HB1866 SD1.DOC

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

"§206E-A Assignment of powers and duties prohibited. Notwithstanding anything contained in this chapter to the contrary, the authority shall not assign to any person or agency, including the executive director of the authority, any of its powers and duties related to the approval of any variance, exemption, or modification of any provision of a community development plan or community development rules.

§206E-B Public hearing on variances, exemptions, or modifications; separate hearing required. (a) When considering any developer's proposal to develop lands under the authority's control that includes any request for a variance, exemption, or modification of a community development plan or of the authority's community development rules, the authority shall hear the request for variance, exemption, or modification at a public hearing separate from and subsequent to the hearing at which the developer's proposal was presented; provided that the authority may hear all requests applicable to a single proposal at the same separate public hearing.

(b) The authority shall issue a public notice for the public hearing in accordance with section 1-28.5 and post the notice on its website; provided that the public hearing shall not occur earlier than five business days after the notice is posted.

(c) The authority shall notify the president of the senate and speaker of the house of representatives of any public hearing subject to this section upon posting of the public notice.

(d) The authority's decision on requests subject to this section shall be rendered at the public hearing held pursuant to section 206E-5.6 rendering a decision regarding the developer's proposal.

§206E-C Contested case hearing; intervention. (a) The authority shall adopt rules to provide for intervention in development permit applications, including procedures for contested case hearings.

(b) Procedures for intervention and contested case hearings adopted pursuant to this section shall require:

(1) Final disposition of the hearing prior to the authority's decision on the subject development permit application;

(2) Filing of petitions to intervene no later than twenty days after the subject development permit application is deemed complete; and

(3) The acceptance of testimony from intervenors and individuals other than intervenors."

SECTION 2. Section 171-64.7, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Notwithstanding any law to the contrary, no sale of lands described in subsection (a) in fee simple including land sold for roads and streets, or gift of lands described in subsection (a) in fee simple to the extent such gift is otherwise permitted by law, shall occur without the prior approval of the sale or gift by the legislature by concurrent resolution to be adopted by each house by at least a two-thirds majority vote of the members to which each house is entitled in a regular or special session at which a concurrent resolution is submitted for approval of the sale; provided that the provisions of this section shall not apply to remnants, as that term is defined in section 171-52, or portions thereof; provided further that this section shall not apply to the issuance of licenses, permits, easements, and leases executed in conformance with the laws applicable to the lands listed in subsection (a); provided further that this section shall not apply to non-ceded lands conveyed to the University of Hawaii after December 31, 1989 to which the University of Hawaii holds title[.]; provided further that this section shall not apply to reserved housing, as that term is defined in section 206E-101, conveyed by the Hawaii community development authority."

SECTION 3. Section 206E-4, Hawaii Revised Statutes, is amended to read as follows:

"§206E-4 Powers; generally. Except as otherwise limited by this chapter, the authority 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 chapter;

(4) Make and alter bylaws for its organization and internal management;

(5) Make rules with respect to its projects, operations, properties, and facilities, which rules shall be in conformance with chapter 91;

(6) Through its 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 all designated community development districts;

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

(9) 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, schools, and other public improvements;

(10) By itself, or in partnership with qualified persons, acquire, reacquire, construct, reconstruct, rehabilitate, improve, alter, or 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 that the authority has theretofore sold or otherwise conveyed, transferred, or disposed of;

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

(12) Grant options to purchase any project or to renew any lease entered into by it in connection with any of its projects, on terms and conditions as it deems advisable;

(13) 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 from time to time to modify the plans, specifications, designs, or estimates;

(14) 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 chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(15) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;

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

(17) Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this chapter; and

(18) Allow satisfaction of any affordable housing requirements imposed by the authority upon any proposed development project through the construction of reserved housing, as defined in section 206E-101, by a person on land located outside the geographic boundaries of the authority's jurisdiction; provided that the authority shall [~~not~~] permit [~~any person to make~~] cash payments in lieu of providing reserved housing[~~, except to account for any fractional unit that results after calculating the percentage requirement against residential floor space or total number of units developed~~]. The substituted housing shall be located on the same island as the development project and shall be substantially equal in value to the required reserved housing units that were to be developed on site. The authority shall establish the following priority in the development of reserved housing:

(A) Within the community development district;

(B) Within areas immediately surrounding the community development district;

(D) In outlying areas within the same island as the development project.

The Hawaii community development authority shall adopt rules relating to the approval of reserved housing that are developed outside of a community development district. The rules shall include, but are not limited to, the establishment of guidelines to ensure compliance with the above priorities."

SECTION 4. Section 206E-5.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The authority shall adopt community and public notice procedures pursuant to chapter 91 that shall include at a minimum:

(1) A means to effectively engage the community in which the authority is planning a development project to ensure that community concerns are received and considered by the authority;

(2) The posting of the authority's proposed plans for development of community development districts, public hearing notices, and minutes of its proceedings on the authority's website; [~~and~~]

(3) The posting of every application for a development permit for any project within a community development district on the authority's website when the application is deemed complete;

(4) Notification by the applicant of any application for a development permit for a project valued at $250,000 or more by mail to a list of owners and lessees of record of real property located within a three hundred foot radius of the perimeter of the proposed project compiled from the most current list available from the real property assessment division of the department of budget and fiscal services of the county in which the proposed project is located when the application is deemed complete; provided that notice mailed pursuant to this paragraph shall include but not be limited to notice of:

(A) Project specifications;

(B) Requests for variance, exemption, or modification of a community development plan or the authority's community development rules; and

[~~(3)~~] (5) Any other information that the public may find useful so that it may meaningfully participate in the authority's decision-making processes."

SECTION 5. Section 206E-5.6, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) When rendering a decision regarding:

(1) An amendment to any of the authority's community development rules established pursuant to chapter 91 and section 206E‑7; or

(2) The acceptance of a developer's proposal to develop lands under the authority's control,

the authority shall render its decision at a public hearing separate from the hearing that the proposal under paragraph (1) or (2) was presented[.], subject to the requirements of section 206E-B."

SECTION 6. Section 206E-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-7[]] Community development rules. (a) The authority shall establish community development rules under chapter 91 on health, safety, building, planning, zoning, and land use which, upon final adoption of a community development plan, shall supersede all other inconsistent ordinances and rules relating to the use, zoning, planning, and development of land and construction thereon. Rules adopted under this section shall follow existing law, rules, ordinances, and regulations as closely as is consistent with standards meeting minimum requirements of good design, pleasant amenities, health, safety, and coordinated development. The authority may, in the community development plan or by a community development rule, provide that lands within a community development district shall not be developed beyond existing uses or that improvements thereon shall not be demolished or substantially reconstructed, or provide other restrictions on the use of the lands.

(b) Development rights under a master plan permit and master plan development agreement issued and approved by the authority are vested under the community development district rules in effect at the time of initial approval by the authority and that shall govern development on lands subject to such permit and agreement."

SECTION 7. Section 206E-8, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-8[]] Use of public lands; acquisition of state lands. [~~(a) Any provision of chapter 171 to the contrary notwithstanding, the governor may set aside public lands located within community development districts to the authority for its use.~~

~~(b)~~] (a) If state lands under the control and management of other public agencies are required by the authority for its purposes, the agency having the control and management of those required lands [~~shall,~~] may, upon request by the authority and with the approval of the governor, convey[,] or lease such lands to the authority upon such terms and conditions as may be agreed to by the parties.

[~~(c)~~] (b) Notwithstanding the foregoing, no public lands shall be [~~set aside,~~] conveyed[,] or leased to the authority as above provided if such [~~setting aside,~~] conveyance[,] or lease would impair any covenant between the State or any county or any department or board thereof and the holders of bonds issued by the State or such county, department, or board."

SECTION 8. Section 206E-16, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-16[]] Hawaii community development revolving fund. There is created the Hawaii community development revolving fund into which [~~all~~] receipts and revenues of the authority up to a maximum aggregate amount of $3,641,818 per fiscal year shall be deposited. Amounts exceeding the specified maximum aggregate per fiscal year shall be transferred to the general fund. Proceeds from the fund shall be used for the purposes of this chapter."

SECTION 9. Section 206E-16.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-16.5[]] Expenditures of revolving funds under the authority [~~exempt from~~]; appropriation and allotment. Except as to administrative expenditures, and except as otherwise provided by law, expenditures from any revolving fund administered by the authority may be made by the authority without further appropriation or allotment of the legislature; provided that no expenditure shall be made from and no obligation shall be incurred against any revolving fund in excess of the amount standing to the credit of the fund or for any purpose for which the fund may not lawfully be expended. [~~Nothing~~] Subject to the maximum aggregate amount specified in section 206E-16, nothing in sections 37-31 to 37-41 shall require the proceeds of any revolving fund administered by the authority to be reappropriated annually."

SECTION 10. Section 206E-31.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-31.5[]] Prohibitions. Anything contained in this chapter to the contrary notwithstanding, the authority is prohibited from:

(1) Selling or otherwise assigning the fee simple interest in any lands in the Kakaako community development district to which the authority in its corporate capacity holds title, except with respect to:

(A) Utility easements;

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

(D) Private entities for purposes of any easement, roadway, or infrastructure improvements; or

(E) Reserved housing as defined in section 206E-101; or

(2) Approving any plan or proposal for any residential development in that portion of the Kakaako community development district makai of Ala Moana boulevard and between Kewalo [~~Basin~~] basin and the foreign trade zone."

SECTION 11. Section 206E-33, Hawaii Revised Statutes, is amended to read as follows:

"§206E-33 Kakaako community development district; development guidance policies. The following shall be the development guidance policies generally governing the authority's action in the Kakaako community development district:

(1) Development shall result in a community which permits an appropriate land mixture of residential, commercial, industrial, and other uses. In view of the innovative nature of the mixed use approach, urban design policies should be established to provide guidelines for the public and private sectors in the proper development of this district; while the authority's development responsibilities apply only to the area within the district, the authority may engage in any studies or coordinative activities permitted in this chapter which affect areas lying outside the district, where the authority in its discretion decides that those activities are necessary to implement the intent of this chapter. The studies or coordinative activities shall be limited to facility systems, resident and industrial relocation, and other activities with the counties and appropriate state agencies. The authority may engage in construction activities outside of the district; provided that such construction relates to infrastructure development or residential or business relocation activities; provided further, notwithstanding section 206E-7, that such construction shall comply with the general plan, development plan, ordinances, and rules of the county in which the district is located;

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

(3) Activities shall be located so as to provide primary reliance on public transportation and pedestrian facilities for internal circulation within the district or designated subareas;

(4) Major view planes, view corridors, and other environmental elements such as natural light and prevailing winds, shall be preserved through necessary regulation and design review; provided that no portion of any building or structure shall exceed four hundred eighteen feet in height;

(5) Redevelopment of the district shall be compatible with plans and special districts established for the Hawaii Capital District, and other areas surrounding the Kakaako district;

(6) Historic sites and culturally significant facilities, settings, or locations shall be preserved;

(7) Land use activities within the district, where compatible, shall to the greatest possible extent be mixed horizontally, that is, within blocks or other land areas, and vertically, as integral units of multi-purpose structures;

(8) Residential development may require a mixture of densities, building types, and configurations in accordance with appropriate urban design guidelines; integration both vertically and horizontally of residents of varying incomes, ages, and family groups; and an increased supply of housing for residents of low- or moderate-income may be required as a condition of redevelopment in residential use. Residential development shall provide necessary community facilities, such as open space, parks, community meeting places, child care centers, and other services, within and adjacent to residential development; and

(9) Public facilities within the district shall be planned, located, and developed so as to support the redevelopment policies for the district established by this chapter and plans and rules adopted pursuant to it."

SECTION 12. Section 206E-182, Hawaii Revised Statutes, is amended to read as follows:

"§206E-182 Powers. In addition and supplemental to the powers granted to the authority by law, the authority may:

(1) With the approval of the governor, enter into a special facility lease or an amendment or supplement thereto whereby the authority agrees to construct, acquire, or remodel and furnish or equip a special facility solely for the use by another person to a special facility lease;

(2) With the approval of the governor, issue special facility revenue bonds in principal amounts not to exceed the total amount of bonds authorized by the legislature, that may be necessary to yield all or a portion of the cost of any construction, acquisition, remodeling, furnishing, and equipping of any special facility;

(3) With the approval of the governor, issue refunding special facility revenue bonds, in principal amounts not to exceed the total amount of bonds authorized by the legislature, with which to provide for the payment of outstanding special facility revenue bonds (including any special facility revenue bonds theretofore issued for this purpose) or any part thereof; provided any issuance of refunding special facility revenue bonds shall not reduce the principal amount of the bonds which may be issued as provided in paragraph (2);

(4) Perform and carry out the terms and provisions of any special facility lease;

(5) Notwithstanding section 103-7 or any other law to the contrary, acquire, construct, or remodel and furnish or equip any special facility, or accept the assignment of any contract therefor entered into by the other person to the special facility lease;

(6) Construct any special facility on land owned by the State; provided that no funds derived herein will be expended for land acquisition; and

(7) Agree with the other person to the special facility lease whereby any acquisition, construction, remodeling, furnishing, or equipping of the special facility and the expenditure of moneys therefor shall be undertaken or supervised by another person."

SECTION 13. Section 206E-185, Hawaii Revised Statutes, is amended to read as follows:

"[[]§206E-185[]] Special facility revenue bonds. All special facility revenue bonds authorized to be issued in principal amounts not to exceed the total amount of bonds authorized by the legislature shall be issued pursuant to part III of chapter 39, except as follows:

(1) No revenue bonds shall be issued unless at the time of issuance the authority shall have entered into a special facility lease with respect to the special facility for which the revenue bonds are to be issued;

(2) The revenue bonds shall be issued in the name of the authority, and not in the name of the State;

(3) The revenue bonds shall be payable solely from and secured solely by the revenues derived by the authority from the special facility for which they are issued;

(4) The final maturity date of the revenue bonds shall not be later than either the estimated life of the special facility for which they are issued or the initial term of the special facility lease;

(5) If deemed necessary or advisable by the authority, or to permit the obligations of the other person to the special facility lease to be registered under the U.S. Securities Act of 1933, the authority, with the approval of the director of finance, may appoint a national or state bank within or without the State to serve as trustee for the holders of the revenue bonds and may enter into a trust indenture or trust agreement with the trustee. The trustee may be authorized by the authority to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued and to apply the revenues to the payment of the principal and interest on the revenue bonds. If any trustee shall be appointed, any trust indenture or agreement entered into by the authority with the trustee may contain the covenants and provisions authorized by part III of chapter 39 to be inserted in a resolution adopted or certificate issued, as though the words "resolution" or "certificate" as used in that part read "trust indenture or agreement". The covenants and provisions shall not be required to be included in the resolution or certificate authorizing the issuance of the revenue bonds if included in the trust agreement or indenture. Any resolution or certificate, trust indenture, or trust agreement adopted, issued, or entered into by the authority pursuant to this part may also contain any provisions required for the qualification thereof under the U.S. Trust Indenture Act of 1939. The authority may pledge and assign to the trustee the special facility lease and the rights of the authority including the revenues thereunder;

(6) If the authority, with the approval of the director of finance, shall have appointed or shall appoint a trustee for the holders of the revenue bonds, then notwithstanding the provisions of the second sentence of section 39-68, the director of finance may elect not to serve as fiscal agent for the payment of the principal and interest, and for the purchase, registration, transfer, exchange, and redemption, of the revenue bonds, or may elect to limit the functions the director of finance shall perform as the fiscal agent. The authority, with the approval of the director of finance, may appoint the trustee to serve as the fiscal agent, and may authorize and empower the trustee to perform the functions with respect to payment, purchase, registration, transfer, exchange, and redemption, that the authority may deem necessary, advisable, or expedient, including, without limitation, the holding of the revenue bonds and coupons which have been paid and the supervision and conduction of the destruction thereof in accordance with sections 40-10 and 40-11. Nothing in this paragraph shall be a limitation upon or construed as a limitation upon the powers granted in the preceding paragraph to the authority, with the approval of the director of finance, to appoint the trustee, or granted in sections 36-3 and 39-13 and the third sentence of section 39-68 to the director of finance to appoint the trustee or others, as fiscal agents, paying agents, and registrars for the revenue bonds or to authorize and empower the fiscal agents, paying agents, and registrars to perform the functions referred to in that paragraph and sections, it being the intent of this paragraph to confirm that the director of finance as aforesaid may elect not to serve as fiscal agent for the revenue bonds or may elect to limit the functions the director of finance shall perform as the fiscal agent, that the director of finance may deem necessary, advisable, or expedient;

(7) The authority may sell the revenue bonds either at public or private sale;

(8) If no trustee shall be appointed to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued, the revenues shall be held in a separate account in the treasury of the State, separate and apart from the Hawaii community development revolving fund, to be applied solely to the carrying out of the resolution, certificate, trust indenture, or trust agreement authorizing or securing the revenue bonds;

(9) If the resolution, certificate, trust indenture, or trust agreement shall provide that no revenue bonds issued thereunder shall be valid or obligatory for any purpose unless certified or authenticated by the trustee for the holders of the revenue bonds, signatures of the officers of the State upon the bonds required by section 39-56 may be facsimiles of their signatures;

(10) Proceeds of the revenue bonds may be used and applied by the authority to reimburse the other person to the special facility lease for all preliminary costs and expenses, including architectural and legal costs; and

(11) If the special facility lease shall require the other person to operate, maintain, and repair the special facility which is the subject of the lease, at the other person's expense, the requirement shall constitute compliance by the authority with section 39‑61(a)(2), and none of the revenues derived by the authority from the special facility shall be required to be applied to the purposes of section 39‑62(2). Sections 39-62(4), 39-62(5), and 39-62(6) shall not apply to the revenues derived from a special facility lease."

SECTION 14. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 15. 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 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 17. This Act shall take effect on July 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	1866
TWENTY-SEVENTH LEGISLATURE, 2014		H.D. 2
STATE OF HAWAII		S.D. 1