SB1352 SD1

SECTION 1. The legislature finds that the severe shortage of affordable housing imposes a tremendous hardship on the residents of the State. The lack of affordable housing options is the biggest barrier for employers to recruit and retain skilled workers, and the reason many residents are migrating to more affordable communities in the continental United States. A December 2019 study commissioned by the Hawaii housing finance and development corporation estimates that the State will need to build more than fifty thousand housing units by 2025 to meet the housing demand, with over ninety per cent of the units required for households earning at or below one hundred forty per cent of the area median income.

Accordingly, the purpose of this Act is to provide developers with incentives to encourage the development of additional affordable housing units above and beyond inclusionary requirements, including creating pathways to deliver affordable homes in a timely matter to the public.

SECTION 2. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201H- Rental deposit loan program. (a) There is established within the corporation a rental deposit loan program to assist residents of the State who are renter-occupants and own no other real property with obtaining rental housing by providing zero per cent interest loans for security deposits up to $2,500. Zero interest loans for security deposits under this subsection shall be repaid to the corporation over a period not to exceed forty-eight months.

(b) The corporation shall award grants pursuant to chapter 103D to counties and nonprofit corporations for the administration of the rental deposit loan program.

(c) Prospective tenants who are eligible to participate in the rental deposit loan program shall be limited to individuals and families who reside in the State, are renter-occupants, and own no other real property.

(d) The recipient county or nonprofit corporation shall determine the eligibility of an applicant, including but not limited to:

(1) Proof of a rental offering of at least six months;

(2) Evaluation of the applicant's financial resources;

(3) Determination that the applicant is unable to afford both the rental deposit and first month's rent, but is able to afford the rent thereafter; and

(4) Proof of Hawaii residency.

(e) The recipient county or nonprofit corporation shall enter into a contract with persons deemed eligible and awarded a loan under the rental deposit loan program in which the repayment schedule is agreed upon a specific amount of months not to exceed forty-eight months at zero per cent interest.

(f) A county or nonprofit corporation receiving a grant pursuant to this section may use an amount not to exceed eight per cent of the grant for the costs of administering the rental deposit loan program.

(g) County and nonprofit corporation recipients shall:

(1) Keep statistical records on loan recipients, including the numbers of individuals and families served and repayment status; and

(2) Provide quarterly reports to the corporation."

SECTION 3. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

"§201H- Housing development; income restrictions and additional exemptions. (a) The corporation may develop on behalf of the State or, with an eligible developer, 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.

(b) Housing projects developed by the corporation pursuant to this section shall not be subject to income restrictions by the corporation or any other agency of the State or county in which the project is developed; provided that:

(1) All units constructed under the proposed housing project shall exclusively be:

(A) Sold or transferred as leasehold or fee simple units;

(B) Sold or transferred to owner-occupiers;

(D) Sold or transferred to residents of the State;

provided further that the provisions of this paragraph shall apply in perpetuity. If the project fails to meet the above provisions at any point, all exemptions for the project shall lapse and the developer shall be subject to all fees, fines, or other penalties deemed appropriate by the county in which the project is located;

(2) The corporation finds that the housing project meets minimum requirements of health and safety;

(3) 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;

(4) The county in which the housing project is to be situated shall have approved the project with or without modifications and:

(A) The county 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 county. If on the forty-sixth day a project is not disapproved, it shall be deemed approved by the county;

(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 county 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, as applicable, 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

(5) 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.

(c) For the purposes of this section, "government assistance program" has the same meaning as defined in section 201H-38."

SECTION 4. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Exemption for construction of affordable housing units. (a) All gross income received by any qualified person or firm for the planning, design, financing, construction, sale, or lease of affordable housing units in the State that are part of a government agency's or approving body's condition for approval and that have been certified by the government agency or approving body, shall be exempt from general excise taxes.

(b) This section shall not apply to gross income received by any qualified person or firm for housing projects certified or approved under section 201H-36.

(c) The director of taxation shall modify, or adopt, rules pursuant to chapter 91 for the purpose of this section as necessary.

(d) For purposes of this section:

"Affordable housing units in the State that are part of a government agency's or approving body's condition for approval" means the designated affordable housing units approved by a government agency or approving body for a project to qualify for the exemption under subsection (a).

"Qualified person or firm" means an individual, partnership, joint venture, corporation, association, limited liability partnership, limited liability company, business, trust, or any organized group of persons or legal entities, or any combination thereof, which possesses all professional or vocational licenses necessary to do business in the State in conjunction with the planning, design, financing, construction (including materials and supplies for new construction, moderate rehabilitation, and substantial rehabilitation), sale, or rental of eligible housing projects."

SECTION 5. Section 6E-2, Hawaii Revised Statutes, is amended by amending the definition of "historic property" to read as follows:

""Historic property" means any building, structure, object, district, area, or site, including heiau and an underwater site [~~,which~~] that is over [~~fifty~~] one hundred years old."

SECTION 6. Section 6E-8, Hawaii Revised Statutes, is amended to read as follows:

"§6E-8 Review of effect of proposed state projects. (a) Before any agency or officer of the State or its political subdivisions commences any project [~~which~~] that may affect historic property, aviation artifact, or a burial site, the agency or officer shall advise the department and allow the department an opportunity for review of the effect of the proposed project on historic properties, aviation artifacts, or burial sites, consistent with section 6E-43, especially those listed on the Hawaii register of historic places. The proposed project shall not be commenced, or if it has already begun, continued, until the department has given its written concurrency. If:

(1) The proposed project consists of corridors or large land areas;

(2) Access to properties is restricted; or

(3) Circumstances dictate that construction be done in

stages,

the department may give its written concurrence based on a phased review of the project; provided that there shall be a programmatic agreement between the department and the project applicant that identifies each phase and the estimated timelines for each phase.

The department shall provide written concurrence or non-concurrence within ninety days after the filing of a request with the department. The agency or officer seeking to proceed with the project, or any person, may appeal the department's concurrence or non-concurrence to the Hawaii historic places review board. An agency, officer, or other person who is dissatisfied with the decision of the review board may apply to the governor, who may take action as the governor deems best in overruling or sustaining the department.

(b) The department of Hawaiian home lands, prior to any proposed project relating to lands under its jurisdiction, shall consult with the department regarding the effect of the project upon historic property or a burial site.

(c) The State, its political subdivisions, agencies, and officers shall report to the department the finding of any historic property during any project and shall cooperate with the department in the investigation, recording, preservation, and salvage of the property.

(d) The department may retain a third-party consultant to conduct the review described under subsection (a) if, after an initial evaluation, the department determines that:

(1) It is not able to provide its written concurrence or non-concurrence within sixty days of the filing of the request with the department;

(2) The third-party consultant has the qualifications and experience required pursuant to subsection (e) to conduct the review; and

(3) The third-party consultant will be required by contract to provide a recommendation to the department within thirty days of the filing of the request with the department.

The department shall obtain the approval of the appropriate island burial council and aha moku council prior to retaining the services of the third-party consultant.

(e) Whenever the department retains any third party, including an architect, engineer, archaeologist, planner, or other person to review an application for a permit, license, or approval under subsection (d), the third party shall meet the educational and experience standards and the qualifications for preservation professionals pursuant to rules adopted by the state historic preservation division.

[~~(d)~~] (f) The department shall adopt rules in accordance with chapter 91 to implement this section."

SECTION 7. Section 6E-10, Hawaii Revised Statutes, is amended to read as follows:

"§6E-10 Privately owned historic property. (a) Before any construction, alteration, disposition or improvement of any nature, by, for, or permitted by a private landowner may be commenced [~~which~~] that will affect [an] a historic property on the Hawaii register of historic places, the landowner shall notify the department of the construction, alteration, disposition, or improvement of any nature and allow the department opportunity for review of the effect of the proposed construction, alteration, disposition, or improvement of any nature on the historic property. The proposed construction, alteration, disposition, or improvement of any nature shall not be commenced, or, in the event it has already begun, continue, until the department shall have given its concurrence or ninety days have elapsed. Within ninety days after notification, the department shall:

(1) Commence condemnation proceedings for the purchase of the historic property if the department and property owner do not agree upon an appropriate course of action;

(2) Permit the owner to proceed with the owner's construction, alteration, or improvement; or

(3) In coordination with the owner, undertake or permit the investigation, recording, preservation, and salvage of any historical information deemed necessary to preserve Hawaiian history, by any qualified agency for this purpose.

(b) Nothing in this section shall be construed to prevent the ordinary maintenance or repair of any feature in or on [an] a historic property that does not involve a change in design, material, or outer appearance or change in those characteristics [~~which~~] that qualified the historic property for entry onto the Hawaii register of historic places.

