2011-1763 HB389 SD1 SMA

PART I

SECTION 1. The legislature finds that there is an area in the Heeia ahupua'a, which is located in Koolaupoko, Oahu, in close proximity to the Heeia fishpond that is commonly known as the "Heeia wetlands". The Heeia wetlands, consisting of approximately four hundred five acres, were acquired by the Hawaii community development authority on July 2, 1991, by assuming the buyer's position in an existing purchase agreement and folding it into an exchange agreement with Kamehameha Schools. This transaction provided Kamehameha Schools with what is now the makai gateway park and the parcel of land commonly known as the "Honolulu Ford parcel" in addition to $11,667,917 in public facility credits in exchange for the Heeia wetlands.

Approximately eighty acres adjacent to the Heeia wetlands were added into the acquisition and subsequently reconveyed to Kamehameha Schools in 1994, in accordance with the terms of the original exchange agreement, when the Hawaii housing finance and development corporation declined to use it for the development of affordable housing. This eighty-acre parcel is included in the new Heeia community development district. Kakoo Oiwi, a Hawaii nonprofit corporation, approached the Hawaii community development authority to request a long-term lease to restore the wetlands, eliminate invasive species, and establish an agricultural and educational center that will contribute to the community at large. A thirty-eight year lease was granted to Kakoo Oiwi in March 2010 for these purposes.

The purpose of this part is to establish the Heeia community development district to develop culturally appropriate agriculture, education, and natural-resource restoration and management of the Heeia wetlands.

SECTION 2. Chapter 206E, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . HEEIA COMMUNITY DEVELOPMENT DISTRICT

§206E- Definitions. As used in this part:

"District" means the Heeia community development district.

"Fund" means the Heeia community development revolving fund.

§206E- District established; boundaries. (a) The Heeia community development district is hereby established. The district shall include that area within the boundaries described as follows: the southern boundary begins at the residential portion of lands owned by the Kamehameha Schools and runs west to Kahekili highway and east to Kamehameha highway. The northern boundary borders the McCabe property where it runs west to Kahekili highway and east to Kamehameha highway. The tax map key numbers are 4-6-16:001 and 4-6-16:002 (owned by the authority), 4-6-16:036 (owned by Kamehameha Schools), and 4‑6‑16:004, 011, 012, and 017 (owned by various owners of kuleana parcels).

(b) The authority shall serve as the local redevelopment authority of the district to facilitate culturally appropriate agriculture, education, and natural-resource restoration and management of the Heeia wetlands, in alignment with the Honolulu board of water supply's most current "Koolau Poko Watershed Management Plan" and the city and county of Honolulu's most current "Koolaupoko Sustainable Communities Plan". In addition to any other of its duties under this chapter, the authority shall:

(1) Consult with the following persons and entities:

(A) Recorded landowners in the district;

(B) Recorded landowners in section 6 of zone 4 of the first tax map key division;

(D) Kailua neighborhood board;

(E) Kahaluu neighborhood board; and

(F) Kaneohe neighborhood board,

to implement activities related to and supportive of cultural practices, agriculture, education, and natural-resource restoration and management;

(2) Assist land users to manage their properties and implement activities related to and supportive of cultural practices, agriculture, education, and natural-resource restoration and management;

(3) Work with federal, state, county, and other agencies to ensure that infrastructural support is provided for the district;

(4) Develop the infrastructure necessary to support the implementation of the Heeia community development district master plan; and

(5) Provide, to the extent feasible, maximum opportunity for the restoration and implementation of sustainable, culturally appropriate, biologically responsible, or agriculturally beneficial enterprises.

(c) Three additional voting members shall, except as otherwise provided in this subsection, be appointed to the authority by the governor pursuant to section 26-34 to represent the district. These three members shall be considered in determining quorum and majority only on issues relating to the district and may vote only on issues related to the district. The three members shall be residents of the district or the Koolaupoko district which consists of section 1 through 9 of zone 4 of the first tax map key division.

§206E- Heeia community development district; policies to guide development. The following general policies to guide development shall govern the authority's actions in the district:

(1) Development shall be in accordance with the Heeia master plan, except as it conflicts with the Hawaii State Constitution and the Hawaii Revised Statutes;

(2) With the approval of the governor, and in accordance with law, the authority, upon the concurrence of a majority of its voting members, may modify and make changes to the Heeia master plan to respond to changing conditions; provided that prior to amending the Heeia master plan, the authority shall conduct a public meeting pursuant to chapter 92 to inform the public of the proposed changes and receive public input;

(3) The authority shall provide, to the extent feasible, maximum opportunity for the restoration and implementation of sustainable, culturally appropriate, biologically responsible, or agriculturally beneficial enterprises;

(4) The authority may engage in planning, design, and construction activities within and outside the district; provided that activities outside the district shall relate to infrastructural development, area-wide drainage improvements and sediment transport mitigation, roadway realignments and improvements, and other activities the authority deems necessary to carry out redevelopment of the district and implement this part. Studies or coordinating activities may be undertaken by the authority in conjunction with the county and appropriate federal and state agencies and may address infrastructural systems, natural-resource systems, and other activities;

(5) Planning, replanning, rehabilitation, development, redevelopment, and other preparations for the restoration of cultural practices, education, natural resources, and agriculture related activities shall be pursued;

(6) Hawaiian archaeological, historic, and cultural sites shall be preserved and protected to the extent feasible while allowing for continued use of the property for cultural activities, education, agricultural and economic pursuits, and natural-resource restoration;

(7) Endangered species of flora and fauna shall be preserved and protected to the extent feasible;

(8) Land use and redevelopment activities within the district shall be coordinated with and, to the extent possible, complement existing county and state policies, plans, and programs affecting the district;

(9) Public facilities within the district shall be planned, located, and developed to support the redevelopment policies established by this part for the district, the master plan approved by the governor, and rules adopted pursuant to this chapter; and

(10) Special management area permit administration for the district shall continue to be under the authority of the city and county of Honolulu.

§206E- Heeia community development revolving fund. (a) There is established in the state treasury the Heeia community development revolving fund, into which shall be deposited:

(1) All revenues, income, and receipts of the authority for the district, notwithstanding any other law to the contrary, including section 206E-16;

(2) Moneys directed, allocated, or disbursed to the district from government agencies or private individuals or organizations, including grants, gifts, awards, donations, and assessments of landowners for costs to administer and operate the district; and

(3) Moneys appropriated to the fund by the legislature.

(b) Moneys in the fund shall be used only for the purposes of this part.

§206E- Rules; adoption. The authority shall adopt rules in accordance with chapter 91 to carry out the purposes of this part."

PART II

SECTION 3. Chapter 205, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . TRANSFERABLE DEVELOPMENT RIGHTS

§205-A Short title. This part is to be known and may be cited as the "Transfer of Development Rights Program" or the "TDR Program".

§205-B Purpose. The purposes of this part include:

(1) Preserving open space, scenic views, critical and sensitive areas, and natural hazard areas;

(2) Conserving agricultural land, including important agricultural lands;

(3) Protecting lands and structures of aesthetic, architectural, and historic significance;

(4) Preventing or deterring urban sprawl into agricultural lands;

(5) Ensuring that the owners of agricultural lands may make reasonable use of their property rights by transferring their right to develop to eligible zones in urban areas;

(6) Providing a mechanism whereby development rights may be reliably transferred; and

(7) Ensuring that development rights are transferred to properties in certain urban areas or districts that have adequate community facilities, including infrastructure, to accommodate additional development.

§205-C Definitions. As used in this part:

"Density" or "net density" means the result of multiplying the net area in acres times 43,560 square feet per acre and then dividing the product by the required minimum number of square feet per dwelling unit required by the zoning ordinance or state statute for a specific use district. Density or net density is expressed as dwelling units per acre or per net acre.

"Development rights" means the development potential of real property that can be removed from the real property to which it is appurtenant and transferred to other real property to increase the amount of development allowed on the other real property. For purposes of this definition, development potential specifically comprises the rights of the owner of a parcel of land, under land development regulations, to configure that parcel and the structures thereon to a particular density for residential uses or floor area ratio for nonresidential uses, and specifically excludes uses allowable on the lot or parcel. Development rights include transferable development rights.

"Floor area" means the area of all floors of a structure excluding unroofed areas, measured from the exterior faces of the exterior walls or from the center line of party walls dividing a structure. The floor area of a structure, or portion thereof, that is not enclosed by exterior walls shall be the area under the covering, roof, or floor above that is supported by posts, columns, partial walls, or similar structural members which define the wall line. Excluded from the floor area are:

(1) Parking structures, including covered driveways and accessways, porte cocheres, and parking attendant booths;

(2) Attic areas with head room less than seven feet;

(3) Basements;

(4) Lanais;

(5) Projections such as sunshade devices and architectural embellishments which are decorative only;

(6) Areas covered by roofing treatment to screen roof top machinery only; and

(7) Areas underneath unsupported building overhangs, provided the area is not otherwise enclosed.

Floor area includes the floor area of accessory buildings and structures.

"Floor area ratio" means the ratio of floor area to total area of the zoning lot expressed as a per cent or decimal. Where rounding of numbers is necessary to determine floor area ratio, the nearest one-hundredth shall be used. Multiplying the permissible floor area ratio by the lot area of the zoning lot determines the maximum floor area permitted.

"Net area" means the total area of a site for residential or nonresidential development, excluding street rights-of-way and other publicly dedicated improvements, such as parks, open space, and stormwater detention and retention facilities, and easements, covenants, or deed restrictions that prohibit the construction of building on any part of the site. Net area is expressed in either acres or square feet.

"Receiving district" means one or more districts in which the development rights of parcels in the sending district may be used.

"Receiving property" means a lot or parcel of land in the receiving district that is the subject of a transfer of development rights, where the owner of the receiving property is receiving transferable development rights from a sending property, and on which increased density, increased intensity, or both, is allowed by reason of the transfer of development rights.

"Sending district" means one or more districts in which the development rights of parcels in the district may be designated for use in one or more receiving districts.

"Sending property" means a parcel of land in the sending district that is the subject of a transfer of development rights, where the owner of the parcel is conveying development rights of the parcel, and on which those rights so conveyed are extinguished and may not be used by reason of the transfer of development rights.

"Severance of development rights" means the process by which development rights from a sending property are severed and extinguished pursuant to this part.

"Transfer of development rights" means the procedure prescribed by this part whereby the owner of a lot or parcel in the sending district may convey development rights to the owner of a lot or parcel in the receiving district, whereby the development rights so conveyed are extinguished on the sending property, affixed to the receiving property as an appurtenant real property interest that runs with the land, and may be thereafter exercised on the receiving property in addition to the development rights already existing regarding that lot or parcel.

"Transferable development rights" means all or that portion of development rights that are transferred or are transferable pursuant to this part.

"Transferee" means the person or legal entity that owns property in a receiving district, who purchases the transferable development rights.

"Transferor" means the landowner of a lot or parcel in a sending district.

"Zoning agency" means the state or county agency responsible for enacting ordinances or adopting administrative rules governing the development rights for specific real property.

§205-D Sending district and sending properties; description. (a) All land within the agricultural state land use district shall comprise the sending district.

(b) Any landowner of land within the sending district may convey the land's development rights under this part, subject to the restrictions in this part.

§205-E Receiving districts and receiving properties; description. (a) The receiving district shall be land within the urban state land use district on which is allowed multi-family dwellings, commercial, industrial, business, or mixed use as permitted uses by the applicable zoning agency. No land on which is allowed only single-family dwellings by the applicable zoning agency shall be within the receiving district. Each zoning agency shall cause its official zoning district map and general plan to be amended by depicting the qualifying areas as overlay districts to the affected properties. The designation "TDR-R" shall be the title of the overlay for a receiving district.

(b) A receiving property may increase its density up to the maximum density and intensity described in section 205-G. If a proposed receiving property has already met or exceeded this maximum density or intensity allowable for the receiving property by the applicable zoning agency, then the proposed receiving property may not receive transferable development rights pursuant to this part. A receiving property may use only the development rights permitted in accordance with the zoning regulations applicable to the receiving property and must meet all other development requirements under state law and county ordinances, and any rules adopted thereunder.

(c) No amendment to the zoning map, ordinance, statute, or rules, nor any amendments to the text of the zoning ordinance, statute, or rules, with respect to the zoning district applicable thereto, initiated by the zoning agency that eliminate or materially restrict, reduce, or downzone the uses or the density of uses permitted in the zoning district applicable to any property to which development rights have been transferred, shall be effective with respect to such property unless there has been mistake, fraud, or a material change in circumstances substantially affecting the public health, safety, or welfare.

§205-F Right to transfer development rights. (a) Each transferor shall have the right to sever all or a portion of the development rights from a sending property owned by the transferor in a sending district and to sell, trade, or barter all or a portion of those rights to a transferee consistent with the requirements of this part.

(b) Upon transfer of development rights from a sending property, the transferee may apply them to the transferee's receiving property in a receiving district in order to obtain approval for development at a density or intensity of use greater than would otherwise be allowed on the land, up to the maximum density or intensity indicated in section 205-G.

§205-G Maximum density and intensity allowed through transfer of development rights. (a) The maximum increase in residential density on a receiving property is one hundred per cent of the number of residential dwelling units otherwise permissible by the zoning agency for the receiving property; provided that for any receiving property that is otherwise permitted by the zoning agency to construct ten residential dwelling units, the maximum increase in residential density on a receiving property is fifty per cent of the number of residential dwelling units otherwise permissible by the zoning agency for the receiving property.

(b) The maximum increase in the floor area of commercial, industrial, business, mixed-use, or other uses in the receiving areas and on receiving properties is fifty per cent of the floor area ratio otherwise permissible by the zoning agency for the receiving property.

§205-H Conversion of development rights; density formula. (a) The authority to construct one single-family dwelling unit that is authorized by right by the applicable zoning agency on a sending property shall equal one dwelling unit for the receiving property. The authority to construct one single-family dwelling unit that is authorized by right by the applicable zoning agency on a sending property shall equal 1,500 square feet of floor area, for purposes of calculating transferable development rights for the receiving property when the density of the receiving property is measured by floor area by the receiving property's zoning agency.

(b) Notwithstanding subsection (a), when the sending property and the receiving property are located in the same county, then the ratio above shall be increased by twenty-five per cent, such that a receiving property receives 1.25 dwelling units for one dwelling unit transferred from a sending property, and a receiving property receives 1,875 square feet of floor area for one dwelling unit transferred from a sending property.

(c) For any county that determines allowable density by stating the minimum building site area and does not authorize more than one dwelling unit on the building site even if the lot is more than twice the minimum building site area, the number of single-family dwellings allowed by the zoning agency shall be measured by dividing the lot by the minimum building site area.

(d) The authority to construct an ohana dwelling on the sending property shall not be a development right that may be transferable under this part.

(e) If the applicable zoning agency will only approve a second dwelling unit on the sending property:

(1) Subject to conditions, such as a farm plan, that are not required for the first dwelling unit on the sending property; or

(2) Subject to limitations on square footage that are not required for the first dwelling unit on the sending property,

then the authority to construct the second dwelling on the sending property shall not be a development right that may be transferable under this part.

(f) Any zoning agency may give an additional density bonus, similar to the density bonus described in subsection (b), for the transfer of development rights into a specific portion of the receiving district under the jurisdiction of the zoning agency which may be better served by increasing the area's density. Any designation of an area under this subsection shall be consistent with the community or development plan for the area.

§205-I Residual use of sending property. (a) After the severance of a sending property's transferable development rights, a sending property may be used to generate one or more forms of renewable energy, as otherwise allowed by law, subject to the requirements or conditions of the applicable zoning agency.

(b) The declaration described in section 205-M shall further describe the residual uses of the sending property.

§205-J Zoning agency; transferable development rights certificates; duties. Each zoning agency shall be responsible for:

(1) Determining, upon application by a transferor, the development rights that may be transferred from a sending property within a sending district to a property in a receiving district and issuing a transfer of development rights certificate upon application by the transferor;

(2) Determining, upon application by a transferee, whether the development rights described in a certificate issued to a transferor may be affixed to the transferee's receiving property within a receiving district, or whether the rights described exceed the maximum density of the receiving property, and issuing a transfer of development rights certificate upon application by the transferee;

(3) Countersigning the deed and declaration described in section 205-M, provided that a transfer of development rights certificate and a receipt of development rights certificate for the sending and receiving properties have been validly issued by the applicable zoning agency or agencies;

(4) Maintaining permanent records of all certificates issued, deeds conveying transferable development rights from a sending property to a receiving property, declaration of transferable development rights, and development rights retired or otherwise extinguished and transferred to specific properties; and

(5) Making available forms on which to apply for a transfer of development rights certificate and receipt of development rights certificate.

§205-K Determination of development rights; issuance of certificate for transferor. (a) An application for a transfer of development rights certificate shall contain:

(1) A completed application form;

(2) A title report for the sending property dated not later than forty-five days prior to the date of the application;

(3) A description of the state land use district in which the sending property is located, the sending property's zoning designation, and whether the sending property has used any of its allowable development rights;

(4) A statement of the type and number of development rights in terms of density or floor area ratio being transferred from the sending property, and calculations showing their determination;

(5) Applicable fees; and

(6) Any other additional information required by the zoning agency as necessary to determine the number of development rights that qualify for transfer.

(b) A transfer of development rights certificate shall identify:

(1) The transferor;

(2) The transferee, if known;

(3) A legal description of the sending property on which the calculation of development rights is based;

(4) A statement of the number of development rights in either dwelling units per net acre or square feet of nonresidential floor area eligible for transfer;

(5) The date of issuance; and

(6) The signature of the director or head of the zoning agency.

(c) All development rights shall be calculated to the nearest whole number. For example, any fractional calculation as to development rights must be converted upward if the result is one-half or more of a whole unit, or converted downward if the result is less than one-half of a whole unit, rounded to the nearest whole unit.

(d) After receiving and considering a complete application for a determination of compliance, the zoning agency shall provide a written determination stating the number of residential development rights available for severance from the sending property.

§205-L Receipt of development rights; issuance of certificate for transferee. (a) An application for receipt of development rights certificate shall contain:

(1) A completed application form;

(2) A title report for the receiving property dated not later than forty-five days prior to the date of the application;

(3) A transfer of development rights certificate for the sending property issued by the zoning agency for the sending property;

(4) A description of the state land use district in which receiving property is located, the receiving property's zoning designation, and whether the receiving property has used any of its allowable development rights;

(5) Applicable fees;

(6) Copies of the deed and declaration described in section 205-M that are executed by the transferor and the transferee; and

(7) Any other additional information required to the zoning agency as necessary to confirm that the transfer of development rights is authorized.

(b) A receipt of development rights certificate shall identify:

(1) The transferor;

(2) The transferee;

(3) A legal description of the receiving property and a statement that the development rights to be transferred may be affixed to the receiving property without exceeding the maximum density allowable for the receiving property;

(4) A statement of the number of development rights in either dwelling units per net acre or square feet of nonresidential floor area eligible for transfer;

(5) The date of issuance; and

(6) The signature of the director or head of the zoning agency.

(c) After receiving and considering a complete application for a determination of compliance, the zoning agency shall provide a written determination stating that the development rights to be transferred may be affixed to the receiving property without exceeding the maximum density allowable for the receiving property. Additionally, the zoning agency shall countersign the deed and the declaration described in section 205‑M and return the deed and declaration to the transferee for recording or filing pursuant to section 205-M.

§205-M Instruments of transfer. (a) A transfer of development rights shall be effectuated by the concurrent recordation in the bureau of conveyances or the filing in the office of the assistant registrar of the land court, as applicable, of the following documents:

(1) A deed entitled "Deed; Transferable Development Rights"; and

(2) A declaration entitled "Declaration; Transferable Development Rights".

(b) The deed shall convey the transferable development rights described in the transfer of development rights certificate and the receipt of development rights certificate. The deed shall contain a legal description of the sending property and the receiving property, shall be countersigned by the zoning agency that has jurisdiction over the receiving property, and shall have attached as exhibits the applicable transfer of development rights certificate and the applicable receipt of development rights certificate. The deed shall be recorded in the bureau of conveyances or filed in the office of the assistant registrar of the land court, as applicable.

(c) Concurrently with the recordation of the deed described in subsection (b), the owner of the sending real property shall record in the bureau of conveyances or the land court, as applicable, the declaration described in subsection (a). The declaration shall contain a legal description of the sending property and the receiving property, shall be countersigned by the zoning agency that has jurisdiction over the receiving property, and shall have attached as exhibits the applicable transfer of development rights certificate and the applicable receipt of development rights certificate. The declaration shall also contain a description of residual uses of the sending real property. The declaration shall run with the land and shall permanently remove the transferable development rights from the sending property.

(d) Transferable development rights conveyed pursuant to this part shall be interests in real property and shall be considered as such for purposes of conveyance and taxation. Once the deed and the declaration described in this section have been recorded in the bureau of conveyances or filed in the office of the assistant registrar of the land court, as applicable, the transferable development rights shall vest in the transferee and thereafter may be transferred to a successor in interest, provided that the transaction meets all of the requirements of this part.

(e) For purposes of the title to the receiving property, the transferable development rights shall constitute an appurtenant real property right that runs with the land and, upon recordation or filing described in this section, shall be affixed to the receiving property. The transferable development rights shall not be conveyed separately from the receiving property, unless the rights are conveyed to another receiving property at which point the transferable development rights shall become appurtenant to the subsequent receiving property.

(f) For purposes of the title to the sending property, the transferable development rights shall constitute an encumbrance on the title of the sending property that runs with the land."

SECTION 4. Chapter 501, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§501- Transfer of transferable development rights. Notwithstanding section 501-109, transferable development rights, pursuant to part of chapter 205, received by a receiving property shall be considered an appurtenant real property right that runs with the land, and shall be reflected on the title of the registered land of the receiving property, as defined in section 205-C, in this manner. A declaration filed in accordance with section 205-M shall be treated as an encumbrance on the title of the registered land of the sending property, as defined in section 205-C, for purposes of this chapter. The deed and the declaration described in section 205‑M shall be filed concurrently, however, the deed shall not be recorded without a corresponding declaration. The deed and the declaration shall correspond to the requirements described in section 205-M and shall have the exhibits described in section 205-M attached. The certificates attached to the deed and declaration shall refer to the correct sending and receiving properties, and the transferable development rights referred to in the certificates and in the deed and declaration shall be consistent."

SECTION 5. Chapter 502, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§502‑ Transfer of transferable development rights. For purposes of this chapter, transferable development rights, pursuant to part of chapter 205, received by a receiving property shall be considered an appurtenant real property right that runs with the land, and shall be reflected on the title of the receiving property, as defined in section 205-C, in this manner. A declaration recorded in accordance with section 205‑M shall be treated as an encumbrance on the title of the sending property, as defined in section 205-C, for purposes of this chapter. The deed and the declaration described in section 205‑M shall be recorded concurrently, however, the deed shall not be recorded without a corresponding declaration. The deed and the declaration shall correspond to the requirements described in section 205-M and shall have the exhibits described in section 205-M attached. The certificates attached to the deed and declaration shall refer to the correct sending and receiving properties, and the transferable development rights referred to in the certificates and in the deed and declaration shall be consistent."

PART III

SECTION 6. In codifying the new sections added by section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	389
TWENTY-SIXTH LEGISLATURE, 2011		H.D. 3
STATE OF HAWAII		S.D. 1
		Proposed