HB 794: State Bonds; State Budget
- Session Year: 2025-2026
- House: House
- Latest Version Date: 2025-04-26
Current Status:
In Progress
(2025-07-08: Act 305, on 07/08/2025 (Gov. Msg. No. 1418).)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. (CD1)
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. Effective 7/1/2050. (SD1)
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. Effective 7/1/3000. (HD1)
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
794 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 1 |
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C.D. 1 |
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A BILL FOR AN ACT
RELATING TO STATE BONDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Declaration of findings with respect to the general obligation bonds authorized by this Act. Pursuant to article VII, section 13, of the state constitution, which states: "Effective July 1, 1980, the legislature shall include a declaration of findings in every general law authorizing the issuance of general obligation bonds that the total amount of principal and interest, estimated for such bonds and for all bonds authorized and unissued and calculated for all bonds issued and outstanding, will not cause the debt limit to be exceeded at the time of issuance", the legislature finds and declares as follows:
(1) Limitation on general obligation debt. The debt limit of the State is set forth in article VII, section 13, of the state constitution, which states in part: "General obligation bonds may be issued by the State; provided that such bonds at the time of issuance would not cause the total amount of principal and interest payable in the current or any future fiscal year, whichever is higher, on such bonds and on all outstanding general obligation bonds to exceed: a sum equal to twenty percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance until June 30, 1982; and thereafter, a sum equal to eighteen and one-half percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance." Article VII, section 13, of the state constitution also provides that in determining the power of the State to issue general obligation bonds, certain bonds are excludable, including "[r]eimbursable general obligation bonds issued for a public undertaking, improvement or system but only to the extent that reimbursements to the general fund are in fact made from the net revenue, or net user tax receipts, or combination of both, as determined for the immediately preceding fiscal year" and bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor, but only to the extent the principal amount of those bonds does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under article VII, section 13, of the state constitution.
(2) Actual and estimated debt limits. The limit on principal and interest of general obligation bonds issued by the State, actual for fiscal year 2024-2025 and estimated for each fiscal year from 2025-2026 to 2028-2029, is as follows:
Fiscal Net General
Year Fund Revenues Debt Limit
2021-2022 $10,205,616,785
2022-2023 10,183,780,738
2023-2024 10,629,766,311
2024-2025 11,045,308,000 $1,912,848,436
2025-2026 10,717,304,000 1,964,629,395
2026-2027 11,015,619,000 1,997,529,996
2027-2028 11,291,631,000 2,021,324,245
2028-2029 (not applicable) 2,036,514,163
For fiscal years 2024-2025, 2025-2026, 2026-2027, 2027-2028, and 2028-2029, respectively, the debt limit is derived by multiplying the average of the net general fund revenues for the three preceding fiscal years by eighteen and one-half per cent. The net general fund revenues for fiscal years 2021-2022, 2022-2023, and 2023-2024 are actual, as certified by the director of finance in the Statement of the Debt Limit of the State of Hawaii as of July 1, 2024, dated November 18, 2024. The net general fund revenues for fiscal years 2024-2025 to 2027-2028 are estimates, based on general fund revenue estimates made as of March 12, 2025, by the council on revenues, the body assigned by article VII, section 7, of the Hawaii State Constitution to make these estimates, and based on estimates made by the department of budget and finance of those receipts that cannot be included as general fund revenues for the purpose of calculating the debt limit, all of which estimates the legislature finds to be reasonable.
(3) Principal and interest on outstanding bonds applicable to the debt limit.
(A) According to the department of budget and finance, the total amount of principal and interest on outstanding general obligation bonds, after the exclusions permitted by article VII, section 13, of the Hawaii State Constitution, for determining the power of the State to issue general obligation bonds within the debt limit as of April 1, 2025, is as follows for fiscal year 2025-2026 to fiscal year 2031-2032:
Fiscal Principal
Year and Interest
2025-2026 $1,089,943,307
2026-2027 934,453,241
2027-2028 908,088,820
2028-2029 877,015,816
2029-2030 830,364,175
2030-2031 782,919,432
2031-2032 782,843,996
The department of budget and finance further reports that the amount of principal and interest on outstanding bonds applicable to the debt limit generally continues to decline each year from fiscal year 2032-2033 to fiscal year 2042-2044 when the final installment of $56,989,536 shall be due and payable.
(B) The department of budget and finance further reports that the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $233,500,000, all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the Hawaii State Constitution.
(4) Amount of authorized and unissued general obligation bonds and guaranties and proposed bonds and guaranties.
(A) As calculated from the state comptroller's bond fund report as of February 28, 2025, adjusted for:
(i) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in House Bill No. 300, H.D. 1, S.D. 1, C.D. 1 (the General Appropriations Act of 2025);
(ii) Lapses as provided in House Bill No. 300, H.D. 1, S.D. 1, C.D. 1 (the General Appropriations Act of 2025);
(iii) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in House Bill No. 400, H.D. 1, S.D. 2, C.D. 1 (the Judiciary Appropriations Act of 2025);
(iv) Lapses as provided in House Bill No. 400, H.D. 1, S.D. 2, C.D. 1 (the Judiciary Appropriations Act of 2025);
(v) Appropriations to be funded by general obligation bonds as provided in House Bill No. 1378, H.D. 2, S.D. 2, C.D. 1 (Relating to the State Foundation on Culture and the Arts); and
(vi) Appropriations to be funded by general obligation bonds as provided in Senate Bill No. 1044, S.D. 2, H.D. 2, C.D. 1 (Relating to the Stabilization of Property Insurance);
the total amount of authorized but unissued general obligation bonds is $4,256,835,085. The total amount of general obligation bonds authorized in this Act is $1,913,987,000. The total amount of general obligation bonds previously authorized and unissued, as adjusted, and the general obligation bonds authorized in this Act is $6,134,440,085.
(B) As reported by the department of budget and finance, the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $233,500,000, all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the Hawaii State Constitution.
(5) Proposed general obligation bond issuance. As reported therein for the fiscal years 2024-2025, 2025-2026, 2026-2027, 2027-2028, and 2028-2029, the State proposes to issue $800,000,000 in general obligation bonds during the second half of fiscal year 2024-2025, $775,000,000 in general obligation bonds semi-annually during fiscal year 2025-2026, $700,000,000 in general obligation bonds semi-annually during fiscal year 2026-2027, $650,000,000 in general obligation bonds semi-annually during fiscal year 2027-2028, and $550,000,000 in general obligation bonds semi-annually during fiscal year 2028-2029. The State anticipates issuing a combination of twenty-year serial bonds with principal repayments beginning the first year and seven-year serial bonds with principal repayments beginning the first year, payable in substantially equal annual installments of principal and interest payment with interest payments commencing six months from the date of issuance and being paid semi-annually thereafter. It is assumed that this practice will continue to be applied to the bonds that are proposed to be issued.
(6) Sufficiency of proposed general obligation bond issuance to meet the requirements of authorized and unissued bonds, as adjusted, and bonds authorized by this Act. From the schedule reported in paragraph (5), the total amount of general obligation bonds that the State proposes to issue during the fiscal years 2024-2025 to 2027-2028 is $5,050,000,000. An additional $1,100,000,000 is proposed to be issued in fiscal year 2028-2029. The total amount of $5,050,000,000 that is proposed to be issued through fiscal year 2027-2028 is sufficient to meet the requirements of the authorized and unissued bonds, as adjusted, the total amount of which is $6,134,440,085 reported in paragraph (4), except for $1,084,440,085. It is assumed that the appropriations to which an additional $1,084,440,085 in bond issuance needs to be applied will have been encumbered as of June 30, 2028. The $1,100,000,000 that is proposed to be issued in fiscal year 2028-2029 will be sufficient to meet the requirements of the June 30, 2028 encumbrances in the amount of $1,084,440,085. The amount of assumed encumbrances as of June 30, 2028, is reasonable and conservative, based upon an inspection of June 30 encumbrances of the general obligation bond fund as reported by the state comptroller. Thus, taking into account the amount of authorized and unissued bonds, as adjusted, and the bonds authorized by this Act versus the amount of bonds proposed to be issued by June 30, 2028, and the amount of June 30, 2028 encumbrances versus the amount of bonds proposed to be issued in fiscal year 2028-2029, the legislature finds that in the aggregate, the amount of bonds proposed to be issued is sufficient to meet the requirements of all authorized and unissued bonds and the bonds authorized by this Act.
(7) Bonds excludable in determining the power of the State to issue bonds. As noted in paragraph (1), certain bonds are excludable in determining the power of the State to issue general obligation bonds.
(A) General obligation reimbursable bonds can be excluded under certain conditions. It is not possible to make a conclusive determination as to the amount of reimbursable bonds which are excludable from the amount of each proposed bond issued because:
(i) It is not known exactly when projects for which reimbursable bonds have been authorized in prior acts and in this Act will be implemented and will require the application of proceeds from a particular bond issue; and
(ii) Not all reimbursable general obligation bonds may qualify for exclusion.
However, the legislature notes that with respect to the principal and interest on outstanding general obligation bonds, according to the department of budget and finance, the average proportion of principal and interest that is excludable each year from the calculation against the debt limit is 0.37 per cent for approximately ten years from fiscal year 2025-2026 to fiscal year 2034-2035. For the purpose of this declaration, the assumption is made that 0.25 per cent of each bond issue will be excludable from the debt limit, an assumption that the legislature finds to be reasonable and conservative.
(B) Bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor can be excluded, but only to the extent the principal amount of those guaranties does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under subparagraph (A) of this paragraph (7); and provided that the State shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State as provided by law. According to the department of budget and finance and the assumptions presented herein, the total principal amount of outstanding general obligation bonds and general obligation bonds proposed to be issued, which are not otherwise excluded under article VII, section 13, of the Hawaii State Constitution for the fiscal years 2024-2025, 2025-2026, 2026-2027, 2027-2028, and 2028-2029 are as follows:
Total amount of
General Obligation Bonds
not otherwise excluded by
Article VII, Section 13
Fiscal year of the State Constitution
2024-2025 $9,499,257,832
2025-2026 11,045,387,832
2026-2027 12,441,887,832
2027-2028 13,738,637,832
2028-2029 14,835,887,832
Based on the foregoing and based on the assumption that the full amount of a guaranty is immediately due and payable when the guaranty changes from a contingent liability to an actual liability, the aggregate principal amount of the portion of the outstanding guaranties and the guaranties proposed to be incurred, which does not exceed seven per cent of the average amount set forth in the last column of the above table and for which reserve funds have been or will have been established as heretofore provided, can be excluded in determining the power of the State to issue general obligation bonds. As it is not possible to predict with a reasonable degree of certainty when a guaranty will change from a contingent liability to an actual liability, it is assumed in conformity with fiscal conservatism and prudence, that all guaranties not otherwise excluded pursuant to article VII, section 13, of the Hawaii State Constitution will become due and payable in the same fiscal year in which the greatest amount of principal and interest on general obligation bonds, after exclusions, occurs. Thus, based on these assumptions and on the determination in paragraph (8), all of the outstanding guaranties can be excluded.
(8) Determination whether the debt limit will be exceeded at the time of issuance. From the foregoing and on the assumption that all of the bonds identified in paragraph (5) will be issued at an interest rate not to exceed 7.50 per cent in fiscal years 2025 through 2029, it can be determined from the following schedule that the bonds that are proposed to be issued, which include all authorized and unissued bonds previously authorized, as adjusted, general obligation bonds, and instruments of indebtedness under which the State incurs a contingent liability as a guarantor authorized in this Act, will not cause the debt limit to be exceeded at the time of the bond issuance:
Greatest Amount
Time of Issuance and Year of
and Amount to be Debt Limit Highest Principal
Counted Against at Time of and Interest
Debt Limit Issuance on Bonds and Guaranties
2nd half FY 2024-2025
$798,000,000 1,912,848,436 1,203,086,123 (2025-2026)
1st half FY 2025-2026
$773,065,000 1,964,629,395 1,232,076,061 (2025-2026)
2nd half FY 2025-2026
$773,065,000 1,964,629,395 1,251,499,953 (2026-2027)
1st half FY 2026-2027
$698,250,000 1,997,529,996 1,316,974,091 (2027-2028)
2nd half FY 2026-2027
$698,250,000 1,997,529,996 1,410,797,841 (2027-2028)
1st half FY 2027-2028
$648,375,000 2,021,324,245 1,464,220,947 (2028-2029)
2nd half FY 2027-2028
$648,375,000 2,021,324,245 1,551,349,072 (2028-2029)
1st half FY 2028-2029
$548,625,000 2,036,514,163 1,576,817,594 (2029-2030)
2nd half FY 2029-2030
$548,625,000 2,036,514,163 1,650,544,469 (2029-2030)
(9) Overall and concluding finding. From the facts, estimates, and assumptions stated in this declaration of findings, the conclusion is reached that the total amount of principal and interest estimated for the general obligation bonds authorized in this Act, and for all bonds authorized and unissued, and calculated for all bonds issued and outstanding, and all guaranties, will not cause the debt limit to be exceeded at the time of issuance.
SECTION 2. The legislature finds the bases for the declaration of findings set forth in this Act are reasonable. The assumptions set forth in this Act with respect to the principal amount of general obligation bonds that will be issued, the amount of principal and interest on reimbursable general obligation bonds that are assumed to be excludable, and the assumed maturity structure shall not be deemed to be binding, it being the understanding of the legislature that these matters shall remain subject to substantial flexibility.
SECTION 3. Authorization for issuance of general obligation bonds. General obligation bonds may be issued as provided by law in an amount that may be necessary to finance projects authorized in House Bill No. 300, H.D. 1, S.D. 1, C.D. 1 (the General Appropriations Act of 2025); House Bill No. 400, H.D. 1, S.D. 2, C.D. 1 (the Judiciary Appropriations Act of 2025); House Bill No. 1378, H.D. 2, S.D. 2. C.D. 1 (Relating to the State Foundation on Culture and the Arts); and Senate Bill No. 1044, S.D. 2, H.D. 2, C.D. 1 (Relating to the Stabilization of Property Insurance); passed by the legislature during this regular session of 2025 and designated to be financed from the general obligation bond fund and from the general obligation bond fund with debt service cost to be paid from special funds; provided that the sum total of general obligation bonds so issued shall not exceed $1,913,987,000. The proceeds of the general obligation bonds herein authorized are intended to be applied to finance projects and/or to reimburse expenditures made for projects after the effective date of this Act for the purpose for which such bonds are authorized. The foregoing statement of intent with respect to reimbursement is made in conformity with Treasury Regulation Section 1.150-2 of the United States Treasury Department.
Any law to the contrary notwithstanding, general obligation bonds may be issued from time to time in accordance with section 39-16, Hawaii Revised Statutes, in a principal amount as may be required to refund any general obligation bonds of the State of Hawaii heretofore or hereafter issued pursuant to law.
SECTION 4. The provisions of this Act are declared to be severable and if any portion thereof is held to be invalid for any reason, the validity of the remainder of this Act shall not be affected.
SECTION 5. In printing this Act, the revisor of statutes shall substitute in section 1 and section 3 the corresponding act numbers for bills identified therein.
SECTION 6. This Act shall take effect upon its approval.
Report Title:
State Bonds; State Budget
Description:
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. (CD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
794 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO STATE BONDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Declaration of findings with respect to the general obligation bonds authorized by this Act. Pursuant to article VII, section 13, of the state constitution, which states: "Effective July 1, 1980, the legislature shall include a declaration of findings in every general law authorizing the issuance of general obligation bonds that the total amount of principal and interest, estimated for such bonds and for all bonds authorized and unissued and calculated for all bonds issued and outstanding, will not cause the debt limit to be exceeded at the time of issuance", the legislature finds and declares as follows:
(1) Limitation on general obligation debt. The debt limit of the State is set forth in article VII, section 13, of the state constitution, which states in part: "General obligation bonds may be issued by the State; provided that such bonds at the time of issuance would not cause the total amount of principal and interest payable in the current or any future fiscal year, whichever is higher, on such bonds and on all outstanding general obligation bonds to exceed: a sum equal to twenty percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance until June 30, 1982; and thereafter, a sum equal to eighteen and one‑half percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance." Article VII, section 13, of the state constitution also provides that in determining the power of the State to issue general obligation bonds, certain bonds are excludable, including "[r]eimbursable general obligation bonds issued for a public undertaking, improvement or system but only to the extent that reimbursements to the general fund are in fact made from the net revenue, or net user tax receipts, or combination of both, as determined for the immediately preceding fiscal year" and bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor, but only to the extent the principal amount of those bonds does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under said article VII, section 13, of the state constitution.
(2) Actual and estimated debt limits. The limit on principal and interest of general obligation bonds issued by the State, actual for fiscal year - and estimated for each fiscal year from - to - , is as follows:
Fiscal Net General
Year Fund Revenues Debt Limit
For fiscal years - , - , - , - , and - , respectively, the debt limit is derived by multiplying the average of the net general fund revenues for the three preceding fiscal years by eighteen and one-half per cent. The net general fund revenues for fiscal years - , - , and - are actual, as certified by the director of finance in the Statement of the Debt Limit of the State of Hawaii as of July 1, , dated , . The net general fund revenues for fiscal years - to - are estimates, based on general fund revenue estimates made as of , , by the council on revenues, the body assigned by article VII, section 7, of the state constitution to make such estimates, and based on estimates made by the department of budget and finance of those receipts that cannot be included as general fund revenues for the purpose of calculating the debt limit, all of which estimates the legislature finds to be reasonable.
(3) Principal and interest on outstanding bonds applicable to the debt limit.
(A) According to the department of budget and finance, the total amount of principal and interest on outstanding general obligation bonds, after the exclusions permitted by article VII, section 13, of the state constitution, for determining the power of the State to issue general obligation bonds within the debt limit as of April 1, , is as follows for fiscal year - to fiscal year - :
Fiscal Principal
Year and Interest
The department of budget and finance further reports that the amount of principal and interest on outstanding bonds applicable to the debt limit generally continues to decline each year from fiscal year - to fiscal year - when the final installment of $ shall be due and payable.
(B) The department of budget and finance further reports that the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(4) Amount of authorized and unissued general obligation bonds and guaranties and proposed bonds and guaranties.
(A) As calculated from the state comptroller's bond fund report as of , , adjusted for:
(i) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025) to be expended in fiscal year - ;
(ii) Lapses as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025);
(iii) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); and
(iv) Lapses as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025);
the total amount of authorized but unissued general obligation bonds is $ . The total amount of general obligation bonds authorized in this Act is $ . The total amount of general obligation bonds previously authorized and unissued, as adjusted, and the general obligation bonds authorized in this Act is $ .
(B) As reported by the department of budget and finance the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(5) Proposed general obligation bond issuance. As reported therein for the fiscal years ‑ , - , - , - , and - , the State proposes to issue $ in general obligation bonds during the first half of fiscal year - , $ in general obligation bonds during the second half of fiscal year - , $ in general obligation bonds semiannually during fiscal years - and - , and $ in general obligation bonds semiannually during fiscal years - and - . Generally, it has been the practice of the State to issue twenty‑year serial bonds with principal repayments beginning in the third year, the bonds payable in substantially equal annual installments of principal and interest payment with interest payments commencing six months from the date of issuance and being paid semi‑annually thereafter. It is assumed that this practice will continue to be applied to the bonds that are proposed to be issued.
(6) Sufficiency of proposed general obligation bond issuance to meet the requirements of authorized and unissued bonds, as adjusted, and bonds authorized by this Act. From the schedule reported in paragraph (5), the total amount of general obligation bonds that the State proposes to issue during the fiscal years - to - is $ . An additional $ is proposed to be issued in fiscal year - . The total amount of $ that is proposed to be issued through fiscal year - is sufficient to meet the requirements of the authorized and unissued bonds, as adjusted, the total amount of which is $ reported in paragraph (4), except for $ . It is assumed that the appropriations to which an additional $ in bond issuance needs to be applied will have been encumbered as of June 30, . The $ that is proposed to be issued in fiscal year - will be sufficient to meet the requirements of the June 30, , encumbrances in the amount of $ . The amount of assumed encumbrances as of June 30, , is reasonable and conservative, based upon an inspection of June 30 encumbrances of the general obligation bond fund as reported by the state comptroller. Thus, taking into account the amount of authorized and unissued bonds, as adjusted, and the bonds authorized by this Act versus the amount of bonds proposed to be issued by June 30, , and the amount of June 30, , encumbrances versus the amount of bonds proposed to be issued in fiscal year - , the legislature finds that in the aggregate, the amount of bonds proposed to be issued is sufficient to meet the requirements of all authorized and unissued bonds and the bonds authorized by this Act.
(7) Bonds excludable in determining the power of the State to issue bonds. As noted in paragraph (1), certain bonds are excludable in determining the power of the State to issue general obligation bonds.
(A) General obligation reimbursable bonds can be excluded under certain conditions. It is not possible to make a conclusive determination as to the amount of reimbursable bonds which are excludable from the amount of each proposed bond issued because:
(i) It is not known exactly when projects for which reimbursable bonds have been authorized in prior acts and in this Act will be implemented and will require the application of proceeds from a particular bond issue; and
(ii) Not all reimbursable general obligation bonds may qualify for exclusion.
However, the legislature notes that with respect to the principal and interest on outstanding general obligation bonds, according to the department of budget and finance, the average proportion of principal and interest that is excludable each year from the calculation against the debt limit is per cent for approximately ten years from fiscal year - to fiscal year - . For the purpose of this declaration, the assumption is made that per cent of each bond issue will be excludable from the debt limit, an assumption that the legislature finds to be reasonable and conservative.
(B) Bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor can be excluded, but only to the extent the principal amount of those guaranties does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under subparagraph (A) of this paragraph; provided that the State shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State as provided by law. According to the department of budget and finance and the assumptions presented herein, the total principal amount of outstanding general obligation bonds and general obligation bonds proposed to be issued, which are not otherwise excluded under article VII, section 13, of the state constitution for the fiscal years - , - , - , - , and - are as follows:
Total amount of
General Obligation Bonds
not otherwise excluded by
Article VII, Section 13
Fiscal Year of the State Constitution
Based on the foregoing and based on the assumption that the full amount of a guaranty is immediately due and payable when such guaranty changes from a contingent liability to an actual liability, the aggregate principal amount of the portion of the outstanding guaranties and the guaranties proposed to be incurred, which does not exceed seven per cent of the average amount set forth in the last column of the above table and for which reserve funds have been or will have been established as heretofore provided, can be excluded in determining the power of the State to issue general obligation bonds. As it is not possible to predict with a reasonable degree of certainty when a guaranty will change from a contingent liability to an actual liability, it is assumed in conformity with fiscal conservatism and prudence, that all guaranties not otherwise excluded pursuant to article VII, section 13, of the state constitution will become due and payable in the same fiscal year in which the greatest amount of principal and interest on general obligation bonds, after exclusions, occurs. Thus, based on such assumptions and on the determination in paragraph (8), all of the outstanding guaranties can be excluded.
(8) Determination whether the debt limit will be exceeded at the time of issuance. From the foregoing and on the assumption that all of the bonds identified in paragraph (5) will be issued at an interest rate not to exceed per cent in fiscal years through , it can be determined from the following schedule that the bonds that are proposed to be issued, which include all authorized and unissued bonds previously authorized, as adjusted, general obligation bonds, and instruments of indebtedness under which the State incurs a contingent liability as a guarantor authorized in this Act, will not cause the debt limit to be exceeded at the time of such issuance:
Greatest Amount
Time of Issuance and Year of
and Amount to be Debt Limit Highest Principal
Counted Against at Time of and Interest
Debt Limit Issuance on Bonds and Guaranties
(9) Overall and concluding finding. From the facts, estimates, and assumptions stated in this declaration of findings, the conclusion is reached that the total amount of principal and interest estimated for the general obligation bonds authorized in this Act, and for all bonds authorized and unissued, and calculated for all bonds issued and outstanding, and all guaranties, will not cause the debt limit to be exceeded at the time of issuance.
SECTION 2. The legislature finds the bases for the declaration of findings set forth in this Act are reasonable. The assumptions set forth in this Act with respect to the principal amount of general obligation bonds that will be issued, the amount of principal and interest on reimbursable general obligation bonds that are assumed to be excludable, and the assumed maturity structure shall not be deemed to be binding, it being the understanding of the legislature that such matters must remain subject to substantial flexibility.
SECTION 3. Authorization for issuance of general obligation bonds. General obligation bonds may be issued as provided by law in an amount that may be necessary to finance projects authorized in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025), and Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); passed by the legislature during this regular session of 2025 and designated to be financed from the general obligation bond fund and from the general obligation bond fund with debt service cost to be paid from special funds; provided that the sum total of general obligation bonds so issued shall not exceed $ .
Any law to the contrary notwithstanding, general obligation bonds may be issued from time to time in accordance with section 39-16, Hawaii Revised Statutes, in such principal amount as may be required to refund any general obligation bonds of the State of Hawaii heretofore or hereafter issued pursuant to law.
SECTION 4. The provisions of this Act are declared to be severable and if any portion thereof is held to be invalid for any reason, the validity of the remainder of this Act shall not be affected.
SECTION 5. In printing this Act, the revisor of statutes shall substitute in section 1 and section 3 the corresponding act numbers for acts identified therein.
SECTION 6. This Act shall take effect on July 1, 2050.
Report Title:
State Bonds; State Budget
Description:
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. Effective 7/1/2050. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
794 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO STATE BONDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Declaration of findings with respect to the general obligation bonds authorized by this Act. Pursuant to article VII, section 13, of the state constitution, which states: "Effective July 1, 1980, the legislature shall include a declaration of findings in every general law authorizing the issuance of general obligation bonds that the total amount of principal and interest, estimated for such bonds and for all bonds authorized and unissued and calculated for all bonds issued and outstanding, will not cause the debt limit to be exceeded at the time of issuance", the legislature finds and declares as follows:
(1) Limitation on general obligation debt. The debt limit of the State is set forth in article VII, section 13, of the state constitution, which states in part: "General obligation bonds may be issued by the State; provided that such bonds at the time of issuance would not cause the total amount of principal and interest payable in the current or any future fiscal year, whichever is higher, on such bonds and on all outstanding general obligation bonds to exceed: a sum equal to twenty percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance until June 30, 1982; and thereafter, a sum equal to eighteen and one-half percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance." Article VII, section 13, of the state constitution also provides that in determining the power of the State to issue general obligation bonds, certain bonds are excludable, including "[r]eimbursable general obligation bonds issued for a public undertaking, improvement or system but only to the extent that reimbursements to the general fund are in fact made from the net revenue, or net user tax receipts, or combination of both, as determined for the immediately preceding fiscal year" and bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor, but only to the extent the principal amount of those bonds does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under said article VII, section 13, of the state constitution.
(2) Actual and estimated debt limits. The limit on principal and interest of general obligation bonds issued by the State, actual for fiscal year - and estimated for each fiscal year from - to - , is as follows:
Fiscal Net General
Year Fund Revenues Debt Limit
For fiscal years - , - , - , - , and - , respectively, the debt limit is derived by multiplying the average of the net general fund revenues for the three preceding fiscal years by eighteen and one-half per cent. The net general fund revenues for fiscal years - , - , and - are actual, as certified by the director of finance in the Statement of the Debt Limit of the State of Hawaii as of July 1, , dated , . The net general fund revenues for fiscal years - to - are estimates, based on general fund revenue estimates made as of , , by the council on revenues, the body assigned by article VII, section 7, of the state constitution to make such estimates, and based on estimates made by the department of budget and finance of those receipts that cannot be included as general fund revenues for the purpose of calculating the debt limit, all of which estimates the legislature finds to be reasonable.
(3) Principal and interest on outstanding bonds applicable to the debt limit.
(A) According to the department of budget and finance, the total amount of principal and interest on outstanding general obligation bonds, after the exclusions permitted by article VII, section 13, of the state constitution, for determining the power of the State to issue general obligation bonds within the debt limit as of April 1, , is as follows for fiscal year - to fiscal year - :
Fiscal Principal
Year and Interest
The department of budget and finance further reports that the amount of principal and interest on outstanding bonds applicable to the debt limit generally continues to decline each year from fiscal year - to fiscal year - when the final installment of $ shall be due and payable.
