SB338 SD1

PART I

SECTION 1. The legislature finds that there are multiple state agencies responsible for housing. Having so many separate agencies creates redundancies and bureaucracies that hinder the work of solving Hawaii's housing crisis. The purpose of this Act is to consolidate the Hawaii housing finance and development corporation, Hawaii community development authority, Hawaii public housing authority, and office of planning and sustainable development into a new department of housing.

PART II

SECTION 2. Chapter 26, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§26- Department of housing. (a) The department of housing shall be headed by a single executive to be known as the director of housing.

(b) The department of housing shall:

(1) Be responsible for planning, coordinating, and implementing the provisions of section 226-19;

(2) Strengthen and revitalize communities by promoting affordable housing opportunities;

(3) Work in concert with municipal leaders, public agencies, community groups, local housing authorities, and other housing developers in the planning and development of affordable homeownership and rental housing units;

(4) Provide leadership for all aspects of policy and planning relating to the development, redevelopment, preservation, maintenance, and improvement of housing serving all levels of income for individuals and families; and

(5) Oversee compliance with applicable statutes, regulations, and financial assistance agreements for funded activities through long-term program compliance monitoring.

(d) The following are placed in the department of housing for administrative purposes pursuant to section 26-35: Hawaii community development authority; Hawaii housing finance and development corporation; office of planning and sustainable development; Hawaii public housing authority; and any other agencies, boards, and commissions as shall be provided by law."

SECTION 3. Section 26-4, Hawaii Revised Statutes, is amended to read as follows:

"§26-4 Structure of government. Under the supervision of the governor, all executive and administrative offices, departments, and instrumentalities of the state government and their respective functions, powers, and duties shall be allocated among and within the following principal departments that are hereby established:

(1) Department of human resources development (Section 26‑5);

(2) Department of accounting and general services (Section 26-6);

(3) Department of the attorney general (Section 26-7);

(4) Department of budget and finance (Section 26-8);

(5) Department of commerce and consumer affairs (Section 26-9);

(6) Department of taxation (Section 26-10);

(7) University of Hawaii (Section 26-11);

(8) Department of education (Section 26-12);

(9) Department of health (Section 26-13);

(10) Department of human services (Section 26-14);

(11) Department of land and natural resources (Section 26‑15);

(12) Department of agriculture (Section 26-16);

(13) Department of Hawaiian home lands (Section 26-17);

(14) Department of business, economic development, and tourism (Section 26-18);

(15) Department of transportation (Section 26-19);

(16) Department of labor and industrial relations (Section 26-20);

(17) Department of defense (Section 26-21);

(18) Department of public safety (Section 26-14.6); [~~and~~]

(19) Department of law enforcement (Section 26-14.8)[.]; and

(20) Department of housing (Section 26- )."

SECTION 4. Section 26-14, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The [~~Hawaii public housing authority and the~~] Hawaii state commission on the status of women [~~are~~] is placed within the department of human services for administrative purposes only."

SECTION 5. Section 26-18, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The following are placed in the department of business, economic development, and tourism for administrative purposes as defined by section 26-35: [~~Hawaii community development authority, Hawaii housing finance and development corporation,~~] Hawaii technology development corporation, natural energy laboratory of Hawaii authority, and any other boards and commissions as shall be provided by law."

SECTION 6. Section 26-52, Hawaii Revised Statutes, is amended to read as follows:

"§26-52 Department heads and executive officers. The salaries of the following state officers shall be as follows:

(1) The salary of the superintendent of education shall be set by the board of education at a rate no greater than $250,000 a year. The superintendent shall be subject to an annual performance evaluation that is in alignment with other employee evaluations within the department of education and are based on outcomes determined by the board of education; provided that nothing shall prohibit the board of education from conditioning a portion of the salary on performance;

(2) The salary of the president of the University of Hawaii shall be set by the board of regents;

(3) Effective July 1, 2004, the salaries of all department heads or executive officers of the departments of accounting and general services, agriculture, attorney general, budget and finance, business, economic development, and tourism, commerce and consumer affairs, Hawaiian home lands, health, housing, human resources development, human services, labor and industrial relations, land and natural resources, law enforcement, public safety, taxation, and transportation shall be as last recommended by the executive salary commission. Effective July 1, 2007, and every six years thereafter, the salaries shall be as last recommended by the commission on salaries pursuant to section 26-56, unless rejected by the legislature; and

(4) The salary of the adjutant general shall be $85,302 a year. Effective July 1, 2007, and every six years thereafter, the salary of the adjutant general shall be as last recommended by the commission on salaries pursuant to section 26-56, unless rejected by the legislature, except that if the state salary is in conflict with the pay and allowance fixed by the tables of the regular Army or Air Force of the United States, the latter shall prevail."

SECTION 7. Section 201H-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established the Hawaii housing finance and development corporation to be placed within the department of [~~business, economic development, and tourism~~] housing for administrative purposes only. The corporation shall be a public body and a body corporate and politic."

SECTION 8. Section 201H-3, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) There is created a board of directors of the Hawaii housing finance and development corporation consisting of nine members, of whom six shall be public members appointed by the governor as provided in section 26-34. At least four of the public members shall have knowledge and expertise in public or private financing and development of affordable housing. Public members shall be appointed from each of the counties of Honolulu, Hawaii, Maui, and Kauai. At least one public member shall represent community advocates for low-income housing, affiliated with private nonprofit organizations that serve the residents of low-income housing. The public members of the board shall serve four-year staggered terms; provided that the initial appointments shall be as follows:

(1) Two members to be appointed for four years;

(2) Two members to be appointed for three years; and

(3) Two members to be appointed for two years.

The director of [~~business, economic development, and tourism~~] housing and the director of finance, or their designated representatives, and a representative of the governor's office, shall be ex officio[[],[]] voting members. The corporation shall be headed by the board.

(b) The board of directors shall select a chairperson and vice chairperson from among its members; provided that the chairperson shall be a public member. The director of [~~business, economic development, and tourism,~~] housing, director of finance, and the governor's representative shall be ineligible to serve as chairperson of the board."

SECTION 9. Section 206E-3, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) There is established the Hawaii community development authority, which shall be a body corporate and a public instrumentality of the State, for the purpose of implementing this chapter. The authority shall be placed within the department of [~~business, economic development, and tourism~~] housing for administrative purposes.

(b) The authority shall consist of the director of finance or the director's designee; the director of transportation or the director's designee; the director of [~~business, economic development, and tourism~~] housing or the director's designee; the chairperson of the board of land and natural resources; the director of planning or planning and permitting of each county in which a community development district is located or the director's designee; a cultural specialist; an at-large member nominated by the president of the senate; an at-large member nominated by the speaker of the house of representatives; two representatives of the Heeia community development district, comprising one resident of that district or the Koolaupoko district, which consists of sections 1 through 9 of zone 4 of the first tax map key division, and one owner of a small business or one officer or director of a nonprofit organization in the Heeia community development district or Koolaupoko district; two representatives of the Kalaeloa community development district, comprising one resident of the Ewa zone (zone 9, sections 1 through 2) or the Waianae zone (zone 8, sections 1 through 9) of the first tax map key division, and one owner of a small business or one officer or director of a nonprofit organization in the Ewa or Waianae zone; two representatives of the Kakaako community development district, comprising one resident of the district and one owner of a small business or one officer or director of a nonprofit organization in the district; and two representatives of the Pulehunui community development district, consisting of one resident of the island of Maui, and one owner of a small business or one officer or director of a nonprofit organization on the island of Maui.

All members except the director of finance, director of transportation, county directors of planning or planning and permitting, director of [~~business, economic development, and tourism,~~] housing, chairperson of the board of land and natural resources, or their respective designees shall be appointed by the governor pursuant to section 26-34. The two at-large members nominated by the president of the senate and speaker of the house of representatives shall each be invited to serve and appointed by the governor from a list of three nominees submitted for each position by the nominating authority specified in this subsection.

The president of the senate and the speaker of the house of representatives shall each submit a list of six nominees for each district to the governor to fill the two district representative positions for each community development district. For each community development district, the governor shall appoint one member from a list of nominees submitted by the president of the senate and one member from a list of nominees submitted by the speaker of the house of representatives, and of the two appointees, one shall meet the district residency requirement and one shall meet the district small business owner or nonprofit organization officer or director requirement.

The authority shall be organized and shall exercise jurisdiction as follows:

(1) For matters affecting the Heeia community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Heeia community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Heeia community development district;

(2) For matters affecting the Kalaeloa community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Kalaeloa community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Kalaeloa community development district;

(3) For matters affecting the Kakaako community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Kakaako community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Kakaako community development district; and

(4) For matters affecting the Pulehunui community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning for the county in which the Pulehunui community development district is located or the director's designee;

(E) The chairperson of the board of land and natural resources or the chairperson's designee;

(F) The cultural specialist;

(G) The two at-large members; and

(H) The two representatives of the Pulehunui community development district.

In the event of a vacancy, a member shall be appointed to fill the vacancy in the same manner as the original appointment within thirty days of the vacancy or within ten days of the senate's rejection of a previous appointment, as applicable.

