Relating To State Finances.
If enacted, SB2339 would significantly modify state laws concerning the management and allocation of bond debt in Hawaii. The bill intends to circumvent existing constitutional limits on bond indebtedness by creating frameworks under which certain types of bonds can be excluded from state debt calculations. This would allow for the establishment of a reserve fund for any unsecured debt incurred as part of the bond recycling program, thus ensuring the state's overall debt capacity can accommodate the financing needs for affordable housing without breaching its constitutional limits.
Senate Bill 2339 proposes the establishment of a bond recycling program aimed at enhancing access to affordable rental housing in Hawaii. This initiative is set against the backdrop of the 2008 Housing and Economic Recovery Act, which allows jurisdictions to recycle their multifamily private activity bond volume cap to finance new affordable rental housing projects. By enabling counties and the Hawaii Housing Finance and Development Corporation (HHFDC) to leverage these bonds, the bill aims to streamline financing, making it easier to fund new developments while maximizing the current fiscal resources available for housing projects.
The introduction of this bond recycling program, however, is not without debate. Concerns may arise regarding the potential for increased state financial liabilities, with critics arguing that while the program aims to address housing shortages, it might also lead to fiscal mismanagement or overreliance on borrowed funds. Furthermore, local governments may be apprehensive about their control over housing development decisions, as the program facilitates a cooperative relationship between state and county governments. The dynamics of power and financial responsibility between these entities could become focal points of contention as this legislation moves forward.