Bill Text: HI HB1741 | 2014 | Regular Session | Amended

Hawaii House Bill 1741 (Prior Session Legislation)

Bill Title: Construction; Revolving Fund; Appropriations ($)

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Enrolled - Dead) 2014-04-14 - Received notice of Senate conferees (Sen. Com. No. 677). [HB1741 Detail]

Download: Hawaii-2014-HB1741-Amended.html

HOUSE OF REPRESENTATIVES	H.B. NO.	1741
TWENTY-SEVENTH LEGISLATURE, 2014		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO COUNTY INFRASTRUCTURE CAPACITY BUILDING CONSTRUCTION FINANCING.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature understands that counties and some state agencies have aging and limited infrastructure that have been neglected over time and now require a significant capital improvement investment. An example is the Waikiki sewer line that ruptured on March 24, 2006, after flooding rains. The rupture forced the city and county of Honolulu to divert untreated sewage into the Ala Wai canal. The resulting national media coverage of Waikiki beach being closed due to a sewer spill no doubt had a negative impact on tourism, one of Hawaii's major economic industries.

Another example is the lack of upkeep to maintain the state and county freeways and highways throughout the State. TRIP, a national transportation research group, released a report in October 2013 that found the Honolulu urban area ranks nineteenth among large cities (500,000+) in the annual cost to motorists of driving on rough roads and thirteenth in the percentage of roads in poor condition. The report further noted that "[d]riving on roads in disrepair increases consumer costs by accelerating vehicle deterioration and depreciation, increasing the frequency of needed maintenance and requiring additional fuel consumption," as well as increasing the frequency of water main breaks on Oahu each year.

The legislature finds that orderly and planned infrastructure construction is the foundation for planned population growth and desirable communities. It is a public purpose for which public funds should be appropriated and expended, and infrastructure construction should be coordinated and timed or phased with planned development. Adequate infrastructure to accommodate future growth would provide livable communities with a desirable quality of life, make possible strategically situated affordable housing (for example, near job growth), and allow the transfer of development rights to protect and preserve important agricultural lands by targeting growth to specific areas that have necessary infrastructure capacity to support development. Counties would first determine where development is desirable and then proceed to construct, in coordination with applicable state agencies, the infrastructure to support development in that area, rather than vice versa as is the present practice.

Population increase will occur, and economic growth is necessary, and therefore both should be planned for properly. Prior experience indicates that the lack of adequate infrastructure is a severe constraint to future growth. For example, as Honolulu plans for its new fixed guide-way system, discussion will focus on quality of life issues as the community begins to balance higher densities in and around the transit corridor with the need to protect open space and agricultural areas. Infrastructure capacity must be increased to accommodate higher densities in and around the transit corridor. While this problem is most evident on Oahu, the neighbor islands also suffer from lack of infrastructure capacity to accommodate future growth. It is necessary to assist all counties, in accordance with an orderly and predictable plan for increasing infrastructure capacity, to better utilize existing areas for planned growth and mitigate impacts to areas that are appropriate for growth.

The State could assist the counties by providing a supplemental financing incentive for infrastructure construction wherever and whenever feasible. Although the primary responsibility for basic municipal infrastructure needs continues to reside with the counties, much of the work will not be done if state assistance is not provided. Infrastructure projects included under this Act are regional sewer, water, drainage, roads, and telecommunications and broadband, if a project would increase the capacity to accommodate future growth, and not solely benefit one particular project. Increased capacity is distinguishable from maintenance. While maintenance would increase the life of the facility or infrastructure, only projects that would result in increased infrastructure capacity would be eligible for supplemental funding under this Act.

The State cannot afford to abandon the counties and must provide financial assistance for improving infrastructure. In addition, while the counties have primary jurisdiction over planning and development, development links the State with the counties to several shared responsibilities under the Constitution of the State of Hawaii, including the following:

(1) Article IX, section 6, relating to management of state population growth;

(2) Article XI, section 3, relating to agricultural lands; and

(3) Article XI, section 5 relating to general laws over the lands owned by or under the control of the State.

The purpose of this Act is to create an infrastructure capacity construction loan revolving fund to provide loans to the counties, state agencies, and private developers for infrastructure improvements. Furthermore, the intent of this Act is to allow for innovative financing techniques, such as tax increment financing and improvement districts, to fund the loan based upon the use of the new infrastructure capacity.

SECTION 2. Chapter 36, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . INFRASTRUCTURE CAPACITY FINANCING

§36- Infrastructure capacity construction loan revolving fund. (a) There is established within the state treasury an infrastructure capacity construction loan revolving fund. The revolving fund shall be administered by the department of budget and finance. This section shall be deemed to satisfy the requirements of section 37-52.4.

(b) The infrastructure capacity construction loan revolving fund shall consist of the following sources of revenue:

(1) Moneys received by the department from counties for the repayment of the loan principal and the payment of simple interest; provided that simple interest charged to a county for a loan shall be per cent below the prevailing market rate at the time the loan is made but not less than per cent; provided further that in no event shall the simple interest charged to a county exceed per cent;

(2) Appropriations from the legislature;

(3) Federal grants and subsidies to the State or counties, if any;

(4) Private investor contributions; and

(5) Voluntary contributions.

(c) The department shall expend revenues in the fund to make loans to counties, state agencies, or private developers for the costs, in whole or in part, of infrastructure improvements that would increase the capacity of the infrastructure facilities, including regional sewer, water, drainage systems, roads, and telecommunications and broadband.

Loans shall be made only for capital improvement projects approved by the respective county council or state agency with a view towards planned growth rather than upkeep and maintenance.

(d) Eligible costs shall include those for planning, design, feasibility studies, construction, and materials. No loan shall be made:

(1) For maintenance or repair costs unless the construction would simultaneously increase the carrying capacity of the infrastructure facility; or

(2) Solely for mass transit or electrical utilities.

The department may also expend revenues in the fund to repay private investors for their investment plus any interest accrued on their investments made into the fund to finance, in whole or in part, infrastructure improvements that would increase the capacity of the infrastructure facilities, including regional sewer, water, drainage, roads, and telecommunications and broadband.

(e) The department shall adopt rules in accordance with chapter 91 for the purposes of this section."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2014-2015 for deposit into the infrastructure capacity construction loan revolving fund.

SECTION 4. There is appropriated out of the infrastructure capacity construction loan revolving fund the sum of $ or so much thereof as may be necessary for fiscal year 2014-2015 for the making of loans to the counties, state agencies, or private developers for the costs, in whole or in part, of infrastructure improvements that would increase the capacity of the infrastructure facilities.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2014-2015 for the implementation, administration, and coordination of the infrastructure capacity construction loan revolving fund.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 6. This Act shall take effect on July 1, 2050; provided that sections 3, 4, and 5 shall take effect on July 1, 2014.

Report Title:

Construction; Revolving Fund; Appropriations

Description:

Establishes the infrastructure capacity construction loan revolving fund to provide loans to counties, state agencies, or private developers for infrastructure improvements. Makes appropriations. Effective 7/1/2050. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.