REPORT TITLE:
Revenue Bonds


DESCRIPTION:
Authorizes issuance of special purpose revenue bonds to Rickmar
Properties, Inc. for the purpose of constructing a district
cooling facility and pipeline distribution system in downtown
Honolulu.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3014
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                S.D. 1
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO SPECIAL PURPOSE REVENUE BONDS.



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

 1      SECTION 1.  The legislature finds that it is in the public
 
 2 interest to encourage the development of local district cooling
 
 3 facilities to make chilled water available to connected buildings
 
 4 for use in the provision of air conditioning to those buildings.
 
 5 The issuance of special purpose revenue bonds and refunding
 
 6 special purpose revenue bonds under this Act will encourage the
 
 7 development of facilities for the distribution of chilled water
 
 8 for these purposes by lowering interest rates in financing
 
 9 capital improvement costs associated with chilled water
 
10 distribution systems, through the use of tax exempt special
 
11 purpose revenue bonds, thereby making such projects more
 
12 economically feasible.
 
13      The legislature finds that Rickmar Properties, Inc., is
 
14 engaged in the planning, design, and construction of a district
 
15 cooling facility and pipeline distribution system in downtown
 
16 Honolulu.  The legislature further finds that the issuance of
 
17 special purpose revenue bonds and refunding special purpose
 
18 revenue bonds under this Act to assist Rickmar Properties, Inc.,
 
19 in constructing the portion of this district cooling project
 

 
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 1 consisting of its distribution system will make the development
 
 2 of such a cooling system more economically feasible and provide
 
 3 numerous benefits, including the following:
 
 4      (1)  The general public will benefit by the displacement of
 
 5           large electrical loads to off-peak hours, increased
 
 6           energy efficiency, replacement of older refrigerants
 
 7           (e.g. chloroflourocarbons), and minimization of
 
 8           refrigerant emission points;
 
 9      (2)  The general public will benefit because the lower cost
 
10           to connect to the local district cooling facility in
 
11           comparison to building stand-alone air conditioning
 
12           systems will allow more economical construction of new
 
13           buildings, and more leasable space will be available in
 
14           both new and old buildings because some of the space
 
15           otherwise occupied by cooling equipment will not be
 
16           needed for that purpose;
 
17      (3)  The general public will benefit environmentally because
 
18           the proposed cooling facility will use brackish water,
 
19           thereby resulting in a substantial reduction in the
 
20           current use of Oahu's fresh water supply to provide air
 
21           conditioning;
 
22      (4)  Owners, tenants, and other occupants of connected
 

 
 
 
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 1           buildings will benefit economically through lower air
 
 2           conditioning costs and reduced maintenance requirements
 
 3           (since individual chillers and cooling towers are
 
 4           eliminated) and the related elimination of the capital
 
 5           costs of replacing cooling systems serving individual
 
 6           buildings and such reduction of costs will be
 
 7           beneficial to the economy of the State; and
 
 8      (5)  Owners, tenants, and other occupants of connected
 
 9           buildings will benefit economically since the local
 
10           district cooling facility will be able to take
 
11           advantage of greater economies of scale and use off-
 
12           peak (and lower cost) electricity by local district
 
13           cooling facilities and such benefits will also promote
 
14           the general economy of the State.
 
15      SECTION 2.  The legislature further finds that the
 
16 activities of the district cooling project proposed to be
 
17 constructed by Rickmar Properties, Inc., including the
 
18 distribution system, constitute an industrial enterprise defined
 
19 in part V, chapter 39A, Hawaii Revised Statutes, and that the
 
20 cost of construction of the distribution system thereof is
 
21 qualified to be financed through the issuance of special purpose
 
22 revenue bonds under such part V.
 

 
 
 
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 1      SECTION 3.  Pursuant to part V, chapter 39A, Hawaii Revised
 
 2 Statutes, the department of budget and finance is hereby
 
 3 authorized, with the approval of the governor, to issue special
 
 4 purpose revenue bonds in a total amount not to exceed $19,000,000
 
 5 in one or more series, for the purpose of assisting Rickmar
 
 6 Properties, Inc. (or a partnership in which Rickmar Properties,
 
 7 Inc. is a general partner, or the successor in interest or
 
 8 assignee of Rickmar Properties, Inc.), with one or more of the
 
 9 following:
 
10      (1)  The establishment of a distribution system through
 
11           which chilled water produced at a water cooling
 
12           facility will be moved to buildings wishing to be
 
13           connected to the cooling facility; and
 
14      (2)  The financing, refinancing, or both, of the costs
 
15           related to the planning, design, and construction of
 
16           the distribution system, including costs of
 
17           construction, renovation, equipping, and purchasing
 
18           tangible assets (including land and easements for such
 
19           distribution system and pipelines and other
 
20           improvements) comprising such distribution system.
 
21      SECTION 4.  The department of budget and finance shall
 
22 process applications for special purpose revenue bonds under this
 

 
 
 
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 1 Act in accordance with the requirements of its "Formal
 
 2 Application for Financing of an Industrial Enterprise" as it
 
 3 existed on October 22, 1987.  The department shall report to the
 
 4 legislature twenty days before the convening of the regular
 
 5 sessions of 2001 and 2002 regarding any progress made with
 
 6 respect to the issuance of the special purpose revenue bonds
 
 7 authorized by this Act.
 
 8      SECTION 5.  The department of budget and finance is
 
 9 authorized, with the approval of the governor, to issue from time
 
10 to time (including times subsequent to June 30, 2003), refunding
 
11 special purpose revenue bonds in such principal amounts as the
 
12 department shall determine to be necessary to refund the special
 
13 purpose revenue bonds authorized in section 3 and any refunding
 
14 special purpose revenue bonds authorized in this section,
 
15 regardless of whether the outstanding special purpose revenue
 
16 bonds or refunding special purpose revenue bonds have matured or
 
17 are the subject of redemption, and any such refunding special
 
18 purpose revenue bonds shall be bonds for the projects and
 
19 purposes described in section 3.  In making this determination,
 
20 the department shall comply with federal law relating to the
 
21 exemption from federal income taxation of the interest on bonds
 
22 of the nature authorized under this section.
 

 
 
 
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 1      SECTION 6.  Any unused portion of the authorization to issue
 
 2 new special purpose revenue bonds under this Act shall lapse as
 
 3 of the close of business on June 30, 2003.
 
 4      SECTION 7.  This Act shall take effect on July 1, 2000.