(B) The department of budget and finance further reports that the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(4) Amount of authorized and unissued general obligation bonds and guaranties and proposed bonds and guaranties.
(A) As calculated from the state comptroller's bond fund report as of , , adjusted for:
(i) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025) to be expended in fiscal year - ;
(ii) Lapses as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025);
(iii) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); and
(iv) Lapses as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025);
the total amount of authorized but unissued general obligation bonds is $ . The total amount of general obligation bonds authorized in this Act is $ . The total amount of general obligation bonds previously authorized and unissued, as adjusted, and the general obligation bonds authorized in this Act is $ .
(B) As reported by the department of budget and finance the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(5) Proposed general obligation bond issuance. As reported therein for the fiscal years ‑ , - , - , - , and - , the State proposes to issue $ in general obligation bonds during the first half of fiscal year - , $ in general obligation bonds during the second half of fiscal year - , $ in general obligation bonds semiannually during fiscal years - and - , and $ in general obligation bonds semiannually during fiscal years - and - . Generally, it has been the practice of the State to issue twenty‑year serial bonds with principal repayments beginning in the third year, the bonds payable in substantially equal annual installments of principal and interest payment with interest payments commencing six months from the date of issuance and being paid semi‑annually thereafter. It is assumed that this practice will continue to be applied to the bonds that are proposed to be issued.
(6) Sufficiency of proposed general obligation bond issuance to meet the requirements of authorized and unissued bonds, as adjusted, and bonds authorized by this Act. From the schedule reported in paragraph (5), the total amount of general obligation bonds that the State proposes to issue during the fiscal years - to - is $ . An additional $ is proposed to be issued in fiscal year - . The total amount of $ that is proposed to be issued through fiscal year - is sufficient to meet the requirements of the authorized and unissued bonds, as adjusted, the total amount of which is $ reported in paragraph (4), except for $ . It is assumed that the appropriations to which an additional $ in bond issuance needs to be applied will have been encumbered as of June 30, . The $ that is proposed to be issued in fiscal year - will be sufficient to meet the requirements of the June 30, , encumbrances in the amount of $ . The amount of assumed encumbrances as of June 30, , is reasonable and conservative, based upon an inspection of June 30 encumbrances of the general obligation bond fund as reported by the state comptroller. Thus, taking into account the amount of authorized and unissued bonds, as adjusted, and the bonds authorized by this Act versus the amount of bonds proposed to be issued by June 30, , and the amount of June 30, , encumbrances versus the amount of bonds proposed to be issued in fiscal year - , the legislature finds that in the aggregate, the amount of bonds proposed to be issued is sufficient to meet the requirements of all authorized and unissued bonds and the bonds authorized by this Act.
(7) Bonds excludable in determining the power of the State to issue bonds. As noted in paragraph (1), certain bonds are excludable in determining the power of the State to issue general obligation bonds.
(A) General obligation reimbursable bonds can be excluded under certain conditions. It is not possible to make a conclusive determination as to the amount of reimbursable bonds which are excludable from the amount of each proposed bond issued because:
(i) It is not known exactly when projects for which reimbursable bonds have been authorized in prior acts and in this Act will be implemented and will require the application of proceeds from a particular bond issue; and
(ii) Not all reimbursable general obligation bonds may qualify for exclusion.
However, the legislature notes that with respect to the principal and interest on outstanding general obligation bonds, according to the department of budget and finance, the average proportion of principal and interest that is excludable each year from the calculation against the debt limit is per cent for approximately ten years from fiscal year - to fiscal year - . For the purpose of this declaration, the assumption is made that per cent of each bond issue will be excludable from the debt limit, an assumption that the legislature finds to be reasonable and conservative.
(B) Bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor can be excluded, but only to the extent the principal amount of those guaranties does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under subparagraph (A) of this paragraph; provided that the State shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State as provided by law. According to the department of budget and finance and the assumptions presented herein, the total principal amount of outstanding general obligation bonds and general obligation bonds proposed to be issued, which are not otherwise excluded under article VII, section 13, of the state constitution for the fiscal years - , - , - , - , and - are as follows:
Total amount of
General Obligation Bonds
not otherwise excluded by
Article VII, Section 13
Fiscal Year of the State Constitution
Based on the foregoing and based on the assumption that the full amount of a guaranty is immediately due and payable when such guaranty changes from a contingent liability to an actual liability, the aggregate principal amount of the portion of the outstanding guaranties and the guaranties proposed to be incurred, which does not exceed seven per cent of the average amount set forth in the last column of the above table and for which reserve funds have been or will have been established as heretofore provided, can be excluded in determining the power of the State to issue general obligation bonds. As it is not possible to predict with a reasonable degree of certainty when a guaranty will change from a contingent liability to an actual liability, it is assumed in conformity with fiscal conservatism and prudence, that all guaranties not otherwise excluded pursuant to article VII, section 13, of the state constitution will become due and payable in the same fiscal year in which the greatest amount of principal and interest on general obligation bonds, after exclusions, occurs. Thus, based on such assumptions and on the determination in paragraph (8), all of the outstanding guaranties can be excluded.
(8) Determination whether the debt limit will be exceeded at the time of issuance. From the foregoing and on the assumption that all of the bonds identified in paragraph (5) will be issued at an interest rate not to exceed per cent in fiscal years through , it can be determined from the following schedule that the bonds that are proposed to be issued, which include all authorized and unissued bonds previously authorized, as adjusted, general obligation bonds, and instruments of indebtedness under which the State incurs a contingent liability as a guarantor authorized in this Act, will not cause the debt limit to be exceeded at the time of such issuance:
Greatest Amount
Time of Issuance and Year of
and Amount to be Debt Limit Highest Principal
Counted Against at Time of and Interest
Debt Limit Issuance on Bonds and Guaranties
(9) Overall and concluding finding. From the facts, estimates, and assumptions stated in this declaration of findings, the conclusion is reached that the total amount of principal and interest estimated for the general obligation bonds authorized in this Act, and for all bonds authorized and unissued, and calculated for all bonds issued and outstanding, and all guaranties, will not cause the debt limit to be exceeded at the time of issuance.
SECTION 2. The legislature finds the bases for the declaration of findings set forth in this Act are reasonable. The assumptions set forth in this Act with respect to the principal amount of general obligation bonds that will be issued, the amount of principal and interest on reimbursable general obligation bonds that are assumed to be excludable, and the assumed maturity structure shall not be deemed to be binding, it being the understanding of the legislature that such matters must remain subject to substantial flexibility.
SECTION 3. Authorization for issuance of general obligation bonds. General obligation bonds may be issued as provided by law in an amount that may be necessary to finance projects authorized in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025), and Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); passed by the legislature during this regular session of 2025 and designated to be financed from the general obligation bond fund and from the general obligation bond fund with debt service cost to be paid from special funds; provided that the sum total of general obligation bonds so issued shall not exceed $ .
