SB863

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII RESIDENTIAL DEVELOPERS LOAN COrporation

§ -1 hawaii residential developers loan corporation; establishment. (a) There is established the Hawaii residential developers loan corporation to be placed within the department of business, economic development, and tourism for administrative purposes only. The corporation shall be a public body and a body corporate and politic.

(b) The corporation shall employ, exempt from chapter 76 and section 26-35(a)(4), an executive director and an executive assistant to be nominated and, by and with the advice and consent of the senate, appointed by the governor.

§ -2 Corporation; duties. (a) The corporation shall guarantee and insure loans made by private financial institutions to developers of residential housing required to be sold to Hawaii residents who will be owner-occupants and who own no other real property.

(b) When the application for a loan has been approved by the corporation, the corporation shall issue to the lender a guarantee for that percentage of the loan on which it guarantees payment of principal and interest. The private lender shall collect all payments from the borrower and otherwise service the loan.

§ -3 Board; establishment, functions, duties. (a) There is created a board of directors of the Hawaii residential developers loan 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 private financing and development of housing. Public members shall be appointed from each of the counties of Honolulu, Hawaii, Maui, and Kauai. 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 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, director of finance, and the governor's representative shall be ineligible to serve as chairperson of the board.

(c) Five members shall constitute a quorum, whose affirmative vote shall be necessary for all actions by the corporation. The members shall receive no compensation for services, but shall be entitled to necessary expenses, including travel expenses, incurred in the performance of their duties.

§ -4 General powers. (a) The corporation may:

(1) Sue and be sued;

(2) Have a seal and alter the same at pleasure;

(3) Make and execute contracts and other instruments necessary or convenient to the exercise of its powers;

(4) Adopt bylaws and rules in accordance with chapter 91 for its organization, internal management, and to carry into effect its purposes, powers, and programs; and

(5) Notwithstanding any law to the contrary, establish and collect fees for administrative expenses incurred by the corporation to process applications for loans, grants, services, and real estate documents related to the corporation's functions under this chapter.

(b) In addition to other powers conferred upon it, the corporation may do all things necessary and convenient to carry out the powers expressly provided in this chapter.

§ -5 Hawaii residential developers loan special fund. (a) There is established the Hawaii residential developers loan special fund to be administered by the corporation. The proceeds of the funds shall be used to guarantee and insure loans that private financial institutions make to developers of residential housing for Hawaii residents who will be owner‑occupants and who own no other real property.

(b) The following may be deposited into the fund: appropriations made by the legislature, funds from the rental housing revolving fund, private contributions, repayment of loans, interest, other returns, and moneys from other sources."

SECTION 2. Section 201H-202, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The fund shall be used to provide loans or grants for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The fund may also be used to guarantee and insure loans that private financial institutions make to developers of residential housing required to be sold to Hawaii residents who will be owner‑occupants and who own no other real property pursuant to chapter . Permitted uses of the fund may include but are not limited to planning, design, land acquisition, costs of options, agreements of sale, downpayments, equity financing, capacity building of nonprofit housing developers, or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide for a means of recapturing loans or grants made from the fund if a rental housing project financed under the fund is refinanced or sold at a later date. The rules may also provide that moneys from the fund shall be leveraged with other financial resources to the extent possible."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $200,000,000 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 to be deposited into the Hawaii residential developers loan special fund.

SECTION 4. There is appropriated out of the Hawaii residential developers loan special fund the sum of $200,000,000 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 to be used to guarantee and insure loans made by private financial institutions to developers of residential housing for Hawaii residents who will be owner‑occupants and who own no other real property, consistent with the purposes of chapter , Hawaii Revised Statutes.

The sums appropriated shall be expended by the Hawaii residential developers loan corporation for the purposes of this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2023.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	863
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII