Editor’s Note—Here is One Paragraph of the “Numerous new language regarding … OHA” in SB3104SD1:

§201H-   Residential projects on state lands; requirements. (a) The corporation shall transfer to the department of Hawaiian home lands or the office of Hawaiian affairs, housing units in residential projects developed on state lands set aside by the governor or leased by any state department or agency to the corporation as described in section 171-2(6); provided that the corporation shall establish rules pursuant to chapter 91 to determine the number of units or percentage of units to be transferred to the department of Hawaiian home lands or to the office of Hawaiian affairs; provided further that the corporation may not grant certificates of occupancy for any units prior to the implementation of these rules.

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Joint legislative package bills on schools facilities agency and affordable housing move out of committees

News Release from Senate Democratic Caucus, Feb 14, 2020

HONOLULU – On Feb. 12, 2020, in decision-making hearings, the Senate Committees on Education, and Water and Land, approved two bills, with amendments, that are part of the 2020 joint legislative package to provide real economic benefits for Hawai‘i’s working-class families and individuals.

Senate Bill 3104 was amended and passed the Water and Land Committee 5-0, two voting with reservations. The bill also passed the Senate Committee on Housing on Feb. 11.

The amendments include:

• Adding a requirement under Part II for the Hawaii Housing Finance and Development Corporation (HHFDC) to submit a program to the Legislature by December 31, 2020, to address various concerns raised in testimony including, but not limited to, ending the housing shortage by producing enough supply to meet demand of Hawaii residents; ensuring the lowest sales price possible; that development be limited to Hawaii residents and owner-occupants who own no other real property; maximizing walkability and minimizing private vehicles and traffic; minimizing short-term rentals; inclusion of Native Hawaiians; the enforcement of Chapter 104 for construction of leasehold property; maximizing availability to Hawaii residents at all income levels; producing a demonstration project; minimizing the financial burden to state taxpayers; ensuring excellence of maintenance and repairs; prioritizing neighbors and residents impacted by the development; and preventing windfall profits to buyers who resell their units.
• Add land set aside to HHFDC to HRS 171-64.7 to ensure legislative approval for alienation of the fee interest in state lands.
• Require “majority of development” to refer to the square footage of the development.
• Require “affordable housing” on page 11, line 20, with a three-part requirement for Hawaii residents, owner-occupants, and own no other real property, in perpetuity.
• Give the Housing Advocate the power to set aside lands from a state agency to a housing agency (HHFDC, the Hawaii Public Housing Authority [HPHA], and the Department of Hawaiian Home Lands [DHHL]), subject to legislative approval.
• Set a defect date.
• Clarify that county authority does not extend to conservation districts. DBAs will be limited to lands contiguous to the urban district.
• Add language requiring the transfer of units to the Office of Hawaiian Affairs/DHHL.
• All the units will be priced to be affordable to families making 80% of Area Median Income, provided that no income restrictions or first-time homebuyer requirements apply.
• Replace Section 3 with an amendment to HRS 171-2 to exempt real property set aside by the Governor or leased by any state department or agency for a period not to exceed 99 years.
• Request that the appropriation language in Section 6 be broadened to provide HHFDC with the added flexibility to fund those regional infrastructure projects that will enable the completion of housing projects as quickly as possible, including lands located within one mile of a rail transit station.
• HHFDC will require at least three full-time project manager positions to oversee the infrastructure work funded by this bill.
• Numerous new language regarding the HHFDC, HPHA, Office of Planning, OHA, the University of Hawaii, Office of the Ombudsman, Department of Agriculture, Land Use Commission, and Hawaiian Community Assets.

In its original form, the legislation authorizes the HHFDC to lease real property for a period not to exceed 99 years for the development of certain projects that include affordable housing.

It requires the HHFDC to submit a report to the legislature that identifies all state lands that may be developed for multi-unit dwellings. The bill authorizes the issuance of $200 million in general obligation bonds, with the proceeds used for the establishment of infrastructure to support the development of housing on lands near the University of Hawaiʻi West Oahu campus.

Senate Bill 3104 authorizes the issuance of $75 million in general obligation bonds, with the proceeds used for affordable housing infrastructure in counties with a resident population of 500,000 or less. It authorizes a state or county department or agency to petition the appropriate county land use decision-making authority, rather than the Land Use Commission, for a change in the boundary of a district involving land areas between 15 acres and 25 acres where the majority of the development will be for affordable housing.

The bill authorizes the State Historic Preservation Division to delegate the responsibility of historic preservation project reviews to the impacted county. It establishes the Office of the Housing Ombudsman, and removes the existing statutory cap on the amount of conveyance tax revenues that are deposited into the rental housing revolving fund each fiscal year.

The Committee on Housing is chaired by Senator Stanley Chang, with Senator Michelle Kidani chairing the Committee on Education, and Senator Kaiali‘i Kahele chairing the Committee on Water and Land.

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Senate Bill 3103 was amended and passed the Water and Land Committee 4-0. The bill also passed the Senate Committee on Education on Feb. 11.

The amendments include:

• Amending the powers of the agency to be able to hold title.
• Reducing the size of the board of the School Facilities Agency from 11 to 7 members.
• Inserting language prohibiting board members from having a financial stake in an entity that bids on projects authorized by the Agency or from having bid on a project within the last 12 months.
• Placing the agency board under the Sunshine Law requirements.
• Removing language moving the 3Rs program to the School Facilities Agency.
• Removing language moving the 3Ts program to the School Facilities Agency.
• Deleting the Special Education Facilities Improvement Fund and moving any remaining balance under the newly created School Facilities Special Fund.
• Allowing the Agency to issue their own bond financing.
• Allow the Agency to enter into public-private partnerships.
• Require that any construction or renovation projects for school lands that are adjacent to or have Hawaii State Public Library facilities on them consult with the Hawaii State Public Library System prior to project approval.
• Include the amendment suggested by the Department of Land and Natural Resources that would revert any lands not used for educational purposes.
• Include the Attorney General’s amendments for special fund conformity with Internal Revenue Service law.
• Include protections from the procurement code against bid-shopping.
• Include a Qualification Based Selection process for professional service contracts as currently outlined in 103-D.
• Taking the Ethics Commission’s recommendation to clarify the gifts and disclosure requirements are intended to be for gifts and contributions to the special fund and not employees who will still fall under current guidelines. It also takes the commission’s recommendation to delete the financial disclosure exemption.

In its original form, the legislation establishes the School Facilities Agency to be responsible for all public school development, planning, and construction, related to capital improvement projects assigned by the Legislature, Governor, or Board of Education. The agency transfers statutes pertaining to the Hawaii 3Rs and 3Ts programs to a new School Facilities Agency statutory subpart, places management of school impact fees with the agency, and appropriates funds.