§37D-2  Financing agreements. (a)  There is hereby established and authorized the financing agreement programof the State.  Any agency desiring to acquire or improve projects through thefinancing agreement program established and authorized by this chapter shallsubmit a written request to the department providing any information that thedepartment shall require.  Notwithstanding any other law to the contrary, andexcept for the Hawaii health systems corporation and its regional systemboards, only with the approval by the attorney general as to form and legalityand upon the written request of one or more agencies may the department enterinto a financing agreement in accordance with this chapter, and only with theapproval by the attorney general as to form and legality, and by the directoras to fiscal responsibility, and upon thewritten request of an agency, the agency may enterinto a financing agreement in accordance with this chapter, except thatthe department of education may enter into a financing agreement in accordancewith section 36-32 with the concurrence of the director and with the approvalof the attorney general as to form and legality; and that the board of regentsof the University of Hawaii may enter into a financing agreement in accordancewith this chapter without the approval of the director and of the attorneygeneral as to form and legality if the principal amount of the financingagreement does not exceed $3,000,000.  A financing agreement may be enteredinto by the department on behalf of one or more agencies, or by an agency, atany time (before or after commencement or completion of any improvements oracquisitions to be financed) and shall be upon terms and conditions thedepartment finds to be advantageous.  In each case of a written request by thejudiciary to participate in the financing agreement program, the departmentshall implement the request; provided that the related financing agreementshall be upon terms and conditions the department finds to be advantageous.  Anyfinancing agreement entered into by the department without the approval, or byan agency without the approvals required by this section shall be void and ofno effect.  A single financing agreement entered into by the department mayfinance a single item or multiple items of property to be used by multipleagencies or may finance a single item or multiple items of property to be usedby a single agency.  If the financing agreement is by the department, thedepartment shall bill any agency that benefits from property acquired with theproceeds of a financing agreement for the agency's pro rata share of:

(1)  The department's costs of administration of thefinancing agreement program; and

(2)  The financing costs, including the principal andinterest components of the financing agreement and insurance premiums,

on a monthly or other periodic basis, and maydeposit payments received in connection with the billings with a trustee assecurity for the financing agreement.  Any agency receiving such a bill shall beauthorized and shall pay the amounts billed from available moneys.

If a financing agreement is by an agency, theagency shall deposit on a monthly or other periodic basis with the department,payments from available moneys with respect to the agency's financing costs,including the principal and interest components of the financing agreement andinsurance premiums, which payments the department may deposit with a trustee assecurity for the financing agreement.  The department may bill an agency for thedepartment's costs of administering the agency's payments and the agencyreceiving such a bill shall be authorized to and shall pay the amounts billedfrom available moneys.

(b)  Financing agreements shall be subject tothe following limitations:

(1)  Amounts payable by an agency to or upon thedirection of the department in respect to a project and by the department or anagency under a financing agreement shall be limited to available moneys.  In nocircumstance shall the department or an agency be obligated to pay amounts dueunder a financing agreement from any source other than available moneys.  If,by reason of insufficient available moneys or other reason, amounts due under afinancing agreement are not paid when due, the lender may exercise any propertyright that the department or the agency has granted to it in the financingagreement, against the property that was purchased with the proceeds of thefinancing agreement, and apply the amounts so received toward paymentsscheduled to be made by the department or the agency under the financingagreement;

(2)  No property rights may be granted in propertyunless the property is being acquired, is to be substantially improved, is tobe refinanced with the proceeds of a financing agreement, or is land on whichthe property is located;

(3)  Notwithstanding any other law to the contrary,and except for the Hawaii health systems corporation and its regional systemboards, and as otherwise provided in this section with respect to thedepartment of education and the University of Hawaii, and except as provided inchapter 323F as to the Hawaii health systems corporation and its regionalsystem boards, an agency shall not have the power to enter into a financingagreement, except as authorized by this chapter, and nothing in this chaptershall be construed to authorize the sale, lease, or other disposition ofproperty owned by an agency;

(4)  Except as otherwise provided in this section withrespect to the department of education and the University of Hawaii, the sale,assignment, or other disposition of any financing agreements, includingcertificates of participation relating thereto, shall require the approval ofthe director; and

(5)  The department or the agency proposing to enterinto a financing agreement shall not be subject to chapter 103D and anyand all other requirements of law for competitive bidding for financingagreements. [L 1996, c 119, pt of §2; am L 1998, c 41, §6; am L 1999, c 31, §1;am L 2001, c 200, pt of §3; am L 2007, c 126, pt of §1, c 220, §3, and c 290,§12]