HRS §39A-84.5
Bonds must meet federal tax rules when possible
This section says special purpose revenue bonds should be issued to follow federal tax law so their interest is not counted as income for federal taxes, except for certain minimum or environmental taxes. The finance director can make agreements, set up funds, and take needed steps to follow federal law. The section also allows bonds whose interest is taxable.
financial institutionsstate agencies
The statute, as written — Federal tax exempt status
Special purpose revenue bonds issued pursuant to this part, to the extent practicable, shall be issued to comply with requirements imposed by applicable federal law providing that the interest on the special purpose revenue bonds shall be excluded from gross income for federal income tax purposes (except as certain minimum taxes or environmental taxes may apply). The director of finance may enter into agreements, establish funds or accounts, and take any action required to comply with applicable federal law. Nothing in this part shall be deemed to prohibit the issuance of special purpose revenue bonds, the interest on which may be included in gross income for federal income tax purposes.
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