REPORT TITLE:
Convention Center; Tourism


DESCRIPTION:
Extends the sunset date of the convention center authority (CCA)
to June 30, 2000; combines convention center capital and
operations special funds; appropriates moneys from this
consolidated special fund to CCA; specifies that reimbursement of
the general fund for debt service on general obligation bonds or
reimbursable general obligation funds for the Hawaii convention
center be in accordance with a schedule determined by the
director of finance, with the approval of the governor, in the
best interest of the State; authorizes CCA to waive or
substantially discount any payment of the convention center for a
specific event whenever CCA determines that the waiver or
discount is in the best interest of the convention center
facility or the State by attracting new tourist markets or
conventioneers.  (CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        816
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            C.D. 1
                                                        
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE CONVENTION CENTER.



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

 1      SECTION 1.  The legislature recognizes that the primary
 
 2 intent behind the development of the convention center was to
 
 3 bring new and additional outside money into the state economy.
 
 4 Since the development of the convention center was financed by
 
 5 the sale of bonds that would be repaid by the transient
 
 6 accommodations tax, it is the State's policy to link the use of
 
 7 the convention center facility with hotel room bookings.
 
 8 Therefore, the legislature finds that it is appropriate for the
 
 9 convention center authority to give first priority booking at the
 
10 convention center to out-of-state bookings that would generate
 
11 new tourism revenues for the State by attracting new business and
 
12 nonresident spending.
 
13      The legislature further finds that the convention center
 
14 authority should give second priority booking at the convention
 
15 center to smaller corporate meetings, special events, trade and
 
16 consumer shows, entertainment, and other local events open to the
 
17 public, provided that it does not interfere with the booking of
 
18 out-of-state functions and that the preferred booking for local
 
19 events that do not generate new revenues for the State be booked
 

 
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 1 at other local venues such as the Neal Blaisdell Center or
 
 2 hotels.  Traffic and noise impacts to the community arising from
 
 3 the booking of local events at the convention center should also
 
 4 be considered.
 
 5      The legislature believes that the effectiveness of the
 
 6 convention center is to be determined by its ability to generate
 
 7 new tourism revenues for the State and not its ability to
 
 8 generate revenues to support its operations.
 
 9      The purpose of this Act is to, among other things:
 
10      (1)  Extend the sunset date of the convention center
 
11           authority (CCA) from June 30, 1999, to June 30, 2000;
 
12      (2)  Combine the convention center capital special fund with
 
13           the convention center operations special fund;
 
14      (3)  Appropriate moneys from this consolidated special fund
 
15           to CCA;
 
16      (4)  Specify that reimbursement of the general fund for debt
 
17           service on general obligation bonds or reimbursable
 
18           general obligation bonds for the Hawaii convention
 
19           center be in accordance with a schedule determined by
 
20           the director of finance, with the approval of the
 
21           governor, in the best interest of the State; and
 
22      (5)  Authorize CCA to waive or substantially discount any
 
23           payment of the convention center for a specific event
 

 
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 1           whenever CCA determines that the waiver or discount is
 
 2           in the best interest of the convention center facility
 
 3           or the State by attracting new tourist markets or
 
 4           conventioneers.
 
 5      SECTION 2.  Section 36-27, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "§36-27  Transfers from special funds for central service
 
 8 expenses.  Except as provided in this section, and
 
 9 notwithstanding any other law to the contrary, from time to time
 
10 the director of finance, for the purpose of defraying the
 
11 prorated estimate of central service expenses of government in
 
12 relation to all special funds, except the:
 
13      (1)  Special summer school and intersession fund under
 
14           section 302A-1310;
 
15      (2)  School cafeteria special funds of the department of
 
16           education;
 
17      (3)  Special funds of the University of Hawaii;
 
18      (4)  State educational facilities improvement special fund;
 
19      (5)  Convention center capital and operations special fund
 
20           under section 206X-10.5 [and the convention center
 
21           operations special fund under section 206X-10.6];
 
22      (6)  Special funds established by section 206E-6;
 
