Establishes a low interest loan program for persons who are at least 55 years of age and who meet income and occupancy qualifications to fix unsafe living conditions and to bring dwellings into compliance with building, electrical, and plumbing codes.

A BILL FOR AN ACT

SECTION 1. Chapter 201H, Hawaii Revised Statutes, is amended by adding five new sections to be appropriately designated and to read as follows:

"§201H- Purpose of the elderly housing renovation revolving loan fund; findings and determinations. The legislature finds that many elderly persons on fixed incomes own older dwellings that require renovations to be brought into compliance with existing building, electrical, and plumbing codes. These renovations are costly and, if required to be paid immediately, largely unaffordable for many elderly persons on fixed incomes. However, the legislature finds that the cost of these essential residential renovations is far less than the alternative of institutional care for the elderly. The legislature further finds that assisting elderly residents in making essential residential repairs provides a mechanism to keep the State's housing inventory in compliance with current building, electrical, and plumbing codes.

It is the purpose of the elderly housing renovation revolving loan fund program to assist elderly persons on fixed incomes by making affordable loans available for necessary renovations to their residences to enable them to live in safe dwellings and maintain an independent lifestyle.

§201H- Elderly housing renovation revolving loan fund. (a) There is created an elderly housing renovation revolving loan fund, to be administered by the administration as a separate fund from the other funds under this chapter. The revolving loan fund shall provide low interest loans to eligible elderly persons on fixed incomes to make renovations for the purposes of elderly housing renovation revolving loan fund program; provided that the maximum loan shall be $         per residence occupied by one or more eligible elderly persons on a fixed income.

(b) Loans provided under the elderly housing renovation revolving loan fund program shall be used by loan recipients to renovate the dwelling in which the recipient is domiciled to remediate unsafe living conditions, bring the dwelling into compliance with current building, electrical, or plumbing codes, or any combination thereof.

(c) Any funds appropriated for the purpose of the elderly housing renovation revolving loan fund and all moneys received or collected by the administration for the purpose of the revolving loan fund shall be used for loans under the elderly housing renovation revolving loan fund program; provided that interest earned on funds appropriated for the elderly housing renovation revolving loan fund may be used by the administration for administrative purposes.

§201H- Program administration. (a) The administration, in administering the elderly housing renovation revolving loan fund program, shall establish the terms and conditions, maturities, interest rates, collateral, monetary penalties, and other requirements for loans; provided that in addition to any other qualifications the administration may impose under this program:

(b) Any person who fails to meet the requirement of subsection (a)(4) shall be subject to a penalty equal to the compounded difference between the interest rate charged by the corporation under the elderly housing renovation revolving fund loan program and the average of the interest rate for a similar loan charged by the three largest banks chartered to do business in the State at the time the loan provided under this program was approved. The administration shall impose the penalty on a person who receives loan funds under this program if the person, prior to expiration of the period established under subsection (a)(4), vacates or sells the person's interest in a dwelling renovated with moneys obtained under this program. The administration may waive the penalty authorized under this subsection for good cause shown.

(c) The administration may take all necessary actions to collect any delinquent amounts in the event of a default on the payment of any installment of principal or interest on any loans made from the elderly housing renovation revolving loan fund and to otherwise secure the loans in a manner that affords reasonable protection of the State's resources. The administration may enter into agreements with or purchase services required for the purposes of this revolving fund loan program from any state or national bank authorized to accept or hold deposits in the State.

§201H- Rules. The administration, in consultation with the appropriate county agencies with jurisdiction over building, electrical, and plumbing codes, shall adopt rules in accordance with chapter 91 with respect to the administration of this program and the elderly housing renovation revolving loan fund.

§201H- Additional powers. The powers conferred upon the administration by the elderly housing renovation revolving fund loan program shall be in addition and supplemental to the powers conferred upon it by any other law, and nothing herein shall be construed as limiting any powers, rights, privileges, or immunities so conferred upon it."

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 2006-2007, for deposit into the elderly housing renovation revolving loan fund established under section 1 of this Act.

SECTION 3. The sum appropriated shall be expended by the Hawaii housing finance and development administration for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2006.