REPORT TITLE:
Harbors Division


DESCRIPTION:
Allows DOT and DLNR to enter into cost-containment contracts with
private developers for public improvements that cost up to
$2,000,000 without legislative approval.  Allows DOT and DLNR to
enter into such contracts up to $5,000,000 with legislative
approval. (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO HARBORS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that private development
 
 2 of harbor facilities on state lands should be encouraged to save
 
 3 taxpayers the burden of funding costly construction or
 
 4 improvements.  The legislature further finds that private
 
 5 development would more likely result in projects being completed
 
 6 on time.
 
 7      The purpose of this Act is to allow the department of
 
 8 transportation and the department of land and natural resources
 
 9 to enter into cost-containment contracts with private developers
 
10 with a value that does not exceed $2,000,000 for public
 
11 improvements of harbor facilities without legislative approval,
 
12 and cost-containment contracts up to $5,000,000 with legislative
 
13 approval.
 
14      SECTION 2.  Chapter 266, Hawaii Revised Statutes, is amended
 
15 by adding a new section to part I to be appropriately designated
 
16 and to read as follows:
 
17      "�266-    Private financing of harbor improvements.  (a)
 
18 Notwithstanding any law to the contrary, the department of
 
19 transportation and the department of land and natural resources
 

 
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 1 may enter into a cost-containment contract with a private party
 
 2 for any public improvement to or construction of a state harbor,
 
 3 commercial harbor, roadstead, or other waterfront improvement
 
 4 belonging to or controlled by the State, if the director of
 
 5 transportation or the board of land and natural resources
 
 6 determines that a cost-containment contract promotes the best
 
 7 interest of the State by a finding that:
 
 8      (1)  Private development is likely to be less costly than
 
 9           any other type of contract;
 
10      (2)  Private development provides needed public improvements
 
11           on a significantly timely basis; or
 
12      (3)  Public financing for public improvements is not
 
13           available on a timely basis.
 
14      (b)  A cost-containment contract under subsection (a) may be
 
15 financed by legislative appropriation to reimburse the private
 
16 party or by credit from the private party's future rental or
 
17 tariff payments to the State; provided that the terms of the
 
18 contract shall ensure that the State benefits financially from
 
19 the arrangement and that public use of the facility is
 
20 maintained.
 
21      (c)  A cost-containment contract under subsection (a) shall
 
22 be subject to the requirements of chapters 103 and 103D and
 
23 subject to the approval of the administrator of the state
 

 
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 1 procurement office, established under section 103D-204(a);
 
 2 provided that all related transactions shall be subject to state
 
 3 audit.
 
 4      (d)  The department of transportation and the department of
 
 5 land and natural resources may execute cost-containment contracts
 
 6 pursuant to subsection (a) with a total contract value of
 
 7 $2,000,000 or less without legislative approval.  If the total
 
 8 value of a cost-containment contract pursuant to subsection (a)
 
 9 has a contract value above $2,000,000 but does not exceed
 
10 $5,000,000 then the department of transportation or the
 
11 department of land and natural resources shall obtain legislative
 
12 approval in the form of the adoption of a concurrent resolution
 
13 affirming the purpose, project, and contract issuance prior to
 
14 executing the cost-containment contract.  For the purposes of
 
15 this subsection, "total value" includes any contract extension,
 
16 project redesign, add-ons, or any other occurrence, act, or
 
17 material cost that may increase the cost of the contracted
 
18 project."
 
19      SECTION 3.  New statutory material is underscored.
 
20      SECTION 4.  This Act shall take effect upon its approval.