SB 3327

THE SENATE
S.B. NO.
3327
THIRTY-THIRD LEGISLATURE, 2026
S.D. 1
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� The legislature finds that Act 252, Session
Laws of Hawaii 2025 (Act 252), equipped the Hawaii community development
authority with additional financing tools and enhanced authority to advance and
improve development planning and projects.�
Act 252 also modernized the authority's development model to reduce the
cost of housing construction and improve critical community infrastructure,
public spaces, and amenities that support a lower cost of living and a higher
quality of life.
���� The
legislature further finds that the Hawaii community development authority's
traditional development strategy relies heavily on requiring private developers
to finance public infrastructure through negotiation and compromise.� This approach frequently results in
inadequate or substandard public improvements that diminish community quality
of life.� It also increases housing costs
and reduces the availability of affordable housing units.� By contrast, modern development strategies
used elsewhere shift much of the responsibility for financing public
infrastructure away from developers and toward a mix of innovative revenue
sources.� These approaches enable the
creation of complete communities with stronger public infrastructure and
amenities, while lowering housing and overall living costs for residents.
���� The
purpose of this Act is to provide statutory updates to ensure that the Hawaii
community development authority can fully modernize its development strategy
and adopt best practices that have been successfully implemented for decades in
jurisdictions across the United States and around the world.
���� SECTION
2.� Section 206E-6,
Hawaii Revised Statutes, is amended to read as follows:
���� "�206E-6�
District-wide improvement program.�
(a)� The authority shall develop a
district-wide improvement program to identify necessary district-wide public
facilities within a community development district.
���� (b)
�Whenever the authority determines to
undertake, or causes to be undertaken, planning and development to include
housing in a district or community, the authority shall endeavor to plan for
complete communities that include, to the maximum extent appropriate:
���� (1)� Infrastructure for utilities,
including sewer, water, power, and similar needs;
���� (2)� Affordable housing and related
infrastructure;
���� (3)� Public and private commercial spaces;
���� (4)� Public spaces of meaningful scale
that shall include:
��������� (A)� Public parks and gathering spaces;
��������� (B)� Public spaces for hosting markets
and events;
��������� (C)� Natural areas with open green space
and water for passive relaxation;
��������� (D)� Public spaces for active recreation;
and
��������� (E)� Public spaces for pets and animals;
���� (5)� Facilities for public arts and
culture that include:
��������� (A)� Public libraries;
��������� (B)� Public works of art;
��������� (C)� Spaces for public performances and
events;
��������� (D)� Accessible educational and narrative
exhibits on the history, culture, and people of the area; and
��������� (E)� Flexible spaces and infrastructure
for seasonal, rotating, and evolving programming and engagement;
���� (6)� Public spaces for local economic
development and community empowerment; provided that the primary focus shall be
assisting local residents, entrepreneurs, and brands, including:
��������� (A)� Community-based economic development
hubs and cooperative spaces such as public commercial kitchens, processing
facilities, or similar work hubs available to the community and small
businesses;
��������� (B)� Cooperative commercial and retail
locations capable of supporting and aggregating products and services from
numerous small businesses;
��������� (C)� Spaces for hosting micro-businesses
such as food trucks, market stalls, and similar temporary business fronts;
��������� (D)� Spaces for hosting growing small
businesses in permanent micro or small commercial locations or rotating pop-up
locations; and
��������� (E)� Spaces for hosting larger, maturing
businesses in regular food, retail, and commercial locations;
���� (7)� Commuting infrastructure; provided
that the infrastructure shall be designed to have the capacity to enable at
least seventy per cent of all daily commutes to, from, and within the area to
be safely and comfortably made by walking, biking, using micro‑mobility
devices, or using public transit, between common destinations, as well as for
long‑distance daily commuting without interruption pursuant to section
264-142 and shall include amenities such as rest stops, secure bicycle and
micro-mobility device parking, and emergency support stations with tools and
other resources as may be appropriate; and
���� (8)� Public parking hubs of meaningful
capacity, including charging for electric vehicles, a reasonable distance from
which minimum requirements for parking stalls that are not designated as
parking spaces reserved for persons with disabilities as defined in section
291-51 shall be prohibited; provided that of the parking stalls developed as
part of the public parking hubs pursuant to this paragraph, twenty-five per
cent shall be electric vehicle-ready.
���� (c)� Public properties, public
commercial facilities, and other relevant infrastructure shall be planned with the
capacity to provide meaningful revenue generation from appropriate facilities,
leases, programs, or other means as may be appropriate to help finance the
infrastructure projects identified in this section, fund public community
programs in the area, or financially sustain the community within the district.
���� [[(b)]]
(d)� Whenever the authority shall
determine to undertake, or cause to be undertaken, any public facility as part
of the district-wide improvement program, the cost of providing the public
facilities shall be assessed against the real property in the community
development district specially benefiting from [[such]] the public
facilities[[.]], the revenue generated under subsection (c), or other
revenue generated by any financing mechanism available to the authority under
this chapter.� The authority shall determine
the areas of the community development district [[which]] that will
benefit from the public facilities to be undertaken and, if less than the
entire community development district benefits, the authority may establish
assessment areas within the community development district.� The authority may issue and sell bonds in [[such]]
the amounts as may be authorized by the legislature to provide funds to
finance [[such]] public facilities.�
The authority shall fix the assessments against real property specially
benefited.� All assessments made pursuant
to this section shall be a statutory lien against each lot or parcel of land
assessed from the date of the notice declaring the assessment until paid and [[such]]
the lien shall have priority over all other liens except the lien of
property taxes.� As between liens of
assessments, the earlier lien shall be superior to the later lien.
���� [[(c)]]
(e)� Bonds issued to provide funds
to finance public facilities shall be secured solely by the real properties
benefited or improved, the assessments thereon, or by the revenues derived from
the program for which the bonds are issued, including reserve accounts and
earnings thereon, insurance proceeds, and other revenues, or any combination
thereof.� The bonds may be additionally
secured by the pledge or assignment of loans and other agreements or any note
or other undertaking, obligation, or property held by the authority.� Bonds issued pursuant to this section and the
income therefrom shall be exempt from all state and county taxation, except
transfer and estate taxes.� The bonds
shall be issued according and subject to the provisions of the rules adopted
pursuant to this section.
���� [[(d)]]
(f)� Any other law to the contrary
notwithstanding, in assessing real property for public facilities, the
authority shall assess the real property within an assessment area according to
the special benefits conferred upon the real property by the public
facilities.� These methods may include
assessment on a frontage basis or according to the area of real property within
an assessment area or any other assessment method [[which]] that
assesses the real property according to the special benefit conferred, or any
combination thereof.� No [[such]]
assessment levied against real property specially benefited as provided by this
chapter shall constitute a tax on real property within the meanings of any
constitutional or statutory provisions.
���� [[(e)]]
(g)� The authority shall adopt
rules pursuant to chapter 91, and may amend the rules from time to time,
providing for the method of undertaking and financing public facilities in an
assessment area or an entire community development district.� The rules adopted pursuant to this section
shall include[[,]] but are not limited to[[,]] the following:� methods by which the authority shall
establish assessment areas; the method of assessment of real properties
specially benefited; the costs to be borne by the authority, the county in
which the public facilities are situated, and the property owners; the
procedures before the authority relating to the creation of the assessment
areas by the owners of real property therein, including provisions for
petitions, bids, contracts, bonds, and notices; provisions relating to
assessments; provisions relating to financing, such as bonds, special funds,
advances from available funds, special funds for payment of bonds, payment of
principal and interest, and sale and use of bonds; provisions relating to funds
and refunding of outstanding debts; [[and]] provisions relating to
limitations on time to sue[[,]]; and other related provisions.
���� [[(f)]]
(h)� Any provisions to the
contrary notwithstanding, the authority [[may]], in its discretion, may
enter into any agreement with the county in which the public facilities are
located, to implement all or part of the purposes of this section.
���� [[(g)]]
(i)� All sums collected under this
section shall be deposited in the Hawaii community development special fund
established by section 206E-16; [[except]] provided that,
notwithstanding section 206E-16, all moneys collected on account of assessments
and interest thereon for any specific public facilities financed by the
issuance of bonds shall be set apart in a separate special fund and applied
solely to the payment of the principal and interest on these bonds[[,]];
the cost of administering, operating, and maintaining the program[[,]];
the establishment of reserves[[,]]; and other purposes as may be
authorized in the proceedings providing for the issuance of the bonds.� If any surplus remains in any special fund
after the payment of the bonds chargeable against that fund, it shall be
credited to and become a part of the Hawaii community development special
fund.� Moneys in the Hawaii community
development special fund may be used to make up any deficiencies in the special
fund.
���� [[(h)]]
(j)� If the public facilities to
be financed through bonds issued by the authority may be dedicated to the
county in which the public facilities are to be located, the authority shall
ensure that the public facilities are designed and constructed to meet county
requirements.
���� [[(i)]]
(k)� Notwithstanding any law to
the contrary, whenever as part of a district-wide improvement program it
becomes necessary to remove, relocate, replace, or reconstruct public utility
facilities, the authority shall establish by rule the allocation of cost
between the authority, the affected public utilities, and properties that may
specially benefit from [[such]] the improvement, if any.� In determining the allocation of cost, the
authority shall consider the cost allocation policies for improvement districts
established by the county in which the removal, relocation, replacement, or
reconstruction is to take place."
���� 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, 2050.
Report Title:
HCDA;
Housing; Community Planning and Development; Quality of Life
Description:
Requires
the Hawaii Community Development Authority, when planning and developing housing,
to plan for complete communities that include various aspects supporting
quality of life.� 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.