SB3174 SD2

SECTION 1. The legislature finds that the affordable housing crisis continues to be one of the State's most significant and challenging social problems and is a critical issue for many Hawaii residents. As the cost of home ownership and rentals increases, the State must continue to assist residents to obtain affordable housing.

This Act provides that assistance by:

(1) Extending the sunset date of the conveyance tax allocation to the rental housing trust fund to ensure continued funding and emphasis on providing rental housing to those in need;

(2) Appropriating funds to assist developers in contracting for third party review and certification to expedite the processing and issuance of building permits for affordable housing projects;

(3) Establishes a self-help housing technical assistance trust fund under the Hawaii housing finance and development corporation to provide funding for self-help housing projects; and

(4) Increases the Hula Mae multifamily revenue bond authorization from $400,000,000 to $500,000,000 to not only provide home financing for residents but to also finance the purchase of the Kukui Gardens Rental Housing Complex.

PART II.

SECTION 2. Act 100, Session Laws of Hawaii 2006, as amended by Act 222, Session Laws of Hawaii 2007, is amended by amending section 30 to read as follows:

"SECTION 30. This Act shall take effect on July 1, 2006; provided that on June 30, [~~2008,~~] 2013, section 21 shall be repealed and section 247-7, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the approval of this Act."

SECTION 3. 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 assist developers in contracting for third party review and certification, including but not limited to inspections, discretionary permits, and ministerial permits, to expedite the processing and issuance of building permits for affordable housing projects; provided that, in order to qualify for funding under this section, an affordable housing project shall offer not less than forty per cent of all units, whether rental or for sale, in leasehold or fee simple, at prices or rents that are affordable to persons earning eighty per cent or less of the area median income as determined by the United States Department of Housing and Urban Development.

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

PART III.

SECTION 4. The legislature finds that self-help housing is the lowest-cost means of producing affordable housing for very low- and low-income households. Self-help housing programs target families who are unable to buy clean, safe housing through conventional methods and provide assistance to very low-and low-income households to construct their own homes. The savings from the reduction in labor costs allow otherwise ineligible families to own their own homes.

In Hawaii, more than one thousand one hundred homes have been constructed using the self-help housing method for very low-, low-, and moderate-income families. Additional funding, especially in the area of technical assistance, allow self-help housing programs to provide an average of fifty additional units annually.

There is limited funding for technical assistance, which includes construction supervision, construction plans, contractor payment processing, project bidding, subcontractor monitoring, recruiting and qualifying self-help builders, and family guidance and motivation throughout the entire self-help housing process. The typical technical assistance cost per self-help housing unit is $20,000. Although there are other sources of funding available for the construction of homes, additional funding to cover technical assistance costs will allow these programs to provide more housing opportunities to families in need.

SECTION 5. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new subpart under part III to be appropriately designated and to read as follows:

" . SELF-HELP HOUSING TECHNICAL ASSISTANCE TRUST FUND

§201H-A Definitions. As used in this subpart, unless a different meaning is clearly required by the context:

"Fund" means the self-help housing technical assistance trust fund established in this subpart.

"Self-help housing" means a model of housing production in which purchasers reduce the cost of their homes by contributing "sweat equity" — their own labor in the construction of their own homes.

"Technical assistance" means any assistance necessary to carry out housing efforts by or for very low- and low-income households to improve the quality or quantity of housing available to meet their needs, including but not limited to construction supervision and planning, contractor payment processing and bidding, subcontractor monitoring, recruiting and qualifying self-help housing builders, and guiding and educating families throughout the entire self-help housing process.

§201H-B Self-help housing technical assistance trust fund. (a) There is established the self-help housing technical assistance trust fund to be administered by the corporation.

(b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the fund; provided that fund moneys shall not be used to finance day-to-day administrative expenses of projects allotted fund moneys.

(1) Appropriations made by the legislature;

(2) Private contributions;

(3) Interest;

(4) Other returns; and

(5) Moneys from other sources.

(d) The moneys available in the fund shall be used to provide, in whole or in part, additional funding to self-help housing organizations for technical assistance costs generated from self-help housing projects in the State. Permitted uses of the fund may include but are not limited to construction supervision and planning, contractor payment processing and bidding, subcontractor monitoring, recruiting and qualifying self-help housing builders, guiding and educating families throughout the entire self-help housing process, or other self-help housing services or activities as provided in rules adopted by the corporation pursuant to chapter 91.

(e) Funds available for technical assistance of the self-help housing project shall be limited to $20,000 per unit.

(f) The corporation shall submit an annual report to the legislature no more than twenty days prior to the convening of each regular session describing the projects funded, its efforts to develop self-help housing projects, a description of proposals submitted for self-help housing projects and action taken on the proposals, and any barriers to developing self-help housing projects.

§201H-C Eligible organizations for funds. Eligible organizations for funds shall be limited to tax exempt charitable organizations under the Internal Revenue Code section 501(c)(3) in accordance with rules adopted by the corporation pursuant to chapter 91.

§201H-D Eligible self-help housing projects. (a) Self-help housing projects eligible for technical assistance funding shall be based solely on the readiness to use moneys available in the fund, such as whether the project site is ready for house construction or the track record of the eligible self-help housing organization in producing self-help housing units.

(b) Technical assistance funding for self-help housing projects shall be limited to the projects targeted to very low- low-, and medium-income families. For purposes of this subpart, the applicable median family income shall be the median family income for the county or standard metropolitan statistical area in which the project is located as determined by the United States Department of Housing and Urban Development, as adjusted from time to time.

(c) The corporation may include other eligibility criteria as it deems necessary to carry out the purposes of this subpart.

§201H-E Additional powers. The powers conferred upon the corporation by this subpart shall be in addition and supplemental to the powers conferred by any other law, and nothing in this subpart shall be construed as limiting any powers, rights, privileges, or immunities conferred."

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 2008-2009 to be deposited into the self-help housing technical assistance trust fund to be used to provide additional funding for technical assistance costs generated by self-help housing projects in the State.

SECTION 7. There is appropriated out of the self-help housing technical assistance trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 to be used to provide additional funding for technical assistance costs generated by self-help housing projects in the State.

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

PART IV.

SECTION 8. Act 291, Session Laws of Hawaii 1980, as amended by Act 304, Session Laws of Hawaii 1996, as amended by Act 185, Session Laws of Hawaii 2004, as amended by Act 231, Session Laws of Hawaii 2007, is amended by amending section 11 to read as follows:

"SECTION 11. Issuance of revenue bond; amount authorized. Revenue bonds may be issued by the Hawaii housing finance and development corporation pursuant to part III, chapter 39 and subpart A of part III of chapter 201H, Hawaii Revised Statutes, in an aggregate principal amount not to exceed [~~$400,000,000,~~] $ at such times and in such amounts as the Hawaii housing finance and development corporation deems advisable for the purpose of undertaking and maintaining any of the housing loan programs under subpart A of part III of chapter 201H, Hawaii Revised Statutes, relating to the funding or purchasing of eligible project loans."

SECTION 9. In codifying the new sections added by section 5 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 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect upon its approval; provided that section 2 of this Act shall take effect on June 29, 2008; and sections 3, 6, and 7 shall take effect on July 1, 2008.

THE SENATE	S.B. NO.	3174
TWENTY-FOURTH LEGISLATURE, 2008		S.D. 2
STATE OF HAWAII