23      (7)  Housing loan program revenue bond special fund;
 

 
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 1      (8)  Housing project bond special fund;
 
 2      (9)  Aloha Tower fund created by section 206J-17;
 
 3     (10)  Domestic violence prevention special fund under section
 
 4           321-1.3;
 
 5     (11)  Spouse and child abuse special account under section
 
 6           346-7.5;
 
 7     (12)  Spouse and child abuse special account under section
 
 8           601-3.6;
 
 9     (13)  Funds of the employees' retirement system created by
 
10           section 88-109;
 
11     (14)  Unemployment compensation fund established under
 
12           section 383-121;
 
13     (15)  Hawaii hurricane relief fund established under chapter
 
14           431P;
 
15     (16)  Hawaii health systems corporation special funds;
 
16     (17)  Boiler and elevator safety revolving fund established
 
17           under section 397-5.5;
 
18     (18)  Tourism special fund established under section
 
19           [[]201B-11[]]; and
 
20     (19)  Department of commerce and consumer affairs' special
 
21           funds;
 
22 shall deduct five per cent of all receipts of all other special
 
23 funds, which deduction shall be transferred to the general fund
 

 
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 1 of the State and become general realizations of the State.  All
 
 2 officers of the State and other persons having power to allocate
 
 3 or disburse any special funds shall cooperate with the director
 
 4 in effecting these transfers.  To determine the proper revenue
 
 5 base upon which the central service assessment is to be
 
 6 calculated, the director shall adopt rules pursuant to chapter 91
 
 7 for the purpose of suspending or limiting the application of the
 
 8 central service assessment of any fund.  No later than twenty
 
 9 days prior to the convening of each regular session of the
 
10 legislature, the director shall report all central service
 
11 assessments made during the preceding fiscal year."
 
12      SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
 
13 amended by amending subsection (a) to read as follows:
 
14      "(a)  Each special fund, except the:
 
15      (1)  Transportation use special fund established by section
 
16           261D-1;
 
17      (2)  Special summer school and intersession fund under
 
18           section 302A-1310;
 
19      (3)  School cafeteria special funds of the department of
 
20           education;
 
21      (4)  Special funds of the University of Hawaii;
 
22      (5)  State educational facilities improvement special fund;
 
23      (6)  Special funds established by section 206E-6;
 

 
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 1      (7)  Aloha Tower fund created by section 206J-17;
 
 2      (8)  Domestic violence prevention special fund under section
 
 3           321-1.3;
 
 4      (9)  Spouse and child abuse special account under section
 
 5           346-7.5;
 
 6     (10)  Spouse and child abuse special account under section
 
 7           601-3.6;
 
 8     (11)  Funds of the employees' retirement system created by
 
 9           section 88-109;
 
10     (12)  Unemployment compensation fund established under
 
11           section 383-121;
 
12     (13)  Hawaii hurricane relief fund established under chapter
 
13           431P;
 
14     (14)  Convention center capital and operations special fund
 
15           established under section 206X-10.5 [and the convention
 
16           center operations special fund established under
 
17           section 206X-10.6];
 
18     (15)  Hawaii health systems corporation special funds; and
 
19     (16)  Tourism special fund established under section
 
20           [[]201B-11[]];
 
21 shall be responsible for its pro rata share of the administrative
 
22 expenses incurred by the department responsible for the
 
23 operations supported by the special fund concerned."
 

 
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 1      SECTION 4.  Section 206X-4, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (b) to read as follows:
 
 3      "(b)  Except as otherwise limited by this chapter, the
 
 4 authority also may:
 
 5      (1)  Sue and be sued;
 
 6      (2)  Have a seal and alter the same at pleasure;
 
 7      (3)  Make and execute contracts and all other instruments
 
 8           necessary or convenient for the exercise of its powers
 
 9           and functions under this chapter;
 
10      (4)  Make and alter bylaws for its organization and internal
 
11           management;
 
12      (5)  Adopt rules in accordance with chapter 91 with respect
 
13           to its projects, operations, properties, and
 
14           facilities;
 
