HRS §39-11
Bonds are tax-free and backed by the state
This section says that bonds issued under this part are free from state and county taxes, except for inheritance, transfer, and estate taxes. The state promises to pay the bond principal and interest on time, using its general fund as the first source of payment.
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The statute, as written — Bonds tax exempt; first charge on general fund
All bonds issued pursuant to this part and the income therefrom shall be exempt from all taxation by the State or any county or other political subdivision thereof, except inheritance, transfer, and estate taxes. Interest and principal payments of the bonds shall be a first charge on the general fund of the State. The full faith and credit of the State shall be and they are hereby pledged to the punctual payment of the principal thereof, and interest thereon, as the same shall become due, irrespective of whether or not the pledge be stated in the bonds, and sufficient revenues shall be raised or provided from time to time for the purpose of payment.
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