Hawaii Bonds for Dam and Reservoir Assistance, Amendment 5 (2014)

Amendment 5 Type Constitutional amendment Origin Hawaii Legislature Topic Bonds Status Approved a

2014 measures November 4 Amendment 1 a Amendment 2 a Amendment 3 d Amendment 4 d Amendment 5 a Polls Endorsements Expenditures Local measures

The Hawaii Bonds for Dam and Reservoir Assistance, Amendment 5 was on the November 4, 2014 ballot in Hawaii as a legislatively referred constitutional amendment, where it was approved. The measure empowered the legislature to issue special purpose revenue bonds in order to offer loans and financial assistance to dam and reservoir owners, so that they can make facility improvements.

The amendment was introduced into the Hawaii Legislature by State Senator Donna Mercado Kim as Senate Bill No. 2876.

In Hawaii, an amendment must win a majority of all votes cast on that particular proposal and a majority of the vote of everyone voting in that election. This is known as a double majority.

Election results

Hawaii Amendment 5
Result		Votes	Percentage
a Yes		234,016	63.32%
No		106,377	28.79%

Due to Hawaii's double majority requirements, the amount of total votes in the overall election are used to calculate the percent of "yes" and "no" votes. This may result in the percents for the "yes" and "no" votes adding up to less than 100 percent.

Election results via: Hawaii Secretary of State

Text of measure

Ballot title

The text that appeared on the ballot was as follows:

“

Shall the State be authorized to issue special purpose revenue bonds and use the proceeds from the bonds to offer loans to qualifying dam and reservoir owners to improve their facilities to protect public safety and provide significant benefits to the general public as important water resources?

”

Constitutional changes

Note: Hover over the text and scroll to see the full text.

Section 12.
For the purposes of this article:

1. The term "bonds" shall include bonds, notes and other instruments of indebtedness.

2. The term "general obligation bonds" means all bonds for the payment of the principal and interest of which the full faith and credit of the State or a political subdivision are pledged and, unless otherwise indicated, includes reimbursable general obligation bonds.

3. The term "net revenues" or "net user tax receipts" means the revenues or receipts derived from:

a. A public undertaking, improvement or system remaining after the costs of operation, maintenance and repair of the public undertaking, improvement or system, and the required payments of the principal of and interest on all revenue bonds issued therefor, have been made; or

b. Any payments or return on security under a loan program or a loan thereunder, after the costs of operation and administration of the loan program, and the required payments of the principal of and interest on all revenue bonds issued therefor, have been made.

4. The term "dam and reservoir owner" means any person who has a right to, title to, or an interest in, a dam, a reservoir, or the property upon which a dam, a reservoir, or appurtenant work is located or proposed to be located.

4. 5. The term "person" means an individual, firm, partnership, corporation, association, cooperative or other legal entity, governmental body or agency, board, bureau or other instrumentality thereof, or any combination of the foregoing.

5. 6. The term "rates, rentals and charges" means all revenues and other moneys derived from the operation or lease of a public undertaking, improvement or system, or derived from any payments or return on security under a loan program or a loan thereunder; provided that insurance premium payments, assessments and surcharges, shall constitute rates, rentals and charges of a state property insurance program.

6. 7. The term "reimbursable general obligation bonds" means general obligation bonds issued for a public undertaking, improvement or system from which revenues, or user taxes, or a combination of both, may be derived for the payment of the principal and interest as reimbursement to the general fund and for which reimbursement is required by law, and, in the case of general obligation bonds issued by the State for a political subdivision, general obligation bonds for which the payment of the principal and interest as reimbursement to the general fund is required by law to be made from the revenue of the political subdivision

7. 8. The term "revenue bonds" means all bonds payable from the revenues, or user taxes, or any combination of both, of a public undertaking, improvement, system or loan program and any loan made thereunder and secured as may be provided by law, including a loan program to provide loans to a state property insurance program providing hurricane insurance coverage to the general public.

8. 9. The term "special purpose revenue bonds" means all bonds payable from rental or other payments made to an issuer by a person pursuant to contract and secured as may be provided by law.

9. 10. The term "user tax" means a tax on goods or services or on the consumption thereof, the receipts of which are substantially derived from the consumption, use or sale of goods and services in the utilization of the functions or services furnished by a public undertaking, improvement or system; provided that mortgage recording taxes shall constitute user taxes of a state property insurance program.

The legislature, by a majority vote of the members to which each house is entitled, shall authorize the issuance of all general obligation bonds, bonds issued under special improvement statutes and revenue bonds issued by or on behalf of the State and shall prescribe by general law the manner and procedure for such issuance. The legislature by general law shall authorize political subdivisions to issue general obligation bonds, bonds issued under special improvement statutes and revenue bonds and shall prescribe the manner and procedure for such issuance. All such bonds issued by or on behalf of a political subdivision shall be authorized by the governing body of such political subdivision.

Special purpose revenue bonds shall only be authorized or issued to finance facilities of or for, or to loan the proceeds of such bonds to assist:

1. Manufacturing, processing[,] or industrial enterprises;

2. Utilities serving the general public;

3. Health care facilities provided to the general public by not-for-profit corporations;

4. Early childhood education and care facilities provided to the general public by not-for-profit corporations;

5. Low and moderate income government housing programs;

6. Not-for-profit private nonsectarian and sectarian elementary schools, secondary schools, colleges and universities; or

7. Agricultural enterprises serving important agricultural lands,; or

8. Dam and reservoir owners; provided that the bonds are issued for and the proceeds are used to offer loans to assist dam and reservoir owners to improve their facilities to protect public safety and provide significant benefits to the general public as important water sources, each of which is hereinafter referred to in this paragraph as a special purpose entity.

The legislature, by a two-thirds vote of the members to which each house is entitled, may enact enabling legislation for the issuance of special purpose revenue bonds separately for each special purpose entity, and, by a two-thirds vote of the members to which each house is entitled and by separate legislative bill, may authorize the State to issue special purpose revenue bonds for each single project or multi-project program of each special purpose entity; provided that the issuance of such special purpose revenue bonds is found to be in the public interest by the legislature; and provided further that the State may combine into a single issue of special purpose revenue bonds two or more proposed issues of special purpose revenue bonds to assist not-for-profit:

(1) Not-for-profit private nonsectarian and sectarian elementary schools, secondary schools, colleges, and universities,; or

(2) Dam and reservoir owners,

separately authorized as aforesaid, in the total amount of not exceeding the aggregate of the proposed separate issues of special purpose revenue bonds. The legislature may enact enabling legislation to authorize political subdivisions to issue special purpose revenue bonds. If so authorized, a political subdivision by a two-thirds vote of the members to which its governing body is entitled and by separate ordinance may authorize the issuance of special purpose revenue bonds for each single project or multi-project program of each special purpose entity; provided that the issuance of such special purpose revenue bonds is found to be in the public interest by the governing body of the political subdivision. No special purpose revenue bonds shall be secured directly or indirectly by the general credit of the issuer or by any revenues or taxes of the issuer other than receipts derived from payments by a person or persons under contract or from any security for such contract or contracts or special purpose revenue bonds and no moneys other than such receipts shall be applied to the payment thereof. The governor shall provide the legislature in November of each year with a report on the cumulative amount of all special purpose revenue bonds authorized and issued, and such other information as may be necessary.

Background

Kaloko Reservoir

The breached dam of Kaloko Reservoir. Image is from May 2, 2006.

On March 14, 2006, Kaloko Reservoir's dam was breached and ruptured after weeks of heavy rain. Approximately 370 million gallons of water rushed out of the reservoir and into the town of Kilauea. The wave of water was reported to be between 20 and 70 feet high and 200 feet wide. Seven people were killed due to the dam's failure. The 118-year-old earthen dam was owned by Jimmy Pflueger, one of the wealthiest individuals in Hawaii, at the time of the accident. The Hawaiian government has increased safety protocol since the 2006 disaster, but private landowners, including farmers, say they cannot pay for increased regulations. Edwin Matsuda, head of the state's Dam Safety Program, noted reservoir owners are shutting them down or draining the water to lower levels to avoid higher costs. In response, State Land Board Chairman William Aila suggested a bond ballot measure to help owners of dams and reservoirs finance improvements.

