Shown verbatim: the complete text as captured from the official page posted by the Hawaii State Legislature, fetched 2026-08-29. Where this bill amends existing law, language marked for deletion in the official page appears here in brackets. This is the first conference draft. The official bill page.
THE SENATE S.B. NO. 2338 THIRTY-THIRD LEGISLATURE, 2026 S.D. 1 STATE OF HAWAII H.D. 2 C.D. 1 A BILL FOR AN ACT RELATING TO HOUSING. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: SECTION 1. The legislature finds that the Hawaii housing finance and development corporation and Hawaii public housing authority both provide critical services to address Hawaii's affordable housing crisis. The Hawaii housing finance and development corporation oversees the financing of affordable housing and the Hawaii public housing authority manages the State's public housing programs and housing choice vouchers. Through these two entities, the supply of affordable housing in Hawaii has grown, with billions of dollars financed and more than six thousand public housing units currently being managed. The legislature further finds that the executive directors of the two entities face different compensation limitations, with the executive director of the Hawaii public housing authority being paid not more than the governor, and the executive director of the Hawaii housing finance and development corporation being paid a lower salary of not more than the director of business, economic development, and tourism--a difference of more than $10,000. In addition, the salary of the executive assistant of the Hawaii housing finance and development corporation is also capped at a percentage of the executive director's salary. The legislature believes that increasing certain salary caps will help the State compete with the private sector for highly skilled individuals and further increase the supply of affordable housing in Hawaii. Additionally, the legislature recognizes that increases in salary caps are necessary, and that these increases will help expand agencies' development plans. Accordingly, the purpose of this Act is to: (1) Exempt Hawaii housing finance and development corporation (HHFDC) employees from the requirement that their employment actions and job descriptions be subject to approval by the director of business, economic development, and tourism; (2) Require the executive director of HHFDC to be paid a salary recommended by its board of directors and subject to the approval of the director of business, economic development, and tourism, not to exceed ninety‑nine percent of the salary of the governor; (3) Rename the position of executive assistant to deputy executive director for HHFDC and increase the salary cap for the deputy executive director; (4) Establish conditions for the issuance, renewal, and termination of employment contracts issued by the HHFDC, Hawaii community development authority (HCDA), and the Hawaii public housing authority (HPHA); (5) Exempt the executive director of HCDA, and officers, agents, and employees appointed by the executive director, from the requirement that their employment actions and job descriptions be subject to approval by the director of business, economic development, and tourism; and (6) Require the executive director of HCDA to be paid a salary recommended by the authority and subject to the approval of the director of business, economic development, and tourism, not to exceed ninety‑nine per cent of the salary of the governor. SECTION 2. Section 201H-2, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows: "(a) There is established the Hawaii housing finance and development corporation to be placed within the department of business, economic development, and tourism for administrative purposes only. The corporation shall be a public body and a body corporate and politic. All employees covered under subsection (b) shall be exempt from section 26-35(a)(4). (b) The corporation shall employ, exempt from chapter 76 [and section 26-35(a)(4)], an executive director [and an executive assistant.], a deputy executive director, and a finance manager. The executive director shall be paid a salary [not to exceed the salary of the director of business, economic development, and tourism.] recommended by the board; provided that the salary shall be subject to the approval of the director of business, economic development, and tourism, and shall not exceed ninety‑nine per cent of the salary of the governor. The [executive assistant] deputy executive director shall be paid a salary not to exceed [ninety] ninety-five per cent of the executive director's salary. The finance manager shall be paid a salary set by the board. Subsequent salary increases shall be determined by the board; provided that the salary increases shall be not less than the collective bargaining increases provided to state employees in comparable professional bargaining units. The finance manager shall oversee all finance programs of the corporation and develop new initiatives to deliver housing to a range of household incomes using minimal state resources and as efficiently as possible. The finance manager shall have knowledge of the following: (1) State housing finance agencies; (2) Public finance; (3) Bond issuance, debt management, and credit underwriting; (4) Regulatory compliance; (5) Portfolio management; and (6) Housing finance planning and legislation. The corporation may employ, subject to chapter 76, technical experts and officers, agents, and employees, permanent and temporary, as required. The corporation may also employ officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, not subject to chapter 76, when in the determination of the corporation, the services to be performed are unique and essential to the execution of the functions of the corporation. The corporation shall not offer an employment contract entered into on or after the effective date of this Act that exceeds a three-year term. No employment contract shall contain an automatic renewal provision. Any renewal or extension of an employment contract shall be subject to approval by the board. No employment contract shall contain any provision for severance pay, liquidated damages, or a financial buyout of the unexpired term of the contract; provided that nothing in this subsection shall prohibit the payment of any compensation or benefits earned or accrued before the date of termination. The corporation may call upon the attorney general for legal services as it may require. The corporation may delegate to one or more of its agents or employees its powers and duties as it deems proper." SECTION 3. Section 206E-3, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows: "(c) The authority shall appoint [the], exempt from chapter 76 and section 26-35(a)(4), an executive director who shall be the chief executive officer[. The authority shall set the salary of the executive director, who shall serve at the pleasure of the authority and shall be exempt from chapter 76.] and whose salary shall be recommended by the authority; provided that the salary shall be subject to the approval of the director of business, economic development, and tourism and shall not exceed ninety-nine per cent of the salary of the governor. The executive director shall serve at the pleasure of the authority. The authority shall not offer an employment contract entered into on or after the effective date of this Act that exceeds a three-year term. No employment contract shall contain an automatic renewal provision. Any renewal or extension of an employment contract shall be subject to approval by the authority. No employment contract shall contain any provision for severance pay, liquidated damages, or a financial buyout of the unexpired term of the contract; provided that nothing in this subsection shall prohibit the payment of any compensation or benefits earned or accrued before the date of termination." SECTION 4. Section 206E-4, Hawaii Revised Statutes, is amended to read as follows: "§206E-4 Powers; generally. Except as otherwise limited by this chapter, the authority may: (1) Sue and be sued; (2) Have a seal and alter the same at pleasure; (3) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter; (4) Make and alter bylaws for its organization and internal management; (5) Make rules with respect to its projects, operations, properties, and facilities, which rules shall be in conformance with chapter 91; (6) Through its executive director appoint officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76[;] and section 26-35(a)(4); (7) Prepare or cause to be prepared a community development plan for all designated community development districts; (8) Acquire, reacquire, or contract to acquire or reacquire by grant or purchase real, personal, or mixed property or any interest therein; to own, hold, clear, improve, and rehabilitate, and to sell, assign, exchange, transfer, convey, lease, or otherwise dispose of or encumber the same; (9) Acquire or reacquire by condemnation real, personal, or mixed property or any interest therein for public facilities, including but not limited to streets, sidewalks, parks, schools, and other public improvements; (10) By itself, or in partnership with qualified persons, acquire, reacquire, construct, reconstruct, rehabilitate, improve, alter, or repair or provide for the construction, reconstruction, improvement, alteration, or repair of any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of or encumber any project, and in the case of the sale of any project, accept a purchase money mortgage in connection therewith; and repurchase or otherwise acquire any project that the authority has theretofore sold or otherwise conveyed, transferred, or disposed of; (11) Arrange or contract for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, or other places, or for the furnishing of facilities or for the acquisition of property or property rights or for the furnishing of property or services in connection with a project; (12) Grant options to purchase any project or to renew any lease entered into by it in connection with any of its projects, on terms and conditions as it deems advisable; (13) Prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project, and from time to time to modify the plans, specifications, designs, or estimates; (14) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice; (15) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable; (16) Contract for and accept gifts or grants in any form from any public agency or from any other source; (17) Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this chapter; and (18) Allow satisfaction of any affordable housing requirements imposed by the authority upon any proposed development project through the construction of reserved housing, as defined in section 206E-101, by a person on land located outside the geographic boundaries of the authority's jurisdiction; provided that the authority may permit cash payments in lieu of providing reserved housing. The substituted housing shall be located on the same island as the development project and shall be substantially equal in value to the required reserved housing units that were to be developed on site. The authority shall establish the following priority in the development of reserved housing: (A) Within the community development district; (B) Within areas immediately surrounding the community development district; (C) Areas within the central urban core; (D) In outlying areas within the same island as the development project. The Hawaii community development authority shall adopt rules relating to the approval of reserved housing that are developed outside of a community development district. The rules shall include, but are not limited to, the establishment of guidelines to ensure compliance with the above priorities." SECTION 5. Section 356D-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows: "(b) The authority shall employ, exempt from chapter 76 and section 26-35(a)(4), an executive director, an executive assistant, a chief financial management advisor, a property management branch chief, a chief planner, and a redevelopment officer, whose salaries shall be set by the board established under section 356D-3; provided that no salary shall exceed the governor's salary. The authority may employ, subject to chapter 76, technical experts and officers, agents, and employees, permanent or temporary, as required. The authority may also employ officers, agents, and employees; prescribe their duties and qualifications; and fix their salaries, not subject to chapter 76, when in the determination of the authority, the services to be performed are unique and essential to the execution of the functions of the authority; provided that if the authority hires an officer, agent, or employee in a capacity not subject to chapter 76, the authority shall include in an annual report to the legislature, to be submitted [not] no later than twenty days prior to the convening of each regular session, the position descriptions and reasons for hiring the personnel in a civil service exempt capacity. The authority shall not offer an employment contract entered into on or after the effective date of this Act that exceeds a three-year term. No employment contract shall contain an automatic renewal provision. Any renewal or extension of an employment contract shall be subject to approval by the board. No employment contract shall contain any provision for severance pay, liquidated damages, or a financial buyout of the unexpired term of the contract; provided that nothing in this subsection shall prohibit the payment of any compensation or benefits earned or accrued before the date of termination. The authority may call upon the attorney general for legal services as it may require. The authority may delegate to one or more of its agents or employees the powers and duties it deems proper." SECTION 6. The amendments made to sections 201H-2(b) and 206E-3(c), Hawaii Revised Statutes, regarding the approval of the salaries of the executive directors of the Hawaii housing finance and development corporation and Hawaii community development authority by the director of business, economic development, and tourism, shall not apply to any employment contract executed before the effective date of this Act. The amendments shall apply to any new employment contract, contract renewal, or contract extension entered into after the expiration of a contract in effect on the effective date of this Act. SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 8. This Act shall take effect upon its approval.
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