(c) Any person, natural or corporate, who violates the provisions of this section shall be fined not more than $1,000, and each day of continued violation shall constitute a distinct and separate offense under this section for which the offender may be punished.

(d) If funds for the acquisition of needed property are not available, the governor may, upon the recommendation of the department, allocate from the contingency fund an amount sufficient to acquire an option on the property or for the immediate acquisition, preservation, restoration, or operation of the property.

(e) The department may retain a third-party consultant to conduct the review described under subsection (a) if, after an initial evaluation, the department determines that:

(1) It is not able to provide its written concurrence or non-concurrence within sixty days of the landowner's notification of construction, alteration, disposition, or improvement;

(2) The third-party consultant has the qualifications and experience required pursuant to subsection (f) to conduct the review; and

(3) The third-party consultant will be required by contract to provide a recommendation to the department within thirty days of the landowner's notification of construction, alteration, disposition, or improvement.

The department shall obtain the approval of the appropriate island burial council and aha moku council prior to contracting to retain the services of the third-party consultant.

(f) Whenever the department retains any third party, including an architect, engineer, archaeologist, planner, or other person, to review an application for a permit, license, or approval under subsection (e), the third party shall meet the educational and experience standards as well as the qualifications for preservation professionals pursuant to rules adopted by the state historic preservation division.

[~~(e)~~] (g) The department or third-party consultant, as applicable, may enter, solely in performance of [~~its~~] the department's official duties and only at reasonable times, upon private lands for examination or survey thereof. Whenever any member of the department or the department's third-party consultant, as applicable, that is duly authorized to conduct investigations and surveys of [an] a historic or cultural nature determines that entry onto private lands for examination or survey of historic or cultural finding is required, the department or the department's third-party consultant, as applicable, shall give written notice of the finding to the owner or occupant of such property at least five days prior to entry. If entry is refused, the member or the department's third-party consultant, as applicable, may make a complaint to the district environmental court in the circuit in which such land is located. The district environmental court may thereupon issue a warrant, directed to any police officer of the circuit, commanding the officer to take sufficient aid, and, being accompanied by a member of the department[,] or the department's third-party consultant, as applicable, between the hours of sunrise and sunset, allow the member of the department or the department's third-party consultant, as applicable, to examine or survey the historic or cultural property."

SECTION 8. Section 6E-42, Hawaii Revised Statutes, is amended to read as follows:

"§6E-42 Review of proposed projects. (a) Except as provided in section 6E-42.2, before any agency or officer of the State or its political subdivisions approves any project involving a permit, license, certificate, land use change, subdivision, or other entitlement for use[~~, which~~] that may affect historic property, aviation artifacts, or a burial site, the agency or office shall advise the department and, prior to any approval, allow the department an opportunity for review and comment on the effect of the proposed project on historic properties, aviation artifacts, or burial sites, consistent with section 6E-43, including those listed in the Hawaii register of historic places. If:

(1) The proposed project consists of corridors or large land areas;

(2) Access to properties is restricted; or

(3) Circumstances dictate that construction be done in stages,

the department's review and comment may be based on a phased review of the project; provided that there shall be a programmatic agreement between the department and the project applicant that identifies each phase and the estimated timelines for each phase.

(b) The department shall inform the public of any project proposals submitted to it under this section that are not otherwise subject to the requirement of a public hearing or other public notification.

(c) The department may retain a third-party consultant to conduct the review described under subsection (a) if, after an initial evaluation, the department determines that:

(1) It is not able to provide its written concurrence or non-concurrence within sixty days of being advised of the project pursuant to subsection (a);

(2) The third-party consultant has the qualifications and experience required pursuant to subsection (d) to conduct the review; and

(3) The third-party consultant will be required by contract to provide a recommendation to the department within thirty days of being advised of the project pursuant to subsection (a).

The department shall obtain the approval of the appropriate island burial council and aha moku council prior to contracting to retain the services of the third-party consultant.

(d) Whenever the department retains any third party, including an architect, engineer, archaeologist, planner, or other person to review an application for a permit, license, or approval under subsection (c), the third party shall meet the educational and experience standards and the qualifications for preservation professionals pursuant to rules adopted by the state historic preservation division.

[~~(c)~~] (e) The department shall adopt rules in accordance with chapter 91 to implement this section."

SECTION 9. Section 46-4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) This section and any ordinance, rule, or regulation adopted in accordance with this section shall apply to lands not contained within the forest reserve boundaries as established on January 31, 1957, or as subsequently amended.

Zoning in all counties shall be accomplished within the framework of a long-range, comprehensive general plan prepared or being prepared to guide the overall future development of the county. Zoning shall be one of the tools available to the county to put the general plan into effect in an orderly manner. Zoning in the counties of Hawaii, Maui, and Kauai means the establishment of districts of [~~such~~] a number, shape, and area, and the adoption of regulations for each district to carry out the purposes of this section. In establishing or regulating the districts, full consideration shall be given to all available data as to soil classification and physical use capabilities of the land to allow and encourage the most beneficial use of the land consonant with good zoning practices. The zoning power granted herein shall be exercised by ordinance [~~which~~] that may relate to:

(1) The areas within which agriculture, forestry, industry, trade, and business may be conducted;

(2) The areas in which residential uses may be regulated or prohibited;

(3) The areas bordering natural watercourses, channels, and streams, in which trades or industries, filling or dumping, erection of structures, and the location of buildings may be prohibited or restricted;

(4) The areas in which particular uses may be subjected to special restrictions;

(5) The location of buildings and structures designed for specific uses and designation of uses for which buildings and structures may not be used or altered;

(6) The location, height, bulk, number of stories, and size of buildings and other structures;

(7) The location of roads, schools, and recreation areas;

(8) Building setback lines and future street lines;

(9) The density and distribution of population;

(10) The percentage of a lot that may be occupied, size of yards, courts, and other open spaces;

(11) Minimum and maximum lot sizes; [~~and~~]

(12) Promoting labor standards, including but not limited to living wages, benefits, requirements for participation in state-approved apprenticeship programs that promote the efficient and expeditious completion of construction projects and permit and encourage the orderly development of land resources within the county's jurisdiction; and

[~~(12)~~] (13) Other regulations the boards or city council find necessary and proper to permit and encourage the orderly development of land resources within their jurisdictions.

The council of any county shall prescribe rules, regulations, and administrative procedures and provide personnel it finds necessary to enforce this section and any ordinance enacted in accordance with this section. The ordinances may be enforced by appropriate fines and penalties, civil or criminal, or by court order at the suit of the county or the owner or owners of real estate directly affected by the ordinances.

Any civil fine or penalty provided by ordinance under this section may be imposed by the district court, or by the zoning agency after an opportunity for a hearing pursuant to chapter 91. The proceeding shall not be a prerequisite for any injunctive relief ordered by the circuit court.

Nothing in this section shall invalidate any zoning ordinance or regulation adopted by any county or other agency of government pursuant to the statutes in effect prior to July 1, 1957.

The powers granted herein shall be liberally construed in favor of the county exercising them, and in [~~such~~] a manner as to promote the orderly development of each county or city and county in accordance with a long-range, comprehensive general plan to ensure the greatest benefit for the State as a whole. This section shall not be construed to limit or repeal any powers of any county to achieve these ends through zoning and building regulations, except insofar as forest and water reserve zones are concerned and as provided in subsections (c) and (d).

Neither this section nor any ordinance enacted pursuant to this section shall prohibit the continued lawful use of any building or premises for any trade, industrial, residential, agricultural, or other purpose for which the building or premises is used at the time this section or the ordinance takes effect; provided that a zoning ordinance may provide for elimination of nonconforming uses as the uses are discontinued, or for the amortization or phasing out of nonconforming uses or signs over a reasonable period of time in commercial, industrial, resort, and apartment zoned areas only. In no event shall [~~such~~] the amortization or phasing out of nonconforming uses apply to any existing building or premises used for residential (single-family or duplex) or agricultural uses. Nothing in this section shall affect or impair the powers and duties of the director of transportation as set forth in chapter 262."

SECTION 10. Section 104-2, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (b) to read:

"(b) Every laborer and mechanic [~~performing work on the job site~~] employed for the construction of any public work project, including but not limited to off-site construction where a portion of the building or work is manufactured or constructed for the performance of the contract, shall be paid no less than prevailing wages; provided that:

(1) The prevailing wages shall be established by the director as the sum of the basic hourly rate and the cost to an employer of providing a laborer or mechanic with fringe benefits. In making prevailing wage determinations, the following shall apply:

(A) The director shall make separate findings of:

(i) The basic hourly rate; and

(ii) The rate of contribution or cost of fringe benefits paid by the employer when the payment of the fringe benefits by the employer constitutes a prevailing practice. The cost of fringe benefits shall be reflected in the wage rate scheduled as an hourly rate; and

(B) The rates of wages which the director shall regard as prevailing in each corresponding classification of laborers and mechanics shall be the rate of wages paid to the greatest number of those employed in the State, the modal rate, in the corresponding classes of laborers or mechanics on projects that are similar to the contract work;

(2) Except for the project prevailing wages established by subsections (h) and (i), the prevailing wages shall be not less than the wages payable under federal law to corresponding classes of laborers and mechanics employed on public works projects in the State that are prosecuted under contract or agreement with the government of the United States; and

(3) Notwithstanding the provisions of the original contract, the prevailing wages shall be periodically adjusted during the performance of the contract in an amount equal to the change in the prevailing wage as periodically determined by the director."

2. By amending subsection (i) to read:

"(i) The terms of section 201H-36(a)(5) prevailing wages shall be deemed the prevailing wages serving as the basis of compliance with this chapter for work on the project when:

(1) The Hawaii housing finance and development corporation has approved and certified a qualified person or firm involved with a newly constructed, or moderately or substantially rehabilitated project under section 201H-36(a)(5) for exemption from general excise taxes; and

(2) The qualified person or firm has entered into a contract with a general contractor or subcontractors whose workforce is subject to either:

(A) A collective bargaining agreement with a bona fide labor union for which a section 201H‑36(a)(5) prevailing wage for the laborers and mechanics employed for the construction project has been approved by the director; or

(B) A project labor agreement with the group whose wages are reflected in the Hawaii prevailing wage schedule for which section 201H-36(a)(5) prevailing wages for the laborers and mechanics employed for the construction project have been approved by the director[~~; and~~

~~(3)~~ The qualified person or firm has received no other direct or indirect financing for the construction project from any other governmental contracting agency, including the Hawaii housing finance and development corporation]."

SECTION 11. Section 171-11, Hawaii Revised Statutes, is amended to read as follows:

"§171-11 Public purposes, lands set aside by the governor; management. The governor may, with the prior approval of the board of land and natural resources, set aside public lands to any department or agency of the State, the city and county, county, or other political subdivisions of the State for public use or purpose. All withdrawals of the lands or portions thereof so set aside shall be made by the governor. Any order issued by the governor to set aside public lands for public purposes pursuant to this section to be under the control and management of any county or state agency for the development of affordable housing projects and related purposes, and in the interests of promoting the fair, efficient, and expeditious completion of the projects, shall incorporate, as a condition of the order, that the applicable county or state agency, as part of any request for proposal for an affordable housing project, require the developer of the affordable housing project to enter into contracts with only general contractors and subcontractors whose wages are reflected in the Hawaii prevailing wage statute, chapter 104, for laborers and mechanics employed for the affordable housing project. The developer shall certify to the applicable county or state agency that this requirement shall be met in the construction of the affordable housing project, including but not limited to off-site construction where a portion of the building or work is manufactured or constructed for the performance of the contract.

Any public lands set aside by the governor prior to the enactment of this chapter, or any public lands set aside by the governor of the Territory of Hawaii, shall be subject to the provisions of this section.

Lands while so set aside for such use or purpose or when acquired for roads and streets shall be managed by the department, agency, city and county, county, or other political subdivisions of the State having jurisdiction thereof, unless otherwise provided by law. Such department, agency of the State, the city and county, county, or other political subdivisions of the State in managing such lands shall be authorized to exercise all of the powers vested in the board in regard to the issuance of leases, easements, licenses, revocable permits, concessions, or rights of entry covering such lands for such use as may be consistent with the purposes for which the lands were set aside on the same terms, conditions, and restrictions applicable to the disposition of public lands, as provided by this chapter all such dispositions being subject to the prior approval of the board; provided that any nonrenewable dispositions granting rights for a period not in excess of fourteen days shall not require (1) the approval of the board or (2) public auction or public advertisement for sealed tenders; and provided further that disposition of lands set aside for use as agricultural parks pursuant to chapter 166 shall not be subject to the prior approval of the board. If at the time of the disposition of any such leases the board shall have approved the same, any order withdrawing or setting aside any or all of such lands for any other public purpose shall be made subject to such leases. Subject to section 5(f) of the Act of March 18, 1959 (73 Stat. 6), all proceeds from such lands shall be deposited into the appropriate funds provided by law.

This section shall also apply where the purposes are the uses and purposes of the United States; provided that all revenues derived from the lands and improvements thereon shall be paid to the department of land and natural resources by the United States.

Whenever lands set aside for a public purpose to the various departments and agencies of the State, or to any city and county, county, or other political subdivisions of the State, or to the United States, are not being utilized or required for the public purpose stated, the order setting aside the lands shall be withdrawn and the lands shall be returned to the department. The governor may withdraw public lands and, with the prior approval of the board of land and natural resources, set aside the withdrawn lands to another department or agency of the State, the city and county, county, or political subdivision of the State, or to the United States for public use or purpose, provided that no structure on such lands shall be built, demolished or altered until after the legislative action or inaction as hereinbelow provided.

The power granted to the governor in this section to set aside or withdraw or withdraw and set aside public lands shall be exercised subject to disapproval by the legislature by two-thirds vote of either the senate or the house of representatives or by the majority vote of both, in any regular or special session next following the date of the setting aside or withdrawal, or withdrawal and setting aside.

Whenever portions of lands set aside for a public purpose to the various departments and agencies of the State, or to any city and county, county, or other political subdivision of the State are not presently utilized or required for the public purpose stated, the board shall have the power, without withdrawing the order setting aside the lands, to dispose of any and all real property interest less than the fee in the portions of such lands where the disposition is for a use which is consistent or inconsistent with the purpose for which the land was set aside. All funds derived from disposition by the board shall be deposited in the general fund of the State or be paid to the appropriate account; provided that all such dispositions shall be with the prior written approval of the department, agency, city and county, county, or other political subdivisions of the State and the governor, and shall be undertaken in compliance with all other applicable sections of this chapter."

SECTION 12. Section 201H-36, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) In accordance with section 237-29, the corporation may approve and certify for exemption from general excise taxes any qualified person or firm involved with a newly constructed, or a moderately or substantially rehabilitated, project that is:

(1) Developed under this part;

(2) Developed under a government assistance program approved by the corporation, including but not limited to the United States Department of Agriculture's section 502 direct loan program and Federal Housing Administration's section 235 program;

(3) Developed under the sponsorship of a private nonprofit organization providing home rehabilitation or new homes for qualified families in need of decent, low-cost housing;

(4) Developed by a qualified person or firm to provide affordable rental housing where at least fifty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below sixty per cent of the area median family income as determined by the United States Department of Housing and Urban Development; or

(5) Approved or certified from July 1, 2018, to June 30, 2030, and developed under a contract described in section 104‑2(i)(2) by a qualified person or firm to provide affordable rental housing through new construction or substantial rehabilitation; provided that[:

~~(A)~~ The allowable general excise tax and use tax costs shall apply to contracting only and shall not exceed $30,000,000 per year in the aggregate for all projects approved and certified by the corporation; and

~~(B)~~ ~~All~~] all available units are for households with incomes at or below one hundred forty per cent of the area median family income as determined by the United States Department of Housing and Urban Development, of which at least twenty per cent of the available units are for households with incomes at or below eighty per cent of the area median family income as determined by the United States Department of Housing and Urban Development; provided that an owner shall not refuse to lease a unit solely because the applicant holds a voucher or certificate of eligibility under section 8 of the United States Housing Act of 1937, as amended."

SECTION 13. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for the establishment of the rental deposit loan program and one full-time equivalent (1.0 FTE) staff position to administer the rental deposit loan program.

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

SECTION 14. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 15. Statutory material to be repealed is bracketed and stricken. New material is underscored.

SECTION 16. This Act shall take effect on January 1, 2024; provided that:

(1) Section 13 shall take effect on July 1, 2023;

(2) The amendments made to sections 104-2 and 201H-36(a), Hawaii Revised Statutes, in sections 10 and 12 of this Act shall not be repealed when those sections are repealed and reenacted on June 30, 2030, by Act 39, Session Laws of Hawaii 2018; and

(3) On July 1, 2028, sections 6, 7, and 8 shall be repealed, and sections 6E-8, 6E-10, and 6E-42, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the approval of this Act.

THE SENATE	S.B. NO.	1352
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII