REPORT TITLE:
ERS; Mortgage Loans for Police


DESCRIPTION:
Encourages ERS home loan program investments for police officer
members at favorable terms.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1191
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE EMPLOYEES' RETIREMENT SYSTEM.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that the combination of
 
 2 Hawaii's high cost of living, current economic downturn, and
 
 3 lucrative offers from mainland cities have resulted in a major
 
 4 exodus of qualified police officers to police forces in Oregon,
 
 5 Washington state, and elsewhere.  The legislature is particularly
 
 6 concerned that a number of our trained police officers are being
 
 7 enticed away when their skills and experience have reached a
 
 8 level that could be valuable to our communities on Oahu, Maui,
 
 9 and the other islands.  The legislature also finds that the
 
10 employees' retirement system maintains a member home loan program
 
11 under its investment portfolio.  Under the program, mortgage
 
12 loans are available to qualified members for the purpose of
 
13 acquiring or constructing their principal place of residence.
 
14 These loans are made under favorable terms and conditions and are
 
15 handled by many local banks.
 
16      The purpose of this Act is to specifically provide for
 
17 priority to be given to mortgage loans for police officers in an
 
18 effort to enhance their benefits, even if their salaries cannot
 
19 be increased directly.
 

 
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                                     S.B. NO.           1191
                                                        
                                                        

 
 1      SECTION 2.  Section 88-119.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "�88-119.5  Investment guidelines.  (a)  Notwithstanding any
 
 4 other law to the contrary, real estate loans and mortgages made
 
 5 pursuant to section 88-119(1)(D) and (E) shall be in accordance
 
 6 with conditions and restrictions set forth by the board of
 
 7 trustees; provided that the board may establish the minimum and
 
 8 maximum loan amounts and interest rates for these real estate
 
 9 loans and mortgages by motion, at any duly noticed meeting of the
 
10 board.  The board of trustees, subject to chapter 91, shall
 
11 adopt, amend, and repeal rules having the force of and effect of
 
12 law to implement all provisions of this section other than those
 
13 relating to loan amounts and interest rates for its real estate
 
14 loans and mortgages.
 
15      (b)  The board of trustees, in applying this section shall
 
16 develop rules to specifically encourage county police officers to
 
17 apply for real estate loans and mortgages, and give priority to
 
18 those police officers in making funds available, considering
 
19 factors that include the following:
 
20      (1)  Years of service required to qualify;
 
21      (2)  Owner-resident occupancy requirements; and
 
22      (3)  Any other provision designed to encourage police
 
23           officer participation without placing undue financial
 

 
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                                     S.B. NO.           1191
                                                        
                                                        

 
 1           risk on the mortgage."
 
 2      SECTION 3.  New statutory material is underscored.
 
 3      SECTION 4.  This Act shall take effect upon its approval.
 
 4 
 
 5                              INTRODUCED BY:______________________