Report Title:

Housing Omnibus Bill

Description:

Creates more affordable rental housing. Establishes homeless programs. Allows more individuals to qualify for lower cost housing. Makes administrative changes to various state housing programs. Establishes a legislative Affordable Rental Housing and Homeless Task Force. (HB1303 HD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

1303

TWENTY-THIRD LEGISLATURE, 2005

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to housing.

 

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

SECTION 1. The Senate and House of Representatives of the Twenty-second Legislature of the State of Hawaii, Regular Session of 2004 passed Senate Concurrent Resolution No. 135 S.D.1, requesting the housing and community development corporation of Hawaii to convene a task force to develop near-term solutions to Hawaii's affordable housing shortage problem with respect to ownership and rental markets. The affordable housing task force issued its report with findings and recommendations in January 2005.

The purpose of this Act is to implement many of the recommendations of the task force.

PART I

SECTION 2. According to the "Consolidated Plan; Action Plan" of 2003, prepared by the housing and community development corporation of Hawaii, Hawaii's greatest housing need is housing for those earning below fifty per cent and from fifty to eighty per cent of the median income. Over twenty eight thousand units are expected to be needed, and nearly forty per cent of those will be needed by those earning below eighty per cent of the median income. These households carry the heaviest burdens with regard to the cost of rent, substandard housing quality, and overcrowding. According to the "Hawaii Housing Policy Study, 2003," over forty-seven per cent of all households (family of four) statewide have incomes at or below eighty per cent of the median income.

The "Homeless Point-in-Time" report of 2003 found that approximately six thousand persons are homeless statewide at any given time. Of these six thousand persons, four thousand have no shelter, and the remainder live in temporary shelters. In 2003, the number of persons homeless during the year exceeded fourteen thousand persons. However, even more troubling is the dramatic increase in the number of "hidden homeless". The "hidden homeless" are those relying on public assistance, relatives, or friends for shelter because they cannot afford to live on their own. From 1992 to 2003, the hidden homeless more than doubled, from over ninety thousand to over two hundred twenty thousand persons. The very tight housing market in Hawaii drives out those who can least afford to pay for housing.

In short, housing in Hawaii has priced-out a substantial portion of the population.

Currently, the rental housing trust fund, established to increase the number of available rental housing units in the state, helps provide about two hundred to two hundred fifty units per year. But additional units are needed immediately to relieve families caught in crisis.

The purpose of this part is to provide mechanisms and incentives that will help to increase the supply of low-income rental housing units for persons and families earning less than eighty per cent of the median income.

SECTION 3. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- Land use density; low-income rental units. Notwithstanding any other law to the contrary, the counties are authorized to provide flexibility in land use density provisions to encourage the development of any rental housing complex where at least fifty per cent of the rental units are set aside for very low-income and low-income households."

SECTION 4. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Exemption for certified housing projects. (a) All gross income received by any person for the planning, design, financing, construction, sale, or lease in the state of a certified housing project shall be exempt from general excise taxes.

(b) Any person claiming an exemption under this section shall include a copy of the certification of the housing project issued pursuant to subsection (c) when filing the person's general excise tax return.

(c) The department shall certify housing projects based on verified information provided by the developer of the project where the project consists of units to be built or rehabilitated and:

(1) At least fifty per cent of the available units are for households with incomes at or below eighty per cent of the median family income as determined periodically by the United States Department of Housing and Urban Development; and

(2) At least twenty per cent of the available units are for households with incomes at or below sixty per cent of the median family income as determined periodically by the United States Department of Housing and Urban Development."

SECTION 5. Section 201G-432, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Moneys in the fund shall be used for the purpose of providing in whole or in part loans or grants for housing projects wherein:

(1) At least fifty per cent of the available units are for persons and families with incomes at or below [sixty] eighty per cent of the median family income;

(2) At least ten per cent of the available units are for persons and families with incomes at or below thirty per cent of the median income; and

(3) The remaining units are for persons and families with incomes at or below one hundred per cent of the median family income;

provided that the corporation may establish rules to ensure full occupancy of fund projects."

SECTION 6. Section 235-110.8, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The low-income housing tax credit shall be [thirty] _______ per cent of the applicable percentage of the qualified basis of each building located in Hawaii. Applicable percentage shall be calculated as provided in section 42(b) of the Internal Revenue Code."

SECTION 7. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department [of taxation] to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) The sum from all general excise tax revenues realized by the State that represents the difference between $45,000,000 and the proceeds from the sale of any general obligation bonds authorized for that fiscal year for the purposes of the state educational facilities improvement special fund shall be deposited in the state treasury in each fiscal year to the credit of the state educational facilities improvement special fund;

(2) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund; [and]

(3) A sum, not to exceed the amount necessary to meet the obligations of the integrated tax information management systems performance-based contract may be retained and deposited in the state treasury to the credit of the integrated tax information management systems special fund. The sum retained by the director of taxation for deposit to the integrated tax information management systems special fund for each fiscal year shall be limited to amounts appropriated by the legislature. This paragraph shall be repealed on July 1, 2005[.]; and

(4) Ten per cent of the remittances of taxes imposed on residential rentals shall be deposited into the rental housing trust fund established by section 201G-432."

SECTION 8. Section 247-2, Hawaii Revised Statutes, is amended to read as follows:

"§247-2 Basis and rate of tax. The tax imposed by section 247-1 shall be based on the actual and full consideration (whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit) paid or to be paid, which shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance, and shall be at the [rate of 10 cents per $100] following rates:

(1) For properties where the purchaser is eligible for a county homeowner's exemption on property tax:

(A) 10 cents per $100 for properties with a value of less than $600,000;

(B) 20 cents per $100 for properties with a value of $600,000 and over but less than $1,000,000; and

(C) 30 cents per $100 for properties with a value of $1,000,000 or greater;

and

(2) For properties where the purchaser is not eligible for a county homeowner's exemption on property tax:

(A) 20 cents per $100 for properties with a value of less than $600,000;

(B) 30 cents per $100 for properties with a value of $600,000 and over but less than $1,000,000; and

(C) 40 cents per $100 for properties with a value of $1,000,000 or greater,

of such actual and full consideration; provided that in the case of a lease or sublease, this chapter shall apply only to a lease or sublease whose full unexpired term is for a period of five years or more, and in those cases, including (where appropriate) those cases where the lease has been extended or amended, the tax in this chapter shall be based on the cash value of the lease rentals discounted to present day value and capitalized at the rate of six per cent, plus the actual and full consideration paid or to be paid for any and all improvements, if any, which shall include on-site as well as offsite improvements, applicable to the leased premises; and provided further that the tax imposed for each transaction shall be not less than $1."

SECTION 9. Section 247-3, Hawaii Revised Statutes, is amended to read as follows:

"§247-3 Exemptions. The tax imposed by section 247-1 shall not apply to:

(1) Any document or instrument that is executed prior to January 1, 1967;

(2) Any document or instrument that is given to secure a debt or obligation;

(3) Any document or instrument that only confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed;

(4) Any document or instrument between husband and wife, reciprocal beneficiaries, or parent and child, in which only a nominal consideration is paid;

(5) Any document or instrument in which there is a consideration of $100 or less paid or to be paid;

(6) Any document or instrument conveying real property that is executed pursuant to an agreement of sale, and where applicable, any assignment of the agreement of sale, or assignments thereof; provided that the taxes under this chapter have been fully paid upon the agreement of sale, and where applicable, upon such assignment or assignments of agreements of sale;

(7) Any deed, lease, sublease, assignment of lease, agreement of sale, assignment of agreement of sale, instrument or writing in which the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof are the only parties thereto;

(8) Any document or instrument executed pursuant to a tax sale conducted by the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof for delinquent taxes or assessments;

(9) Any document or instrument conveying real property to the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof pursuant to the threat of the exercise or the exercise of the power of eminent domain;

(10) Any document or instrument that solely conveys or grants an easement or easements;

(11) Any document or instrument whereby owners partition their property, whether by mutual agreement or judicial action; provided that the value of each owner's interest in the property after partition is equal in value to that owner's interest before partition;

(12) Any document or instrument between marital partners or reciprocal beneficiaries who are parties to a divorce action or termination of reciprocal beneficiary relationship that is executed pursuant to an order of the court in the divorce action or termination of reciprocal beneficiary relationship;

(13) Any document or instrument conveying real property from a testamentary trust to a beneficiary under the trust;

(14) Any document or instrument conveying real property from a grantor to the grantor's revocable living trust, or from a grantor's revocable living trust to the grantor as beneficiary of the trust;

(15) Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity; [and]

(16) Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the partnership, determined by applying section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership[.]; and

(17) Any document or instrument conveying real property to any nonprofit organization that has been certified by the Hawaii housing finance and development administration for low-income housing development."

SECTION 10. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year, [twenty-five] fifty per cent shall be paid into the rental housing trust fund established by section 201G-432 and twenty-five per cent shall be paid into the natural area reserve fund established by section 195-9; provided that the funds paid into the natural area reserve fund shall be annually disbursed by the department of land and natural resources after joint consultation with the forest stewardship committee and the natural area reserves system commission in the following priority:

(1) To natural area partnership and forest stewardship programs;

(2) Projects undertaken in accordance with watershed management plans pursuant to section 171-58 or watershed management plans negotiated with private landowners; and

(3) The youth conservation corps established under chapter 193."

SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2005-2006 and the same sum or so much thereof as may be necessary for fiscal year 2006-2007 to be paid into the rental housing trust fund created in section 201G-432, Hawaii Revised Statutes.

The sums appropriated shall be expended by the housing and community development corporation of Hawaii to be used as provided in section 201G-432, Hawaii Revised Statutes.

PART II

SECTION 12. The legislature finds that rehabilitating public housing that has been decommissioned by the State will increase the supply of low-income rental housing units.

The purpose of this part is to help the unsheltered and hidden homeless population by determining whether decommissioned public housing can be rehabilitated, including:

(1) Prior to their demolition, offering decommissioned public housing to private nonprofit entities to rehabilitate into rental housing for people in the lowest income bracket; and

(2) Declaring a moratorium on the demolition of decommissioned public housing until a determination has been made whether to rehabilitate them.

SECTION 13. Section 201G-44, Hawaii Revised Statutes, is amended to read as follows:

§201G-44 Administration of state [low income] low-income housing projects and programs. (a) The corporation may construct, develop, and administer property or housing for the purpose of state [low income] low-income housing projects and programs.

(b) The corporation shall offer any decommissioned low-income public housing project, except for federal housing projects, to nonprofit organizations or government agencies for rehabilitation into emergency or transitional shelter facilities for the homeless or rehabilitation into rental units for very low-income and low-income households; provided that:

(1) The housing project is wholly owned by the State on either state-owned or ceded lands;

(2) The corporation has determined that the housing project is no longer suitable for its original use and intends to demolish the housing project;

(3) The corporation has determined that the housing project is not eligible for rehabilitation using the corporation's current resources; and

(4) The nonprofit organization or government agency demonstrates expertise in rehabilitation of housing projects and has community, public, and private resources to substantially pay for the rehabilitation.

The land and improvements may be leased to the nonprofit organization or government agency for a period not to exceed ninety-nine years for a sum of $1 per year.

[(b)](c) The corporation shall adopt necessary rules in accordance with chapter 91, including the establishment and collection of reasonable fees for administering the projects or programs and to carry out any state program under [[]subsection[]] (a)."

SECTION 14. The legislature declares a moratorium on the demolition of all decommissioned housing projects administered by the corporation for two years or until such time that the housing projects may be offered for rehabilitation to nonprofit organizations and government agencies in accordance with section 201G-132(c), whichever occurs first.

PART III

SECTION 15. The legislature finds that reducing the hidden homeless population through the development of low-income rental housing is equally important to helping the unsheltered homeless population, or those who have a primary nighttime residence that is a public or private place not ordinarily used as a regular sleeping accommodation, such as a beach. The legislature finds that there are about four thousand unsheltered homeless in Hawaii.

The legislature finds that even though the housing and community development corporation of Hawaii’s "Strategic Plan" 2005-2010 states that its goal is to end chronic homelessness by 2010, its strategic objectives for calendar year 2005 offer no immediate solutions to assist the homeless population.

Accordingly, the purpose of this part is to help the unsheltered homeless population by:

(1) Increasing the direct appropriation to nonprofit community groups that provide housing and services to the homeless to increase the temporary, short-term facilities available; and

(2) Establishing measurable goals to determine that more homeless are being served and transitioned into permanent housing.

SECTION 16. There is appropriated out of the general revenues of the State of Hawaii the sum of $1 or so much thereof as may be necessary for fiscal year 2005-2006 for the expansion of emergency and transition shelter facilities serving the homeless; provided that these funds shall be administered by the housing and community development corporation of Hawaii pursuant to section 201G-455; provided further that all provider agencies shall be required to adopt measurable goals to transition homeless individuals and families into permanent housing, pursuant to section 201G-461(d).

The sum appropriated shall be expended by the housing and community development corporation of Hawaii for the purposes of this part.

SECTION 17. Section 201G-461, Hawaii Revised Statutes, is amended to read as follows:

"§201G-461 Annual performance audits. (a) The corporation shall require any provider agency that dispensed shelter or assistance for any homeless facility or any other program for the homeless authorized by this part to submit to the corporation a financial audit and report on an annual basis conducted by a certified public accounting firm. This audit and report shall contain information specific to the funds received under state homeless programs contracts. The audit shall include recommendations to address any problems found.

(b) Continuing contracts with provider agencies to participate in any program for the homeless authorized by this part shall require that the provider agency address the recommendations made by the auditing agency, subject to exceptions as set by the corporation.

(c) Failure to carry out the recommendations made by the auditing agency may be grounds for the corporation to bar a provider agency from further contracts for programs authorized by this part until the barred provider has addressed all deficiencies.

(d) As a condition of continued contracts, the corporation shall require all provider agencies to submit an annual report that contains statistical information to enable the corporation to measure the effectiveness of contracted services in transitioning homeless into permanent housing."

PART IV

SECTION 18. The legislature finds that private-public partnerships encourage the development of affordable ownership housing programs. A family of four with one hundred forty per cent of median income, currently $91,980 in Honolulu, $71,400 on the island of Hawaii, $84,980 on Maui, and $78,820 on Kauai, are part of a gap group that are shut out of the median-priced homes in their communities. For example, a typical family of four in Honolulu that earns $92,000 may qualify for a home priced at $376,800, assuming a six per cent interest rate on their home mortgage. However, the median price of a home in Honolulu is nearly $500,000.

The purpose of this part is to exempt from statutes, ordinances, and rules, those housing developments approved by the housing and community development corporation of Hawaii that are aimed at households whose income does not exceed one hundred forty per cent of median family income. This exemption is intended to encourage private nonprofit and for profit developers to produce more affordably priced homes.

SECTION 19. Section 201G-118, Hawaii Revised Statutes, is amended to read as follows:

"§201G-118 [Housing] Lower-cost housing development; exemption from statutes, ordinances, charter provisions, rules. (a) The corporation may develop, on behalf of the State or with an eligible developer, or may assist under a government assistance program in the development of, lower-cost housing projects [which] that shall be exempt from all statutes, ordinances, charter provisions, and rules of any governmental agency relating to planning, zoning, construction standards for subdivisions, development and improvement of land, and the construction of units thereon; provided that:

(1) The corporation finds the lower-cost housing project is consistent with the purpose and intent of this chapter, and meets minimum requirements of health and safety;

(2) The development of the proposed lower-cost housing project does not contravene any safety standards, tariffs, or rates and fees approved by the public utilities commission for public utilities or the various boards of water supply authorized under chapter 54; [and]

(3) The legislative body of the county in which the lower-cost housing project is to be situated shall have approved the lower-cost housing project.

(A) The legislative body shall approve or disapprove the lower-cost housing project by resolution within forty-five days after the corporation has submitted the preliminary plans and specifications for the lower-cost housing project to the legislative body. If on the forty-sixth day, a lower-cost housing project is not disapproved, it shall be deemed approved by the legislative body;

(B) No action shall be prosecuted or maintained against any county, its officials, or employees on account of actions taken by them in reviewing, approving, or disapproving the plans and specifications; and

(C) The final plans and specifications for the lower-cost housing project shall be deemed approved by the legislative body if the final plans and specifications do not substantially deviate from the preliminary plans and specifications. The final plans and specifications for the lower-cost housing project shall constitute the zoning, building, construction, and subdivision standards for that lower-cost housing project. For purposes of sections 501-85 and 502-17, the executive director of the corporation, or the responsible county official may certify maps and plans of lands connected with the lower-cost housing project as having complied with applicable laws and ordinances relating to consolidation and subdivision of lands, and the maps and plans shall be accepted for registration or recordation by the land court and registrar;

and

(4) The land use commission shall approve or disapprove a boundary change within forty-five days after the corporation has submitted a petition to the commission as provided in section 205-4. If on the forty-sixth day, the petition is not disapproved, it shall be deemed approved by the commission.

(b) For the purposes of this section[, "government assistance program"]:

"Dwelling" or "dwelling unit" means a room or rooms connected together, constituting an independent living unit and containing a single kitchen and at least one bathroom. A dwelling unit shall not include a unit used for time-sharing or as a transient accommodation unit.

"Government assistance program" means a housing program qualified by the corporation and administered or operated by the corporation or the United States or any of their political subdivisions, agencies, or instrumentalities, corporate or otherwise.

"Kitchen" means a facility in a dwelling unit that contains fixtures, appliances, or devices for all of the following:

(1) Heating or cooking food;

(2) Washing utensils used for dining and food preparation and for washing and preparing food; and

(3) Refrigerating food.

"Lower-cost housing project" means a residential housing project in which one hundred per cent of the dwelling units are for persons or families whose incomes are identified as one hundred forty per cent or less of the area median income for each of the counties of Hawaii, Maui, Honolulu, and Kauai as determined by the United States Department of Housing and Urban Development from time to time, and as adjusted by family size.

(c) The corporation shall not have authority to adopt rules pursuant to chapter 91 that would limit the application of this section."

PART V

SECTION 20. The affordable housing task force recommended that the housing and community development corporation of Hawaii be split into two organizations to more effectively concentrate on the development of affordable housing. The legislature finds that the State's role in maintaining affordable housing in Hawaii has evolved into two parts:

(1) Administering the state’s public housing programs; and

(2) Financing and developing affordable housing.

The housing and community development corporation of Hawaii has managed both of these functions since its inception. However, the burden of administering the public housing projects in the state has overshadowed the ability of the corporation to pay sufficient attention to the financing and development of affordable housing.

The purpose of parts V, VI, and VII is to establish:

(1) The Hawaii public housing administration to perform the function of developing and maintaining public housing; and

(2) The Hawaii housing finance and development administration to perform the function of housing financing and development.

SECTION 21. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII HOUSING FINANCE AND DEVELOPMENT ADMINISTRATION

§ -1 Definitions. The following terms, wherever used or referred to in this chapter, shall have the following respective meanings, unless a different meaning clearly appears from the context:

"Administration" means the Hawaii housing finance and development administration.

"Board" means the board of directors of the Hawaii housing finance and development administration.

"Bonds" means any bonds, interim certificates, notes, debentures, participation certificates, pass-through certificates, mortgage-backed obligations, or other evidences of indebtedness of the administration issued pursuant to this chapter.

"Community facilities" includes real and personal property; buildings, equipment, lands, and grounds for recreational or social assemblies, or educational, health, or welfare purposes; and necessary or convenient utilities, when designed primarily for the benefit and use of the administration or the occupants of the dwelling.

"Contract" means any agreement of the administration with an obligee or a trustee for the obligee, whether contained in a resolution, trust indenture, mortgage, lease, bond, or other instrument.

"Dwelling", "dwelling unit", or "unit" means any structure or room, for sale, lease, or rent, that provides shelter.

"Elder" or "elderly" means a person who is a resident of the state and has attained the age of sixty-two years.

"Elder or elderly households" means households in which at least one member is at least sixty-two years of age, the spouse or partner of that member has attained the age of majority, and the remaining members have attained the age of fifty-five years at the time of application to a public housing project. A live-in aide shall cease to be a resident therein upon the recovery of, or removal from the project of, the elder.

"Elder or elderly housing" means:

(1) A housing project intended for and occupied by elder or elderly households; or

(2) Housing provided under any state or federal program that the Secretary of the United States Department of Housing and Urban Development determines is specifically designed and operated to assist elders or elderly persons, which upon a determination by the Secretary, may also be occupied by persons with disabilities who have reached the age of majority.

"Executive director" means the executive director of the Hawaii housing finance and development administration.

"Federal government" includes the United States and any agency or instrumentality, corporate or otherwise, of the United States.

"Government" includes the State and the United States and any political subdivision, agency, or instrumentality, corporate or otherwise, of either of them.

"Household member" means a person who:

(1) Is a co-applicant; or

(2) Will reside in the dwelling unit purchased from the corporation.

"Housing project", "public housing project", or "project" includes all real and personal property, buildings and improvements, commercial spaces, lands for farming and gardening, and community facilities acquired or constructed or to be acquired or constructed, and all tangible or intangible assets held or used in connection with the public housing project.

The term "housing project", "public housing project", or "project" may also be applied to the planning of the buildings and improvements, the acquisition of property by purchase, lease, or otherwise, the demolition of existing structures, the construction, reconstruction, alteration, and repair of the improvements, and all other work in connection therewith.

"Land" or "property" includes vacant land or land with site improvements whether partially or entirely finished in accordance with governmental subdivision standards, or with complete dwellings.

"Live-in aide" means a person who:

(1) Is eighteen years of age or older;

(2) Is living in the unit solely to assist the elder or elderly person in daily living activities, including bathing, meal preparation and delivery, medicinal care, transportation, and physical activities;

(3) Is not legally obligated to support the elder or elderly person; and

(4) Is verified by the corporation as meeting these requirements.

"Mortgage holder" includes the United States Department of Housing and Urban Development, Federal Housing Administration, the United States Department of Agriculture, or other federal or state agency engaged in housing activity, Administrator of Veterans Affairs, Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Mortgage Corporation, private mortgage lender, private mortgage insurer, and their successors, grantees, and assigns.

"Mortgage lender" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, credit union, insurance company, or any other financial institution, or a holding company for any of the foregoing, which:

(1) Is authorized to do business in the state;

(2) Customarily provides service or otherwise aids in the financing of mortgages on single-family or multifamily residential property; and

(3) Is a financial institution whose accounts are federally insured or is an institution that is an approved mortgagee for the Federal Housing Administration, an approved lender for the United States Department of Veterans Affairs or the United States Department of Agriculture, or an approved mortgage loan servicer for the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.

"Nonprofit organization" means a corporation, association, or other duly chartered entity that is registered with the State and has received a written determination from the Internal Revenue Service that it is exempt under either Section 501(c)(3), Section 501(c)(4), or so much of Section 501(c)(2) as applied to title holding corporations that turn over their income to organizations that are exempt under either Section 501(c)(3) or 501(c)(4), of the Internal Revenue Code of 1986, as amended.

"Obligee of the administration" or "obligee" includes any bondholder, trustee or trustees for any bondholders, any lessor demising property to the administration used in connection with a public housing project, or any assignee or assignees of the lessor's interest or any part thereof, and the United States, when it is a party to any contract with the administration.

"Real property" includes lands, land under water, structures, and any and all easements, franchises, and incorporeal hereditaments and every estate and right therein, legal and equitable, including terms for years and liens by way of judgment, mortgage, or otherwise.

§ -2 Hawaii housing finance and development administration; establishment, staff. (a) There is established the Hawaii housing finance and development administration to be placed within the department of business, economic development, and tourism for administrative purposes only. The administration shall be a public body and a body corporate and politic.

(b) The administration shall employ, exempt from chapter 76 and section 26-35(a)(4), an executive director and an executive assistant. Effective July 1, 2006, the executive director shall be paid a salary not to exceed eighty-five per cent of the salary of the director of human resources development. Effective July 1, 2006, the executive assistant shall be paid a salary not to exceed ninety per cent of the executive director's salary. The administration may employ, subject to chapter 76, technical experts and officers, agents, and employees, permanent and temporary, as required. The administration may also employ officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, not subject to chapter 76, when in the determination of the administration, the services to be performed are unique and essential to the execution of the functions of the administration. The administration may call upon the attorney general for legal services as it may require. The administration may delegate to one or more of its agents or employees its powers and duties as it deems proper.

§ -3 Board; establishment, functions, duties. (a) There is created a board of directors of the Hawaii housing finance and development administration consisting of nine members, of whom six shall be public members appointed by the governor as provided in section 26-34. Public members shall be appointed from each of the counties of Honolulu, Hawaii, Maui, and Kauai. At least two public members shall be community advocates for low-income housing, affiliated with private nonprofit organizations that serve the residents of low-income housing. The public members of the board shall serve four-year staggered terms; provided that the initial appointments shall be as follows:

(1) Two members to be appointed for four years;

(2) Two members to be appointed for three years; and

(3) Two members to be appointed for two years.

The director of business, economic development, and tourism or the director's designated representative shall be an ex officio voting member. The administration shall be headed by the board.

(b) The board of directors shall select a chairperson and vice chairperson from among its members; provided that the chairperson shall be a public member. The director of business, economic development, and tourism shall be ineligible to serve as chairperson of the board.

(c) Five members shall constitute a quorum, whose affirmative vote shall be necessary for all actions by the corporation. The members shall receive no compensation for services, but shall be entitled to necessary expenses, including travel expenses, incurred in the performance of their duties.

§ -4 General powers. (a) The administration may:

(1) Sue and be sued;

(2) Have a seal and alter the same at pleasure;

(3) Make and execute contracts and other instruments necessary or convenient to the exercise of its powers; and

(4) Adopt bylaws and rules in accordance with chapter 91 for its organization, internal management, and to carry into effect its purposes, powers, and programs.

(b) In addition to other powers conferred upon it, the administration may do all things necessary and convenient to carry out the powers expressly provided in this chapter.

§ -5 Fair housing law to apply. Notwithstanding any law to the contrary, the provisions of chapter 515 shall apply in administering this chapter.

§ -6 Housing research. (a) The administration may study the plans of any government in relation to the problem of clearing, replanning, or reconstructing an area in which unsafe or unsanitary public dwelling or public housing conditions exist.

(b) The administration may purchase materials for the development of land and the construction of dwelling units in the manner it shall conclude to be most conducive to lower costs, including purchase from other states or from foreign countries for drop shipment in the state or on cost-plus contracts for materials with persons or firms doing business in the state, or otherwise.

(c) The administration may conduct, or cause to be conducted, research on public housing needs, materials, design, or technology, and apply the findings of the investigation to public housing projects, including the following:

(1) Sociocultural investigation of public housing and community utilization, preferences, or needs of residents within the public housing need classification of the public housing functional plan;

(2) Development of technology for the application of innovative building systems or materials, to provide energy or resource conservation or cost savings in the construction or operation of a public housing project;

(3) Investigation of the applicability of locally-produced building materials and systems to dwelling unit construction;

(4) Investigation of new forms of project construction, maintenance, operation, financing, or ownership, involving tenants, homeowners, financing agencies, and others; or

(5) Other necessary or appropriate research that may lower the long-term costs of public housing, conserve resources, or create communities best suited to the needs of residents.

(d) In the development and construction of a public housing project, the administration may provide for an on-the-job training program or other projects as it may deem justifiable, including innovative projects to develop a larger qualified work force in the state.

§ -7 Acquisition, use, and disposition of property. (a) The administration may acquire any real or personal property or interest therein by purchase, exchange, gift, grant, lease, or other means from any person or government to provide public housing. Exchange of real property shall be in accordance with section 171-50.

(b) The administration may own or hold real property. All real property owned or held by the administration shall be exempt from mechanic's or materialman's liens and also from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against the same nor shall any judgment against the administration be a charge or lien upon its real property; provided that this subsection shall not apply to or limit the right of obligees to foreclose or otherwise enforce any mortgage of the administration or the right of obligees to pursue any remedies for the enforcement of any pledge or lien given by the administration on its rents, fees, or revenues. The administration and its property shall be exempt from all taxes and assessments.

(c) The administration may lease or rent all or a portion of any public housing project and establish and revise the rents or charges therefor. The administration may sell, exchange, transfer, assign, or pledge any property, real or personal, or any interest therein to any person or government.

(d) The administration may insure or provide for the insurance of its property or operations against risks as it deems advisable.

§ -8 Cooperative agreements with other governmental agencies. (a) The administration may:

(1) Obtain the aid and cooperation of governmental agencies in the planning, construction, and operation of public housing projects and enter into agreements and arrangements as it deems advisable to obtain aid and cooperation;

(2) Arrange or enter into agreements with any governmental agency for the acquisition of property, options, or property rights or for the furnishing, installing, opening, or closing of streets, roads, alleys, sidewalks, or other places, or for the furnishing of property, services, parks, sewage, water, and other facilities in connection with public housing projects, or for the changing of the map of a political subdivision or the planning, replanning, zoning, or rezoning of any part of a political subdivision;

(3) Procure insurance or guarantees from any governmental agency for the payment of any debts or parts thereof incurred by the administration, including the power to pay premiums on any such insurance; and

(4) Agree to make payments to any state or county agency, if the agency is authorized to accept payments, as the administration deems consistent with the maintenance of the character of public housing projects or the purposes of this chapter.

(b) For the purpose of aiding and cooperating in the planning, construction, and operation of housing projects located within their respective territorial boundaries, any state or county agency, upon those terms, with or without consideration, as it determines, may:

(1) Dedicate, grant, sell, convey, or lease any of its property, or grant easements, licenses, or any other rights or privileges therein to the administration or to the federal government;

(2) To the extent that it is within the scope of the agency:

(A) Cause the services customarily provided by the agency to be rendered for the benefit of public housing projects and the occupants thereof;

(B) Provide and maintain parks and sewage, water, lights, and other facilities adjacent to or in connection with public housing projects;

(C) Open, close, pave, install, or change the grade of streets, roads, roadways, alleys, sidewalks, or other related facilities; and

(D) Change the map of a political subdivision or plan, replan, zone, or rezone any part of a political subdivision;

(3) Enter into agreements with the administration with respect to the exercise of their powers relating to the repair, closing, or demolition of unsafe, unsanitary, or unfit dwellings;

(4) Employ, notwithstanding any other law as to what constitutes legal investments, any available funds belonging to them or within their control, including funds derived from the sale or furnishing of property or facilities to the administration;

(5) Do any and all things necessary or convenient to aid and cooperate in the planning, undertaking, and construction of such public housing projects; and

(6) Enter into contracts with the administration or the federal government for any period agreeing to exercise any of the powers conferred hereby or to take any other action in aid of such public housing projects.

In connection with the exercise of this power, any political subdivision may incur the entire expense of any such public improvements located within its territorial boundaries without assessment against abutting property owners.

For the purpose of aiding and cooperating in the planning, construction, and operation of public housing projects, the department of land and natural resources, the Hawaiian homes commission, and any other agency of the state having power to manage or dispose of its public lands, may, with the approval of the governor and with or without consideration, grant, sell, convey, or lease for any period, any parts of such public lands, without limit as to area, to the administration or to the federal government.

Any law to the contrary notwithstanding, any gift, grant, sale, conveyance, lease, or agreement provided for in this section may be made by the State or county government without appraisal, public notice, advertisement, or public bidding.

If at any time title to, or possession of, any public housing project is held by any governmental agency authorized by law to engage in the development or administration of low-rent housing or slum clearance projects, any agreement made under this chapter relating to the project shall inure to the benefit of and may be enforced by that governmental agency.

Insofar as this subsection is inconsistent with the provisions of any other law, this subsection shall be controlling.

(c) Any county in which a public housing project is located or is about to be located may make donations or advances to the administration in sums as the county in its discretion may determine. The advances or donations shall be made for the purpose of aiding or cooperating in the construction and operation of the public housing project. The administration, when it has money available therefor, shall reimburse the county for all advances made by way of a loan to it.

§ -9 Development of property. (a) The administration, in its own behalf or on behalf of any federal, state, or county agency, may:

(1) Clear, improve, and rehabilitate property;

(2) Plan, develop, construct, and finance public housing projects; and

(3) In cooperation with the department of education and department of accounting and general services, plan educational facilities and related infrastructure as a necessary and integral part of its public housing projects, using all its innovative powers toward achieving that end expeditiously and economically; provided that the educational facilities comply with the department of education's educational specifications, timelines, and siting requirements.

(b) The administration may develop public land in an agricultural district subject to the prior approval of the land use commission, when developing lands greater than five acres in size, and public land in a conservation district subject to the prior approval of the board of land and natural resources. The administration shall not develop state monuments or historical sites, or parks. When the administration proposes to develop public land, it shall file with the department of land and natural resources a petition setting forth such purpose. The petition shall be conclusive proof that the intended use is a public use superior to that which the land has been appropriated.

(c) The administration may develop or assist in the development of federal lands with the approval of appropriate federal authorities.

(d) The administration shall not develop any public land where the development may endanger the receipt of any federal grant, impair the eligibility of any public body for a federal grant, prevent the participation of the federal government in any government program, or impair any covenant between the government and the holder of any bond issued by the government.

(e) The administration may contract or sponsor with any county, housing authority, or person, subject to the availability of funds, an experimental or demonstration public housing project designed to meet the needs of elders; the disabled; displaced or homeless persons; low- and moderate-income persons; teachers or other government employees; or university and college students and faculty.

§ -10 Eminent domain, exchange or use of public property. The administration may acquire any real property, including fixtures and improvements, or interest therein, through voluntary negotiation; through exchange of land in accordance with section 171-50; provided that the public land to be exchanged need not be of like use to that of the private land; or by the exercise of the power of eminent domain which it deems necessary by the adoption of a resolution declaring that the acquisition of the property described therein is in the public interest and required for public use. The administration shall exercise the power of eminent domain granted by this section in the same manner and procedure as is provided by chapter 101, and otherwise in accordance with all applicable provisions of the general laws of the State; provided that condemnation of parcels greater than fifteen acres shall be subject to legislative disapproval expressed in a concurrent resolution adopted by majority vote of the senate and the house of representatives in the first regular or special session following the date of condemnation.

The administration may acquire by the exercise of the power of eminent domain property already devoted to a public use; provided that no property belonging to any government may be acquired without its consent, and that no property belonging to a public utility corporation may be acquired without the approval of the public utilities commission, and subject to legislative disapproval expressed in a concurrent resolution adopted by majority vote of the senate and the house of representatives in the first regular or special session following the date of condemnation.

§ -11 Contracts with federal government. (a) The administration may:

(1) Borrow money or accept grants from the federal government for or in aid of any public housing project that the administration is authorized to undertake;

(2) Take over any land acquired by the federal government for the construction or operation of a public housing project;

(3) Take over, lease, or manage any public housing project constructed or owned by the federal government, and to these ends, enter into contracts, mortgages, leases, or other agreements as the federal government may require, including agreements that the federal government shall have the right to supervise and approve the construction, maintenance, and operation of the public housing project;

(4) Procure insurance or guarantees from the federal government of the payment of any debts or parts thereof secured by mortgages made or held by the administration on any property included in any public housing project;

(5) Agree to any conditions attached to federal financial assistance relating to the determination of prevailing salaries or wages or payment of not less than prevailing salaries or wages or compliance with labor standards, in the development or administration of projects, and include in any construction contract let in connection with a project, stipulations requiring that the contractor and any subcontractors comply with requirements as to minimum salaries or wages and maximum hours of labor; and

(6) Comply with any conditions required by the federal government in any contract for financial assistance.

(b) In any contract for annual contributions with the federal government, the administration may obligate itself to convey to the federal government possession of or title to the project to which the contract relates, if a substantial default, as defined by contract, occurs. Notwithstanding any other law to the contrary, this obligation shall be specifically enforceable and shall not constitute a mortgage.

The contract may provide further that if a conveyance occurs, the federal government may complete, operate, manage, lease, convey, or otherwise deal with the project in accordance with the terms of the contract; provided that the contract shall require that as soon as practicable after the federal government is satisfied that all defaults with respect to the project have been cured and that the project will thereafter be operated in accordance with the terms of the contract, the federal government shall reconvey to the administration the project as then constituted.

(c) It is the purpose and intent of this part to authorize the administration to do any and all things necessary to secure the financial aid and the cooperation of the federal government in the undertaking, construction, maintenance, and operation of any public housing project that the administration is empowered to undertake.

§ -12 Administration of low-income housing credit allowed under section 235-110.8. (a) The administration is designated as a state housing credit agency to carry out section 42(h) (with respect to limitation on aggregate credit allowable with respect to a project located in a state) of the Internal Revenue Code of 1986, as amended. As a state housing credit agency, the administration shall determine the eligibility basis for a qualified low-income building, make the allocation of housing credit dollar amounts within the state, and determine the portion of the State's housing credit ceiling set aside for projects involving qualified nonprofit organizations. The administration shall file any certifications and annual reports required by section 42 (with respect to low-income housing credit) of the Internal Revenue Code of 1986, as amended.

(b) The state aggregate housing credit dollar amount shall be allocated annually as required by section 42 of the Internal Revenue Code of 1986, as amended, by the administration in an amount equal to $1.25 multiplied by the state population in the calendar year or such greater or lesser amount as provided by section 42(h) of the Internal Revenue Code of 1986, as amended.

(c) The administration shall adopt rules under chapter 91 necessary to comply with federal and state requirements for determining the amount of the tax credit allowed under section 42 of the Internal Revenue Code of 1986, as amended, and section 235-110.8. The administration may establish and collect reasonable fees for administrative expenses incurred in providing the services required by this section, including fees for processing developer applications for the credit. All fees collected for administering these provisions, including developer application fees, shall be used to cover the administrative expenses of the administration.

(d) All claims for allocation of the low-income housing credit under section 235-110.8 shall be filed with the administration. The administration shall determine the amount of the credit allocation, if necessary, and return the claim to the taxpayer. The taxpayer shall file the credit allocation with the taxpayer's tax return with the department of taxation.

§ -13 Administration of federal programs. (a) The administration may carry out federal programs designated to be carried out by a housing finance or housing development entity.

(b) The administration shall adopt necessary rules in accordance with chapter 91, including the establishment and collection of reasonable fees for administering the program, to carry out any federal program in subsection (a).

(c) All fees collected for administering the program may be deposited into an appropriate special fund of the administration and may be used to cover the administrative expenses of the administration.

§ -14 Federal funds outside of state treasury. Notwithstanding chapter 38, the administration may establish and manage federal funds outside of the state treasury to be used for federal housing programs. The administration shall invest such funds in permitted investments in accordance with chapter 36.

§ -15 Subordination of mortgage to agreement with government. The administration may agree in any mortgage made by it that the mortgage shall be subordinate to a contract for the supervision by a governmental agency of the operation and maintenance of the mortgaged property and the construction of improvements thereon. In that event, any purchaser or purchasers at a sale of the property of the administration pursuant to a foreclosure of the mortgage or any other remedy in connection therewith shall obtain title subject to the contract.

§ -16 Duty to make reports. Except as otherwise provided by law, the administration shall:

(1) File at least once a year with the governor a report of its activities for the preceding fiscal year;

(2) Report to the state comptroller on moneys deposited in depositories other than the state treasury under section 40-81, and rules adopted thereunder; and

(3) Submit an annual report to the legislature on all administration program areas and funds organized by program area, and by fund within each program area, no later than twenty days prior to the convening of each regular session, which shall provide the following information on the status of its programs and finances:

(A) A description of programs being developed in the current fiscal biennium, including a summary listing of the programs, the status of each program, the methods of project financing or loans, and other information deemed significant;

(B) A description of programs planned for development during the two ensuing fiscal bienniums, including a summary listing of the proposed programs, the methods of project financing or loans, and other information deemed significant;

(C) A status report of actual expenditures made in the prior completed fiscal year from each fund established under this chapter, estimated expenditures anticipated for the current fiscal year, and projected expenditures for the ensuing fiscal years to be described in relation to specific projects developed to implement the purposes of any program or fund established under this chapter;

(D) A financial audit and report conducted on an annual basis by a certified public accounting firm; and

(E) Recommendations with reference to any additional legislation or other action that may be necessary in order to carry out the purposes of this part."

PART VI

SECTION 22. Effective July 1, 2006, the functions of the housing and community development corporation of Hawaii described in subparts F, G, and H of part II of chapter 201G, relating to state housing programs, and part III of chapter 201G, relating to financing programs, except for subpart D, shall be transferred to the Hawaii housing finance and development administration.

SECTION 23. Transfer of officers and employees. All rights, powers, functions, and duties of the housing and community development corporation of Hawaii under subparts F, G, and H of part II of chapter 201G, relating to state housing programs and part III of chapter 201G, relating to homeless assistance, except for subpart D, are transferred to the Hawaii housing finance and development administration.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 24. Transfer of records, equipment, and other personal property. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the housing and community development corporation of Hawaii relating to the functions transferred to the Hawaii housing finance and development administration shall be transferred with the functions to which they relate.

SECTION 25. Transfer of functions; continuity of rules, policies, and other material. All rules, policies, procedures, guidelines, and other material adopted or developed by the housing and community development corporation of Hawaii to implement provisions of the Hawaii Revised Statutes which are made applicable to the Hawaii housing finance and development administration by this Act, shall remain in full force and effect until amended or repealed by the Hawaii housing finance and development administration, pursuant to chapter 91, Hawaii Revised Statutes.

In the interim, every reference to the housing and community development corporation of Hawaii or the executive director of the development corporation in those rules, policies, procedures, guidelines, and other material is amended to refer to the Hawaii housing finance and development administration or the executive director of the Hawaii housing finance and development administration, as appropriate.

SECTION 26. Transfer of functions; effect on deeds, permits, and other documents. All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the housing and community development corporation of Hawaii or the Hawaii housing authority pursuant to the Hawaii Revised Statutes, which are made applicable to the Hawaii housing finance and development administration by this Act, shall remain in full force and effect.

Effective on the same day that legislation transferring the functions of the housing and community development corporation of Hawaii to the Hawaii public housing administration is approved, every reference to the housing and community development corporation of Hawaii or the executive director of the development corporation therein shall be construed as a reference to the Hawaii housing finance and development administration or the executive director of the Hawaii housing finance and development administration, as appropriate.

SECTION 27. (a) All references to the "housing and community development corporation of Hawaii", or "corporation", or like terms as the case may be in sections 27-11, 36-24, 53-6, 76-16, 111-8, 206E-15, 209-16, and 521-7, Hawaii Revised Statutes, shall be amended to "Hawaii public housing administration", "administration", or like terms, as the case may be, as the context requires.

(b) All references to the "housing and community development corporation of Hawaii", or "corporation", or like terms as the case may be in chapter 201G, and sections 10-2, 10-13.6, 46-15.1, 53-17, 53-22(e), 111-9, 171-2, 171-18.5, 171-50.2, 209-16(b), 209-17, 237-29, 290-8, 519-2(b), and 519-3(b), Hawaii Revised Statutes, shall be amended to "Hawaii housing finance and development administration", "administration", or like terms, as the case may be, as the context requires.

PART VII

SECTION 28. Chapter 201G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201G-   Public housing revolving fund; housing project bond special funds. (a) There is established the public housing revolving fund to be administered by the administration. Notwithstanding section 36-21, the proceeds in the fund shall be used for long-term and other special financings of the administration and for necessary expenses in administering this chapter.

(b) All moneys received and collected by the administration, not otherwise pledged or obligated nor required by law to be placed in any other special fund, shall be deposited into the public housing revolving fund.

(c) A separate special fund shall be established for each housing project or projects financed from the proceeds of bonds secured under the trust indenture. Each fund shall be designated "housing project bond special fund" or "housing loan program revenue bonds special fund", as appropriate, and shall bear additional designation as the administration deems appropriate to properly identify the fund.

(d) Notwithstanding any other law to the contrary, all revenues, income, and receipts derived from a housing project or projects or loan program financed from the proceeds of bonds or pledged to the payment of principal of and interest and premium on bonds, shall be paid into the housing project bond special fund established for the housing project or projects or loan program and applied as provided in the proceedings authorizing the issuance of bonds."

SECTION 29. Section 201G-3, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) There is created a board consisting of nine members, of whom [six] seven shall be public members appointed by the governor as provided in section 26-34. Public members shall be appointed from each of the counties of Honolulu, Hawaii, Maui, and Kauai. [One public member shall be the chairperson of the rental housing trust fund advisory commission.] At least one public member shall be a person who is directly assisted by the corporation under the federal low-rent public housing or federal section 8 tenant-based housing assistance payments program while serving on the board. At least three public members shall be community advocates for low-income housing, affiliated with private nonprofit organizations that serve the low-income and homeless population. No more than four members of the same political party shall be appointed to the board. The public members of the board shall serve four-year staggered terms; provided that the initial appointments shall be as follows: two members to be appointed for four years; two members to be appointed for three years; and [one member] two members to be appointed for two years. [The chairperson of the rental housing trust fund advisory commission shall serve a concurrent term on the board.] The director [of business, economic development, and tourism and the director] of human services, or [their designated representatives, and a representative of the governor's office,] a designated representative, shall be an ex officio voting [members.] member. The corporation shall be headed by the board.

(b) The board of directors shall select a chairperson and [vice-chairperson] vice chairperson from among its members. The [director of business, economic development, and tourism or the] director of human services shall be ineligible to serve as chairperson of the board."

SECTION 30. Section 201G-14, Hawaii Revised Statutes, is repealed.

["[§201G-14] Administration of low-income housing credit allowed under section 235-110.8. (a) The corporation is designated as the state housing credit agency to carry out section 42(h) (with respect to limitation on aggregate credit allowable with respect to a project located in a state) of the Internal Revenue Code of 1986, as amended. As the state housing credit agency, the corporation shall determine the eligibility basis for a qualified low-income building, make the allocation of housing credit dollar amounts within the State, and determine the portion of the State's housing credit ceiling set aside for projects involving qualified nonprofit organizations. The corporation shall file any certifications and annual reports required by section 42 (with respect to low-income housing credit) of the Internal Revenue Code of 1986, as amended.

(b) The state aggregate housing credit dollar amount shall be allocated annually as required by section 42 of the Internal Revenue Code of 1986, as amended by the corporation in an amount equal to $1.25 multiplied by the state population in the calendar year or such greater or lesser amount as provided by section 42(h) of the Internal Revenue Code of 1986, as amended.

(c) The corporation shall adopt rules under chapter 91 necessary to comply with federal and state requirements for determining the amount of the tax credit allowed under section 42 of the Internal Revenue Code of 1986, as amended and section 235-110.8. The corporation may establish and collect reasonable fees for administrative expenses incurred in providing the services required by this section, including fees for processing developer applications for the credit. All fees collected for administering these provisions, including developer application fees, shall be deposited into the corporation's housing finance revolving fund to be used to cover the administrative expenses of the corporation.

(d) All claims for allocation of the low-income housing credit under section 235-110.8 shall be filed with the corporation. The corporation shall determine the amount of the credit allocation, if necessary, and return the claim to the taxpayer. The taxpayer shall file the credit allocation with the taxpayer's tax return with the department of taxation.]"

SECTION 31. Section 201G-431, Hawaii Revised Statutes, is amended by deleting the definition of "advisory commission".

[""Advisory commission" means the rental housing trust fund advisory commission established by this subpart."]

SECTION 32. Section 201G-433, Hawaii Revised Statutes, is repealed.

["§201G-433 Rental housing trust fund advisory commission. (a) There is established within the corporation the rental housing trust fund advisory commission consisting of seven members, five of whom shall be public members and appointed pursuant to section 26-34. The public members of the advisory commission shall serve four-year staggered terms; provided that the initial appointments shall be as follows: two members to be appointed for four years; two members to be appointed for three years; and one member to be appointed for two years. As part of this appointment process, an appropriate organization from each of the categories of organizations enumerated below shall submit a list of three public member nominees to the governor. The governor shall select and appoint one public member from each list.

The public members shall be representative of the following categories of organizations:

(1) Real estate brokers and rental property managers;

(2) Tenants and renters advocacy organizations;

(3) Nonprofit housing developers and low income service providers;

(4) Mortgage lenders; and

(5) Architects and planners.

A county government official who shall be appointed for a two-year term on a rotating basis among counties and the governor's designated representative shall be ex officio voting members of the advisory commission.

(b) The chairperson shall be a public member elected by the members of the advisory commission and shall serve not more than two one-year terms as chair.

(c) The vice-chair shall be a public member elected by the members of the advisory commission.

(d) Four members shall constitute a quorum. Four affirmative votes shall be necessary for all actions by the advisory commission.

(e) The members shall receive no compensation for services, but shall be entitled to necessary expenses, including traveling expenses, incurred in the performance of their duties.

(f) The advisory commission shall advise and serve as the liaison between the board of the corporation and the general public."]

SECTION 33. Section 201G-434, Hawaii Revised Statutes, is repealed.

["[§201G-434] Duties of the advisory commission. (a) In addition to any other duties granted by this subpart, the advisory commission shall advise and assist the board of the corporation, evaluate the fund program each year, and report its evaluation with suggested changes to the legislature not fewer than twenty days before the convening of each regular session starting with the regular session of 1998.

(b) In addition to any other powers and duties granted under subsection (a), the commission shall:

(1) Define the guidelines, procedures, conditions, and details of loans and grants under this section; including, but not limited to the establishment of loan-to-value and debt-coverage ratios; and

(2) Have the authority to obtain the services of technical and support staff from other government agencies to carry out the purposes of this chapter."]

PART VIII

SECTION 34. The legislature finds that the urgency of the affordable housing shortage situation in Hawaii requires that the State, in addition to developing long-range plans, develop more immediate solutions that can be implemented in the near future to help ease Hawaii's housing shortage and the needs of the homeless. There are currently many public and private rental housing units in the state, but there is a lack of coordination in determining how many units exist and how many unoccupied units exist that could be renovated and repaired.

The purpose of this part is to establish a legislative affordable rental housing and homeless task force to:

(1) Gather data to determine how existing units and state lands can be most effectively used to address this need; and

(2) Further identify the types of development incentives that are needed to encourage public-private partnerships to develop low-income rental units and homeless facilities.

SECTION 35. (a) There is established a temporary legislative task force in the house of representatives to further identify near-term solutions to Hawaii's affordable rental housing and homeless problem. The task force shall cease to exist after June 30, 2007. The task force shall be exempt from chapter 92.

(b) The task force shall consist of twelve members to be appointed without regard to section 26-34, Hawaii Revised Statutes, by the speaker of the house of representatives. The task force shall be chaired by the chair of the house of representatives committee on housing.

(c) The task force shall determine, among other things:

(1) The inventory of all state lands used for low-income rental housing, the condition of the units on the lands, and whether other state lands are available and suitable for the development of low-income rental housing;

(2) The inventory and condition of all public and private low-income rental housing units;

(3) The number of decommissioned units still in existence and if those units could possibly be used if they are repaired or renovated; and

(4) Strategies for public partnerships with private and nonprofit entities to renovate housing units and develop low-income rental housing and homeless facilities.

(d) The task force shall submit a report of its findings and recommendations to the legislature no later than twenty days prior to the convening of the regular session of 2006.

(e) The task force may request assistance from appropriate state agencies in fulfilling the purposes of the task force.

PART IX

SECTION 36. Effective July 1, 2006, sections 201G-7, 201G-9, 201G-10, 201G-12, 210G-13, 201G-16, 201G-17, 201G-18, and 201G-22, Hawaii Revised Statutes, are repealed.

SECTION 37. The revisor of statutes shall substitute all references to any specific section, part, or subpart of chapter 201G, as the case may be, in part IV of this Act, with the corresponding section, part, or subpart of the new law created and codified under this Act, as appropriate.

SECTION 38. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 39. This Act shall take effect on July 1, 2010.