HB599 HD1

SECTION 1. The legislature is aware that with an overall shortage of teachers and other educational staff members, including administrators and related service professionals, many schools are hard-pressed to keep staff from accepting positions in other schools or leaving the profession altogether.

The cost and availability of housing can greatly impact the recruitment and retention of teachers, especially in geographically isolated communities and in schools plagued with hard-to-fill vacancies. In addition, the high cost of housing in Hawaii creates added economic stress on younger teachers who are those most likely to leave the profession.

The legislature is also aware that the current condition of state-owned teacher housing units necessitates extensive repair and renovation, and will require a consistent maintenance program and dedicated oversight and support personnel when the program is transferred from the Hawaii housing finance and development corporation to the department of education on July 1, 2008.

The purpose of this Act is to address the teacher shortage problem in Hawaii by:

(1) Establishing and appropriating funds for a program that offers deferred-interest second mortgages to qualified teachers and educational staff; and

(2) Appropriating funds to manage teacher housing and for the repair and renovation of existing teacher housing units.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding three new sections to part III, subpart E, to be appropriately designated and to read as follows:

"§302A-A Educators' affordable housing program. (a) There is established an affordable housing program for qualified teachers and other educational staff of the department of education to be administered by the Hawaii housing finance and development corporation.

(b) The Hawaii housing finance and development corporation shall offer a deferred-interest second mortgage to qualified teachers and other educational staff, and their spouses if the property will be owned jointly, at the time a residential dwelling unit is purchased. The deferred-interest second mortgage is due, together with deferred interest, at the earlier of:

(1) The sale of the property;

(2) Other conveyance of the property;

(3) Six months after the purchaser ceases to be qualified;

(4) The refinancing of any mortgage on the dwelling unit that increases the principal;

(5) Six months after the purchaser ceases to occupy the unit full time; or

(6) Fifteen years from the date of the purchase.

(c) The deferred-interest second mortgage shall not exceed the lesser of one-half of the purchase price or $125,000. The interest on the second mortgage shall be equal to a percentage of the increase between:

(1) The purchase price; and the gross sale price on an arms-length sale to an unrelated third party; or

(2) The fair market value of the property as determined by an appraiser selected by the department.

The State's percentage shall be the principal amount of the second mortgage divided by the purchase price.

(d) The department shall adopt rules pursuant to chapter 91 to carry out this section.

§302A-B Qualifications for educators' affordable housing program. A qualified teacher or other educational staff of the department of education shall be eligible to participate in the program if the teacher or educational staff member:

(1) Is an active, full-time teacher or educational staff member within the Hawaii public school system;

(2) Resides on the property purchased under this subpart as the teacher or educational staff member's permanent and primary residence for at least nine months in a twelve-month period; and

(3) Together with a spouse, if any, or the spouse individually, does not own other real estate.

§302A-C Educators' second mortgage revolving trust fund. (a) There is established the educators' revolving trust fund, into which shall be deposited:

(1) Appropriations made by the legislature to the fund;

(2) All contributions from public or private partners;

(3) All interest earned on or accrued to moneys deposited in the fund; and

(4) Any other moneys made available to the fund from other sources.

(b) Moneys in the fund shall be used:

(1) To provide deferred-interest second mortgages for Hawaii public school teachers and other educational staff as provided in 302A‑A; or

(2) For any other purpose deemed necessary to carry out the educators' affordable housing program."

SECTION 3. The department of education shall identify and if necessary, hire personnel or a management firm, which may include vocational education students, to initiate a program of repair and renovation for all existing teacher housing units.

In determining the order of priority for schools that need repair and renovation of existing teacher housing units, the department of education shall consider:

(1) Which schools currently have the highest staff housing needs; and

(2) Which vacancies have been hardest to fill.

The department shall, within five years, provide evidence that housing availability and cost have become reduced factors in the recruitment and retention of teachers for high priority schools and vacancies.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ for fiscal year 2007-2008 to be deposited into the educators' second mortgage revolving trust fund established under section 302A-C, Hawaii Revised Statutes.

SECTION 5. There is appropriated out of the educators' second mortgage revolving trust fund established under section 302A-C, Hawaii Revised Statutes, the sum of $ or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 to provide deferred-interest second mortgages for qualified teachers and educational staff under the educators' affordable housing program pursuant to chapter 302A, Hawaii Revised Statutes.

The sums appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this section.

SECTION 6. 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 2007-2008 to the Hawaii housing finance and development corporation to manage teacher housing and to repair and renovate existing teacher housing units.

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

SECTION 7. 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 2008-2009 to the department of education to manage teacher housing and to repair and renovate existing teacher housing units.

The sum appropriated shall be expended by the department of education for the purposes of this section.

SECTION 8. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 9. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	599
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII