LOS ANGELES -- A Hawaii housing official expressed interest last week in having the state participate in federal legislation that would reduce current restrictions on tax-free debt for areas recently harmed by hurricanes.
Joseph Conant, executive director of Hawaii's Housing Finance and Development Corp., said "we are submitting recommendations to our congressional delegation that Hawaii be joined to legislation that could also benefit Florida and Louisiana.
Florida officials have spearheaded such legislation in the wake of Hurricane Andrew, which produced severe devastation in Dade County. Among other things, the proposal would allow the county to resume issuing mortgage revenue bonds. The tax exemption for such bonds expired June 30, and Congress is debating whether to renew the tax break for all issuers.
Mr. Conant said Hawaii also would benefit from additional authority to use low-income housing tax credits. The state has used all of its allocation for those tax credits in 1992, Mr. Conant said, adding that Hawaii would benefit from more authority and a doubling of its allocation in 1993.
The Hawaiian island of Kauai suffered the bulk of damage from Hurricane Iniki, which struck earlier this month. The intensity of Iniki, compared by some to Hurricane Andrew, caused widespread damage on the island.
The Federal Emergency Management Agency put preliminary damage estimates at more than $1 billion for Kauai. The damage estimates in Florida, meanwhile, amount to $7 billion, while Louisiana's range up to $1 billion.
According to various sources, Kauai officials still are grappling with the immediate aftermath of the hurricane, such as restoring electricity and other services.
On the financial side, market sources said Kauai might benefit from various municipal financing mechanisms. Private-activity bonds could help fund the rebuilding of heavily damaged utility facilities, and financing vehicles such as grant anticipation notes could raise other up-front money.
Mr. Conant said his agency is doing what it can to assist home owners. The housing authority has instituted a 90-day moratorium on mortgage payments for home owners in hurricane-damaged areas who participated in the agency's tax-exempt mortgage revenue bond program.
The delayed payments can be repaid over a six-month period or tacked on to the end of the mortgage period, Mr. Conant said.
Mr. Conant said the U.S. senators from Hawaii would be asked to assist in the effort to join Hawaii to any federal legislation that eased municipal bond curbs for hurricane-damaged areas.
Urban aid legislation pending in the Senate likely would be used as a vehicle for an amendment that would ease bond curbs to aid Florida, Louisiana, and Hawaii in hurricane rebuilding. The urban aid legislation already contains provisions that would renew the tax exemptions for mortgage revenue bonds and small-issue industrial development bonds and extend them through Sept. 30, 1993.
Hawaii officials also are stressing to market participants that overall state finances remain in good shape, primarily because the bulk of hurricane damage occurred on Kauai, an island with just 51,000 people.
The state tentatively plans Wednesday to price $100 million of tax-exempt general obligation bonds for public improvement projects and $120 million of taxable GO bonds to reimburse the state general fund for advances that helped finance private housing development.
The preliminary official statement for the bond sale notes that "the federal government has assured the state of $1.2 billion in public assistance, loans, and grants with minimum, if any, matching requirements by the state."
The prospectus says that no predictions could be made as to the ultimate impact of Hurricane Iniki.
"Preliminary indications are, however, that the impact on state tax receipts may be less than what would be expected from such a disaster," the prospectus says, adding that state tax collections from Kauai have averaged just over 2% of the total state receipts for the last three fiscal years.
"As such, the state has not dependend heavily on Kauai for financial support," the prospectus says.