Any law to the contrary notwithstanding, general obligation bonds may be issued from time to time in accordance with section 39-16, Hawaii Revised Statutes, in such principal amount as may be required to refund any general obligation bonds of the State of Hawaii heretofore or hereafter issued pursuant to law.
SECTION 4. The provisions of this Act are declared to be severable and if any portion thereof is held to be invalid for any reason, the validity of the remainder of this Act shall not be affected.
SECTION 5. In printing this Act, the revisor of statutes shall substitute in section 1 and section 3 the corresponding act numbers for acts identified therein.
SECTION 6. This Act shall take effect on July 1, 3000.
Report Title:
State Bonds; State Budget
Description:
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded. Effective 7/1/3000. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
794 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to state bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Declaration of findings with respect to the general obligation bonds authorized by this Act. Pursuant to article VII, section 13, of the state constitution, which states: "Effective July 1, 1980, the legislature shall include a declaration of findings in every general law authorizing the issuance of general obligation bonds that the total amount of principal and interest, estimated for such bonds and for all bonds authorized and unissued and calculated for all bonds issued and outstanding, will not cause the debt limit to be exceeded at the time of issuance", the legislature finds and declares as follows:
(1) Limitation on general obligation debt. The debt limit of the State is set forth in article VII, section 13, of the state constitution, which states in part: "General obligation bonds may be issued by the State; provided that such bonds at the time of issuance would not cause the total amount of principal and interest payable in the current or any future fiscal year, whichever is higher, on such bonds and on all outstanding general obligation bonds to exceed: a sum equal to twenty percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance until June 30, 1982; and thereafter, a sum equal to eighteen and one-half percent of the average of the general fund revenues of the State in the three fiscal years immediately preceding such issuance." Article VII, section 13, of the state constitution also provides that in determining the power of the State to issue general obligation bonds, certain bonds are excludable, including "[r]eimbursable general obligation bonds issued for a public undertaking, improvement or system but only to the extent that reimbursements to the general fund are in fact made from the net revenue, or net user tax receipts, or combination of both, as determined for the immediately preceding fiscal year" and bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor, but only to the extent the principal amount of those bonds does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under said article VII, section 13, of the state constitution.
(2) Actual and estimated debt limits. The limit on principal and interest of general obligation bonds issued by the State, actual for fiscal year - and estimated for each fiscal year from - to - , is as follows:
Fiscal Net General
Year Fund Revenues Debt Limit
For fiscal years - , - , - , - , and - , respectively, the debt limit is derived by multiplying the average of the net general fund revenues for the three preceding fiscal years by eighteen and one-half per cent. The net general fund revenues for fiscal years - , - , and - are actual, as certified by the director of finance in the Statement of the Debt Limit of the State of Hawaii as of July 1, , dated , . The net general fund revenues for fiscal years - to - are estimates, based on general fund revenue estimates made as of , , by the council on revenues, the body assigned by article VII, section 7, of the state constitution to make such estimates, and based on estimates made by the department of budget and finance of those receipts that cannot be included as general fund revenues for the purpose of calculating the debt limit, all of which estimates the legislature finds to be reasonable.
(3) Principal and interest on outstanding bonds applicable to the debt limit.
(A) According to the department of budget and finance, the total amount of principal and interest on outstanding general obligation bonds, after the exclusions permitted by article VII, section 13, of the state constitution, for determining the power of the State to issue general obligation bonds within the debt limit as of April 1, , is as follows for fiscal year - to fiscal year - :
Fiscal Principal
Year and Interest
The department of budget and finance further reports that the amount of principal and interest on outstanding bonds applicable to the debt limit generally continues to decline each year from fiscal year - to fiscal year - when the final installment of $ shall be due and payable.
(B) The department of budget and finance further reports that the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(4) Amount of authorized and unissued general obligation bonds and guaranties and proposed bonds and guaranties.
(A) As calculated from the state comptroller's bond fund report as of , , adjusted for:
(i) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025) to be expended in fiscal year - ;
(ii) Lapses as provided in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025);
(iii) Appropriations to be funded by general obligation bonds or reimbursable general obligation bonds as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); and
(iv) Lapses as provided in Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025);
the total amount of authorized but unissued general obligation bonds is $ . The total amount of general obligation bonds authorized in this Act is $ . The total amount of general obligation bonds previously authorized and unissued, as adjusted, and the general obligation bonds authorized in this Act is $ .
(B) As reported by the department of budget and finance the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $ , all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to article VII, section 13, of the state constitution.
(5) Proposed general obligation bond issuance. As reported therein for the fiscal years ‑ , - , - , - , and - , the State proposes to issue $ in general obligation bonds during the first half of fiscal year - , $ in general obligation bonds during the second half of fiscal year - , $ in general obligation bonds semiannually during fiscal years - and - , and $ in general obligation bonds semiannually during fiscal years - and - . Generally, it has been the practice of the State to issue twenty‑year serial bonds with principal repayments beginning in the third year, the bonds payable in substantially equal annual installments of principal and interest payment with interest payments commencing six months from the date of issuance and being paid semi‑annually thereafter. It is assumed that this practice will continue to be applied to the bonds that are proposed to be issued.
(6) Sufficiency of proposed general obligation bond issuance to meet the requirements of authorized and unissued bonds, as adjusted, and bonds authorized by this Act. From the schedule reported in paragraph (5), the total amount of general obligation bonds that the State proposes to issue during the fiscal years - to - is $ . An additional $ is proposed to be issued in fiscal year - . The total amount of $ that is proposed to be issued through fiscal year - is sufficient to meet the requirements of the authorized and unissued bonds, as adjusted, the total amount of which is $ reported in paragraph (4), except for $ . It is assumed that the appropriations to which an additional $ in bond issuance needs to be applied will have been encumbered as of June 30, . The $ that is proposed to be issued in fiscal year - will be sufficient to meet the requirements of the June 30, , encumbrances in the amount of $ . The amount of assumed encumbrances as of June 30, , is reasonable and conservative, based upon an inspection of June 30 encumbrances of the general obligation bond fund as reported by the state comptroller. Thus, taking into account the amount of authorized and unissued bonds, as adjusted, and the bonds authorized by this Act versus the amount of bonds proposed to be issued by June 30, , and the amount of June 30, , encumbrances versus the amount of bonds proposed to be issued in fiscal year - , the legislature finds that in the aggregate, the amount of bonds proposed to be issued is sufficient to meet the requirements of all authorized and unissued bonds and the bonds authorized by this Act.
(7) The Hawaii housing finance and development corporation may secure a line of credit or other instrument of indebtedness, in an amount not to exceed $ during the fiscal biennium beginning July 1, 2025, and ending June 30, 2027, to meet the requirements of federal tax law for the bond volume cap recycling program under section 39B-2(f), Hawaii Revised Statutes.
(8) Bonds excludable in determining the power of the State to issue bonds. As noted in paragraph (1), certain bonds are excludable in determining the power of the State to issue general obligation bonds.
(A) General obligation reimbursable bonds can be excluded under certain conditions. It is not possible to make a conclusive determination as to the amount of reimbursable bonds which are excludable from the amount of each proposed bond issued because:
(i) It is not known exactly when projects for which reimbursable bonds have been authorized in prior acts and in this Act will be implemented and will require the application of proceeds from a particular bond issue; and
(ii) Not all reimbursable general obligation bonds may qualify for exclusion.
