For fiscal years 2000-2001, 2001-2002, 2002-2003, 2003-2004 and 2004-2005, respectively, the debt limit is derived by multiplying the average of the net general fund revenues for the three preceding fiscal years by eighteen and one-half per cent. The net general fund revenues for fiscal years 1997-1998, 1998-1999, and 1999-2000 are actual, as certified by the director of finance in the Statement of the Debt Limit of the State of Hawaii as of July 1, 2000, dated November 24, 2000. The net general fund revenues for fiscal years 2000-2001 to 2003-2004 are estimates, based on general fund revenue estimates made as of May 25, 2001, by the council on revenues, the body assigned by Article VII, Section 7 of the State Constitution to make such estimates, and based on estimates made by the department of budget and finance of those receipts which cannot be included as general fund revenues for the purpose of calculating the debt limit, all of which estimates the legislature finds to be reasonable.

(3) Principal and interest on outstanding bonds applicable to the debt limit. (A) According to the department of budget and finance, the total amount of principal and interest on outstanding general obligation bonds, after the exclusions permitted by Article VII, Section 13 of the State Constitution, for determining the power of the State to issue general obligation bonds within the debt limit as of April 1, 2001 is as follows for fiscal year 2001-2002 to fiscal year 2007-2008:

The department of budget and finance further reports that the amount of principal and interest on outstanding bonds applicable to the debt limit generally continues to decline each year from fiscal year 2008-2009 to fiscal year 2020-2021 when the final installment of $13,670,916 shall be due and payable. (B) The department of budget and finance further reports that the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $238,500,000, all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to Article VII, Section 13 of the State Constitution.

(4) Amount of authorized and unissued general obligation bonds and guaranties and proposed bonds and guaranties. (A) As calculated from the state comptroller's bond fund report as of February 28, 2001, adjusted for lapses totaling $4,264,867 as provided in House Bill No. 200, H.D. 1, S.D. 1, C.D. 1, (The General Appropriations Act of 2001) the total amount of authorized but unissued general obligation bonds is $998,411,187. The total amount of general obligation bonds authorized in this Act is $697,458,000. The total amount of general obligation bonds previously authorized and unissued and the general obligation bonds authorized in this Act is $1,695,869,187. (B) As reported by the department of budget and finance the outstanding principal amount of bonds constituting instruments of indebtedness under which the State may incur a contingent liability as a guarantor is $238,500,000, all or part of which is excludable in determining the power of the State to issue general obligation bonds, pursuant to Article VII, Section 13 of the State Constitution.

(5) Proposed general obligation bond issuance. As reported therein for the fiscal years 2000-2001, 2001-2002, 2002-2003, 2003-2004 and 2004-2005, the State proposed to issue $350,000,000 in general obligation bonds during the remainder of fiscal year 2000-2001, $350,000,000 during the first half of fiscal year 2001-2002, $150,000,000 during the second half of fiscal year 2001-2002, $200,000,000 during the first half of fiscal year 2002-2003, $200,000,000 during the second half of fiscal year 2002-2003, $150,000,000 during the first half of fiscal year 2003-2004, $100,000,000 during the second half of fiscal year 2003-2004, $100,000,000 during the first half of fiscal year 2004-2005, and $100,000,000 during the second half of fiscal year 2004-2005. It has been the practice of the State to issue twenty-year serial bonds with principal repayments beginning the fourth year, the bonds payable in substantially equal annual installments of principal and interest payment with interest payments commencing six months from the date of issuance and being paid semi-annually thereafter. It is assumed that this practice will continue to be applied to the bonds that are proposed to be issued.

(6) Sufficiency of proposed general obligation bond issuance to meet the requirements of authorized and unissued bonds, as adjusted, and bonds authorized by this Act. From the schedule reported in paragraph (5), the total amount of general obligation bonds which the State proposes to issue during the fiscal years 2000-2001 to 2003-2004 is $1,500,000,000. An additional $200,000,000 is proposed to be issued in fiscal year 2004-2005. The total amount of $1,500,000,000 which is proposed to be issued through fiscal year 2003-2004 is sufficient to meet the requirements of the authorized and unissued bonds, as adjusted, the total amount of which is $1,695,869,187, as reported in paragraph (4), except for $195,869,187. It is assumed that the appropriations to which an additional $195,869,187 in bond issuance needs to be applied will have been encumbered as of June 30, 2004. The $200,000,000 which is proposed to be issued in fiscal year 2004-2005 will be sufficient to meet the requirements of the June 30, 2004 encumbrances in the amount of $195,869,187. The amount of assumed encumbrances as of June 30, 2004 is reasonable and conservative, based upon an inspection of June 30 encumbrances of the general obligation bond fund as reported by the state comptroller. Thus, taking into account the amount of authorized and unissued bonds, as adjusted, and the bonds authorized by this Act versus the amount of bonds which is proposed to be issued by June 30, 2004, and the amount of June 30, 2004 encumbrances versus the amount of bonds which is proposed to be issued in fiscal year 2004-2005, the legislature finds that in the aggregate, the amount of bonds which is proposed to be issued is sufficient to meet the requirements of all authorized and unissued bonds and the bonds authorized by this Act.

(7) Bonds excludable in determining the power of the State to issue bonds. As noted in paragraph (1), certain bonds are excludable in determining the power of the State to issue general obligation bonds. (A) General obligation reimbursable bonds can be excluded under certain conditions. It is not possible to make a conclusive determination as to the amount of reimbursable bonds which are excludable from the amount of each proposed bond issued because:

However, the legislature notes that with respect to the principal and interest on outstanding general obligation bonds, according to the department of budget and finance, the average proportion of principal and interest which is excludable each year from the calculation against the debt limit is 6.31 percent for the ten years from fiscal year 2001-2002 to fiscal year 2010-2011. For the purpose of this declaration, the assumption is made that five percent of each bond issue will be excludable from the debt limit, an assumption which the legislature finds to be reasonable and conservative. (B) Bonds constituting instruments of indebtedness under which the State incurs a contingent liability as a guarantor can be excluded but only to the extent the principal amount of such guaranties does not exceed seven percent of the principal amount of outstanding general obligation bonds not otherwise excluded under subparagraph (A) of this paragraph (7) and provided that the State shall establish and maintain a reserve in an amount in reasonable proportion to the outstanding loans guaranteed by the State as provided by law. According to the department of budget and finance and the assumptions presented herein, the total principal amount of outstanding general obligation bonds and general obligation bonds proposed to be issued, which are not otherwise excluded under Article VII, Section 13 of the State Constitution for the fiscal years 2000-2001, 2001-2002, 2002-2003, 2003-2004, and 2004-2005 are as follows:

Based on the foregoing and based on the assumption that the full amount of a guaranty is immediately due and payable when such guaranty changes from a contingent liability to an actual liability, the aggregate principal amount of the portion of the outstanding guaranties and the guaranties proposed to be incurred, which does not exceed seven percent of the average amount set forth in the last column of the above table and for which reserve funds have been or will have been established as heretofore provided, can be excluded in determining the power of the State to issue general obligation bonds. As it is not possible to predict with a reasonable degree of certainty when a guaranty will change from a contingent liability to an actual liability, it is assumed in conformity with fiscal conservatism and prudence, that all guaranties not otherwise excluded pursuant to Article VII, Section 13 of the State Constitution will become due and payable in the same fiscal year in which the greatest amount of principal and interest on general obligation bonds, after exclusions, occurs. Thus, based on such assumptions and on the determination in paragraph (8), all of the outstanding guaranties can be excluded.

(8) Determination whether the debt limit will be exceeded at the time of issuance. From the foregoing and on the assumption that all of the bonds identified in paragraph (5) will be issued at an interest rate of 6.0 per cent, it can be determined from the following schedule that the bonds which are proposed to be issued, which include all authorized and unissued bonds previously authorized, as adjusted, general obligation bonds and instruments of indebtedness under which the State incurs a contingent liability as a guarantor authorized in this Act, will not cause the debt limit to be exceeded at the time of such issuance:

(9) Overall and concluding finding. From the facts, estimates, and assumptions stated in this declaration of findings, the conclusion is reached that the total amount of principal and interest estimated for the general obligation bonds authorized in this Act, and for all bonds authorized and unissued, and calculated for all bonds issued and outstanding, and all guaranties, will not cause the debt limit to be exceeded at the time of issuance.