Homes Revolving Fund

Appropriates moneys from the homes revolving fund to fill in or
remove an underground irrigation line from the Cliffside at
Hanapepe, Kauai subdivision.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  In 1987, the legislature determined that there
 2 existed a critical shortage of affordable housing units and that
 3 the problem required overview and direction by the legislature
 4 itself.  Consequently, the housing finance and development
 5 corporation was created to carry out the purposes of Act 337,
 6 Session Laws of Hawaii 1997.
 7      As the state agency responsible for overseeing the
 8 development of affordable housing projects such as the Cliffside
 9 at Hanapepe, the housing finance and development corporation
10 contracted with private interests to develop such subdivisions.
11 Unfortunately, a limited portion of the Cliffside project was
12 built over an active underground irrigation line owned by Gay and
13 Robinson without any type of disclosure to the affected
14 homeowners.  The incidental discovery of this line by the
15 homeowners occurred during its normal use for sugar operations
16 nearby.  Since that time, the housing finance and development
17 corporation and its successor, the housing and community
18 development corporation of Hawaii, have disavowed any duty or
19 obligation to remove the irrigation line but have sought to

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                                     H.B. NO.           

 1 obtain bids in an attempt to rectify the situation.
 2      Unfortunately, the bids received were considered too high
 3 and the housing and community development corporation of Hawaii
 4 has subsequently placed the onus for resolving this matter on the
 5 project developer and Gay and Robinson.  However, according to
 6 Act 337, the housing finance and development corporation could
 7 only develop a housing project that met the minimum requirements
 8 of health and safety.  In this respect, the housing finance and
 9 development corporation had an obligation to prospective
10 homeowners that it had completely reviewed the plans for the
11 Cliffside at Hanapepe project and that all disclosures had been
12 made regarding any irregularities.
13      The purpose of this Act is to appropriate funds from the
14 homes revolving fund to satisfy the State's obligation to the
15 homeowners at Cliffside in resolving the failure by the housing
16 finance and development corporation to disclose the existence of
17 an active irrigation line running under a state housing project
18 to prospective buyers.
19      SECTION 2.  There is appropriated out of the homes revolving
20 fund of the State of Hawaii the sum of $       , or so much
21 thereof as may be necessary for fiscal year 1999-2000, for the
22 filling in or removal of the Gay and Robinson irrigation line
23 located under a limited portion of the Cliffside at Hanapepe

Page 3                                         1748        
                                     H.B. NO.           

 1 housing project.
 2      SECTION 3.  The sum appropriated shall be expended by the
 3 housing and community development corporation of Hawaii for the
 4 purposes of this Act.
 5      SECTION 4.  This Act shall take effect on July 1, 1999.
 7                           INTRODUCED BY:  _______________________