Requires developer of new residential development to pay school impact fee for each new dwelling unit built; provides for fee to be phased in over 24 month period; restricts use of impact fees for construction of school facilities in the benefit district where they were collected; establishes school impact fee special fund; eff 7/1/2050. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that:

The legislature determines that new residential developments should pay school impact fees proportionate to their impacts.

The purpose of this Act is to require residential developments to pay school impact fees.

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 impact fees

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

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

"Building permit" shall mean the official document or certificate issued by the county, authorizing the commencement of construction of any building or parts thereof.

"County" or "counties" mean 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.

"Person" means an individual, firm, partnership, corporation, company, association, syndicate, or any legal entity, including any trustee, receiver, assignee, or other similar representative thereof.

"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-   School impact fee; exemptions. (a) Except as provided below, any person who seeks to develop a residential development by applying to any county for a building permit shall be required to pay a school impact fee. Assessment of impact fees shall be a condition precedent to the issuance of a building permit and shall be paid in full to the department prior to the issuance of the permit.

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

§302A-   Assessment districts; impact fee calculation. (a) The state benefit districts shall be divided into the following twenty-six geographically limited assessment districts, to be adopted through administrative rules by the department:

(b) All residential developments that are required to pay the school impact fee shall pay the impact fee for each dwelling unit constructed. Impact fees shall be phased in over a twenty-four-month period. The fee levels after the twenty-four-month phase-in period represent one-half of the full net cost.

Following the twenty-four-month phase-in period, the impact fee for each dwelling units shall be set by administrative rule on an assessment district by assessment district basis; provided that any increase in any impact fee shall be reported to the legislature not less than twenty days prior to the convening of the next regular session of the legislature following the increase.

(c) Single-family detached, single-family attached, and duplexes shall pay the following impact fees per dwelling unit constructed, based upon the time that has elapsed from the effective date of this section to the time of building permit application:

Benefit Assessment After 6 After 12 After 18 After 24 District District  Initially months  months months months 

Honolulu Honolulu $ 847 $1,694 $2,541 $3,388 $4,236

Central Ewe 847  1,694  2,541  3,388  4,236

Central Wahiawa   913  1,826  2,739  3,652  4,565

Central Waialua   979  1,958  2,936  3,915  4,894

Windward Koolaupoko   847  1,694  2,541  3,388  4,236

Windward Koolauloa   979  1,958  2,936  3,915  4,894

Leeward Ewa   847  1,694  2,541  3,388  4,236

Leeward Waianae   979  1,958  2,936  3,915  4,894

Hawaii Hue  1,045  2,089  3,134  4,178  5,223

Hawaii Puna  1,111  2,221  3,332  4,442  5,553

Hawaii Kona  1,111  2,221  3,332  4,442  5,553

Hawaii Hamakua  1,111  2,221  3,332  4,442  5,553

Hawaii South Kohala  1,111  2,221  3,332  4,442  5,553

Hawaii North Kohala  1,176  2,353  3,529  4,705  5,882

Hawaii Pohakuloa  1,176  2,353  3,529  4,705  5,882

Hawaii Kau  1,242  2,484  3,727  4,969  6,211

Maui Wailuku  1,045  2,089  3,134  4,118  5,223

Maui Makawao  1,176  2,353  3,529  4,705  5,882

Maui Lahaina  1,242  2,484  3,127  4,969  6,211

Maui Hana  1,308  2,616  3,924  5,232  6,540

Molokai Molokai  1,242  2,484  3,727  4,969  6,211

Lanai Lanai  1,308  2,616  3,924  5,232  6,540

Kauai Lihue  1,045  2,089  3,134  4,178  5,223

Kauai Koloa  1,111  2,221  3,332  4,442  5,553

Kauai Kawaihau  1,111  2,221  3,332  4,442  5,553

Kauai Waimea  1,176  2,353  3,529  4,705  5,882

Kauai Hanalei  1,176  2,353  3,529  4,705  5,882

(d) Apartments and residential condominiums, consisting of more than two dwellings, shall pay the following impact fees per dwelling unit constructed, based upon the time that has elapsed from the effective date of this section to the time of building permit application:

Benefit Assessment After 6 After 12 After 18 After 24 District District  Initially months  months  months  months 

Honolulu Honolulu $332 $ 665 $ 997 $1,330 $1,662

Central Ewa  332   665   997  1,330  1,662

Central Wahiawa  358   716  1,074  1,432  1,790

Central Waialua  383   767  1,150  1,534  1,917

Windward Koolaupoko  332   665   997  1,330  1,662

Windward Koolauloa  383   767  1,150  1,534  1,917

Leeward Ewa  332   665   997  1,330  1,662

Leeward Waianae  383   767  1,150  1,534  1,917

Hawaii Hilo  409   818  1,227  1,636  2,045

Hawaii Puna  434   889  1,303  1,738  2,172

Hawaii Kona  434   869  1,303  1,738  2,172

Hawaii Hamakua  434   869  1,303  1,738  2,172

Hawaii South Kohala  434   869  1,303  1,738  2,172

Hawaii North Kohala  460   920  1,380  1,840  2,300

Hawaii Pohakuloa  460   920  1,380  1,840  2,300

Hawaii Kau  486   971  1,457  1,942  2,428

Maui Wailuku  409   818  1,227  1,636  2,045

Maui Makawao  460   920  1,380  1,840  2,300

Maui Lahaina  486   971  1,457  1,942  2,428

Maui Hana  511  1,022  1,533  2,044  2,555

Molokai Molokai  486   971  1,457  1,942  2,428

Lanai Lanai  511  1,022  1,533  2,044  2,555

Kauai Lihue  409   818  1,227  1,636  2,045

Kauai Koloa  434   869  1,303  1,738  2,172

Kauai Kawaihau  434   869  1,303  1,738  2,172

Kauai Waimea  460   920  1,380  1,840  2,300

Kauai Hanalei  460   920  1,380  1,840  2,300

(e) No building permit shall be issued until the applicant for the building permit submits a certificate from the department to the county issuing the building permit that the impact fee for the dwelling unit has been paid to the department.

§302A-   School impact fee special fund; expenditures. (a) There is established a school impact fee special fund. All fees collected pursuant to this part shall be deposited into the school impact fee special fund.

(b) Moneys in the school impact fee special fund shall only be used in the benefit district within which they were collected.

(c) Moneys in the school impact fee special fund shall be used for the costs of school construction that includes, but is not limited to, planning, engineering, architectural, permitting, financing, and administrative expenses and any other capital equipment expenses pertaining to educational facilities.

(d) Moneys in the school impact fee special fund shall not be expended for any costs related to the acquisition of land. Moneys in the school impact fee special fund shall not be expended for the maintenance or operation of existing schools in the district.

(e) Any school impact fee shall be expended or encumbered within six years of the date of collection.

§302A-   Refund of impact fees. If any school impact fees are not expended or encumbered within six years, the department shall refund to the developer or the developer's successor in interest, the amount of fees paid and any interest accrued. Fees paid shall be considered expended on a first-in, first-out basis. Application for a refund shall be submitted to the department within one year of the date on which the right to claim arises. Any unclaimed refund shall be retained in the school impact fee special trust.

§302A-   Alternative school impact fee calculation. (a) In the event a developer believes that the impact to the school system necessitated by the developer's residential construction is less than the fee established in this part, the developer, prior to issuance of a building permit, may submit a calculation of an alternative school impact fee, including documentation submitted showing the basis upon which the alternative school impact fee calculation was made.

(b) The proposed alternative school impact fee shall be submitted to the department, which shall review the calculations and mail a written determination to the developer within sixty calendar days.

(c) If the department determines that the calculation of the alternative school impact fee was done by an acceptable methodology, then the alternative school impact fee shall be paid in lieu of the fee set forth in this part. If the department determines that the calculation of the alternative school impact fee was not done by an acceptable methodology, then the alternative school impact fee calculation shall be rejected. The determination of the department shall be final.

§302A-   Credits. (a) Any developer subject to the school impact fee requirements pursuant to this part may apply for credit for any similar contribution, payment, or construction of public school facilities accepted and received by the department for the same residential development that was subject to this part. No credit shall be authorized against the value of land dedicated or the payment of a fee in lieu of land dedication for school facility development.

(b) Credits for contributions, payments, or construction made prior to the effective date of this section shall be provided if the residential development for which the contribution, payment, or construction was made has not been completed. The current owner of the property for which the contribution, payment, or construction was made as a condition of development approval shall file an application for credit within one year of the effective date of this part. If the application is not made within one year following the effective date of this section, no credit shall be provided. The application for credit shall be submitted and reviewed as provided in this section. The amount of the credit for a contribution, payment, or construction made prior to the effective date of this section shall be the current value of the contribution, payment, or construction, less the total amount of school impact fees that would have been owed for the building permits already issued for the project had those permits been subject to the fees specified in this part that are to be in effect after twenty-four-months following the effective date of this part. The current value shall be determined using the Engineering News-Record Construction Cost Index, or an equivalent index if such index is discontinued. Credits for payments or contributions prior to the effective date of this section shall not exceed that value of the impact fee required under this section.

(c) A construction credit may be applied only against school impact fees that would otherwise be due for building permits issued within the residential development for which the payment or contribution was required as a condition of development approval. The department shall maintain an accounting of the amount of the credit applicable to a residential development and shall reduce the amount of the credit by the amount by which the school impact fees that would otherwise be due are reduced for each building permit issued for the residential development. After the credit balance is exhausted, no additional credits shall be applied to subsequent building permits issued within the residential development.

(d) If private construction of school facilities is proposed by a developer after the effective date of this section that is acceptable to the department, and the value of the proposed construction exceeds the total impact fees that would be due from the residential development, the department shall execute with the developer an agreement to provide reimbursement for the excess credit from the impact fees 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 on July 1, 2050.