One of the significant changes introduced by SB1206 is the ability for the Director of Finance to exempt a depository from the requirement to pay all public funds on demand. This exemption is contingent upon the depository providing loans at below-market rates for housing projects designated for owner-occupants who do not own other real estate. This provision is expected to encourage financial institutions to support affordable housing, thus addressing housing needs in Hawaii, where there is an ongoing crisis of affordability. It also reflects a broader state policy goal of promoting home ownership among residents.
Summary
Senate Bill 1206 is a legislative measure concerning the management of public funds in Hawaii. It amends Section 38-2 of the Hawaii Revised Statutes, outlining the conditions under which public funds may be deposited by the Director of Finance. The bill allows the Director to choose depositories for state funds and sets limits on how much can be deposited in these institutions, particularly emphasizing the importance of security and local engagement in the deposit process. This aims to ensure that funds are not only secure but also utilized in ways that benefit the local economy.
Contention
Despite its potential benefits, the bill may encounter points of contention among stakeholders. Critics could argue that by allowing exceptions to the immediate availability of public funds, there could be increased risks involved, particularly concerning liquidity for the state treasury. Additionally, the focus on certain types of projects and the differentiated treatment of loans based on market rates might provoke debates regarding fairness and accessibility in public funding processes. Opponents may also raise concerns about the long-term implications of shifting public funds into potentially less liquid investments.
Requesting The Director Of Finance To Expressly Consider The Amount Of Loans With Favorable Terms That A Depository Has Issued To Developers Of Housing For Hawaii Residents When Evaluating The Beneficial Effects To The State Of Using That Depository, In Addition To The Existing Requirements To Consider Factors Such As Safety, Liquidity, And Yield Offered On Deposits.
Urging The Director Of Finance To Adopt Administrative Rules To Define "beneficial Effects To The State" In Section 38-2, Hawaii Revised Statutes, To Include The Financing Of Housing.
Urging The Director Of Finance To Adopt Administrative Rules To Define "beneficial Effects To The State" In Section 38-2, Hawaii Revised Statutes, To Include The Financing Of Housing.