THE SENATE
S.B. NO.
1326
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Act 184, Session Laws of Hawaii 2022 (Act 184), which established transit‑oriented development infrastructure improvement districts, could be more efficient. The transit-oriented development infrastructure improvement districts were comprised of the land within county-designated transit-oriented development zones or within a one-half mile radius of a proposed or existing transit station if the county has not designated transit-oriented development zones, as designated by the board. Act 184 also established the transit-oriented development infrastructure improvement district boards for each county, under the Hawaii community development authority for administrative purposes. To date these boards have not been constituted, due in part to a lack of community volunteers willing to serve.
The purpose of this Act is to streamline transit-oriented development infrastructure improvements by making chapter 206E, part X, Hawaii Revised Statutes, a program under the Hawaii community development authority and making additional consistent revisions to chapter 206E, Hawaii Revised Statutes.
SECTION 2. Section 206E-1, Hawaii Revised Statutes, is amended to read as follows:
"§206E-1 Findings and purpose. The legislature finds that many areas of the State are substantially undeveloped, blighted, or economically depressed, and are or are potentially in need of renewal, renovation, or improvement to alleviate such conditions as dilapidation, deterioration, age, and other such factors or conditions [[Struck through: which]] [Underlined: that] make such areas an economic or social liability.
The legislature further finds that there exists within the State vast, unmet community development needs. These include, but are not limited to, a lack of suitable affordable housing; insufficient commercial and industrial facilities for rent; residential areas [[Struck through: which]] [Underlined: that] do not have facilities necessary for basic liveability, such as parks and open space; [[Struck through: and]] areas [[Struck through: which]] [Underlined: that] are planned for extensive land allocation to one, rather than mixed uses[[Struck through: .]][Underlined: ; a lack of infrastructure necessary to facilitate community development; and insufficient culturally appropriate agriculture, education, and natural-resource restoration and management.]
It is further determined that the lack of planning and coordination in such areas has given rise to these community development needs and that existing laws and public and private mechanisms have either proven incapable or inadequate to facilitate timely redevelopment and renewal[[Struck through: .]][Underlined: , or restoration and management, as the case may be.]
The legislature finds that a new and comprehensive authority for community development must be created to join the strengths of private enterprise, public development, and regulation into a new form capable of long-range planning and implementation of improved community development. The purpose of this chapter is to establish such a mechanism in the Hawaii community development authority, which is a public entity [[Struck through: which]] [Underlined: that] shall determine community development programs [Underlined: and projects] and cooperate with private enterprise and the various components of federal, state, and county governments in bringing plans [Underlined: and projects] to fruition. [[Struck through: For such areas designated as community development districts, the]] [Underlined: The] legislature believes that the planning and implementation [[Struck through: program]] [Underlined: expertise] of the Hawaii community development authority will result in communities [[Struck through: which]] [Underlined: that] serve the highest needs and aspirations of Hawaii's people.
The legislature finds that the creation of the Hawaii community development authority, the establishment of community development districts[[Struck through: , and]] [Underlined: and program areas,] the issuance of bonds pursuant to this chapter to finance public facilities[Underlined: , and the ability of the Hawaii community development authority to cooperate with or assist public and private sector entities to engage in projects that improve the State,] serve the public interest and are matters of statewide concern."
SECTION 3. Chapter 206E, part X, Hawaii Revised Statutes, is amended to read as follows:
"[[Struck through: []]Part X.[[Struck through: ]]] Transit-oriented development infrastructure improvement [[Struck through: district]] [Underlined: Program]
[[Struck through: []]§206E-241[[Struck through: ]]] Findings and purpose. The legislature finds that construction, installation, and improvement of certain infrastructure is necessary and desirable to facilitate renewal and redevelopment of areas designated by the State and the counties for transit-oriented development. Transit-oriented development is a powerful tool that can ultimately deliver a wide range of social, environmental, and economic benefits. Transit-oriented development promotes development patterns that support quality of life, preserves the natural environment, provides a range of housing choices for residents, and encourages walking, biking, and use of mass transit. The State plays an important role in overcoming barriers to transit‑oriented development, including encouraging needed investments in improving regional infrastructure such as roads, sewers, water, power, communication, and storm water management systems. This part is intended to move transit-oriented development planning efforts forward into infrastructure improvements that benefit the community. The legislature further finds that, currently, no single state agency has the authority to improve infrastructure along a transit corridor in the best interest of the State. This part will enable the delivery of infrastructure needed to support development on lands within designated transit-oriented development zones.
