HB1205 Summary

• Proposes constitutional amendments to Article VII, Sections 12 and 13 of the Hawaii Constitution to expressly authorize the legislature to allow counties to issue tax increment bonds.

• Defines "tax increment bonds" as bonds payable solely from real property taxes on the assessed valuation increase in a tax increment district, compared to valuation before public works or county actions like rezoning.

• Broadens the conventional definition of tax increment bonds beyond infrastructure financing to include bonds payable from tax revenue increases resulting from county actions such as rezoning.

• Excludes tax increment bonds from a political subdivision's debt limit calculation, provided the principal and interest are actually paid from the incremental real property tax revenues.

• Effective date: July 1, 2020; ballot question asks voters whether the constitution should be amended to authorize counties to issue tax increment bonds.