Hawaii-2018-SB431-Introduced

SECTION 1. The legislature finds that the State desperately needs to increase the development and construction of affordable housing units. The legislature passed Act 127, Session Laws of Hawaii 2016, which established a rental housing goal of developing at least 22,500 rental housing units, ready for occupancy between 2017 and 2026. The transit-oriented development associated with the construction of a rail transit system in Honolulu has the potential to fulfill this housing need; however, the potential is currently limited because of the lack of infrastructure on land along the rail transit line. Because the State is the largest landowner of properties along the rail transit line, the State has the opportunity to install the much needed infrastructure to facilitate further development.

The legislature further finds that, Act 130, Session Laws of Hawaii 2016, established an interagency council for transit-oriented development to develop a strategic plan that, among other things, identifies financing and prioritizes state financing for the public infrastructure, facility, and service investments required to support transit-oriented development, mixed use projects, and affordable and rental housing project plans. Therefore, creating a significant source of funding to install the infrastructure to facilitate development will not only increase the affordable housing stock, but also support rail ridership goals by locating denser, mixed use developments along the rail transit line.

The purpose of this Act is to specify that:

(1) 0.5 per cent, rather than 10 per cent, of the gross proceeds of a county's surcharge on state tax shall be used to reimburse the State for costs associated with handling the assessment, collection, and disposition of the county surcharge on state tax; and

(2) The remaining portion of the surcharge retained by the State, 9.5 per cent, shall be used for improvements to infrastructure, street, and trails and bike paths along the rail corridor.

SECTION 2. Section 248-2.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) If adopted by county ordinance, all county surcharges on state tax collected by the director of taxation shall be paid into the state treasury quarterly, within ten working days after collection, and shall be placed by the director of finance in special accounts. Out of the revenues generated by county surcharges on state tax paid into each respective state treasury special account, the director of finance shall deduct [~~ten~~]:

(1) 0.5 per cent of the gross proceeds of a respective county's surcharge on state tax to reimburse the State for the costs of assessment, collection, and disposition of the county surcharge on state tax incurred by the State[~~. Amounts retained shall be general fund realizations of the State.~~]; and

(2) 9.5 per cent of the gross proceeds of a respective county's surcharge on state tax to be used by the State for the following:

(A) Infrastructure improvements to state-owned lands along the rail corridor to enhance opportunities for development of such lands for medium- to high-density mixed use developments that include a significant component of affordable housing; provided that priority for infrastructure improvements shall be given to lands wholly or partially within transit-oriented development zones as defined by the respective county;

(B) Street improvements along the rail corridor, including connectivity, safety, and beautification to encourage walking and bicycling; provided that first priority shall be given to state roads connecting to rail stations, and second priority shall be given to county roads providing necessary connectivity between state roads and rail stations; and

provided that the gross proceeds deducted pursuant to this paragraph may also be used for debt payments for bond funding of improvements described in subparagraphs (A) to (C). For the purposes of this paragraph, "rail corridor" means an area that is within one mile of a rail line of a mass transit project.

(b) The amounts deducted [~~for costs of assessment, collection, and disposition of county surcharges on state tax~~] pursuant to subsection (a) shall be withheld from payment to the counties by the State out of the county surcharges on state tax collected for the current calendar year."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2017.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	431
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII