Hawaii Senate Bill SB2712

Hawaii 2022 Regular Session

• Introduced: 1/21/22
• Refer: 1/24/22

Caption

Relating To Certificates Of Participation.

Impact

The introduction of this bill signifies a substantial shift in the financial governance of state-associated projects. By enforcing a cap on certificates of participation, SB2712 is set to create a more cautious approach to state financing agreements. This will likely lead to a more prudent evaluation of proposed projects requiring financing while ensuring that the state does not over-leverage its fiscal resources. Such measures are anticipated to bolster long-term financial health and stability for state funding mechanisms.

Summary

SB2712, also known as the Certificates of Participation Act, amends Section 37D-3 of the Hawaii Revised Statutes. The bill's primary focus is on the issuance of certificates of participation related to financing agreements by state agencies. Notably, the legislation imposes a limitation, prohibiting the Director of Finance from issuing or approving any certificate of participation exceeding $10 million. This change is aimed at tightening the fiscal responsibility regarding state-level financing and ensuring better management of public funds.

Contention

As with many financial regulations, debates surrounding SB2712 may arise regarding the impact of the funding cap on various state projects. Proponents argue that the limit is essential for maintaining fiscal integrity and preventing future financial distress. Critics, however, may contend that this constraint restricts necessary investments in infrastructure and other critical state needs, potentially stifling economic growth. Moreover, ensuring access to affordable financing while managing the public debt will be a point of contention as stakeholders adjust to these new limitations.