Amends the definition of "project costs" in the tax increment
financing law to expand the services that may be provided through
tax increment financing.

THE SENATE                              S.B. NO.           156
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that since 1982, New York
 2 has had state and city laws permitting the establishment of
 3 business improvement districts (BID).  The New York BID is an
 4 organizing and financing mechanism that permits property owners
 5 and merchants to band together to use the city's tax collection
 6 powers to assess themselves.  These funds are collected by the
 7 city and returned in their entirety to the BID to be used for
 8 purchasing supplemental services (e.g., maintenance, sanitation,
 9 security, promotions, special events), and capital improvements
10 (e.g., street furniture, trees, signage, special lighting) beyond
11 those services and improvements provided by the city.  As a
12 result of this legislation, thirty-seven BIDs have been
13 established in the New York City metropolitan area as of June
14 1998.
15      The legislature further finds that Act 267, Session Laws of
16 Hawaii 1985, established the enabling legislation for tax
17 increment financing and tax increment districts under chapter 46,
18 part VI, Hawaii Revised Statutes (HRS).  Senate standing
19 committee report No. 238, S.B. No. 155, recognized tax increment

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                                     S.B. NO.           156

 1 financing as an innovative financing method that may be utilized
 2 by county redevelopment agencies to finance public improvements
 3 in designated urban areas.
 4      The legislature believes that while chapter 46, part VI,
 5 HRS, provides the broad, general authority to create business
 6 improvement districts, it does not provide for some of the
 7 additional services enjoyed by New York's business improvement
 8 districts.
 9      The purpose of this Act is to amend chapter 46, part VI,
10 HRS, to authorize expenditures for additional services.
11      SECTION 2.  Section 46-102, Hawaii Revised Statutes, is
12 amended by amending the definition of "project costs" to read as
13 follows:
14      ""Project costs" means expenditures made or estimated to be
15 made or monetary obligations incurred or estimated to be incurred
16 by the agency that are listed in a tax increment financing plan
17 as costs of public works or public improvements in a tax
18 increment district, plus other costs incidental to the
19 expenditures or obligations.  Project costs include:
20      (1)  Capital costs, including the actual costs of the
21           construction of public works or public improvements,
22           new buildings, structures, and fixtures; the actual
23           costs of the demolition, alteration, remodeling,

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                                     S.B. NO.           156

 1           repair, or reconstruction of existing buildings,
 2           structures, and fixtures; and the actual costs of the
 3           acquisition, clearing, and grading of land;
 4      (2)  Financing costs, including, but not limited to, all
 5           necessary and incidental expenses related to the
 6           issuance of tax increment bonds and all interest paid
 7           to holders of evidences of indebtedness or other
 8           obligations issued to pay for project costs, any
 9           capitalized interest, and any premium paid over the
10           principal amount of the obligations because of the
11           redemption of the obligations prior to maturity;
12      (3)  Professional service costs, including architectural,
13           planning, engineering, marketing, appraisal, financial
14           consultant, and special services and legal advice;
15      (4)  Imputed administrative costs, including reasonable
16           charges for the time spent by employees of the agency
17           in connection with the implementation of a tax
18           increment financing plan;
19      (5)  Relocation costs to the extent required by federal or
20           state law;
21      (6)  Organizational costs, including the costs of conducting
22           environmental impact studies or other studies, the
23           costs of publicizing the creation of a tax increment

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                                     S.B. NO.           156

 1           district, and the cost of implementing the tax
 2           increment financing plan for the tax increment
 3           district;
 4      (7)  Payments determined by the county council to be
 5           necessary or convenient to the creation of a tax
 6           increment district or to the implementation of the tax
 7           increment financing plan for the tax increment
 8           district[.]; and
 9      (8)  Maintenance or other services required for the
10           enjoyment and protection of the public and the
11           promotion and enhancement of the district whether or
12           not in conjunction with improvements authorized by this
13           part, including but not limited to, enhanced sanitation
14           services, promotion and advertising of activities
15           within the district, marketing education for businesses
16           within the district, decorations and lighting for
17           seasonal and holiday purposes, and services to enhance
18           the security of persons and property within the
19           district."
20      SECTION 3.  Statutory material to be repealed is bracketed.
21 New statutory material is underscored.
22      SECTION 4.  This Act shall take effect on July 1, 1999.
24                           INTRODUCED BY:  _______________________