15      (6)  Through its executive director appoint officers,
 
16           agents, and employees, prescribe their duties and
 
17           qualifications, and fix their salaries, without regard
 
18           to chapters 76 and 77;
 
19      (7)  Review and approve the convention center development
 
20           plan proposed by a developer, for the convention center
 
21           district; inspect and approve development within the
 
22           convention center district for compliance with
 
23           convention center development plans and rules; and upon
 

 
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 1           construction of the convention center facility, manage,
 
 2           operate, and maintain or enter into contracts for the
 
 3           professional management, operation, and maintenance of
 
 4           the convention center facility;
 
 5      (8)  Cause a developer to prepare plans, specifications, and
 
 6           designs for the construction, reconstruction,
 
 7           rehabilitation, improvement, alteration, or repair of
 
 8           any project, and from time to time, to modify such
 
 9           plans, specifications, or designs; provided that the
 
10           plans, specifications, or designs shall be subject to
 
11           review and approval by the authority;
 
12      (9)  Procure insurance against any loss and any liability in
 
13           connection with the convention center and other related
 
14           assets and operations in such amounts and from such
 
15           insurers as it deems desirable;
 
16     (10)  Contract for and accept gifts or grants in any form
 
17           from any public agency, or any other source;
 
18     (11)  Upon the request of the authority and the approval of
 
19           the governor, condemn any real property interests as
 
20           the authority deems necessary for the development of a
 
21           convention center pursuant to chapter 101; provided
 
22           that the valuation of any such property acquired
 
23           pursuant to the exercise of the authority's power under
 

 
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 1           this subsection shall be done without regard to any
 
 2           increase or decrease in the value of the property
 
 3           resulting from the application of this chapter.
 
 4           Property acquired by condemnation shall not be subject
 
 5           to chapter 171;
 
 6     (12)  Negotiate with the developer for contribution by the
 
 7           developer to defray costs relating to the relocation of
 
 8           persons displaced because of the development;
 
 9     (13)  On behalf of the State, accept the authority to
 
10           operate, manage, and maintain the convention center
 
11           facility upon completion or acquisition of such
 
12           facility;
 
13     (14)  Issue revenue bonds, subject to the approval of the
 
14           legislature.  All revenue bonds shall be issued
 
15           pursuant to part III of chapter 39, except as provided
 
16           in this chapter.  All revenue bonds shall be issued in
 
17           the name of the authority and not in the name of the
 
18           State.  The final maturity date of the revenue bonds
 
19           may be any date not exceeding thirty years from the
 
20           date of issuance;
 
21     (15)  Pledge or assign all or any part of the receipts and
 
22           revenues of the authority;
 
23     (16)  Set and collect rents, fees, charges, or other payments
 

 
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 1           for the lease, use, occupancy, or disposition of the
 
 2           convention center facility acquired, constructed, or
 
 3           reconstructed by the authority pursuant to this
 
 4           chapter; provided that the authority may waive or
 
 5           substantially discount any rent, fee, charge, or other
 
 6           payment at an open public meeting subject to the
 
 7           requirement of chapter 92 for a specific event whenever
 
 8           the authority determines that the waiver or discount is
 
 9           in the best interest of the convention center facility
 
10           or the State by attracting new tourist markets or
 
11           conventioneers;
 
12     (17)  Acquire, lease as lessee or lessor, own, rent, hold,
 
13           and dispose of real and personal property in the
 
14           exercise of its powers and the performance of its
 
15           duties under this chapter;
 
16     (18)  Acquire by purchase, lease, or otherwise, and develop,
 
17           construct, operate, own, manage, repair, reconstruct,
 
18           enlarge, or otherwise effectuate, either directly or
 
19           through developers, a convention center;
 
20     (19)  Reimburse the state general fund for debt service on
 
21           general obligation bonds or reimbursable general
 
22           obligation bonds issued by the State for purposes of
 
23           the convention center[;] in accordance with a schedule
 

 
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 1           determined by the director of finance, with the
 
 2           approval of the governor, as may be in the best
 
 3           interest of the State;
 
