SB179 CD1 CCR181

CONFERENCE COMMITTEE REP. NO. 181

Honolulu, Hawaii

, 2005

RE: S.B. No. 179

S.D. 3

H.D. 2

C.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 179, S.D. 3, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this measure is to address Hawaii's critical affordable housing and homelessness problem by, among other things:

(1) Providing flexibility to the counties in their land use density restrictions to allow for the development of low-income housing rentals;

(2) Establishing a general excise tax exemption for developers of certified housing projects when:

(a) At least fifty per cent of the available units are for households with incomes at or below eighty per cent of the median family income; and

(b) At least twenty per cent are for households with incomes at or below sixty per cent of the median family income;

(3) Providing that through June 29, 2010, the Rental Housing Trust Fund (Trust Fund) loans and grants to developers may be provided when fifty per cent or more of the available units are for persons with incomes at or below eighty per cent, instead of sixty per cent, of the median family income and establishing an order of priority in which the loans and grants may be provided;

(4) Authorizing mixed finance development of public housing units;

(5) Requiring that the Housing and Community Development Corporation of Hawaii's (Corporation) yearly report describe its efforts to develop rental housing projects for families with incomes less than thirty per cent of the median income, describe the proposals submitted and action taken on them, and the barriers to the development of units for this target group;

(6) Establishing a sliding scale for the payment of conveyance taxes;

(7) Exempting, from the conveyance tax, conveyances by nonprofit and for profit organizations certified for low-income housing development;

(8) Increasing the amount of conveyance taxes transferred into the Trust Fund from twenty-five to fifty per cent;

(9) Making it a priority for the Corporation to fund rental housing projects that provide:

(a) At least five per cent of the total number of units for persons and families with incomes at or below thirty per cent of the median family income; and

(b) A maximum number of units for persons or families with incomes at or below eighty per cent of the median family income;

(10) Increasing the low-income housing tax credit to fifty per cent of the applicable percentage of the qualified basis of each building located in Hawaii;

(11) Appropriating general revenue funds into the Trust Fund;

(12) Declaring a moratorium on demolition of decommissioned public housing until it can be determined whether or not to rehabilitate them;

(13) Offering decommissioned public housing that will not be rehabilitated by the Corporation to nonprofit and for profit entities or government agencies for rehabilitation into emergency transitional shelter facilities or rental units;

(14) Requiring the organizations and agencies that rehabilitate decommissioned units to set aside at least fifty per cent of the units to persons or families with incomes at or below fifty per cent of the area median family income;

(15) Appropriating general revenue funds for the expansion of emergency and transitional shelter facilities serving the homeless upon meeting certain conditions;

(16) Refocusing the Corporation's housing developments on lower cost housing projects serving only persons with incomes one hundred forty per cent or less of the area median income;

(17) Authorizing funds in the Dwelling Unit Revolving Fund to be used for expenses related to permanent primary or secondary financing and low-income housing tax credits;

(18) Splitting the Corporation into two entities:

(a) The Hawaii Public Housing Administration (Housing Administration) to perform the function of developing and maintaining public housing; and

(b) The Hawaii Housing Finance and Development Administration (Development Administration) to perform the function of housing financing and development;

(19) Repealing the Trust Fund Advisory Commission;

(20) Establishing a Legislative Affordable Rental Housing and Homeless Task Force; and

(21) Establishing procedures that allow Corporation funds to be expended by the Department of Budget and Finance in the event of federal action prior to the effective date of the separation of the Corporation;

Understanding the importance this measure has on facilitating the proliferation of much-needed affordable housing in the State, your Committee on Conference diligently deliberated on crafting a workable solution to ameliorate the State's affordable housing crisis. Basing its solutions on the recommendations made by the Affordable Housing Task Force established pursuant to S.C.R. No. 135, S.D. 1, of the 2004 Regular Session, your Committee on Conference also endeavored to find additional solutions to the affordable housing problem.

Your Committee on Conference expressed its support for military personnel, National Guard members, and reservists in their need for affordable housing by considering the establishment of an exemption for military housing allowances in determining eligibility for affordable rental housing. However, because the Corporation already excludes military housing allowances, it was not necessary to include the provision in this measure.

While this measure takes extraordinary steps to ease the burden of Hawaii's affordable housing and homeless crisis, your Committee on Conference recognizes that other measures passed by this Legislature will significantly contribute to helping people face Hawaii's housing shortage:

H.B. No. 1308 reallocates the distribution of the collected conveyance taxes by increasing the percentage allotted to the Rental Housing Trust Fund from twenty-five to thirty per cent; and

H.B. No. 100, the General Appropriations Act of 2005-2007, appropriates $1,650,000 in each year of the 2005-2007 fiscal biennium for the expansion and operation of emergency and transition shelter facilities serving the homeless.

Upon further consideration, your Committee on Conference has amended the measure by:

(1) Deleting provisions relating to amending the conveyance tax rates and allocations;

(2) Expediting the splitting of the Corporation into two entities by moving the effective date of the metamorphosis from July 1, 2007, to July 1, 2006;

(3) Requiring the Corporation to establish an implementation plan, report, and proposed legislation on the reorganization;

(4) Deleting the requirement that at least three members of the Corporation's board of directors be community advocates for low-income housing and that no more than four members on the board be from the same political party;

(5) Adding a provision that requires that a representative from the counties' continuum of care systems sit on the Corporation's board of directors until July 1, 2006;

(6) Reducing the membership of the Joint Legislative Housing and Homeless Task Force from eighteen to eight and expanding its scope;

(7) Clarifying the procedures that allow Corporation funds to be expended by the Department of Budget and Finance in the event of federal action prior to the effective date of the separation of the Corporation;

(8) Making numerous clarifying amendments; and

(9) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 179, S.D. 3, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 179, S.D. 3, H.D. 2, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________ MICHAEL P. KAHIKINA, Co-Chair		____________________________ RON MENOR, Chair
____________________________ BOB NAKASONE, Co-Chair		____________________________ DAVID Y. IGE, Co-Chair
		____________________________ BRIAN T. TANIGUCHI, Co-Chair