HI SB2577

Establishes a low-income housing tax credit loan program administered by the Hawaii housing finance and development corporation allowing owners of qualified low-income buildings to receive interest-free loans in lieu of claiming state housing tax credits.

Loan amount equals a percentage of the cash value of the ten-year low-income housing tax credit period discounted to present value and capitalized at the taxable general obligation bond interest rate.

Buildings receiving loans become ineligible for the state income tax credit under section 235-110.8 and must comply with federal section 42 requirements; loans are forgiven after 30 years if owner remains in compliance.

Authorizes issuance of general obligation bonds to fund the loans; appropriation does not lapse at end of fiscal biennium but any unencumbered funds lapse as of June 30, 2012.

Effective July 1, 2010; allows owners of qualified buildings with federal tax credits or American Recovery and Reinvestment Act subawards to choose loan program instead of tax credits.