HB3406

SECTION 1. Act 127, Session Laws of Hawaii 2007, is amended by amending section 1 to read as follows:

"Section 1. To meet the economic needs of the state, the harbors division of the department of transportation must provide suitable harbor facilities[,] and berthing piers, which in turn ensures the efficient and timely delivery and shipment of goods imported into the state. Ocean surface transportation is our state's lifeline. It remains the only viable means to service the lion's share of Hawaii's economic needs. However, Hawaii's aging commercial harbor system has not kept pace with our growing economy, and [~~it is now~~] Hawaii's commercial ports statewide are experiencing competition for berthing rights for cargo, fuel, and cruise ship activities, and severe congestion in harbor facilities. It is recognized by the harbor users, state administration, and the legislature that it is now extremely critical to upgrade existing port facilities and develop harbor improvements in an expedited manner. The Hawaii Harbors Users Group, a maritime transportation industry group, was formed in 2005 because the industry recognized that Hawaii is facing a shortage of port facilities statewide. Its goal is to help the state identify and prioritize Hawaii's harbor improvement needs. The Hawaii Harbors Users Group has completed research that predicts that if Hawaii's harbor infrastructure is not improved, the loss of real domestic product (in 2007 dollars) could amount to more than $50,000,000,000 by the year 2030. In comparison, an assessment of immediate commercial harbor needs statewide is estimated to cost in the range of $850,000,000.

Under its statutory mandate, the harbors [~~division's focus is on~~] division focuses on essential daily management and operations of the commercial harbor system rather than development of new expansion opportunities. To expeditiously develop critically needed harbor infrastructure improvements and curtail statewide economic hardships that will occur if the harbors reach maximum cargo handling capacity by the year 2011 as currently projected, the harbors division [~~desires to partner~~] partnered with Aloha Tower development corporation, an entity with a development-oriented mission, statutory powers, and expertise in the development of state-owned properties for development of Honolulu harbor pursuant to this Act.

The harbors division is additionally stymied by the lack of funding necessary to develop costly wharfs and cargo handling terminals and its [~~inability~~] traditional structure limits its ability to consider development-oriented financing options such as public or private partnerships [~~under its traditional structure~~], but the Aloha Tower development corporation is empowered to do such things. A partnership with the Aloha Tower development corporation, which has jurisdiction over a portion of Honolulu harbor, can also assist the harbors division by providing financial support from its limited commercial development along the downtown urban waterfront. Revenues generated from commercial development are proposed to be directed towards the funding of commercial harbor system infrastructure improvements.

The legislature, together with the administration and key harbor users, recognizes that extraordinary means must be employed to catch up on deferred harbor infrastructure development. Accordingly, the legislature finds that the harbors division should be given further development tools to accomplish the formidable task of bringing the State's commercial harbors up to the standards needed to sustain economic growth. The purpose of this Act is to [~~establish a~~] expand the formal partnership for development of Honolulu harbor between the Aloha Tower development corporation and the department of transportation harbors division to a statewide jurisdiction for the [~~development of Honolulu harbor infrastructure improvement projects.~~] implementation of the commercial harbors modernization plan."

SECTION 2. Section 206J-2, Hawaii Revised Statutes, is amended by amending the definition of "development corporation" to read:

"Development corporation" means the Aloha Tower [~~Development Corporation~~] development corporation established by section 206J-4.

SECTION 3. Section 206J-5.5, Hawaii Revised Statutes, is amended to read as follows:

"§206J-5.5 Partnership with department of transportation for [~~Honolulu~~ ~~harbor.~~] the implementation of the commercial harbors modernization plan and the establishment of the harbors modernization group. (a) Consistent with its general powers under this chapter, the development corporation [~~may~~] shall establish a subgroup called the harbors modernization group to undertake projects for [~~Honolulu harbor and its adjacent lands,~~] the commercial harbors modernization plan in subsection (b), which are under the jurisdiction of the department of transportation. Notwithstanding any provision in section 206J-17 to the contrary, payments to the development corporation for its administrative and operational expenses shall be made by the department of transportation and deposited into the Aloha Tower fund in a subaccount designated for [~~the particular development project.~~] commercial harbors modernization plan projects. The department of transportation shall delegate to the development corporation the implementation of commercial harbors modernization plan projects. All projects, prior to implementation by the development corporation, shall be approved by the director of transportation and the governor. After approval by the director of transportation and the governor, expending authority for the approved projects shall be delegated to the development corporation.

[(b) All appropriations for the development of Honolulu harbor by the development corporation shall be received and administered by the department of transportation. The department of transportation shall retain fiscal management and oversight of all project cost expenditures, budget, and contract approvals.]

(b) The harbors modernization group shall have jurisdiction over harbors projects that shall collectively be known as the commercial harbors modernization plan. These harbor projects shall be as follows:

(1) Honolulu harbor. Development of infrastructure, expansion of facilities, and tenant relocations, including the development of the new Kapalama container terminal;

(2) Kahului harbor. Development of infrastructure, expansion of facilities, tenant relocations, and acquisition of lands, including the West harbor barge or ferry slip or both, West harbor dredging and breakwater, West harbor cruise terminal, Pier 1 fuel line replacement and upgrade, East harbor breakwater, and Pier 2B strengthening;

(3) Hilo harbor. Development of infrastructure, expansion of facilities, tenant relocations, and acquisition of lands, including the Pier 4 interisland cargo terminal;

(4) Kawaihae harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including the Pier 2 terminal and barge improvements, Pier 2 extension and terminal, and Pier 4 and liquid bulk terminals;

(5) Kalaeloa harbor. Development of infrastructure, expansion of facilities, tenant relocations, and acquisition of lands, including the West harbor infrastructure, Pier 4 dedicated fuel pier, and extension of the fuel line; and

(6) Nawiliwili harbor. Development of infrastructure, expansion of facilities, tenant relocations, and acquisition of lands, including the new multi-use pier.

(c) For the purposes of this section, the chief executive officer of the development corporation shall have the power to appoint officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76.

(d) Projects identified in the commercial harbors modernization plan involving land disposition matters, including land acquisition, leasing, conveyance, or acquisition of easements or rights-of-ways, shall continue to be under the jurisdiction of the board of land and natural resources pursuant to chapter 171.

(e) The harbors modernization group shall retain all the powers of the development corporation under sections 206J-5 to 206J-21.

(f) Six additional voting members shall, except as otherwise provided in this subsection, be appointed to the development corporation by the governor to comprise the harbors modernization group for four year terms pursuant to chapter 26-34. These members shall act and be counted in determining quorum and majority only with respect to the directing of planning, design, construction, and financing of the harbor projects identified in the commercial harbors modernization plan. A majority of members of the development corporation and four of the six members of the harbor modernization group shall constitute quorum for matters relating to the directing of planning, design, construction, and financing of the harbor projects identified in the commercial harbors modernization plan. Majority of the voting members of the quorum shall be required to validate any act relating to the harbor projects. These members shall serve without compensation, but each member shall be reimbursed for expenses, including travel expenses, incurred in the performance of their duties. These members shall consist of:

(1) The director of the department of budget and finance, or a respective designated representative, who shall serve as an ex officio voting member;

(2) Two public members from the maritime industry who shall be directly involved with a harbor or off-shore mooring facility which is primarily for the movement of commercial cargo, passenger, and fishing vessels entering, leaving, or traveling within the State harbor system, or directly involved with an activity that requires and is directly related to the loading, off-loading, storage, or distribution of goods and services by means of seaborne transportation; and

(3) The mayors of the counties of Hawaii, Maui, and Kauai, or their respective designated representatives, who shall serve as ex-officio voting members.

All members shall continue in office until their respective successors have been appointed. The chairperson of the harbors modernization group shall be the chairperson of the board.

[~~(c)~~](g) Subject to existing contractual and statutory commitments to the department of transportation for any losses in revenue under this chapter, the development corporation may apply any revenues derived from commercial development projects in the Aloha Tower project area to defray the cost of harbor infrastructure improvements incurred within the [~~State.~~] state."

SECTION 4. Section 171-59, Hawaii Revised Statutes, subsection (b) is amended to read as follows:

"(b) Disposition of public lands for airline, aircraft, airport-related, agricultural processing, cattle feed production, aquaculture, marine, maritime, and maritime-related operations may be negotiated without regard to the limitations set forth in subsection (a) and section 171-16(c); provided that:

(1) The disposition encourages competition within the aeronautical, airport-related, agricultural, aquaculture, maritime, and maritime-related industries;

(2) The disposition shall not exceed a maximum term of thirty-five years[~~; and~~] except in the case of maritime and maritime-related operations which may provide for a maximum term of seventy years; and

(3) The method of disposition of public lands for cattle feed production as set forth in this subsection shall not apply after December 31, 1988.

For the purpose of this subsection: "agricultural processing" means the processing of agricultural products, including dairying, grown, raised, or produced in Hawaii, "airport-related" means a purpose or activity that requires air transportation to achieve that purpose or activity, and "maritime-related" means a purpose or activity that requires and is directly related to the loading, off-loading, storage, or distribution of goods and services of the maritime industry.″

SECTION 5. The department of transportation is authorized to issue harbor revenue bonds for harbor capital improvement projects authorized in section 6 of this Act and designated to be financed by revenue bond funds or by general obligation bond funds with debt service cost to be paid from special funds, in such principal amount as shall be required to yield the amounts appropriated for such capital improvement program projects, and, if so determined by the department and approved by the governor, such additional amounts as may be deemed necessary by the department to pay interest on such revenue bonds during the estimated construction period of the capital improvement project for which such harbor revenue bonds are issued to establish, maintain, or increase reserves for the harbor revenue bonds or harbor revenue bonds heretofore authorized (whether authorized and issued or authorized and still unissued), and to pay the expenses of issuance of such bonds. The aforementioned harbor revenue bonds shall be issued pursuant to the provisions of part III of chapter 39, Hawaii Revised Statutes, as the same may be amended from time to time. The principal of and interest on harbor revenue bonds, to the extent not paid from the proceeds of such bonds, shall be payable solely from and secured solely by the revenues derived from harbors and related facilities under the ownership of the State or operated and managed by the department, including rents, mooring, wharfage, dockage, pilotage fees, and other fees or charges presently or hereafter derived from or arising through the ownership, operation, and management of harbor and related facilities and the furnishing and supplying of the services thereof. The expenses of the issuance of such harbor revenue bonds shall, to the extent not paid from the proceeds of such bonds, be paid from the harbor special fund.

The governor, at the governor's discretion, is authorized to use the harbor revenue fund to finance those projects authorized in section 6 of this Act where the method of financing is designated to be by harbor revenue bond funds.

SECTION 6. The following sums, or so much thereof as may be sufficient to accomplish the purposes designated herein, are hereby appropriated or authorized, as the case may be, from the harbor revenue bond funds for the fiscal year beginning July 1, 2008, and ending June 30, 2012. The sums appropriated shall be expended by the department of transportation for the purposes of this Act. The department of transportation, as expending agency, shall delegate to the Aloha Tower development corporation the implementation of the capital improvement projects authorized in this Act and subsequent acts, for the projects identified as the commercial harbors modernization plan described in chapter 206J, Hawaii Revised Statutes. After approval of the project by the director of transportation and the governor, expending authority for the approved projects shall be delegated to the Aloha Tower development corporation. The authorized capital improvement projects are:

1. HMP - Kapalama military reservation improvements, Honolulu harbor, Oahu

Design and construction for the development of a new container terminal facility.

Design $26,900,000

Construction $3,000,000

Total funding $29,900,000

2. HMP – Kalaeloa Barbers Point harbor infrastructure improvements, Oahu

Design of utility and infrastructure improvements.

Design $300,000

Total funding $300,000

3. HMP – Kalaeloa Barbers Point harbor fuel pier improvements, Oahu

Design of new fuel pier and other site related improvements.

Design $6,300,000

Total Funding $6,300,000

4. HMP – Pier 4 interisland cargo terminal, Hilo harbor, Hawaii

Design of additional interisland cargo terminal areas including a pier, yard, roadways, and utilities.

Design $13,400,000

Total Funding $13,400,000

5. HMP – Kahului harbor land acquisition and improvements, Maui

Purchase additional land and subsequent design of improvements for the acquired land.

Land $15,000,000

Design $2,000,000

Total Funding $17,000,000

6. MP – West harbor barge/ferry slip, Kahului harbor, Maui

Design for a new west harbor barge/ferry slip and associated site work improvements.

Design $8,000,000

Total Funding $8,000,000

7. HMP – West harbor dredging and breakwater, Kahului harbor, Maui

Design for west harbor breakwater, dredging and associated improvements.

Design $3,000,000

Total Funding $3,000,000

8. HMP – West harbor cruise terminal Kahului harbor, Maui

Design of a cruise terminal including paving, utilities, security, and other site work improvements.

Design $3,000,000

Total Funding $3,000,000

9. HMP – East harbor breakwater, Kahului harbor, Maui

Design of the east harbor breakwater and related improvements.

Design $3,000,000

Total Funding $3,000,000

10. HMP – Pier 2 improvements, Kahului harbor, Maui

Design of improvements to the pier including strengthening, bollard replacement, dredging, and environmental permitting.

Design $500,000

Total Funding $500,000

11. HMP – Kawaihae harbor development plan, Hawaii

Development plan for improving new terminal cargo facilities at Kawaihae harbor.

Plans $500,000

Total Funding $500,000

12. HMP – Pier 2 terminal improvements, Kawaihae harbor, Hawaii

Design and construction of terminal improvements including and not limited to paving, utilities, relocation of the harbor agent’s office, and interim ferry improvements.

Design $5,000,000

Construction $21,000,000

Total Funding $26,000,000

13 HMP – Pier 4, Kawaihae harbor, Hawaii

Design of a multi user pier 4 and associated site work.

Design $9,000,000

Total Funding $9,000,000

14. HMP – Multi-user pier 4, Nawiliwili harbor

Design of new pier improvements and related site and utility work.

Design $300,000

Total Funding $300,000

15. HMP – Construction management support, statewide

Construction consultant services during construction of harbor modernization plan projects at harbor facilities statewide.

Construction $2,400,000

Total Funding $2,400,000

16. HMP – Harbors division capital improvement program staff cost, statewide

Costs related to wages and fringes for permanent harbor modernization plan project funded positions.

Planning $1,735,000

Total Funding $1,735,000

The appropriations made for capital improvement projects authorized by this Act shall not lapse at the end of the fiscal biennium for which the appropriation is made; provided that all appropriations which are unencumbered as of June 30, 2012, shall lapse as of that date.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval; provided that:

(1) The amendments to section 206J-5.5, Hawaii Revised Statutes, in section 3 of this Act shall be repealed on June 30, 2016, and section 206J-5.5, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act; and

(2) On June 30, 2016, any moneys or funds under the management of the harbors modernization group pursuant to section 206J-5.5, Hawaii Revised Statutes, shall be deposited into the department of transportation harbor special fund.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	3406
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII