HB756 HD2

SECTION 1. The legislature finds that managed retreat is the shifting of development inland from the coast either by the physical movement of structures or changing the restrictions and management of coastal areas. Managed retreat in Hawaii will be an essential tool for relocating development away from areas that are critically impacted by coastal erosion and flooding with sea level rise, particularly in areas with high natural and community resource value. The legislature further finds that in 2019, the office of planning and sustainable development completed a study that assessed the feasibility and implications of managed retreat strategies for vulnerable coastal areas in Hawaii. The study had the following recommendations:

(1) Determine the feasibility and implications of additional managed retreat tools, such as transfer of development rights;

(2) Establish criteria for areas to be retreated from and priority lists;

(3) Identify funding for retreat;

(4) Review state and county land use to determine possible locations to which to retreat;

(5) Review state and county plans to determine whether amendments or updates are necessary to support retreat;

(6) Review laws and regulations to determine whether amendments or adoption are necessary to facilitate retreat; and

(7) Conduct outreach to obtain community input and buy-in for retreat strategies.

The legislature further finds that transferring development rights and land exchanges are useful techniques to achieve managed retreat strategies by voluntarily shifting development away from areas that are critically threatened by sea level rise, including areas with particularly high natural and community resource value. To help achieve this goal, the legislature enacted Act 223, Session Laws of Hawaii 2022, which expanded the authority of the counties to regulate the transfer of development rights to protect areas vulnerable to sea level rise, coastal erosion, storm surge, and flooding, thereby facilitating the potential movement of development away from at-risk areas to locations more appropriate for development.

The purpose of this Act is to effectuate some of the recommendations in the office of planning and sustainable development's 2019 report by:

(1) Requiring the department of land and natural resources to prepare plans and a program to facilitate voluntary relocation of residential development away from certain at-risk areas;

(2) Establishing the sea level rise relocation special fund;

(3) Allowing the exchange of public land for private lands for the transfer of development rights or land exchanges to relocate private development away from high-risk areas; and

(4) Appropriating funds.

SECTION 2. Chapter 171, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . voluntary relocation of residential development from sea level rise exposure areAs involving state lands

§171-A Definitions. As used in this part, unless the context otherwise requires:

"Land exchanges" means mechanisms to secure lands while compensating property owners in-kind, including partial or full replacement to financial compensation, through providing land or development rights.

"Leaseback" means a transaction in which a property owner wilingly sells the real property to the State or third party and leases the property back from that new owner until such time as the State deems the land is unsafe for the leased use due to increasing erosion or flood hazard.

"Receiving area" means an area where additional growth and development can be accommodated from a sending area.

"Sending area" means an area where development is no longer encouraged due to exposure to increasing hazards with climate change and sea level rise.

"Transfer of development rights" means programs allowing property owners to transfer development rights from property in areas where development is no longer desirable or sustainable to desirable or sustainable development areas. "Transfer of development rights" includes programs allowing developers to purchase development rights from property owners in areas where development is no longer desirable or sustainable and transfer those development rights to their own property.

§171-B General powers. In carrying out its functions under this part, the board may do all things necessary, useful, and convenient in connection with voluntary relocation of development from locations that are or will be critically threatened by impacts related to climate change and sea level rise and have high natural resource value, including acquisitions, leasebacks, transfers of development rights, land exchanges, and restoration of coastal lands from sending areas to receiving areas in state-owned lands, subject to all applicable laws, so long as the public interest is served.

§171-C Sea level rise relocation plan. (a) The department, in cooperation with the appropriate state and county agencies, shall prepare, and from time to time revise, plans for the implementation of a program to facilitate voluntary relocation of residential development from areas that:

(1) Are critically threatened by coastal erosion and flooding due to sea level rise; and

(2) Have high natural and community resource value,

to areas outside of the sea level rise exposure area, as designated by the Hawaii climate change mitigation and adaptation commission, and special flood hazard areas.

(b) Plans developed pursuant to this section shall guide the board in identifying and prioritizing:

(1) Coastal lands that are critically threatened by coastal erosion and sea level rise and have high natural and community resource value; and

(2) Potential sending areas and receiving areas for relocation of development.

(1) May utilize studies:

(A) Pertaining to the need for restoration of lands to natural conditions and for public purposes; and

(B) Necessary to support the development of voluntary relocation projects, including the development of environmental studies pertaining to relocation of development, cost-benefit analyses for project viability, and engineering studies;

(2) Shall consider any plan relating to the restoration of lands that has been prepared by any federal, state, county, or private agency or entity;

(3) Shall include a community education and outreach component to inform and obtain input from affected communities on the plans; and

(4) Shall ensure that any plans and programs for voluntary relocation be aligned with the state and county hazard mitigation plans.

§171-D Sea level rise relocation special fund. (a) There is established in the state treasury the sea level rise relocation special fund, into which shall be deposited:

(1) Appropriations made by the legislature;

(2) Donations and contributions made by private individuals or organizations;

(3) Grants provided by government agencies or other sources;

(4) Proceeds from transfers of development rights, leasebacks, and land exchanges;

(5) Proceeds from lawsuits holding industries accountable for climate change impacts that threaten the State; and

(6) Appropriations made out of the climate impact special fund, if established, for deposit into the sea level rise relocation special fund.

(b) The sea level rise relocation special fund may be used for the following:

(1) Planning, designing, development, or implementation of sea level rise relocation projects;

(2) Providing grants to the counties, nongovernmental organizations, and the University of Hawaii for the restoration of coastal lands in sending areas and for research or engineering studies necessary to support sea level rise relocation projects; or

(3) Acquiring through eminent domain private development at risk of exposure to sea level rise and flooding."

SECTION 3. Section 171-50, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Purpose. No exchange of public land for private land shall be made except for public purposes, including but not limited to [~~(1) consolidation~~]:

(1) Consolidation of holdings of public lands; [~~(2) straightening~~]

(2) Straightening of boundaries of public lands; [~~(3) acquisition~~]

(3) Acquisition of adequate access for landlocked public lands which have development potential; [~~or (4) acquisition~~]

(4) Acquisition of lands suitable for residential use[.]; or

(5) Transfer of development rights or land exchanges to relocate private development away from high-risk areas of sea level rise and flooding exposure.

Exchanges shall be effected without public auction. Public notice of any proposed exchange shall be given in accordance with the applicable provisions set forth in section 171-16(d). All private lands conveyed to the State by way of exchanges shall thereafter become public lands."

SECTION 4. 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 2023-2024 to be deposited into the sea level rise relocation special fund established pursuant to section 171-D, Hawaii Revised Statutes.

SECTION 5. There is appropriated out of the sea level rise relocation special fund established pursuant to section 171-D, Hawaii Revised Statutes, the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 for the department of land and natural resources to prepare and implement the sea level rise relocation plan and program pursuant to section 171-C, Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

SECTION 6. In codifying the new sections added by section 2 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 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on June 30, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	756
THIRTY-SECOND LEGISLATURE, 2023		H.D. 2
STATE OF HAWAII