HB2616

SECTION 1. The legislature finds that the Waiakea peninsula, which includes Banyan Drive and was historically known as Makaokū, is an area of significant cultural and historical importance to the island of Hawaii. Its strategic location near Hilo town and the sites of the Merrie Monarch Festival make it a primary center for community activities and tourism that supports the State's cultural identity and economy. However, the legislature finds that the area currently requires focused revitalization to address conditions of blight. Issues such as a lack of adequate cultural stewardship, public safety, the declining health of historic banyan trees, poor lighting, and a substandard pedestrian experience have hindered the area's potential and diminished its value to the community.

To address these challenges, the legislature determines that regaining state control over lands within the district in the near term is essential for successful renewal. By establishing a community development district under the jurisdiction of the Hawaii community development authority, the area can be revitalized in a way that fosters cultural enrichment and enables cultural activities, events, and uses to coexist effectively with standalone hotel, commercial, and public uses. This transformation will include the development of cultural and public facilities, including recreational, educational, and entertainment spaces that enhance the experience for residents and visitors.

The legislature further finds that the ongoing oversight, regulation, and maintenance of the district require a stable and dedicated financial framework. Because the costs of providing these services and maintaining the district's infrastructure may vary from year to year, the general fund appropriation process may not be sufficient to ensure long-term success.

Therefore, the purpose of this Act is to:

(1) Establish the Banyan Drive-Makaokū community development district; and

(2) Establish a special fund to provide the Hawaii community development authority with the consistent resources necessary to improve and safeguard the cultural, economic, and social value of this vital area.

SECTION 2. Chapter 206E, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Banyan drive-Makaokū community development district

§206E- Definitions. As used in this part:

"District" means the Banyan Drive-Makaokū community development district.

"Fund" means the Banyan Drive-Makaokū community development district special fund.

§206E- District established; boundaries. The Banyan Drive-Makaokū community development district is hereby established. The district shall include all lands makai of the following areas:

(1) The western boundary is the Wailoa river;

(2) The southern boundary begins at the Wailoa river and follows Kamehameha avenue to its intersection with Kalanianaole street and then follows Kalanianaole street to Banyan way; and

(3) The eastern boundary is Reeds bay.

The district shall also include Moku Ola, also known as Coconut island on the north.

§206E- Banyan Drive-Makaokū redevelopment agency; chairperson; established. (a) The Banyan Drive-Makaokū redevelopment agency is hereby established. The Banyan Drive-Makaokū redevelopment agency shall be an entity of the authority and responsible for implementing this part.

(b) The Banyan Drive-Makaokū redevelopment agency shall be headed by a chairperson to be known as the chairperson of the Banyan Drive-Makaokū redevelopment agency. The chairperson of the Banyan Drive-Makaokū redevelopment agency shall be appointed by and shall serve at the pleasure of the authority.

§206E- Development guidance policies. (a) The following general development guidance policies shall govern the authority's actions in the district:

(1) Development shall seek to promote cultural activities, provide community facilities, and foster sustainable economic growth by encouraging diverse land uses and private sector investments;

(2) Hawaiian archaeological, historic, and cultural sites shall be preserved and protected;

(3) Land use and redevelopment activities within the district shall be coordinated with and, to the extent possible, complement existing state and county policies, plans, and programs affecting the district;

(4) Public facilities within the district shall be planned, located, and developed so as to support the redevelopment policies for the district established by this part and plans and rules adopted pursuant to this part;

(5) Development shall consider the impacts of climate change, sea level rise, inundation risk, and climate‑resilient development in the design and siting of buildings; and

(6) Development shall consider the inclusion of mobility solutions.

(b) The authority may engage in planning, design, and construction activities within and outside the district; provided that activities outside the district shall relate to infrastructure development, area-wide drainage improvements, roadway realignments and improvements, business and industrial relocation, and any other activities the authority deems necessary to carry out redevelopment of the district and implement this chapter. Studies or coordinating activities may be undertaken by the authority in conjunction with the county and appropriate state agencies and may address, without limitation, facility systems, industrial relocation, and other activities.

§206E- Federal government; financial aid; contracts. (a) The authority may secure financial aid from the federal government for any planning, design, development, construction, and maintenance work that the authority is authorized to undertake pursuant to this part.

(b) Supplemental to the powers granted to the authority under section 206E-4, the authority may also:

(1) Borrow moneys or accept grants from the federal government in aid of or for any development project the authority is authorized to undertake pursuant to this part;

(2) Issue bonds or other evidence of indebtedness and pledge revenues and other assets as security for indebtedness incurred pursuant to this part;

(3) Repay any indebtedness, including any interest incurred thereon by the authority pursuant to this part;

(4) Procure insurance or loan guarantees from the federal government for the payment of any debts or parts thereof secured by mortgages made or held by the authority;

(5) Execute contracts with the federal government in accordance with this part; and

(6) Comply with terms and conditions required by the federal government in any contract or grant for federal assistance.

(c) It is the purpose and intent of this section to authorize the authority to do all things necessary to secure the cooperation of and financial aid from the federal government for any planning, design, development, construction, and maintenance work that the authority is authorized to undertake pursuant to this part.

§206E- District improvement and maintenance program. Supplemental to the powers granted to the authority under section 206E-4, the authority may establish a district improvement and maintenance program to establish a mechanism to improve and maintain the district and do all things necessary to effectuate the establishment and operation of the district improvement and maintenance program, including but not limited to determining and assessing a service or regulatory fee in accordance with applicable law. The authority may adopt rules pursuant to chapter 91 to implement the program.

§206E- Banyan Drive-Makaokū community development district special fund. (a) There is established in the state treasury the Banyan Drive-Makaokū community development district special fund into which shall be deposited:

(1) All revenues, income, and receipts of the authority for the district, notwithstanding any other law to the contrary, including section 206E-16; provided that revenues, income, and receipts derived from leases shall be paid to the agency that owns or manages the property;

(2) Moneys directed, allocated, or disbursed to the district from government agencies or private individuals or organizations, including grants, gifts, awards, donations, and moneys collected from the district improvement and maintenance program, for costs to administer and operate the district; and

(3) Moneys appropriated to the fund by the legislature.

(b) Moneys in the fund shall be used only for the purposes of this part.

SECTION 3. Section 206E-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The authority shall consist of the director of finance or the director's designee; the director of transportation or the director's designee; the director of business, economic development, and tourism or the director's designee; the chairperson of the board of land and natural resources; the director of planning or planning and permitting of each county in which a community development district is located or the director's designee; the chairperson of the Banyan Drive-Makaokū redevelopment agency; a cultural specialist; an at‑large member nominated by the president of the senate; an at‑large member nominated by the speaker of the house of representatives; two representatives of the Heeia community development district, comprising one resident of that district or the Koolaupoko district, which consists of sections 1 through 9 of zone 4 of the first tax map key division, and one owner of a small business or one officer or director of a nonprofit organization in the Heeia community development district or Koolaupoko district; two representatives of the Kalaeloa community development district, comprising one resident of the Ewa zone (zone 9, sections 1 through 2) or the Waianae zone (zone 8, sections 1 through 9) of the first tax map key division, and one owner of a small business or one officer or director of a nonprofit organization in the Ewa or Waianae zone; two representatives of the Kakaako community development district, comprising one resident of the district and one owner of a small business or one officer or director of a nonprofit organization in the district; two representatives of the Pulehunui community development district, consisting of one resident of the island of Maui, and one owner of a small business or one officer or director of a nonprofit organization on the island of Maui; [~~and,~~] two representatives of the Banyan Drive-Makaokū community development district, consisting of one resident of the Waiakea ahupuaa (zone 2, section 1, 2, or 4 of the third tax map key division), and one owner of a small business or an officer or director of a nonprofit organization located in the town of Hilo (zone 2, sections 1 through 5 of the third tax map key division); and for the purposes of part X of this chapter only, two experts on transit-oriented development, to be appointed one each by the president of the senate and the speaker of the house of representatives; and the following ex officio, nonvoting members: the chairpersons of the respective senate and house of representatives standing committees having jurisdiction over transportation, and the chairpersons of the respective senate and house of representatives standing committees having jurisdiction over housing.

All members except the director of finance; director of transportation; county directors of planning or planning and permitting; director of business, economic development, and tourism; chairperson of the board of land and natural resources; the two experts on transit-oriented development appointed by the president of the senate and speaker of the house of representatives, respectively; the chairpersons of the respective senate and house of representatives standing committees having jurisdiction over transportation; the chairpersons of the respective senate and house of representatives standing committees having jurisdiction over housing; or, where relevant, their respective designees; and the chairperson of the Banyan Drive-Makaokū redevelopment agency, shall be appointed by the governor pursuant to section 26-34. The two at-large members nominated by the president of the senate and speaker of the house of representatives shall each be invited to serve and appointed by the governor from a list of three nominees submitted for each position by the nominating authority specified in this subsection.

The president of the senate and the speaker of the house of representatives shall each submit a list of six nominees for each district to the governor to fill the two district representative positions for each community development district. For each community development district, the governor shall appoint one member from a list of nominees submitted by the president of the senate and one member from a list of nominees submitted by the speaker of the house of representatives, and of the two appointees, one shall meet the district residency requirement and one shall meet the district small business owner or nonprofit organization officer or director requirement.

The president of the senate and the speaker of the house of representatives shall each appoint a member having expertise and experience in urban planning and community development to fill the two positions designated for experts on transit-oriented development.

The authority shall be organized and shall exercise jurisdiction as follows:

(1) For matters affecting the Heeia community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Heeia community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Heeia community development district;

(2) For matters affecting the Kalaeloa community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Kalaeloa community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Kalaeloa community development district;

(3) For matters affecting the Kakaako community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning and permitting for the county in which the Kakaako community development district is located or the director's designee;

(E) The cultural specialist;

(F) The two at-large members; and

(G) The two representatives of the Kakaako community development district;

(4) For matters affecting the Pulehunui community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The director of planning for the county in which the Pulehunui community development district is located or the director's designee;

(E) The chairperson of the board of land and natural resources or the chairperson's designee;

(F) The cultural specialist;

(G) The two at-large members; and

(H) The two representatives of the Pulehunui community development district; [~~and~~]

(5) For matters affecting part X of this chapter only, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of finance or the director's designee;

(B) The director of transportation or the director's designee;

(D) The chairperson of the board of land and natural resources or the chairperson's designee;

(E) The director of planning for the county in which the program area is located or the director's designee;

(F) The cultural specialist;

(G) The two at-large members; and

(H) The two experts on transit-oriented development appointed by the president of the senate and the speaker of the house of representatives[.]; and

(6) For matters affecting the Banyan Drive-Makaokū community development district, the following members shall be considered in determining quorum and majority and shall be eligible to vote:

(A) The director of business, economic development, and tourism or the director's designee;

(B) The director of finance or the director's designee;

(D) The director of transportation or the director's designee;

(E) The director of planning for the county in which the Banyan Drive-Makaokū community development district is located or the director's designee;

(F) The chairperson of the Banyan Drive-Makaokū redevelopment agency;

(G) The cultural specialist;

(H) The two at-large members;

(I) A lineal descendant of the Makaokū area; and

(J) The two representatives of the Banyan Drive-Makaokū community development district;

[~~In the event of~~] 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.

The terms of the director of finance; director of transportation; county directors of planning and permitting; director of business, economic development, and tourism; and chairperson of the board of land and natural resources[;], or their respective designees; and the chairperson of the Banyan Drive-Makaokū redevelopment agency, shall run concurrently with each official's term of office. The terms of the appointed voting members shall be for four years, commencing on July 1 and expiring on June 30. The governor shall provide for staggered terms of the initially appointed voting members so that the initial terms of four members selected by lot shall be for two years, the initial terms of four members selected by lot shall be for three years, and the initial terms of the remaining three members shall be for four years. The terms on the authority of the chairpersons of the senate and house of representatives standing committees having jurisdiction over housing and the chairpersons of the senate and house of representatives standing committees having jurisdiction over transportation shall run concurrently with that respective legislator's term as the chairperson of that respective committee.

The governor may remove or suspend for cause any member after due notice and public hearing.

Notwithstanding section 92-15, a majority of all eligible voting members as specified in this subsection shall constitute a quorum to do business, and the concurrence of a majority of all eligible voting members as specified in this subsection shall be necessary to make any action of the authority valid. All members shall continue in office until their respective successors have been appointed and qualified. Except as herein provided, no member appointed under this subsection shall be an officer or employee of the State or its political subdivisions.

For purposes of this section, "small business" means a business that is independently owned and that is not dominant in its field of operation."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,000,000 or so much thereof as may be necessary for the fiscal year 2026-2027 for the Hawaii community development authority to implement this Act and to:

(1) Draft and adopt rules under chapter 91, Hawaii Revised Statutes; and

(2) Perform an environmental assessment or environmental impact statement under chapter 343, Hawaii Revised Statutes, for any property within the Banyan Drive-Makaokū community development district.

The sum appropriated shall be expended by the Hawaii community development authority for the purposes of this Act.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2026-2027 for deposit into the Banyan Drive-Makaokū community development district special fund.

SECTION 6. There is appropriated out of the Banyan Drive-Makaokū community development district special fund the sum of $250,000 or so much thereof as may be necessary for fiscal year 2026-2027 to be used for the purposes of the Banyan Drive-Makaokū community development district special fund.

The sum appropriated shall be expended by the Hawaii community development authority for the purposes of this Act.

SECTION 7. 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 2026-2027 for the establishment of one full-time equivalent (1.0 FTE) position within the Hawaii community development authority.

The sum appropriated shall be expended by the Hawaii community development authority for the purposes of this Act.

SECTION 8. This Act shall be liberally construed in order to accomplish the purposes set forth herein. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2026.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2616
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII