HB2366.DOC

SECTION 1. Chapter 206E, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . EAST HAWAII community development district

§206E-A East Hawaii community development district; purpose. The legislature finds that:

(1) There is an area in east Hawaii that is in need of renewal, renovation, or improvement to enhance the economic and social value of the area to the State;

(2) The Banyan Drive area contains about eighty-five per cent of the overnight visitor accommodations in east Hawaii;

(3) The Kanoelehua industrial area of east Hawaii is in need of improvement to alleviate conditions such as dilapidation, deterioration, and age;

(4) There has been little incentive for the lessees of the properties in the area to make major investments in improvements to their infrastructure, resulting in the deterioration of the area's infrastructure and facilities; and

(5) The State has a responsibility to ensure that the east Hawaii area does not deteriorate and have a harmful impact on the economy of the east Hawaii community as a whole.

The authority, through the east Hawaii community development district board, shall plan a district where hotel and resort, industrial, commercial, residential, and public uses may coexist compatibly within the same area.

§206E-B East Hawaii community development district board; established. (a) There is established the east Hawaii community development district board which shall be a body corporate and a public instrumentality of the State for the purpose of implementing this part.

(b) The east Hawaii community development district board shall consist of eleven voting members; provided that:

(1) Ten public voting members shall be appointed by the governor for staggered terms pursuant to section 26-34;

(2) The director of planning of the county of Hawaii shall be an ex officio voting member;

(3) The members shall be residents of the county of Hawaii and have knowledge, experience, and expertise in land economics, development, real estate, business, finance, marketing, management, and the visitor industry. At least two members shall be representatives of businesses located within the boundaries of the designated district; and

(4) Three members shall be appointed by the governor from a list of three names submitted for each appointment by the president of the senate, and three members shall be appointed by the governor from a list of three names submitted for each appointment by the speaker of the house of representatives; provided that if fewer than three names are submitted for each appointment, the governor may disregard the list.

(d) Seven members shall constitute a quorum and a minimum of seven affirmative votes shall be necessary for all actions by the board. The members shall serve without compensation, but shall be reimbursed for expenses, including traveling expenses, necessary for the performance of their duties.

(e) The board shall appoint an executive director who shall be exempt from chapters 76 and 78.

(f) As used in this part, "board" means the east Hawaii community development district board.

§206E-C Powers; generally. Except as otherwise limited by this chapter, the board may:

(1) Sue and be sued;

(2) Have a seal and alter the same at pleasure;

(3) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this part;

(4) Adopt and amend bylaws for its organization and internal management;

(5) Adopt rules with respect to its projects, operations, properties, and facilities in accordance with chapter 91;

(6) Through the executive director, appoint officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76;

(7) Prepare or cause to be prepared a community development plan for the east Hawaii community development district;

(8) Exercise the powers of the Hawaii community development authority within the east Hawaii community development district;

(9) Acquire, reacquire, contract to acquire or reacquire, own, hold, clear, improve, rehabilitate, sell, assign, exchange, transfer, convey, lease, or otherwise dispose of or encumber by grant or purchase real, personal, or mixed property or any interest therein;

(10) Acquire or reacquire by condemnation real, personal, or mixed property or any interest therein for public facilities, including but not limited to streets, sidewalks, parks, and other public improvements;

(11) By itself, or in partnership with qualified persons, acquire, reacquire, construct, reconstruct, rehabilitate, improve, alter, repair, or provide for the construction, reconstruction, improvement, alteration, or repair of any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of or encumber any project, and in the case of the sale of any project, accept a purchase money mortgage in connection therewith; and repurchase or otherwise acquire any project which the authority has theretofore sold or otherwise conveyed, transferred, or disposed of;

(12) Arrange or contract for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, or other places; the furnishing of facilities; the acquisition of property or property rights; or the furnishing of property or services in connection with a project;

(13) Grant options to purchase any project or to renew any lease entered into by the board in connection with any of the board's projects, on such terms and conditions as the board deems advisable;

(14) Prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project, and modify from time to time the plans, specifications, designs, or estimates;

(15) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, to carry out the purposes of this part, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(16) Procure insurance against any loss in connection with the board's property and other assets and operations in such amounts and from such insurers as it deems desirable;

(17) Contract for and accept gifts or grants in any form from any public agency or from any other source;

(18) Do any and all things necessary to carry out the board's purposes and exercise the powers given and granted in this part; and

(19) Authorize assistance and assist the public land development corporation established by section 171C-3 in identifying public lands that may be suitable for development, carrying on marketing analysis to determine the best revenue-generating programs for the public lands identified, entering into public-private agreements to appropriately develop the public lands identified, and providing leadership for the development, financing, improvement, or enhancement of the selected development opportunities.

§206E-D Prohibitions. Notwithstanding any provision of this chapter to the contrary, the board is prohibited from selling or otherwise assigning the fee simple interest in any lands in the east Hawaii community development district to which the board in its corporate capacity holds title, except with respect to:

(1) Utility easements;

(2) Remnants as defined in section 171-52;

(3) Grants to any state or county department or agency; or

(4) Private entities for purposes of any easement, roadway, or infrastructure improvements.

§206E-E East Hawaii community development district; boundaries. The east Hawaii community development district shall include the area bounded by the shoreline from the intersection of Lihiwai Street and Mamalahoa Highway; Mamalahoa Highway to where it becomes Kamehameha Avenue; Kamehameha Avenue to its intersection with Keaa Street; Keaa Street from its intersection with Kamehameha Avenue to its intersection with Kalanianaole Avenue; Kalanianaole Avenue to Kumai Street; Kumai Street to its intersection with Ocean View Drive; the north end of Ocean View Drive to the shoreline; and the shoreline from the north end of Ocean View Drive to the intersection of Lihiwai Street and Mamalahoa Highway.

§206E-F Development guidance policies. The following shall be the development guidance policies generally governing any board action in the east Hawaii community development district:

(1) The board may engage in planning, design, and construction activities relating to infrastructure development and other activities the board determines to be necessary to carry out a mixed use approach according to policies that provide guidelines for public and private development in the district. The board may also engage in any studies or activities that affect areas outside the district where the board in its discretion decides that those activities are necessary to implement the intent of this part;

(2) Existing and future commercial, industrial, resort, hotel, and business uses shall be permitted and encouraged in appropriate locations within the district. No plan or implementation strategy shall prevent continued activity or redevelopment of existing uses which meet reasonable performance standards;

(3) 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;

(4) Public facilities within the district shall be planned, located, and developed to support the redevelopment policies established by this part for the district; and

(5) Historic sites and culturally significant facilities, settings, or locations shall be preserved.

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

(1) Notwithstanding section 206E-16, all revenues, income, and receipts for the east Hawaii community development district;

(2) Moneys directed, allocated, or disbursed to the east Hawaii community development district from government agencies, 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 east Hawaii community development revolving fund shall be used solely for the purposes of this part.

(c) All interest accruing from the investment of the moneys in the fund shall be credited to the east Hawaii community development revolving fund."

SECTION 2. Section 206E-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The authority shall consist of thirteen voting members. The director of finance, the director of business, economic development, and tourism, the comptroller, and the director of transportation, or their respective designated representatives shall serve as ex officio, voting members. One member shall be appointed by the governor from a list of not less than three prospective appointees submitted by the president of the senate, and one member shall be appointed by the governor from a list of not less than three prospective appointees submitted by the speaker of the house of representatives. Seven members shall be appointed by the governor for staggered terms pursuant to section 26-34; provided that four members shall be appointed at large and, initially, three members, hereinafter referred to as county members, shall be selected from a list of ten prospective appointees recommended by the local governing body of the county in which the initial designated district is situated; and provided further that when vacancies occur in any of the three positions for which the members were selected from a list of county recommendations, the governor shall fill such vacancies on the basis of one from a list of four recommendations, two from a list of seven recommendations, or three from a list of ten recommendations. The list of recommendations shall be made by the local governing body of the county.

Of the nine members appointed either by the governor from the lists provided by the president of the senate and speaker of the house, at-large by the governor, or as county members recommended by the local governing body of the county in which the initial designated district is situated, at least two members shall represent small businesses and shall be designated as the small business representatives on the board whose purpose, among other things, is to vote on matters before the board that affect small businesses. The small business representatives shall be owners or active managers of a small business with its principal place of operation located within the physical boundaries of the initial designated district. Notwithstanding section 84-14(a), the small business representatives shall not be prohibited from voting on any matter concerning any district under the board's jurisdiction; provided that the matter is not limited to solely benefiting the specific interest of that member and the matter concerns broader interests within the district.

If an additional district is designated by the legislature, the total membership of the authority shall be increased as prescribed above by the appointment of three additional members, except as provided for in [~~section~~] sections 206E-191[.] and 206E-B. Notwithstanding section 92-15, a majority of all members shall constitute a quorum to do business, and the concurrence of a majority of all members shall be necessary to make any action of the authority valid; except that, on any matter relating solely to a specific community development district, the members representing districts other than that specific community development district shall neither vote, nor shall they be counted to constitute a quorum, and concurrence shall be required of a majority of that portion of the authority made up of all ex officio voting members, members at large, and county and district members representing the district for which action is being proposed for such action to be valid. All members shall continue in office until their respective successors have been appointed and qualified. Except as herein provided, no member appointed under this subsection shall be an officer or employee of the State or its political subdivisions.

For [[]purposes[]] of this section, "small business" means a business which is independently owned and which is not dominant in its field of operation."

SECTION 3. The department of land and natural resources shall deed to the east Hawaii community development district board the leases for the public lands within the east Hawaii community development district, including lands covered by the fifteen leases in the Banyan Drive resort area, the ten leases covering three resort facilities (Naniloa Volcanoes Resort, Hilo Bay Hotel, and Hilo Hawaiian Hotel), the three leases for each of three apartment or condominium facilities (Country Club Hawaii Condo Hotel, Bayview Banyan, and Reed's Bay Resort Hotel), one golf course lease, and one restaurant lease.

SECTION 4. (a) The powers, functions, and duties of the department of land and natural resources relating to the leases in the east Hawaii community development district are transferred to the east Hawaii community development district board.

(b) All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the department of land and natural resources which are reenacted or made applicable to the east Hawaii community development district board by this Act shall remain in full force and effect. Effective July 1, 2012, every reference to the department of land and natural resources or the board of land and natural resources in the documents that pertain to the east Hawaii community development district board shall be construed as a reference to the east Hawaii community development district board.

SECTION 5. In codifying the new sections added by section 1 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 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2012.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2366
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII