S.B. NO.



S.D. 2


H.D. 1


C.D. 1












SECTION 1. The legislature finds that agriculture has a long and valuable history in Hawaii and continues to be an important industry generating $1,900,000,000 and 42,000 jobs. With the decline of the sugar industry, agricultural lands have been increasingly used by small farms growing diversified agricultural products which have gained recognition in foreign and domestic markets. Despite the importance of agriculture, in the last twenty years the State has developed nearly 3,300 acres of prime farmland, increasing the price of remaining land and creating financial hardships for farmers. Article XI, section 3, of the Hawaii State Constitution requires the State to conserve and protect agricultural lands and increase self-sufficiency and directs the legislature to provide standards and criteria to meet these requirements. Yet, the State needs a strategic community-oriented criterion to protect our unspoiled landscapes and farming lands, preserve the beauty of the islands, and secure its unique agricultural business.

The increased development of farmland is partially the result of the addition of substantial numbers, at least 100,000 on average, to the Hawaii resident population each decade from 1960 to 2000. For each decade between 2000 and 2030, the population is expected to increase by 140,000, with approximately 59,000 of that growth being in the neighbor island counties.

The increasing population puts pressure on the State and counties to implement land use practices that carefully regulate a balance of development while sustaining the beauty and natural resources of the islands. Changes in state and county land use practices need to be implemented to plan for proper population growth; otherwise, new housing supply will decrease and island-wide prices will increase. It costs approximately $300,000 to subsidize one affordable rental unit, which, multiplied by the state shortage of 10,000 units, requires $3,000,000,000 of taxpayer subsidy and provides no solution to the affordable housing shortage or expansion of urban sprawl. On the island of Oahu, up to 4,000 new households are created each year which requires the building of 100,000 new homes over the next twenty-five years.

Concurrently, changes need to be made to provide opportunities to preserve or increase the number of affordable housing facilities within transit-oriented development zones and improve facilities for the care of children and the elderly. Family-oriented support services for children and elders, including child care and elder care so that families can use mass transit while meeting the needs of their family members. Focusing on such redevelopment and reinvestment will provide communities in which future generations can grow up in a safe and healthy environment by reducing traffic congestion, greenhouse gases, and use of fossil fuels.

It is also important to encourage redevelopment and reinvestment in the historic nature of towns and communities to preserve Hawaii's heritage for future generations. Existing land use practices increase urban sprawl and have discouraged economic activity in main street settings by decreasing the number of visitors to main street shops and vendors because development is concentrated away from rather than in and around main street settings. The counties must look at tools such as transferring density rights, incentives for redevelopment, revenue generating public-private partnerships, and economic development strategies. Current land codes do not encourage consistency in maintaining building facades of historical buildings in the area or community. Encouraging the development of infrastructure that allows for a preferred choice of walking, biking, or the use of public transportation will help accommodate the State's growing population.

Existing land use practices, including statutes, ordinances, permitting, development application processes, and environmental infrastructure, need to be reviewed to effectively provide the necessary information and recommendations required to plan for the reduction of urban sprawl and proper development and redevelopment to accommodate population growth. Furthermore, to prevent urban sprawl from destroying our agricultural lands, a viable option would be to focus growth along the transit corridors and through the county development or sustainable communities plans for Ewa, Central Oahu, and the Primary Urban Center.

The purpose of this Act is to establish planning districts, create a comprehensive application process to apply for residential and commercial qualified projects, and establish the transit-oriented or main-street redevelopment district program.

SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part    . planning districts

46-A Findings and purpose. The legislature finds that successful planning for growth requires reducing sprawl and creating urban developments in existing and new communities that offer a high quality of life for a broad range of household types. Further, well-designed and well-integrated higher-density development can significantly reduce dependency on cars and decrease traffic congestion and vehicle emissions. Benefits are even greater when job locations and retail shopping locations are incorporated with the housing. Mixed-use neighborhoods make it easier for persons to park their cars in one location where they may accomplish several tasks. This not only reduces the number of car trips required but also reduces overall parking needs for the community and our carbon imprint. Infrastructure improvements are greatly needed to increase safety and promote healthy lifestyle habits such as walking and biking.

