Hawaii Revised Statutes
39. State Bonds
39-16 Refunding bonds authorized.

§39-16 Refunding bonds authorized. (a) The director of finance, with the approval of the governor but without further authorization of the legislature, from time to time, may issue general obligation refunding bonds of the State to pay or provide for the payment of all or any part of the then outstanding bonds of the State or bonds issued by any department, board, agency, instrumentality, commission, or public corporation of the State, at or before their maturity or redemption date, and may include various series and issues of those outstanding bonds in a single issue of refunding bonds, and may include refunding bonds and bonds otherwise to be issued pursuant to this part in a single issue of bonds.
The interest rate or rates of the refunding bonds shall not be limited by the interest rate or rates borne by any of the bonds to be refunded thereby.
The refunding bonds may be issued and delivered at or at any time before the maturity or redemption date of the bonds to be refunded that the director of finance, with the approval of the governor, determines to be in the best interest of the State. The refunding bonds shall be issued in accordance with the provisions of this part with respect to bonds and all provisions of this part shall be applicable to refunding bonds.
Proceeds of the sale of the refunding bonds shall be applied solely to the payment of the principal of, and redemption premium, if any, and interest on the bonds to be refunded under the provisions of this part and to the payment of all costs of issuance of refunding bonds and interest accrued on refunding bonds to the date of delivery thereof and payment therefor.
Pending the time the proceeds derived from the sale of refunding bonds issued pursuant to this section are required for the purposes for which they were issued, the director of finance, upon authorization or approval of the governor, may invest the proceeds in obligations of, or obligations unconditionally guaranteed by, the United States of America, or in savings accounts, time deposits, or certificates of deposit of any bank or trust company within or without the State, to the extent that the savings accounts, time deposits, or certificates of deposits are collaterally secured by a pledge of obligations of, or obligations unconditionally guaranteed by, the United States of America, or in obligations of any state of the United States of America or any agency, instrumentality, or local government thereof, the provision for payment of the principal of and interest on which shall have irrevocably been made by deposit of obligations of, or obligations unconditionally guaranteed by, the United States of America. To further secure those refunding bonds the State, through the director of finance, may enter into a contract with any bank or trust company, within or without the State, with respect to the safekeeping and application of the earnings of the investment. All bonds so refunded and redeemed by the issue and sale of refunding bonds shall be canceled.
(b) The bonds which may be refunded pursuant to this section include bonds issued pursuant to this part, bonds payable or secured in whole or in part from the general fund of the State, bonds payable or secured in whole or in part by any taxes or by the taxing power of the State, and bonds which must be included when determining the power of the legislature to authorize the issuance of bonds and other evidences of indebtedness of the State. Nothing in this section shall require or be deemed to require the director of finance to elect to redeem or prepay bonds being refunded, or, if the director of finance elects to redeem or prepay any bonds, to redeem or prepay as of any particular date or dates.
However, without express authorization by the legislature, no bonds shall be issued pursuant to this part to refund bonds, notes, or other instruments of indebtedness payable solely from and secured solely by the revenues, or user taxes, of a public undertaking, improvement, or system, unless the bonds to be refunded were issued prior to November 5, 1968, and are payable from both the revenues and the user taxes of the undertaking, improvement, or system for which they were issued. In the event of the issuance of bonds pursuant to this part to refund bonds payable solely from and secured solely by the revenues or user taxes, or combination of both, of a public undertaking, improvement, or system, reimbursement shall be made to the general fund from those revenues or taxes, or combination thereof, for the payment of all of the principal of and interest on the refunding bonds.
(c) Notwithstanding any other law to the contrary, for purposes of the statements required to be prepared by part IV of chapter 39, the director of finance may determine the manner of allotting the debt service on the general obligation refunding bonds among the purposes for which the proceeds of the bonds being refunded were allotted. [L 1988, c 28, pt of §3]

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