STAND. COM. REP. NO. 398

Honolulu, Hawaii

RE: S.B. No. 874

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committees on Housing and Education, to which was referred S.B. No. 874 entitled:

"A BILL FOR AN ACT RELATING TO SCHOOL IMPACT FEES,"

beg leave to report as follows:

The purpose and intent of this measure is to exempt certain housing developments from the assessment of school impact fees.

Your Committees received testimony in support of this measure from the Office of the Governor; Hawaii Public Housing Authority; NAIOP Commercial Real Estate Development Association, Hawaii Chapter; Building Industry Association of Hawaii; Complete Construction Services Corp.; BKF & Associates, LLC; and one individual. Your Committees received testimony in opposition of this measure from the Center for Hawaiian Sovereignty Studies. Your Committees received comments on this measure from the Department of Education; Department of Hawaiian Home Lands; School Facilities Authority; EAH Housing; and Tax Foundation of Hawaii.

Your Committees find that there are an overwhelming number of Hawaii residents on the public housing waiting list, but the demand far exceeds the current supply of affordable housing projects. Your Committees also find that, although important for the funding of new school facilities, school impact fees required by section 302A—l603, Hawaii Revised Statutes, present a substantial barrier to the development of affordable housing projects in Hawaii as a result of the increase costs for developers. Several developers of affordable housing projects rely on funds from the State's Rental Housing Revolving Fund or other state appropriations to offset the cost of the school impact fee to make affordable housing projects financially viable. Your Committees believe that an exemption from school impact fees for certain housing projects as proposed by this measure will both allow those housing projects to be more cost-effective and able to proceed more quickly to meet the desperate demand for housing in the State.

As affirmed by the records of votes of the members of your Committees on Housing and Education that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 874 and recommend that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Housing and Education,

________________________________ MICHELLE N. KIDANI, Chair

________________________________ STANLEY CHANG, Chair