Requires new residential developments to dedicate land or pay an in lieu fee or a combination thereof for the development of new school facilities. Restricts use of land dedicated or fees collected for development of school facilities in the benefit district where land was dedicated or fees collected. Provides for refund of fees collected if not expended within 6 years of collection.

A BILL FOR AN ACT

SECTION 1. The legislature finds that:

The legislature determines that new residential subdivisions should provide land for schools or pay a fee in lieu of land proportionate to their impact on the requirement for additional school facilities.

The purpose of this Act is to require new residential developments to dedicate land or pay an in lieu fee for the development of additional school facilities.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . school land dedication

§302A- Definitions. As used in this part, the following terms shall have the following meanings, unless the context indicates otherwise;

"Benefit district" means any of the nine districts of the State based on the State's island geography, school districts, and high school attendance boundaries, as follows:

"County" or "counties" means the city and county of Honolulu, the county of Hawaii, the county of Kauai, and the county of Maui.

"Developer" means a person, corporation, organization, partnership, association, or other legal entity constructing, erecting, enlarging, altering, or engaging in any development activity.

"Dwelling unit" means a room or rooms connected together, constituting an independent housekeeping unit for a family containing a single kitchen.

"Multifamily dwelling unit" means a duplex, townhouse, apartment, cooperative, or condominium dwelling unit.

"Owner" means the owner of record of real property or the owner's authorized agent.

"Plat" means the map or drawing on which the subdivider's plan of subdivision is presented and that the subdivider submits for approval.

"Residential development" means the development of any single-family or multifamily dwelling units.

"School facilities" means the facilities owned or operated by the department or the facilities included in the department's capital budget or capital facilities plan.

§302A- Land dedication; exemptions. (a) Except as provided in this section, any person who seeks to develop residential land by applying to a county for the issuance of a subdivision approval or for a building permit for a residential development shall be required to dedicate land for school facilities or pay a fee in lieu of dedicating that land.

(b) The following shall be exempt from this section:

(2) All nonresidential development; and

§302A- Land or fee in lieu required. (a) The procedure for determining whether the dedication of land is required or a payment of a fee in lieu is required for new schooling facilities shall be as follows:

(b) Whether the department determines to require land dedication or the payment of a fee in lieu, or a combination of both, it shall be guided by the following criteria:

(c) The determination of the department as to whether land shall be dedicated, or whether a fee in lieu shall be paid, or a combination of both, shall be final and exclusive.

§302A- Amount of land to be dedicated or fee in lieu; appraisal. (a) In the event that land is to be dedicated, the size of the tract of land to be dedicated by the developer shall be determined using the following formula:

(b) In the event of a payment of a fee in lieu, the dollar amount of the fee in lieu shall be determined using the following formulas:

(c) Residential subdivisions of less than fifty acres shall pay a standard fee in lieu based upon an average land value of $100,000 per acre. The standard fee in lieu of land dedication per single-family detached, single-family attached, and duplex unit is $899. The standard fee in lieu of land dedication per apartment, cooperative, and condominium unit is $356. At least every three years, the department shall prepare an analysis to update the appropriate average land value and shall submit the analysis to the legislature with a recommendation to update the standard fee in lieu established in this section.

(d) The fee in lieu of land dedication shall be based upon the value of the improved land, after typical subdivision improvements such as roads, drainage and utilities. A real estate appraiser who is selected and compensated by the developer shall determine the value of the land. If the department does not agree with the developer's appraisal, the department may engage another real estate appraiser at its own expense, and the value shall be an amount equal to the average of the two appraisals. If either party does not accept the average of the two appraisals, a third appraisal shall be obtained, with the cost of the third appraisal being shared equally by the department and the developer. The first two appraisers shall select the third appraiser, and the third appraisal shall be binding on both parties. All real estate appraisers used in this process shall be licensed pursuant to chapter 466K.

§302A- Refund of fee in lieu. If the fee in lieu is not expended within six years of the date of collection, the department shall refund to the developer or the developer's successor in interest the amount of fees in lieu paid and any interest accrued. Application for a refund shall be submitted to the department within one year of the date that the right to claim arises.

§302A- Use of land; expenditure of fee in lieu. (a) Land dedicated by a developer, pursuant to this part, shall be used only as a site for the construction of a new school or for the expansion of existing school facilities within the benefit district where the land was dedicated. If the land is sold, the proceeds shall be used to reacquire land for school facilities in the same benefit district.

(b) Fee in lieu funds shall only be used for the acquisition of land for school purposes in the benefit district where the fee in lieu was collected. Funds may be used for expenses related to acquiring a piece of land, including but not limited to surveying, appraisals, and associated legal fees. Fee in lieu funds shall not be used for the maintenance or operation of existing schools in the benefit district, construction costs, including architectural, permitting or financing costs, or administrative expenses.

§302A- Credits. (a) Any person subject to the land dedication or fee in lieu requirements pursuant to this part may apply for credit for any similar dedication or payment accepted and received by the department for the same subdivision subject to this part.

(b) Any credit provided for under this section shall be based upon the present value of the dedication or payment.

(c) Credits for contributions prior to the effective date of this part shall be based upon the present value; provided that the credited amount shall not exceed the value of the dedication or fee in lieu required under this part.

(d) If a dedication is proposed by a developer after the effective date of this part that is acceptable to the department and it exceeds the dedication requirements for the residential development, the department shall execute with the developer an agreement to provide reimbursement for the excess land dedication from the fees in lieu collected from other developers within the same benefit district.

302A- Rules. The department may adopt rules, pursuant to chapter 91, to implement this part."

SECTION 3. This Act shall take effect upon its approval.