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COUNTY OF HAWAII <br />ORDINANCE NO. <br />STATE OF HAWAII <br />BILL NO. 312 <br />AN ORDINANCE AMENDING CHAPTER 21, ARTICLE 5, OF THE HAWAII COUNTY <br />CODE 1983 (2005 EDITION), RELATING TO SEWER CONNECTION LOAN PROGRAM. <br />BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: <br />SECTION 1. The purpose of this measure is to update and amend Article 5 relating to the <br />Sewer Connection Loan Program. <br />SECTION 2. Chapter 21, Article 5, Section 21-40, Hawaii County Code 1983 (2005 <br />edition), is amended to read as follows: <br />"Section 21-40. Loan application. <br />(a) Any owner who is required to connect such owner's property to a sewer pursuant to section <br />21-5, and who has been rejected by any two banks or financial institutions for any type of <br />loan to pay for the sewer connection, based on insufficient ability to repay said loan, may <br />apply to a designated bank for a sewer connection loan which is guaranteed by the County <br />of Hawaii. Any application for a guaranteed loan must be submitted to a designated bank <br />no more than [sixty] one hundred and twenty calendar days after the date of the notification <br />by the director requiring the owner to connect to the sewer. <br />(b) All such timely applications for guaranteed loans shall be sent by any receiving designated <br />bank to the director of finance. Any owner whose application for a sewer connection loan is <br />referred to the director of finance by a designated bank and is deemed to have a reasonable <br />ability to repay the loan may participate in a loan guaranteed by the County of Hawaii and <br />become a guaranteed borrower. As conditions of participation, the applicant shall execute: <br />(1) A loan agreement with a designated bank, with the County of Hawaii as <br />guarantor of the loan, providing that: <br />(A) The money will be paid by the bank directly to the contractor performing the <br />connection; and <br />(B) In the event the guaranteed borrower fails to pay the required payment on the <br />loan within ninety days of the date upon which payment is due, the loan shall <br />be considered in default and the County of Hawaii will repay the loan in full <br />to the designated bank, and will assume the designated bank's status as <br />creditor. <br />(2) An agreement with the County of Hawaii giving the County of Hawaii a lien on the <br />property to be connected. The County of Hawaii may initiate foreclosure <br />proceedings immediately upon default by the owner and any non-payment of a <br />payment required by a payment plan under section 21-41. Upon execution, the loan <br />agreement and the lien document shall be recorded at the bureau of conveyances. <br />(c) For the protection of the interest of the County of Hawaii, a title search for any property <br />upon which the County of Hawaii will have a lien shall be conducted prior to execution of <br />any agreements, and the cost of the search shall be paid from -the loan proceeds." <br />