However, the legislature notes that with respect to the principal and interest on outstanding general obligation bonds, according to the department of budget and finance, the average proportion of principal and interest that is excludable each year from the calculation against the debt limit is per cent for approximately ten years from fiscal year - to fiscal year - . For the purpose of this declaration, the assumption is made that per cent of each bond issue will be excludable from the debt limit, an assumption that the legislature finds to be reasonable and conservative.
(B) Bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor can be excluded, but only to the extent the principal amount of those guaranties does not exceed seven per cent of the principal amount of outstanding general obligation bonds not otherwise excluded under subparagraph (A) of this paragraph; provided that the State shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State as provided by law. According to the department of budget and finance and the assumptions presented herein, the total principal amount of outstanding general obligation bonds and general obligation bonds proposed to be issued, which are not otherwise excluded under article VII, section 13, of the state constitution for the fiscal years - , - , - , - , and - are as follows:
Total amount of
General Obligation Bonds
not otherwise excluded by
Article VII, Section 13
Fiscal Year of the State Constitution
Based on the foregoing and based on the assumption that the full amount of a guaranty is immediately due and payable when such guaranty changes from a contingent liability to an actual liability, the aggregate principal amount of the portion of the outstanding guaranties and the guaranties proposed to be incurred, which does not exceed seven per cent of the average amount set forth in the last column of the above table and for which reserve funds have been or will have been established as heretofore provided, can be excluded in determining the power of the State to issue general obligation bonds. As it is not possible to predict with a reasonable degree of certainty when a guaranty will change from a contingent liability to an actual liability, it is assumed in conformity with fiscal conservatism and prudence, that all guaranties not otherwise excluded pursuant to article VII, section 13, of the state constitution will become due and payable in the same fiscal year in which the greatest amount of principal and interest on general obligation bonds, after exclusions, occurs. Thus, based on such assumptions and on the determination in paragraph (8), all of the outstanding guaranties can be excluded.
(9) Determination whether the debt limit will be exceeded at the time of issuance. From the foregoing and on the assumption that all of the bonds identified in paragraph (5) will be issued at an interest rate not to exceed per cent in fiscal years through , it can be determined from the following schedule that the bonds that are proposed to be issued, which include all authorized and unissued bonds previously authorized, as adjusted, general obligation bonds, and instruments of indebtedness under which the State incurs a contingent liability as a guarantor authorized in this Act, will not cause the debt limit to be exceeded at the time of such issuance:
Greatest Amount
Time of Issuance and Year of
and Amount to be Debt Limit Highest Principal
Counted Against at Time of and Interest
Debt Limit Issuance on Bonds and Guaranties
(10) Overall and concluding finding. From the facts, estimates, and assumptions stated in this declaration of findings, the conclusion is reached that the total amount of principal and interest estimated for the general obligation bonds authorized in this Act, and for all bonds authorized and unissued, and calculated for all bonds issued and outstanding, and all guaranties, will not cause the debt limit to be exceeded at the time of issuance.
SECTION 2. The legislature finds the bases for the declaration of findings set forth in this Act are reasonable. The assumptions set forth in this Act with respect to the principal amount of general obligation bonds that will be issued, the amount of principal and interest on reimbursable general obligation bonds that are assumed to be excludable, and the assumed maturity structure shall not be deemed to be binding, it being the understanding of the legislature that such matters must remain subject to substantial flexibility.
SECTION 3. Authorization for issuance of general obligation bonds. General obligation bonds may be issued as provided by law in an amount that may be necessary to finance projects authorized in Act , Session Laws of Hawaii 2025 (the General Appropriations Act of 2025), and Act , Session Laws of Hawaii 2025 (the Judiciary Appropriations Act of 2025); passed by the legislature during this regular session of 2025 and designated to be financed from the general obligation bond fund and from the general obligation bond fund with debt service cost to be paid from special funds; provided that the sum total of general obligation bonds so issued shall not exceed $ .
Any law to the contrary notwithstanding, general obligation bonds may be issued from time to time in accordance with section 39-16, Hawaii Revised Statutes, in such principal amount as may be required to refund any general obligation bonds of the State of Hawaii heretofore or hereafter issued pursuant to law.
SECTION 4. Authorization to secure line of credit for the bond volume cap recycling program. Pursuant to section 201H-88, Hawaii Revised Statutes, the Hawaii housing finance and development corporation may secure a line of credit or other instrument of indebtedness, in an amount not to exceed $ during the fiscal biennium beginning July 1, 2025, and ending June 30, 2027, to meet the requirements of federal tax law for the bond volume cap recycling program under section 39B-2(f), Hawaii Revised Statutes.
SECTION 5. The provisions of this Act are declared to be severable and if any portion thereof is held to be invalid for any reason, the validity of the remainder of this Act shall not be affected.
SECTION 6. In printing this Act, the revisor of statutes shall substitute in section 1 and section 3 the corresponding act numbers for acts identified therein.
SECTION 7. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
State Bonds; State Budget; HHFDC; Bond Recycling Program
Description:
Authorizes issuance of general obligation bonds. Makes findings required by Article VII, Section 13, of the Hawaii State Constitution to declare that the issuance of authorized bonds will not cause the debt limit to be exceeded.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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Date
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Status
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| Jul 8, 2025 | Act 305, on 07/08/2025 (Gov. Msg. No. 1418). |
| Jul 8, 2025 | Act 305, 07/08/2025 (Gov. Msg. No. 1418). |
| May 1, 2025 | Transmitted to Governor. |
| May 2, 2025 | Received notice of passage on Final Reading in House (Hse. Com. No. 821). |
| May 1, 2025 | Received notice of Final Reading (Sen. Com. No. 888). |
| Apr 30, 2025 | Passed Final Reading as amended in CD 1 with Representative(s) Belatti, Perruso voting aye with reservations; Representative(s) Iwamoto voting no (1) and Representative(s) Cochran excused (1). |
| Apr 30, 2025 | Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none. |
| Apr 25, 2025 | 48 Hrs. Notice (as amended CD 1) 04-30-25 |
| Apr 25, 2025 | Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 243). |
| Apr 25, 2025 | Forty-eight (48) hours notice Wednesday, 04-30-25. |
| Apr 25, 2025 | Reported from Conference Committee (Conf Com. Rep. No. 243) as amended in (CD 1). |
| Apr 23, 2025 | The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 3 Aye(s): Senator(s) Moriwaki, Hashimoto, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. |
| Apr 23, 2025 | The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 3 Ayes: Representative(s) Yamashita, Kitagawa, Reyes Oda; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none. |
| Apr 22, 2025 | Bill scheduled for Conference Committee Meeting on Wednesday, 04-23-25 10:30AM in conference room 309. |
| Apr 15, 2025 | Received notice of Senate conferees (Sen. Com. No. 788). |
| Apr 15, 2025 | Senate Conferees Appointed: Moriwaki Chair; Hashimoto, Fevella. |
| Apr 15, 2025 | Received notice of appointment of House conferees (Hse. Com. No. 732). |
| Apr 14, 2025 | House Conferees Appointed: Yamashita Chair; Kitagawa, Reyes Oda. |
| Apr 10, 2025 | Received notice of disagreement (Hse. Com. No. 621). |
| Apr 8, 2025 | House disagrees with Senate amendment (s). |
