Rep. Thielen addresses HB 304 State Finances; Bond Allocation; Pooling

Stand. Comm. Rep. No. 727-12 H.B. No. 304, H.D. 1 RELATING TO STATE FINANCES.
(State Finances; Bond Allocation; Pooling) AS AMENDED, PASS SECOND READING, PLACE ON THE CALENDAR FOR THIRD READING

Allows the Department of Budget and Finance to enter into agreements with other bond issuers to pool bond allocations. The Department of Budget and Finance testified that according to the State’s bond counsel, there are federal tax regulations that would prohibit the State from pooling bond allocations with other states. Any inter-state pooling of bond allocations made possible in this bill would be a violation of federal tax regulations. By partnering with other entities, the state may expose itself to more risk and will be dealing with larger amounts of allocations not previously experienced. The other entity may not be credit worthy or cause a higher interest rate to be applied hurting the State.

Contact repthielen@capitol.hawaii.gov

Excerpt from Capitol TV

Advertisements