Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1519
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Government Operations and Housing, to
which was referred S.B. No. 1519 entitled: 


begs leave to report as follows:

     The purpose of this measure is to require assisted housing
development owners who are terminating a contract or prepaying a
mortgage to provide one year's notice to tenants and to give the
tenant's or a nonprofit organization the first opportunity to
purchase the development.

     Testimony in favor of this measure was received from
American Association of Retired Persons, Affordable Housing and
Homeless Alliance, Legal Aid Society of Hawaii, a petition signed
by McCully Circle tenants, and four individuals.  Testimony in
favor of the intent of this measure was received from the
Department of Commerce and Consumer Affairs.  Testimony opposed
to this measure was received from the Housing and Community
Development Corporation of Hawaii.

     Your Committee finds that Hawaii's 3,000 units of Section 8,
subsidized housing are at risk of being sold due to non-renewal
of the Section 8 contract or pre-payment of the Federal mortgage.
Your Committee recognizes that owners of subsidized housing may
wish to pay off their mortgages and increase rents, sell the
buildings, or convert them to condominiums.  However, low income
residents who may lose their homes should be given time to plan
for this change.

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                                   STAND. COM. REP. NO. 137
                                   Page 2

     Your Committee finds that during the year after the notice
is given, residents of low income housing could form a non-profit
organization or work with an existing non-profit organization to
purchase the building.  Giving first right of refusal to a non-
profit entity is a sensible way to continue offering affordable
housing and avoid low income residents having to find alternative
housing accommodations.

     Your Committee made technical, nonsubstantive amendments,
added a definition for "economically feasible" in the section
dealing with right to purchase, and deleted an inappropriate
reference to California law.

     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and
purpose of S.B. No. 1519, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 1519, S.D. 1, and be referred to the Committee on Ways and

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Government
                                   Operations and Housing,

                                   ROD TAM, Chair

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