001Welcome to the Joint Senate Committee on Education, Committee on Hawaiian Affairs, and Committee on Housing. Today is Thursday, March 20th, 2025. This is our 1:00 PM agenda, and we are in hearing room 224. This meeting, including the audio and video of remote participants, is being streamed live on YouTube. You will find links to viewing options for all Senate meetings on the live and on demand video page of the legislaturator's website. In the unlikely event that we must abruptly end this hearing due to major technical difficulties, the committees will reconvene to discuss any outstanding business on Friday, March 21, 2025 at 3:00 p.m. in room 229 and a public notice will be posted on the legislaturator's website. I'd like to take this time to remind our testifiers that due to time restrictions on our hearing, we
002will be limiting testimony to one minute for testifier for approval. For people participating remotely, please remain muted and video disabled until shortly before it is your turn to testify. When I call your name, unmute yourself and your time will begin. After your minute is completed, staff will mute you so that we can move this hearing along in an orderly and efficient manner. Okay. Our only item on this agenda is House Bill 1088HD1 relating to school impact fees which exempts housing developed by the Department of Hawaiian Homelands from school impact fees. [Music] testify superintendent. [Music] Good afternoon, chairs, vice chairs, members of the committee. Ducha, deputy superintendent with the department of education. The department stands on its written testimony provide and provide providing comments on this measure. The department is open to working with the legislature
003and the department of homes and is open to eliminating the construction cost impact fee for DHL. probably as as well as any other government affordable housing developer. But would we like to keep the requirement for the land dedication for future public school sites should any development produce more students that would exceed the capacity of the existing schools in area. Thank you. Thank you Ricky Fujitani, executive director SFA. Aloha Kenyon Tam testifying for Ricky Fujitani from the school facilities authority. and we submitted testimony in support of this measure and we'll stand on that testimony and available for any questions. Thank you members. Questions? Partner with Hawaiian Homelands. Good afternoon chairs, vice chair, members of the committees, Katie Lambert. On behalf of the Department of Hawaiian Homelands, we'll stand on our written testimony and strong support. We
004do want to note that our testimony makes reference and attaches the 10th um emergency proclamation for affordable housing. Um we're actually in the 11th proclamation, but the exemption that exists there for school impact fees for DHHL is still in the 11th. Um we also want to make note that um we um have no objection. We did receive uh uh prehering notice from the Wahhouli Hawaiian Homestead Association about um their proposed amendment and we have no objection to that. Thank you and available for questions. Thank you. Tom Yamamaica, Tax Foundation of Hawaii. Good afternoon, chairs, vice chairs, committee members. Tom Yamamaica from Tax Foundation of Hawaii. Um the uh school impact fee program has had some difficulties. Uh one of which is that uh because of the current restrictions on the fund or and and the
005and I'm talking about not only the school impact fee fee program but its predecessor uh none of the money has been spent. So we have about 29 million currently doing nothing uh in this program. So, um, we kind of raised the question and and, uh, not only that, but, um, the auditor in report number 19-13, speak up, please. It's hard to hear. Okay. I'm very sorry. We also note that the state auditor in report number 19-13 uh has called attention to several problems regarding the administration of the school impact fees and has raised constitutional concerns. Uh and for that reason we think it may be a better idea to just get rid of this program entirely. I'll be happy to answer any questions. Thank you very much. Is there anyone else here wishing to testify
006on this measure? Members questions. Chair Coin Homes. Um, for the record. Oh, Katie Lambert, Department of Coin Homelands. Okay. Thank you. How many built homes do you think you have in the pipelines in the next 5 years? So, um we do have attached to our testimony and I think this was in response to um this bill when it was going through previous committees, we were asked to try to quantify um what the cost would be. So, part of our testimony um does note locations where we are planning I think largely act 279 projects. Um and so in the excuse me so in the pipeline for example we have um a lot of things coming up in our capo in fact on Saturday we're having a lot offering for our east caplet developments and you can
007see um that the school impact fees there would be $4 million 9407 I'm sorry 700 $760 um with a with um potential or um anticipated lots being 1,220 upcoming in the pipeline. So, we do have that. Um, and it's we also have Hawaii County noted 600 I'm sorry, I'm so sorry. 1,684 lots with housing projected. Um, uh, Maui County with lots and dwelling units of,421, lots with housing 1,34 upcoming projected. And we do we did attempt to quantify what those school impact fees would be for those housing developments in the pipeline. Okay. Thank you. Um thank you chair. Thank you members for the question. Department of please. Good afternoon. Can you explain you when you say that there Artman would be open to support the elimination of the construction impact fee for DHHL provided agency
008provides necessary land for future public schools for that development. Right. Um I think part of what we've been looking at is um there's two components to the impact fee. One is the land and one is the construction costs. Um, but with this push for affordable housing, especially from the government agencies, I think the department is willing to eliminate the construction cost aspect or component for any government affordable housing project. But we still need the land component because if they're building a big project and the schools in the area can't accommodate the additional students, we're going to need a new school somewhere. So, that's kind of what we're looking at as a compromise. And would the impact fees then be able to pay for this school if the school is needed? If we don't collect the
009construction costs, whether you collect the construction cost or not, um I think the construction cost was based on only like 10% of the construction of a school. So we wouldn't have enough money to build a new school with all the money that you have. So isn't the nexus for the impact fee is any development that would generate so many families with children that that's the impact and that is why you charge them the fee. Correct. Okay. Well, they look at the schools in the area and if the schools in the area are underutilized and can accommodate the growth, then there's no need for the impact fee. It's mainly for areas where you don't have enough capacity in the existing schools is why you have the impact fee for the school site. Well, that's interesting because
010I looked at what was passed out to us as far as your impact fees and you have areas Khalihi to Alam Moana, Leeward to Oah Leah, central Maui, West Maui and yet these fees I mean like Khi to Alam Moana. I know there's a lot of housing going on but the schools there I don't know where you would put a new school. Where would you put a new school? Right. So I think they amended the law u when the to things came up that allows the DOE to purchase like a warehouse or lease space for a school because we we understand that the the land area might be limited. So they allow for more flexibility in how the fees could be used in that Alamana Khi corridor. Yeah. But aren't you focusing on consolidating schools?
011We're starting that process right now. Yes. In what area? I think they're looking statewide except for Maui on the enrollment. Right. We've looked at central school central intermediate which is now um yeah um about consolidating right? Yes. So this a it's a statewide effort that we're looking at um how they're going to go about it. I think it's just starting like within the next month or so. I don't that's why there are concerns about how this impact fee is being implemented because it is intended for large projects that have multi lot of multif family the smaller projects which is also have to pay the impact fee right if it's in if it's in the declared impact fee district right so like khi to Alam Moana so if khi people and they build a small apartment
012building or even they put on one house on their lot have to pay impact I believe so yeah if they're in the impact fee district right right and yet there's no place we're not going to get a new school in Khini you're probably right right not right now get so you know that's the concern I have and so we're going to exempt and I'm not against exempting my homelands for the homes that we need but that's the case all around Okay. I mean, Khali, people are building on their lots because they can't find places to go and yet they're being impacted by 5 to$10,000 worth of impact fees, which is is big for a family unit. I understand. Um, so you know, this whole thing of impact fees is concerning. You have what 19.9 million
013almost $20 million in your fund statewide. statewide fund and it's been that way for a while, right? 12 years. We've had all this money not being used and I know the law just changed in 2021, but since 2021 to now and you guys have a billion dollars worth of of u encumbered funds, CP funds that is sitting there not being utilized, I mean not being funded because of lack of funds. water the impact fee had to has to be used in the area where was collected. So we cannot just take the money and apply it anywhere. So if it was in if it was a project in Capo then we'd have to use it for capacity in Capo. Okay. So in Klehi how are you going to use the the small amount of money that
014you're going to collect there? I think they allow us to do like renovations add more capacity to existing schools. I think the amendment Yeah. I think in 2021 they amended the law to allow for that because all of this time you weren't being able to use that. But again, you're hitting the small guys, which is exactly what the audit says. We're own people said that the land use planner remarked that there was a strong desire by the development community to pass the school impact fee law to catch the small guys. To catch the small guys. And to me, that's ludicrous that we're going to look at impacting all the small guys and letting all the the big guys. Oh, I don't know who made that statement, but I don't I don't know if it came
015from you folks. It's in the audit. This audit was 2019. Yeah, I read the audit and the people who were running the program, most of them had left already. So, I I don't know who But you guys inherited and it's not a lot that changed except now they have the law that allows you to use the monies for other things. Yeah. I don't know if they went back and looked at what the impact like what you're talking about in Khalihi where we we're heating up people who are renovating or building an ADU on their house and whether that should be the basis to generate an impact. Right. But that's what you guys should be doing and that's the and that was the um the concern raised in the audit that you folks are not looking
016at your program and how to implement it. You're so busy looking for new new things. I I can find a statement that they make in there. I agree with you. Yeah. So you want to keep this program but yet you guys aren't making the effort to or revising it so that it's relevant. Well, it's it's transferred to SFA now. All we're saying is that because of the land component, we're mainly concerned about the land component because large projects might need a new school. So if that's the case, then you should not be charging these small landowners or the small um residential areas from the impact fee. It's really impacting the small guy. I agree. So, we can go back and take a look, but SFA is responsible for that the impact fee right now. So,
017okay. Thank you, Sure. Yes, sir. So just just a couple of things I I understand and I when this impact fees came about it was never ever and I'm going to be clear was made for somebody who building one extra room in the house or billing with extension never was the intent and I was there from the beginning because our community was growing beyond belief and we wasn't keeping up with the schools as I expressed before Capo was never there. It's going to be take this on the record so you guys understand that's Eva Plains from Poa Limits to Black Rock Nakuli. That's our community. You guys keep calling them Capo A. And don't get me wrong with the Capo A people, but I'm saying when you guys make development, reason why you guys getting
018confused on the books cuz 96706 is being left out cuz you guys keep using Capo. Capo is not Croc Center. That's Ever Beach. A new development of Hawaiian Homes is in Ever Beach. The new elementary school is in Ever Beach. A new high school is in Ever Beach. So that's why when you said the highly impact areas to be used, we get families in Ever Beach have to same like Senator Kim said, bail out because nobody in Ever Beach has $6 billion. You know how much an average home inside uh in Ocean Point going for right now? Huh? $5 million. Anybody in this room, we can all put together. We're not going to afford that house. Our community is going up. The impact is going up. Yes. But the big picture was the large developers.
019Hiko, Gentry, right? They are heartened, right? Co Ridge, all all those areas that making big impact, right? Not saying they don't. You're talking about you like the you like them to give to take away the impact. Okay, fine. But don't take away the land. But you guys got to specify to this committee. Don't just get the land. You got to have the developer build the infrastructure. Mhm. Because I can give you land. I can go have all these developers give the DOE land. Do you have money to put in the infrastructure? Do you have the money to put in the infrastructure? No, we require them. No, but that's what I'm saying. But then you got to be clear to this committee that you're not only requiring the land, but the infrastructure to put into build.
020Correct. Right now, two of the schools in the district is not going to get built anytime soon. So that's what I'm trying to say. So I I battle with this a lot. Don't get me wrong. I support the fact because we need to get Hawaiians in homes. But the question to the fact is that what Senator Kim is asking regardless of and and I don't want to keep hearing that um the people not there anymore. So did the computer blow up? Did the notes they took prior is it gone? Don't you guys can access these guys records? Cuz if you guys cannot, they're not understand. But don't tell us that all these guys left for really. You know what I mean? I understand that. I understand too because I I I'm I'm a new senator.
021I took over from my last sir. You don't hear me blaming my previous senator for things that because you're not here. You take it up, put on your big boy pants, and you move on. Don't tell us because the person will leave or anything. Can cannot we cannot do that. And I and and I know you long time. You know what I mean? We worked long time together. You you know the projects we worked on. But the impact fees was never to hurt the small guy. So, I need you guys to just go do some homework and work with this committee and the chairs to figure out how if we be salvaging anything and how we're going to salvage. You got to give more details. Thank you, chair. Thank you. Members, further questions. All right,
022deputy superintendent. So I guess from the the last hearing that we had, did you go figure out what lands did you get since 2007 that has been owed to the DOE and where are we with the status of those lands? Yeah, we sent you a summary of the history of the impact fee law as well as the amendments and Okay, where did you send that? We sent it to the committee chairs earlier today. Okay. Well, maybe you should share that with the members. Okay. Um I apologize if you didn't get it, but um we got so far and this is still like we're still looking for information. So this is kind of an ongoing thing, but we got 12 acres on Central Midway through the impact fee law and we got like 373.4 acres using
023a fair share or educational contribution agreement. Um to date since the impact fee law was in in place a lot of the projects got approval which required them to comply with the school fair share agreement before the impact fee law was in effect. So that's why there's a whole bunch of um projects that were under the prior agreement even after the impact fee law was passed. Okay. So you only got one project that's owed under the new impact fee law then. So far that's all we could find so far. Okay. So, what about all the lands under former fair share agreements? Because if you listen to what the senator, you know, from Westside is saying, he has, you know, he he you you guys got your fair share of land, right? But you're not wanting
024to accept it. So, you have land that you're owed and yet you don't want to take it. So I don't know what the problem is is but you can't come to us and say you want the land and then at the same time you say okay yeah we're owed the land but we're not going to take it. So it's either you're going to take it or you don't want the land. So I I don't know what's going on there but it alarms me when the senator from the west side is saying you know and this is under probably the land use commission that they're owed this right this is gentry now that's that has to owe this land and yet the department doesn't want to accept it. So, I don't know what's going on of
025what what the issue is, but when you're owed land, it's you should be like, "Okay, we're going to take it." Or if you don't like those lands or if there's problems with the lands, then maybe it's, you know, and and you guys don't want it, then then I don't know why we need to have this this this impact fee law in place, if you're not going to take the land anyway. Yeah. I I got to go find out why we're not taking the I don't know if it's the infrastructure is not in yet or where we're on the project, but I I'll follow up and But you can't have it both ways. You can't say, "Okay, we want the land, but we really really don't want the land." I don't know what the status is
026and why the land's not being conveyed. I don't have that information right now, but I'll get it for you. Okay? Because, you know, I think that's and that's the issue, too, is okay, land is one thing. I think Senator Favlla is is is right. I think, you know, you you have to be clear on maybe it's not the land that we're concerned about. Maybe it's the infrastructure. Maybe it's just the planning of the area to make sure that it's the lowest cost department. And and part of that, that's why I'm really concerned about it. it coming from a formula. You have to look at every development and you have to make an assessment of what is the best deal for the department and that is the role of the land use commission right I understand
027department of fine homelands doesn't go through that but you know so I think that's a whole another conversation with them but I think when you take a look at impact fees it has to make sense right in terms of what we're trying to do to get you know to to make sure that we have places but if even if we have places you know it doesn't make sense if if you guys don't want it so I think you guys really got to take a deep dive if really want this, you have to take a deep dive and fix it. And it's it's been kind of frustrating. The department says, "Oh, we want it. We want it." And and yet you you're letting you look at the audit and most of those things didn't get addressed.
028So, thank you, chair. Thank you. I have a followup question. So, going back, can you tell me how much money is been collected to be used for Khali schools? Um, we collected about 500,000 of construction money and 2.8 million in land contribution. No, but Kalihi does that incl. And the whole projects that are being built is the is the Koku area, the whole Alam Moana area there. That's where most of the money coming from. But I want to know how much money Khalihi, you guys charge Khalihi residents or people in that area in Kihi and how much money can build can be used for the schools because you said it's from the area you collected from. Right. I have to get get back to you. I don't have that breakdown right now. Okay. because I
029have an issue with how you guys are breaking it down to to lump khalihi with Alam Moana area and Kakaako area and all of those areas to me is is not equitable. And then I want to know if you folks have done what was in the audit in 2019. And it says here, the land use planner acknowledges that DOE has an obligation to revisit prior district calculations, which is what we're talking about the calculations from Khaled to Alam Moana and in Eva, but explained that its work has been driven by the urgency to establish new districts rather than update existing districts. School site area averages cost per student. District cost favors and student generation rate data have not been updated since West Maui, Central Maui, and Leeward schools impact districts were designated. And it goes
030on. So, have you folks done that? Have you have you updated the district calculations? Um, I don't think so, but I have to go back. I'll go check again. Yeah, I don't think. And this came out before it went to SFA. This came out in 2019 2019 to the youth haven't done that. So again, it's difficult for me to support this this going on when you folks have not even attempted and in all we got now is this really fancy PowerPoint. You guys tend to list all the stuff yet. You haven't even done what was what was in the audit. I agree. where the questions end if not recess. Reconvening the joint committees on uh Hawaiian affairs, education and housing. The recommendation of the chair of committee on education is to defer this measure. on
031the committee on Hawaiian Affairs. Uh I'm going to call for the vote. So vice chair for the vote. It's a recommendation to pass the committee or excuse me the bill 1088 as written. Education just I'm calling for the vote. Okay. And what's the recommendation? Recommendation to pass as is. As is. Okay. So for HB 1088 HD1 chair recommendation is to pass as is chair votes I um Senator Sanur is with reservation Senator Ihara I senator Kole I sort I chair recommendation has been adopted thank you committee on housing will be deferring this measure as well thank you members thank