Ruling puts school
bonds in jeopardyFear of lawsuits after a high court
decision is hurting bond sales
A state Supreme Court ruling last month that threw out a proposed constitutional amendment could also halt state bond sales that fund construction at private schools.
Though the amendment permitting the bond sales was not part of the ruling, companies that sell the bonds are shying away, fearing future lawsuits.
"We have received information that many of the (special purpose revenue bonds) that we processed have now come to a screeching halt," said state Sen. Colleen Hanabusa (D, Nanakuli-Makua), Judiciary and Hawaiian Affairs Committee chairwoman.
The state Legislature has approved $42 million in bonds for five private schools. But companies that sell bonds for the state have yet to sell any because their attorneys are worried about the validity of the constitutional amendment, state Attorney General Mark Bennett said.
Five other schools are seeking $89 million in bonds this year.
Without a court ruling, Bennett hopes to convince the corporate attorneys to authorize the release of the bonds by issuing a formal opinion that the constitutional amendment is valid and not subject to legal challenge.
"I think there is no appreciable likelihood that the Supreme Court will invalidate any other amendment," he said.
In case it does, Hanabusa has introduced legislation to put the amendment back on the ballot. She is also forwarding legislation to put the amendment that the high court struck down back on the ballot.
The amendment authorizing the bond sales is clouded by the Supreme Court's ruling that the state did not properly publish the text of a separate amendment prior to the 2002 general election.
The high court said a proposed amendment giving prosecutors another method for filing charges against felony suspects failed to meet the constitutional requirements for ratification because the full text of the amendment was not published in a newspaper for four consecutive weeks prior to the election.
The court's ruling was in response to a lawsuit filed by opponents of the amendment prior to the election.
The full text of the bond amendment and one other on the 2002 ballot also were not published, but have not been challenged.
The other amendment changed the residency requirement for state House and Senate candidates.
Constitutional amendments since 1994 have been published in the same manner, Bennett said, but it is too late to challenge them.
According to state law, he said, anyone contesting an election result has 20 days to file a complaint.
Bennett said he is asking the high court to let the state put the rejected amendment on the November general election ballot rather than conduct a special election.