park financed from the
 
18           proceeds thereof, and interest thereon, and to covenant
 
19           against thereafter pledging any such revenues and
 
20           receipts to any other bonds or any other obligations of
 
21           the development corporation for any other purpose,
 
22           except as otherwise stated in the proceedings providing
 
23           for the issuance of special purpose revenue bonds
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           permitting the issuance of additional special purpose
 
 2           revenue bonds to be equally and ratably secured by a
 
 3           lien upon such [moneys, rates, charges, and other]
 
 4           revenues [.] and receipts;
 
 5      (2)  To pledge and assign the interest and right of the
 
 6           development corporation under any project agreement and
 
 7           other agreements related to a project or industrial
 
 8           park, and the rights, duties, and obligations of the
 
 9           development corporation thereunder, including the right
 
10           to receive revenues and receipts thereunder [.];
 
11      3)   To pledge or assign all or any part of the proceeds
 
12           derived by the development corporation from proceeds of
 
13           insurance or condemnation awards [.];
 
14      (4)  To covenant as to the use and disposition of the
 
15           proceeds from the sale of such special purpose revenue
 
16           bonds [.];
 
17      (5)  To covenant to set aside or pay over reserves and
 
18           sinking funds for such special purpose revenue bonds
 
19           and as to the disposition thereof [.];
 
20      (6)  To covenant and prescribe as to what happenings or
 
21           occurrences shall constitute "events of default" , the
 
22           terms and conditions upon which any or all of such
 
23           bonds shall become or may be declared due before
 

 
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                                     H.B. NO.           
                                                        
                                                        


 1           maturity, and as to the terms and conditions upon which
 
 2           such declaration and its consequences may be waived
 
 3           [.];
 
 4      (7)  To covenant as to the rights, liabilities, powers, and
 
 5           duties arising upon the breach by [it] the development
 
 6           corporation of any covenant, condition or obligation;
 
 7      (8)  Subject to the approval of the [state] director of
 
 8           finance, to designate a national or state bank or trust
 
 9           company within or without the State, incorporated in
 
10           the United States, to serve as trustee for the holders
 
11           of the special purpose revenue bonds and to enter into
 
12           a trust indenture, trust agreement, or indenture of
 
13           mortgage with such trustee.  The trustee may be
 
14           authorized by the development corporation to receive
 
15           and receipt for, hold, and administer the proceeds of
 
16           such special purpose revenue bonds and to apply the
 
17           proceeds to the purposes for which such special purpose
 
18           revenue bonds are issued, or to receive and receipt
 
19           for, hold, and administer the revenues and receipts
 
20           derived or to be derived by the development corporation
 
21           under a project agreement or other agreement related to
 
22           a project or industrial park, and to apply such
 
23           revenues and receipts to the payment of the principal
 

 
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 1           of and interest on such special purpose revenue bonds,
 
 2           or both, and any excess revenues and receipts to the
 
 3           payment of expenses incurred by the development
 
 4           corporation in administering such special purpose
 
 5           revenue bonds or in carrying out such project agreement
 
 6           or other agreement.  If the trustee shall be appointed,
 
 7           any trust indenture, trust agreement, or indenture of
 
 8           mortgage entered into by the development corporation
 
 9           with the trustee may contain whatever covenants and
 
10           provisions as may be necessary, convenient, or
 
11           desirable in order to secure such special purpose
 
12           revenue bonds.  The development corporation may pledge
 
13           and assign to the trustee the interest of the
 
14           development corporation under a project agreement and
 
15           other agreements related thereto and the rights,
 
16           duties, and obligations of the development corporation
 
17           thereunder, including the right to receive revenues and
 
18           receipts thereunder.  The development corporation may
 
19           appoint the trustee to serve as fiscal agent for the
 
20           payment of the principal and interest, and for the
 
21           purchase, registration, transfer, exchange, and
 
22           redemption of the special purpose revenue bonds, and
 
23           may authorize and empower the trustee to perform such
 

 
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 1           functions with respect to such payment, purchase,
 
 2           registration, transfer, exchange, and redemption, as
 
 3           the development corporation may deem necessary,
 
 4           advisable, or expedient, including, without limitation,
 
 5           the holding of the special purpose revenue bonds and
 
 6           coupons which have been paid and the supervision of the
 
 7           destruction thereof in accordance with law [.];
 
