REPORT TITLE:
Taxation; Real Property


DESCRIPTION:
Allows the counties to tax certain state undemised real property
by ordinance.

 
a                                            OCS/HON STATETX.B99
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1357
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  The purpose of this Act is to consent to the
 
 2 taxation by the counties of certain state undemised real
 
 3 property.
 
 4      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
 5 a new chapter to be appropriately designated and to read as
 
 6 follows:
 
 7                             "CHAPTER
 
 8     COUNTY TAXATION OF CERTAIN UNDEMISED STATE REAL PROPERTY
 
 9         -1 Legislative findings.  (a)  The legislature finds
 
10 that this chapter is a law of statewide concern intended to
 
11 supplement the counties' exclusive jurisdiction over real
 
12 property taxation conferred by article VII, section 3 of the
 
13 Constitution of the State of Hawaii.
 
14      (b)  The legislature also finds that this chapter is not
 
15 intended to affect the counties' existing authority to tax state-
 
16 owned real property which is demised to a private person.  The
 
17 legislature recognizes and affirms that authority.
 
18         -2 Definitions.  For the purpose of this chapter:
 
19      "County" does not include the county of Kalawao.
 

 
a                                            OCS/HON STATETX.B99
Page 2                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      "State airport system" means the statewide system of
 
 2 airports under the control and management of the department of
 
 3 transportation pursuant to chapter 261.
 
 4      "State commercial harbor system" means the system of state
 
 5 commercial harbors under the control and management of the
 
 6 department of transportation pursuant to chapter 266.
 
 7      "State income producing enterprise" means a discrete
 
 8 activity which conforms with the following:
 
 9      (1)  The activity is operated or managed by the State for a
 
10           commercial, economic development, or recreational
 
11           purpose;
 
12      (2)  The activity is operated on real property held in fee
 
13           simple by the State;
 
14      (3)  The activity is authorized to generate income from
 
15           either or both of the following:
 
16           (A)  A private person or public agency using or
 
17                occupying the real property or any facility or
 
18                service on the real property; or
 
19           (B)  A private person allowed to enter the real
 
20                property as a customer, attendee, or licensee; and
 
21      (4)  The activity is authorized to retain at least a
 
22           majority of the generated income in order to achieve
 
23           self-sufficiency or reduce general fund subsidies.
 

 
a                                            OCS/HON STATETX.B99
Page 3                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      "State small boat harbor system" means the system of small
 
 2 boat harbors under the jurisdiction of the department of land and
 
 3 natural resources pursuant to chapter 200.
 
 4      "State undemised real property" means real property held in
 
 5 fee simple by the State and not demised by lease, sublease, or
 
 6 other conveyance to a private person.
 
 7         -3 Consent to county taxation of state undemised real
 
 8 property.  Except as otherwise provided under section    -4, the
 
 9 State consents to the taxation by a county of the following state
 
10 undemised real property situated within the boundaries of the
 
11 county:
 
12      (1)  State undemised real property of the state airport
 
13           system;
 
14      (2)  State undemised real property of the state commercial
 
15           harbor system and state undemised real property held by
 
16           the Aloha tower development corporation or Hawaii
 
17           community development authority, but used for a
 
18           commercial harbor purpose;
 
19      (3)  State undemised real property of the state small boat
 
20           harbor system and state undemised real property held by
 
21           the Hawaii community development authority, but used by
 
22           facilities and services supporting the Kewalo Basin
 
23           harbor operation;
 

 
a                                            OCS/HON STATETX.B99
Page 4                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      (4)  State undemised real property of the Aloha stadium;
 
 2      (5)  State undemised real property of the Hawaii convention
 
 3           center; and
 
 4      (6)  Other state undemised real property of a state income
 
 5           producing enterprise when the property is identified by
 
 6           the county in the ordinance required under section
 
 7              -5.  "State undemised real property of a state
 
 8           income producing enterprise" means state undemised real
 
 9           property which is integral to the management,
 
10           operation, or maintenance of the state income producing
 
11           enterprise.  Such state undemised real property
 
12           includes all or some of the state undemised real
 
13           property held by the following state agencies for the
 
14           following purposes: agribusiness development
 
15           corporation for any purpose authorized under chapter
 
16           163D; department of agriculture for an agricultural
 
17           park authorized chapter 166; department of land and
 
18           natural resources for an industrial park authorized
 
19           under chapter 171, part VII; Hawaii community
 
20           development authority for a commercial project
 
21           authorized under chapter 206E; Barbers Point Naval Air
 
22           Station redevelopment commission for a commercial
 
23           project authorized under chapter 206G; Aloha Tower
 

 
a                                            OCS/HON STATETX.B99
Page 5                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           development corporation for any purpose authorized
 
 2           under chapter 206J; high technology development
 
 3           corporation for any purpose authorized under chapter
 
 4           206M; Hawaii information network corporation for any
 
 5           purpose authorized under chapter 206P; Hawaii strategic
 
 6           development corporation for any purpose authorized
 
 7           under chapter 211F; and natural energy laboratory of
 
 8           Hawaii authority for any purpose authorized under
 
 9           chapter 227D.
 
10         -4  Exemptions from consent to county taxation.(a)
 
11 The consent to county taxation under section    -3 shall not
 
12 extend to state undemised real property held by the following:
 
13      (1)  Office of Hawaiian affairs;
 
14      (2)  Hawaiian homes commission or department of Hawaiian
 
15           home lands;
 
16      (3)  Housing and community development corporation of
 
17           Hawaii;
 
18      (4)  University of Hawaii; and
 
19      (5)  Any other state agency, the real property of which is
 
20           expressly exempt by other law from county real property
 
21           taxation.  An exemption from a county-levied
 
22           "assessment" shall not be deemed an express exemption
 
23           from the real property tax.
 

 
a                                            OCS/HON STATETX.B99
Page 6                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      (b)  The consent to county taxation under section    -3 also
 
 2 shall not extend to state undemised real property under the
 
 3 control and management of the department of education or Hawaii
 
 4 health systems corporation.
 
 5         -5 County levy of real property tax by ordinance.(a)
 
 6 The taxation of state undemised real property authorized by this
 
 7 chapter shall not be self-executing.  If choosing to do so, a
 
 8 county shall levy its real property tax on state undemised real
 
 9 property by ordinance.  The ordinance levying the tax shall be
 
10 enacted after the effective date of this chapter.  Under the
 
11 ordinance, the tax may be levied on all or only some of the state
 
12 undemised real property listed under section    -3.
 
13      (b)  The ordinance shall provide for the treatment of the
 
14 State in the same manner as any other real property taxpayer;
 
15 except that:
 
16      (1)  No lien shall attach to any state undemised real
 
17           property for delinquent real property taxes, but any
 
18           delinquency shall be a debt owed by the State and
 
19           collectible by the county in any lawful manner besides
 
20           foreclosure and sale of the subject real property;
 
21      (2)  An appeal of whether a particular parcel of state real
 
22           property is taxable pursuant to this chapter may be
 
23           filed, considered, and decided in a manner different
 

 
a                                            OCS/HON STATETX.B99
Page 7                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           from an appeal of an assessment or exemption; and
 
 2      (3)  Other provisions applicable only to the State as a
 
 3           taxpayer may be established for situations unique to
 
 4           the State.
 
 5      (c)  The ordinance also shall allow the State to claim and,
 
 6 if eligible, receive any real property tax exemption, dedication,
 
 7 or credit available to any other taxpayer.
 
 8         -6 Commencement of real property tax levy;
 
 9 retroactivity.(a)  A county may commence levying the real
 
10 property tax on state undemised real property no earlier than
 
11 July 1, 1999.
 
12      (b)  The real property tax may be levied retroactive to
 
13 July 1, 1999, but only if the ordinance levying the tax is
 
14 enacted no later than October 1, 1999 and expresses an intent to
 
15 be retroactive."
 
16      SECTION 3.  Section 37D-8, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "37D-8  Exemption from taxation.  [All] Except as otherwise
 
19 provided under chapter    , all real and personal property owned
 
20 or operated by the agency, and any interests created in or
 
21 transfer or recording of the property or any interest in the
 
22 property, and payments made under the financing agreements to
 
23 which the property is subject shall be exempt from all state,
 

 
a                                            OCS/HON STATETX.B99
Page 8                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 county, and municipal taxation, and fees and charges of every
 
 2 kind.  Financing agreements issued pursuant to this chapter and
 
 3 the income therefrom, including, without limitation, the interest
 
 4 component of any lease payments, shall be exempt from all
 
 5 taxation by the agency or any county or other political
 
 6 subdivision thereof, except inheritance, transfer, and estate
 
 7 taxes."
 
 8      SECTION 4.  Section 39-61, Hawaii Revised Statutes, is
 
 9 amended by amending subsection (a) to read as follows:
 
10      "(a)  The department issuing revenue bonds pursuant to this
 
11 part shall impose, prescribe, and collect rates, rentals, fees,
 
12 or charges for the use and services of, and the facilities and
 
13 commodities furnished by, the undertaking or for the use and
 
14 services and benefits of the loan program for which the revenue
 
15 bonds are issued, and shall revise the rates, rentals, fees, or
 
16 charges from time to time whenever necessary, so that, together
 
17 with the proceeds of the user taxes derived with respect to the
 
18 undertaking pledged to the payment of those revenue bonds, the
 
19 undertaking or loan program shall be and always remain self-
 
20 sustaining.  The rates, rentals, fees, or charges imposed and
 
21 prescribed shall produce revenue which, together with the
 
22 proceeds of the user taxes, will be at least sufficient:
 
23      (1)  To make the required payments of the principal of and
 

 
a                                            OCS/HON STATETX.B99
Page 9                                                     
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           interest on all revenue bonds issued for the
 
 2           undertaking or loan program, including the payment of
 
 3           all revenue bonds and interest thereon for the payment
 
 4           of which the revenue, or user taxes, or combination of
 
 5           both, are or shall have been pledged, charged or
 
 6           otherwise encumbered, or which are otherwise payable
 
 7           from the revenue or user taxes, or combination of both,
 
 8           or are payable from a special fund maintained, or to be
 
 9           maintained, from the revenue or user taxes, or
 
10           combination of both, including reserves therefor, and
 
11           to maintain the special fund in an amount at least
 
12           sufficient to pay when due all revenue bonds and
 
13           interest thereon which are payable from the special
 
14           fund, including reserves therefor;
 
15      (2)  To pay the cost of operation, maintenance, and repair
 
16           of the undertaking, or to pay the cost of the
 
17           administration, operation, and maintenance of the loan
 
18           program, including reserves therefor; and
 
19      (3)  To carry out the covenants of the resolution or
 
20           resolutions or certificate or certificates authorizing
 
21           the issuance of the revenue bonds, including any
 
22           covenants approved by the governor as to the minimum
 
23           amounts of revenue to be produced by the undertaking or
 

 
a                                            OCS/HON STATETX.B99
Page 10                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           loan program for which the revenue bonds are issued.
 
 2 For the purpose of paragraph (2), the "cost of operation of the
 
 3 undertaking" includes county real property taxes levied on the
 
 4 real property of the undertaking pursuant to chapter     ."
 
