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Palau Housing Authority Act, RPPL No. 9-29 2014



To amend Title 34, Chapter 70 of the Palau National Code to increase the low income housing assistance, and for other related purposes.


Section 1. Legislative findings. The Olbiil Era Kelulau finds that due to the increased pressures of inflation and rising housing costs, the need and demand for affordable housing has increased dramatically in the past decade in the Republic. However, while the Palau Housing Authority has available various affordable housing programs designed to ensure maximum participation of low income families, the need to authorize appropriate loan funding for the various affordable housing programs has to ensure maximum participation of low income families by providing access to the intended populace, which are families with limited repayment capability.

Section 2. Repealer. Sections 7001 through 7014 of Title 34 Palau National Code are repealed in their entirety.

Section 3. Amendment. Amend Chapter 70 of Title 34 Palau National Code to include new sections as follows:



Chapter 70

The Palau Housing Authority

§ 7001.  Definitions.

In this chapter:

(a)  "Families of low income" or "low income families" means individuals or families who cannot afford to pay enough to cause a private enterprise to build an adequate supply of decent, safe and sanitary housing for their use.

(b)  "Housing project" means any work, or undertaking, or activity to provide decent, safe, and sanitary dwellings, and other living accommodations for families of low income.

(c)  "Overcrowded or blighted areas" means areas in which there is a predominance of buildings or improvements, whether residential or nonresidential, which, by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, inadequate street layout, accessibility or usefulness, or the existence of any condition which endangers life or property by fire or other means, or any combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime, and is detrimental to the public health, safety, morals or welfare.

(d)  "Real property" or "land," unless restricted meaning is clearly indicated, means all lands, including improvements and fixtures thereon, and appurtenances thereto, or used in connection therewith, and every estate, interest, right, and use, legal or equitable therein, including terms for years, and liens by way of mortgage, pledge, attachment, judgment, or otherwise.

§ 7002.  Palau Housing Authority.

(a) There is a Palau Housing Authority within the executive branch of the national government.

(b)  Board of Directors. The powers of the Palau Housing Authority shall be vested in a board of directors, which shall consist of five (5) members, all of whom shall serve four (4) year terms, appointed by the President with the advice and consent of the Senate.  Any member of the Palau Housing Authority may be removed from the board by the President for cause.  In the event of any vacancy on the membership of the board, such vacancy shall be filled in the same manner as the original appointments; provided, however, that an appointment to fill the vacancy on the board shall be made for the unexpired term of the member who vacated the seat. The board shall elect from among its members a chairman, a vice-chairman, and a secretary/treasurer.

(c)  Compensation. Directors shall be entitled to administrative leave and all necessary travel expenses and per diem at standard Republic of Palau rates for travel necessitated by the business of the board.  Directors shall be paid, in addition to any other compensation, fifty dollars ($50) per day while on the business of the Board.

(d)  Executive Director. The board shall appoint an executive director, who shall be an ex-officio member of the board.  The executive director shall submit to the board an annual budget for its approval, which budget shall include provisions for the expenditure of all salaries and logistical support incurred by the Palau Housing Authority during the fiscal year to which the budget applies.  The executive director shall, subject to the approval of the board, have the power to hire and fire all employees of the Palau Housing Authority.

§ 7003.  Powers and duties of the Palau Housing Authority.

The powers and duties of the Palau Housing Authority shall include, but not be limited to, the following:

(a)  to administer the Republic of Palau low-cost housing loan program.

(b) to have perpetual succession; to sue and be sued in its own name; to be represented by the Attorney General in such suits; and to have a seal and modify it.

(c)  (1)  To make loans or guarantee loans to individuals, groups, or associations to assist in the construction of low-cost housing in the Republic.  Such loans shall bear interest at such rate as may be established by regulation, but at no time shall such rate be more than four and one-half percent (4.5%) a year on loans made from international or local grant, loan or subsidy funds, nor more than the prevailing prime interest rate on loans made from funds borrowed by the Palau Housing Authority from commercial financial institutions, nor shall loans be guaranteed which bear interest at a rate greater than one percent (1%) a year below the prime interest rate offered by commercial financial institutions that may issue such loans, nor shall any loan be granted or guaranteed in excess of such amount as may be approved by the board of directors.

(2) Loans made by the Palau Housing Authority shall be subject to the prior approval of the board of directors, and shall be made in the form and shall be secured as provided in the regulations issued under the provisions of this chapter; provided, however, that the Palau Housing Authority shall by regulation establish a loan ceiling at a level to ensure the maximum number of low income families may receive loans; and provided further, that the Palau Housing Authority shall by regulation establish income limits, adjusted by household size, beyond which no loan may be granted, such limits to be devised to insure maximum participation in the housing program by low-income families; and provided further, that no loan shall be granted or guaranteed for the construction of any housing unit in excess of ninety percent (90%) of the value of the land and buildings involved; and provided further, that loans shall not be granted to pay or repay prior indebtedness on lands and buildings; and provided further, that applicants for loans may contribute their equity in the form of land, building material, cash, or labor.

(d)  to be exempt from all licensing requirements and taxation.

(e)  to enter into and execute contracts and instruments of every kind and nature, necessary or convenient to the exercise of its powers and functions.

(f)  to make, and from time to time, modify and repeal, bylaws and regulations, not inconsistent with this chapter, providing for the internal organization and management for the administration of its affairs and operations, and for carrying out the powers and duties granted and imposed by law.

(g)  to borrow money from public and private sources, and give such security as may be required.

(h)  to apply for and accept advances, loans, grants, contributions, gifts, donations, appropriations of funds and any other form of financial assistance and enter into and carry out contracts.

(i)  to deposit funds into banking institutions.

(j)  to invest funds in property or securities.

(k)  to acquire any real or personal property, or any interest or estate therein, by lease, option, purchase, gift, grant, donation, bequest or devise, and own, hold, improve, clear, to prepare for development any such property.

(l)  to sell, lease, exchange, transfer, assign, mortgage, pledge, or otherwise dispose of, or encumber, any real or personal property, or any interest or estate in such.

(m)  to build, construct, manage, operate and maintain housing projects for low-income families, and install, construct, and reconstruct streets, utilities, parks, playgrounds and other public improvements.

(n)  to insure, or provide for the insurance, in any stock or mutual company or any public or private insurance facility, of any real or personal property or operations, against any risks and hazards.

(o)  to undertake and carry out studies, analyses, research, and investigations of living and housing conditions; determine where overcrowded and blighted conditions exist, where there is a shortage of affordable, safe, decent, and sanitary dwellings for low-income families; make findings, determinations, and recommendations as to means and methods of dealing with such matters; carry into effect such findings, determinations, and recommendations; make available to the public the results of such studies and information.

(p)  to make or have made all plans necessary to the carrying out of the purposes of this chapter and include in such plans, without limitations,

(1)  plans for construction of housing for low-income families,

(2)  plans for carrying out a program of voluntary repair and rehabilitation of buildings and improvements, and

(3)  plans for the enforcement of local laws, codes, and regulations relating to the use of land and the use and occupancy of buildings and other improvements and to the repair, rehabilitation, demolition, or removal of buildings.

(q)  to develop, test, and report methods and techniques, and carry out demonstrations and other activities for the prevention and elimination of overcrowded areas and community blight.

(r)  to lease any dwellings, accommodations, land, structures, or facilities embraced in any project.

(s)  to clear or prepare any property owned by it for conservation or rehabilitation.

(t)  to establish from time to time standards of eligibility, rules, regulations and conditions for admission to, and occupancy of, housing accommodations for low-income families in dwellings and facilities, including rents and charges therefor, in the manner which is or may be provided by the adoption of rules and regulations.

(u)  to make such expenditures, subject to the provisions of this chapter or any other applicable law, regulation or restriction, as may be necessary for the activities and operations to carry out the purposes of this chapter.

(v)  to conduct examinations and investigations on any matters material to the functions or operations of the housing program.

§ 7004.  Administration of housing programs for low-income families.

(a)  The Palau Housing Authority in carrying out a program of housing for low- income families shall construct, manage, and operate housing projects established for low-income families in the most economical and efficient manner, consistent with applicable requirements, so as to enable the Palau Housing Authority to fix rentals or charges for dwelling accommodations at low rents, in consonance with the purpose of providing safe, decent, and sanitary housing for families and individuals of low income, and shall not operate such housing projects for profit or as a source of revenue to the Palau Housing Authority or the government of the Republic.  To this end, the Palau Housing Authority shall fix the rentals or charges for dwellings in such housing projects at rates no higher than those it shall determine to be necessary to produce revenues, which together with all other available moneys, revenues, incomes and receipts of the Palau Housing Authority from all sources, including any financial assistance provided to maintain the low-rent character of the housing accommodations, will be sufficient to:

(1)  pay, as they become due, the principal and interest on loans and obligations of the Palau Housing Authority issued to finance the housing program;

(2)  establish and maintain such reserves as may be required to assure the payment of such principal and interest as they become due;

(3)  meet the cost of, and to provide for, the maintenance and operation of the housing projects, including necessary reserves, and for costs of insurance protection, as well as the administrative expenses of the Palau Housing Authority; and

(4)  make payments in lieu of taxes as provided for in this chapter.  Rentals and charges for dwellings shall be established, and the housing projects shall be administered, to the greatest degree possible, so as to ensure that any financial assistance required shall be in the minimum amounts and periods necessary to maintain the low-rent character of the projects.

(b)  Subject to the requirements of this chapter, the Palau Housing Authority, in the operation and management of a low-rent housing program shall rent or lease the dwelling accommodations only to families or individuals who lack the amount of income deemed necessary by the Palau Housing Authority to enable them, without financial assistance, to secure decent, affordable, safe and sanitary dwellings.  The Palau Housing Authority shall establish rentals which it determines to be within the financial reach of such families or individuals.

§ 7005.  Cooperation by state and national government.

(a)  For the purpose of aiding and cooperating with the Palau Housing Authority in the planning, undertaking, carrying out, developing, constructing and operating of housing projects, the National Government, any public agency, public body, or any state government of the Republic with or without consideration, upon such terms as it may determine, and acting through appropriate agencies and officials, may do any, all, or any combination of the following:

(1)  enter into contracts and agreements, which may extend over any period, with any other public agency or body respecting action to be taken pursuant to any of the powers granted by this chapter, including the furnishing of funds by loan, grant, contribution, appropriation or otherwise, or other assistance in connection with any project.

(2)  dedicate, sell, convey, lease, or otherwise transfer any of its interests in any property, or grant easements, licenses, or any other rights or privileges therein to any other public agency concerned in any project pertaining to this chapter.

(3)  cause public buildings and public facilities, including parks, playgrounds, recreational, community, educational, water, sewage, or drainage facilities, illumination, or any other works or facilities which it is otherwise empowered to undertake or furnish, to be furnished to or in connection with any project.

(4)  close, vacate, furnish, install, grade, regrade, pave, plan or replan, highways, streets, roads, alleys, sidewalks, ways or other places.

(5)  plan or replan, zone or rezone any part of any community, or locality, and make exceptions and grant waivers from any building codes, regulations or rules in areas where no duly authorized planning commission exists.

(6)  cause administrative and other services to be furnished.

(7)  incur all or any part of the expense of any public improvement necessary for the purposes of this chapter.

(8)  lend, grant, appropriate, or contribute funds for the purposes of this chapter.

(9)  exercise powers relating to the repair, improvement, vacating, closing, demolition, or removal of unsafe, insanitary, or unfit buildings and structures.

(10)  do any and all other things reasonably necessary or convenient to aid and cooperate in the planning, or carrying out, or operating of projects toward achieving the purposes of this chapter.

(b)  All agencies and public officials of the national government and state governments shall cooperate to the extent necessary to facilitate the exercise by the Palau Housing Authority of their powers, duties, and functions under this chapter and in carrying out the purposes of this chapter.

(c)  Any sale, conveyance, lease, transfer, or agreement authorized by this section may be made without appraisal, public notice, advertisement, or public bidding.

(d)  All projects shall comply with the planning, zoning, sanitary, and building laws or codes, or other regulatory measures applicable to the community in which the project is situated.

(e)  The National Government may levy taxes, appropriate funds, incur indebtedness and issue bonds for the purposes of procuring funds to be loaned, appropriated, contributed, or granted, to the Palau Housing Authority for carrying out its powers, functions and duties under this chapter, for the provision of public improvements and other forms of local governmental cooperation, and for use in connection with any project of the Palau Housing Authority, or otherwise to carry out the purposes of this chapter.  Bonds which are issued by such government pursuant to the provisions of this subsection shall be issued in the manner and within the limitations which are or may be prescribed by law for the issuance and authorization of bonds generally.

§ 7006.  Instruments of conveyance.

An instrument executed by the Palau Housing Authority, or by the National Government, conveying any right, title or interest in any property under this chapter, shall be conclusively presumed to have been executed in compliance with this chapter insofar as the title or other interest of any bona fide purchaser, lessee, or transferee of the property is concerned, and shall be entitled to recordation in the appropriate records of the clerk of courts or registrar of titles, as may be appropriate, so as to afford actual or constructive notice thereof.

§ 7007.  Exemption of property and funds from execution, liens or taxes; payments in lieu of taxes.

(a)  All property, including funds, of the Palau Housing Authority shall be exempt from judicial process of every kind, including, without limitation, attachment, levy, execution, and sale by virtue of an execution, and no judgment shall be a lien or charge upon its property or funds.

(b)  The property acquired or held for the purposes of this chapter is declared to be public property used for essential public and governmental purposes, and such property shall be exempt from all taxes and special assessments of the National Government or any political subdivision thereof.

(c)  The Palau Housing Authority may agree to make payment in lieu of taxes on its housing projects to the National Government or any political subdivision thereof, or instrumentality thereof as may be designated by the National Government, as it finds consistent, from time to time, with the maintenance of the low-rent character of housing projects.

§ 7008.  Expenditures; accounting for funds.

The Palau Housing Authority shall make administrative, maintenance, and operating expenditures in accordance with an annual budget, and shall account to the President and the Olbiil Era Kelulau in accordance with applicable law, for any funds that may have been furnished to it or appropriated for its use.

§ 7009.  Annual report and recommendations.

Not later than January 31 of each year, the Palau Housing Authority shall file with the President and the Olbiil Era Kelulau a report of its activities for the preceding year, and shall make recommendations with reference to such additional legislation or other action as it deems necessary or desirable in order to carry out the purpose of this chapter.

§ 7010.  Republic of Palau Emergency Housing Revolving Loan Fund.

(a) There is herein established a revolving emergency loan fund to be administered by the Palau Housing Authority.  Use of funds in the Emergency Revolving Housing Loan Fund shall be limited to loans to private homeowners whose homes have been destroyed or otherwise rendered uninhabitable as a result of damage done by natural disaster or fire.  The Palau Housing Authority shall create rules and procedures for: i) the application process for loans by aggrieved homeowners; ii) proper disbursement of loans from the revolving loan fund;  iii) the specific terms and conditions for such loans; and iv) the requirements for verification of repair expenditures made by homeowners.  The amount available to any borrower shall not exceed the amount necessary needed to make specific repairs, and priority shall be given to low income families.  The Palau Housing Authority shall charge an interest rate of one percent (1%) on funds disbursed through this program.  Funds advanced under this program may only be used to make repairs on or reconstruct a borrower's primary residence.

(b) Funds appropriated by the national government for use in emergency situations for residential new construction or repairs shall be administered and managed by Palau Housing Authority through the Palau Emergency Housing Revolving Loan Fund. Where necessary or prudent, Palau Housing Authority shall work in conjunction with other government agencies such as the National Emergency Management Office for such endeavors.

(c) All prior appropriations for National Emergency housing replacement or repair will establish the Emergency Housing Fund and must be used solely for this purpose.

§ 7011. Affordable housing loans; inflation.

(a) The maximum loan available from the Palau Housing Authority for the construction of a new home and home improvements for low income families may increase annually at a rate sufficient to mitigate the impact of inflation on the price of goods and services, and set at an amount that the Palau Housing Authority can continue affordable housing programs while ensuring that the housing needs of low income families are met.

(b) The Palau Housing Authority may set a maximum loan amount that the Palau Housing Authority will guarantee and that amount may be a higher amount than the maximum loan amount available under subsection (a)."

Section 4. Rules and regulations. The Palau Housing Authority shall have ninety (90) days after the effective date of this Act to promulgate rules and regulations consistent with Section 3 of this Act.

Section 5. Effective Date. This Act shall take effect upon its approval by the President of the Republic of Palau or upon its becoming law without such approval, except as otherwise provided by law.

PASSED: June 10, 2014

Approved this _ 25th__ day of ____June________, 2014

Tommy E. Remengesau, Jr.
President of the Republic of Palau

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