 8      (9)  To execute all instruments necessary or convenient in
 
 9           the exercise of the powers herein granted or in the
 
10           performance of its covenants and duties [.];
 
11      (10) To invest or provide for the investment of the proceeds
 
12           of special purpose revenue bonds and revenues and
 
13           receipts derived by the development corporation in such
 
14           securities and in such manner as it deems proper [.];
 
15           and
 
16      (11) To make such covenants and do any and all acts and
 
17           things as may be necessary, convenient, or desirable in
 
18           order to secure such special purpose revenue bonds,
 
19           notwithstanding that such covenants, acts, or things
 
20           may not be enumerated in this chapter.
 
21      No holder or holders of special purpose revenue bonds issued
 
22 under this chapter shall ever have the right to compel any
 
23 exercise of the taxing power of the State or any political
 

 
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 1 subdivision of the State to pay such special purpose revenue
 
 2 bonds or the interest thereon and no moneys other than the
 
 3 revenues pledged to such special purpose revenue bonds shall be
 
 4 applied to the payment thereof.
 
 5      [(h)] (i)  [Bonds] Special purpose revenue bonds bearing the
 
 6 signature or facsimile signature of officers in office on the
 
 7 date of the signing thereof shall be valid and sufficient for all
 
 8 purposes, notwithstanding that before the delivery thereof and
 
 9 payment therefor any or all of the persons whose signatures
 
10 appear thereon shall have ceased to be officers of the
 
11 development corporation.  The special purpose revenue bonds shall
 
12 contain a recital that they are issued pursuant to this chapter
 
13 which recital shall be conclusive evidence of their validity and
 
14 of the regularity of their issuance.
 
15      [(i)] (j) Subject to authorization by an act enacted by the
 
16 legislature by an affirmative vote of two-thirds of the members
 
17 to which each house is entitled, the development corporation may
 
18 issue special purpose revenue bonds for the purpose of refunding
 
19 special purpose revenue bonds then outstanding and issued under
 
20 this chapter whether or not such outstanding special purpose
 
21 revenue bonds have matured or are then subject to redemption.
 
22 The development corporation may issue special purpose revenue
 
23 bonds for the combined purposes of (1) financing or refinancing
 

 
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 1 the cost of a project or industrial park, or the improvement or
 
 2 expansion thereof, and (2) refunding special purpose revenue
 
 3 bonds which shall theretofore have been issued under this chapter
 
 4 and then shall be outstanding, whether or not such outstanding
 
 5 bonds have matured or then are subject to redemption.
 
 6      Nothing in this subsection shall require or be deemed to
 
 7 require the development corporation to elect to redeem or prepay
 
 8 special purpose revenue bonds being refunded, or to redeem or
 
 9 prepay special purpose revenue bonds being refunded which were
 
10 issued, in the form customarily known as term bonds in accordance
 
11 with any sinking fund installment schedule specified in any
 
12 proceeding authorizing the issuance thereof, or, if the
 
13 development corporation elects to redeem or prepay any such
 
14 bonds, to redeem or prepay as of any particular date or dates.
 
15 The issuance of such special purpose revenue bonds, the
 
16 maturities and other details thereof, the rights and remedies of
 
17 the holders thereof, and the rights, powers, privileges, duties,
 
18 and obligations of the development corporation with respect to
 
19 the bonds, shall be governed by the foregoing provisions of this
 
20 chapter insofar as the same may be applicable.
 
21      (k)  If special purpose revenue bonds issued pursuant to
 
22 this chapter are issued bearing interest at a rate or rates which
 
23 vary from time to time and with a right of holders to tender the
 

 
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 1 bonds for purchase, the development corporation may contract for
 
 2 such support facility or facilities and remarketing arrangements
 
 3 as are required to market the special purpose revenue bonds to
 
 4 the greatest advantage of the development corporation upon such
 
 5 terms and conditions as the development corporation deems
 
 6 necessary and proper.
 
 7      The development corporation may enter into contracts or
 
 8 agreements with the entity or entities providing a support
 
 9 facility; provided that any contract or agreement shall provide,
 
10 in essence, that any amount due and owing by the development
 
11 corporation under the contract or agreement on an annual basis
 
12 shall be payable solely from the revenue and receipts of the
 
13 project agreement and any obligation issued or arising pursuant
 
14 to the terms of the contract or agreement in the form of special
 
15 purpose revenue bonds, notes, or other evidences of indebtedness
 
16 shall only arise at such time as either:
 
17 (1)  Moneys or securities have been irrevocably set aside for the
 
18      full payment of a like principal amount of special purpose
 
19      revenue bonds issued pursuant to this chapter; or
 
20 (2)  A like principal amount of the issue or series of special
 
21      purpose revenue bonds to which the support facility relates
 
22      are held in escrow by the entity or entities providing the
 
23      support facility."
 

 
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 1      SECTION 13.  Section 206M-10, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "206M-10  Authorization for loans; loan terms and
 
 4 conditions; loan procedure. (a) Notwithstanding any law to the
 
 5 contrary, the [state] director of finance is authorized, with the
 
 6 approval of the governor, to make loans up to the aggregate sum
 
 7 of $1,000,000, or so much thereof as may be necessary, to the
 
 8 development corporation.  The loans shall be made from the state
 
 9 general fund moneys which are in excess of the amounts necessary
 
10 for immediate state requirements, and shall be used for the
 
11 purpose of paying administrative and other costs associated with
 
12 the development of industrial parks and other projects and
 
13 activities that encourage the growth of the high technology
 
14 industry in Hawaii.
 
15      (b)  The development corporation, to the extent moneys
 
16 become available from bond proceeds or otherwise, shall repay the
 
17 general fund the principal amount of any loan made by the [state]
 
18 director of finance.  No interest shall be required for any such
 
19 loan.
 
20      (c)  Loans authorized by this section shall be drawn upon by
 
21 the development corporation from time to time upon at least five
 
22 days notice to the [state] director of finance and upon the
 
23 filing with the [state] director of finance of a certificate of
 

 
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 1 the chairperson of the board setting forth the amount being
 
 2 borrowed, the names of the persons, firms, or corporations to
 
 3 which moneys will be paid from the proceeds of such borrowing and
 
 4 the amount to be paid to each.  In addition, the chairperson of
 
 5 the board shall file with the [state] director of finance a copy
 
 6 of the resolution or resolutions of the board approving contracts
 
 7 for services which will be paid from the proceeds of the
 
 8 borrowing. 
 
 9      SECTION 14.  Section 206M-11, Haaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "[[]206M-11 []Bonds]  Special purpose revenue bonds not a
 
12 general or moral obligation of State.  No holder or holders of
 
13 special purpose revenue bonds issued under this chapter shall
 
14 ever have the right to compel any exercise of the taxing power of
 
15 the State to pay such bonds or the interest thereon and no moneys
 
16 other than the revenues pledged to such bonds shall be applied to
 
17 the payment thereof.  Each special purpose revenue bond issued
 
18 under this chapter shall recite in substance that such bond,
 
19 including interest thereon, is not a general or moral obligation
 
20 of the State and is payable solely from the revenues pledged to
 
21 the payment thereof, and that such bond is not secured, directly
 
22 or indirectly, by the full faith and credit or the general credit
 
23 of the State or by revenues or taxes of the State other than the
 

 
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 1 revenues specifically pledged thereto."
 
 2      SECTION 15. Section 206M-12, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "[[]206M-12 []Bonds]  Special purpose revenue bonds exempt
 
 5 from taxation.  Special purpose revenue bonds and the income
 
 6 therefrom issued [Bonds] pursuant to this chapter shall be exempt
 
 7 from all state taxation, except inheritance, transfer, and estate
 
 8 taxes."
 
 9      SECTION 16.  Section 206M-13, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "[[] 206M-13 []Bonds]  Special purpose revenue bonds as
 
12 legal investments and lawful security.  [Bonds] The special
 
13 purpose revenue bonds issued pursuant to this chapter shall be
 
14 and are declared to be legal and authorized investments for
 
15 banks, savings banks, trust companies, savings and loan
 
16 associations, insurance companies, credit unions, fiduciaries,
 
17 trustees, guardians, and for all public funds of the State or
 
18 other political corporations or subdivisions of the State.  Such
 
19 special purpose revenue bonds shall be eligible to secure the
 
20 deposit of any and all public funds of the State [or] and any and
 
21 all public funds of counties or other political corporations or
 
22 subdivisions of the State, and such bonds shall be lawful and
 
23 sufficient security for such deposits to the extent of their
 

 
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 1 value when accompanies by all unmatured coupons, if any,
 
 2 appertaining thereto. 
 
 3      SECTION 17.  Section 206M-14, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]206M-14 []]  Status of special purpose revenue bonds
 
 6 under the Uniform Commercial Code.  Notwithstanding any of the
 
 7 provisions of this chapter or any recital in any special purpose
 
 8 revenue bond issued under this chapter, all such special purpose
 
 9 revenue bonds shall be deemed to be investment securities under
 
10 the Uniform Commercial Code, chapter 490, subject only to the
 
11 provisions of the special purpose revenue bonds pertaining to
 
12 registration."
 
13      SECTION 18.  Section 206M-15, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "[[]206M-14 []]  High technology research and development
 
16 loans and grants.  (a) All moneys necessary to carry out the
 
17 purposes of this section shall be allocated by the legislature
 
18 through appropriations out of the state general fund.  The
 
19 development corporation shall include in its budgetary request
 
20 for the upcoming fiscal period, the amounts necessary to
 
21 effectuate the purposes of this section.  All moneys, interest
 
22 charges, and other fees collected by the development corporation
 
23 under this section shall be deposited to the credit of the State
 

 
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 1 general fund.  In making any expenditure under this section, the
 
 2 development corporation shall analyze each funding request to
 
 3 determine whether the project to be undertaken will be
 
 4 economically viable and beneficial to the State.
 
 5      (b)  The development corporation may provide grants of [up
 
 6 to] not exceeding the lesser of (1) fifty per cent of the federal
 
 7 [grant up to] small business innovation research phase I award or
 
 8 contract; or (2) $25,000 to each business in Hawaii that receives
 
 9 a federal small business innovation research phase I award or
 
10 contract from any participating federal agency subject to the
 
11 availability of funds.
 
12      (c)  The development corporation shall adopt rules pursuant
 
13 to chapter 91 that:
 
14      (1)  Specify the qualifications for eligibility of grant
 
15           applicants;
 
16      (2)  Establish priorities in determining eligibility in the
 
17           event that insufficient funds are available to fund
 
18           otherwise qualified applicants; and
 
19      (3)  Give preference to all qualified businesses receiving
 
20           their first award in one fiscal year over multiple
 
21           award grantees.
 
22      The development corporation may adopt any other rules
 
23 pursuant to chapter 91 necessary for the purposes of this
 

 
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 1 section.
 
 2      (d)  If funds appropriated for the purpose of making grants
 
 3           under this section are inadequate to satisfy all
 
 4           qualified requests, the development corporation shall
 
 5           apply for funds to be transferred from the Hawaii
 
 6           capital loan revolving fund to provide the grants in
 
 7           accordance with subsection (b).  The amount of any
 
 8           single transfer of funds shall not exceed $100,000, and
 
 9           the development corporation shall transfer the entire
 
10           amount back to the Hawaii capital loan revolving fund
 
11           within twelve months of receiving the funds.  No more
 
12           than one fund transfer shall be outstanding at any one
 
13           time.  The director of business, economic development,
 
14           and tourism may transfer funds from the Hawaii capital
 
15           loan revolving fund to the [high technology research
 
16           and] development corporation upon request to carry out
 
17           the purposes of this section.  Transfers of funds shall
 
18           be made without any charges or fees."
 
19      SECTION 19. Section 206M-15.5, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "[[]206M-15.5 []]  High technology special fund.  There is
 
22 established in the state treasury a fund to be known as the high
 
23 technology special fund, into which shall be deposited, except as
 

 
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 1 otherwise provided by section 206M-17, all moneys and fees from
 
 2 tenants, qualified persons, or other users of the development
 
 3 corporation's industrial parks, projects, other leased
 
 4 facilities, and other services and publications.  All moneys in
 
 5 the fund are hereby appropriated for the purposes of and shall be
 
 6 expended by the development corporation for the operation,
 
 7 maintenance, and management of its industrial parks, projects,
 
 8 facilities, services, and publications [/], and to pay the
 
 9 expenses in administering the special purpose revenue bonds of
 
10 the development corporation or in carrying out its project
 
11 agreements."
 
12      SECTION 20.  Section 206M-16, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "206M-16-16.  Exemption of development corporation From
 
15 taxation and competitive bidding. (a) All revenues and receipts
 
16 derived by the development corporation from any project or
 
17 industrial park or under a project agreement or other agreement
 
18 pertaining thereto shall be exempt from all state and county
 
19 taxation.  Any right, title, and interest of the development
 
20 corporation in any project or industrial park shall also be
 
21 exempt from all state and county taxation.  Except as otherwise
 
22 provided by law, the interest of a qualified person or other user
 
23 of a project or industrial park under a project agreement or
 

 
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 1 other agreements related to a project or industrial park shall
 
 2 not be exempt from taxation to a greater extent than it would be
 
 3 if the costs of the project or industrial park were directly
 
 4 financed by the qualified person or user.
 
 5      (b)  The development corporation shall not be subject to any
 
 6 requirement of law for competitive bidding for project
 
 7 agreements, construction contracts, lease and sublease
 
 8 agreements, or other contracts unless a project agreement with
 
 9 respect to a project or industrial park otherwise shall so
 
10 require."
 
11      SECTION 21.  Section 206M-17, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "206M-17  Revenue bond fund accounts.  The development
 
14 corporation shall establish separate special funds in accordance
 
15 with section 39-62 for the deposit of the proceeds of special
 
16 purpose revenue bonds and special facility revenue bonds
 
17 authorized under this [chapter.] part and part II of this
 
18 chapter, respectively.  The development corporation shall have
 
19 the right to appropriate, apply, or expend the revenues derived
 
20 with respect to the project agreement for a project for the
 
21 following purposes:
 
22      (1)  To pay when due all special purpose revenue bonds and
 
23           special facility revenue bonds, premiums, if any, and
 

 
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 1           interest thereon, for the payment of which the revenues
 
 2           are or have been pledged, charged, or otherwise
 
 3           encumbered, including reserves therefor; and
 
 4      (2)  To the extent not paid by the qualified person to
 
 5           provide for all expenses of administration, operations,
 
 6           and maintenance of the project, including reserves
 
 7           therefor.
 
 8      Unless and until adequate provision has been made for the
 
 9 foregoing purposes, the development corporation shall not
 
10 transfer the revenues derived from the project agreement to the
 
11 high technology special fund of the State."
 
12      SECTION 22.  Chapter 205M, Hawaii Revised Statutes, is
 
13 amending by redesignating Part II entitled Hawaii Software
 
14 Service Center as Part III as follows:
 
15 "[[PART II.]  PART III.  HAWAII SOFTWARE SERVICE CENTER"
 
16      SECTION 23.  Section 206M-34, Hawaii Revised Statutes, is
 
17 amended by amending subsection (a) to read as follows: (a) The
 
18 development corporation shall have the authority to copyright
 
19 software applications and programs developed for state use with
 
20 public funds and to license their subsequent sale and
 
21 distribution; provided that this authority shall be subject to
 
22 the terms and conditions of a contract to license between the
 
23 development corporation and the affected state departments or
 

 
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 1 agencies that developed the software applications or programs
 
 2 [.]; and provided further that such authority shall not apply to
 
 3 software applications and programsdeveloped by or on behalf of
 
 4 private sector qualified persons for which the development
 
 5 corporation has issued special purpose revenue bonds under this
 
 6 chapter or otherwise provided financing.  Any copyright arising
 
 7 from center activities shall belong to the State and any revenues
 
 8 generated by licenses and subsequent sale and distribution of
 
 9 copyrighted software shall be deposited into the general fund
 
10 unless otherwise stipulated in a licensing agreement."
 
11      SECTION 24.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 25.  This Act shall take effect upon its approval.  
 
14 
 
15                           INTRODUCED BY:  _______________________
 

 
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