 5      SECTION 5.  Section 39-62, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      39-62  Use of revenue and user taxes by any undertaking,
 
 8 loan program, or the Hawaii hurricane relief fund.  Whenever any
 
 9 revenue bonds have been issued pursuant to this part for an
 
10 undertaking, a loan program, or the Hawaii hurricane relief fund,
 
11 the revenue, or the user taxes, or combination of both, of the
 
12 undertaking, loan program, or fund from which the revenue bonds
 
13 are payable and by which they are secured shall be deposited in a
 
14 special fund and shall be appropriated, applied, or expended in
 
15 the amount necessary therefor for the following purposes and in
 
16 the order of priority as the department shall provide in the
 
17 resolution or certificate authorizing the issuance of revenue
 
18 bonds pursuant to this part:
 
19      (1)  To pay when due all revenue bonds and interest thereon
 
20           issued for the undertaking, loan program, or the Hawaii
 
21           hurricane relief fund for the payment of which the
 
22           revenue, or user taxes, or combination of both, is or
 
23           shall have been pledged, charged, or otherwise
 

 
a                                            OCS/HON STATETX.B99
Page 11                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           encumbered, including reserves therefor;
 
 2      (2)  To pay or provide for the payment of the cost of
 
 3           operation, maintenance, and repair of the undertaking,
 
 4           including the payment of county real property taxes
 
 5           levied pursuant to chapter    , or to pay or provide
 
 6           for the payment of administering, operating, and
 
 7           maintaining the loan program, including reserves
 
 8           therefor;
 
 9      (3)  For such purposes, within the jurisdiction, powers,
 
10           duties, and functions of the department, including the
 
11           creation and maintenance of reserves, as shall have
 
12           been covenanted in any resolution or resolutions or
 
13           certificate or certificates of the department providing
 
14           for the issuance of revenue bonds;
 
15      (4)  To reimburse the general fund of the State for all bond
 
16           requirements for general obligation bonds which are or
 
17           shall have been issued for the undertaking, loan
 
18           program, or the Hawaii hurricane relief fund, or to
 
19           refund any general obligation bonds, except insofar as
 
20           the obligation of reimbursement has been or shall be
 
21           canceled by the legislature, the bond requirements
 
22           being the interest on term and serial bonds, sinking
 
23           fund for term bonds, and principal of serial bonds
 

 
a                                            OCS/HON STATETX.B99
Page 12                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           maturing the following year;
 
 2      (5)  To provide for betterments and improvements to the
 
 3           undertaking or expansion of the loan program or the
 
 4           Hawaii hurricane relief fund including reserves
 
 5           therefor; and
 
 6      (6)  To provide special reserve funds and other special
 
 7           funds as are or may be created by law.
 
 8 The appropriation, application, or expenditure of amounts
 
 9 deposited in the special fund pursuant to this section shall be
 
10 accounted for on a fiscal year basis.  Unless and until adequate
 
11 provision has been made for the foregoing purposes, the State
 
12 shall not have the right to transfer to its general fund or any
 
13 special fund or to apply to any other purposes any part of the
 
14 revenue or user taxes pledged to the payment of revenue bonds of
 
15 the undertaking or loan program."
 
16      SECTION 6.  Section 39-65, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "39-65  Undertaking, loan program, and revenue bonds exempt
 
19 from taxation.  So long as the State owns any undertaking or
 
20 administers a loan program, the property and revenue of the
 
21 undertaking or loan program shall be exempt from all state,
 
22 county, and municipal taxation; provided that [any]:
 
23      (1)  Any interest in property provided or given as security
 

 
a                                            OCS/HON STATETX.B99
Page 13                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1           for a loan made under a loan program shall not be or be
 
 2           deemed to be property of a department for purposes of
 
 3           this section[.]; and
 
 4      (2)  The exemption from county taxation shall not apply when
 
 5           the real property tax is levied on the real property of
 
 6           the undertaking pursuant to chapter    .
 
 7      Revenue bonds issued pursuant to this part and the income
 
 8 therefrom shall be exempt from all taxation by the State or any
 
 9 county or other political subdivision thereof, except
 
10 inheritance, transfer, and estate taxes."
 
