SB3227

PART I

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,~~] State, the harbors division of the department of transportation must provide suitable harbor facilities[,] and birthing piers, which in turn ensures the efficient and timely delivery and shipment of goods imported into the [~~state.~~] State. Ocean surface transportation is the 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 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 harbor 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 harbor 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.

In consideration of the recognition by the key harbor users, the administration, and the legislature that extraordinary means must be employed to catch up on deferred harbor infrastructure development, 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 the 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 171-59, Hawaii Revised Statutes, is amended by amending subsection (b) 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[;], except in the case of the 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 3. Section 206J-2, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Maritime industry" means that the member of the development corporation board or harbors modernization group board designated as from the maritime industry is directly involved with a harbor or off-shore mooring facility that 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."

SECTION 4. 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 under 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.~~

(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.] 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) The harbors modernization group shall have jurisdiction over the harbors projects listed below that shall be known as the commercial harbors modernization plan collectively:

(1) Honolulu harbor. Development of infrastructure, expansion of facilities and tenant relocations, including but not limited to, the development of the new Kapalama container terminal;

(2) Kahului harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including but not limited to, west harbor barge-ferry slip, west harbor dredging and breakwater, west harbor cruise terminal, pier 1 fuel line replacement-upgrade, east harbor breakwater, and pier 2b strengthening;

(3) Hana harbor. Development of infrastructure, demolition, as necessary, and expansion of facilities, acquisition of lands;

(4) Hilo harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including but not limited to, pier 4 interisland cargo terminal;

(5) Kawaihae harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including but not limited to, pier 2 terminal and barge improvements, pier 2 extension and terminal, pier 4 and liquid bulk terminals;

(6) Kalaeloa harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including but not limited to, west harbor infrastructure, pier 4 dedicated fuel pier, and extension of fuel line; and

(7) Nawiliwili harbor. Development of infrastructure, expansion of facilities, tenant relocations, acquisition of lands, including but not limited to, a new multi-use pier.

(c) For the purpose 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) The harbors modernization group shall include additional members to the development corporation board of directors for the purpose of directing the planning, design, construction, and financing of the harbor projects identified in the commercial harbors modernization plan. Should projects identified in the commercial harbors modernization plan involve land disposition matters, including but not limited to, land acquisition, leasing, conveyance or acquisition of easements or rights-of-ways, such land disposition matters shall continue to be governed under chapter 171, under the jurisdiction of the board of land and natural resources.

(e) The harbors modernization group shall retain all the powers of the Aloha Tower development corporation under sections 206J-5 through 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 section 26‑34. These members shall act and be counted in determining quorum and majority only with respect to duties under the harbors modernization group as described in section (d). Quorum and majority for the harbors modernization group shall be defined as a majority of members from the development corporation plus four of the six members added by this subsection to form the harbors modernization group. 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 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; 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 development corporation.

[~~(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.

(h) Any moneys or funds under the management of the harbors modernization group shall be deposited into the harbor special fund pursuant to section 266-19 upon the repeal of this section."

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, in 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 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. After approval of the project by the director of transportation and the governor, expending authority for the approved projects shall be delegated to the development corporation.

1. HMP – Kapalama military reservation improvements, Honolulu harbor

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. HMP – Hana harbor, Maui

Development of infrastructure, demolition, as necessary, and expansion of facilities

Total funding $20,000,000

7. HMP – 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

8. 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

9. 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

10. 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

11. 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

12. HMP – Kawaihae harbor development plan, Hawaii

Development plan for improving new terminal cargo facilities at Kawaihae harbor

Plans $500,000

Total funding $500,000

13. 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

14. 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

15. 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

16. 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

17. 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.

PART II

SECTION 7. Chapter 266, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§266- Hana ramp and wharf; jurisdiction. Any law to the contrary notwithstanding, the department of transportation shall have jurisdiction and administrative authority over the previously operational pier portion of the area designated as Hana ramp and wharf; provided that the portion of the Hana ramp that is utilized as a small boat ramp facility and maintained by the department of land and natural resources shall remain under the control of the department of land and natural resources pursuant to part I of chapter 200. This area is located on the easterly end of the island of Maui, fifty-nine miles from Kahului and consists of one pier and one ramp."

SECTION 8. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of land and natural resources relating to the functions transferred to the department of transportation shall be transferred with the functions to which they relate.

PART III

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon approval; provided that part I of this Act shall be repealed on June 30, 2016, and sections 206J-2 and 206J-5.5, Hawaii Revised Statutes,

are reenacted in the form in which they read on the day before the effective date of this Act.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3227
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII