HB636

SECTION 1. Chapter 342D, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§342D- Hawaii septic system loan program; eligibility; amounts. (a) There is created the Hawaii septic system loan program to be administered by the department of health, to provide financial assistance to property owners who install septic tanks on their property. Loan eligibility requirements and loan amounts shall be established and awarded based on criteria formulated by the department according to rules adopted pursuant to chapter 91. The department may also adopt any other rules necessary to administer this section pursuant to chapter 91.

(b) Based on the availability of funds, the department shall provide loans to eligible borrowers from moneys in the Hawaii septic system loan special fund; provided that all loans made under this section shall bear interest at zero per cent simple interest. Repayment of the principal amount shall be made according to rules adopted by the department pursuant to chapter 91; provided that the department:

(1) May place a lien on the real property with the installed septic system to secure a loan under this section; and

(2) Shall require all loans to be paid in full upon any transfer or change in the title to the real property with the installed septic system.

(c) The department may enter into written contracts with collection agencies for the purpose of collecting delinquent loans. All payments collected, exclusive of a collection agency's commission, shall revert and be credited to the Hawaii septic system loan special fund. A collection agency that enters into a written contract with the department for the collection of delinquent loans pursuant to this section, may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in, the written contract.

(d) As used in this section, "septic tank" means an above ground septic system used by residences within one hundred yards of the shoreline.

§342D- Hawaii septic system loan special fund. There is established the Hawaii septic system loan special fund to be administered by the department of health. All moneys received by the department from legislative appropriations, loan payments, or any other moneys related to the Hawaii septic system loan program shall be deposited into the special fund. All interest earned or accrued on moneys deposited in the special fund shall become part of the special fund. Moneys in the special fund shall be expended to cover loans and costs to administer the Hawaii septic system loan program and the special fund."

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 2007-2008, to be deposited into the Hawaii septic system loan special fund for the purposes of providing loans for the installation of septic systems.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 3. There is appropriated out of the Hawaii septic system loan special fund the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum etc. to be expended for the purposes of providing loans for the installation of septic systems.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	636
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII