Hawaii-2018-SB2212-Introduced

PART I

SECTION 1. The purpose of this Act is to assist tenants in state public housing transition into permanent housing. This Act brings together several existing state and federal programs to provide tenants with the means of saving funds toward the purchase of a permanent dwelling.

PART II

SECTION 2. The purpose of this part is to require the Hawaii public housing authority to establish a family self-sufficiency program and trust accounts to provide matching funds to tenants who rent certain dwelling units to assist tenants in the purchase of housing units. This part also establishes a family self-sufficiency program revolving fund to hold the trust accounts of the tenants.

SECTION 3. Chapter 356D, Hawaii Revised Statutes, is amended by adding two new sections to part III to be appropriately designated and to read as follows:

"§356D-A Family self-sufficiency program; trust accounts; rental units. (a) The authority shall establish a family self-sufficiency program to be modeled after and similar to the family self-sufficiency program as provided in title 42 United States Code section 1437u for tenants who rent a dwelling unit subject to section 356D-43.

(b) Trust accounts shall be established within the family self-sufficiency program revolving fund, established pursuant to section 356D-B, to enable the authority to provide matching funds to tenants who rent a dwelling unit subject to section 356D-43 to be used solely toward the purchase of a housing unit.

(c) If at any time there are more applicants for dwelling units subject to section 356D-43 than available dwelling units, the authority shall maintain a waiting list of eligible applicants for those dwelling units. When a dwelling unit becomes available, the authority shall determine who shall fill the vacancy from the waiting list; provided that the eligible applicant agrees to the conditions set forth in this section; provided further that the authority shall give priority to working families earning between thirty per cent and sixty per cent of the state median income.

(d) The authority shall require an eligible applicant who rents a dwelling unit subject to section 356D-43 to:

(1) Establish and maintain a trust account, to be managed by the authority;

(2) Be a participant in the family self-sufficiency program established pursuant to subsection (a); and

(3) Participate in a financial literacy program that is approved by the authority.

(e) The tenant shall pay thirty per cent of the tenant's income to the authority as payment for rent; provided that such rent is greater than the minimum rent. The authority shall take the difference between the:

(1) Tenant's payment; and

(2) Minimum rent set by the authority for state-aided public housing project units with the same number of bedrooms on the date the tenant first occupies the unit; provided that the minimum rent shall not be lower than $250 per month,

and deposit the moneys into the tenant's trust account.

For the purposes of this subsection, the minimum rent for the tenant shall remain the same during the entire period that the tenant occupies the unit; provided that the authority may raise the minimum rent for a subsequent twenty-four month rental period granted pursuant to section 356D-43.

(f) The trust fund moneys shall be the authority's funds until the tenant vacates the unit and a purchase and sale agreement of a housing unit is signed and provided to the authority. Upon the expiration of the tenancy period established in section 356D-43, or upon the date the tenant voluntarily vacates the unit, the authority shall match, on a dollar-for-dollar basis, the amount deposited by the authority on behalf of the tenant pursuant to subsection (e) and deposit the matching amount into the trust account in the name of the tenant. All interest accrued on the balance in the trust account shall be included in the trust account.

Once the tenant provides a signed purchase and sale agreement for the purchase of a housing unit to the authority, the authority shall transfer the funds from the trust account of the tenant into the designated escrow account of the tenant within fourteen days to assist in the purchase of the housing unit.

The escrow account shall be established in a bank, savings and loan association, or a trust company authorized to do business in the State under an escrow arrangement or corporation licensed as an escrow depository under chapter 449.

(g) Upon the expiration of the tenancy period established in section 356D-43, or upon the date the tenant voluntarily vacates the unit, the authority shall issue a housing choice voucher to the tenant to be used towards the purchase or to assist in paying the mortgage of a housing unit. The voucher shall be used for up to ten years, and may be extended for an additional five years at the request of the tenant.

(h) After the end of the tenth year from the date of initial purchase or execution of an agreement of sale, the former tenant may sell the housing unit and sell or assign the real property free from any price restrictions; provided that the former tenant shall be required to pay the authority the sum of the authority's share of the net appreciation of the value of the real property as determined by the authority, which shall be deposited into the family self-sufficiency program revolving fund, established pursuant to section 356D-B.

(i) No tenant subject to this section who is evicted from the tenant's unit for cause by the authority shall be eligible to receive any matching funds pursuant to subsection (f).

(j) If a former tenant who has received moneys pursuant to subsection (f) wishes to reapply for a dwelling unit subject to section 356D-43, the former tenant shall first repay the entire amount of the trust fund moneys paid pursuant to subsection (f) and meet any other requirements imposed by the authority.

(k) The authority may adopt rules pursuant to chapter 91 to effectuate this section.

§356D-B Family self-sufficiency program revolving fund. There is created a family self-sufficiency program revolving fund to be administered by the authority, which shall hold the trust accounts of tenants established pursuant to section 356D-A, and shall consist of:

(1) Amounts deposited by the authority pursuant to section 356D-A(e), to be held within each tenant's respective trust account;

(2) Amounts deposited by the authority in satisfaction of the matching requirement under section 356D-A(f), to be held within each tenant's respective trust account;

(3) Moneys collected from payments made to the authority by a former tenant who participated in the family self-sufficiency program, pursuant to section 356D-A(f); and

(4) Appropriations from the legislature."

PART III

SECTION 4. The purpose of this part is to impose a maximum rental period for certain state low-income housing projects that are owned or operated by the authority; provided that the maximum rental periods do not apply to tenants who are disabled or sixty-two years of age or older. This part also requires the tenancy of all tenants of a dwelling unit in a state low-income housing project to terminate upon either the termination of the tenancy of the last head or co-head of the household who was an original household head or co-head at the time the initial lease or rental agreement was executed, subject to certain exceptions or, for applicable units, on the last day of the five-year rental period, or sooner; provided that the authority may grant the tenant an additional twenty-four-month rental period.

SECTION 5. Section 356D-42, Hawaii Revised Statutes, is amended to read as follows:

"§356D-42 Housing; tenant selection[.]; tenancy termination. (a) The authority shall select tenants upon the basis of those in greatest need for the particular housing, subject to the following limitations and preferences:

(1) The authority may limit the tenants of any state low-income housing project to classes of persons when required by federal law or state or regulation as a term or condition of obtaining assistance from the federal government; [~~provided that not less than fifty per cent of available units shall be for applicants without preference and up to fifty per cent of available units shall be for applicants with preference;~~]

(2) Within the priorities established by the authority recognizing need[~~, veterans~~]:

(A) Working families earning between thirty per cent and sixty per cent of the state median income; and

(B) Veterans with a permanent disability of ten per cent or more, as certified by the United States Department of Veterans Affairs, and their dependent parents, if any. The deceased veteran's widow or widower shall be given first preference. Parents of veterans shall not use the veteran status of their adult child as a basis for preference; and

(3) Subject to any limitations set by federal law or regulation, the authority shall not select as a tenant, and may terminate the tenancy of, any person if the person or any household member owns or acquires a home within the State.

(b) The authority shall not allow remaining members of tenant households to continue to occupy a dwelling unit in a state low-income housing project upon the death or removal from the unit of the last original head or co-head of the household; provided that where the original head or co-head of the household is survived by a minor, the authority may allow a legal guardian to assume responsibility for the unit to care for any minor who was subsequently added to the household by birth, adoption, or court order and who was properly reported to the authority, until the youngest minor added to the household reaches the age of twenty-one, or reaches the age of twenty-three if the youngest minor is a full-time student at a business school, technical school, college, community college, or university. No legal guardian shall be added to the household to care for the minor or minors unless the legal guardian is also eligible for participation in the state low-income public housing program; provided further that any legal guardian added to the household shall not remain in the unit after the youngest minor has reached the age of twenty-one, or has reached the age of twenty-three if the youngest minor is a full-time student at a business school, technical school, college, community college, or university.

[~~(b)~~] (c) The authority shall adopt rules pursuant to chapter 91 to carry out the purposes of this section."

SECTION 6. Section 356D-43, Hawaii Revised Statutes, is amended to read as follows:

"[[]§356D-43[]] Rentals. (a) Notwithstanding any other law to the contrary, the authority shall fix the rates of the rentals for dwelling units and other facilities in state low-income housing projects provided for by this subpart[,] at rates of a minimum of $250 per month that will produce revenues that will be sufficient to pay all expenses of management, operation, and maintenance, including the cost of insurance, a proportionate share of the administrative expenses of the authority to be fixed by it, and the costs of repairs, equipment, and improvements, to the end that the state low-income housing projects shall be and always remain self-supporting. The authority, in its discretion, may fix the rates in amounts as will produce additional revenues (in addition to the foregoing) sufficient to amortize the cost of the state low-income housing project or projects, including equipment, over a period or periods of time that the authority may deem advisable.

(b) Notwithstanding any other law to the contrary, if:

(1) Any state low-income housing project or projects have been specified in any resolution of issuance adopted pursuant to part I;

(2) The income or revenues from any project or projects have been pledged by the authority to the payment of any bonds issued under part I; or

(3) Any of the property of any state low-income housing project or projects is security for the bonds,

the authority shall fix the rates of the rentals for dwelling units and other facilities in the state low-income housing project or projects so specified or encumbered at increased rates that will produce the revenues required by subsection (a) and, in addition, those amounts that may be required by part I, by any resolution of issuance adopted under part I, and by any bonds or mortgage or other security issued or given under part I.

(c) The authority shall set aside two hundred fifty dwelling units in state low-income housing projects owned or operated by the authority for the purpose of occupancy by tenants participating in the family self-sufficiency program established pursuant to section 356D-A. The authority shall apply an initial maximum rental period of five years upon these two hundred fifty dwelling units; provided that the authority shall not apply the maximum rental period to individuals who are disabled or are sixty-two years of age or older. Notwithstanding subsection (a), for tenants who agree to the conditions set forth in section 356D‑A, the authority shall fix the minimum rental rate for the entire rental period at the minimum amount of rent set by the authority for state-aided family public housing project units with the same number of bedrooms as of the date the tenant first occupies the unit.

(d) A tenant of a unit subject to subsection (c) may request and the authority may grant an additional twenty-four month rental period; provided that when granted, the tenant shall continue to:

(1) Maintain the already established trust account managed by the authority;

(2) Remain a participant in the family self-sufficiency program established pursuant to section 356D-A; and

(3) Maintain participation in a financial literacy program that is approved by the authority.

(e) A tenant of a unit subject to subsection (c) shall pay thirty per cent of the tenant's income to the authority as payment for rent provided that such rent is greater than the minimum rent. The authority shall take the difference between the:

(1) Tenant's payment; and

(2) Minimum rent set by the authority for state-aided public housing project units on the date the tenant first occupied the unit, provided that the minimum rent shall not be lower than $250 per month;

and deposit the moneys in the tenant's trust account established pursuant to section 356D-A(b)."

PART IV

SECTION 7. The purpose of this part is to appropriate funds to establish the trust accounts pursuant to section 356D-A, Hawaii Revised Statutes, and a position to manage the family self-sufficiency program.

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2018-2019 for the Hawaii public housing authority; provided that:

(1) $1,380,000 shall be for the Hawaii public housing authority's share of matching funds to be placed in the trust accounts established under this Act; and

(2) $120,000 shall be to establish one full-time equivalent (1.0 FTE) position to manage the family self-sufficiency program.

The sum appropriated shall be expended by the Hawaii public housing authority for the purposes of this part.

PART V

SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 10. In codifying the new sections added by section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on July 1, 2018; provided that sections 356D-A and 356D-B, Hawaii Revised Statutes, shall apply to all tenants who entered into lease or rental agreements for dwelling units in state low-income housing projects before July 1, 2018, or after June 30, 2018.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2212
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII