Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Education and Military Affairs and Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 2708 entitled:

beg leave to report as follows:

The purpose of this measure is to enact a school impact fees law to require residential developments to pay school impact fees.

Your Committees received testimony in support of this measure from the Department of Education. Testimony in opposition was received from the Department of Budget and Finance. Comments were received from the Department of Business, Economic Development, and Tourism and the Land Use Foundation of Hawaii.

Your Committees find that new residential developments should pay school impact fees proportionate to their impacts, for the following reasons:

Your Committees are mindful of the comments received in testimony to the effect that this measure may be premature. However, your Committees intend to continue the discussions on this measure in recognition of the importance of creating a school impact fees law. New communities understandably place a burden on resources to provide amenities such as schools. Impact fees should lessen that burden on the State. Your Committees believe that a mandatory school impact fee on developers, while increasing the costs of development, would make a development more attractive to homeowners, as residential developments often attract families with school age children.

Your Committees have amended this measure by changing the effective date to July 1, 2050 to continue the discussions.

As affirmed by the records of votes of the members of your Committees on Education and Military Affairs and Commerce, Consumer Protection, and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2708, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2708, S.D. 1, and be referred to the Committee on Ways and Means.