Bills

SB 2808: B&F; Defeasement Trust Fund; Tax-Exempt Bonds; State Facilities; Private Use; Appropriation

Session Year: 2025-2026
House: Senate
Latest Version Date: 2026-04-08

Current Status:

Failed

(2026-05-01: Conference committee meeting to reconvene on 05-01-26 4:30 PM; Conference Room 309.)

Introduced

In Committee

First Chamber

In Committee

Second Chamber

Final Decking

Enacted

What does this bill do?

Creates a Defeasement Trust Fund in the Department of Budget and Finance to defease (set aside money to pay off) certain tax-exempt bonds so state facilities financed by those bonds can be used for private activities. The department must consult bond counsel to assess impacts, evaluate the bonds, and determine defeasement costs. The bill provides funding into and out of the trust for those defeasements.

Version:

Establishes the Defeasement Trust Fund within the Department of Budget and Finance for the defeasement of tax-exempt bonds to allow private use of state facilities financed by tax-exempt bonds. Requires the Department to consult with bond counsel before defeasement. Appropriates moneys in and out of the Defeasement Trust Fund for defeasement of certain tax-exempt bonds. Effective 7/1/3000. (HD1)

Version:

SB2808 HD1

THE SENATE	S.B. NO.	2808
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII		H.D. 1

A BILL FOR AN ACT

RELATING TO THE BUDGET.

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

SECTION 1. The legislature finds that state facilities can be used for both public and private activities to further the economic development of the State. Full use of these facilities provides the maximum benefit to the community.

The legislature recognizes that the Internal Revenue Service has previously determined that facilities financed with tax-exempt bonds may not be used for private activities. Accordingly, the purpose of this Act is to promote the private use of state facilities by creating a trust fund to address tax‑exempt bond payments.

SECTION 2. Chapter 39, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:

"§39- Defeasement fund; established. (a) There is established within the department of budget and finance a defeasement trust fund into which shall be deposited appropriations made by the legislature. The defeasement trust fund shall be administered by the department of budget and finance and shall be used to take all actions necessary to defease tax-exempt bonds to allow the private use of state facilities that are financed by tax-exempt bonds; provided that the department shall consult with bond counsel before any defeasement to:

(1) Assess the specific impacts of the defeasement necessary to allow private activity in state facilities;

(2) Evaluate the relevant bonds; and

(3) Determine the cost of the defeasement.

(b) The defeasement trust fund shall be terminated upon the full payment of all outstanding obligations under the tax‑exempt bonds subject to defeasement. Upon termination, any moneys in the defeasement trust fund shall lapse to the general fund."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the defeasement trust fund for the defeasement of certain tax-exempt bonds.

SECTION 4. There is appropriated out of the defeasement trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the defeasement of certain tax-exempt bonds.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 3000.

Report Title:

B&F; Defeasement Trust Fund; Tax-Exempt Bonds; State Facilities; Private Use; Appropriation

Description:

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

SB2808 SD1

THE SENATE	S.B. NO.	2808
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE BUDGET.

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

SECTION 2. Chapter 39, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:

(1) Assess the specific impacts of the defeasement necessary to allow private activity in state facilities;

(2) Evaluate the relevant bonds; and

(3) Determine the cost of the defeasement.

SECTION 4. There is appropriated out of the defeasement trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the defeasement of certain tax-exempt bonds.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2026.

Report Title:

B&F; Defeasement Trust Fund; Tax-Exempt Bonds; State Facilities; Private Use; Appropriation

Description:

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

SB2808

THE SENATE	S.B. NO.	2808
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE BUDGET.

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

SECTION 2. Chapter 39, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:

(b) The defeasement trust fund shall be terminated upon the full payment of all outstanding obligations under the tax-exempt bonds subject to defeasement. Upon termination, any moneys in the defeasement trust fund shall lapse to the general fund.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

B&F; Defeasement Trust Fund; Tax-Exempt Bonds; State Facilities; Private Use

Description:

Establishes the Defeasement Trust Fund within the Department of Budget and Finance for the defeasement of tax-exempt bonds to allow private use of state facilities financed by tax-exempt bonds.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

Date	Status
May 1, 2026	Conference committee meeting to reconvene on 05-01-26 4:30 PM; Conference Room 309.
May 1, 2026	Conference committee meeting to reconvene on 05-01-26 3:30 PM; Conference Room 309.
May 1, 2026	Conference committee meeting to reconvene on 05-01-26 1:00 PM; Conference Room 309.
Apr 30, 2026	Conference committee meeting to reconvene on 05-01-26 11:00AM; Conference Room 309.
Apr 29, 2026	Conference committee meeting scheduled for 04-30-26 11:00AM; CR 309.
Apr 20, 2026	Received notice of Senate conferees (Sen. Com. No. 714).
Apr 20, 2026	Senate Conferees Appointed: Moriwaki Chair; Hashimoto, Fevella.
Apr 20, 2026	Received notice of appointment of House conferees (Hse. Com. No. 787).
Apr 20, 2026	House Conferees Appointed: Takenouchi Chair; Kitagawa, Gedeon.
Apr 16, 2026	Received notice of disagreement (Sen. Com. No. 710).
Apr 16, 2026	Senate disagrees with House amendments.
Apr 16, 2026	Received from House (Hse. Com. No. 704).
Apr 14, 2026	Passed Third Reading with Representative(s) Iwamoto voting aye with reservations; none voting no (0) and Representative(s) Quinlan excused (1). Transmitted to Senate.
Apr 9, 2026	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 excused (1).
Apr 9, 2026	Reported from FIN (Stand. Com. Rep. No. 1988-26) as amended in HD 1, recommending passage on Second Reading and placement on the calendar for Third Reading.
Apr 7, 2026	The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 16 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Morikawa, Perruso, Templo, Yamashita, Alcos, Gedeon, Reyes Oda; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.
Apr 2, 2026	Bill scheduled to be heard by FIN on Tuesday, 04-07-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
Mar 12, 2026	Referred to FIN, referral sheet 17
Mar 12, 2026	Pass First Reading
Mar 10, 2026	Received from Senate (Sen. Com. No. 302) in amended form (SD 1).
Mar 10, 2026	Passed Third Reading, as amended (SD 1). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House.
Mar 5, 2026	48 Hrs. Notice 3/10/2026.
Mar 5, 2026	Report adopted; Passed Second Reading, as amended (SD 1).
Mar 5, 2026	Reported from WAM (Stand. Com. Rep. No. 2875) with recommendation of passage on Second Reading, as amended (SD 1) and placement on the calendar for Third Reading.
Mar 4, 2026	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, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Richards, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.
Mar 2, 2026	The committee(s) on WAM deferred the measure until 03-04-26 10:32AM; Conference Room 211 & Videoconference.
Feb 27, 2026	The committee(s) on WAM has scheduled a public hearing on 03-02-26 10:00AM; Conference Room 211 & Videoconference.
Jan 30, 2026	Referred to WAM.
Jan 26, 2026	Passed First Reading.
Jan 23, 2026	Introduced.

Date	Description	Location	Votes
Apr 14, 2026	Third Reading	House Floor	51 0 1 Passed
Apr 7, 2026	The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS	House Standing Committee on Finance	16 0 0 Passed
Mar 10, 2026	Third Reading	Senate Floor	25 0 0 Passed
Mar 4, 2026	The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS	Senate Standing Committee on Ways and Means	13 0 0 Passed

Key

Pro

Against

Did Not Vote

SSCR2875 Jill M. Tsuchitori SSCR Ainoa Naniole 2 8 2026-03-03T23:35:00Z 2026-03-05T19:15:00Z 2026-03-05T19:15:00Z 2 427 2268 House of Representatives 23087 90 27 2686 16.00 Print 0 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman",serif;}

STAND. COM. REP. NO. 2875

Honolulu, Hawaii

RE: S.B. No. 2808

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2808 entitled:

"A BILL FOR AN ACT RELATING TO THE BUDGET,"

begs leave to report as follows:

The purpose and intent of this measure is to establish the means to defease certain tax-exempt bonds to allow the private use of state facilities financed by tax-exempt bonds.

More specifically, this measure:

(1) Establishes the Defeasement Trust Fund within the Department of Budget and Finance to take all actions necessary to defease tax-exempt bonds; and

(2) Appropriates moneys into the Defeasement Trust Fund.

Your Committee received comments on this measure from the Department of Budget and Finance and Department of the Attorney General.

Your Committee finds that some state facilities that are financed by tax-exempt bonds are underutilized by the State. Your Committee further finds that facilities for community use by private groups are in demand and underutilized state facilities could help alleviate some of this demand. In addition, the State could generate significant revenue if allowed to rent and license these underutilized facilities for private use. Because federal tax law prohibits the private use of state facilities financed by tax-exempt bonds, establishing a fund to finance defeasement of the tax-exempt bonds financing underutilized facilities will allow the State to generate revenue and better use its physical assets for community benefit.

Your Committee has amended this measure by:

(1) Requiring the Department of Budget and Finance to consult with bond counsel before defeasement to evaluate the relevant bonds and to assess the impacts of bond defeasance, including the cost to retire the bonds;

(2) Adding an appropriation of an unspecified sum from the Defeasement Trust Fund to the Department of Budget and Finance for the defeasement of certain tax-exempt bonds; and

(3) Making technical nonsubstantive amendments to properly reflect standard Ramseyering conventions and for the purpose of style.

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 S.B. No. 2808, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2808, 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,

________________________________

DONOVAN M. DELA CRUZ, Chair

Date	Testimony PDF
Apr 7, 2026	SB2808_SD1_TESTIMONY_FIN_04-07-26_.PDF
Mar 2, 2026	SB2808_TESTIMONY_WAM_03-02-26_.PDF

Discussed in Hearing

26SEC

Authors shown for version:
SB2808_HD1 (4/8/2026)

SB 2808: B&F; Defeasement Trust Fund; Tax-Exempt Bonds; State Facilities; Private Use; Appropriation

Current Status:

What does this bill do?

Conference Committee

Conference Committee

Conference Committee

Conference Committee

Conference Committee

Conference Committee

Senate Standing Committee on Judiciary

Senate Standing Committee on Ways and Means