SB2338 SD1

SECTION 1. The legislature finds that the Hawaii housing finance and development corporation and the Hawaii public housing authority both provide critical services to address Hawaii's affordable housing crisis. The Hawaii housing finance and development corporation oversees the financing of affordable housing and the Hawaii public housing authority manages the State's public housing programs and housing choice vouchers. Through these two entities, the supply of affordable housing in Hawaii has grown, with billions of dollars financed and more than six thousand public housing units currently being managed.

The legislature further finds that the executive directors of the two entities face different compensation limitations, with the executive director of the Hawaii public housing authority being paid no more than the governor, and the executive director of the Hawaii housing finance and development corporation being paid a lower salary of not more than the director of business, economic development, and tourism--a difference of more than $10,000. In addition, the salary of the executive assistant of the Hawaii housing finance and development corporation is also capped at a percentage of the executive director's salary.

The legislature further finds that the Hawaii housing finance and development corporation would benefit from the creation of a finance director position to oversee all finance programs of the corporation.

The legislature believes that increasing certain salary caps will help the State compete with the private sector for highly skilled individuals and further increase the supply of affordable housing in Hawaii. Additionally, the legislature recognizes that an increase in salary caps and the creation of a finance director position are necessary, not merely to reward the greater responsibilities of the housing agencies over the last ten years, but also to greatly expand the housing agencies' development plans.

Accordingly, the purpose of this Act is to:

(1) Increase the salary cap for the executive director of the Hawaii housing finance and development corporation to an amount that does not exceed the governor's salary;

(2) Rename the position of executive assistant to deputy executive director for the Hawaii housing finance and development corporation and increases the salary cap for the deputy executive director;

(3) Establish the finance director position within the Hawaii housing finance and development corporation;

(4) Require the Hawaii housing finance and development corporation to measure personnel performance according to the number of units delivered by program type, state funding per unit, the rate at which funds revolve, and the range of household incomes served;

(5) Provide the Hawaii housing finance and development corporation and Hawaii public housing authority with autonomy in personnel matters; and

(6) Establish a cap on the term of employment contracts for the Hawaii housing finance and development corporation and Hawaii public housing authority.

SECTION 2. Section 201H-2, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) 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 for administrative purposes only[.]; provided that the corporation shall have autonomy in personnel matters, including establishing and filling positions and setting salaries. 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.~~], a deputy executive director, and a finance director. The executive director shall be paid a salary not to exceed the salary of the [~~director of business, economic development, and tourism.~~] governor. The [~~executive assistant~~] deputy executive director shall be paid a salary not to exceed [~~ninety~~] ninety-five per cent of the executive director's salary. The finance director shall be paid a salary set by the board; provided that the salary may exceed the salary of the executive director. The finance director shall oversee all finance programs of the corporation and develop new initiatives to deliver housing to a range of household incomes as efficiently as possible and with the least use of state resources. The finance director shall possess experience relevant to:

(1) Public finance and housing finance, including the administration of revolving loan funds and complex capital structuring;

(2) Bond issuance, debt management, and credit underwriting;

(3) Asset and portfolio management, including risk assessment and mitigation strategies for long-term loan portfolios; and

(4) Strategic financial planning and regulatory compliance with federal and state housing programs.

The corporation may employ, subject to chapter 76, technical experts and officers, agents, and employees, permanent and temporary, as required. The corporation may also employ officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, not subject to chapter 76, when in the determination of the corporation, the services to be performed are unique and essential to the execution of the functions of the corporation. Unless approved by the legislature by concurrent resolution, the corporation shall not offer any employment contract that exceeds two years. The corporation may call upon the attorney general for legal services as it may require. The corporation may delegate to one or more of its agents or employees its powers and duties as it deems proper. The corporation shall measure personnel performance according to the number of units delivered by program type, state funding per unit, rate at which funds revolve, and the range of household incomes served."

SECTION 3. Section 356D-2, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) There is established the Hawaii public housing authority to be placed within the department of human services for administrative purposes only[.]; provided that the authority shall have autonomy in personnel matters, including establishing and filling positions and setting salaries. The authority shall be a public body and a body corporate and politic.

(b) The authority shall employ, exempt from chapter 76 and section 26-35(a)(4), an executive director, an executive assistant, a chief financial management advisor, a property management branch chief, a chief planner, and a redevelopment officer, whose salaries shall be set by the board established under section 356D-3; provided that no salary shall exceed the governor's salary. The authority may employ, subject to chapter 76, technical experts and officers, agents, and employees, permanent or temporary, as required. The authority may also employ officers, agents, and employees; prescribe their duties and qualifications; and fix their salaries, not subject to chapter 76, when in the determination of the authority, the services to be performed are unique and essential to the execution of the functions of the authority; provided that if the authority hires an officer, agent, or employee in a capacity not subject to chapter 76, the authority shall include in an annual report to the legislature, to be submitted [~~not~~] no later than twenty days prior to the convening of each regular session, the position descriptions and reasons for hiring the personnel in a civil service exempt capacity. Unless approved by the legislature by concurrent resolution, the authority shall not offer any employment contract that exceeds two years. The authority may call upon the attorney general for legal services as it may require. The authority may delegate to one or more of its agents or employees the powers and duties it deems proper."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	2338
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII