Hawaii Revised Statutes, Chapter 39B — Allocation of Private Activity Bonds

Division 1. Government — Title 5. State Financial Administration

Hawaii Revised Statutes as published by the Hawaii State Legislature (files updated 1/5/2026 7:14 PM).

Division 1 Government

Title 5 State Financial Administration

Chapter 39B Allocation of Private Activity Bonds

§39B-1 Definitions

Whenever used in this [chapter], unless a different meaning clearly appears from the context:

"Annual state ceiling" means the principal amount of private activity bonds which may be issued in each calendar year by all issuers and counties in the State under the Internal Revenue Code of 1986, as the same may be amended.

"Department" means the department of budget and finance.

"Governing body" means the councils of the counties, or any other body exercising the legislative powers of a county.

"Issuer" means any state department, board, commission, officer, or authority, or private not-for-profit corporation authorized under the laws of the State to issue private activity bonds.

"Private activity bond" shall have the same meaning as the term is defined in the Internal Revenue Code of 1986, as the same may be amended.

[L 1985, c 12, pt of §2; am L 1987, c 62, §3]

§39B-2 Allocation of annual state ceiling

(a) The annual state ceiling shall be allocated for each calendar year in the following proportions:

(1) An amount equal to fifty per cent of the annual state ceiling to the State;

(2) An amount equal to 37.55 per cent of the annual state ceiling to the city and county of Honolulu;

(3) An amount equal to 5.03 per cent of the annual state ceiling to the county of Hawaii;

(4) An amount equal to 2.41 per cent of the annual state ceiling to the county of Kauai; and

(5) An amount equal to 5.01 per cent of the annual state ceiling to the county of Maui.

(b) The department, with the approval of the governor, may assign all or any part of the allocation of the State to any issuer or any county for a specific calendar year or years. At the request of the department, any issuer or county to which any part of the State's allocation has been assigned shall return all or part of the assignment, in which case the department may provide for its reassignment.

(c) The department may request return of all or any part of the allocations of one or more counties made pursuant to subsection (a), and may assign and reassign the allocation to any other county or issuer for a specified calendar year or years.

(d) A county, by resolution of its governing body, or any issuer, by written certificate of the issuer, may request additional allocations of the annual state ceiling from, or assign all or any part of its portion of the allocation of the annual state ceiling to, the State for a specified calendar year or years. Before requesting an additional allocation of the annual state ceiling for a specific calendar year or years under this subsection, a county shall have applied all of its allocation of the annual state ceiling for the specified calendar year or years as evidenced by a certificate of the issuer or the director of finance of a county, as applicable, under section 39B-3. If a county assigns all or any part of its private activity bond allocation for a specific calendar year or years to the State under this subsection, the assigned portion shall be applied to a project or projects located in the assigning county; provided that pursuant to a cooperative agreement with the department and Hawaii housing finance and development corporation under subsection (e), the private activity bond allocation may be awarded to projects located in other counties.

(e) In order to facilitate the construction of new rental housing projects, the department and Hawaii housing finance and development corporation may enter into a cooperative agreement with a county to coordinate the award of private activity bonds and low-income housing tax credits for new rental housing projects in the county. The agreement shall, except as provided under federal law, be exempt from all statutes, charter provisions, ordinances and rules of any government agency relating to the award of private activity bonds and low-income housing tax credits.

(f) The Hawaii housing finance and development corporation or a county may establish a bond volume cap recycling program pursuant to section 146(i)(6) of the Internal Revenue Code of 1986, as amended. Under the program, if the repayment of a loan financed by an issue of which ninety-five per cent or more of the net proceeds are used to provide projects described in section 142(d) of the Internal Revenue Code of 1986, as amended, and the repayment is used to provide a new loan for any project so described, any bond that is issued to refinance the issue shall be treated as a refunding issue to the extent the principal amount of the refunding issue does not exceed the principal amount of the bonds refunded.

(g) The department and Hawaii housing finance and development corporation may enter into a cooperative agreement with a county to facilitate and coordinate the establishment and implementation of a bond volume cap recycling program. The agreement shall be exempt from all statutes, charter provisions, ordinances, and rules of any government agency relating to the award of private activity bonds except federal law, subsection (f), this subsection, and section 39B-5(2).

[L 1985, c 12, pt of §2; am L 1987, c 62, §4; am L 2023, c 262, §1; am L 2024, c 35, §3]

§39B-3 Application of allocation

The extent to which all or any part of an allocation made to a county or an issuer pursuant to section 39B-2 is applied to a project subject to the annual state ceiling shall be evidenced by a certificate of the issuer or the director of finance of a county, as applicable.

[L 1987, c 62, §2]

§39B-4 Report of unused allocation; reversion to State

The director of finance of each county shall report to the department and Hawaii housing finance and development corporation in writing by November 15 of each year as to the amount of allocation to the county that has not been applied to private activity bonds in the year or assigned pursuant to this chapter.

In preparing the report, the director of finance of the county shall deduct any allocation that is unused or unassigned as of November 15 but will be applied to private activity bonds on or before December 1 of the specified year.

Unless the director of finance of the county or any issuer, by written certificate, indicates to the department and the Hawaii housing finance and development corporation before November 15 of each year that it intends to carry forward all or any portion of its allocation that has not been applied to private activity bonds in the specified year or assigned pursuant to this chapter, the unused or unassigned allocation shall revert to the State on December 1 and the State shall be entitled to carry forward the unused or unassigned allocation as permitted by federal law.

[L 1991, c 58, §1; am L 2022, c 182, §3; am L 2023, c 262, §2]

§39B-5 Semi-annual report status or use of allocation

§39B-5 Semi-annual report status or use of allocation. In addition to the report required by section 39B-4, within thirty days of the end of each fiscal and calendar year, each county or any issuer shall submit a report to the department and Hawaii housing finance and development corporation on:

(1) The status or use of its portion of the allocation of the annual state ceiling, including any carryforward allocation, that has not been applied to an issuance of a qualified private bond; and

(2) The status or use of its portion of the allocation of the annual state ceiling previously applied to an issuance of a qualified private bond and used to provide a new loan under the bond volume cap recycling program pursuant to section 39B-2(f) and section 146(i)(6) of the Internal Revenue Code of 1986, as amended,

as evidenced by a certificate of the issuer or director of finance of a county, as applicable.

[L 2022, c 182, §2; am L 2024, c 35, §4]