HB2638 HD1.DOC

SECTION 1. Chapter 356D, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"§356D- Trust accounts; renovation of rental units. (a) Trust accounts shall be established within the authority to enable the authority to provide matching funds to tenants who rent a dwelling unit subject to section 356D-43(c).

(b) The authority shall maintain a waiting list of eligible applicants for dwelling units subject to section 356D-43(c). When a unit becomes vacant but prior to renovating the unit, the authority shall determine who shall fill the vacancy from the waiting list; provided that the eligible applicant agrees to the conditions set forth in this section.

(c) The authority, as a condition of renovation and rental of a dwelling unit subject to section 356D-43(c), shall require an eligible applicant who rents the dwelling unit to:

(1) Establish and maintain a trust account, to be managed by the authority; and

(2) Be a participant in the Family Self-Sufficiency Program as provided in title 42 United States Code section 1437u.

If the applicant agrees to the conditions established in this section, the authority may renovate the dwelling unit prior to the applicant moving into the unit.

(d) The tenant shall pay per cent of the tenants income to the authority as payment for rent. The authority shall take the difference between the tenant's payment and the rate established pursuant to section 356D-43(c) and deposit the moneys into the tenant's trust account.

(e) Upon the expiration of the five-year tenancy limitation established in section 356D-43(c), or upon the date the tenant voluntarily vacates the unit, the authority shall match, on a dollar-for-dollar basis, the amount deposited by the tenant pursuant to subsection (c) and deposit the matching amount into the trust account in the name of the tenant. All interest accrued on the balance in the trust account shall be included in the trust account. Within three months after the date of tenancy termination, the authority shall release to the tenant the moneys contained in the tenant's trust account.

(f) No tenant subject to this section who is evicted from the tenant's unit for cause by the authority shall be eligible to receive any matching funds pursuant to subsection (d).

(g) If a former tenant who has received moneys pursuant to subsection (d) wishes to reapply for a dwelling unit subject to section 356D-43(c), the former tenant shall first repay the entire amount of the trust fund moneys paid pursuant to subsection (d) and meet any other requirements imposed by the authority.

(h) The authority may adopt rules pursuant to chapter 91 to effectuate this section."

SECTION 2. Section 356D-43, Hawaii Revised Statutes, is amended to read as follows:

"[[]§356D-43[]] Rentals. (a) Notwithstanding any other law to the contrary, the authority shall fix the rates of the rentals for dwelling units and other facilities in state low-income housing projects provided for by this subpart, at rates that will produce revenues that will be sufficient to pay all expenses of management, operation, and maintenance, including the cost of insurance, a proportionate share of the administrative expenses of the authority to be fixed by it, and the costs of repairs, equipment, and improvements, to the end that the state low-income housing projects shall be and always remain self-supporting. The authority, in its discretion, may fix the rates in amounts as will produce additional revenues (in addition to the foregoing) sufficient to amortize the cost of the state low-income housing project or projects, including equipment, over a period or periods of time that the authority may deem advisable.

(b) Notwithstanding any other law to the contrary, if:

(1) Any state low-income housing project or projects have been specified in any resolution of issuance adopted pursuant to part I;

(2) The income or revenues from any project or projects have been pledged by the authority to the payment of any bonds issued under part I; or

(3) Any of the property of any state low-income housing project or projects is security for the bonds,

the authority shall fix the rates of the rentals for dwelling units and other facilities in the state low-income housing project or projects so specified or encumbered at increased rates that will produce the revenues required by subsection (a) and, in addition, those amounts that may be required by part I, by any resolution of issuance adopted under part I, and by any bonds or mortgage or other security issued or given under part I.

(c) The authority shall impose a maximum rental period of five years upon a dwelling unit in a state low-income housing project that receives state funding for repair and maintenance or for capital improvement; provided that the authority shall not impose the maximum rental period to individuals who are disabled or are sixty-five years of age or older. Notwithstanding subsection (a), for tenants who agree to the conditions set forth in section 356D‑ , the authority shall fix the rate for the entire rental period at the minimum amount of rent set by the authority for state-aided family public housing project units with the same number of bedrooms."

SECTION 3. 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 2016-2017 for the purpose of funding repair and maintenance for state low-income housing under chapter 356D, part III, Hawaii Revised Statutes.

SECTION 4. 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, 2018, shall lapse as of that date.

SECTION 5. 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 2016-2017 for the public housing authority to provide funds for repair and maintenance on state low-income housing projects.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

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 2016-2017 for the public housing authority: provided that

(1) $ is used to fund the matching funds to be placed in the trust accounts established under this Act; and

(2) $ is used to establish positions to manage the funds of the trust accounts established under this Act.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	2638
TWENTY-EIGHTH LEGISLATURE, 2016		H.D. 1
STATE OF HAWAII