STAND. COM. REP. NO. 1482

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1018
                                        H.D. 2
                                        S.D. 1




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

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 1018, H.D. 2, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE HOUSING AND COMMUNITY
     DEVELOPMENT CORPORATION OF HAWAII,"

begs leave to report as follows:

     The purpose of this bill is to establish a federal assisted
rental housing preservation program.

     In particular, this program seeks to protect low-income
tenants residing in United States Department of Housing and Urban
Development project based Section 8 housing from conversion of
their affordable housing to market rate housing, by:

     (1)  Requiring owners of federally assisted rental housing
          projects to provide a one-year notice to both tenants
          and the Housing and Community Development Corporation
          of Hawaii of any intent to terminate a subsidy contract
          on assisted housing development or prepay its mortgage;
          and

     (2)  Requiring the owners of federally assisted rental
          housing projects to provide a right of first refusal to
          the tenant association of the development and certain

 
a                                                     HB1018 SD1
 
 
 
                                   STAND. COM. REP. NO. 1482
                                   Page 2


          nonprofit organizations for a one hundred eighty-day
          period following the notice to sell the project.

     In addition, this bill amends the qualifications for housing
and rental assistance by, among other things:

     (1)  Lowering from low and moderate to very low the maximum
          income a person may have and still qualify for
          participation in the state rent supplement program;

     (2)  Increasing the amount of supplemental rent paid by the
          housing and community development corporation from one-
          fifth to an unspecified percentage of a qualified
          tenant's income; and

     (3)  Amending the definition of "qualified tenant" under the
          state rent supplement program to enable eligible single
          persons who are not elderly or disabled to participate
          in the program.

     Your Committee agrees with the intent of this bill, and
finds that the supply of the Section 8 low-income rental housing
projects subsidized by the United States Department of Housing
and Urban Development may decrease in the future due to
anticipated reductions in the subsidies offered by the federal
government to housing project owners.  Decreased subsidies
increase the risks that owners will terminate the federal subsidy
contracts, pay off their mortgages, increase rents, sell the
buildings, or convert them to condominiums.  Your Committee finds
that this bill will help to protect low-income renters from
financial devastation and possible homelessness.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1018, H.D. 2, S.D. 1, and recommends that it pass Third Reading.


 
a                                                     HB1018 SD1
 
 
 
 
 
 
 
 
 
 
                                   STAND. COM. REP. NO. 1482
                                   Page 3


                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                     HB1018 SD1