SB3191

PART I

SECTION 1. The legislature finds that the State's population has declined each year over the past three years, an unprecedented situation that has not happened since Hawaii became a state in 1959. A significant portion of this population loss can be attributed to the State's high cost of living and lack of affordable dwellings. The legislature further finds that housing costs continue to rise, keeping homeownership outside the reach of many Hawaii residents.

Accordingly, the purpose of this Act is to provide solutions to expeditiously develop housing for working families in the State.

PART II

SECTION 2. The purpose of this part is to:

(1) Create a residential leasehold program to increase homeownership opportunities for Hawaii residents, particularly working individuals and families. The residential leasehold developments are envisioned to offer lower-priced homes in quality neighborhoods that promote smart growth principles; and

(2) Address some of the barriers to the development of affordable housing, namely the lack of developable land and infrastructure capacity.

SECTION 3. Chapter 201H, Hawaii Revised Statutes, is amended by amending part II as follows:

1. By designating sections 201H-31 to 201H-34 as subpart A, entitled "General Provisions";

2. By designating sections 201H-35 to 201H-70 as subpart B, entitled "Development Programs"; and

3. By adding a new subpart to be appropriately designated and to read as follows:

" . RESIDENTIAL LEASEHOLD PROGRAM

§201H- Residential leasehold project; definition. As used in this subpart, "residential leasehold project" means a multi-family, affordable condominium development to be sold under a lease term not to exceed ninety-nine years.

§201H- Residential leasehold program. (a) The corporation, on behalf of the State or with eligible developers and contractors, may develop residential leasehold projects on state lands set aside by the governor or leased by any state department or agency to the corporation. Residential leasehold projects developed under this section shall have preferences for lower-priced housing that is designed to address the State's housing shortage.

(b) The corporation shall adopt rules pursuant to chapter 91, necessary for the purposes of this subpart. The rules shall address eligibility criteria for homebuyers, the process and criteria for the development of residential leasehold projects, restrictions on the use, sale, and transfer of dwelling units, residential leasehold terms, and other major provisions of the residential leasehold program.

§201H- Commercial, industrial, and other uses. (a) In connection with the development of residential leasehold projects, the corporation may also develop commercial, industrial, and other properties if it determines that the uses can be an integral part of the development or can help to enhance the lifestyles of residents of the development. The corporation may designate any portions of the development for commercial, industrial, or other use and shall have all the powers granted under this chapter with respect thereto, including the power to exempt a project from the requirements of any statutes, ordinances, charter provisions, and rules of any government agency pursuant to section 201H-38.

(b) The corporation shall adopt rules, pursuant to chapter 91, to effectuate the purposes of this section.

§201H- Additional powers. The powers conferred upon the corporation by this subpart shall be in addition and supplemental to the powers conferred by any other law, and nothing in this subpart shall be construed as limiting any powers, rights, privileges, or immunities so conferred."

SECTION 4. Section 171-2, Hawaii Revised Statutes, is amended to read as follows:

"§171-2 Definition of public lands. "Public lands" means all lands or interest therein in the State classed as government or crown lands previous to August 15, 1895, or acquired or reserved by the government upon or subsequent to that date by purchase, exchange, escheat, or the exercise of the right of eminent domain, or in any other manner; including lands accreted after May 20, 2003, and not otherwise awarded, submerged lands, and lands beneath tidal waters that are suitable for reclamation, together with reclaimed lands that have been given the status of public lands under this chapter, except:

(1) Lands designated in section 203 of the Hawaiian Homes Commission Act, 1920, as amended;

(2) Lands set aside pursuant to law for the use of the United States;

(3) Lands being used for roads and streets;

(4) Lands to which the United States relinquished the absolute fee and ownership under section 91 of the Hawaiian Organic Act prior to the admission of Hawaii as a state of the United States unless subsequently placed under the control of the board of land and natural resources and given the status of public lands in accordance with the state constitution, the Hawaiian Homes Commission Act, 1920, as amended, or other laws;

(5) Lands to which the University of Hawaii holds title;

(6) [~~Lands~~] Non-ceded lands set aside by the governor, leased by and state department or agency to the Hawaii housing finance and development corporation for the primary purpose of developing affordable housing, or lands to which the Hawaii housing finance and development corporation in its corporate capacity holds title;

(7) Lands to which the Hawaii community development authority in its corporate capacity holds title;

(8) Lands set aside by the governor to the Hawaii public housing authority or lands to which the Hawaii public housing authority in its corporate capacity holds title;

(9) Lands to which the department of agriculture holds title by way of foreclosure, voluntary surrender, or otherwise, to recover moneys loaned or to recover debts otherwise owed the department under chapter 167;

(10) Lands that are set aside by the governor to the Aloha Tower development corporation, lands leased to the Aloha Tower development corporation by any department or agency of the State, or lands to which the Aloha Tower development corporation holds title in its corporate capacity;

(11) Lands that are set aside by the governor to the agribusiness development corporation, lands leased to the agribusiness development corporation by any department or agency of the State, or lands to which the agribusiness development corporation in its corporate capacity holds title;

(12) Lands to which the Hawaii technology development corporation in its corporate capacity holds title;

(13) Lands to which the department of education holds title;

(14) Lands to which the stadium authority holds title; and

[[](15)[]]Lands to which the school facilities authority holds title;

provided that, except as otherwise limited under federal law and except for state land used as an airport as defined in section 262-1, public lands shall include the air rights over any portion of state land upon which a county mass transit project is developed after July 11, 2005; provided further that if the lands pursuant to paragraph (14) are no longer needed for the stadium development district or related purposes, the lands shall be returned to the public land trust administered by the department."

SECTION 5. Section 171-64.7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) This section applies to all lands or interest therein owned or under the control of state departments and agencies classed as government or crown lands previous to August 15, 1895, or acquired or reserved by the government upon or subsequent to that date by purchase, exchange, escheat, or the exercise of the right of eminent domain, or any other manner, including accreted lands not otherwise awarded, submerged lands, and lands beneath tidal waters that are suitable for reclamation, together with reclaimed lands that have been given the status of public lands under this chapter, including:

(1) Land set aside pursuant to law for the use of the United States;

(2) Land to which the United States relinquished the absolute fee and ownership under section 91 of the Organic Act prior to the admission of Hawaii as a state of the United States;

(3) Land to which the University of Hawaii holds title;

(4) [~~Land~~] Non-ceded lands set aside by the governor to the Hawaii housing finance and development corporation, land leased to the Hawaii housing finance and development corporation by any department or agency of the State, or land to which the Hawaii housing finance and development corporation in its corporate capacity holds title;

(5) Land to which the department of agriculture holds title by way of foreclosure, voluntary surrender, or otherwise, to recover moneys loaned or to recover debts otherwise owed the department under chapter 167;

(6) Land that is set aside by the governor to the Aloha Tower development corporation or land to which the Aloha Tower development corporation holds title in its corporate capacity;

(7) Land that is set aside by the governor to the agribusiness development corporation or land to which the agribusiness development corporation in its corporate capacity holds title;

(8) Land to which the Hawaii technology development corporation in its corporate capacity holds title;

(9) Land to which the department of education holds title;

(10) Land to which the Hawaii public housing authority in its corporate capacity holds title;

(11) Land to which the stadium authority holds title; and

[[](12)[]]Land to which the school facilities authority holds title."

SECTION 6. 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 2022-2023 to be deposited into the dwelling unit revolving fund established pursuant to section 201H-191, Hawaii Revised Statutes.

SECTION 7. There is appropriated out of the dwelling unit revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2022-2023 for the establishment of regional infrastructure for the primary purpose of supporting development of housing on lands located within one mile of a rail transit station, including lands owned by the University of Hawaii that are near or adjacent to the University of Hawaii West Oahu campus; provided that:

(1) The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this part; and

(2) The appropriation shall not lapse at the end of the fiscal biennium for which the appropriation is made.

SECTION 8. There is appropriated out of the dwelling unit revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2022-2023 for the establishment of infrastructure to support the development for affordable housing in counties with a population of less than five hundred thousand; provided that:

(1) The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this part; and

(2) The appropriation shall not lapse at the end of the fiscal biennium for which the appropriation is made.

SECTION 9. There is appropriated out of the dwelling unit revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2022-2023 to establish three full-time equivalent (3.0 FTE) project manager positions; provided that the amount appropriated and positions authorized pursuant to this section shall be included in the base budget for the Hawaii housing finance and development corporation in future fiscal bienniums.

The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this part.

PART III

SECTION 10. The purpose of this part is to remove the statutory cap on the amount of conveyance tax revenues that are deposited into the rental housing revolving fund each fiscal year.

SECTION 11. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:

(1) Ten per cent or $5,100,000, whichever is less, shall be paid into the land conservation fund established pursuant to section 173A-5; and

(2) Fifty per cent [~~or $38,000,000, whichever is less,~~] shall be paid into the rental housing revolving fund established by section 201H-202."

PART IV

SECTION 12. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 13. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2022.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3191
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII