Bill Text: HI SB515 | 2019 | Regular Session | Introduced

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Bill Title: Relating To A State Infrastructure Bank.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2019-01-24 - Referred to HOU/CPH, WAM. [SB515 Detail]

Download: Hawaii-2019-SB515-Introduced.html

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THE SENATE	S.B. NO.	515
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING to a state INFRASTRUCTURE bank.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The purpose of this Act is to define eligibility requirements, prescribe the application and selection processes, and detail certain terms for securing financial assistance for affordable housing infrastructure projects within the State from the Hawaii state infrastructure bank.

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

"Part      .  Hawaii state infrastructure bank

     §201H-A  Definitions.  As used in this part:

     "Affordable housing" means housing that is affordable to households with incomes at or below one hundred per cent of the median family income as determined by the United States Department of Housing and Urban Development.

     "Bank" means the Hawaii state infrastructure bank.

     "Infrastructure" includes water, drainage, sewer, waste disposal and waste treatment systems, roads, and street lighting that connect to the infrastructure of the county.

     "Market rate" means an interest rate that corresponds to the Merrill Lynch bond index rate for a seven- to twelve-year general obligation bond.

     "Project sponsor" means the entity or organization that is requesting financial assistance.

     "Qualified project" means:

     (1)  Any public or private infrastructure project as authorized by the corporation, including but not limited to planning, environmental impact studies, feasibility studies, engineering, construction, reconstruction, resurfacing, restoring, rehabilitation, or replacement of a public or private affordable housing infrastructure project;

     (2)  The acquisition of real or personal property, or interests therein, for a public or private affordable housing infrastructure project within the State;

     (3)  Any affordable housing infrastructure project within the State that is eligible for financing or financial assistance under state or federal law; and

     (4)  The maintenance, repair, improvement, or construction of any affordable housing infrastructure project within the State.

"Qualified project" does not include affordable housing infrastructure projects that are restricted to private use.

     §201H-B  Eligibility requirements for financial assistance.  Entities eligible to receive financial assistance from the bank shall include public entities, including political subdivisions and state agencies, and private companies and non-profit organizations with a local government partner, or under the authority of a public-private partnership.

     §201H-C  Eligible projects.  (a)  All qualified projects shall be eligible for financial assistance.  Qualified projects shall include any infrastructure project that benefits or has the effect of benefitting an affordable housing project.

     (b)  Any infrastructure project as authorized by the corporation, including but not limited to planning, environmental impact studies, feasibility studies, engineering, construction, reconstruction, resurfacing, restoring, rehabilitation, replacement, or acquisition of real or personal property, or interests therein, within the State that benefits affordable housing projects shall be eligible.

     §201H-D  Application process.  (a)  Applications shall be accepted not less than annually on the condition that funds are available in the bank.  The corporation shall provide public notification of the availability of funds for financial assistance, instructions for requesting an application package, and the deadline to submit an application to the corporation for financial assistance.

     (b)  The application shall contain instructions and guidelines for completing the application as determined by the corporation and shall be available upon request not less than forty-five days in advance of the application deadline.  The project sponsor shall be responsible for requesting an application from the corporation.

     (c)  All applications shall be submitted by the deadline date.  The application shall be completed as described in the application instructions.  If an application is received by the corporation after the deadline date or is incomplete, at that time it shall be rejected and not considered for financial assistance.

     §201H-E  Project selection.  The overall objective of the project selection process shall be to provide a mechanism for the evaluation of potential infrastructure projects that benefit or have the effect of benefitting affordable housing.  The evaluation shall identify how the infrastructure project will benefit from financial assistance and how well the project sponsor can meet the terms for debt repayment.  The corporation shall rank projects using the criteria identified in section 201H-F.

     §201H-F  Selection criteria; funding process.  (a)  Project rankings shall be accomplished by incorporating a rating scheme across certain criteria.  The project sponsor shall:

     (1)  Identify the infrastructure project and how it benefits or has the effect of benefitting affordable housing;

     (2)  Indicate whether it is a public or private entity.  An evaluation on the basis of public-private partnerships shall allow the bank to facilitate infrastructure projects that promote public purposes and feature some private financing;

     (3)  Submit certain financial information to help identify how sponsored infrastructure projects would benefit financially from financial assistance;

     (4)  Present a statement of revenue sources for the purpose of paying back loans and demonstrate its ability to repay the loan;

     (5)  Identify security provisions available to secure the loan;

     (6)  Provide information on the total cost of the project;

     (7)  Indicate how long it needs to repay the loan;

     (8)  Reveal any other options for funding the infrastructure project; and

     (9)  Describe the benefits of its infrastructure project by using financial assistance from the bank.

     (b)  The corporation shall assign quantitative scores to potential infrastructure projects based upon an evaluation of the responses required under subsection (a).

     (c)  The corporation shall give funding approval and set the maximum level of financial assistance for the project.

     §201H-G  Loan agreement; interest rates and fees.  (a)  The corporation shall negotiate the terms of a loan agreement with the approved project sponsor.

