REPORT TITLE:
Educ. Real Estate Trust


DESCRIPTION:
Establishes a real estate trust for the benefit of charter
schools.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        3142
THE SENATE                              S.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO EDUCATION.
 

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

 1      SECTION 1.  To provide more autonomous and flexible
 
 2 decision-making at the school level, legislation for the
 
 3 establishment of new century charter schools was enacted last
 
 4 year.  Although the law enables the establishment of new century
 
 5 charter schools by a group of teachers, administrators, and
 
 6 community members, the cost to build or rent facilities for a new
 
 7 school is a major impediment to such initiatives.  To ensure
 
 8 implementation of the new century charter school concept, the
 
 9 legislature must provide economically feasible means for citizen
 
10 groups to construct, renovate, or lease facilities for their new
 
11 century charter schools.
 
12      The purpose of this Act is to establish an education real
 
13 estate trust from which new century charter schools may acquire
 
14 lands, facilities, or capital financing.
 
15      SECTION 2.  Chapter 302A, Hawaii Revised Statutes, is
 
16 amended by adding a new part to be appropriately designated and
 
17 to read as follows:
 
18              "PART   . EDUCATION REAL ESTATE TRUST
 
19      �302A-A  Education real estate trust; establishment,
 

 


 

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 1 purpose.(a)  There is established the education real estate
 
 2 trust for the purposes of providing lands, facilities, and
 
 3 capital financing for new century charter schools as provided in
 
 4 section 302A-  .  The trust shall have the powers and privileges
 
 5 of a corporation and may sue and be sued; transact all of its
 
 6 business; acquire, sell, or lease real estate; accept donations
 
 7 of real property, cash, securities, and other property; invest
 
 8 all of its funds; and hold all of its cash and securities, and
 
 9 other property.
 
10      �302A-B  Board of trustees; appointment, composition.(a)
 
11 The general administration and responsibility for the proper
 
12 operation of the education real estate trust shall be vested in a
 
13 board of trustees, subject only to the area of administrative
 
14 control vested in the department of budget and finance by
 
15 sections 26-8 and 26-35.
 
16      (b)  The board shall consist of five trustees to be
 
17 appointed by the governor in accordance with section 26-34.  At
 
18 least one trustee shall be a chief financial officer of a
 
19 financial institution authorized to do business with the State,
 
20 one shall have extensive knowledge and experience in securities
 
21 or real estate investment, and one shall be the chief
 
22 administrator of a private school offering instruction for grades
 
23 K-12.
 

 
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 1      (c)  Trustees shall serve without compensation but shall be
 
 2 reimbursed for all necessary expenses incurred in the performance
 
 3 of duties required under this part.
 
 4      �302A-C  Oath of trustees.  Each trustee, within ten days
 
 5 after the trustee's appointment, shall take an oath of office
 
 6 that, so far as it devolves upon the trustee, the trustee will
 
 7 diligently and honestly administer the affairs of the board of
 
 8 trustees, and that the trustee will not knowingly violate or
 
 9 willingly permit to be violated any of the provisions of law
 
10 applicable to the trust.  The oath shall be subscribed to by the
 
11 member making it and certified by the officer before whom it is
 
12 taken and shall be immediately filed in the office of the
 
13 lieutenant governor.
 
14      �302A-D  Voting; rules.  Each trustee shall be entitled to
 
15 one vote on the board of trustees.  Three concurring votes shall
 
16 be necessary for a decision by the trustees at any meeting of the
 
17 board.
 
18      Subject to the limitations of this part, the board, from
 
19 time to time, shall establish rules for the administration of the
 
20 trust and for the transaction of its business.
 
21      �302A-E  New century charter schools facilities program.
 
22 The board of trustees shall establish a program under which new
 
23 century charter schools established pursuant to part IV, subpart
 

 
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                                     S.B. NO.           
                                                        
                                                        

 
 1 D, may apply for assistance from the trust to acquire or lease
 
 2 real estate or obtain financing to build or renovate facilities
 
 3 for a new century charter school.  In establishing this program,
 
 4 the board shall:
 
 5      (1)  Give priority to new century charter schools that are
 
 6           established by citizen groups or other private entities
 
 7           and will not be operating out of an existing public
 
 8           school facility;
 
 9      (2)  Exercise the broad authority of the trust under section
 
10           302A-A to develop and implement innovative programs
 
11           involving partnerships with the business community,
 
12           especially in the real estate and financial sectors;
 
13      (3)  Examine the qualified zone academy bond and the real
 
14           estate investment trust concepts authorized under
 
15           sections 1397E and 856 et seq., respectively, of the
 
16           federal Internal Revenue Code of 1986, as amended, and
 
17           determine the feasibility of incorporating such
 
18           concepts into this program; and
 
19      (4)  Keep abreast of state, local, and federal initiatives
 
20           to address real estate acquisition and capital
 
21           financing for charter schools and where applicable and
 
22           appropriate incorporate such initiatives into this
 
23           program.
 

 
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 1      �302A-F  Officers, employees, consultants.  The board of
 
 2 trustees shall elect from its membership a chairperson, and by a
 
 3 majority vote of all its members, shall appoint an administrator
 
 4 and a chief investment officer who shall be exempt from chapters
 
 5 76 and 77 and serve under and at the pleasure of the board.  The
 
 6 salary of the administrator shall be set by the board within the
 
 7 range established for deputy directors.  The board shall engage
 
 8 financial or legal consultants and other services that shall be
 
 9 required to transact the business of the trust.  The compensation
 
10 for all services engaged by the board, and all other expenses of
 
11 the board necessary for the operation of the system, shall be
 
12 paid at rates and in amounts the board shall approve.
 
13      �302A-G  Prohibited interest of trustees and employees of
 
14 board.  Except as herein provided, no trustee, employee, or
 
15 consultant of the board of trustees shall have any direct
 
16 interest in the gains or profits of any real estate or capital
 
17 financing transaction or investment made by the board, nor as
 
18 such receive any pay or emolument for the trustee's and
 
19 employee's services.  No trustee or employee of the board,
 
20 directly or indirectly, for oneself or as an agent in any manner,
 
21 shall use the moneys or any property of the trust, except as may
 
22 be authorized by the board; nor shall any trustee or employee of
 
23 the board become an indorser or surety or become in any manner an
 

 
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 1 obligor for moneys loaned by or borrowed from the board.
 
 2      �302A-H  Records; annual report.  The board of trustees
 
 3 shall keep a record of all its proceedings which record shall be
 
 4 open to public inspection.  It shall publish annually a report
 
 5 showing details of all transactions and the assets and
 
 6 liabilities of the trust ending the preceding June 30.  The board
 
 7 shall submit the report to the governor and legislature.
 
 8      �302A-I  Education real estate trust fund.  All assets of
 
 9 the trust shall be assigned to a trust fund.  All operating
 
10 expenses of the trust shall be paid from the trust fund.  The
 
11 state director of finance shall be the custodian of the trust
 
12 fund; provided that all payments from the trust fund shall be
 
13 made only upon vouchers signed by the chairperson of the board
 
14 and countersigned by such other person as may be designated by
 
15 the board.  As trustees of the trust fund, the board may invest
 
16 and reinvest such funds and may hold, purchase, sell, assign,
 
17 transfer, or dispose of any of the real estate, securities, and
 
18 investments of the trust fund, as well as of any proceeds
 
19 thereof."
 
20      SECTION 3.  Section 302A-1151, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "[[]�302A-1151[]]  [Sale] Transfer of school lands
 
23 unnecessary for public school purposes.  [The chairperson of the
 

 
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 1 board of land and natural resources is hereby requested, upon the
 
 2 recommendation and approval of the superintendent, to sell any]
 
 3 Any state lands, including the buildings thereon, [once used but]
 
 4 no longer necessary for [school] purposes[.] of a public school
 
 5 that is not a new century charter school, shall be transferred to
 
 6 the education real estate trust established under part   ."
 
 7      SECTION 4.  In codifying the new sections added by this Act,
 
 8 the revisor of statutes shall substitute the appropriate section
 
 9 numbers for the letters used in designating the new sections in
 
10 this Act.
 
11      SECTION 5.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 6.  This Act shall take effect upon its approval.
 
14 
 
15                              INTRODUCED BY:______________________