| Apr 4, 2025 | Returned from Senate (Sen. Com. No. 579) in amended form (SD 1). |
| Apr 4, 2025 | Passed Third Reading, as amended (SD 1). Ayes, 25; Aye(s) with reservations: none. Noes, 0 (none). Excused, 0 (none). Transmitted to House. |
| Apr 2, 2025 | 48 Hrs. Notice 04-04-25. |
| Apr 2, 2025 | Report adopted; Passed Second Reading, as amended (SD 1). |
| Apr 2, 2025 | Reported from WAM (Stand. Com. Rep. No. 1535) with recommendation of passage on Second Reading, as amended (SD 1) and placement on the calendar for Third Reading. |
| Mar 31, 2025 | The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Moriwaki, Aquino, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. |
| Mar 18, 2025 | The committee(s) on WAM deferred the measure until 03-31-25 10:00AM; Conference Room 211 & Videoconference. |
| Mar 13, 2025 | The committee(s) on WAM has scheduled a public hearing on 03-18-25 10:00AM; Conference Room 211 & Videoconference. |
| Mar 6, 2025 | Referred to WAM. |
| Mar 6, 2025 | Passed First Reading. |
| Mar 6, 2025 | Received from House (Hse. Com. No. 283). |
| Mar 4, 2025 | Passed Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Pierick, Ward excused (2). Transmitted to Senate. |
| Feb 28, 2025 | Passed Second Reading as amended in HD 1; placed on the calendar for Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Pierick, Templo, Ward excused (4). |
| Feb 28, 2025 | Reported from FIN (Stand. Com. Rep. No. 996) as amended in HD 1, recommending passage on Second Reading and placement on the calendar for Third Reading. |
| Feb 19, 2025 | The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 12 Ayes: Representative(s) Yamashita, Takenouchi, Holt, Hussey, Kitagawa, Kusch, Lamosao, Lee, M., Miyake, Morikawa, Templo, Reyes Oda; Ayes with reservations: none; Noes: none; and 4 Excused: Representative(s) Grandinetti, Keohokapu-Lee Loy, Alcos, Ward. |
| Feb 14, 2025 | Bill scheduled to be heard by FIN on Wednesday, 02-19-25 2:00PM in House conference room 308 VIA VIDEOCONFERENCE. |
| Jan 21, 2025 | Referred to FIN, referral sheet 2 |
| Jan 21, 2025 | Introduced and Pass First Reading. |
| Jan 17, 2025 | Pending introduction. |
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Date
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Description
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Location
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Votes
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| Apr 30, 2025 | Final Reading | House Floor |
Passed |
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| Apr 30, 2025 | Final Reading | Senate Floor |
Passed |
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| Apr 4, 2025 | Third Reading | Senate Floor |
Passed |
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| Mar 31, 2025 | The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Ways and Means |
Passed |
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| Mar 4, 2025 | Third Reading | House Floor |
Passed |
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| Feb 19, 2025 | The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Finance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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|---|---|---|
| Department of Budget and Finance | ** Support |
CONFERENCE COMMITTEE REP. NO. 243
Honolulu, Hawaii
, 2025
RE: H.B. No. 794
H.D. 1
S.D. 1
C.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madam and Sir:
Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 794, H.D. 1, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO STATE BONDS,"
having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.
The purpose of this measure is to authorize the issuance of general obligation bonds and to make the constitutionally required findings that the bond issuance will not cause the state debt limit to be exceeded.
Your Committee on Conference finds that article VII, section 13, of the Constitution of the State of Hawaii requires the Legislature to include a declaration of findings in every general law authorizing the issuance of general obligation bonds, which shall declare that the issuance of state bonds authorized will not cause the debt limit to be exceeded at the time of issuance. Your Committee on Conference further finds that the proceeds generated from the general obligation bonds authorized to be issued under this measure will be used to finance the fulfillment of important state objectives.
Your Committee on Conference has amended this measure by:
(1) Inserting the appropriate dollar amounts throughout the measure as provided by the Department of Budget and Finance;
(2) Updating references to applicable dates and measure numbers that are cited in the measure;
(3) Making it effective upon approval; and
(4) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 794, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 794, H.D. 1, S.D. 1, C.D. 1.
Respectfully submitted on behalf of the managers:
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ON THE PART OF THE SENATE |
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ON THE PART OF THE HOUSE |
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____________________________ SHARON MORIWAKI Chair |
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____________________________ KYLE T. YAMASHITA Chair |
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STAND. COM. REP. NO. 1535
Honolulu, Hawaii
RE: H.B. No. 794
H.D. 1
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred H.B. No. 794, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO STATE BONDS,"
begs leave to report as follows:
The purpose and intent of this measure is to authorize the issuance of general obligation bonds to finance project appropriations contained in Acts of the Legislature.
Your Committee received testimony in support of this measure from the Department of Budget and Finance.
Your Committee finds that Article VII, Section 13 of the Constitution of the State of Hawaii requires the Legislature to include a declaration of findings in every general law authorizing the issuance of general obligation bonds. Your Committee further finds that the declaration of findings must include a statement that the issuance of the general obligation bonds will not cause the state debt limit to be exceeded at the time of issuance.
Your Committee further finds that this measure makes the constitutionally required findings.
Your Committee has amended this measure by changing the effective date to July 1, 2050, to facilitate further discussion on the measure.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 794, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 794, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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________________________________ DONOVAN M. DELA CRUZ, Chair |
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STAND. COM. REP. NO. 996
Honolulu, Hawaii
, 2025
RE: H.B. No. 794
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Finance, to which was referred H.B. No. 794 entitled:
"A BILL FOR AN ACT RELATING TO STATE BONDS,"
begs leave to report as follows:
Your Committee finds that article VII, section 13, of the Hawaii State Constitution requires the Legislature to include a declaration of findings in every general law authorizing the issuance of general obligation bonds, which shall declare that the issuance of state bonds authorized will not cause the debt limit to be exceeded at the time of issuance. Your Committee further finds that the proceeds generated from the general obligation bonds authorized to be issued under this measure will be used to finance the fulfillment of important state objectives.
Your Committee has amended this measure by:
(1) Removing the provisions that allow the Hawaii Housing Finance and Development Corporation to secure a line of credit or other instrument of indebtedness during fiscal biennium 2025-2027 for the Bond Volume Cap Recycling Program;
(2) Changing the effective date to July 1, 3000, to encourage further discussion; and
(3) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 794, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 794, H.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ KYLE T. YAMASHITA, Chair |
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Date
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Testimony PDF
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|---|---|
| Mar 17, 2025 | HB794_HD1_TESTIMONY_WAM_03-18-25_.PDF |
| Feb 19, 2025 | HB794_TESTIMONY_FIN_02-19-25_.PDF |
Discussed in Hearing
1MIN
House Floor
5MIN
House Floor
1MIN
Conference Committee
1MIN
House Standing Committee on Finance
Bill Author
Bill Co-Author(s):