11      SECTION 7.  Section 109-3, Hawaii Revised Statutes, is
 
12 amended to read as follows:
 
13      "109-3 Stadium special fund.  There is created a special
 
14 fund to be known as the stadium special fund into which funds
 
15 collected by the authority shall be deposited.  The fund shall be
 
16 applied, used, and disposed of for the payment of:
 
17      (1)  The expenses of the operation, maintenance, promotion,
 
18           and management of; and
 
19      (2)  All or a portion of the cost of financing any capital
 
20           improvement project for;
 
21 the stadium and related facilities; provided that all services
 
22 required for the stadium and related facilities shall be
 
23 performed by persons hired on contract or otherwise, without
 

 
a                                            OCS/HON STATETX.B99
Page 14                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 regard for chapters 76 and 77; provided further that the
 
 2 authority shall report to the legislature all receipts and
 
 3 expenditures of the stadium special fund account twenty days
 
 4 prior to the convening of each regular session.  For the purpose
 
 5 of this section, the "expenses of operation" includes county real
 
 6 property taxes levied pursuant to chapter    ."
 
 7      SECTION 8.  Section 200-8, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]200-8[]]  Boating program; payment of costs.  The cost
 
10 of administering a comprehensive statewide boating program,
 
11 including, but not limited to, the cost of:
 
12      (1)  Operating, maintaining, and managing all boating
 
13           facilities under the control of the department;
 
14      (2)  Improving boating safety;
 
15      (3)  Operating a vessel registration and boating casualty
 
16           investigation and reporting system; and
 
17      (4)  Other boating program activities,
 
18 shall be paid from the boating special fund.  The amortization
 
19 (principal and interest) of the costs of capital improvements for
 
20 boating facilities appropriated after July 1, 1975, including,
 
21 but not limited to, berths, slips, ramps, related accommodations,
 
22 general navigation channels, breakwaters, aids to navigation, and
 
23 other harbor structures, may be paid from the boating special
 

 
a                                            OCS/HON STATETX.B99
Page 15                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 fund or from general revenues as the legislature may authorize in
 
 2 each situation.  Revenues provided in this chapter for the
 
 3 boating special fund shall be at least sufficient to pay the
 
 4 special fund costs established in this section.  For the purpose
 
 5 of this section, the "cost of operation" includes county real
 
 6 property taxes levied pursuant to chapter    ."
 
 7      SECTION 9.  Chapter 206E-17, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "[[]206E-17[]]  Exemption from taxation.  The authority
 
10 shall not be required to pay improvement or maintenance district
 
11 assessments levied by any county, nor shall the authority be
 
12 required to pay state taxes of any kind."
 
13      SECTION 10.  Section 206J-5, Hawaii Revised Statutes, is
 
14 amended by amending subsection (b) to read as follows:
 
15      "(b)  The development corporation shall impose, prescribe,
 
16 and collect rates, rentals, fees, or charges for the lease and
 
17 use and services of its projects at least sufficient to pay the
 
18 costs of operation, maintenance and repair, if any, of its
 
19 projects and the required payments of the principal of and
 
20 interest on all bonds issued to finance its projects.  The "costs
 
21 of operation" includes county real property taxes levied pursuant
 
22 to chapter    .  Notwithstanding anything to the contrary
 
23 contained in this section, the development corporation may take
 

 
a                                            OCS/HON STATETX.B99
Page 16                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 into account any project costs supplied by qualified persons in
 
 2 calculating such rates, rentals, fees, or charges, to the extent
 
 3 that if the qualified persons selected by the development
 
 4 corporation is willing to underwrite the entire or substantially
 
 5 all of the costs of development and construction of that project,
 
 6 the development corporation is empowered to negotiate nominal
 
 7 rentals."
 
 8      SECTION 11.  Section 206J-16, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "206J-16  Exemption from taxation of development
 
11 corporation.  All revenues derived by the development corporation
 
12 from any project or under a lease or other agreement pertaining
 
13 thereto shall be exempt from all state and county taxation.
 
14 [Any] Except as otherwise provided in chapter    , any right,
 
15 title, and interest of the development corporation in any project
 
16 shall also be exempt from all state and county taxation.  Except
 
17 as otherwise provided by law, the interest of a qualified person
 
18 or other user of a project under a lease or other agreements
 
19 related to a project shall not be exempt from taxation to a
 
20 greater extent than it would be if the costs of the project were
 
21 directly financed by the qualified person or other user."
 
22      SECTION 12.  Section 206X-11, Hawaii Revised Statutes, is
 
23 amended to read as follows:
 

 
a                                            OCS/HON STATETX.B99
Page 17                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      "[[]206X-11[]]  Exemption from taxation.  The authority
 
 2 shall not be required to pay improvement or maintenance district
 
 3 assessments levied by any county, nor shall the authority be
 
 4 required to pay state taxes of any kind.  This exemption shall
 
 5 apply only with respect to the real property interest of the
 
 6 authority within the convention center district and the business
 
 7 of the authority relating to the real property interest."
 
 8      SECTION 13.  Section 261-5, Hawaii Revised Statutes, is
 
 9 amended by amending subsection (a) to read as follows:
 
10      "(a)  Except for that portion of the payments received by
 
11 the department under a contract entered into as authorized by
 
12 section 261-7 and deposited in the transportation use special
 
13 fund pursuant to section 261D-1, all moneys received by the
 
14 department from rents, fees and other charges collected pursuant
 
15 to this chapter, as well as all aviation fuel taxes paid pursuant
 
16 to section 243-4(a)(2), shall be paid into the airport revenue
 
17 fund created by section 248-8.
 
18      All moneys paid into the airport revenue fund shall be
 
19 appropriated, applied or expended by the department for any
 
20 purpose within the jurisdiction, powers, duties, and functions of
 
21 the department related to the statewide system of airports,
 
22 including, without limitation, the costs of operation,
 
23 maintenance and repair of the statewide system of airports and
 

 
a                                            OCS/HON STATETX.B99
Page 18                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 reserves therefor, and acquisitions (including real property and
 
 2 interests therein), constructions, additions, expansions,
 
 3 improvements, renewals, replacements, reconstruction,
 
 4 engineering, investigation, and planning for the statewide system
 
 5 of airports, all or any of which in the judgment of the
 
 6 department are necessary to the performance of its duties or
 
 7 functions.  For the purpose of this section, the "costs of
 
 8 operation" includes county real property taxes levied pursuant to
 
 9 chapter    .  The department shall generate sufficient revenues
 
10 from its airport properties to meet all of the expenditures of
 
11 the statewide system of airports and to comply with section
 
12 39-61; provided that as long as sufficient revenues are generated
 
13 to meet such expenditures, the director of transportation may, in
 
14 the director's discretion, grant a rebate of the aviation fuel
 
15 taxes paid into the airport revenue fund during a fiscal year
 
16 pursuant to sections 243-4(a)(2) and 248-8 to any person who has
 
17 paid airport use charges or landing fees during such fiscal year.
 
18 Such rebate may be granted during the next succeeding fiscal year
 
19 but shall not exceed one-half cent per gallon per person, and
 
20 shall be computed on the total number of gallons for which the
 
21 tax was paid by such person, for such fiscal year."
 
22      SECTION 14.  Section 266-17, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

 
a                                            OCS/HON STATETX.B99
Page 19                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      "(a)  The department of transportation shall adjust, fix,
 
 2 and enforce the rates assessable and chargeable by it in respect
 
 3 to dockage, wharfage, demurrage, and other rates and fees
 
 4 pertaining to harbors, wharves, and properties managed and
 
 5 operated by it so as to produce from the rates and fees, in
 
 6 respect to all harbors, wharves, and other properties, except
 
 7 those that are principally used for recreation or the landing of
 
 8 fish, revenues sufficient to:
 
 9      (1)  Pay when due the principal of and interest on all bonds
 
10           and other obligations for the payment of which the
 
11           revenue is or has been pledged, charged, or otherwise
 
12           encumbered, or which are otherwise payable from the
 
13           revenue or from a special fund maintained or to be
 
14           maintained from the revenue, including reserves
 
15           therefor, and to maintain the special fund in an amount
 
16           at least sufficient to pay when due all bonds or other
 
17           revenue obligations and interest thereon, which are
 
18           payable from the special fund, including reserves
 
19           therefor;
 
20      (2)  Provide for all expenses of operation and maintenance
 
21           of the properties, including reserves therefor, and the
 
22           expenses of the department in connection with operation
 
23           and maintenance; and
 

 
a                                            OCS/HON STATETX.B99
Page 20                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1      (3)  Reimburse the general fund of the State for all bond
 
 2           requirements for general obligation bonds which are or
 
 3           have been issued for harbor or wharf improvements, or
 
 4           to refund any of the improvement bonds, excluding
 
 5           bonds, the proceeds of which were or are to be expended
 
 6           for improvements which are or will be neither revenue
 
 7           producing nor connected in their use directly with
 
 8           revenue producing properties.  For the purpose of
 
 9           paragraph (2), the "expenses of operation" includes
 
10           county real property taxes levied pursuant to chapter
 
11              ."
 
12      SECTION 15.  Section 266-19, Hawaii Revised Statutes, is
 
13 amended by amending subsection (a) to read as follows:
 
14      "(a)  There is created in the treasury of the State the
 
15 harbor special fund.  All moneys received by the department of
 
16 transportation from the rates and fees pursuant to section
 
17 266-17(a)(1) shall be paid into the harbor special fund.  The
 
18 harbor special fund and the second separate harbor special fund
 
19 heretofore created shall be consolidated into the harbor special
 
20 fund at such time as there are no longer any revenue bonds
 
21 payable from the second separate harbor special fund.  The harbor
 
22 reserve fund heretofore created is abolished.
 
23      All moneys derived pursuant to this chapter from harbor
 

 
a                                            OCS/HON STATETX.B99
Page 21                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 properties of the statewide system of harbors (excluding
 
 2 properties principally used for recreation or the landing of
 
 3 fish, except properties located at Kewalo Basin, ewa of Ala Moana
 
 4 Park, Honolulu) shall be paid into the harbor special fund and
 
 5 each fiscal year shall be appropriated, applied, or expended by
 
 6 the department of transportation for the statewide system of
 
 7 harbors for any purpose within the jurisdiction, powers, duties,
 
 8 and functions of the department of transportation related to the
 
 9 statewide system of harbors (excluding properties principally
 
10 used for recreation or the landing of fish, except the properties
 
11 located at Kewalo Basin, ewa of Ala Moana Park, Honolulu),
 
12 including, without limitation, the costs of operation,
 
13 maintenance and repair of the statewide system of harbors and
 
14 reserves therefor, and acquisitions (including real property and
 
15 interests therein), constructions, additions, expansions,
 
16 improvements, renewals, replacements, reconstruction,
 
17 engineering, investigation, and planning, for the statewide
 
18 system of harbors, all or any of which in the judgment of the
 
19 department of transportation are necessary to the performance of
 
20 its duties or functions.  For the purpose of this section, the
 
21 "costs of operation" includes county real property taxes levied
 
22 pursuant to chapter    .
 
23      SECTION 16.  Statutory material to be repealed is bracketed.
 

 
a                                            OCS/HON STATETX.B99
Page 22                                                    
                                     S.B. NO.           1357
                                                        
                                                        

 
 1 New statutory material is underscored.
 
 2      SECTION 17.  This Act shall take effect upon its approval.
 
 3 
 
 4                           INTRODUCED BY:_________________________
 

 
a                                            OCS/HON STATETX.B99