Report Title:

Hawaiian Housing Finance Corporation

Description:

Establishes the Hawaiian housing finance corporation within the department of Hawaiian home lands for administrative purposes, to be headed by a board of directors, to remedy the housing shortage that exists for many individuals of Hawaiian ancestry in this State, and to provide for urban redevelopment.

HOUSE OF REPRESENTATIVES

H.B. NO.

1636

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO HAWAIIAN HOUSING finance CORPORATION.

 

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

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

HAWAIIAN HOUSING FINANCE CORPORATION

PART I. HOUSING PROJECT AND PUBLIC BUILDING ASSISTANCE ACT

-1 Purpose. The purpose of this chapter is to remedy the acute housing shortage that exists for many people of Hawaiian ancestry in certain localities of the State by undertaking low-cost housing projects, housing for persons and their families engaged in national defense activities in the State, and housing projects and housing for veterans and other citizens of the State, and to remedy the short supply of necessary public buildings by providing for the financing, construction, and acquisition of public buildings for lease to the State.

-1.5 Hawaiian housing finance corporation; establishment, staff. (a) There is established the Hawaiian housing finance corporation, which shall be placed within the department of Hawaiian home lands for administrative purposes only. The corporation shall be a public body and a body corporate and politic.

(b) The corporation shall employ, exempt from chapter 76 and section 26-35(4), an executive director and an executive assistant. The executive director's salary shall be within the range of salaries paid directors of the departments of the state government. The executive director shall be a member of the state employees' retirement system and shall be eligible to receive the benefits of any state or federal employee benefit program generally applicable to officers and employees of the State.

(c) The corporation, subject to chapter 76, may employ technical experts and officers, agents, and employees, permanent and temporary, as required. The corporation 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 corporation, the services to be performed are unique and essential to the execution of the functions of the corporation. The corporation may call upon the attorney general for legal services as it may require. The corporation may delegate to one or more of its agents or employees the powers and duties as it deems proper.

-1.6 Board of directors; establishment, functions, duties. (a) There is created a board of directors 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 Hawaii, Maui, and Kauai and the city and county of Honolulu. 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. 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 two members to be appointed for two years. The chairperson of the Hawaiian homes commission and the chairperson of the board of trustees of the office of Hawaiian affairs, or their designated representatives, and a representative of the governor's office, shall serve as ex officio voting members. The corporation shall be headed by the board.

(b) The board of directors shall select a chairperson and vice-chairperson from among its members. The chairperson of the Hawaiian homes commission and the chairperson of the board of trustees of the office of Hawaiian affairs 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.

-2 Members or employees prohibited from acquiring interest in projects. A member of the board of directors or employee of the corporation may not acquire an interest, direct or indirect, in a housing or public building project or in property or a contract for materials or services included or planned to be included in a project authorized under this chapter. If a member of the board of directors or employee owns or controls an interest, the member or employee shall immediately disclose the interest in writing to the corporation. Failure to make disclosure constitutes misconduct in office.

-3 Powers of corporation. (a) To the extent not already provided by law, the corporation has all powers necessary to carry out the purposes of this part, including the power to:

(1) Sue and be sued;

(2) Adopt a seal;

(3) Have perpetual succession;

(4) Adopt, amend, and repeal rules;

(5) Enter into and execute contracts and other instruments;

(6) In its own name, own, exchange, transfer, lease, rent, convey, or acquire by eminent domain, real and personal property; provided that no project site or part of a project site may be acquired by eminent domain until the corporation has secured, through negotiation, options for the purchase of at least fifty per cent of the properties included in the site, except in disaster areas. In an eminent domain proceeding the court may, upon motion and after a hearing, fix the time when and the terms upon which the parties in possession are required to surrender possession to the plaintiff. If the court finds that urgent public necessity requires, it may grant the plaintiff possession at any time after the proceeding has been commenced;

(7) Provide, subject to the applicable planning, zoning, sanitary, and building laws, ordinances, and regulations for the construction, improvement, alteration, or repair of a housing or public building project or any part of a housing or public building project, and also, subject to the same restrictions, to provide for the construction, improvement, alteration, repair, planning, financing, and interim operation of a sewer or water system, or part of a sewer or water system, to foster, encourage, and permit the development of housing projects by private and public developers and builders;

(8) Operate those housing projects and to act as agent or lessee in developing or administering housing projects undertaken by the federal government;

(9) Arrange or contract for services, privileges, works, or facilities for or in connection with a housing project or the occupants of a housing project and, notwithstanding anything to the contrary contained in parts I and II of this chapter or in any other provision of law, include in the contract that the contractor and subcontractors comply with requirements as to minimum wages and maximum hours of labor, with any conditions that the federal government may have attached to its financial aid of the project, and with any pertinent state law;

(10) Establish and revise rent schedules;

(11) Insure any real or personal property or operations of the corporation against any risks or hazards;

(12) Invest in property or securities in which banks or trust companies may legally invest any money held in reserves or sinking funds or any money not required for immediate disbursement;

(13) Purchase its bonds at a price not more than the principal amount of the bonds and accrued interest, all bonds so purchased to be canceled;

(14) Investigate and study living and housing conditions and the clearing and reconstructing of slum areas;

(15) Arrange or contract for the financing, design, construction, and acquisition of public buildings for lease to the state in accordance with this part;

(16) Charge to and collect fees from owners or developers of low-income housing for the application for and allocation of federal low-income housing tax credits; and

(17) Collect and pay reasonable fees and charges in connection with making, purchasing, and servicing its mortgages, loans, notes, bonds, certificates, commitments, and other evidences of indebtedness.

(b) Notwithstanding any other provisions of parts I and II to the contrary, when the local governing body certifies that an area is in need of a housing project under any of the provisions or powers within parts I and II as a result of a disaster, and all results and after effects respecting which the governor has certified the need for disaster assistance, the corporation may plan, undertake, and carry out the project in the disaster area.

With the approval of the local governing body, and immediately after the approval, the corporation may acquire real property for the purposes of parts I and II, and demolish and remove any structure on the property, and it may pay all costs related to the acquisition, demolition, or removal, including any administrative or relocation expenses, unless payment of the costs are contrary to applicable federal law or regulation.

For the purposes of this subsection, sections     -6 and     -34 do not apply.

(c) Any two or more governmental entities may join or cooperate with one another in the exercise of any or all of the power conferred by this chapter for the purpose of financing, planning, undertaking, constructing, or operating a housing project or projects located within the area of operation of one or more of the agencies.

(d) Notwithstanding subsection (a)(7) and (15), a proposed public building project shall be submitted by the corporation to the legislature for review. The corporation may proceed with the public building project only if it is approved by law. An appropriation does not constitute approval by law for purposes of this subsection.

-4 Cooperation with and aid of federal government. For purposes of this part, the corporation may do all things necessary or desirable to cooperate with or act as agent for the federal government, or to secure financial aid for housing projects for veterans as defined in section     -46 and other citizens of the State; provided that those projects may not be undertaken unless an acute shortage of housing exists. With respect to those projects, the corporation may not be subject to limitations, restrictions, or requirements of other laws, except those relating to land acquisition, prescribing or limiting the procedure or action to be taken in the development or administration of any buildings, property, public works, undertakings, or projects of municipal or public corporations or agencies of the State.

-5 Operation and management of projects. For purposes of this part, the corporation shall manage and operate low-cost housing projects with rentals fixed at the lowest rates consistent with decent, safe, and sanitary dwellings. A low-cost housing project may not be constructed or operated for profit or as a source of revenue to a municipality or the State. Rentals in the housing projects may not exceed the amount that the corporation finds necessary to produce revenues sufficient together with all other available moneys from whatever source derived, to:

(1) Pay, as they become due, the principal and interest on its bonds;

(2) Meet the cost of maintaining and operating the projects, including insurance and administrative expenses; and

(3) Create, during not less than the six years immediately following issuance of any bonds, a reserve sufficient to meet the largest principal and interest payments due in any one year thereafter and to maintain that reserve.

-6 Qualifications of tenants and maximum number of rooms. (a) In the operation or management of low-cost housing projects, the corporation shall from time to time establish rents and requirements for admission of tenants to its low-cost housing projects in each municipality in which low-cost housing projects of the corporation are located. The rents and requirements for admission are subject to the approval of the United States Department of Housing and Urban Development.

(b) Except in the case of leased housing as provided in 42 U.S.C. 1437f, the corporation shall fix the income limits for occupancy of its low-cost housing projects and rents that are approved by the United States Department of Housing and Urban Development after taking into consideration:

(1) The family size, composition, age, physical handicaps, and other factors that might affect the rent-paying ability of the family; and

(2) The economic factors that affect the financial stability and solvency of the project.

(c) Rents and requirements for admission to low-cost housing projects as provided in subsections (a) and (b) shall be established such that a gap of at least twenty per cent, except in the case of an elderly family or displaced family or in the case of leased housing under 42 U.S.C. 1437f, will be left between the upper rental limits for admission to low-cost housing projects of the corporation and the lowest rents at which private enterprise unaided by public subsidy is providing housing substantially similar to the low-cost housing projects of the corporation.

(d) The corporation may not rent more than the minimum number of rooms that it considers necessary to provide safe and sanitary accommodations without overcrowding.

(e) Nothing in this section or section -5 shall limit the power of the corporation to vest in an obligee the right to take possession of a housing project or have a receiver appointed free from the restrictions imposed by this section or section -5 in case of default by the corporation.

-7 Issuance of bonds, notes, and refunding bonds. The corporation may issue bonds and notes from time to time in its discretion for a purpose authorized by this chapter and may issue refunding bonds for the purpose of paying or retiring bonds previously issued under this chapter.

-8 Security for bonds. (a) In conjunction with projects authorized by this chapter, the corporation may issue bonds, including bonds on which the principal and interest are payable:

(1) Exclusively from the income and revenue of the housing project financed with the proceeds of the bonds;

(2) Exclusively from the income and revenue of designated housing projects whether or not they are financed in whole or in part with the proceeds of the bonds;

(3) From its revenue generally; or

(4) Exclusively from rents collected on public buildings.

(b) Bonds authorized by subsection (a) may be additionally secured:

(1) By a pledge of a grant or contribution from the federal government or from another source;

(2) By a pledge of income or revenue of the corporation; or

(3) By a mortgage of a housing project or other property of the corporation.

-9 Limitation of liability on bonds. (a) The members of the board of directors of the corporation and any person executing the bonds issued under this part are not liable personally on the bonds by reason of their issuance.

(b) The bonds of the corporation issued under this part are not a debt of the State or a political or municipal corporation or other subdivision of the State and each bond shall so state on its face. Neither the State nor a political or municipal corporation or other subdivision of the State other than the corporation is liable on the bonds, nor are the bonds payable out of moneys or property other than those of the corporation.

(c) The corporation may not pledge the full faith and credit of the State for a loan or obligation that is entered into under this part.

(d) Bonds of the corporation issued under this part are not a debt, indebtedness, or the borrowing of money within the meaning of any limitation or restriction on the issuance of bonds contained in the constitution or laws of the State.

-10 Exemption from taxes. Bonds and other obligations of the corporation issued under this part are declared to be issued for an essential public and governmental purpose and are public instrumentalities and, together with interest on them and income from them, are exempt from taxes.

-11 Issuance and sale of bonds and notes. Bonds and notes of the corporation issued under this part are authorized by adoption of a resolution prescribing the date of issuance and maturity, interest rate, denomination, form, conversion privilege, rank or priority, execution, terms of redemption, medium, and place of payment. Bonds and notes may be sold in the manner, on the terms, and at the price the corporation determines. Each bond and note is negotiable. The signature of a member of the board of directors of the corporation or an officer of the corporation upon a bond or note or coupon is not invalidated by that person's ceasing to hold office before the delivery of the bond or note. The recitation of a bond or note that it has been issued in the financing of a housing or public building project under this part is conclusive as to the issuance of the bond or note and the character of the project in a challenge of the validity of the bond or note or the security for it.

-12 Independent financial advisor. In negotiating the private sale of bonds or bond anticipation notes to an underwriter when that sale is authorized by this part, the corporation shall retain a financial advisor who is independent from the underwriter. The financial advisor may not bid on the bonds or notes if offered at public sale or negotiate for their purchase if sold at private sale.

-13 Additional powers to secure bonds or obligations under leases. When authorized by this part, in connection with the issuance of bonds or the incurring of obligations under leases and in order to secure the payment of bonds or lease obligations, the corporation, in addition to its other powers, may:

(1) Pledge all or a part of its gross or net rents, fees, or revenues to which its right exists or may exist;

(2) Mortgage all or a part of its real or personal property, owned or later acquired;

(3) Covenant against pledging all or a part of its rents, fees, and revenues, or against mortgaging all or a part of its real or personal property, to which its right or title exists or may come into existence or against permitting or suffering any lien on the revenues or property;

(4) Covenant with respect to limitations on its right to sell, lease, or otherwise dispose of a housing or public building project or a part of a housing or public building project;

(5) Covenant as to what other, or additional debts or obligations may be incurred by it;

(6) Covenant as to the bonds to be issued and as to the issuance of the bonds in escrow or otherwise, and as to the use and disposition of the proceeds of bonds;

(7) Provide for the replacement of lost, destroyed, or mutilated bonds;

(8) Covenant against extending the time for the payment of its bonds or interest on the bonds;

(9) Redeem the bonds, and covenant for their redemption and to provide the terms and conditions of redemption;

(10) Covenant subject to the limitations contained in this part as to the rents and fees to be charged in the operation of a housing or public building project, the amount to be raised each year or other period of time by rents, fees, and other revenues, and as to the use and disposition of these revenues;

(11) Create or authorize the creation of special funds for moneys held for construction or operating costs, debt service, reserves, or other purposes, and covenant as to the use and disposition of these moneys;

(12) Prescribe the procedure by which the terms of a contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which the consent may be given;

(13) Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of a covenant, condition, or obligation, and covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds or obligations shall become or may be declared due before maturity, and covenant as to the terms and conditions upon which this declaration and its consequences may be waived;

(14) Vest in a trustee or trustees or the holders of bonds or a specified proportion of them, the right to enforce the payment of the bonds or covenants securing or relating to the bonds;

(15) Vest in one or more trustees the right, in the event of a default by the corporation, to take possession of a housing or public building project or a part of the project, and so long as the corporation continues in default to retain possession and to use, operate, and manage the project, and to collect the rents and revenues from the project, and to dispose of the money according to the agreement between the corporation and the trustees;

(16) Provide for the powers and duties of the trustees, and limit the liability of the trustees; and

(17) Provide the terms and conditions upon which the trustee or trustees or the holders of bonds, or portions of bonds, may enforce a covenant or right securing or relating to the bonds.

-14 Right of obligee of corporation to bring action. An obligee of the corporation may, in addition to all other rights that may be conferred by this part and subject only to contractual restriction binding upon the obligee, seek an injunction or an action for mandamus against the members of the board of directors, the corporation, or its officers, agents, or employees for a matter arising out of this part.

-15 Power of corporation to confer upon obligee right to bring action or proceeding. In conjunction with the exercise of a power authorized by this part, the corporation may, by resolution, trust indenture, mortgage, lease, or other contract, confer upon an obligee holding or representing a specified amount in bonds, or holding a lease, the right upon a default as defined in the resolution or instrument by suit, action, or proceeding to:

(1) Have possession of a housing or public building project or part of one surrendered to the obligee, with possession retained by the obligee as long as the corporation continues in default;

(2) Obtain the appointment of a receiver of a housing or public building project or part of one and its rents and profits, who may enter, take possession, and for the duration of the default operate and maintain it, collect and receive all fees, rents, revenues, or other charges thereafter arising, and keep the money in a separate account or accounts to be applied in accordance with the obligations of the corporation as the court directs; and

(3) To require the corporation and the members of its board of directors to account as if they were the trustees of an express trust.

-16 Exemption of real property of corporation from execution or other process. In conjunction with the exercise of a power authorized by this part, the real property of the corporation is exempt from levy and sale by execution. Execution or other judicial process may not issue against it and judgment against the corporation may not be a charge or lien upon its real property. However, this section does not limit the right of an obligee to foreclose or otherwise enforce a mortgage of the corporation or to pursue any remedy for the enforcement of a pledge or lien given by the corporation under this part on its rents, fees, or revenues.

-17 Power of corporation to obtain federal aid and cooperation. The corporation may borrow, accept contributions, grants, or other financial assistance from the federal government in aid of any housing or public building project and for this purpose may comply with conditions and enter into the mortgages, trust indentures, leases, or agreements that are necessary, convenient, or desirable in order to obtain financial aid or cooperation from the federal government in the undertaking, construction, maintenance, or operation of a housing or public building project authorized by this part.

-18 Exemption from taxes and assessments. The property owned by the corporation under the authority granted in this part is public property used for essential public and governmental purposes, and is exempt from all taxes and special assessments of a municipality, the State, or a political subdivision of the State. The corporation may make payments to the municipality or political subdivision for improvements, services, and facilities furnished by the municipality or political subdivision for the benefit of a housing or public building project.

-19 Disposal of surplus property. (a) In conjunction with the exercise of a power authorized by this part, the corporation may convey real or personal property that it determines is in excess of its needs. Except as provided in subsections (b) and (c), the sale shall be by public auction or by sealed bids at a price not lower than the fair market value determined by an appraisal made within 180 days before the sale by a qualified appraiser. Public notice shall be given by publishing notice of the sale at least once a week for two consecutive weeks in a newspaper of general circulation within the area in which the property to be sold is located and by posting notice of the sale in at least two public places in the area. In no event may the auction be held less than thirty days after the last day of publication. If acceptable bids are not received the corporation may sell the property at a negotiated sale within six months after the date of the auction. A negotiated sale may not be made on an appraisal made more than nine months before the date of sale. The price at a negotiated sale may not be less than the appraised value.

(b) Real or personal property of the corporation may be conveyed under subsection (a) to a state or federal agency or political subdivision for less than the appraised value without competitive bidding, upon a determination by the board that the terms are fair and proper and in the best interests of the State. Before authorizing a conveyance under this section, the board of directors of the corporation shall consider both the nature of the agency's or political subdivision's public services or functions and the terms under which the property was acquired by the corporation.

(c) Property acquired or renovated to provide mental health community housing is not subject to the procedures of subsection (a) or (b) and may be conveyed for less than the fair market value to grantees selected by the department of human services upon terms and conditions consistent with law.

(d) This section does not apply to property that is covered by section -33 or -58.

-20 Legality of corporation's bonds as investments. Bonds of the corporation that are issued under this part are legal and proper investments and security for public and private banking, insurance, and trust funds.

-21 Recommendations for legislation. The corporation shall make recommendations for legislation or other action it considers necessary to carry out the purposes of this part.

-22 Public loans or donations to or cooperation with corporation. (a) In conjunction with the exercise by the corporation of a power authorized by this part, a public body, officer, or agency of the State may:

(1) Lend or donate money or property to the corporation;

(2) Cooperate with the corporation in the planning, construction, or operation of a public housing or public building project;

(3) Transfer to the corporation an interest in property, grant an easement, and undertake otherwise authorized construction of facilities adjacent to a project;

(4) Furnish or improve otherwise authorized roads, streets, alleys, and sidewalks;

(5) Make exceptions from building codes, exercise its planning and zoning powers, and annex the site of a project;

(6) Contract to exercise its powers relating to repair, elimination, or closing of unsafe, unsanitary, or unfit dwellings;

(7) Purchase the bonds of the corporation for a housing or public building project authorized by this part;

(8) Incur the entire expense of improvements made under this part;

(9) Agree with the corporation that a certain sum or that no sum shall be paid by the corporation to the public body, officer, or agency instead of taxes;

(10) Enter into agreements respecting exercise of a power granted in this part if that agreement is approved and executed by the public body or municipality in or adjacent to the project before the project is constructed; and

(11) In general do all things necessary or convenient to cooperate in the planning, construction, or operation of a project.

(b) A sale, conveyance, lease, or agreement under this section may be made without appraisal, public notice, or advertisement or bidding. A public body may exercise the powers granted in this section by resolution or ordinance by a majority of the members of the governing body present at the meeting at which it is introduced, and the resolution or ordinance takes effect immediately without publishing or posting.

-23 Definitions. In this part:

"Corporation" means the Hawaiian housing finance corporation.

"Project site" means area devoted to a housing project.

"Public building" means a publicly owned structure leased to the State for governmental, public, or educational use.

-24 Short title. This part may be cited as the Housing Project and Public Building Assistance Act.

PART II. MODERATE COST AND RENTAL HOUSING

-31 Declaration of purpose. The legislature declares that in addition to an acute shortage of low-income rental housing, there is a serious shortage of moderate-cost and rental housing for families in the State that endangers their health and constitutes a threat to the safety, morals, welfare, and comfort of the people of the State. This shortage is a serious deterrent to the development of the State that requires positive action by the legislature.

-32 Powers and duties of corporation. The corporation shall construct, protect, operate, maintain, rent, and sell at the places in the State that it considers most appropriate moderate-cost or rental housing facilities and projects for veterans and other residents of the State. For this purpose the corporation may accept funds from any source, including the federal government, and may enter into appropriate contracts, including contracts with the federal government.

-33 Sale of surplus property. (a) The corporation may sell a property held by it under this part that it finds is in excess of its needs. The sale shall be by public auction or by sealed bids at a price not lower than the fair market value determined by an appraisal made within 180 days of the sale by a qualified appraiser. Public notice shall be given by publishing notice of the sale at least once a week for two consecutive weeks in a newspaper of general circulation within the area in which the property to be sold is located and by posting notice of sale in at least two public places in the area. In no event shall the auction be held less than thirty days after the last day of publication. If no acceptable bids are received, the corporation may sell the property at a negotiated sale, within six months of the date of auction. A negotiated sale may not be made on an appraisal made more than nine months before the date of sale. The price at a negotiated sale may not be less than the appraised value except as provided in subsection (b).

(b) The sale may be made to a state or federal agency or political subdivision for less than the appraised value without competitive bidding as required in subsection (a) if the board determines that it is in the best interests of the public with due consideration given to the nature of the public services or functions rendered by the agency or political subdivision making application and of the terms under which the land was acquired.

-34 Preference to veterans. The corporation shall initially offer fifty per cent of the dwelling units in a housing project held by it under this part for rent or sale to veterans. The offer shall be by publication of reasonable notice in a newspaper circulated in the area in which the housing project is located. The corporation shall set aside these units for rental or sale to veterans for at least thirty days following first publication of the notice before making them available to other residents. If, after an additional thirty days any unit remains unassigned, the corporation may rent or sell it to any person in the State; provided that residents have first preference.

-35 Care, operation, maintenance, and rental of housing. The corporation has control over and is responsible for the care, operation, maintenance, and rental or sale of the housing held by it under this part. It may enter into appropriate arrangements for carrying out this responsibility and for safeguarding the interest of the State.

-36 Availability of housing units. The corporation shall make the housing units held by it under this part available for rental to eligible persons upon application in the form it prescribes, and at the moderate rentals that it considers proper, or for sale at the prices and subject to the terms and conditions that it considers fair and equitable. The corporation shall use the money it receives from the sale of housing or housing projects held by it under this part, and the revenue from rentals, after payment of obligations and deductions for proper expenses of maintenance and operation, for the construction of further housing, under the terms of this part.

-37 Use of money. Money appropriated or made available under this part may be used by the corporation to make:

(1) Character loans, not exceeding $500 for each dwelling, to residents or cooperatives for the improvement, conversion, or construction of dwellings in remote areas for occupancy by the residents or members of the cooperatives; and

(2) Loans for moderate-cost or rental housing facilities and projects to public agencies, or private nonprofit or limited dividend corporations, or private corporations or cooperatives that are regulated or restricted by the corporation until the termination of all loan obligations to it as to rents or sales, charges, capital structure, rate of return, and methods of operation to the extent and in the manner that provides reasonable rentals to tenants and a reasonable return on the investment; loans to cooperatives may be made for up to ninety-five per cent of the appraised value of the housing facility.

-38 Corporation may use powers under other laws. The corporation may invoke a power given to it under any statute, including the powers of eminent domain and those relating to the issuance of bonds and obligations with respect to a project undertaken or loan made or to be made under the authorization provided in this part.

-39 Limitation on corporation's power. The power of the corporation to act under this part is limited to projects in which adequate financing on reasonable terms is not otherwise available or entrepreneurial sponsorship is lacking.

-40 Expenditure of money. The corporation may spend the portion of the money appropriated under this part that it considers advisable, either directly or in cooperation with educational institutions or government agencies, to develop, through study, research, and analysis, information regarding low cost building supplies, materials, and methods of construction, and to disseminate this information.

-41 Power to sell, transfer, or dispose of projects. The corporation may at any time sell, transfer, or otherwise dispose of a housing project under this part to the federal government, provided the corporation is completely relieved of all obligations assumed or guaranteed by it in connection with the housing project. Upon the disposal, the provisions of this part no longer apply to the housing project.

-42 Rules; allocation of units and projects. The corporation may:

(1) Adopt and enforce reasonable rules to carry out the purposes of this part; and

(2) Determine the allocation of dwelling units and projects constructed in a municipality on the basis of the municipality's population or the demand or potential demand for dwelling units in it.

-43 Additional powers to acquire land or interests in land. For the purpose of carrying out this part, the corporation may acquire by purchase, lease, condemnation, or otherwise:

(1) Land and appurtenances to land necessary or desirable for the establishment, construction, and operation of moderate-cost and moderate rental housing; and

(2) Rights-of-way or easements for roads, streets, trails, utilities, power lines, and other similar facilities necessary and desirable for the proper establishment, operation, and maintenance of a housing project.

-44 Ability to accept land and other property. The corporation may accept land, buildings, property, or equipment that is available from the state or federal government, or a municipality, for the purpose of carrying out this part.

-45 Preference for state professional and contractors' services. In planning, designing, and constructing projects under this part, the corporation shall use professional and contractor services of state residents as far as practicable and shall encourage the use of local building materials.

-46 Definitions. In this part:,

"Board" means the board of directors of the Hawaiian housing finance corporation.

"Corporation" means the Hawaiian housing finance corporation.

"Moderate-cost" means a cost determined by the corporation that is below the level at which private enterprise is currently building a needed volume of reasonably safe and sanitary dwellings for sale in the locality involved.

"Moderate rental" means a rental rate determined by the corporation that is below the level at which dwellings are currently being offered for rent by private persons in the locality involved.

"Veteran" means a person:

(1) Honorably separated from the military service of the United States who has at any time resided continuously for at least a year in the State and who served in the armed forces of the United States for at least ninety days or whose service was for less than ninety days because of injury or disability incurred in the line of duty, between:

(A) September 16, 1940, and July 25, 1947;

(B) June 25, 1950, and January 31, 1955; or

(C) August 4, 1964, and November 7, 1975;

(2) Who served in the Hawaii National Guard for at least ninety days or whose service was for less than ninety days because of injury or disability incurred in the line of duty, and who has at any time resided continuously for at least a year in the State; or

(3) Who is the spouse or widow or widower of a person described under paragraph (1) or (2).

PART III. REDEVELOPMENT ACT

-51 Findings and declaration of necessity. The legislature finds and declares that:

(1) Blighted areas exist in localities throughout the State and they constitute a serious and growing menace, injurious and inimical to the public health, safety, morals, and welfare of the residents of the State;

(2) The existence of these slum and blighted areas contributes substantially and increasingly to the spread of disease and crime, necessitating excessive and disproportionate expenditures of public funds for the preservation of the public health and safety, for crime prevention, correction, prosecution, punishment, and the treatment of juvenile delinquency and for the maintenance of adequate police, fire, and accident protection, and other public services and facilities, and constitutes an economic and social liability, substantially impairs or arrests the sound growth of municipalities, and retards the provision of housing accommodations;

(3) This menace is beyond remedy and control solely by regulatory process in the exercise of the police power and cannot be dealt with effectively by the ordinary operations of private enterprise without the assistance provided in this part;

(4) The elimination of slum conditions or conditions of blight, the acquisition and preparation of land in or necessary to the redevelopment of slum or blighted areas and its sale or lease for development or redevelopment in accordance with comprehensive plans and redevelopment plans of municipalities, and any assistance that may be given by any public body in connection therewith are public uses and purposes for which public moneys may be expended and private property acquired; and

(5) The necessity in the public interest for the provisions of this part is a matter for legislative determination.

-52 Legislative intent. It is the intent of the legislature in this part to take advantage of 42 U.S.C. 1441 to 1469c (Title I of the Housing Act of 1949 (P.L. 81-171; 63 Stat. 413)), as amended.

-53 Interest of members of board of directors or employees of corporation in project prohibited. (a) A member of the board of directors or employee of the corporation may not voluntarily acquire an interest, direct or indirect, in a redevelopment project or in property included or planned by the corporation to be included in a redevelopment project, or in a contract or proposed contract in connection with a project. If the acquisition is not voluntary the member or employee shall immediately disclose the interest in writing to the corporation and the disclosure shall be entered upon the minutes of the corporation.

(b) If a member of the board of directors or employee of the corporation owns or controls or owned or controlled within the preceding two years an interest, direct or indirect, in property that the member or employee knows is included or planned by the corporation to be included in a redevelopment project, the member or employee shall immediately disclose the interest in writing to the corporation and the disclosure shall be entered upon the minutes of the corporation, and the member or employee may not participate in an action by the corporation affecting the property. A violation of this section constitutes misconduct in office or dereliction of duties of employment or both.

-54 Finding of necessity by municipality. (a) The corporation may not transact business or exercise its powers under this part in a municipality until the governing body approves by resolution the exercise in the municipality of the powers, functions, and duties of the corporation under this part.

(b) The governing body of a municipality may not adopt a resolution under subsection (a) unless it finds that:

(1) One or more slum or blighted areas exist in the municipality; or

(2) The redevelopment of the slum or blighted area is necessary in the interest of the public health, safety, morals, or welfare of the residents of the municipality.

(c) When the governing body of a municipality adopts the resolution, it shall promptly notify the corporation.

-55 Powers of the corporation. In addition to all powers previously vested in or granted to the corporation by any other law, the corporation has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this part, including the following powers:

(1) To prepare or have prepared and to recommend redevelopment plans to the governing body of any municipality within its area of operation and to undertake and carry out redevelopment projects within its area of operation;

(2) To arrange or contract for the furnishing or repair, by any person or agency, public or private, of services, privileges, works, streets, roads, public utilities or other facilities for or in connection with a redevelopment project; and notwithstanding anything to the contrary contained in this part or any other provision of law, to agree to the conditions that it considers reasonable and appropriate that are attached to federal financial assistance and imposed pursuant to federal law relating to the determination of prevailing salaries or wages or compliance with labor standards, in the undertaking or carrying out of a redevelopment project, and to include in a contract let in connection with a redevelopment project, provisions to fulfill any of these conditions it considers reasonable and appropriate;

(3) Within its area of operation:

(A) To purchase, lease, obtain options upon, acquire by gift, grant, bequest, devise, eminent domain, or otherwise, any real or personal property or any interest in it, together with any improvements on it necessary or incidental to a redevelopment project;

(B) To hold, improve, clear, or prepare for redevelopment the property it obtains under subparagraph (A);

(C) To sell, lease, exchange, transfer, assign, subdivide, retain for its own use, mortgage, pledge, hypothecate, or otherwise encumber or dispose of any real or personal property or any interest in it;

(D) To enter into contracts with redevelopers of property containing covenants, restrictions, and conditions regarding the use of the property for residential, commercial, industrial, or recreational purposes, or for public purposes in accordance with the redevelopment plan and other covenants, restrictions, and conditions that the corporation considers necessary to prevent a recurrence of slum or blighted areas or to effectuate the purposes of this part;

(E) To make any covenant, restriction, or condition of the foregoing contracts a covenant running with the land, and to provide appropriate remedies for a breach of the covenant, restriction, or condition, including the right in the corporation to terminate the contract and the interest in the property created under the contract;

(F) To borrow money and issue bonds and provide security for loans or bonds;

(G) To insure or provide for the insurance of real or personal property or operations of the corporation against risk or hazard, including the power to pay premiums on this insurance;

(H) To enter into any contracts necessary to effectuate the purposes of this part; however, statutory provisions with respect to the acquisition, clearance, or disposition of property by another public body do not restrict the corporation or the other public body in these functions, unless the legislature has specifically so provided;

(4) To invest money held in reserves or sinking funds or any money not required for immediate disbursement, in property or securities in which savings banks may legally invest money subject to their control, and to redeem its bonds at the redemption price established in the bonds or to purchase its bonds at less than redemption price; and all bonds redeemed or purchased shall be cancelled;

(5) To borrow money and to apply for and accept advances, loans, grants, contributions, and any other form of financial assistance from the federal government, the State, municipality, or other public body or from any sources, public or private, for the purposes of this part, to give the security required and to enter into and carry out contracts in connection with the transaction; notwithstanding the provisions of any other law, the corporation may include in a contract for financial assistance with the federal government for a redevelopment project those conditions imposed pursuant to federal law that the corporation considers reasonable and appropriate and which are not inconsistent with the purposes of this part;

(6) To act through a member or another person designated by the corporation to conduct examinations and investigations and to hear testimony and take proof under oath at public or private hearings on any matter material for its information; to administer oaths, and to issue commissions for the examination of witnesses who are outside the State or unable to attend before the corporation, or excused from attendance; to make available to appropriate agencies or public officials, including those charged with the duty of abating or requiring the correction of nuisances or like conditions or of demolishing unsafe or unsanitary structures or eliminating slums or conditions of blight within its area of operation, its findings and recommendations with regard to any building or property where conditions exist that are dangerous to the public health, safety, morals, and welfare;

(7) Within its area of operation, to make or have made all surveys, appraisals, studies, and plans necessary to carry out the purposes of this part and to contract or cooperate with persons or agencies, public or private, in the making and carrying out of the surveys, appraisals, studies, and plans;

(8) To prepare plans and provide reasonable assistance for the relocation of families displaced from a redevelopment project area to the extent essential for acquiring possession of and clearing the area or parts of the area to permit the carrying out of the redevelopment project;

(9) To make expenditures that are necessary to carry out the purposes of this part, and to make expenditures from money obtained from the federal government and the State, without regard to any other laws pertaining to the making and approval of appropriations and expenditures;

(10) To exercise all or any part or combination of powers granted by this section;

(11) With the approval of the local governing body:

(A) Before approval of an urban renewal or redevelopment plan, or approval of any modifications of the plan to acquire real property in an urban renewal or redevelopment area, to demolish and remove any structures on the property, and pay all costs related to the acquisition, demolition, or removal, including any administrative or relocation expenses; and

(B) To assume the responsibility to bear any loss that may arise as the result of the exercise of its powers under this paragraph in the event that the real property is not made part of the urban renewal or redevelopment project; and

(12) To prepare or have prepared and to recommend neighborhood development plans to the governing body of any municipality within its area of operation and to undertake and carry out neighborhood development projects within its area of operation.

-56 Neighborhood development projects. (a) A neighborhood development project, as undertaken and administered by the corporation, shall consist of urban renewal project undertakings and activities in one or more urban renewal areas that are planned and carried out on the basis of annual increments in accordance with 42 U.S.C. 1469 to 1469c (secs. 131 to 134, Title I, Housing Act of 1949), as amended.

(b) The corporation shall adhere to the provisions of this part in its planning and carrying out of a neighborhood development project.

-57 Preparation and approval of redevelopment plans. (a) Except as provided in section -55(11), the corporation may not acquire real property for a redevelopment project unless the governing body of the municipality has approved the redevelopment plan, as prescribed in subsection (i).

(b) The corporation may not prepare a redevelopment plan for a redevelopment project area unless the governing body of the municipality has, by resolution, declared the area to be a slum or blighted area in need of redevelopment.

(c) The corporation may not recommend a redevelopment plan to the governing body of the municipality until a general plan for the physical development of the municipality has been prepared.

(d) The corporation may prepare or have prepared a redevelopment plan or any person or agency, public or private, may submit a redevelopment plan to the corporation. A redevelopment plan must be sufficiently complete to indicate its relationship to definite local objectives as to appropriate land uses, improved traffic, public transportation, public utilities, recreational and community facilities, and other public improvements and the proposed land uses and building requirements in the redevelopment project area, and must include:

(1) The boundaries of the redevelopment project area, with a map showing the existing uses and conditions of the real property within those boundaries;

(2) A land use plan showing proposed uses of the area;

(3) Information showing the standards of population densities, land coverage, and building intensities in the area after redevelopment;

(4) A statement of the proposed changes, if any, in zoning ordinances or maps, street layouts, street levels or grades, building codes, and ordinances;

(5) A site plan of the area; and

(6) A statement as to the kind and number of additional public facilities or utilities that will be required to support the new land uses in the area after redevelopment.

(e) Before recommending a redevelopment plan to the governing body for approval, the corporation shall submit the plan to the planning commission, if any, of the area in which the redevelopment project area is located for review and recommendations as to its conformity with the general plan for the physical development of the area. The planning commission shall submit its written recommendations with respect to the proposed redevelopment plan to the corporation within thirty days after receipt of the plan for review. Upon receipt of the recommendations of the planning commission or, if recommendations are not received within thirty days, then without the recommendations, the corporation may recommend the redevelopment plan to the governing body of the municipality for approval.

(f) Before recommending a redevelopment plan to the governing body of the municipality for approval, the corporation shall consider whether the proposed land uses and building requirements in the redevelopment project area are designed with the general purpose of accomplishing, in conformance with the general plan, a coordinated, adjusted, and harmonious development of the municipality and its environs that will, in accordance with present and future needs, promote public health, safety, morals, order, convenience, prosperity, and the general welfare, as well as efficiency and economy in the process of development and, including, among other things, adequate provision for traffic, vehicular parking, the promotion of safety from fire, panic, and other dangers, adequate provision for light and air, the promotion of the healthful and convenient distribution of population, the provision of adequate transportation, water, sewerage, and other public utilities, schools, parks, recreational and community facilities, and other public requirements, the promotion of sound design and arrangement, the wise and efficient expenditure of public funds, the prevention of the recurrence of unsanitary or unsafe dwelling accommodations, slums, or conditions of blight, and the provision of adequate, safe, and sanitary dwelling accommodations.

(g) The recommendation of a redevelopment plan by the corporation to the governing body of a municipality shall be accompanied by:

(1) The recommendations, if any, of the planning commission concerning the redevelopment plan;

(2) A statement of the proposed method and estimated cost of the acquisition and preparation for redevelopment of the redevelopment project area and the estimated proceeds or revenues from its disposal to redevelopers;

(3) A statement of the proposed method of financing the redevelopment project; and

(4) A statement of a feasible method proposed for the relocation of families to be displaced from the redevelopment project area.

(h) The governing body shall hold a public hearing on the redevelopment plan or substantial modification of the redevelopment plan recommended by the corporation, after public notice by publication in a newspaper of general circulation in the municipality once each week for two consecutive weeks, the last publication to be at least ten days before the date set for hearing, or, if there is no newspaper of general circulation, by posting the notice in three public places in the municipality at least ten days before the date set for hearing. The notice must describe the time, place, and purpose of the hearing and must generally identify the area to be redeveloped under the plan. At the public hearing all interested parties shall be given a reasonable opportunity to express their views respecting the proposed redevelopment plan.

(i) Following the hearing required by subsection (h), the governing body may by ordinance initially approve a redevelopment plan if it finds that the plan is feasible and conforms with the general plan for the physical development of the area. Approval of subsequent modifications of the plan that do not involve substantive changes shall be by resolution. A redevelopment plan that has not been approved by the governing body when recommended by the corporation may again be recommended to it with any modifications considered advisable.

(j) The corporation may modify a redevelopment plan at any time. However, if it is modified after the lease or sale of real property in the redevelopment project area, the redeveloper or the developer's successor in interest affected by the proposed modification must consent to the modification. If the proposed modification will substantially change the redevelopment plan as previously approved by the governing body of the municipality, the modification must similarly be approved by the governing body.

(k) Notwithstanding any other provision of this chapter, if the governing body of a municipality certifies that an area is in need of redevelopment or rehabilitation as a result of flood, fire, hurricane, earthquake, storm, or other catastrophe respecting which the governor has certified the need for disaster assistance under federal law, the local governing body may approve an urban renewal or redevelopment plan and an urban renewal or redevelopment project with respect to the area without regard to the provisions relating to relocation, conformance of the urban renewal or redevelopment plan with the general plan, and the provisions of this chapter requiring a general plan for the municipality and a public hearing on the urban renewal or redevelopment project or plan.

-58 Disposal of property in redevelopment project. (a) The corporation may sell, lease, exchange, or otherwise transfer real property or any interest in real property in a redevelopment project area to a redeveloper for residential, recreational, commercial, industrial, or other uses, or for public use in accordance with the redevelopment plan, subject to those covenants, conditions, and restrictions it considers in the public interest or to carry out the purposes of this part. However, the sale, lease, exchange, or other transfer, or an agreement relating to it, may be made only after, or subject to, the approval of the redevelopment plan by the governing body of the municipality. The real property shall be sold, leased, or transferred at its fair value for uses in accordance with the redevelopment plan although the fair value may be less than the cost of acquiring and preparing the property for redevelopment. In determining the fair value of real property for uses in accordance with the redevelopment plan, the corporation shall consider the uses and purposes required by the redevelopment plan, the restrictions upon, and the covenants, conditions, and obligations assumed by the redeveloper of the property, the objectives of the redevelopment plan for the prevention of the recurrence of slum or blighted areas, and the other matters the corporation specifies as appropriate. In fixing rentals and selling prices, the corporation shall consider appraisals of the property for these uses that are made by land experts employed by the corporation.

(b) Before considering a redevelopment contract proposal, the corporation, by public notice published at least once a week for two consecutive weeks in a newspaper of general circulation in the municipality, or, if there is no newspaper of general circulation, by posting the notice in three public places in the municipality, shall invite proposals from, and make available all pertinent information to private redevelopers or to persons interested in undertaking the redevelopment of an area or any part of an area that the governing body has declared to be in need of redevelopment. The notice must identify the area and must state that the further information that is available may be obtained at the office of the corporation. The corporation shall consider all redevelopment proposals and the financial and legal ability of the prospective redevelopers to carry out their proposals and may negotiate with redevelopers for proposals for the purchase or lease of real property in the redevelopment project area. The corporation may accept the redevelopment contract proposal it considers in the public interest and in furtherance of the purposes of this part; provided that the corporation has given to the governing body at least thirty days' written notice of its intent to accept the redevelopment contract proposal. Thereafter the corporation may execute a redevelopment contract in accordance with the provisions of subsection (a) and deliver deeds, leases, and other instruments and take all steps necessary to effectuate the redevelopment contract. The corporation may, without regard to the foregoing provisions of this subsection, dispose of real property in a redevelopment project area to private redevelopers for redevelopment under the reasonable competitive bidding procedures it prescribes, subject to the provisions of subsection (a).

(c) The corporation may temporarily operate and maintain real property in a redevelopment project area pending the disposition of the property for redevelopment, without regard to the provisions of subsections (a) and (b), for uses and purposes that it considers desirable even though not in conformity with the redevelopment plan.

(d) A person owning land in the urban renewal area at the time of the approval of the urban renewal plan by the governing body of the municipality may, with approval of the governing body and under regulations, conditions, and limitations the corporation prescribes, be granted a preferred right to purchase or lease land within the redevelopment area. This preferred right shall be exercised within fifteen days after public notice of the date of the intended leasing or sale of land within the area. Public notice shall be given in substantially the manner set forth in subsection (a).

-59 Eminent domain. (a) The corporation may:

(1) Acquire by eminent domain real property that it considers necessary within the boundaries of the redevelopment project or for its purposes under this part after the adoption by it of a resolution declaring that the acquisition of the real property described in the resolution is necessary for those purposes; and

(2) Exercise the power of eminent domain in the manner provided by law.

(b) Property already devoted to a public use may be acquired in the same manner, provided that real property belonging to the municipality or the State may not be acquired without its consent.

-60 Acquisition and development of undeveloped vacant land. Upon a determination, by resolution, of the governing body of the municipality that the acquisition and development of undeveloped vacant land not within a slum or blighted area is essential to the proper clearance or redevelopment of a slum or blighted area or a necessary part of the general slum clearance program of the municipality, the acquisition, planning, preparation for development, or disposal of the land shall constitute a redevelopment project that may be undertaken by the corporation in the manner provided in this part. The determination by the governing body is a substitute for the declaration required by section -57(b) but the determination may not be made until the governing body finds that:

(1) There is a shortage of decent, safe, and sanitary housing in the municipality;

(2) The undeveloped vacant land will be developed for predominantly residential uses; and

(3) The provisions of dwelling accommodations on the undeveloped vacant land is necessary to accomplish the relocation in decent, safe, and sanitary housing in the municipality, of families to be displaced from slum or blighted areas that are to be redeveloped.

-61 Issuance of bonds and notes. (a) The corporation may:

(1) Issue bonds and notes from time to time for any of the purposes of this part, including the payment of principal and interest upon advances for surveys and plans for redevelopment projects;

(2) Issue refunding bonds for the purpose of the payment or retirement or in exchange for bonds previously issued by it;

(3) Issue the types of bonds and notes it determines, including bonds and notes on which the principal and interest are payable:

(A) Exclusively from the income, proceeds, and revenues of the redevelopment project financed with the proceeds of the bonds or notes; or

(B) Exclusively from the income, proceeds, and revenue of any of its redevelopment projects whether or not they are financed in whole or in part with the proceeds of the bonds or notes; and

(4) Further secure the bonds or notes authorized by paragraphs (1) to (3) by a pledge of all or any part of a loan, grant, or contribution from the federal government or from another source, or by a mortgage of a redevelopment project of the corporation.

(b) The members of the board of directors of the corporation or a person executing the bonds or notes authorized by subsection (a) are not liable personally on the bonds or notes by reason of the issuance of them. The bonds, notes, and other obligations of the corporation are not a debt of the municipality, the State, or the United States, and neither the municipality, the State, nor the United States is liable on them, nor are the bonds, notes, or obligations payable out of money or property other than those of the corporation acquired for the purposes of this part and each bond and note shall state this on its face. A bond or note does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Bonds and notes of the corporation issued under this part are declared to be issued for an essential public and governmental purpose and, together with interest on them and income from them, are exempt from all taxes.

(c) Bonds and notes of the corporation issued under this part shall be authorized by resolution and may be issued in one or more series and shall bear the date or dates, be payable upon demand or mature at the time or times, bear interest at the rate or rates provided, be in the denomination or denominations, be in the form either coupon or registered, carry the conversion or registration privileges, have the rank or priority, be executed in the manner, be payable in the medium of payment, at the place or places, and be subject to the terms of redemption, with or without premium, which the resolution, its trust indenture, or mortgage provides.

(d) Bonds and notes may be sold in the manner, on the terms, and at the price the corporation determines.

(e) If a member of the board of directors or officer of the corporation whose signature appears on a bond, note, or coupon ceases to be a member or officer before the delivery of the bonds or notes, the signature is nevertheless valid and sufficient for all purposes as if the member or officer had remained in office until delivery. Any provision of law to the contrary notwithstanding, bonds and notes issued under this part are negotiable.

(f) In an action or proceeding involving the validity or enforceability of a bond or note or security for a bond or note issued under this part where the bond or note recites in substance that it has been issued by the corporation to aid in financing a redevelopment project, the bond or note is conclusive proof that it has been issued for that purpose and the project is conclusively considered to have been planned, located, and carried out in accordance with the purposes and provisions of this part.

-62 Power of corporation to provide additional security for bonds. (a) In connection with the issuance of bonds or the incurring of obligations under leases, in order to secure the payment of the bonds or obligations, the corporation, in addition to its other powers, may:

(1) Pledge all or a part of its gross or net rents, fees, or revenue from redevelopment projects to which its right exists or may come into existence;

(2) Mortgage all or a part of its real or personal property in a redevelopment project owned or later acquired;

(3) Covenant against pledging all or a part of its rents, fees, and revenue from redevelopment projects or against mortgaging all or a part of its real or personal property in a redevelopment project to which its right or title exists or may come into existence or against permitting or suffering a lien on the revenue or property, and covenant with respect to limitations on its right to sell, lease, or otherwise dispose of a redevelopment project or a part of a project, and covenant as to other, or additional debts or obligations that may be incurred by it;

(4) Covenant as to the bonds to be issued and as to the issuance of the bonds in escrow or otherwise, and as to the use and disposition of the proceeds, and provide for the replacement of lost, destroyed, or mutilated bonds, covenant against extending the time for the payment of its bonds or interest, and covenant for the redemption of the bonds and to provide the terms and conditions of redemption;

(5) Covenant, subject to the limitations contained in this part, as to the amount of revenue to be raised each year or other period of time by rents, fees, and other revenue, and as to their use and disposition, and create or authorize the creation of special funds for money held for operating costs, debt service, reserves, or other purposes, and covenant as to the use and disposition of the money held in these funds;

(6) Prescribe the procedure by which the terms of a contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which consent may be given;

(7) Covenant as to the use, maintenance, and replacement of any or all of its real or personal property in a redevelopment project, the insurance to be carried and the use and disposition of insurance money, and warrant its title to that property;

(8) Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of a covenant, condition, or obligation, and covenant and prescribe as to events of default and terms and conditions upon which any or all of its bonds or obligations shall become or may be declared due before maturity, and as to the terms and conditions upon which the declaration and its consequences may be waived;

(9) Vest in any obligees of the corporation the right to enforce the payment of the bonds or any covenants securing or relating to the bonds;

(10) Vest in any obligee or obligees holding a specified amount in bonds the right, in the event of a default by the corporation, to take possession of and use, operate, and manage a redevelopment project or a part of a project, title to which is in the corporation, or money connected with a project, and to collect the rent and revenue arising from the project or part of the project and to dispose of the money in accordance with the agreement of the corporation with the obligees;

(11) Provide for the powers and duties of the obligees and limit their liability;

(12) Provide the terms and conditions upon which the obligees may enforce any covenant or rights securing or relating to the bonds;

(13) Exercise all or any part or combination of the powers granted in this part;

(14) Make the covenants and do any and all acts and things necessary or convenient or desirable in order to secure its bonds, or, in the absolute discretion of the corporation, as will tend to make the bonds more marketable even if the covenants, acts, or things are not enumerated in this section.

(b) The corporation may, by resolution, trust, indenture, mortgage, lease, or other contract confer upon an obligee holding or representing a specified amount in bonds, the right, in addition to all rights that may be conferred, upon the happening of an event of default as defined in the resolution or instrument, by an action or proceeding in a competent court:

(1) To have possession of a redevelopment project or part of one, title to which is in the corporation, surrendered to the obligee;

(2) To obtain the appointment of a receiver of a redevelopment project or part of a project, title to which is in the corporation, and of the rents and profits from the project or part, and, if a receiver is appointed, the receiver may enter and take possession of, carry out, operate, and maintain the project or a part of the project and may collect and receive all fees, rents, revenue, or other charges thereafter arising from the project or part, and shall keep this money in a separate account and apply it in accordance with the obligations of the corporation as the court directs; and

(3) To require the corporation, the members of its board of directors, officers, agents, and employees to account as if it and they were the trustees of an express trust.

-63 Remedies of obligee. An obligee of the corporation may, in addition to all other rights that may be conferred on the obligee, subject only to contractual restrictions binding upon the obligee:

(1) By mandamus, suit, action, or proceeding at law or in equity compel the corporation, the members of its board of directors, and its officers, agents, or employees to perform each and every term, provision, and covenant contained in a contract of the corporation with or for the benefit of the obligee, and require the carrying out of any or all those covenants and agreements of the corporation and the fulfillment of all duties imposed upon it by this part; and

(2) By suit, action, or proceeding in equity enjoin any acts or things that may be unlawful, or in violation of any of the rights of the obligee of the corporation.

-64 Bonds as legal investment. (a) The following persons may legally invest sinking funds, money, and other funds belonging to them or within their control in the investments listed in subsection (b):

(l) All public officers, municipal corporations, political subdivisions, and public bodies;

(2) All banks, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business;

(3) All insurance companies, insurance associations, and other persons carrying on an insurance business; and

(4) All executors, administrators, curators, trustees, and other fiduciaries.

(b) The following investments are proper investments under subsection (a): any bonds or other obligations issued by the corporation under this part or by any public housing or redevelopment authority or commission, or agency or any other public body in the United States for redevelopment purposes, when the bonds and other obligations are secured by an agreement between the issuing agency and the federal government in which the issuing agency agrees to borrow from the federal government and the federal government agrees to lend to the issuing agency, before the maturity of the bonds or other obligations, money in an amount that, together with any other money irrevocably committed to the payment of interest on the bonds or other obligations, is sufficient to pay the principal of the bonds or other obligations with interest to maturity, if, under the terms of the agreement, the money is required to be used for the purpose of paying the principal and interest on the bonds or other obligations at their maturity. The bonds and other obligations shall be authorized security for all public deposits.

(c) It is the purpose of this section to authorize any persons, political subdivisions, and officers, public or private, to use any funds owned or controlled by them for the purchase of any of the bonds or other obligations. However, nothing contained in this section with regard to legal investments shall be construed as relieving any person of any duty of exercising reasonable care in selecting securities.

-65 Conveyance to federal government on default. In any contract for financial assistance with the federal government, the corporation may obligate itself to convey possession or title to the redevelopment project and land to the federal government, when the contract relates to the project and the land, upon the occurrence of a substantial default. This obligation is not a mortgage. The obligation is specifically enforceable. The contract may provide that in case of the conveyance, the federal government may complete, operate, manage, lease, convey, or otherwise deal with the redevelopment project in accordance with the terms of the contract; provided that, as soon as practicable after the federal government is satisfied that all defaults have been cured and that the redevelopment project will be operated in accordance with the terms of the contract, the federal government shall reconvey the redevelopment project to the corporation.

-66 Property exempt from taxes and execution. (a) All property held by the corporation for a purpose set out in part II and in this part is exempt from levy and sale by virtue of an execution, and an execution or other judicial process may not issue against it nor may judgment against it be a charge or lien upon its property. However, this subsection does not apply to or limit the right of an obligee to foreclose or otherwise enforce any mortgage of the corporation or to pursue remedies for the enforcement of a pledge or lien given by the corporation on its rents, fees, grants, or revenue.

(b) The property held by the corporation for a purpose set out in part II and in this part is declared to be public property used for essential public and governmental purposes and the property is exempt from all taxes of the State or a political subdivision of the State. However, subject to subsection (c), the corporation shall, from the time it acquires title to property in a redevelopment project until it sells, leases, or otherwise disposes of that property, make payment equal in amount and in lieu of taxes that would be assessed and paid to a political subdivision in which the property is situated if the property had not been acquired by the corporation. From the time the corporation sells, leases, or otherwise transfers the property, the obligation of the corporation to make payment in lieu of taxes shall cease and the property shall thereafter be taxable in the same manner as other property within the political subdivision, unless the property is exempt from taxation by law. The property sold, leased, or otherwise transferred by the corporation may be assessed for taxation on that part of the tax year during which it was not owned by the corporation, unless the property is exempt from taxation by law. Except for the payments required by this subsection, the power vested in the corporation to make payments in lieu of taxes under section -18 or other law is not affected by this subsection.

(c) Property for which payments are required under subsection (b) is limited to land and valuable improvements on the land, including buildings located on the property on the assessment date.

(d) Payments for property under subsection (b) may not be required from the corporation unless the payments are eligible project costs under federal policy.

-67 Cooperation by public bodies. (a) For the purpose of aiding and cooperating in the planning, undertaking, or carrying out of a redevelopment project located within the area in which it is authorized to act, a public body may, upon terms, with or without consideration, as it determines:

(1) Dedicate, sell, convey, or lease any of its interest in a property, or grant easements, licenses, or other rights or privileges in the property to the corporation;

(2) Cause parks, playgrounds, or recreational, community, educational, water, sewer, or drainage facilities, or other works that it is otherwise empowered to undertake to be furnished in connection with a redevelopment project;

(3) Furnish, dedicate, close, vacate, pave, install, grade, regrade, plan, or replan streets, roads, sidewalks, ways, or other places, that it is otherwise empowered to undertake;

(4) Plan or replan, or zone or rezone any part of the public body or make exceptions from building regulations and ordinances if the functions are of the character that the public body is otherwise empowered to perform;

(5) Cause administrative and other services to be furnished to the corporation of the character that the public body is otherwise empowered to undertake or furnish for the same or other purposes;

(6) Incur the entire expense of public improvements made by the public body in exercising the powers granted in this section;

(7) Do any and all things necessary or convenient to aid and cooperate in the planning or carrying out of a redevelopment plan;

(8) Lend, grant, or contribute money to the corporation;

(9) Employ any money belonging to or within the control of the public body, including money derived from the sale or furnishing of property, service, or facilities to the corporation, in the purchase of the bonds or other obligations of the corporation and, as the holder of the bonds or other obligations, exercise the rights connected with them; and

(10) Enter into agreements, which may extend over any period, notwithstanding a provision or rule of law to the contrary, with the corporation respecting action to be taken by the public body under any of the powers granted by this part.

(b) If at any time title to or possession of a redevelopment project is held by a public body or governmental agency, other than the corporation, authorized by law to engage in the undertaking, carrying out, or administration of redevelopment projects, including the federal government, the provisions of the agreement shall inure to the benefit of and may be enforced by the public body or governmental agency.

(c) A sale, conveyance, lease, or agreement provided for in this section may be made by a public body without appraisal, public notice, advertisement, or public bidding.

-68 Title of purchaser of project property. An instrument executed by the corporation and purporting to convey a right, title, or interest in property under this part is conclusive evidence of compliance with the provisions of this part insofar as title or other interest of a bona fide purchaser, lessee, or transferee of the property is concerned.

-69 Additional powers of governing body. Whenever the corporation exercises its rights, powers, and duties under this part in the area adjacent to a municipality, the governing body of the municipality may prepare or have prepared general plans for the physical development of the area if the preparation of those plans is not otherwise authorized by law and approve redevelopment plans, and lend or grant money and other assistance for the undertaking of redevelopment projects in the area and to take other action with respect to the area or redevelopment project area that is authorized or required by this part of the governing body of the municipality.

-70 Preparation of general plan by local governing body. The governing body of a municipality, not authorized to create a planning commission with power to prepare a general plan for the redevelopment of the municipality, may prepare a general plan before a redevelopment project is initiated under this part.

-71 Urban renewal projects. (a) In addition to the power given under this part, the corporation may plan and undertake an urban renewal project. In this part an urban renewal project includes undertaking and activity for the elimination and prevention of the development or spread of slums or blighted, deteriorated, or deteriorating areas. An urban renewal project may involve any work or undertaking for this purpose that constitutes a redevelopment project or any rehabilitation or conservation work or any combination of an undertaking or work.

(b) Rehabilitation or conservation work includes:

(1) Carrying out plans for a program of voluntary or compulsory repair and rehabilitation of buildings or other improvements;

(2) Acquisition of real property and demolition, removal, or rehabilitation of buildings and improvements from it where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, lessen density, reduce traffic hazards, eliminate obsolete or other uses detrimental to the public welfare, or to otherwise remove or prevent the spread of blight or deterioration, or to provide land for needed public facilities;

(3) Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the objectives of the urban renewal project; and

(4) The disposition, for uses in accordance with the objectives of the urban renewal project, of any property or part of property acquired in the area of the project; disposition shall be in the manner prescribed in this part for the disposition of property in a redevelopment project area.

-72 Urban renewal plan. An urban renewal project undertaken pursuant to section -71 shall be undertaken in accordance with an urban renewal plan for the area of the project. As used in this part, "urban renewal plan" means a plan for an urban renewal project which conforms to the general plan for the municipality as a whole, and is sufficiently complete to indicate the land acquisition, demolition, and removal of structures, redevelopment, improvements, and rehabilitation that are proposed in the area of the urban renewal project, zoning, and planning changes, if any, land uses, maximum densities, building requirements, and the plan's relationship to definite local objectives respecting appropriate land uses, improved traffic, public transportation, public utilities, recreational and community facilities, and other public improvements. An urban renewal plan shall be prepared and approved pursuant to the same procedure as provided in this part for a redevelopment plan.

-73 Powers with respect to urban renewal. (a) The corporation has all the powers necessary or convenient to undertake and carry out urban renewal plans and urban renewal projects, including the power to acquire and dispose of property, to issue bonds and other obligations, to borrow and accept grants from the federal government or other source, and to exercise the other powers granted to it by this part with respect to redevelopment projects.

(b) In connection with the planning and undertaking of an urban renewal plan or urban renewal project, the corporation, the municipality, and all public and private offices, agencies, and bodies have all the rights, powers, privileges, and immunities that they have with respect to a redevelopment plan or redevelopment project, in the same manner as though all of the provisions of this part applicable to a redevelopment plan or redevelopment project were applicable to an urban renewal plan or urban renewal project. However, for the purpose of this subsection:

(l) The word "redevelopment" as used in this part, except in this section and in the definition of "redevelopment project" in section -100, means "urban renewal";

(2) The words "slum" and "blighted" as used in this part, except in this section and in the definitions in section -100, mean "blighted, deteriorated, or deteriorating"; and

(3) The finding required by section -54(b) with respect to a blighted area is not required.

(c) In addition to the surveys and plans that the corporation may otherwise make, it may make plans:

(1) For carrying out a program of voluntary repair and rehabilitation of buildings and improvements; and

(2) For the enforcement of laws, codes, and regulations relating to the use of land and the use and occupancy of buildings and improvements, and the compulsory repair, rehabilitation, demolition, or removal of buildings and improvements.

(d) The corporation may develop, test, and report methods and techniques, and carry out demonstrations and other activities for the prevention and the elimination of slums and urban blight.

-74 Public bodies authorized to assist in urban renewal projects. A municipality or other public body may, without limiting any provisions of section -73, do any and all things necessary to aid and cooperate in the planning and undertaking of an urban renewal project in the area in which it is authorized to act, including the furnishing of financial and other assistance as the municipality or public body is authorized by this part for or in connection with a redevelopment plan or redevelopment project.

-75 Corporation may delegate functions to municipalities and public bodies. The corporation may delegate to a municipality or other public body any of its powers or functions with respect to the planning or undertaking of an urban renewal project in the area in which the municipality or public body is authorized to act, and the municipality or public body may carry out or perform these powers and functions for the corporation.

-76 Agreements for exercising powers and granting assistance. Any public body may enter into agreements that may extend over any period, notwithstanding any provision or rule of law to the contrary, with any other public body respecting action to be taken under any power granted by this part, including the furnishing of funds or other assistance in connection with an urban renewal plan or urban renewal project.

-77 Workable program. The governing body of a municipality, or a public officer or public body, as it designates, may prepare a workable program, including an official plan of action, for effectively dealing with the problem of urban slums and blighted, deteriorated, or deteriorating areas within the community and for the establishment and preservation of a well-planned community with well-organized residential neighborhoods of decent homes and suitable living environment for adequate family life, for utilizing appropriate private and public resources to eliminate, and prevent the development or spread of, slums and urban blight and deterioration, to encourage needed urban rehabilitation, to provide for the redevelopment of blighted, deteriorated, or slum areas, or to undertake any of these activities or other feasible activities that may be suitably employed to achieve the objectives of the program.

-78 Municipality may repair, etc., dwellings unfit for habitation. When a municipality finds that a dwelling exists that is unfit for human habitation due to dilapidation, defects increasing the hazard of fire, accident, or other calamity, lack of ventilation, light or sanitary facilities, or another condition, including one of those set out in section -89 that makes the dwelling unsafe or unsanitary, or dangerous or detrimental to the health, safety, or morals, or otherwise inimical to the welfare of the residents of the municipality, the municipality may require or cause the repair, closing, or demolition or removal of the dwelling in the manner provided in this part.

-79 Ordinances relating to unfit dwellings. Upon the adoption of an ordinance finding that dwelling conditions of the character described in section -78 exist in a municipality, its governing body may adopt an ordinance relating to dwellings that are unfit for human habitation.

-80 What ordinance must include. An ordinance adopted under section 79 must provide that the corporation must exercise the powers prescribed by the ordinance. The ordinance must also contain the provisions set out in sections -81 to    -88.

-81 Petition or finding that dwelling is unfit and filing of complaint. When at least five residents file a petition charging that a dwelling is unfit for human habitation or when it appears to a public officer that a dwelling is unfit for human habitation, the public officer shall conduct a preliminary investigation, and if the investigation discloses a basis for the charges, the public officer shall issue and have served upon the owner, every mortgagee of record, and all parties in interest in the dwelling, including those in possession, a complaint stating the charges.

-82 Pleadings and hearing. The complaint must contain a notice of a hearing before the corporation or designated agent and the time and place fixed for the hearing. The hearing shall be not less than ten days nor more than thirty days after the service of the complaint. The complaint must state that the parties in interest may file an answer to the complaint, appear and give testimony at the place and time fixed in the complaint.

-83 Rules of evidence do not control in hearings before the corporation. The rules of evidence in judicial proceedings are not controlling in hearings before the corporation.

-84 Findings and order. If, after the hearing, the executive director of the corporation determines that the dwelling is unfit for human habitation the executive director shall state the findings of fact in support of the determination in writing and shall issue and have served upon the owner an order, which:

(1) If the dwelling can be repaired, altered, or improved at a reasonable cost in relation to its value, shall require the owner, within the time specified in the order, to repair, alter, or improve the dwelling to render it fit for human habitation or to vacate and close the dwelling as a human habitation; or

(2) If the dwelling cannot be repaired, altered, or improved at a reasonable cost in relation to its value, shall require the owner, within the time specified in the order, to remove or demolish the dwelling.

-85 Ordinance to fix percentage of cost as reasonable. The ordinance of the municipality must fix the percentage of the cost of repair, alteration, or improvement for the purpose of determining whether the cost is reasonable within the meaning of section -84.

-86 Failure of owner to comply with order. (a) If the owner fails to comply with an order to repair, alter, or improve or to vacate and close the dwelling, the corporation may have the dwelling repaired, altered, or improved, or vacated.

(b) If the owner fails to comply with an order to remove or demolish the dwelling, the corporation may have the dwelling removed or demolished.

-87 Costs of repair, etc., are a lien. If the corporation has the dwelling repaired, altered, improved, vacated and closed, removed or demolished, the costs, including costs of the proceeding and necessary attorney fees, constitute a lien against the real property and the lien may be foreclosed in the manner provided or authorized by law for loans secured by liens on real property.

-88 Disposition of material where dwelling is removed or demolished. If the corporation removes or demolishes the dwelling, it shall sell the materials and shall credit the proceeds of the sale against the costs of the removal or demolition. If there is a surplus remaining, the corporation shall return it to the parties entitled to it as determined by a judicial proceeding brought by the corporation. The court shall determine the cost incurred by the corporation in this judicial proceeding including its necessary attorney fees, and shall deduct the cost from the surplus.

-89 Ordinance to give corporation power to determine fitness of dwellings for habitation. (a) The ordinance adopted by a municipality under this part:

(1) Shall provide that the corporation may determine that a dwelling is unfit for human habitation if it finds that conditions exist that:

(A) Are dangerous or injurious to the health, comfort, safety, or morals of the occupant of the dwelling, the occupants of neighboring dwellings or other residents of the municipality; or

(B) Have a blighting influence on properties in the area; and

(2) May provide additional standards to guide the corporation in determining the fitness of a dwelling for human habitation.

(b) The conditions sufficient to support a finding under subsection (a)(l) include the following, without limitation:

(1) Defects increasing the hazards of fire, accident, or other calamity;

(2) Lack of adequate ventilation, light, or sanitary facilities, or an adequate heating source;

(3) Dilapidation;

(4) Disrepair;

(5) Structural defects;

(6) Uncleanliness;

(7) Overcrowding;

(8) Inadequate ingress and egress;

(9) Inadequate drainage; or

(10) A violation of health, fire, building, or zoning regulations, or any other laws or regulations, relating to the use of land and the use and occupancy of buildings and improvements.

-90 Manner of serving parties in interest. The corporation shall serve complaints and orders issued in accordance with this part upon all parties in interest either personally or by registered mail. If, after the exercise of reasonable diligence, the corporation cannot find a party, it shall make an affidavit to that effect, and it may then effect service by publishing the complaint or order once each week for two consecutive weeks in a newspaper printed and published in the municipality, or, if there is none, in a newspaper printed and published in the State and circulated in the municipality in which the dwelling is located. The corporation shall also post a copy of the complaint or order in a conspicuous place on the premises affected and file a copy with the clerk of the circuit court in the judicial district in which the dwelling is located. The filing of the complaint or order with the clerk has the same effect as other lis pendens notices provided by law.

-91 Injunction to prevent corporation from proceeding. A person affected by an order issued by the corporation may, within sixty days from the date the order is posted and served, petition the circuit court for an injunction restraining the corporation from carrying out the provisions of the order, and the court may, upon the petition, issue a temporary injunction restraining the corporation from proceeding until it disposes of the matter. The court shall hear the petition within twenty days from the date it is filed, or as soon after filing as possible. A petition for an injunction under this section shall be given preference over other matters on the court calendar. The court shall hear and determine the issues raised and shall enter a final order or decree in the proceeding. The findings of fact by the corporation, if supported by evidence, are conclusive. Costs shall be awarded in the discretion of the court.

-92 Remedies provided are exclusive. The remedies provided in section -91 are exclusive and a person affected by an order of the corporation may not recover damages for an action taken under an order of the corporation, or because the person complies with an order of the corporation.

-93 Ordinance may give corporation additional powers. An ordinance adopted by the governing body of the municipality may authorize the corporation to exercise those powers that are necessary or convenient to carry out the purposes of this part including the power to:

(1) Investigate the dwelling conditions in the municipality in order to determine which dwellings are unfit for human habitation;

(2) Administer oaths and affirmations, examine witnesses, and receive evidence;

(3) Enter upon premises for the purpose of making examinations, if the entry is made in the manner that causes the least possible inconvenience to the person in possession, or, if entry is denied, obtain a court order for this purpose;

(4) Appoint and fix the duties of the officers, agents, and employees that the corporation considers necessary to carry out the purposes of the ordinance; and

(5) Delegate functions and powers under the ordinance to the officers, agents, and employees whom the corporation designates.

-94 Municipality to prepare estimate of costs of administration. After adopting an ordinance under sections    -78 to -96, the governing body of the municipality shall as soon as possible prepare an estimate of the annual expenses necessary to provide the equipment, personnel, and supplies for periodic examinations and investigations of dwellings for the purpose of determining their fitness for human habitation, and for the enforcement and administration of ordinances of the municipality.

-95 Sections -78 to -96 not a limitation on municipalities. Sections -78 to -96 do not limit the power of a municipality to enforce its ordinances or regulations, and to prevent or punish violations of them, or to define and declare nuisances and have them removed or abated. The powers granted by sections -78 to -96 are in addition to the powers granted by any other law.

-96 Powers of a municipality to control use and occupancy of dwellings. A municipality may, by ordinance adopted by its governing body:

(1) Prescribe minimum standards for the use and occupancy of dwellings inside its boundaries;

(2) Prevent the use or occupancy of a dwelling that is injurious to the public health, safety, morals, or welfare; and

(3) Prescribe punishment for the violation of the ordinance.

-97 Urban redevelopment or urban renewal in a disaster area. (a) Notwithstanding any other provisions in this part, when the legal governing body certifies that an area is in need of redevelopment or urban renewal as a result of a disaster and all results and after effects respecting which the governor has certified the need for disaster assistance, the corporation may plan, undertake, and carry out a redevelopment project or an urban renewal project in the disaster area and the area shall constitute a slum or blighted area.

(b) In connection with the carrying out of a project under this section, the corporation may, with the approval of the local governing body and before the approval of the redevelopment plan or urban renewal plan, acquire real property in the project area, demolish and remove any structure on the property, and pay all costs related to the acquisition, demolition, or removal, including administrative or relocation expenses.

(c) The governing body, when the corporation acquires land under subsection (b), may assume the responsibility to bear any loss that may result from the acquisition in the event that the real property is not made part of the project.

(d) Real property acquired under this section that is not made a part of the project may be disposed of without regard to section -58 if the local governing body has consented to the disposal.

(e) The corporation, in carrying out a project under this section, may recommend to the local governing body a redevelopment plan or an urban renewal plan without regard to the requirement in section -57(c) that a general plan for the physical development of the municipality has been prepared before the recommendation, and the governing body may approve the plan without regard to the requirement in section -57(i) that the plan conform with the general plan for the physical development of the area.

(f) For the purpose of this section, the corporation may file and use a declaration of taking and acquire real property as provided by law.

(g) The provisions of this section apply whenever an area has been declared by the President of the United States to be a disaster area and the legal governing body certifies that the need of the area for redevelopment or urban renewal has been substantially increased as a result of the natural disaster and all results and after effects respecting which the governor has also certified the need for disaster assistance.

-98 State aid for an urban redevelopment or urban renewal project in a disaster area. (a) In connection with any project carried out under section -97, the department of business, economic development, and tourism may contract with the corporation, under terms approved by the governor to provide a state grant-in-aid equal to one-half the excess of the cost of the project, as determined by the director, over the federal grant-in-aid.

(b) The governor may expend money from the general fund for state grants-in-aid provided for in subsection (a).

(c) For purposes of this section, "cost of the project" includes, in addition to costs directly related to the project, the sum total of all costs of financing and carrying out the project. These include, but are not limited to, the costs of all necessary studies, surveys, plans and specifications, architectural, engineering or other special services, acquisition of real property, site preparation and development, purchase, construction, reconstruction and improvement of real property and the acquisition of machinery and equipment as may be necessary in connection with the project; an allocable portion of the administrative and operating expenses of the grantee; the cost of financing the project, including interest on bonds issued to finance the project; the cost of other items, including any indemnity and surety bonds issued to finance the project; and the cost of other items, including any indemnity and surety bonds and premiums on insurance, legal fees, fees and expenses of trustees, depositaries, financial advisors, and paying agents for the bonds issued as the issuer considers necessary.

-99 Inconsistent provisions superseded. Insofar as the provisions of this part are inconsistent with any other law, the provisions of this part shall control.

-100 Definitions. In this part, unless the context otherwise requires:

"Area of operation" means the State of Hawaii.

"Blighted area" means an area, other than a slum area, that by reason of the predominance of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility, or usefulness, unsanitary or unsafe conditions, deterioration of site or improvements, tax or special assessment delinquency exceeding the fair value of the land, improper subdivision or obsolete platting, or the existence of conditions that endanger life or property by fire and other causes, or any combination of these factors, substantially impairs or arrests the sound growth of the municipality, retards the provision of housing accommodations, or constitutes an economic or social liability and is a menace to the public health, safety, morals, or welfare in its condition and use.

"Bond" means any bond, note, interim certificate, debenture, or other obligation issued by the corporation under section -61.

"Corporation" means the Hawaiian housing finance corporation.

"Dwelling" means a building or structure or part of a building or structure used and occupied for human habitation or intended to be so used, and includes an appurtenance belonging to the building or structure or usually enjoyed with it.

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

"Governing body" means the legislative body of a municipality.

"Obligee" includes a bondholder, agent, or trustee for a bondholder, or lessor demising to the corporation property used in connection with a redevelopment project, or an assignee of the lessor's interest or a part of the interest, and the federal government when it is a party to a contract with the corporation.

"Public body" means the State or a county.

"Real property" includes all land, including improvements and fixtures on it, and property of any nature appurtenant to it, or used in connection with it, and every estate, interest, and right, legal or equitable, in it, including a term for years, a lien, and indebtedness secured by a lien.

"Redeveloper" means a person, partnership, or public or private corporation or agency that enters or proposes to enter into a redevelopment contract.

"Redevelopment contract" means a contract between the corporation and a redeveloper for the redevelopment of an area in accordance with a redevelopment plan.

"Redevelopment plan" means a plan, other than a preliminary or tentative plan, for the acquisition, clearance, reconstruction, rehabilitation, or future use of a redevelopment project area.

"Redevelopment project" includes the preparation of a redevelopment plan, the planning, survey, and other work incident to a redevelopment project and the preparation of all plans and arrangements for carrying out a redevelopment project, and means a work or undertaking:

(1) To acquire all or a portion of a slum area or a blighted area, including lands, structures, or improvements that are necessary or incidental to the clearance or redevelopment of the area or to the prevention of the spread or recurrence of slum conditions or conditions of blight;

(2) To clear a slum or blight area by demolishing or removing buildings, structures, streets, utilities, or other improvements and to install, construct, or reconstruct streets, utilities, and site improvements necessary to prepare sites for use in accordance with a redevelopment plan; and

(3) To sell, lease, or otherwise make available land in a slum or blight area for residential, recreational, commercial, industrial, or other use or for public use or to retain the land for public use, in accordance with a redevelopment plan.

"Slum area" means an area where buildings predominate that, by reason of dilapidation, deterioration, age or overcrowding, lack of ventilation, light, air, sanitation, or the existence of conditions that endanger life or property by fire or other causes, or a combination of these factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, and crime, and is detrimental to the public health, safety, morals or welfare.

-101 Short title. This part may be cited as the Slum Clearance and Redevelopment Act.

PART IV. REGIONAL HAWAIIAN HOUSING AUTHORITIES

-110 Purpose and intent. The legislature finds that an acute shortage of housing and related facilities exists in this State for many individuals of Hawaiian ancestry, and that adequate housing cannot be provided by the private sector. It is the purpose and intent of the legislature to provide a means for certain Hawaiian associations to form public corporations with the powers and duties comparable to those provided in parts I to III.

-111 Creation of authorities. (a) The following associations are given the authority specified in subsection (b):

(1) (associations and geographical location);

(2);

(3);

(b) There is created with respect to each of the associations named in subsection (a) a public body corporate and politic to function in the operating area of the individual associations to be known as the regional housing authority of the associations possessing all powers, rights, and functions now or subsequently specified under parts I to III, except those specified with respect to the construction and acquisition of public buildings for lease to the State or any authority that is inconsistent with section -110. A regional housing authority may enter into agreements with local government, other political subdivisions of the State, the State, or the federal government for the exercise of a function or power relating to construction, operation, and maintenance of public facilities or public utilities. Upon execution of an agreement and for the period of the agreement the regional housing authority shall have the same powers and functions relating to the subject matter of the agreement as those that may legally be exercised by the governmental unit with whom the agreement is made including the authority to separately or together with the other unit borrow money and issue notes, bonds, or other evidence of indebtedness to finance a project within the scope of the agreement subject to the express limitations, if any, contained in the agreement. All obligations or liabilities of the regional housing authority shall remain their own and are not obligations or liabilities of the State.

(c) A housing authority created by this section may not transact business or exercise powers granted to it until the governing body of the named association has, by proper resolution, declared that there is a need for the authority to function, gives it the authority to function, and has named its commissioners as provided under subsection (d).

(d) The governing body of the association in question shall, after determining that it wishes to have a regional Hawaiian housing authority, appoint five persons to serve as the board of commissioners of the authority. The term of office of each member is for three years except that, of the commissioners first appointed, one shall serve for a term of one year and two shall serve for a term of two years. Vacancies shall be filled by the governing body of the association in question.

(e) Questions arising as to jurisdiction and boundary disputes as a result of the jurisdictional lines set out by subsection (a) shall be resolved by the governing board of the             .

(f) The authority shall have the power to acquire, construct, operate, and maintain group homes, multipurpose community centers, child care centers, and other community facilities.

(g) If an activity associated with the planning, financing, construction, or operation of a project by a regional housing authority established in this section and authorized under part I conflicts with an activity of the Hawaiian housing finance corporation, the governing body of the municipality in which the project is located shall resolve the conflict.

(h) Before a contract for the construction, alteration, or repair of a housing unit constructed under a federal or state funded housing program is awarded, the regional housing authority shall require the contractors to comply with the bond provisions specified by law.

(i) A housing authority created under this section shall have its financial records audited annually by an independent certified public accountant. The legislative auditor may prescribe the form and content of the financial records of the housing authority and shall have access to these records at any time.

-112 Residential loans. (a) In addition to the powers authorized to a regional housing authority under section    -111, a regional housing authority may, in accordance with procedures and policies adopted and approved by the Hawaiian housing finance corporation, make loans for the purchase or development of residential housing in rural areas of the State, other than in an area where the corporation has a loan office. A loan shall be secured by collateral in an amount acceptable to the corporation. The rate of interest on a loan authorized by this section may not exceed the interest rate on a loan originated or purchased.

(b) In this section:

(1) "Development" means the construction of a new residence or the repair, remodeling, rehabilitation, or expansion of an existing home;

(2) "Rural" has the meaning given the term "Small community".

- 113 Supplemental housing development grants. (a) There is created in the Hawaiian housing finance corporation, a supplemental housing development grant fund. Using corporate earnings or other available funds, the corporation shall make grants to regional housing authorities established under section    -111 for the cost of on-site sewer and water facilities, road construction to project sites, energy efficient design features in homes, and extension of electrical distribution facilities to individual residences.

(b) A grant may be made only for residential housing for which federal loan or grant approval has been obtained from the United States Department of Housing and Urban Development and which will be made available to the public on a nondiscriminatory basis. A grant may not be used to retire or repay obligations or debts of the grant recipient. A grant may only be for the difference between the maximum amount available under federal law or regulation for construction of the residential housing for which the grant is made and the actual costs of the construction. A grant may not exceed twenty per cent of the United States Department of Housing and Urban Development total development cost per unit in effect at the time the grant is made.

(c) Grant money may be used only for the purposes specified in subsection (a). No part of the grant money may be used for administrative or other costs of a regional housing authority whether the costs are directly associated with the construction or general costs of the authority.

(d) The Hawaiian housing finance corporation shall adopt rules pursuant to chapter 91 to carry out the purposes of this section.

(e) In order to make grants authorized by subsection (a) in its administration of the supplemental housing development grant fund established by this section, the board of directors of the corporation shall identify in the corporation's proposed operating budget the money available to the corporation, including the corporation's own assets, to supplement available federal development money."

SECTION 2. This Act shall take effect upon its approval.

INTRODUCED BY:

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