Hawaii Revised Statutes Division 1. Government § 39-151

(a) There is hereby established the Hawaii compound interest bond reserve fund, as a trust fund in the state treasury for the benefit of the State, to be held and administered by the department of budget and finance. The director, from time to time, may transfer a portion of general excise tax revenues collected pursuant to section 237-31 to the credit of the compound interest bond reserve fund, up to but not in excess of $5,000,000 during any fiscal year. Not fewer than thirty days before the convening of each regular session of the legislature, the director shall submit to the legislature a report of all funds transferred to the credit of the compound interest bond reserve fund.

(b) The moneys in the compound interest bond reserve fund shall be held exclusively for the payment of principal of and interest on compound interest bonds. The moneys shall be invested in such amounts and in a manner as will assure the availability to the State of moneys in an amount, together with other moneys available therefor, sufficient to make payments of principal of and interest on compound interest bonds as the same become due. The director of finance may invest and reinvest moneys deposited in the compound interest bond reserve fund only in a manner that will not cause the interest on any series of compound interest bonds to be includable in gross income for federal income tax purposes for any reason, including, without limitation, by causing any compound interest bond to be subjected to treatment as an “arbitrage bond”, as defined in section 148(a) of the Internal Revenue Code of 1986, as amended, and applicable regulations.