STAND. COM. REP. NO. 838

Honolulu, Hawaii

RE:    S.B. No. 120

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 120, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING,"

begs leave to report as follows:

     The purpose and intent of this measure is to appropriate funds to support affordable and public housing, and the housing first programs for the chronically homeless.

     More specifically, this measure:

(1)  Authorizes the issuance of general obligation bonds and the appropriation of funds for deposit into the rental housing trust fund and the dwelling unit revolving trust fund;

(2)  Appropriates moneys for the construction of mirco apartment housing units; and

(3)  Appropriates funds for the continued administration of the housing first programs for the chronically homeless.

     Your Committee received written comments in support of this measure from the Hawaii Housing Finance and Development Corporation, Catholic Charities Hawaii, The Chamber of Commerce of Hawaii, United States Veterans Initiative, Faith Action for Community Equity, Hawaii Appleseed Center for Law and Economic Justice, Goodwill Industries of Hawaii, Inc., Hawaii Catholic Conference, Hawaii Association of REALTORS, Hawaii Primary Care Association, Land Use Research Foundation of Hawaii, Partners in Care, PHOCUSED, and four individuals.  The Department of Budget and Finance and the Department of Human Services submitted written comments on this measure.

Your Committee finds that existing public housing in Hawaii is in severe need of repair.  The Hawaii Public Housing Authority's public housing has a backlog of repairs estimated to cost $754,000,000 according to the Authority's 2014 annual fiscal year report.  Your Committee believes that an expansive and comprehensive approach is needed to address the lack of housing in Hawaii.

     Your Committee also finds that homelessness is a significant problem in Hawaii.  Hawaii has the second highest rate of homelessness in the United States and the rate of homelessness does not appear to be improving.  The 2011 Hawaii housing planning study found that up to 50,000 new housing units need to be built by 2016 to meet demand for housing.

     Your Committee notes the concern by the Department of Budget and Finance that, given federal law restrictions on use of tax-exempt general obligation bonds, the State would need to issue taxable general obligation bonds at a higher cost in order to fund the rental housing trust fund and dwelling unit revolving fund.  Your Committee respectfully requests that, should this measure be heard by other Standing Committees, there be further discussion regarding these concerns.

     Your Committee has amended this measure by:

(1)  Changing the means of financing the construction of micro apartment housing units from general funds to general obligation bonds, which lapse on June 30, 2018;

     (2)  Making all appropriation amounts unspecified sums; and

(3)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 120, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 120, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

JILL N. TOKUDA, Chair