The terms of the director of finance; director of transportation; county directors of planning and permitting; director of [~~business, economic development, and tourism;~~] housing; and chairperson of the board of land and natural resources; or their respective designees shall run concurrently with each official's term of office. The terms of the appointed voting members shall be for four years, commencing on July 1 and expiring on June 30. The governor shall provide for staggered terms of the initially appointed voting members so that the initial terms of four members selected by lot shall be for two years, the initial terms of four members selected by lot shall be for three years, and the initial terms of the remaining three members shall be for four years.

The governor may remove or suspend for cause any member after due notice and public hearing.

Notwithstanding section 92-15, a majority of all eligible voting members as specified in this subsection shall constitute a quorum to do business, and the concurrence of a majority of all eligible voting members as specified in this subsection shall be necessary to make any action of the authority valid. All members shall continue in office until their respective successors have been appointed and qualified. Except as herein provided, no member appointed under this subsection shall be an officer or employee of the State or its political subdivisions.

For purposes of this section, "small business" means a business that is independently owned and that is not dominant in its field of operation."

SECTION 10. Section 225M-1, Hawaii Revised Statutes, is amended to read as follows:

"§225M-1 Purpose. The purpose of this chapter is to establish an office of planning and sustainable development to assist the governor; the director of housing; the director of business, economic development, and tourism; the legislature; and state and county agencies in maintaining an overall framework to guide the development of the State through a continuous process of comprehensive, long-range, and strategic planning to meet the physical, economic, and social needs of Hawaii's people, and provide for the wise use of Hawaii's resources in a coordinated, efficient, and economical manner, including the conservation of those natural, environmental, recreational, scenic, historic, and other limited and irreplaceable resources which are required for future generations.

The establishment of an office of planning and sustainable development in the department of [~~business, economic development, and tourism,~~] housing, for administrative purposes, is intended to:

(1) Fix responsibility and accountability to successfully carry out statewide planning programs, policies, and priorities;

(2) Improve the efficiency and effectiveness of the operations of the executive branch; and

(3) Ensure comprehensive planning and coordination to enhance the quality of life of the people of Hawaii."

SECTION 11. Section 225M-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established the office of planning and sustainable development within the department of [~~business, economic development, and tourism~~] housing for administrative purposes only. The head of the office shall be known as the director of the office of planning and sustainable development and referred to in this chapter as director. The director shall have:

(1) Training in the field of urban or regional planning, public administration, or other related fields;

(2) Experience in programs or services related to governmental planning; and

(3) Experience in a supervisory, consultative, or administrative capacity.

The director shall be nominated by the governor and, by and with the advice and consent of the senate, appointed by the governor without regard to chapter 76, and shall be compensated at a salary level set by the governor. The director shall be included in any benefit program generally applicable to the officers and employees of the State. The director may retain staff as may be necessary for the purposes of this chapter, in conformity with chapter 76. The director shall report to the director of [~~business, economic development, and tourism~~] housing and shall not be required to report directly to any other principal executive department. The director may also employ staff without regard to chapter 76, as authorized in this chapter and as may be necessary."

SECTION 12. Section 225M-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Every state department, county agency, or other public or private agency or individual providing planning programs and services shall be encouraged to participate actively in the activities of the office of planning and sustainable development. The executive heads of all state departments and agencies shall cooperate with the office of planning and sustainable development by providing information as the governor and the director of [~~business, economic development, and tourism~~] housing deem necessary for the effective discharge of its duties."

SECTION 13. Section 225M-4, Hawaii Revised Statutes, is amended to read as follows:

"§225M-4 Allocation of funds. Any of the agencies of the State to which general or special appropriations are made, or a part of whose budget contains an allocation, or which makes an allocation of funds for planning and research, shall consult with the office of planning and sustainable development to ensure that all expenditures are in accordance with, or in furtherance of the goals and objectives of the Hawaii state plan. After first consulting with the director of [~~business, economic development, and tourism,~~] housing, the governor may withhold the expenditure of these funds by any agency until the governor is satisfied that the expenditures will implement those goals and objectives."

SECTION 14. Section 356D-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established the Hawaii public housing authority to be placed within the department of [~~human services~~] housing for administrative purposes only. The authority shall be a public body and a body corporate and politic."

SECTION 15. Act 278, Session Laws of Hawaii 2022, is amended by amending section 20 to read as follows:

"SECTION 20. Section 26-4, Hawaii Revised Statutes, is amended to read as follows:

"§26-4 Structure of government. Under the supervision of the governor, all executive and administrative offices, departments, and instrumentalities of the state government and their respective functions, powers, and duties shall be allocated among and within the following principal departments that are hereby established:

(1) Department of human resources development (Section 26‑5);

(2) Department of accounting and general services (Section 26-6);

(3) Department of the attorney general (Section 26-7);

(4) Department of budget and finance (Section 26-8);

(5) Department of commerce and consumer affairs (Section 26-9);

(6) Department of taxation (Section 26-10);

(7) University of Hawaii (Section 26-11);

(8) Department of education (Section 26-12);

(9) Department of health (Section 26-13);

(10) Department of human services (Section 26-14);

(11) Department of land and natural resources (Section 26‑15);

(12) Department of agriculture (Section 26-16);

(13) Department of Hawaiian home lands (Section 26-17);

(14) Department of business, economic development, and tourism (Section 26-18);

(15) Department of transportation (Section 26-19);

(16) Department of labor and industrial relations (Section 26-20);

(17) Department of defense (Section 26-21);

(18) Department of corrections and rehabilitation (Section 26-14.6); [~~and~~]

(19) Department of law enforcement (Section 26-14.8)[.]; and

(20) Department of housing (Section 26- ).""

SECTION 16. Act 278, Session Laws of Hawaii 2022, is amended by amending section 22 to read as follows:

"SECTION 22. Section 26-52, Hawaii Revised Statutes, is amended to read as follows:

"§26-52 Department heads and executive officers. The salaries of the following state officers shall be as follows:

(2) The salary of the president of the University of Hawaii shall be set by the board of regents;

(3) Effective July 1, 2004, the salaries of all department heads or executive officers of the departments of accounting and general services, agriculture, attorney general, budget and finance, business, economic development, and tourism, commerce and consumer affairs, corrections and rehabilitation, Hawaiian home lands, health, housing, human resources development, human services, labor and industrial relations, land and natural resources, law enforcement, taxation, and transportation shall be as last recommended by the executive salary commission. Effective July 1, 2007, and every six years thereafter, the salaries shall be as last recommended by the commission on salaries pursuant to section 26‑56, unless rejected by the legislature; and

(4) The salary of the adjutant general shall be $85,302 a year. Effective July 1, 2007, and every six years thereafter, the salary of the adjutant general shall be as last recommended by the commission on salaries pursuant to section 26‑56, unless rejected by the legislature, except that if the state salary is in conflict with the pay and allowance fixed by the tables of the regular Army or Air Force of the United States, the latter shall prevail.""

PART III

SECTION 17. In addition to the amendments made by part II of this Act, the revisor of statutes shall substitute "department of housing" for every reference to the "department of business, economic development, and tourism" and "department of human services" as appropriate to reflect the transfer of the Hawaii housing finance and development corporation, Hawaii community development authority, office of planning and sustainable development, and Hawaii public housing authority to the department of housing.

SECTION 18. (a) All rights, powers, functions, and duties of the:

(1) Department of business, economic development, and tourism as they pertain to the:

(A) Hawaii housing finance and development corporation pursuant to chapter 201H, Hawaii Revised Statutes;

(B) Hawaii community development authority pursuant to chapter 206E, Hawaii Revised Statutes; and

(2) Department of human services as they pertain to the Hawaii public housing authority pursuant to chapter 356D, Hawaii Revised Statutes,

are transferred to the department of housing.

(b) All employees who occupy civil service positions and whose functions are transferred to the department of housing 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 applicable 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 position 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 employees possess 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 housing may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

(c) All rules, policies, procedures, guidelines, and other material adopted or developed by the transferred agencies to implement provisions of the Hawaii Revised Statutes that are reenacted or made applicable to the department of housing by this Act shall remain in full force and effect until amended or repealed by the department of housing pursuant to chapter 91, Hawaii Revised Statutes. In the interim, every reference to the department of business, economic development, and tourism and department of human services as they pertain to the transferred agencies in those rules, policies, procedures, guidelines, and other material is amended to refer to the department of housing, as appropriate.

(d) All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the department of business, economic development and tourism and the department of human services as they pertain to the transferred agencies, pursuant to the provisions of the Hawaii Revised Statutes that are reenacted or made applicable to the department of housing by this Act shall remain in full force and effect. Effective July 1, 2023, every reference to the department of business, economic development and tourism and the department of human services as they pertain to the transferred agencies in those deeds, leases, contracts, loans, agreements, permits, or other documents shall be construed as a reference to the department of housing.

(e) All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of department of business, economic development and tourism and the department of human services relating to the functions transferred to the department of housing shall be transferred with the functions to which they relate.

SECTION 19. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 20. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 21. This Act shall take effect on July 1, 2023, provided that section 17 of this Act shall take effect on January 1, 2024.

THE SENATE	S.B. NO.	338
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII