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. (HB1636 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1636

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

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 shortage of housing and related facilities that exists for many beneficiaries of native Hawaiian ancestry in certain localities of the State by undertaking low-cost and moderate cost housing projects on Hawaiian Homelands.

§ -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 Reserved.

§ -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.

PART III. 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 and II.

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

(1) State Council of Hawaiian Homestead Association;

(2) Member Islands Ahupua'a Council of the State Council

of Hawaiian Homestead Association; and

(3) Native Hawaiian department of Hawaiian home lands beneficiaries.

(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 and II, 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

Hawaiian Housing Finance Corporation.

(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. There is appropriated out of the general revenues of the State of Hawaii the sum of $__________, or so much thereof as may be necessary for fiscal year 2003-2004, to carry out the purposes of this Act, including the hiring of necessary staff. The sum appropriated shall be expended by the department of Hawaiian home lands.

SECTION 3. This Act shall take effect on July 1, 2020.