SB2564.DOC

SECTION 1. The purpose of this Act is to address the state rent supplement program.

More specifically, this Act transfers the state rent supplement program from the Hawaii public housing authority to the department of human services.

The legislature finds that the transfer promotes the public interest. The legislature believes that the department of human services has the capability and interest to enhance the state rent supplement program to its fullest utilization. The program potentially is a major component in the spectrum of services that may mitigate the homeless problem by enabling low-income families and individuals to reside in a rental unit that, with the rent supplement, is affordable for them.

The legislature believes that the department of human services should have the power to establish and develop a state rent supplement program that best meets its purposes, instead of merely continuing the program presently operated by the Hawaii public housing authority. With this purpose in mind, this Act includes broad enabling language for the program. The legislature is confident that the department will use its discretion wisely. Additionally, this Act provides the department with a limited, short-term exemption from compliance with chapter 91, Hawaii Revised Statutes, when adopting the initial rules for the program. The legislature finds that expediting the adoption of the initial rules will aid the department in its planning and implementation.

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . STATE RENT SUPPLEMENT PROGRAM

§346-A Definitions. For the purposes of this part:

"Housing owner" means a private owner of a standard housing unit or units deemed qualified by the department to participate in the state rent supplement program.

"Qualified tenant" means a family, including a family of one person, who:

(1) Has been determined by the department to have an income not exceeding eighty per cent of the annual median income of a family of the same size, as calculated by the United States Department of Housing and Urban Development;

(2) Resides in the State; and

(3) Complies with other qualifications as may be established by the department.

§346-B State rent supplement program; established. The department shall establish a state rent supplement program. Under the program, the department shall supplement the monthly rent of a qualified tenant, either through:

(1) Monthly payments to a housing owner on behalf of the qualified tenant; or

(2) Monthly issuance of rent vouchers to the qualified tenant that can be used to pay to a housing owner all or a portion of the monthly rent charged the qualified tenant.

§346-C State rent supplement program; operation, annual report. (a) Subject to legislative appropriation, the department may operate the state rent supplement program through:

(1) Staff who are employees of the department and under the supervision of the director;

(2) Agreement with a county;

(3) Contract with a private person; or

(4) A combination of its own staff, a county agreement, and a contractor.

(b) The department may operate the state rent supplement program as part of, or separate from, the homeless programs of part XVII.

(c) The department shall include information and data about the state rent supplement program in its annual report required under section 346-5.

§346-D State rent supplement amount. The department shall establish the monthly amount of the state rent supplement to be provided to a qualified tenant or method of calculating that monthly amount; provided that the amount shall not exceed thirty per cent of the qualified tenant's monthly income. The department may periodically adjust the monthly rent supplement amounts or method of calculating that amount.

§346-E Determination of eligibility of qualified tenants and housing owners, periodic recertification of tenants' incomes, and adjustment of state rent supplement amounts. The department shall establish criteria and procedures for:

(1) Determining and certifying the qualified tenants and housing owners who may participate in the state rent supplement program; and

(2) Periodically reviewing and recertifying qualified tenants and housing owners.

§346-F Preferences. The department may establish preferences for the receipt of state rent supplements by rule.

§346-G Rules. (a) The department shall adopt rules to implement and operate the state rent supplement program. The rules may prescribe terms and conditions for continued eligibility of tenants and housing owners for participation in the program. Except as otherwise provided under section 6 of Act , Session Laws of Hawaii 2016, the rules shall be adopted in accordance with chapter 91.

(b) In order to facilitate the administration of the state rent supplement program, the department may adopt rules that incorporate by reference amendments to the section 8 housing choice voucher program regulations. If adopted, the rules for the state rent supplement program shall be deemed amended automatically, without necessity of public hearing, when the regulations for the section 8 housing choice voucher program are amended; provided that the department shall give at least thirty days public notice before the state rent supplement program rules take effect. For the purpose of this subsection, the "section 8 housing choice voucher program" means the program under section 8 of the United States Housing Act of 1937, as amended, that provides for the issuance of vouchers to assist low-income tenants with rent payments.

§346-H Additional powers. The powers conferred upon the department by this part shall be in addition to the powers conferred by any other law, and nothing in this part shall be construed as limiting any powers, rights, privileges, or immunities so conferred."

SECTION 3. Chapter 356D, part VIII, Hawaii Revised Statutes, is repealed.

SECTION 4. (a) On July 1, 2017, all rights, powers, functions, and duties of the Hawaii public housing authority relating to the state rent supplement program are transferred to the department of human services.

(b) On July 1, 2017, all employees who occupy civil service positions and whose functions are transferred to the department of human services by this Act shall retain their civil service status, whether permanent or temporary. Employees shall be transferred without loss of salary, seniority (except as prescribed by application collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or positions to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employee possesses the legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The director of human services may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

SECTION 5. On July 1, 2017, all appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii public housing authority relating to the functions transferred to the department of human services shall be transferred with the functions to which they relate.

SECTION 6. (a) From July 1, 2016, the department of human services shall commence preparation to implement and operate the state rent supplement program commencing on July 1, 2017.

The department shall adopt the initial rules for the state rent supplement program without necessity of compliance with chapter 91, Hawaii Revised Statutes; provided that:

(1) The department shall hold at least one public hearing on the proposed rules before adoption; and

(2) Any rules adopted after June 30, 2017, shall be subject to chapter 91, Hawaii Revised Statutes.

The department shall submit to the legislature as part of the executive budget for the fiscal biennium 2017-2019 a request to transfer to the department the appropriation for the state rent supplement program that is in the base budget of the Hawaii public housing authority. The department also shall submit a request to fund the additional positions authorized for the program under section 7 and may submit any other request for funding the program.

(b) Between July 1, 2016 and July 1, 2017, the Hawaii public housing authority shall continue to operate the state rent supplement program in accordance with chapter 356D, Hawaii Revised Statutes, but shall begin preparation for the transfer of the program to the department of human services on July 1, 2017. The Hawaii public housing authority shall cooperate with the department of human services and any other department to effectuate the transfer.

SECTION 7. There are authorized 2.00 full-time equivalent program management specialist IV positions in the department of human services for the state rent supplement program. The positions may be filled commencing on July 1, 2016.

The department shall use the employees occupying the positions to prepare for the transfer of the state rent supplement program from the Hawaii public housing authority to the department of human services.

Alternatively, the department may use the employees occupying the positions to assume the duties of incumbent employees of the department who are reassigned to prepare for the transfer.

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $100,000 or so much thereof as may be necessary for fiscal year 2016-2017 to prepare for the transfer of the state rent supplement program from the Hawaii public housing authority to the department of human services.

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

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2017; except that sections 6, 7, and 8 shall take effect on July 1, 2016.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2564
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII