STAND. COM. REP. NO. 2418

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2021
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Government Operations and Housing, to
which was referred S.B. No. 2021 entitled: 

     "A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

     The purpose of this measure is to provide protection to
residents of the Department of Housing and Urban Development
(HUD) assisted housing who are at risk of losing their housing
subsidy due to changes in the HUD project based Section 8
program.

     This measure requires assisted housing development owners to
give one year's notice to tenants if the owner intends to
terminate a subsidy contract.  This measure also gives tenants or
nonprofit organizations opportunities to purchase developments if
the owner of the development has not given notice to sell prior
to July 1, 2000.

     Testimony in support of this measure was received from the
Legal Aid Society, Catholic Charities, Hawaii Catholic
Conference, Affordable Housing and Homeless Alliance, and three
individuals.

     Oral testimony in support of this measure was received from
four individuals.  Testimony in opposition of this measure was
received from the Housing and Community Development Corporation
of Hawaii (HCDCH).


 
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     Your Committee has amended this measure by:

     (1)  Deleting the notice requirement set forth in section
          201G-B as there is already a similar provision in HUD
          rules;

     (2)  Renumbering section 201G-C to 201G-B and adding
          language to that section to further clarify the duties
          and requirements of the HCDCH with respect to
          maintaining existing Section 8 assisted housing
          subsidies, and incorporating language to further
          clarify the duties of the HCDCH when an owner of an
          assisted housing development gives notice of intent to
          terminate a subsidy contract or prepay the mortgage; 

     (3)  Deleting from the right to purchase section, the
          language:

          (A)  Allowing a purchaser to remove one or more units
               from rent and occupancy requirements if the
               housing project becomes economically unfeasible;

          (B)  Requiring an owner of a housing project to provide
               one year's notice if the owner decides to
               terminate or limit the subsidy contract;

          (C)  Listing the requirements for the initial notice of
               a bona fide intention to sell;

          (D)  Listing the requirements for a qualified entity
               who elects to purchase an assisted housing
               project;

          (E)  Requiring the HCDCH to publish forms and lists
               containing entities interested in preserving
               subsidized housing and entities who have contacted
               the HCDCH expressing an interest in purchasing a
               subsidized housing project; and

          (F)  Giving entities with the right of first refusal
               the right to maintain a cause of action against
               owners' in violation of the provisions of this
               chapter including those listed above;

          to limit the scope of this measure and preclude any
          conflict with federal law; and

     (4)  Making the necessary technical amendments to
          accommodate the amendments listed above.

 
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     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and
purpose of S.B. No. 2021, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 2021, S.D. 1, and be referred to the Committee on Ways and
Means.

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



                                   ______________________________
                                   ROD TAM, Chair

 
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