Hawaii-2010-SB1011-Introduced

SECTION 1. Rapid transit on Oahu is not only another means of moving people across the island, but can also stimulate more compact development around transit stations, thereby reducing urban sprawl. By virtue of this more intense use of land, community benefits, such as affordable housing, open plazas, and parks can be provided. But transit-oriented developments often require multiple sources of financing, and community benefits increase the development costs. This increases project risk. Therefore, to support and encourage transit-oriented development that includes the benefit of affordable housing, there is a need to offer loan guaranties for qualifying projects as an incentive for the provision of affordable housing.

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

"§201H‑ Loan guaranty program for transit-oriented development. (a) The corporation may guarantee loans made by commercial lenders authorized to do business in this State, to developers for the purpose of developing transit-oriented development projects that include affordable housing; provided that the executive director shall determine that:

(1) The transit-oriented development projects are located within a transit-oriented development zone designated by the respective county; and

(2) The commercial lender has completed its due diligence in approving the loan, including ensuring adequate collateral.

The corporation may impose other conditions that the executive director deems reasonable to implement the loan guaranty.

(b) In addition to the conditions that the executive director may impose under subsection (a), any loan guaranty made pursuant to this section shall meet the following conditions:

(1) For any loan that finances operating costs, the maximum term of the loan shall be ten years;

(2) For any loan that finances capital improvement costs, the maximum term of the loan shall be twenty years;

(3) The interest rate charged on any loan shall be one per cent below the commercial lender's prime rate for as long as the loan guaranty is in effect;

(4) The loan guaranty may be up to eighty-five per cent of the outstanding principal amount of any single loan, but shall not include any fees or accrued interest associated with the loan or its collection; and

(5) The total principal amount of the guaranteed portion of all loans outstanding at any time shall not exceed $10,000,000.

(d) As used in this section, "transit-oriented development" means any land use project of relatively intense concentration involving a mixture of uses that depends upon and supports transit ridership."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2009.

INTRODUCED BY:

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By Request

THE SENATE	S.B. NO.	1011
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII