THE SENATE

S.B. NO.

368

TWENTY-SEVENTH LEGISLATURE, 2013

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to energy.

 

 

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

SOLAR LOAN GUARANTEE PROGRAM

        -1  Definitions.  As used in this chapter:

     "Department" means the department of business, economic development, and tourism.

     "Director" means the director of business, economic development, and tourism.

     "Qualified homeowner" means the owner of a residential property who:

     (1)  Is not currently a party to a bankruptcy proceeding;

     (2)  Has not declared bankruptcy in the past five years;

     (3)  Is current on all mortgage payments, if any;

     (4)  Does not currently have any other payments relating to the residential property that are delinquent past thirty days;

     (5)  Does not own any real or personal property subject to a lien or encumbrance of any kind for failure to pay taxes of any kind; and

     (6)  Is not personally subject to any fine, penalty, or encumbrance of any kind for failure to pay taxes of any kind.

     "Solar energy device" means any identifiable facility, equipment, apparatus, or the like, including a photovoltaic cell application, that is applicable to a single-family residential dwelling or townhouse and makes use of solar energy for heating, cooling, or reducing the use of other types of energy dependent upon fossil fuel for generation; provided that "solar energy device" shall not include skylights or windows.

     §   -2  Hawaii solar loan guarantee program.  There is created a Hawaii solar loan guarantee program which shall be administered by the director in accordance with the spirit and intent of this chapter.

     §   -3  Solar loan guarantee revolving fund.  (a)  There is established the solar loan guarantee revolving fund into which shall be deposited all moneys received under this chapter.  The department may transfer moneys from any fund under this title to the solar loan guarantee revolving fund, and these funds shall be disbursed by the department or the director pursuant to this chapter.

     (b)  The department shall report any transfer of funds made under this section to the legislature within thirty days of the transfer.

     §   -4  Solar energy device loans guaranteed by the department.  (a)  The department may guarantee up to       per cent of the principal balance of a loan made to a qualified homeowner by a private lender who is unable to otherwise lend the applicant sufficient funds at reasonable rates; provided that at no time shall the aggregate amount of the State's liability, contingent or otherwise, on loans guaranteed under this section exceed $5,000,000 based on a reserve level established at one per cent of the loan guarantee amount.  The reserve amount to be funded shall be calculated by determining the difference between the solar loan guarantee revolving fund balance at the beginning of each fiscal year and its annual authorization ceiling.

     (b)  Loans guaranteed under this section shall be limited by section    -7; provided that loan guarantees are to be limited to qualified homeowners for the following purposes:

     (1)  Up to $25,000 for installation of a photovoltaic system;

     (2)  Up to $10,000 for the installation of a solar water heater that meets the standards established pursuant to section 269-44; and

     (3)  Up to $10,000 for the installation of other technology that meets the criteria of this chapter.

     (c)  Interest charged on a guaranteed loan made under this section shall be determined by the department based on the market rate of interest charged by the private lender for a similar type of loan unless waived by the director.

     (d)  When the application for a guaranteed loan has been approved by the department, the department shall issue to the lender a guaranty for that percentage of the loan on which it guarantees payment of principal and interest.  The lender shall collect all payments from the borrower and otherwise service the loan.

     (e)  In return for the department's guaranty, the lender shall remit a one‑time fee of one per cent on the principal amount of the guaranteed portion of the loan, at the time the loan is booked, except for the following:

     (1)  On loans of $           or more with a maturity between        and        months, a reduced fee of      per cent; and

     (2)  On loans with a maturity of       months or less, a reduced fee of      per cent shall be paid.

This fee may be paid by the borrower as a cost for the loan.

     (f)  When any installment of principal and interest has been due for one hundred twenty days and has not been paid by the borrower, the department shall issue, on request of the lender, a check for the percentage of the overdue payment guaranteed, and shall thereby acquire a division of interest in the collateral pledged by the borrower in proportion to the amount of the payment.  The department shall be reimbursed for any amounts so paid plus the applicable interest rate, where payment is collected from the borrower.

     (g)  The lender may reduce the percentage of the principal balance guaranteed under this section at any time.

     §   -5  Functions, powers, and duties of director.  In the performance of, and with respect to, the functions, powers, and duties vested in the director by this chapter, the director may:

     (1)  Adopt rules pursuant to chapter 91 to carry out this chapter; and

     (2)  Perform all functions necessary to effectuate the purposes of this chapter.

     §   -6  Rules and regulations.  The rules adopted pursuant to section    ‑5 shall:

     (1)  Prescribe the qualifications for eligibility of applicants for loans guaranteed under this chapter;

     (2)  Establish preferences and priorities in determining eligibility for loans guaranteed under this chapter;

     (3)  Establish the conditions, consistent with the purposes of this chapter, for the granting or for the continuance of a grant of a loan guaranteed by this chapter; and

     (4)  Provide for inspection, at reasonable hours, of the books and records of a private lender that has issued a loan guaranteed under this chapter, and to require the submission of reports relating to loans guaranteed under this chapter, if necessary.

     §   -7  Solar energy device loans, terms, and restrictions.  (a)  The department may guarantee loans made by private lenders to qualified homeowners for the installation of solar energy devices.

     (b)  The department may guarantee loans made by private lenders to qualified homeowners; provided that the interest on loans made under this subsection shall bear simple interest at the rate of        per cent below the prime rate or at a rate of        per cent a year, whichever is lower.  For purposes of this subsection, the prime rate shall be determined on the first day of each month, and shall be the rate charged by the two largest banks in the State of Hawaii identified by the department of commerce and consumer affairs.  Should there be a difference in rate charged by the institutions, the lower of the two shall be used.  Payments required under loans guaranteed under this subsection may be deferred, but no loans guaranteed under this subsection shall be forgiven.

     (c)  Except as may be expressly provided otherwise for loans guaranteed under subsection (b), the foregoing powers shall be subject to the following restrictions and limitations:

     (1)  No loans shall be guaranteed unless financial assistance is not otherwise available to the applicant;

     (2)  The amount of the loan or loans to any one applicant at any one time shall in no case exceed a total of $25,000; and

     (3)  No loan shall be made for a term exceeding seven years.

     (d)  The department may contract with any financial institution for administrative services related to loan guarantees provided under this chapter.

     §   -8  Reports.  The department shall make a report as of December 31 of each year of operations under this chapter to the governor, the president of the senate, and the speaker of the house of representatives on the progress made under this chapter.  These reports shall be submitted no later than February 1 immediately following the period covered by the report."

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2013-2014 and the same sum or so much thereof as may be necessary for fiscal year 2014-2015 for deposit into the solar loan guarantee revolving fund established by this Act.

     The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

     SECTION 3.  There is appropriated out of the solar loan guarantee revolving fund the sum of $           or so much thereof as may be necessary for fiscal year 2013-2014 and the same sum or so much thereof as may be necessary for fiscal year 2014-2015 for the Hawaii solar loan guarantee program.

     The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 2013; provided that the Hawaii solar loan guarantee program and solar loan guarantee revolving fund shall be operational no later than January 1, 2014.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Hawaii Solar Loan Guarantee Program; Revolving Fund; Program Requirements; Appropriation

 

Description:

Creates the Hawaii solar loan guarantee program and revolving fund to be administered by the director of business, economic development, and tourism to guarantee loans for solar energy devices and photovoltaic systems.  Makes an appropriation for the program subject to program requirements and restrictions.

 

 

 

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