Hawaii Revised Statutes 39A-40 – Security for special purpose revenue bonds
Terms Used In Hawaii Revised Statutes 39A-40
- bonds: means bonds, notes, or other evidences of indebtedness of the State issued pursuant to this part. See Hawaii Revised Statutes 39A-31
- Department: means the department of budget and finance. See Hawaii Revised Statutes 39A-31
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- project: means any facility for each single project or multiproject program of a project party and includes any structure or building suitable for use as a hospital, clinic, nursing home, home for the aged or infirm, or other health care facility; laboratory; laundry; nurses' or [interns'] residences; administration building; research facility; maintenance, storage, or utility facility; auditorium; dining hall; food service and preparation facility; mental or physical health care facility; dental care facility; nursing school; medical or dental school or teaching facility; mental or physical health facilities related to any such structure or facility; equipment; software; or any other structure, facility, equipment, or software required or useful for the operation of a health care facility, including, but not limited to, offices, parking lots and garages, and other supporting service structures and all necessary, useful, and related equipment, furnishings, and appurtenances and including the acquisition, preparation, and development of all real and personal property necessary or convenient as a site or sites for any such structure or facility, and including the refinancing of outstanding obligations of a project party relating to any of the foregoing. See Hawaii Revised Statutes 39A-31
- Project agreement: means any agreement entered into under this part by the department with a project party providing for the issuance of special purpose revenue bonds to finance facilities of a project party or for a project party or to loan the proceeds of the bonds to assist not-for-profit corporations that provide health care facilities to the general public, including without limitation any loan agreement, lease, sublease, conditional sale agreement, or other similar financing contract or agreement, or any combination thereof, entered into by the department with a project party and, where necessary or appropriate, with a lender, lessor, or other third party. See Hawaii Revised Statutes 39A-31
- Project party: means a not-for-profit corporation that provides health care facilities to the general public. See Hawaii Revised Statutes 39A-31
- Trustee: A person or institution holding and administering property in trust.
Special purpose revenue bonds shall be payable solely from the revenues derived by the department from payments made to the department under the project agreement or other supplemental agreements entered into with respect to the project, and shall be secured solely by such revenues and by the pledges and assignments authorized by this part. All special purpose revenue bonds of the same issue, subject to the prior and superior rights of outstanding bonds, claims, obligations, or mechanic’s and materialman’s liens, shall have a prior and paramount lien on the revenues derived from the project agreement with respect to the project, for which the bonds have been issued, over and ahead of all special purpose revenue bonds of any issue payable from the revenues which may be subsequently issued and over and ahead of any claims or obligations of any nature against the revenues subsequently arising or subsequently incurred; provided that the right and privilege may be reserved by the department in the trust indenture securing an issue of special purpose revenue bonds to subsequently issue additional special purpose revenue bonds, subject to legislative authorization of the issue as provided in § 39A-37, or to permit the project party or another party on its behalf to incur debt, from time to time, payable from the revenues derived from such project agreement on a parity with the first issue of the special purpose revenue bonds and any subsequent issue of special purpose revenue bonds and other debt issued or incurred in accordance with the provisions of the trust indenture shall be secured equally and ratably with the first issue of the special purpose revenue bond without priority by reason of the date of sale, date of execution, or date of delivery, by a lien on the revenues in accordance with this part.
Notwithstanding any other provisions herein, all or part of the property constituting the project and all interest of the project party in the project and the revenues of the project party therefrom may be subjected to the present and future lien of any mortgage of the project party securing the project party’s bonds, and the rights of the department and any trustee for the holders of the special purpose revenue bonds and the holders of the special purpose revenue bonds in the project and the revenues therefrom may be made subject to the prior lien of the project party’s mortgage.