REPORT TITLE:
Housing Loan/Mortgage Prog.


DESCRIPTION:
Authorizes the issuance of general obligation and revenue bonds
for the repair and maintenance of public housing, housing loan
programs and for the rental housing trust fund.  (HB1017 SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1017
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE HOUSING LOAN AND MORTGAGE PROGRAM.



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

 1      SECTION 1.  The legislature finds that general obligation
 
 2 bonds have terms of fifteen and twenty years and are not
 
 3 applicable to repairs and maintenance of government owned
 
 4 housing.  Unfortunately, the repair and maintenance of government
 
 5 owned housing has been neglected, causing extensive damage.  
 
 6      Therefore, repair and maintenance is needed to extend the
 
 7 life of these buildings.  The legislature further finds that the
 
 8 issuance of short-term bonds appropriated for the repair and
 
 9 maintenance of government owned housing is the solution to our
 
10 public housing that has fallen into a state of disrepair.
 
11 Consequently, interest rates are currently low, which is the best
 
12 opportunity to borrow funds and the increased construction
 
13 activity will promote economic growth.
 
14      The legislature finds that under the Hula Mae Single Family
 
15 Mortgage Purchases Program, the Housing and Community Development
 
16 Corporation is authorized to issue tax exempt mortgage revenue
 
17 bonds and to make funds available through mortgage lenders at
 
18 affordable interest rates to households with low to moderate
 
19 incomes.  As of June 30, 1998, over 8,000 first time home buyers
 

 
Page 2                                                     1017
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        

 
 1 have been provided mortgages through the Hula Mae program.  In
 
 2 1997 and 1998, lenders and private developers requested over $1
 
 3 billion of Hula Mae funds, yet only approximately $283 million
 
 4 was actually available for lending.
 
 5      The legislature finds that authorizing more mortgage revenue
 
 6 bonds to be issued will assist the Hula Mae program.
 
 7      The legislature further finds that it is in the best
 
 8 interest of the State to encourage rental housing that does not
 
 9 compete with private developers in the housing sales market.  
 
10      The legislature further finds that the greatest need for
 
11 housing in the State of Hawaii is for families below eighty per
 
12 cent of the median income and that the most effective way to
 
13 perpetuate housing for low-income families is through nonprofit
 
14 development. 
 
15      In 1992, the rental housing trust fund was created under
 
16 Act 308, Session Laws Hawaii, 1992.  The legislature created this
 
17 fund to provide loans and grants for the development,
 
18 pre-development, construction, acquisition, preservation, and
 
19 substantial rehabilitation of rental housing units.
 
20      As of June 30, 1998, the rental housing trust fund
 
21 commission had committed project award loans to twenty-one
 
22 affordable rental developments.  Together they total 1,473 units
 
23 of affordable rental housing.  Projects assisted by the rental
 

 
Page 3                                                     1017
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        

 
 1 housing trust fund, provide low interest, flexible term loans for
 
 2 low-income housing on Oahu, Maui, Kauai, and Hawaii.
 
 3      The purpose of this Act is to:
 
 4      (1)  Authorize the state finance director to issue
 
 5           short-term floating rate interest general obligation
 
 6           bonds for the repair and maintenance of State owned
 
 7           public housing;
 
 8      (2)  Authorize the housing and community development
 
 9           corporation to issue an additional $           in tax
 
10           exempt revenue bonds for the Hula Mae Single Family
 
11           Mortgage Purchase Program; and
 
12      (3)  Authorize general obligation bonds and to appropriate
 
13           money to the rental housing trust fund to encourage the
 
14           development and availability of low-income rental
 
15           housing throughout the State of Hawaii.
 
16      SECTION 2.  Chapter 201G, Hawaii Revised Statutes, is
 
17 amended by adding a new section to part III, subpart A, to be
 
18 appropriately designated and to read as follows:
 
19      "201G-     Issuance of bonds for the repair and maintenance
 
20 of public housing.  The director of finance is authorized to
 
21 issue five to ten year, floating interest rate general obligation
 
22 bonds for the purpose of financing the repair and maintenance of
 
23 State owned public housing."
 

 
Page 4                                                     1017
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        

 
 1      SECTION 3.  Section 7 of Act 50, Session Laws of Hawaii
 
 2 1979, as amended by section 3 of Act 288, Session Laws of Hawaii
 
 3 1980, as amended by section 2 of Act 13, First Special Session
 
 4 Laws 1981, section 1 of Act 224, Session Laws of Hawaii 1984,
 
 5 section 1 of Act 171, Session Laws of Hawaii 1991, and section 7
 
 6 of Act 1, Special Session Laws of Hawaii 1995, is amended to read
 
 7 as follows:
 
 8      "SECTION 7.  Issuance of revenue bonds; amount authorized.
 
 9 Revenue bonds may be issued by the housing [fin] and community
 
10 development corporation of Hawaii pursuant to part III, chapter
 
11 39, and subpart B of part [II] III of chapter [201E,] 201G,
 
12 Hawaii Revised Statutes, in an aggregate principal amount not to
 
13 exceed [$1,775,000,000] $           at such times and in such
 
14 amounts as it deems advisable for the purpose of undertaking and
 
15 maintaining any of its housing loan programs in subpart B of part
 
16 [II] III of chapter [201E,] 201G, Hawaii Revised Statutes,
 
17 relating to the funding or purchasing of eligible loans."
 
18      SECTION 4.  The director of finance is authorized to issue
 
19 general obligation bonds in the sum of $          , or so much
 
20 thereof as may be necessary, and the same sum, or so much thereof
 
21 as may be necessary, is appropriated for fiscal year 1999-2000 to
 
22 be paid into the rental housing trust fund created in section
 
23 201G-432, Hawaii Revised Statutes.
 

 
Page 5                                                     1017
                                     H.B. NO.           H.D. 1
                                                        S.D. 2
                                                        

 
 1      The sum appropriated shall be expended by the housing and
 
 2 community development corporation of Hawaii for the purpose of
 
 3 this Act.
 
 4      SECTION 5.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 6.  This Act shall take effect upon its approval,
 
 7 except section 4 shall take effect on July 1, 1999.