DEBT LIMIT; EXCLUSIONS
Section 13. 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. 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. Any bond issue by or on behalf of the State may exceed the debt limit if an emergency condition is declared to exist by the governor and concurred to by a two-thirds vote of the members to which each house of the legislature is entitled. For the purpose of this paragraph, general fund revenues of the State shall not include moneys received as grants from the federal government and receipts in reimbursement of any reimbursable general obligation bonds which are excluded as permitted by this section.
A sum equal to fifteen percent of the total of the assessed values for tax rate purposes of real property in each political subdivision, as determined by the last tax assessment rolls pursuant to law, is established as the limit of the funded debt of such political subdivision that is outstanding and unpaid at any time.
All general obligation bonds for a term exceeding two years shall be in serial form maturing in substantially equal installments of principal, or maturing in substantially equal installments of both principal and interest. The first installment of principal of general obligation bonds and of reimbursable general obligation bonds shall mature not later than five years from the date of issue of such series. The last installment on general obligation bonds shall mature not later than twenty-five years from the date of such issue and the last installment on general obligation bonds sold to the federal government, on reimbursable general obligation bonds and on bonds constituting instruments of indebtedness under which the State or a political subdivision incurs a contingent liability as a guarantor shall mature not later than thirty-five years from the date of such issue. The interest and principal payments of general obligation bonds shall be a first charge on the general fund of the State or political subdivision, as the case may be.
In determining the power of the State to issue general obligation bonds or the funded debt of any political subdivision under section 12, the following shall be excluded:
1. Bonds that have matured, or that mature in the then current fiscal year, or that have been irrevocably called for redemption and the redemption date has occurred or will occur in the then fiscal year, or for the full payment of which moneys or securities have been irrevocably set aside.
2. Revenue bonds, if the issuer thereof is obligated by law to impose rates, rentals and charges for the use and services of the public undertaking, improvement or system or the benefits of a loan program or a loan thereunder or to impose a user tax, or to impose a combination of rates, rentals and charges and user tax, as the case may be, sufficient to pay the cost of operation, maintenance and repair, if any, of the public undertaking, improvement or system or the cost of maintaining a loan program or a loan thereunder and the required payments of the principal of and interest on all revenue bonds issued for the public undertaking, improvement or system or loan program, and if the issuer is obligated to deposit such revenues or tax or a combination of both into a special fund and to apply the same to such payments in the amount necessary therefor.
3. Special purpose revenue bonds, if the issuer thereof is required by law to contract with a person obligating such person to make rental or other payments to the issuer in an amount at least sufficient to make the required payment of the principal of and interest on such special purpose revenue bonds.
4. Bonds issued under special improvement statutes when the only security for such bonds is the properties benefited or improved or the assessments thereon.
5. General obligation bonds issued for assessable improvements, but only to the extent that reimbursements to the general fund for the principal and interest on such bonds are in fact made from assessment collections available therefor.
6. Reimbursable 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.
7. Reimbursable general obligation bonds issued by the State for any political subdivision, whether issued before or after the effective date of this section, but only for as long as reimbursement by the political subdivision to the State for the payment of principal and interest on such bonds is required by law; provided that in the case of bonds issued after the effective date of this section, the consent of the governing body of the political subdivision has first been obtained; and provided further that during the period that such bonds are excluded by the State, the principal amount then outstanding shall be included within the funded debt of such political subdivision.
8. Bonds constituting instruments of indebtedness under which the State or any political subdivision incurs a contingent liability as a guarantor, but only to the extent the principal amount of such bonds does not exceed seven percent of the principal amount of outstanding general obligation bonds not otherwise excluded under this section; provided that the State or political subdivision shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State or political subdivision as provided by law.
9. Bonds issued by or on behalf of the State or by any political subdivision to meet appropriations for any fiscal period in anticipation of the collection of revenues for such period or to meet casual deficits or failures of revenue, if required to be paid within one year, and bonds issued by or on behalf of the State to suppress insurrection, to repel invasion, to defend the State in war or to meet emergencies caused by disaster or act of God.
The total outstanding indebtedness of the State or funded debt of any political subdivision and the exclusions therefrom permitted by this section shall be made annually and certified by law or as provided by law. For the purposes of section 12 and this section, amounts received from on-street parking may be considered and treated as revenues of a parking undertaking.
Nothing in section 12 or in this section shall prevent the refunding of any bond at any time. [Am Const Con 1968 and election Nov 5, 1968; ren and am Const Con 1978 and election Nov 7, 1978]
Attorney General Opinions
Revenue bonds for University of Hawaii building program; revenue bonds for proposed state capitol. Att. Gen. Op. 65-4.
Unaccrued rent (where State is lessee) does not create funded debt within meaning of Article. Att. Gen. Op. 65-4.
Revenue bonds for state ferry system. Att. Gen. Op. 65-19.
The effective date of the legislative Act authorizing the excess debt constitutes the "time of authorization". Att. Gen. Op. 67-14.
The tax assessment rolls in effect at the time of authorization of excess debt are the rolls that must be used. Att. Gen. Op. 67-14.
Par. 4: Legislature may determine form and content of bonds issued under this paragraph. Att. Gen. Op. 72-11.
The two-thirds vote requirement for issuance of bonds applies to final reading of measure. Att. Gen. Op. 73-3.
Where appropriations for operating costs and authorization for bond issues are contained in a single bill, the invalidity of one portion will not void the other, the matters being severable. Att. Gen. Op. 73-3.
Item (e): Reimbursements to general fund need not be restricted to reimbursements from the revenues and user taxes for the "immediately preceding fiscal year." Att. Gen. Op. 74-9.
Certain highway and aviation revenue bonds held not revenue bonds within meaning of Article. 44 H. 154, 352 P.2d 861.
Funded debt, what constitutes; "total of state indebtedness," how computed. 44 H. 154, 352 P.2d 861.
Conditions for exclusion of revenue bonds discussed; antipollution revenue bonds under §§39-130 and 131 do not satisfy exclusion requirements. 56 H. 566, 545 P.2d 1175.
Revenue bonds authorized by 1993 Hawai`i state legislature pursuant to Act 7, §24 [L Sp 1993] for proposed convention center development and construction qualified for exclusion from debt limit mandated by this section; reimbursable general obligation bonds authorized by the legislature pursuant to Act 7, §23 for proposed convention center development and construction did not qualify for exclusion under paragraph (6). 78 H. 157, 890 P.2d 1197.
Financing agreements entered into in accordance with chapter 37D are not bonds as that term is used in article VII, §12 of Hawaii constitution and thus do not count toward the debt ceiling of this section. 85 H. 1, 936 P.2d 637.