 4     (20)  Do any and all things necessary to carry out its
 
 5           purposes and exercise the powers given and granted in
 
 6           this chapter; and
 
 7     (21)  By itself, or in combination or association with
 
 8           qualified persons, by any form of request for
 
 9           proposals, as determined by the authority, any law to
 
10           the contrary notwithstanding, solicit, accept, review,
 
11           reject, modify, or approve proposals, and thereafter
 
12           enter into agreements, for a convention center
 
13           development plan, and for the initiation, undertaking,
 
14           supervision and regulation of the design, development,
 
15           financing, operation and maintenance of a convention
 
16           center facility and any related developments."
 
17      SECTION 5.  Section 206X-7, Hawaii Revised Statutes, is
 
18 amended by amending subsection (c) to read as follows:
 
19      "(c)  As a further condition and consideration of the right
 
20 to develop the real property within the convention center
 
21 district under the agreement and pursuant to this chapter, the
 
22 developer shall pay a reasonable sum determined by the authority
 
23 as contribution for the payment of costs relating to:
 

 
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 1      (1)  The temporary or permanent relocation of existing
 
 2           licensees and lessees, if any, who are displaced
 
 3           because of the development within the convention center
 
 4           district pursuant to the convention center development
 
 5           plan by the developer; or
 
 6      (2)  Settlement payments in lieu of payments provided under
 
 7           paragraph (1) to existing licensees and lessees, if
 
 8           any, who are displaced by the developer because of the
 
 9           development within the convention center district
 
10           pursuant to the convention center development plan;
 
11 provided that each displaced licensee or lessee shall have the
 
12 option to select either relocation or a settlement payment.
 
13      Upon the approval by the authority of the relocation plan,
 
14 which shall be prepared and submitted by the developer to the
 
15 authority, the developer shall deliver to the authority for
 
16 deposit into the convention center capital and operations special
 
17 fund the sum determined by the authority in the form of a
 
18 certified check, an irrevocable letter of credit, or surety bond.
 
19 The sum determined by the authority shall be used for the
 
20 implementation of the relocation plan; provided that the sum and
 
21 all interest accrued thereon shall be refunded to the developer
 
22 in the event this chapter expires and becomes void.
 
23      The relocation plan shall include an agreement by the
 

 
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 1 developer to give every displaced licensee or lessee who does not
 
 2 elect to receive a settlement payment under paragraph (2) an
 
 3 unassignable right of first refusal of any license or lease of
 
 4 space within the convention center district developed and offered
 
 5 for those activities similar in size and nature to the business
 
 6 conducted by the licensee or lessee at the time of displacement,
 
 7 unless this right is waived by any licensee or lessee.
 
 8      The authority shall establish a task force to assist in the
 
 9 implementation of the relocation plan.  The task force shall
 
10 include persons representing agencies, organizations, government,
 
11 and private interests."
 
12      SECTION 6.  Section 206X-10.5, Hawaii Revised Statutes, is
 
13 amended to read as follows:
 
14      "§206X-10.5  Convention center capital and operations
 
15 special fund.(a)  There is established in the state treasury
 
16 the convention center capital and operations special fund, into
 
17 which shall be deposited:
 
18      (1)  A portion of the revenues from the transient
 
19           accommodations tax, as provided by section 237D-6.5;
 
20      (2)  All proceeds from revenue bonds issued by the
 
21           authority; [and]
 
22      (3)  Appropriations by the legislature [to the convention
 
23           center capital special fund.];
 

 
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 1      (4)  All net revenues or moneys derived from the operations
 
 2           or use of the convention center;
 
 3      (5)  All or a portion of all net revenues derived from the
 
 4           operation of parking and garage facilities and other
 
 5           concessions at the convention center; and
 
 6      (6)  All or a portion of all net revenues derived from the
 
 7           food and beverage operations at the convention center
 
 8           facility.
 
 9      (b)  In addition to the powers of the authority specified in
 
10 section 206X-4, the authority may [do]:
 
11      (1)  Adopt rules in accordance with chapter 91, to define
 
12           the term "net revenues or moneys derived from the
 
13           operations or use of the convention center"; and
 
14      (2)  Do any and all things deemed necessary to administer
 
15           the convention center capital and operations special
 
16           fund.
 
17      (c)  Moneys in the convention center capital and operations
 
18 special fund may be placed in interest-bearing accounts or
 
19 otherwise invested by the authority until such time as the moneys
 
20 may be needed.  All interest accruing from the investment of
 
21 these moneys shall be credited to the convention center capital
 
22 and operations special fund.
 
23      (d)  Moneys in the convention center capital and operations
 

 
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 1 special fund shall be used by the authority for the following
 
 2 purposes:
 
 3      (1)  Planning, design, improvement, construction, land
 
 4           acquisition, equipment, and furnishing necessary for
 
 5           the development or maintenance of a convention center;
 
 6      (2)  Constructing the convention center and any public
 
 7           facilities related thereto;
 
 8      (3)  Payment of debt service on revenue bonds issued by the
 
 9           authority for purposes of the convention center,
 
10           establishment of debt service and other reserves deemed
 
11           necessary by the authority or the State, and
 
12           reimbursement of the state general fund for debt
 
13           service on general obligation bonds or reimbursable
 
14           general obligation bonds issued by the State for
 
15           purposes of the convention center; [and]
 
16      (4)  Operation, maintenance, and improvement of the
 
17           convention center and any public facilities related
 
18           thereto; and
 
19     [(4)] (5)  Any other purpose deemed necessary by the
 
20           authority for the purpose of planning, improving, and
 
21           developing the convention center facility."
 
22      SECTION 7.  Section 237D-6.5, Hawaii Revised Statutes, is
 
23 amended by amending subsection (b) to read as follows:
 

 
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 1      "(b)  [For the fiscal year beginning July 1, 1994, and for
 
 2 each fiscal year thereafter, until December 31, 1998, revenues
 
 3 collected under this chapter shall be distributed as follows:
 
 4      (1)  One-sixth of the revenues collected under this chapter
 
 5           shall be deposited into the convention center capital
 
 6           special fund established under section 206X-10.5;
 
 7      (2)  Of the remaining revenues, five per cent shall be
 
 8           retained by the State; and
 
 9      (3)  Of the remainder, Kauai county shall receive 14.5 per
 
10           cent; Hawaii county shall receive 18.6 per cent; city
 
11           and county of Honolulu shall receive 44.1 per cent; and
 
12           Maui county shall receive 22.8 per cent.]
 
13      Beginning on January 1, 1999 revenues collected under this
 
14 chapter shall be distributed as follows:
 
15      (1)  17.3 per cent of the revenues collected under this
 
16           chapter shall be deposited into the convention center
 
17           capital and operations special fund established under
 
18           section 206X-10.5;
 
19      (2)  37.9 per cent of the revenues collected under this
 
20           chapter shall be deposited into the tourism special
 
21           fund established under section 201B-11;
 
22      (3)  44.8 per cent of the revenues collected under this
 
23           chapter shall be transferred as follows:  Kauai county
 

 
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 1           shall receive 14.5 per cent[;], Hawaii county shall
 
 2           receive 18.6 per cent, city and county of Honolulu
 
 3           shall receive 44.1 per cent, and Maui county shall
 
 4           receive 22.8 per cent.
 
 5      All transient accommodations taxes shall be paid into the
 
 6 state treasury each month within ten days after collection, and
 
 7 shall be kept by the state director of finance in special
 
 8 accounts for distribution as provided in this subsection."
 
 9     SECTION 8.  Section 206X-10.6, Hawaii Revised Statutes, is
 
10 repealed.
 
11     ["[§206X-10.6]  Convention center operations special fund.
 
12 (a)  There is established in the state treasury the convention
 
13 center operations special fund, into which shall be deposited:
 
14     (1)   All revenues or moneys derived from the operations or
 
15           use of the convention center;
 
16     (2)   All or a portion of all revenues derived from the
 
17           operation of parking and garage facilities and other
 
18           concessions at the convention center; and
 
19     (3)   Appropriations by the legislature.
 
20     (b)  In addition to the powers of the authority specified in
 
21 section 206X-4, the authority may:
 
22     (1)   Adopt rules in accordance with chapter 91, to define
 
23           the term "revenues or moneys derived from the
 

 
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 1           operations or use of the convention center"; and
 
 2     (2)   Do any and all things deemed necessary to administer
 
 3           the convention center operations special fund.
 
 4     (c)  Moneys in the convention center operations special fund
 
 5 may be placed in interest-bearing accounts or otherwise invested
 
 6 by the authority until such time as the moneys may be needed.
 
 7 All interest accruing from the investment of these moneys shall
 
 8 be credited to the convention center operations special fund.
 
 9     (d)  Moneys in the convention center operations special fund
 
10 shall be used by the authority for the operation, maintenance,
 
11 and improvement of the convention center and any public
 
12 facilities related thereto."]
 
13      SECTION 9. Act 96, Session Laws of Hawaii 1988, as amended
 
14 by Act 159, Session Laws of Hawaii 1992, Act 241, Session Laws of
 
15 Hawaii 1993, Act 75, Session Laws of Hawaii 1994, and Act 156,
 
16 Session Laws of Hawaii 1998, is amended by amending section 3 to
 
17 read as follows:
 
18      "SECTION 3.  This Act shall automatically expire on June 30,
 
19 [1999.] 2000.  The auditor shall continue to audit and monitor
 
20 the progress made by the convention center authority in resolving
 
21 various outstanding issues and problems so as to assure the
 
22 legislature that these issues have been addressed on or before
 
23 June 30, 2000.  By February 28, 2000, the auditor shall submit a
 

 
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 1 management audit report to the legislature on the effectiveness
 
 2 of the steps taken by the convention center authority to resolve
 
 3 traffic, noise, and other outstanding claims against the
 
 4 authority.  The management audit may include financial audit
 
 5 issues that the auditor deems appropriate.
 
 6      In the event any judicial or quasi-judicial proceeding is
 
 7 commenced regarding the validity of this Act or any section of
 
 8 this Act, or any action of the authority, the running of the
 
 9 period shall be suspended until a final nonappealable
 
10 determination is made in the judicial or quasi-judicial
 
11 proceeding."
 
12      SECTION 10.  The director of finance shall transfer the
 
13 unexpended balance, including encumbrances and accrued
 
14 liabilities, of the convention center operations special fund as
 
15 of the close of business on June 29, 1999, to the credit of the
 
16 convention center capital and operations special fund.
 
17 Encumbered moneys shall continue to be encumbered until paid out
 
18 or released from prior encumbrances.
 
19      SECTION 11.  There is appropriated out of the convention
 
20 center capital and operations special fund the sum of $402,000 or
 
21 so much thereof as may be necessary for fiscal year 1999-2000 and
 
22 the same sum or so much thereof as may be necessary for fiscal
 
23 year 2000-2001 for the general and administrative expenses of the
 

 
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 1 convention center authority.
 
 2      The sums appropriated shall be expended by the department of
 
 3 business, economic development, and tourism for the purposes of
 
 4 this Act.
 
 5      SECTION 12.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 13.  This Act shall take effect on June 29, 1999;
 
 8 provided that:
 
 9      (1)  Section 8 shall take effect on June 30, 1999;
 
10      (2)  Section 11 shall take effect on July 1, 1999;
 
11      (3)  The amendments made to sections 36-27 and 36-30, Hawaii
 
12           Revised Statutes, by this Act shall not be repealed
 
13           when those sections are reenacted on July 1, 2000,
 
14           pursuant to section 13 of Act 216, Session Laws of
 
15           Hawaii 1997; and
 
16      (4)  The amendments made to section 36-27, Hawaii Revised
 
17           Statutes, by this Act shall not be repealed when that
 
18           section is reenacted on July 31, 2003, pursuant to
 
19           section 9 of Act 142, Session Laws of Hawaii 1998.