SB127.DOC

SECTION 1. The legislature finds that low-income individuals have an extremely difficult time finding affordable housing rentals in Hawaii. This situation is more frustrating when "no section 8 accepted" housing vacancy advertisements prevent low-income individuals from being considered as renters. Existing Hawaii laws do not prohibit discrimination based on lawful source of income. However, a number of other states, including California and Oregon, have prohibited this type of income discrimination. Renters who participate in government assistance programs, such as the federal Housing Choice Voucher program, also known as section 8 housing, should have an equal opportunity to find housing.

The legislature further finds that landlords should not be unreasonably burdened when renting under the Housing Choice Voucher program and should be afforded certain exceptions for untimely apartment reinspections and untimely transmission of rent moneys by the government.

The purpose of this Act is to amend the landlord-tenant code to prohibit discrimination based on lawful source of income in rental transactions, including advertisements for available rental units.

SECTION 2. Chapter 521, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . discrimination in a rental transactions

§521- Definitions. As used in this part, unless the context clearly requires otherwise:

"Rental transaction" means any part of the process or transaction for the rental or lease of a premises.

"Source of income" means any lawful source of money paid directly or indirectly to a tenant or potential tenant, including:

(1) Any lawful profession or occupation;

(2) Any government or private assistance, grant, loan, or rental assistance program, including low-income housing assistance certificates and vouchers under the United States Housing Act of 1937, as amended; and

(3) Any gift, inheritance, pension, annuity, alimony, child support, or other consideration or benefit.

"Steer" means the practice of directing persons who seek to enter into a rental transaction toward or away from the premises to deprive them of the benefits of living in a discrimination-free environment.

§521- Discriminatory practices in a rental transaction. (a) In addition to the discriminatory practices provided in section 515-3, it is a discriminatory practice for a person engaging in a rental transaction subject to this part, because of source of income:

(1) To refuse to engage in a rental transaction with a person;

(2) To discriminate against a person in the terms, conditions, or privileges of a rental transaction or in the furnishing of facilities or services in connection with a rental transaction;

(3) To refuse to receive or fail to transmit a bona fide offer to engage in a rental transaction from a person;

(4) To refuse to negotiate for a rental transaction with a person;

(5) To represent to a person that a premises is not available for inspection, rental, or lease when in fact the premises is available; fail to bring a premises listing to the person's attention; refuse to permit the person to inspect the premises; or steer a person away from seeking to engage in a rental transaction;

(6) To offer, solicit, accept, use, or retain a premises listing with the understanding that a person may be discriminated against in a rental transaction or in the furnishing of facilities or services in connection with a rental transaction; or

(7) To discriminate against or deny a person access to, or membership or participation in any multiple listing service or other service, organization, or facility involved either directly or indirectly in rental transactions; or to discriminate against any person in the terms or conditions of access, membership, or participation.

(b) Nothing in this section shall be deemed to prohibit a person from determining the ability of a potential tenant to pay rent by:

(1) Verifying, in a commercially reasonable manner, the source and amount of income of the potential tenant; or

(2) Evaluating, in a commercially reasonable manner, the stability, security, and credit worthiness of the potential tenant or any source of income of the potential tenant.

§521- Restrictive covenants and conditions. (a) Every provision in an oral agreement or a written instrument relating to the premises that purports to forbid or restrict the occupancy or lease thereof to persons because of source of income is void.

(b) Every condition, restriction, or prohibition, including a right of entry or possibility of reverter, that directly or indirectly limits the use or occupancy of the premises on the basis of source of income is void.

(c) It is a discriminatory practice to insert in a written instrument relating to the premises a provision that is void under this section or to honor or attempt to honor the provision in the chain of title.

§521- Blockbusting. It is a discriminatory practice for a person, for the purpose of inducing a rental transaction from which the person may benefit financially, because of source of income:

(1) To represent that a change has occurred, or will or may occur in the composition of the owners or occupants in the block, neighborhood, or area in which the premises is located; or

(2) To represent that this change will or may result in the lowering of property values, an increase in criminal or antisocial behavior, or a decline in the quality of schools in the block, neighborhood, or area in which the premises is located.

§521- Other discriminatory practices in a rental transaction. It is a discriminatory practice for a person, or for two or more persons to conspire:

(1) To retaliate, threaten, or discriminate against a person because:

(A) Of the exercise or enjoyment of any right granted or protected by this part;

(B) The person has opposed a discriminatory practice; or

(C) The person has made a charge, filed a complaint, testified, assisted, or participated in an investigation, proceeding, or hearing under this chapter;

(2) To aid, abet, incite, or coerce a person to engage in a discriminatory practice;

(3) To interfere with any person in the exercise or enjoyment of any right granted or protected by this part or with the performance of a duty or the exercise of a power by any person or agency charged with enforcing this part;

(4) To obstruct or prevent a person from complying with this part or an order issued pursuant to this part;

(5) To intimidate or threaten any person engaging in activities designed to make other persons aware of, or encouraging other persons to exercise rights granted or protected by this part;

(6) To threaten, intimidate, or interfere with persons in their enjoyment of the premises because of the source of income of the persons, or of visitors or associates of the persons; or

(7) To print, circulate, post, or mail, or cause to be published a statement, advertisement, or sign; to use a form of application for a rental transaction; or to make a record or inquiry in connection with a prospective rental transaction that indicates, directly or indirectly, an intent to make a limitation or specification, or to discriminate because of source of income.

§521- Exception; untimely dwelling unit reinspection. A landlord may discriminate on the basis of source of income when the dwelling unit the landlord and potential tenant desire to enter into a rental agreement fails the initial inspection required for participation in a low-income housing assistance certificate and voucher program under the United States Housing Act of 1937, as amended, and the program fails to reinspect the dwelling unit within three business days.

§521- Late fee; untimely payment under low-income housing assistance program. For any dwelling unit rented as part of a low-income housing assistance certificate and voucher program under the United States Housing Act of 1937, as amended, the landlord shall be entitled to ten per cent of the monthly rent where payment from the program is not prepaid."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. This Act shall take effect on July 1, 2017.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	127
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII