HB3376

SECTION 1. The legislature finds that orderly and planned infrastructure capacity construction is the foundation for planned population growth and desirable communities. Infrastructure construction should precede development. Adequate infrastructure to accommodate future growth would provide livable communities with a desirable quality of life, make possible strategically situated affordable housing (for example, near areas of job growth), and preserve the environment by targeting growth to specific areas that have the necessary infrastructure to support development. Counties would first determine where development is desirable and then proceed to construct the infrastructure to support a development, rather than vice versa as is the present practice.

Population increase is natural and inevitable. The issue then becomes how the government can best prepare for future planned growth. Experience indicates that the lack of adequate infrastructure is a tremendous restriction on planned development.

The legislature recognizes that development is linked to several shared responsibilities under the Constitution of the State of Hawaii, including the following: article IX, section 6, relating to management of state population growth to protect the public health and welfare; article XI, section 1, relating to conservation and development of resources for the benefit of present and future generations; and article XVI, section 5, relating to intergovernmental relations to provide cooperation in matters affecting the public health, safety, and general welfare.

Accordingly the legislature finds that the State could assist the counties with supplemental financing of infrastructure capacity construction to increase carrying capacity whenever feasible, although the primary responsibility would continue to rest with the counties. Increasing capacity is distinguishable from maintenance. While maintenance would increase the life of a facility, the legislature finds that only projects that increase capacity should be eligible for such supplemental funding.

The purpose of this Act is to create a county infrastructure capacity construction loan revolving fund to provide loans to the counties for infrastructure improvements. Sewer, water, drainage, and road infrastructure projects that increase the carrying capacity to accommodate future planning are included under this Act.

SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- County infrastructure capacity construction loan revolving fund. (a) There is established within the state treasury a county infrastructure capacity construction loan revolving fund. The revolving fund shall be administered and moneys expended by the department of budget and finance in accordance with this section. Simple interest charged to a county for a loan shall not exceed five per cent to account for administrative costs. The legislature finds that this section satisfies the requirements of section 37‑52.4.

(b) The county infrastructure capacity construction loan revolving fund shall consist of:

(1) Amounts appropriated by the legislature;

(2) Repayment of loan principal and interest;

(3) Appropriate federal grants and subsidies to the State or counties, if any; and

(4) Contributions.

(c) The department shall expend moneys in this fund to make loans to counties for the cost, in whole or in part, of infrastructure improvements that would increase the carrying capacity of infrastructure facilities, including sewer, water, drainage, and road projects. Eligible costs shall be limited to construction and materials, excluding the initial costs of planning, engineering, and feasibility studies. No loan shall be made for maintenance costs, such as for increasing the life of the facility, unless the construction would simultaneously increase the carrying capacity of the facility. No loan shall be made for mass transit or for electrical utilities. Loans shall be made only for capital improvement projects approved by the respective county council with a view towards planned growth rather than upkeep and maintenance.

(d) The department shall comply with section 37‑47. The department shall adopt rules in accordance with chapter 91 to implement this section."

SECTION 3. 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 2008-2009 for deposit into the county infrastructure capacity construction loan revolving fund.

SECTION 4. There is appropriated out of the county infrastructure capacity construction loan revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 for the purpose of making loans under section 46‑ , Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval, except that sections 3 and 4 shall take effect on July 1, 2008.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	3376
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII