STAND. COM. REP. NO. 963

Honolulu, Hawaii

RE: S.B. No. 1476

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1476, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO SPECIAL PURPOSE REVENUE BONDS,"

begs leave to report as follows:

The purpose and intent of this measure is to address West Maui's critical need for an acute care facility.

More specifically, the measure:

(1) Authorizes the Department of Budget and Finance to issue special purpose revenue bonds in an amount not to exceed $20,000,000 to assist West Maui Hospital Foundation, Inc., in the design and construction of West Maui Hospital and Medical Center, including any necessary infrastructure improvements; and

(2) Provides that the Department of Budget and Finance shall not issue any special purpose revenue bonds unless the County of Maui serves as guarantor of any debt service on the special purpose revenue bonds.

Your Committee received written comments in support of this measure from the Maui County Council; West Maui Hospital Foundation, Inc.; Maui Hotel and Lodging Association; West Maui Taxpayers Association, Inc.; Maui Chamber of Commerce, 0889019BC, Ltd.; and eleven individuals.

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

Your Committee finds that West Maui needs a hospital facility due to its growing population and rising visitor numbers, and that the hospital and medical center financed by this measure will help to meet the region's emergency medical needs, provide crucial bed capacity, and potentially provide this isolated region with access to specialty and long-term care.

Your Committee has amended this measure by:

(1) Inserting a provision that explicitly exempts this measure from the requirements of Act 182, Session Laws of Hawaii 2022, which placed a moratorium on the issuance of new private activity bonds within the period after June 30, 2022, and before December 31, 2028, by prohibiting the authorization of special purpose revenue bonds requiring an allocation of the annual state ceiling under section 39B-2, Hawaii Revised Statutes, unless requested by the Governor and approved by the Legislature; and

(2) Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

Your Committee notes that Article VII, section 12, of the Hawaii State Constitution prohibits special purpose revenue bonds from being secured by the issuer. Section 5 of the measure requires the County of Maui to serve as guarantor of any debt service on the special purpose revenue bonds. Consequently, it is unclear if this requirement violates the constitutional prohibition stated in Article VII, section 12, of the Hawaii State Constitution. Your Committee respectfully requests that this issue be considered as the measure moves forward in the legislative process.

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. 1476, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1476, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair