Committee OKs extending HHFDC bond-recycling authority; bill would authorize revenue bonds for a line of credit

The Senate Committee on Housing passed Senate Bill 40 with amendments to authorize the Hawaii Housing Finance and Development Corporation to secure a line of credit or other instrument of indebtedness for the bond volume cap recycling program and to specify that the corporation may use revenue bonds.

Dean Minakami, executive director of the Hawaii Housing Finance and Development Corporation (HHFDC), said the bill would extend a line-of-credit authority beyond fiscal year 2025. He noted that last year's House Bill 1760, which became Act 35, provided a $150 million line of credit for a bond-recycling program but only for fiscal year 2025; the current proposal would authorize the line of credit for the biennium. When asked about bond type, HHFDC said the instrument would be revenue bonds.

Angela Melody Young of ROAR Cares urged support for HHFDC's bond volume cap recycling program and highlighted the role of private activity bonds in financing construction, acquisition and rehabilitation for low-income housing; in her testimony she referenced HRS 39B-2F as the statutory framework discussed. HHFDC staff and committee members discussed alternate sources of indebtedness — such as private bank loans or taxable bonds — and HHFDC warned these alternatives could negatively affect the state's debt ceiling and cost more.

During decision making, the chair said the committee would pass SB 40 with amendments to incorporate the Department of Budget and Finance's request to specify revenue bonds as an authorized tool and would note in the report that the administration should study other ways to secure the line of credit without requiring biennial legislative action.

Action: Committee recommendation to pass SB 40 with amendments was adopted; chair cast an aye vote.