Accordingly, [[Struck through: the purpose of this part is to establish]] [Underlined: there is established the] transit-oriented development infrastructure improvement [[Struck through: districts]] [Underlined: program to be administered by the authority] to foster community development by strategically investing in infrastructure improvements.
[[Struck through: []]§206E-242[[Struck through: ]]] Definitions. As used in this part:
[[Struck through: "Board" means the transit-oriented development infrastructure improvement district board.]
[Struck through: "District" means the transit-oriented development infrastructure improvement district within each county-designated transit-oriented development zone, or within a one-half mile radius of a proposed or existing transit station if the county has not designated transit-oriented development zones, as determined by the board.]][Struck through: ]
"Fund" means the transit-oriented development infrastructure improvement [[Struck through: district]] [Underlined: program] special fund established under section 206E-247.
"Program" means the transit-oriented development infrastructure improvement [[Struck through: district]] program developed by the [[Struck through: board]] [Underlined: authority] pursuant to section 206E-246.
[[Struck through: []]§206E-243[[Struck through: ] District established; boundaries.]] [Underlined: Transit-oriented development infrastructure improvement program areas; established][Underlined: .] [[Struck through: (a) The transit-oriented development infrastructure improvement district is hereby established under the authority.]
[Struck through: (b)]] The [[Struck through: district]] [Underlined: transit-oriented development infrastructure improvement program areas] shall comprise the parcels of land [Underlined: either] within county-designated transit-oriented development zones, or within a one-half mile radius of a proposed or existing transit station if the county has not designated transit-oriented development zones, as determined by the [[Struck through: board,]] [Underlined: authority,] which shall take into account proximity, walkability, adopted county plans, and other relevant factors[[Struck through: ;] [Struck through: provided that in a county with a population in excess of five hundred thousand, a transit-oriented development zone shall include a rail station or a planned rail station]]. The [[Struck through: district]] [Underlined: program areas] shall include all parcels of land of which any portion of the parcels are located within the county-designated transit-oriented development zones, or within a one-half mile radius around proposed or existing transit stations if the county has not designated transit-oriented development zones.
[[Struck through: [§206E-244] Transit-oriented development infrastructure improvement district board; established; members; terms; vacancies. ][Struck through: (a) There is established the transit-oriented development infrastructure improvement district board, which shall be placed under the authority within the department of business, economic development, and tourism for administrative purposes. The board shall carry out the duties and responsibilities as set forth in this part.]
[Struck through: (b) The board shall consist of the following voting members:]
[Struck through: (1)] [Struck through: The director of finance or the director's designee;]
[Struck through: (2)] [Struck through: The director of transportation or the director's designee;]
[Struck through: (3)] [Struck through: The director of the office of planning and sustainable development or the director's designee;]
[Struck through: (4)] [Struck through: The director of planning and permitting of the county in which each district is located or the director's designee; and]
[Struck through: (5)] [Struck through: The following members, who shall be appointed by the governor pursuant to section 26-34:]
[Struck through: (A)] [Struck through: A cultural specialist;]
[Struck through: (B)] [Struck through: An at-large member, to be selected from a list of three nominees submitted by the president of the senate;]
[Struck through: (C)][Struck through: An at-large member, to be selected from a list of three nominees submitted by the speaker of the house of representatives;]
[Struck through: (D)] [Struck through: A resident of the county where the district is located, to be selected from a list of three nominees submitted by the president of the senate; and]
[Struck through: (E)][Struck through: A resident of the county where the district is located, to be selected from a list of three nominees submitted by the speaker of the house of representatives.]
[Struck through: (c) The terms of the appointed members shall be for four years, commencing on July 1 and expiring on June 30; provided that the governor shall provide for staggered terms of the initially appointed members so that the initial terms of one at-large member and one district member selected by lot shall be for three years, the initial terms of one at-large member and one district member selected by lot shall be for four years, and the term of the cultural specialist shall be for two years.]
[Struck through: (d) If a vacancy occurs, a member shall be appointed to fill the vacancy in the same manner as the original appointment within thirty days of the vacancy or within ten days of the senate's rejection of a previous appointment, as applicable.]
[Struck through: (e) The terms of the director of finance, director of transportation, director of the office of planning and sustainable development, and the county directors of planning and permitting, or their respective designees, shall run concurrently with each director's term of office.]
[Struck through: (f) Notwithstanding section 92-15, a majority of all eligible voting members as specified in this section shall constitute a quorum to do business, and the concurrence of a majority of all eligible voting members present shall be necessary to make any action of the board valid. All members shall continue in office until their respective successors have been appointed and received advice and consent of the senate. Except as provided herein, no member appointed under this section shall be an officer or employee of the State or its political subdivisions.]
[Struck through: (g) The members of the board shall serve without compensation but each shall be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.]
[Struck through: [§206E-245] Transit-oriented development infrastructure improvement district board; powers; generally. ][Struck through: Except as otherwise limited by this part, with respect to the development, construction, and improvement of infrastructure within the districts, the board may:]
[Struck through: (1)] [Struck through: Establish and administer districts and programs;]
[Struck through: (2)] [Struck through: Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this part;]
[Struck through: (3)] [Struck through: Prepare or cause to be prepared an infrastructure improvement plan for the district;]
[Struck through: (4)] [Struck through: Acquire, reacquire, or contract to acquire or reacquire, by grant or purchase, real, personal, or mixed property, or any interest therein, and own, hold, clear, improve, rehabilitate, sell, assign, exchange, transfer, convey, lease, or otherwise dispose of or encumber the same;]
[Struck through: (5)] [Struck through: Acquire or reacquire by condemnation real, personal, or mixed property, or any interest therein, for infrastructure improvement;]
[Struck through: (6)] [Struck through: 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 infrastructure and own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of or encumber any infrastructure improvement;]
[Struck through: (7)] [Struck through: Arrange or contract for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, or other places, or the furnishing of facilities, or for the acquisition of property or property rights, or for the furnishing of property or services in connection with an infrastructure improvement project;]
[Struck through: (8)] [Struck through: Prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any infrastructure improvement project, and, from to time, modify the plans, specifications, designs, or estimates of any infrastructure improvement project;]
[Struck through: (9)] [Struck through: 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;]
[Struck through: (10)] [Struck through: Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;]
[Struck through: (11)] [Struck through: Contract for and accept gifts or grants in any form from any public agency or from any other source; and]
[Struck through: (12)] [Struck through: Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this part.]
[Struck through: []]§206E-246[[Struck through: ]]] Transit-oriented development infrastructure improvement [[Struck through: district]] program; assessment; rules. (a) The [[Struck through: board]] [Underlined: authority] shall develop a transit-oriented development infrastructure improvement [[Struck through: district]] program to identify infrastructure improvements within each [[Struck through: district.]] [Underlined: program area.] In determining the required infrastructure improvements to be undertaken, the [[Struck through: board]] [Underlined: authority] shall consider the strategic plan prepared [Underlined: and the prioritization of transit-oriented development projects established] by the Hawaii interagency council for transit-oriented development pursuant to section 226-63(c) and subsequent plans and studies prepared [Underlined: by, or approved by, an appropriate governmental agency] to further implement the strategic plan and the transit-oriented development projects therein.
(b) [[Struck through: Whenever the board determines to undertake, or causes to be undertaken, any infrastructure improvement as part of the program,]] [Underlined: The authority may assess all beneficiaries of the program a user fee for their fair share of] the cost of providing [[Struck through: the]] [Underlined: any] infrastructure improvement [Underlined: the user] may be [[Struck through: assessed against the real property in each district]] specially benefiting from [[Struck through: the infrastructure improvement]]. The [[Struck through: board]] [Underlined: authority] shall determine the [Underlined: program] areas [[Struck through: of each district]] that will benefit from the infrastructure improvement to be undertaken, and if less than the entire [[Struck through: district]] [Underlined: transit-oriented development zone] benefits, the [[Struck through: board]] [Underlined: authority] may establish [[Struck through: assessment]] [Underlined: user fee] areas within the [[Struck through: district.]] [Underlined: program area.] The [[Struck through: board]] [Underlined: authority] may issue and sell bonds in amounts as may be authorized by the legislature to provide funds to finance the infrastructure improvements. [[Struck through: The ][Struck through: board may fix the assessments against real property specially benefited. All assessments made pursuant to this section shall be a statutory lien against each lot or parcel of land assessed from the date of the notice declaring the assessment until the assessment is paid, and the lien shall have priority over all other liens except the lien of property taxes. As between liens of assessments, the earlier lien shall be superior to the later lien.]]
(c) Bonds issued to provide funds to finance transit-oriented development infrastructure improvements shall be secured [[Struck through: solely by the real properties benefited or improved, the assessments thereon,]] [Underlined: in a manner to be determined through the bond issuance process,] or the revenues derived from the program for which the bonds are issued, including reserve accounts and earnings thereon, insurance proceeds, and other revenues, or any combination thereof. The bonds may be additionally secured by the pledge or assignment of loans and other agreements or any note or other undertaking, obligation, or property held by the [[Struck through: board.]] [Underlined: authority.] Bonds issued pursuant to this section and the income therefrom shall be exempt from all state and county taxation, except transfer and estate taxes. The bonds shall be issued subject to rules adopted by the [[Struck through: board]] [Underlined: authority] pursuant to this section.
[[Struck through: (d) Notwithstanding any other law to the contrary, in assessing real property for transit-oriented development infrastructure improvement, the ][Struck through: board shall assess the real property within an assessment area according to the special benefits conferred upon the real property by the infrastructure improvement. These methods may include assessment on a frontage basis or according to the area of real property within an assessment area or any other assessment method that assesses the real property according to the special benefit conferred, or any combination thereof. No assessment levied against real property specially benefited as provided by this part shall constitute a tax on real property within the meanings of any constitutional or statutory provisions. No assessment shall be levied against real property owned by the federal government, the State, or a county, or an agency thereof, without the prior written consent of the owner.]
[Struck through: (e)]] [Underlined: (d)] The [[Struck through: board shall]] [Underlined: authority may] adopt rules [Underlined: for the purposes of this part] pursuant to chapter 91[Underlined: , and] to provide for the method of undertaking and financing transit-oriented development infrastructure improvement in [[Struck through: an assessment area or an entire district.]] [Underlined: a program area or transit-oriented development zone.] [[Struck through: The rules adopted pursuant to this section shall include but not be limited to:]
[Struck through: (1)] [Struck through: The methods by which the board shall establish assessment areas;]
[Struck through: (2)] [Struck through: The method of assessment of real properties specially benefited;]
[Struck through: (3)] [Struck through: The costs to be borne by the board, the county in which districts are situated, and the property owners;]
[Struck through: (4)] [Struck through: The procedures before the board relating to the creation of the assessment areas by the owners of real property therein, including provisions for petitions, bids, contracts, bonds, and notices;]
[Struck through: (5)] [Struck through: Provisions relating to assessments;]
[Struck through: (6)] [Struck through: Provisions relating to financing, including bonds, revolving funds, advances from available funds, special funds for payment of bonds, payment of principal and interest, and sale and use of the bonds;]
[Struck through: (7)] [Struck through: Provisions relating to funds and refunding of outstanding debts;]
[Struck through: (8)] [Struck through: Provisions relating to limitations on time to sue; and]
[Struck through: (9)] [Struck through: Other related provisions.]
[Struck through: (f)]] [Underlined: (e)] Notwithstanding any other provisions to the contrary, the [[Struck through: board]] [Underlined: authority] may, in its discretion, enter into any agreement with the county in which the [[Struck through: districts]] [Underlined: program areas] are located to implement all or part of the purposes of this section.
[[Struck through: (g)]] [Underlined: (f)] All sums collected under this section shall be deposited into the transit-oriented development infrastructure improvement [[Struck through: district]] [Underlined: program] special fund established under section 206E-247 and shall be applied solely to:
(1) The payment of the principal and interest on the bonds and the cost of administering, operating, and maintaining the program;
(2) The establishment of reserves; and
(3) Other purposes as may be authorized in the proceedings providing for the issuance of the bonds.
If any surplus remains in the fund after the payment of the bonds chargeable against the fund, it shall be credited to and become a part of the fund.
[[Struck through: (h)]] [Underlined: (g)] The transit-oriented development infrastructure improvements [[Struck through: to be financed through bonds issued by the ][Struck through: board]] may be dedicated to the county in which the infrastructure improvements are to be located. The [[Struck through: board]] [Underlined: authority] shall ensure that the infrastructure improvements are designed and constructed to meet county requirements and shall enter into an agreement with the county for dedication of the public facilities.
[[Struck through: (i)]] [Underlined: (h)] Notwithstanding any law to the contrary, whenever it becomes necessary to remove, relocate, replace, or reconstruct public utility facilities that are part of a program, the [[Struck through: board]] [Underlined: authority] shall establish by rule the allocation of cost between the [[Struck through: board,]] [Underlined: authority,] the affected public utilities, and the [[Struck through: properties]] [Underlined: users] that may specially benefit from the improvement, if any. In determining the allocation of cost, the [[Struck through: board]] [Underlined: authority] shall consider the cost allocation policies for districts established by the county in which the removal, relocation, replacement, or reconstruction is to take place.
[[Struck through: []]§206E-247[[Struck through: ]]] Transit-oriented development infrastructure improvement [[Struck through: district]] [Underlined: program] special fund. (a) There is established in the state treasury the transit-oriented development infrastructure improvement [[Struck through: district]] [Underlined: program] special fund, into which shall be deposited:
(1) All revenues, income, and receipts from the transit‑oriented development infrastructure improvement [[Struck through: district]] program;
(2) Moneys directed, allocated, or disbursed to the [[Struck through: district]] [Underlined: program] from government agencies or private individuals or organizations, including grants, gifts, awards, [Underlined: and] donations[[Struck through: , and assessments of landowners]] for costs to administer and operate the [[Struck through: district;]] [Underlined: program;]
(3) [[Struck through: Assessments]] [Underlined: User fees] collected under section 206E‑246; and
(4) Moneys appropriated to the fund by the legislature.
(b) Moneys in the fund shall be used only for the purposes of this part.
(c) Investment earnings credited to the assets of the fund shall become part of the fund.
[Underlined: §206E-247.1] [Underlined: Condemnation of real property.] [Underlined: The authority, upon making a finding that it is necessary to acquire any real property for its immediate or future use for the purposes of this part, may acquire the property, including property already devoted to a public use, by condemnation pursuant to chapter 101. The property shall not thereafter be taken for any other public use without the consent of the authority. No award of compensation shall be increased by reason of any increase in the value of real property caused by the designation of the transit-oriented development infrastructure improvement program areas, or the actual or proposed acquisition, use, or disposition of any other real property by the authority.]
[[Struck through: []]§206E-248[[Struck through: ]]] Memorandum of agreement. The [[Struck through: board]] [Underlined: authority] may execute memoranda of agreement with appropriate governmental agencies[[Struck through: .]] [Underlined: for purposes of this part.]
[[Struck through: []]§206E-249[[Struck through: ]]] Annual comprehensive report. The [[Struck through: board]] [Underlined: authority] shall submit an annual comprehensive report on the progress of [[Struck through: development within]] the [[Struck through: district]] [Underlined: program] to the legislature no later than twenty days prior to the convening of each regular session."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
INTRODUCED BY:
_____________________________
BY REQUEST
Report Title:
Transit-Oriented Development Infrastructure Improvement Program; HCDA; Department of Business, Economic Development, and Tourism; Program
Description:
Authorizes the Hawaii Community Development Authority to cooperate with or assist public and private sector entities to engage in projects that improve the State. Establishes the transit-oriented development infrastructure improvement program. Repeals the transit-oriented development infrastructure improvement district and board, under chapter 206E, part X, HRS. Makes additional consistent revisions to chapter 206E.
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