     (b)  Interest earnings and origination fees required to re-capitalize the bank and to offset a portion of the cost of its administration shall be set on an annual basis.  There shall be no interest free loans.  However, interest payments may be delayed for up to two years, and all accrued interest can be capitalized into the principal outstanding balance.  In addition, an origination fee to partially offset the cost of administering the bank may be assessed.  If such fee is assessed, the calculated amount can be added to principal and be repaid according to the agreed upon amortization schedule.

     (c)  The annual interest rate for loans from the bank shall be established and adopted by the corporation by resolution no later than June 30 of each year for the ensuing fiscal year.  The interest rate shall correspond to a rate equal to or less than the market rate.

     (d)  A fee may be charged to reimburse the corporation for reasonable expenses incurred while administering the bank.  No later the June 30 of each year, the corporation shall determine whether or not to assess an origination fee for the ensuing fiscal year.  If assessed, the origination fee schedule shall be as follows:

     (1)  A maximum of one per cent for loan proceeds up to $1,000,000;

     (2)  Three-quarters per per cent for loan proceeds over $1,000,000 and up to $2,500,000;

     (3)  One-half per cent on the amount of loan proceeds over $2,500,000 and up to $5,000,000; and

     (4)  One-quarter per cent on the amount of loan proceeds over $5,000,000.

     §201H-H  Repayment of loans; payback period.  Financial assistance in the form of a loan shall be amortized, and simple interest shall be applied to the outstanding principal of each loan.  Amortization schedules shall be issued to borrowers on an annual basis.  The payback period for financial assistance shall be not more than ten years.  The term of a loan requested by a project sponsor shall be one of the criteria used for evaluation.

     §201H-I  Remedies  (a)  If a recipient of financial assistance from the bank fails to meet any of the terms or conditions of the loan, the corporation may bring a right of action against the recipient in circuit court to seek any applicable legal or equitable remedy, including reasonable attorney's fees.

     (b)  If the recipient is a government entity and defaults on repayment of a loan from the bank, the corporation may withhold funds that it would otherwise disburse to the recipient in an amount that does not exceed what a recipient owes to the fund.  The funds shall be deposited in the bank account from which the recipient received the loan and credited toward the amount due from the recipient.

     §201H-J  Affordable housing infrastructure revolving fund.  (a)  There is established in the state treasury the affordable housing infrastructure revolving fund to be administered by the corporation.  The revolving fund shall consist of federal, state, or private grants and all moneys that may be transferred or appropriated by the legislature or that may otherwise be made available to the fund pursuant to law.  All interest or other return on the investment of moneys in the revolving fund and all payments of principal and interest credited to the revolving fund as repayment of loans and other financial assistance provided from the revolving fund pursuant to this section shall be credited to the revolving fund.  The state treasurer shall be authorized to invest moneys in the revolving fund in such manner as allowed by law so long as such moneys are not needed for the purpose of the revolving fund.  Moneys in the revolving fund shall be used for the purposes set forth in this section.  Any moneys credited to the revolving fund shall remain in the revolving fund and shall not revert to the general fund at the end of any given fiscal year.

     (b)  The corporation shall adopt rules pursuant to chapter 91 that include:

     (1)  The eligibility requirements for financial assistance from the revolving fund;

     (2)  The disbursement of revolving fund moneys;

     (3)  The interest rates to be charged on loans made from the revolving fund; and

     (4)  The repayment of loans made from the revolving fund.

     (c)  Moneys in the revolving fund may be used for the following purposes:

     (1)  To provide assistance to public and private entities for the acquisition, improvement, or construction of affordable housing infrastructure in the State.  Such assistance includes but is not limited to the making of loans and other forms of financial assistance for qualified projects;

     (2)  To pay the costs incurred by the State and the corporation in the performance of duties pursuant to this section; and

     (3)  Any other purpose consistent with this section.

     (d)  In addition to requiring interest to be paid on loans made from the revolving fund, the corporation may charge to and collect from public and private entities receiving assistance from the revolving fund fees and charges sufficient to reimburse the corporation for reasonable expenses incurred in processing and reviewing applications and in recommending loans and financial assistance.

     (e)  If a recipient of financial assistance from the revolving fund fails to meet any of the terms or conditions of the loan or other form of assistance, the corporation may bring a right of action through the state attorney general against such recipient in circuit court to seek any applicable legal or equitable remedy, including reasonable attorney's fees.

     (f)  In addition to the remedies provided under subsection (e), if the recipient is a government entity and defaults on the repayment of any loan made from the revolving fund, the corporation may withhold funds that it would otherwise disburse to the recipient.  In no event shall the amount withheld exceed the amount that a recipient owes to the revolving fund.  Funds withheld from a defaulting recipient shall be deposited in the account of the revolving fund from which the recipient received financial assistance and credited towards the amount due to such fund from the recipient."

     SECTION 3.  In codifying the new sections added by section 2 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 4.  This Act shall take effect on July 1, 2019.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

State Infrastructure Bank

 

Description:

Establishes a state infrastructure bank and affordable housing infrastructure revolving fund to provide financial assistance for affordable housing infrastructure projects.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.