Report Title:

Loan Guaranty Program for Transit Oriented Development

 

Description:

Authorizes Hawaii housing finance and development corporation to guarantee loans made by commercial lenders to developers for the financing of transit-oriented development projects that include affordable housing.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

864

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to ESTABLISHING A LOAN GUARANTY PROGRAM FOR TRANSIT ORIENTED DEVELOPMENT.

 

 

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

 


     SECTION 1.  The legislature finds that rapid transit on Oahu will stimulate more compact development around transit stations, thereby reducing urban sprawl.  The more intense use of land will produce community benefits, such as affordable housing, open plazas, and parks.  However, transit-oriented developments often require multiple sources of financing, and community benefits increase the development costs, thereby increasing project risk.

     The purpose of this Act is to authorize the Hawaii housing finance and development corporation to guarantee loans made by commercial lenders to developers to finance the costs of transit-oriented development projects that include affordable housing.

     SECTION 2.  Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201H‑    Loan guaranty program for transit-oriented development.  (a)  The corporation may guarantee loans made by commercial lenders authorized to do business in this State, to developers for the purpose of developing transit-oriented development projects that include affordable housing; provided that the executive director shall determine that:

     (1)  The transit-oriented development projects are located within a transit-oriented development zone designated by the respective county; and

     (2)  The commercial lender has completed its due diligence in approving the loan, including ensuring adequate collateral.

The corporation may impose other conditions that the executive director deems reasonable to implement the loan guaranty.

     (b)  In addition to the conditions that the executive director may impose under subsection (a), any loan guaranty made pursuant to this section shall meet the following conditions:

     (1)  For any loan that finances operating costs, the maximum term of the loan shall be ten years;

     (2)  For any loan that finances capital improvement costs, the maximum term of the loan shall be twenty years;

     (3)  The interest rate charged on any loan shall be one per cent below the commercial lender's prime rate for as long as the loan guaranty is in effect;

     (4)  The loan guaranty may be up to eighty-five per cent of the outstanding principal amount of any single loan, but shall not include any fees or accrued interest associated with the loan or its collection; and

     (5)  The total principal amount of the guaranteed portion of all loans outstanding at any time shall not exceed $10,000,000.

     (c)  The corporation may adopt rules pursuant to chapter 91 to effectuate this section.

     (d)  As used in this section, "transit-oriented development" means any land use project of relatively intense concentration involving a mixture of uses that depends upon and supports transit ridership."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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By Request