HB2771.DOC

SECTION 1. Section 201H-36, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) To obtain certification for exemption under this section, rental housing projects shall, unless exempted by the corporation, enter into a regulatory agreement with the corporation to ensure the project's continued compliance with the applicable eligibility requirements set forth in subsection (a), as follows:

(1) For moderate rehabilitation projects, a minimum term of five years as specified in a regulatory agreement;

(2) For substantial rehabilitation projects, a minimum term of ten years as specified in a regulatory agreement; or

(3) For new construction projects, a minimum term of thirty years from the date of issuance of the certificate of occupancy[.];

provided that the regulatory agreement shall contain a provision that requires the qualifying person or firm to pay a penalty of no less than the amount of the general excise tax exempted if the qualifying person or firm fails to complete the rental housing project in accordance with this chapter."

SECTION 2. Section 201H-37, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201H-37[]] Exemption from tax on income and obligations. (a) Income earned and obligations issued by a nonprofit entity determined to constitute a "public housing agency" pursuant to section 3(6) of the United States Housing Act of 1937, as amended, and [~~which~~] the income and obligations are declared by the United States Department of Housing and Urban Development to be exempt from all taxation imposed by the United States pursuant to section 11(b) of the Act, shall be exempt from all taxation now or hereafter imposed by the State.

(b) If the qualifying person or firm fails to complete the rental housing project in accordance with this chapter, the corporation shall report the failure to complete the rental housing project to the department of taxation, and the qualifying person or firm shall pay a penalty of no less than the amount of the tax exempted pursuant to this section."

SECTION 3. Section 201H-38, Hawaii Revised Statutes, is amended to read as follows:

"§201H-38 Housing development; exemption from statutes, ordinances, charter provisions, and rules. (a) The corporation may develop on behalf of the State or with an eligible developer, or may assist under a government assistance program in the development of, housing projects that shall be exempt from all statutes, ordinances, charter provisions, and rules of any government agency relating to planning, zoning, construction standards for subdivisions, development and improvement of land, and the construction of dwelling units thereon; provided that:

(1) The corporation finds the housing project is consistent with the purpose and intent of this chapter, and meets minimum requirements of health and safety;

(2) The development of the proposed housing project does not contravene any safety standards, tariffs, or rates and fees approved by the public utilities commission for public utilities or of the various boards of water supply authorized under chapter 54;

(3) The legislative body of the county in which the housing project is to be situated shall have approved the project with or without modifications:

(A) The legislative body shall approve, approve with modification, or disapprove the project by resolution within forty-five days after the corporation has submitted the preliminary plans and specifications for the project to the legislative body. If on the forty-sixth day a project is not disapproved, it shall be deemed approved by the legislative body;

(B) No action shall be prosecuted or maintained against any county, its officials, or employees on account of actions taken by them in reviewing, approving, modifying, or disapproving the plans and specifications; and

(C) The final plans and specifications for the project shall be deemed approved by the legislative body if the final plans and specifications do not substantially deviate from the preliminary plans and specifications. The final plans and specifications for the project shall constitute the zoning, building, construction, and subdivision standards for that project. For purposes of sections 501-85 and 502-17, the executive director of the corporation or the responsible county official may certify maps and plans of lands connected with the project as having complied with applicable laws and ordinances relating to consolidation and subdivision of lands, and the maps and plans shall be accepted for registration or recordation by the land court and registrar; and

(4) The land use commission shall approve, approve with modification, or disapprove a boundary change within forty-five days after the corporation has submitted a petition to the commission as provided in section 205-4. If, on the forty-sixth day, the petition is not disapproved, it shall be deemed approved by the commission.

(b) If an eligible developer fails to complete a housing project in accordance with this chapter, and the housing project has been exempted from any statute, ordinance, charter provision, or rule pursuant to this section, the corporation shall report the failure to complete the rental housing project to the appropriate government agency and the appropriate government agency shall enforce the exempted statute, ordinance, charter provision, or rule.

[~~(b)~~] (c) For the purposes of this section, "government assistance program" means a housing program qualified by the corporation and administered or operated by the corporation or the United States or any of their political subdivisions, agencies, or instrumentalities, corporate or otherwise."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2771
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII