Hawaii Assisting Not-for-Profit Private Schools, Colleges and Universities Act, Question 2 (2002)
|Hawaii Question 2 2002|
Text of measure
The language that appeared on the ballot:
The Hawaii Constitution presently allows the State to issue (sell) special purpose revenue bonds (SPRBs) to assist various entities. These include manufacturing, processing or industrial enterprises; utilities serving the general public; health care facilities provided to the general public by not-for-profit corporations; early childhood education and care facilities provided to the general public by not-for-profit corporations; and low and moderate income government housing programs.
The Hawaii Constitution does not presently allow the State to issue SPRBs to assist not-for-profit private elementary schools, secondary schools, colleges, and universities. In addition, the Constitution does not allow the Legislature to appropriate the proceeds of SPRBs (money raised from the sale of the bonds) for the support or benefit of any sectarian (religious) or nonsectarian (secular) private educational institution.
The ballot question asked voters to allow the State to issue SPRBs and use the proceeds from the bonds to assist not-for-profit private elementary schools, secondary schools, colleges, and universities. In addition, the question asked voters to allow the State to combine ("pool") into a single issue of SPRBs two or more proposed issues of SPRBs to assist these not-for-profit private schools, colleges, and universities.
A "bond" is a written promise to pay a specified sum of money (the principal amount) at a specified time in the future (the maturity date) and to periodically pay interest at a specified rate (the coupon rate), in return for a loan.
If this amendment passes, then special purpose revenue bonds could be issued by the State in order to make funds available to private schools, at interest rates that are lower than the rates offered by commercial lenders.
The State uses its tax-free bond issuing power to assist private schools so that the interest on what would otherwise be a taxable bond becomes free of income tax. Thus, a low interest rate on the borrowed money is obtained for the private schools.
Special purpose revenue bonds are backed solely by the income of a revenue-producing enterprise (e.g., a private school). Special purpose revenue bonds are not backed by the "full faith and credit" (the full taxing and spending powers) of the State. The private schools, not the State, would be responsible to pay the bondholders. The costs of the bond issue would be paid by the private schools, as provided by law.
A "pool" or "pooled issue" would allow a group of private schools to share the costs of a bond issue. It would make it possible for small schools to get together and participate in the bond issue.