HOUSE OF REPRESENTATIVES
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII
A BILL FOR AN ACT
relating to development districts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that among the classes of public lands managed by the department of land and natural resources are commercial, industrial, resort, and hotel lands. The legislature further finds that because of restrictions imposed by various land management policies, there is little incentive for lessees of various parcels to make improvements to the leased parcels. This has resulted in dilapidation, deterioration, and obsolescence of the properties, which reduces the revenue-generating potential of the parcels.
The purpose of this Act is to identify areas of commercial, industrial, resort, and hotel parcels in need of revitalization and to establish guidelines for the redevelopment or development of those parcels.
SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . Public lands improvements; redevelopment
§171-A Findings; purpose. (a) The legislature finds that:
(1) Due to the policies guiding the management of public lands with commercial, industrial, resort, and hotel uses on the properties in the area, there has been little incentive for lessees to make major investments in improvements to their infrastructure, resulting in the deterioration of infrastructure and facilities;
(2) The lack of improvement to property in many areas has resulted in dilapidation, deterioration, age, or obsolescence of the buildings and structures in those areas;
(3) The department has the responsibility of planning for the disposition of commercial, industrial, hotel, and resort classes of public lands to determine:
(A) Specific use or uses;
(B) Minimum size of parcels;
(C) Required building construction or improvements; and
(D) Lease terms and requirements.
(b) The purpose of this part is to: authorize the designation of areas or regions of commercial, industrial, resort, and hotel uses on public lands; and establish and implement guidelines for the development or redevelopment of the areas or regions that will:
(1) Modernize the policies for the management of public lands in the designated area;
(2) Establish a plan for the designated area, including district-wide improvements, that is coordinated with state and county land use and planning policies; and
(3) Implement modern asset and property management concepts that can optimize income and evolve in response to changing principles of property administration.
§171-B Designation of development or redevelopment district. (a) The department may designate an area of public lands as a development or redevelopment district if it determines that there is a need for planning, development, or redevelopment because the buildings and structures in the area are dilapidated or have deteriorated due to age or obsolescence.
(b) The legislature, by concurrent resolution, may designate an area as a development or redevelopment district if it determines that there is a need for planning, development, or redevelopment because the buildings and structures in the area are dilapidated or have deteriorated due to age or obsolescence.
(c) Any designation under subsection (a) or (b) shall describe the boundaries of the development or redevelopment district.
§171-C Planning committee. (a) Upon the designation of a development or redevelopment district pursuant to section 171-B, a planning committee shall be established for the designated district.
(b) The planning committee shall be a policy-making board for the designated district and shall consist of eleven voting members. The members shall consist of:
(1) The director of finance; the director of business, economic development, and tourism; the comptroller; the director of transportation; and the director of planning of the county in which the designated district is located, or their designated representatives, who shall serve as ex officio members; and
(2) Six public members appointed by the governor pursuant to section 26-34; provided that three of the public members shall be selected from a list of six names submitted by the mayor of the county in which the district is located. The six public members shall be residents of the county in which the designated district is located and shall be selected on the basis of their knowledge, experience, and expertise in small and large businesses, economics, banking, real estate, finance, marketing, and management; provided that at least one member shall be an owner or active manager of a business located within the physical boundaries of the designated development district.
(c) The chairperson of a planning committee shall be elected from among its public members.
(d) The members of a planning committee shall serve without compensation but shall be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.
(e) A planning committee shall appoint a district administrator who shall be the chief executive officer for the district and shall set the district administrator’s duties, responsibilities, holidays, vacations, leaves, hours of work, and working conditions. A planning committee shall set the salary of the district administrator, who shall serve at the pleasure of the committee and shall be exempt from chapter 76.
(f) A planning committee shall be responsible for the development of district development policies, the district improvement program, and the development guidelines for the designated development district.
§171-D Powers and duties; generally. A planning committee established pursuant to section 171-C may:
(1) Through its district administrator, appoint officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76, subject to the availability of funds appropriated by the legislature;
(2) Prepare or cause to be prepared a development plan for the designated development district;
(3) Through the department, acquire, reacquire, or contract to acquire or reacquire by grant or purchase real, personal, or mixed property or any interest therein; to own, hold, clear, improve, and rehabilitate, and to sell, assign, exchange, transfer, convey, lease, or otherwise dispose of or encumber the property or interest;
(4) Through the department, acquire or reacquire by condemnation real, personal, or mixed property or any interest therein for public facilities;
(5) Through the department, by itself, or in partnership with qualified persons, acquire, reacquire, construct, reconstruct, rehabilitate, improve, alter, or repair or provide for the construction, reconstruction, improvement, alteration, or repair of any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of or encumber any project, and in the case of the sale of any project, accept a purchase money mortgage in connection therewith; and repurchase or otherwise acquire any project that the department has theretofore sold or otherwise conveyed, transferred, or disposed of;
(6) Through the department, develop and implement a district-wide improvement program for necessary district-wide public facilities within the designated development district;
(7) Through the department, notwithstanding any other law to the contrary, renew any lease in connection with any of its projects, on terms and conditions as it deems advisable;
(8) Prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project in the designated development district, and from time to time to modify the plans, specifications, designs, or estimates;
(9) Through the department, contract for and accept gifts or grants in any form from any public agency or from any other source; and
(10) Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this part.
§171-E Development guidance policies; plan. (a) The following shall be the development guidance policies generally governing the actions of a planning committee established pursuant to section 171-C in a designated development district:
(1) Development shall result in an area that permits an appropriate land mixture of commercial, industrial, hotel, resort, or public uses.
(2) A planning committee may engage in planning, design, and construction activities relating to infrastructure development and other activities that the planning committee determines are necessary to carry out the redevelopment of the district;
(3) A planning committee may conduct studies in conjunction with county and state agencies necessary to determine the appropriate activities for development in the designated district;
(4) Land use and redevelopment activities within the designated district shall be coordinated with and, to the extent possible, complement existing county and state policies, plans, and programs affecting the district; and
(5) Public facilities within the designated district shall be planned, located, and developed to support the redevelopment policies established by this part for the designated district.
(b) A planning committee shall develop and adopt a designated district development plan, which shall supersede all other inconsistent ordinances and rules relating to the use, planning, development, and construction on the land in the designated development district. The designated district development plan shall follow existing law, rules, ordinances, and regulations as closely as is consistent with standards of good design, pleasant amenities, health, safety, and coordinated development.
(c) A planning committee shall hold a public hearing on the proposed designated development district plan pursuant to chapter 91 and, after consideration of comments received and appropriate revision, shall submit the designated development district plan to the governor for the governor's approval. Upon approval, the governor shall submit to the legislature requests for appropriations or authorization to issue bonds, or both, to implement the designated development district plan in an orderly, affordable, and feasible manner. The governor shall submit the requests to the legislature as part of the executive budget or supplemental budget, as appropriate. In addition to the information, data, and materials required under chapter 37, the requests shall be accompanied by:
(1) Plans, maps, narrative descriptions, and other appropriate materials on the:
(A) Locations and design of projects or public facilities proposed to be funded; and
(B) Phase of the designated development district plan proposed to be implemented with the requested funds; and
(2) Other information the governor deems to be of significance to the legislature regarding the projects or public facilities proposed to be funded, including a discussion of the public benefits intended by, and adverse effects which may result from, implementation of the projects or public facilities.
(f) A planning committee, pursuant to chapter 91, may amend the designated development district plan as may be necessary.
§171-F Designated development district public facilities; modification or extension of leases. (a) The cost of providing the public facilities in the designated development district plan shall be assessed against the real property in the designated development district specially benefiting from the public facilities. A planning committee shall determine the areas of the designated development district that will benefit from the public facilities to be undertaken and, if less than the entire designated development district benefits, the planning committee may establish assessment areas within the designated development district. The department may issue and sell bonds in amounts as may be authorized by the legislature to provide funds to finance the public facilities. The planning committee for the designated development district shall fix the assessments against real property specially benefited.
(b) All assessments made pursuant to this section shall be assessed against each lot or parcel of land specially benefitting from the date of the notice declaring the assessment until paid. The department shall enter into negotiations with the lessee to modify or extend the lease of the parcel of land to amortize the cost of the assessments attached to the parcel.
(c) Bonds issued to provide funds to finance public facilities shall be secured solely by the assessments on the real properties benefited or improved. Bonds issued pursuant to this section and the income therefrom shall be exempt from all state and county taxation. The bonds shall be issued according and subject to the provisions of the rules adopted pursuant to this section.
(d) Notwithstanding any law to the contrary, a planning committee, in assessing real property for public facilities, shall assess the real property within an assessment area according to the special benefits conferred upon the real property by the public facilities. These methods may include assessment on a frontage basis, assessment according to the area of real property within an assessment area, or any other assessment method that assesses the real property according to the special benefit conferred, or any combination thereof. No assessment levied against real property specially benefited pursuant to this part shall constitute a tax on real property within the meanings of any constitutional or statutory provisions.
(e) All sums collected under this section shall be deposited into the designated district development revolving fund established pursuant to section 171-G for: the payment of the principal and interest of the bonds; the cost of administering, operating, and maintaining the program; the establishment of reserves; and other purposes as may be authorized in the proceedings providing for the issuance of the bonds. If any surplus remains in the revolving fund after the payment of the bonds chargeable against the fund, it shall be credited to and become a part of the special land and development fund under section 171-19.
(f) If the public facilities to be financed through bonds issued by the department are to be dedicated to the county in which the public facilities are to be located, the department shall ensure that the public facilities are designed and constructed to meet county requirements.
(g) Notwithstanding any law to the contrary, whenever as part of a district-wide improvement program it becomes necessary to remove, relocate, replace, or reconstruct public utility facilities, the department shall establish by rule the allocation of cost among the department, the affected public utilities, and properties that may specially benefit from the improvement, if any. In determining the allocation of cost, the committee shall consider the cost allocation policies for improvement districts established by the county in which the removal, relocation, replacement, or reconstruction is to take place.
§171-G Designated district development revolving fund. (a) There is established the designated development district revolving fund, into which shall be deposited:
(1) per cent of the revenues, income, and receipts received from the properties in the designated development district;
(2) Sums collected pursuant to section 171-F;
(3) Moneys appropriated to the fund by the legislature; and
(4) All interest accruing from the investment of the moneys in the fund.
(b) Moneys in the designated development district revolving fund shall be used solely for the purposes of this part."
SECTION 3. Section 46-78, Hawaii Revised Statutes, is amended to read as follows:
Improvement districts, initiation by the State. Notwithstanding any
provision of law to the contrary, the respective legislative bodies of the
counties [ may], upon the petition of the state department of
transportation[ ,] or department of land and natural resources, may
create, define, and establish improvement districts according to
applicable assessment statutes or ordinances, for any betterment or improvement
proposed by the state department of transportation[ .] or department
of land and natural resources. The petition of the department of
transportation or department of land and natural resources shall include
the necessary surveys, maps, plans and other data for the betterment or
improvement. Upon approval of the petition by the legislative body of the
county, the county shall proceed in the same manner as though the plan for the
proposed construction or improvement had been initiated by the legislative body
of the county on its own motion, provided that the county may abandon the
proceedings prior to adoption of the resolution creating the improvement
The provisions of the assessment statutes or ordinances shall be applicable to the proposed construction or improvement insofar as practicable, provided that the costs thereof shall be assessed against the land specially benefited either on a frontage basis, according to area of the land within the improvement district, or on the basis of assessed valuation for real property tax purposes, or any combination thereof.
The state department of transportation or
department of land and natural resources shall assume, except for the cost
to be borne by the board of water supply of the county, the cost of
construction or improvement [
which] that would have been assumed
by the county had the project been initiated by the county, including the costs
and incidentals necessary to process the project, and the costs allocable to
state land and land exempted by the improvement district statutes from the
payment of improvement assessments; provided that where lands owned by the
county, including the board of water supply of the county, form part of the
improvement district, the county or the board of water supply of the county,
whichever is applicable, shall pay the costs allocable to [ such] the
lands. Nothing contained herein however, shall be construed to prohibit any
county from participating in the costs of an improvement district [ which]
that is initiated upon petition by the department of transportation.
Upon filing the petition for the creation of an improvement district, the department of transportation or department of land and natural resources shall deposit with the county an amount adequate to cover the administrative costs of the county. In addition, the department of transportation or department of land and natural resources shall from time to time upon request of the county deposit the necessary sums to cover the costs of acquiring land required for the project. Upon award of any contract, either for the entire project or separately for the different kinds of work to be performed, the department of transportation or department of land and natural resources shall deposit with the county the amount the State is obliged to pay towards the contract price; provided that if the completion of the contract will extend beyond the fiscal year in which the contract is executed, the department of transportation or department of land and natural resources may deposit with the county, if the contract is to be completed during the next succeeding fiscal year, at least fifty per cent or, if the contract by its terms will not be completed until beyond the next succeeding fiscal year, at least thirty-three and one third per cent of the amount the State is obliged to pay toward the contract price."
SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2014-2015 for the purposes of this Act.
The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.
SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2014.
DLNR; Development and Redevelopment Districts; Appropriation
Authorizes the DLNR to designate public lands as a development or redevelopment district and establish and implement guidelines for the development or redevelopment of the district. Authorizes the DLNR to receive improvement district petitions from the various counties. Makes an appropriation. Effective 07/01/2014.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.