Authorizes State Rent Supplement Program funds to be used for operating subsidies for state low-income housing units transferred to private organizations to operate and manage the units. Increases the allocation of conveyance tax revenues to the Rental Housing Trust Fund. Allows state-owned parcels to be leased for the development of self-help housing. Provides for the transfer of public lands suitable for affordable residential development to the Hawaii Housing and Finance Development Administration. Appropriates funds for homeless and transitional housing programs. Appropriates funds to repair vacant public housing units. Appropriates funds for interim construction loans to develop self-help ownership homes. Appropriates $6,800,000 to acquire the property currently known as Kulana Nani Apartments from Kamehameha Schools. Authorizes the issuance of general obligation bonds to provide shelter to homeless veterans. (SB2958 HD1)

A BILL FOR AN ACT

PART I

SECTION 1. Act 196, Session Laws of Hawaii 2005 (Act 196), was passed by the legislature to address Hawaii's affordable housing and homeless crisis. Act 196 provided a number of mechanisms and incentives to increase the supply of low-income rental housing. In addition, the legislature, recognizing that more meaningful solutions to Hawaii's housing and homeless crisis were needed, established a joint legislative housing and homeless task force to further identify near-term solutions to Hawaii's affordable housing and homeless problem.

The task force spent many hours researching data and meeting with state and county officials, private developers, and nonprofit organizations on Oahu, the Big Island, Kauai, and Maui and also held public hearings and briefings in each county. The task force relied on the information collected in developing its recommendations.

The purpose of this part is to implement many of the recommendations of the task force.

SECTION 2. Section 201G-44, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The administration may offer any decommissioned low-income public housing project, except for federal housing projects, to nonprofit or for-profit organizations or government agencies for rehabilitation into emergency or transitional shelter facilities for the homeless or rehabilitation into rental units that 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; provided that:

The land and improvements may be leased to the nonprofit or for-profit organization or government agency for a period not to exceed ninety-nine years for a sum of $1 per year."

SECTION 3. Section 201G-231, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201G-231[]] Rent supplements. (a) The administration [is authorized to] may make, and contract to make, annual payments to a "housing owner" on behalf of a "qualified tenant", as those terms are defined in this subpart, in [such] amounts and under [such] circumstances as are prescribed in [or pursuant to this subpart. No payment on behalf of a qualified tenant shall exceed a segregated amount of $160 a month.] rules adopted by the administration.

(b) The administration may use state rent supplement program funds for project-based operating subsidies for state low-income housing units that are transferred by the administration to private organizations for the purpose of managing and operating the units; provided that:

SECTION 4. Section 201G-232, Hawaii Revised Statutes, is amended to read as follows:

"§201G-232 Housing owner defined. As used in this subpart, the term "housing owner" means:

SECTION 5. Section 201G-233, Hawaii Revised Statutes, is amended to read as follows:

"§201G-233 Qualified tenant defined. As used in this subpart, the term "qualified tenant" means any single person or family, pursuant to criteria and procedures established by the administration, that has been determined to have an income not exceeding the very low income limit as determined by the administration pursuant to rules adopted by the administration; provided that the qualified tenant's primary place of residence shall be in the State of Hawaii or that the qualified tenant intends to make the State of Hawaii the qualified tenant's primary place of residence. The terms "qualified tenant" and "tenant" include a member of a cooperative who satisfies the foregoing requirements and who, upon resale of the member's membership to the cooperative, will not be reimbursed for more than fifty per cent of any equity increment accumulated through payments under this subpart. With respect to members of a cooperative, the terms "rental" and "rental charges" mean the charges under the occupancy agreements between the members and the cooperative. [The term "qualified tenant" shall not include any person receiving money payments for public assistance from the department of human services; provided that the term "public assistance" shall exclude aid provided through the federal Supplemental Security Income Program.]"

SECTION 6. Section 201G-432, Hawaii Revised Statutes, is amended by amending subsection (i) to read as follows:

"(i) For the period commencing July 1, 2005, through June 30, [2007,] 2009, the fund may be used to provide grants for rental units set aside for persons and families with incomes at or below thirty per cent of the median family income in any project financed in whole or in part by the fund in proportion of those units to the total number of units in the project. At the conclusion of the period described in this subsection, the administration shall report to the legislature on the number and use of grants provided and whether the grants were an effective use of the funds for purposes of developing rental housing for families at or below thirty per cent of median family income."

SECTION 7. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. [All] Of the taxes collected each fiscal year under this chapter [shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year]:

SECTION 8. Act 196, Session Laws of Hawaii 2005, is amended by adding a new section to the chapter established in section 20 of the Act to be appropriately designated and to read as follows:

"§    -    Leases; self-help housing. (a) The administration may lease parcels it deems suitable for affordable housing at $1 per year for up to fifty years to organizations or community trusts that will develop the parcel with ownership units through self-help development.

(c) Parcels leased under this section may be transferred or sublet; provided that the sale or sublease meets affordability restrictions established by the administration."

SECTION 9. No later than September 1, 2006, the Hawaii housing finance and development administration shall identify public lands under the control of any state agency that are suitable for affordable residential development. No later than December 1, 2006, the department of land and natural resources and any other state agency having control of any of the lands identified by the Hawaii housing finance and development administration shall initiate the transfer of the land to the Hawaii housing finance and development administration.

SECTION 10. There is appropriated out of the general revenues of the State of Hawaii the sum of $20,000,000 or so much thereof as may be necessary for fiscal year 2006-2007 for grants-in-aid for homeless services and transitional housing programs; provided that any moneys remaining from the appropriation that have not been distributed as a grant-in-aid by June 30, 2007, are appropriated to the Hawaii public housing administration for homeless programs.

The sum appropriated shall be expended by the Hawaii public housing administration for the purposes of this part.

SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $10,000,000 or so much thereof as may be necessary for fiscal year 2006-2007 to repair and modernize vacant units in federal and state public housing projects.

The sum appropriated shall be expended by the Hawaii public housing administration for the purposes of this part.

SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $400,000 or so much thereof as may be necessary for fiscal year 2006-2007 for interim construction loans for up to ten homes to be developed as self-help ownership homes by private organizations or community trusts on land leased from the State and administered in accordance with subpart B of part III of chapter 201G, Hawaii Revised Statutes.

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

PART II

SECTION 13. Section 201G-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Relative caregiver" means a relative of a minor child by blood or marriage, who is a resident of the state and:

SECTION 14. Section 201G-1, Hawaii Revised Statutes, is amended by amending the definition of "elder or elderly households" to read as follows:

""Elder or elderly households" means households in which at least one member is sixty-two years of age, the spouse or partner has attained the age of majority, and the remaining members have attained the age of fifty-five years at the time of application to the project[.]; provided that in public housing projects, it also may include households in which an elder is the relative caregiver for one or more minor children. Such a child shall cease to be a resident of the household upon attaining the age of majority, or upon the removal from the project of the elder. A live-in aide shall cease to be a resident therein upon the recovery of, or removal from the project of, the elder."

SECTION 15. Section 201G-42, Hawaii Revised Statutes, is amended to read as follows:

"§201G-42 Housing, tenant selection[.]; grandparents. (a) Subject to the [following] limitations and preferences[,] set forth in this section, the administration shall select tenants upon the basis of those in greatest need for such housing.

(b) The administration may limit the tenants of any housing project to classes of persons when required by federal law or regulation as a term or condition of obtaining assistance from the federal government.

(c) Within the priorities established by the administration recognizing need, veterans with a permanent disability of ten per cent or more as certified by the United States Department of Veterans' Affairs, the dependent parents of the veteran and the deceased veteran's widow shall be given first preference.

(d) Five per cent of state low-income public housing units shall be set aside as rentals for grandparents who are the primary caregivers for one or more of their grandchildren; provided that teachers housing under subpart G shall be excluded."

SECTION 16. Section 201G-152, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) In the administration of elder or elderly public housing, the administration shall observe the following with regard to resident selection, dwelling accommodations, and rentals:

PART III

SECTION 17. In its final report dated January 2006, the joint legislative housing and homeless task force expressed concern that the inventory of affordable housing rental units is at risk of being reduced. Affordable rental housing projects built in part with government subsidies have been offered for sale at market prices in anticipation of the expiration of income and regulatory restrictions encumbering the property. The task force is committed to ensuring that these units remain affordable to persons at lower income levels.

In recent months, media reports have announced several affordable housing projects that may be offered for sale, such as the Kulana Nani apartments in Kaneohe, Oahu, that offer affordable rental housing.

The purpose of this part is to preserve Kulana Nani as an affordable rental housing project.

SECTION 18. The Hawaii housing finance and development administration shall immediately initiate negotiations with Kamehameha Schools to ensure state acquisition of the Kulana Nani property and may partner with a private developer for acquisition of the property; provided that one hundred per cent of the housing units on the property shall be retained in perpetuity as affordable housing for households at or below the current income restrictions for rental housing units on the property; provided further that if an agreement to acquire the property is not reached by June 30, 2007, the Hawaii housing finance and development administration shall exercise its power of eminent domain to acquire the property.

The Hawaii housing finance and development administration shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2007 regarding its efforts to ensure acquisition of the Kulana Nani property and its recommendations for financing the purchase of the property.

SECTION 19. There is appropriated out of the general revenues of the State of Hawaii the sum of $6,800,000 or so much thereof as may be necessary for fiscal year 2006-2007 for land acquisition of the Kulana Nani property, tax map key 4-6-31:15, owned by Kamehameha Schools.

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

PART IV

SECTION 20. The director of finance is authorized to issue general obligation bonds in the sum of $ or so much thereof as may be necessary, and the same sum or so much thereof as may be necessary is appropriated for fiscal year 2006-2007 for the purpose of renovating existing barracks and other structures at Kalaeloa to provide shelter to homeless veterans.

SECTION 21. The appropriation made for the capital improvement project authorized by this Act shall not lapse at the end of the fiscal biennium for which the appropriation is made; provided that all moneys from the appropriation unencumbered as of June 30, 2008, shall lapse as of that date.

SECTION 22. The sum appropriated shall be expended by the department of defense for the purposes of this part.

PART V

SECTION 23. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 24. This Act shall take effect on July 1, 2010; provided that on June 30, 2011, section 7 shall be repealed and section 247-7, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the approval of this Act.