Report Title:

DOE; School Land Dedication; Education Impact Fees

Description:

Allows the department of education to impose impact fees or other exactions upon developers to support construction of school facilities that will be required as a result of residential development.

THE SENATE

S.B. NO.

2075

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to school facilities.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that as new residential subdivisions create additional demand for public school facilities and a need for more land on which to construct those school facilities, these subdivisions should provide land or pay an in-lieu fee of land dedication proportionate to their impact. A study commissioned by the department of education and the department of accounting and general services has identified the land dedication requirement that is consistent with proportionate fair-share principles.

The purpose of this Act is to require new residential subdivisions to provide land for schools or pay an in-lieu fee of land proportionate to their impact.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

SCHOOL LAND DEDICATION AND IMPACT FEES

"§   -1 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"County" or "counties" means the city and county of Honolulu, the county of Hawaii, the county of Kauai, and the county of Maui.

"Developer" means a person, corporation, organization, partnership, association, or other legal entity constructing, erecting, enlarging, altering, or engaging in any development activity.

"Dwelling unit" means a room or rooms connected together, constituting an independent housekeeping unit containing a single kitchen.

"Owner" means the owner of record of real property or the owner's authorized agent.

"Plat" means the map or drawing on which the subdivider’s plan of subdivision is presented and which he submits for approval.

"School facilities" means the facilities owned or operated by the department of education, or the facilities included in the department of education capital budget or capital facilities plan.

§   -2 Application, to whom. (a) Except as provided below, any developer who seeks to develop residential land by applying to a county for the issuance of a subdivision approval shall be required to dedicate land for school facilities or pay an in-lieu fee of dedicating that land, provided that the following shall be exempt from this section:

(1) Any forms of housing permanently dedicated exclusively for senior citizens, defined as fifty-five years of age or over, with the necessary covenants or declarations of restrictions recorded on the property;

(2) Any nonresidential development;

(3) Any alteration, expansion, enlargement, remodeling, rehabilitation, or conversion of an existing dwelling unit where no additional dwelling unit is created; and

(4) Any residential subdivision within the Honolulu, Windward, and Kauai benefit districts as defined in section    -4, until an analysis has been prepared by the department of education that demonstrates there will be a need to build or expand school facilities over the next six-year period in order to accommodate projected enrollment growth within the benefit district.

(b) Any impact fees imposed under this chapter shall be in addition to any impact fee assessed, imposed, levied, or collected by a county under chapter 46, part VIII.

§   -3 School land dedication. (a) The procedure for determining whether the dedication of land is required or a payment of an in-lieu fee is required for new schooling facilities shall be as follows:

(1) At the time of filing an application for any residential subdivision containing fifty or more acres of land, the owner or developer of the property, as a part of the filing, shall designate the area proposed to be dedicated for a school on the plat submitted.

(2) When land is proposed to be dedicated for the purpose of providing a school site, it shall be land that is usable to the department of education for that purpose. The department of education shall have the final determination as to whether a particular piece of land is usable.

(3) Within sixty days of the completion of an application for a residential subdivision containing fifty or more acres, the department of education, as a part of such approval, shall determine whether to require a dedication of land, the payment of an in-lieu fee thereof, or a combination of both. Only payment of an in-lieu fee shall be required in subdivisions containing less than fifty acres.

(4) When dedication is required, the land shall be conveyed to the State of Hawaii prior to final subdivision approval.

(5) When the payment of an in-lieu fee is required, the in-lieu fee shall be paid prior to final subdivision approval.

(6) Whether the department of education determines to require land dedication or the payment of an in-lieu fee, or a combination of both, shall be guided by the following criteria:

(A) The topography, geology, access, and location of the land in the development available for dedication;

(B) The size and shape of the development and the land available for dedication; and

(C) The location of existing or proposed schooling facilities.

(7) The determination of the department of education as to whether land shall be dedicated, or whether an in-lieu fee shall be paid, or a combination of both, shall be final and exclusive.

(b) The size of the tract of land to be dedicated by the developer shall be determined using the following formula:

(1) The dedication requirement for single-family detached, single-family attached, and duplex units is as follows: 0.00899 acres multiplied by the number of dwelling units provided for on the subdivision plat; and

(2) The dedication requirement for apartments and condominiums is as follows: 0.00356 acres multiplied by the number of dwelling units provided for on the subdivision plat.

(c) The formula used to determine the in-lieu fee of land dedication for:

(1) Single-family detached, single-family attached, and duplex units shall be 0.00899 multiplied by the number of units provided for on the subdivision plat multiplied by the average cost per acre of land of the subdivision subject to subsection (f); and

(2) Apartments and condominium units shall be 0.00356 multiplied by the number of units provided for on the subdivision plat multiplied by the average cost per acre of land of the subdivision subject to subsection (d).

(d) Subdivisions of less than fifty acres shall pay a standard in-lieu fee based on an average land value of $100,000 per acre. The standard in-lieu fee of land dedication per single-family detached, single-family attached, and duplex unit is $899. The standard in-lieu fee of land dedication per apartment and condominium unit is $356. At least every three years, the department of education shall prepare an analysis to update the appropriate average land value, and shall submit the same to the legislature with a recommendation to update the standard in-lieu fee established in this subsection.

(e) The in-lieu fee of land dedication shall be based on the value of the improved land, after typical subdivision improvements such as roads, drainage, and utilities. An appraiser who is selected and paid for by the developer shall determine the value of the land. If the department of education does not agree with the developer's appraisal, the department of education may engage another appraiser at its own expense, and the value shall be an amount equal to the average of the two appraisals. If either party does not accept the average of the two appraisals, a third appraisal shall be obtained, with the cost of the third appraisal being shared equally by the department of education and the developer. The first two appraisers shall select the third appraiser, and the third appraisal shall be binding on both parties.

(f) If the in-lieu fee is not expended within six years of the date of collection, the department of education shall refund to the developer or the developer’s successor in title the amount of in-lieu fees paid and any interest accrued. Application for a refund shall be submitted to the department of education within one year of the date on which the right to claim arises.

§   -4 Benefit districts and benefit district subdivisions. (a) The State shall be divided into benefit districts corresponding to the departmental school districts established in section 13-1, provided that the second departmental school district (Maui) shall be further subdivided into three separate benefit districts composed of:

(1) The island of Maui;

(2) The island of Molokai (including the county of Kalawao); and

(3) The islands of Lanai, and Kahoolawe.

The in-lieu fee collected in a benefit district shall only be expended in that benefit district.

(b) The benefit districts shall be divided into the following benefit district subdivisions: Honolulu, Ewa, Wahiawa, Waialua, Koolaupoko, Koolauloa, Waianae, Hilo, Puna, Kona, Hamakua, North Kohala, South Kohala, Pohakuloa, Kau, Wailuku, Makawao, Lahaina, Hana, Molokai, Lanai, Lihue, Koloa, Kawaihau, Waimea, and Hanalei.

§   -5 Use of dedicated land and in-lieu fees. (a) Land dedicated by the developer shall be used only as a site for the construction of a new school or for the expansion of existing school facilities. If the land is sold the proceeds shall be used to reacquire land for school facilities in the same benefit district.

(b) In-lieu fees shall only be used for the acquisition of land for school purposes. Funds may be used for expenses related to acquiring a piece of land, including surveying, appraisals, and associated legal fees. In-lieu fees shall not be used for the maintenance or operation of existing schools in the district, construction costs, including architectural, permitting, or financing costs, or administrative expenses.

§   -6 Credits. Any person subject to the land dedication or in-lieu fee requirements pursuant to this section may apply for credit for any similar dedication or payment accepted and received by the department of education for the same subdivision subject to this section. Any credit provided for under this subsection shall be based on the present value of the dedication or payment. Credits for contributions prior to the effective date of this section shall be based on the present value, provided that the credited amount shall not exceed that value of the dedication or in-lieu fee required under this section. If a dedication is proposed by a developer after the effective date of this section, is acceptable to the department of education, and exceeds the dedication requirements for the subdivision, the department of education shall execute with the developer an agreement to provide reimbursement for the excess land dedication from the in-lieu fees collected from other developers within the same benefit district.

§   -7 Impact fees. (a) The department of education shall adopt rules as may be necessary pursuant to chapter 91 for the assessment of impact fees within benefit district subdivisions, provided that impact fee calculation shall be based on a fee schedule that provides a higher cost factor to areas of lower socio-economic standing, and may be changed by the department every six months by rule adopted in accordance with chapter 91.

(b) All residential developments, except as provided in section    -2, which require the issuance of a building permit, shall pay an impact fee for each dwelling unit constructed. Upon collection, the impact fees shall:

(1) Be deposited into a dedicated fund or interest-bearing account;

(2) Be expended for the costs of school construction, which includes planning, engineering, architectural, permitting, financing, and administrative expenses, and any other capital equipment expenses pertaining to educational facilities; and

(3) Not be expended for any costs relating to land acquisition, or the maintenance or operation of existing schools within the benefit district.

(c) If impact fees are not expended or encumbered within six years of the date of collection, the department of education shall refund to the developer or the developer's successor in title, the amount of fees paid and any interest accrued. Fees paid shall be considered expended on a first-in, first-out basis. Application for a refund shall be submitted to the department of education within one year of the date on which the right to claim arises. Any unclaimed refund shall be retained in the dedicated fund or interest-bearing account and expended as provided for in this section.

(d) In the event an applicant believes that the impact to the school system necessitated by residential construction is less than the fee established by rules adopted by the department of education, the applicant, prior to issuance of a building permit, may submit a calculation of an alternative school impact fee. The documentation submitted shall show the basis upon which the independent fee calculation was made. The proposed alternative impact fee shall be submitted to the department of education, which shall review the calculations and mail a written determination to the applicant within sixty calendar days. If the department of education determines that the calculation of the alternative impact fee was done by an acceptable methodology, then the alternative school impact fee shall be paid in lieu of the fee established by rules adopted by the department of education. If the department of education determines that the calculation of the alternative impact fee was not done by an acceptable methodology, then the alternative school impact fee calculation shall be rejected.

(e) Any applicant subject to the school impact fee requirements pursuant to this section may apply for credit for any similar contribution, payment, or construction of public school facilities accepted and received by the department of education for the same subdivision subject to this section. No credit shall be authorized against the impact fees for dedication of land or payment of an in-lieu fee of land dedication. Credits for contributions, payments, or construction made prior to the effective date of this section shall be provided if the subdivision for which the contribution, payment, or construction was made has not been completed. The current owner of the property for which such contribution, payment, or construction was made as a condition of development approval shall file an application for credit within one year of the effective date of this section. If the application is not made within one year following the effective date of this section, no credit shall be provided. The application for credit shall be submitted and reviewed as provided in this section. The amount of the credit for a contribution, payment, or construction made prior to the effective date of this section shall be the current value of the contribution, payment, or construction, less the total amount of school impact fees that would have been owed for the building permits already issued for the project had those permits been subject to the fees specified in subsection (d) that are to be in effect after twenty-four months following the effective date of this section. The current value shall be determined using the Engineering News-Record Construction Cost Index, or an equivalent index if that index is discontinued. Credits for payments or contributions prior to the effective date of this section shall not exceed that value of the impact fee required under this section. A construction credit may be applied only against school impact fees that would otherwise be due for building permits issued within the subdivision for which the contribution was required as a condition of development approval. The department of education shall maintain an accounting of the amount of the credit applicable to the subdivision, and shall reduce the amount of the credit by the amount by which the school impact fees that would otherwise be due are reduced for each building permit issued for the subdivision. After the credit balance is exhausted, no additional credits shall be applied to subsequent building permits issued within the subdivision. If private construction of school facilities is proposed by a developer after the effective date of this section, and is acceptable to the department of education, and the value of the proposed construction exceeds the total impact fees that would be due from the development, the department of education shall execute with the developer an agreement to provide reimbursement for the excess credit from the impact fees collected from other developers within the same benefit district."

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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