The purpose of the bill is to allow counties to issue general obligation bonds that may be secured by a pledge of certain receipts including any rates, rentals, fees, charges, taxes, state and/or federal grants in addition to real property taxes. Furthermore, counties may agree with holders of bonds secured with other receipts to continue to collect receipts in amounts necessary to cover the repayment of the principal and interest of such bonds. The bill also allows counties to agree with holders of bonds secured by a pledge of the revenue of the undertaking, loan program, or other purpose for which the bond was originally authorized to continue to collect such revenue in amounts necessary to cover the repayment of the principal and interest of such bonds. Bill amends section 47-4, Hawaii Revised Statutes, HRS.
Bill passed FIN without amendment.
Usage of alternate receipts as pledges may lead to more bond issuance creating greater debt and future obligations for the counties as securing bonds is easier. Alternate receipts may also deprive other programs or functions that rely on those receipts their source of funding or sustainability. However, ideally the county would not need to use the alternate receipts when repaying the bonds and instead just use them as pledges.
Contact: repmarumoto@Capitol.Hawaii.Gov Excerpt from Capitol TV