2012 amendment

See also: Hawaii Dam and Reservoir Owners Assistance Amendment (2012)

A similar amendment was on the ballot in 2012, but was defeated by voters. William Aila said he believed the bond measure is still a good amendment, despite voter disapproval in 2012. He stated, "We have to back [sic] to the drawing board." Aila said voters may have thought the state would be liable for paying for assistance to dam and reservoir owners. He noted that the bond revenue would help finance projects, but dam and reservoir owners would be responsible for paying debt.

Support

Supporters

Officials

Amendment 5 received unanimous support in the Hawaii Legislature.

Senate

The following state senators voted to place the measure on the ballot:

Note: A yes vote on the measure merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Amendment 5.

• Gilbert Kahele (D-1)
• Russell Ruderman (D-2)
• Joshua Green (D-3)
• Malama Solomon (D-4)
• Gilbert Keith-Agaran (D-5)
• Rosalyn Baker (D-6)
• Jamie Kalani English (D-7)
• Ronald Kouchi (D-8)
• Samuel Slom (R-9)
• Les Ihara, Jr. (D-10)
• Brian Taniguchi (D-11)
• Brickwood Galuteria (D-12)
• Susan Chun-Oakland (D-13)
• Donna Mercado Kim (D-14)
• Glenn Wakai (D-15)
• David Ige (D-16)
• Clarence Nishihara (D-17)
• Michelle Kidani (D-18)
• Will Espero (D-19)
• Mike Gabbard (D-20)
• Maile Shimabukuro (D-21)
• Donovan Dela Cruz (D-22)
• Clayton Hee (D-23)
• Jill Tokuda (D-24)
• Laura Thielen (D-25)

House

The following state representatives voted to place the measure on the ballot:

Note: A yes vote on the measure merely referred the question to voters and did not necessarily mean these legislators approved of the stipulations laid out in Amendment 5.

• Mark Nakashima (D-1)
• Cliff Tsuji (D-2)
• Richard Onishi (D-3)
• Faye Hanohano (D-4)
• Denny Coffman (D-5)
• Nicole Lowen (D-6)
• Cindy Evans (D-7)
• Joe Souki (D-8)
• Justin Woodson (D-9)
• Angus McKelvey (D-10)
• Kaniela Ing (D-11)
• Kyle Yamashita (D-12)
• Diana Mele Carroll (D-13)
• Derek Kawakami (D-14)
• James Tokioka (D-15)
• Daynette Morikawa (D-16)
• Gene Ward (R-17)
• Bert Kobayashi (D-19)
• Calvin Say (D-20)
• Scott Nishimoto (D-21)
• Tom Brower (D-22)
• Isaac Choy (D-23)
• Della Au Belatti (D-24)
• Sylvia Luke (D-25)
• Scott Saiki (D-26)
• Takashi Ohno (D-27)
• John Mizuno (D-28)
• Karl Rhoads (D-29)
• Romy Cachola (D-30)
• Aaron Johanson (R-31)
• Linda Ichiyama (D-32)
• K. Mark Takai (D-33)
• Gregg Takayama (D-34)
• Roy Takumi (D-35)
• Beth Fukumoto (R-36)
• Ryan Yamane (D-37)
• Henry Aquino (D-38)
• Ty Cullen (D-39)
• Bob McDermott (R-40)
• Rida Cabanilla Arakawa (D-41)
• Sharon Har (D-42)
• Karen Leinani Awana (D-43)
• Jo Jordan (D-44)
• Marcus Oshiro (D-46)
• Richard Fale (R-47)
• Jessica Wooley (D-48)
• Ken Ito (D-49)
• Cynthia Thielen (R-50)
• Chris Lee (D-51)

Organizations

• Hawai’i Farm Bureau
• Land Use Research Foundation
• Hawaii Coffee Association
• Hawaii Agriculture Research Center
• Chamber of Commerce of Hawaii
• Maui County Farm Bureau
• Hawaii Cattlemen's Council
• American Society of Civil Engineers

Businesses

• Hawaiian Commercial & Sugar Company

Arguments

Christopher Manfredi, president of the Hawaii Farm Bureau, said the bonds are needed to help reservoir owners in light of recently implemented dam regulations. He continued:

“	Recent Dam and Reservoir Safety rules will levy an additional burden on reservoir owners and Hawaii farmers. Fuel, labor, equipment, transportation, and other expenses are already higher in Hawaii than on the mainland, placing locally grown products at a competitive disadvantage. Inevitably, increased costs will be passed on to consumers and are counterproductive to efforts to grow more food in Hawaii. Some landowners will simply decommission their dams, abandon their reservoir systems and decide what to do with their now fallow lands when agriculture is no longer viable. The issuance of Special Purpose Revenue Bonds will help owners and operators comply with the laws without placing undue burden on the state budget.	”
—Christopher Manfredi

According to the League of Women Voters of Hawaii County, supporters argued:

“	Dams and reservoirs are a critical part of the state’s infrastructure, yet many existing dams pose a flood hazard to life and property due to dam failures. The health and safety of the general public would be better protected if all dams and reservoirs complied with new safety standards. Special purpose revenue bonds are a suitable source of funds for loans to dam and reservoir owners for this purpose.	”
—League of Women Voters of Hawaii County

Opposition

Opponents

• Hawaii Family Advocates

Arguments

Kenneth R. Conklin, an anti-Hawaiian-sovereignty activist, issued a statement opposing the measure:

“	I oppose this proposed Constitutional amendment for four reasons: (1) Any private individual or corporation which owns a dam or reservoir could take out a bank loan to make improvements for fear of liability for injury or property damage if improvements are not made, but it's unlikely any bank or lender would agree to make such a loan because it is unlikely to ever be repaid, which is the reason why the owners of dams and reservoirs are seeking help from the government; (2) The proposed revenue bonds would almost certainly end up as permanent indebtedness of the State, because it is very unlikely that the revenue generated by a dam or reservoir would be sufficient to pay the interest on the bonds, let alone the principal; (3) The State is already swimming in an ocean of debt as well as unfunded pension liability; (4) If the State becomes involved in underwriting the financing of a dam or reservoir, then it seems likely that anyone suffering injury or property damage from it would add the State as a defendant to a lawsuit, necessitating government expenditures for legal defense and perhaps many millions of dollars for liability.	”
—Kenneth R. Conklin

According to the League of Women Voters of Hawaii County, opponents argued:

“	Low cost, taxpayer-subsidized loans benefit not only small dam and reservoir owners, but big land owners, too. Large agribusinesses such as Monsanto, Alexander & Baldwinand Dole will also benefit from such financing.	”
—League of Women Voters of Hawaii County

Media editorial positions

See also: Endorsements of Hawaii ballot measures, 2014

Support

• Honolulu Star Advertiser said, "The horrific result of shoddy maintenance witnessed more than eight years ago in the collapse of Kauai's Ka Loko Dam can never be forgotten. That's the case, regardless of the final disposition of the criminal prosecution, with the sentencing of the dam's owner for his part in the disaster. But an appropriate civic action that could help prevent a recurrence is still possible: the passage of a constitutional amendment that makes upkeep and the safe operation of the state's dams far more likely in the future."

Path to the ballot

See also: Amending the Hawaii Constitution

On January 23, 2014, State Senator Donna Mercado Kim (D-14) introduced a bill, known as Senate Bill 2876, into the legislature to alter the constitution. SB 2876 was approved through a two-thirds vote in both legislative chambers. The bill was approved by the Hawaii House of Representatives on April 8 and the Hawaii Senate on April 21, 2014.

House vote

April 8, 2014 House vote

Hawaii SB 2876 Senate Vote
Result		Votes	Percentage
a Yes		50	100.00%
No		0	0.00%

Senate vote

April 21, 2014 Senate vote

Hawaii SB 2876 Senate Vote
Result		Votes	Percentage
a Yes		25	100.00%
No		0	0.00%

Similar measures

• Hawaii Dam and Reservoir Owners Assistance Amendment (2012) d

See also

Suggest a link

• 2014 ballot measures
• Hawaii 2014 ballot measures
• Hawaii Legislature

External links

• Senate Bill No. 2876