The purpose of this part is to facilitate commercial and residential development of an exceptional level of quality on land adjacent to public transportation stations and centers by creating a process and reduced up-front costs that will, in turn, act as catalytic projects for neighborhood reinvestment.

46-B Definitions. As used in this part, unless the context otherwise requires:

"Action" or "action taken" means approval, approval with modification, or disapproval.

"Application" means the preliminary plans and specifications for a qualified project and includes materials, such as plans, information, or specifications, submitted to a planning agency by a qualified developer.

"Legislative body" means the legislative body of the county to which a qualified developer submits an application for final approval of a qualified project.

"Main-street redevelopment project" means a project designed to promote, preserve, restore, and revitalize the culture, history, architecture, and economic viability of a small town or community.

"Planning agency" or "agency" means the planning agency of a county to which a qualified developer submits an application for a qualified project.

"Program" means the transit-oriented or main-street redevelopment district program pursuant to section 46-D, as established by the county.

"Qualified developer" means a person, landowner, corporation, organization, partnership, association, or other legal entity that is:

(1) Licensed to do business in the State; and

(2) Bonded and in good standing in an amount to be determined by the respective legislative body.

"Qualified project" or "project" means a project as defined by the county that is located wholly within a planning district and promotes public transit ridership.

"Transit-oriented development" or "transit-oriented redevelopment" means land use projects of relatively intense concentration involving a mixture of uses that depend upon and support transit ridership.

46-C Planning districts. The county may establish planning districts contained within the urban district that shall consist of:

(1) A main-street redevelopment project that is:

(A) Approved by the respective county legislative body in which the project is situated; and

(B) Eligible as a community financed project or business improvement district; or

(2) A transit-oriented development within a radius, as specified by a county with a population of five hundred thousand or more pursuant to rule, of a:

(A) Bus transit station or center, as designated by the county to achieve density and ridership goals, located within the county development or sustainable communities plans for Ewa, Central Oahu, and the Primary Urban Center that has existing infrastructure, public utilities, and roadways or is within a developed community; or

(B) Rail transit station, as designated by the county to achieve density and ridership goals, located at east Kapolei, the University of Hawaii West Oahu, West Loch, Waipahu, Leeward Community College, or Pearl Highlands;

provided that the designation of a planning district shall not change the land use classification of the parcel.

46-D Transit-oriented or main-street redevelopment district program. (a) A county that establishes a planning district shall establish a transit-oriented or main-street redevelopment district program. The program shall include:

(1) Guidelines for community-based planning for transit-oriented or main-street redevelopment districts;

(2) Strategies for infrastructure upgrades to support development and redevelopment;

(3) Minimum mixed use design and site plan guidelines;

(4) Guidelines for complete streets programs; and

(5) Strategies to promote public transit ridership.

(b) In developing the program, the county may establish minimum eligibility criteria for qualified projects, including:

(1) Minimum and maximum project sizes;

(2) Requiring a mix of commercial and residential uses;

(3) Establishing workforce and affordable housing requirements;

(4) Proposing parking ratios below any existing required ratio and a maximum cap on the total number of parking spaces, proposing a centralized public or private parking structure, or proposing a transportation plan with innovative parking solutions;

(5) Creating street level activities, including early evening hour activities and retail and public gathering areas; and

(6) Providing community benefits, including off-site open space, on-site social services space, and major off-site infrastructure upgrades.

(c) A county or county agency participating in the program shall adopt rules or regulations as necessary for the purposes of this section, including:

(1) Criteria for granting exemptions pursuant to sections 46-F and 46-G;

(2) Considerations, upon submission of an application for a qualified project to the planning agency, regarding the existing use of lands, including zoning, location, and future impacts; and

(3) Assurances for a fair and equitable application process.

46-E Requirements of contractor. Prior to performing any work on a qualified project, contractors or subcontractors shall be pre-qualified by demonstrating at least three years of experience in Hawaii on similar projects. The pre-qualification process shall be established by the legislative body of the county in which the project is situated.

46-F State incentives; exemptions. Subject to rules adopted pursuant to sections 46-D and 46-J, qualified projects in established planning districts shall be exempt from all state fees associated with land development; provided that approval for the exemption is granted by the state agency that would otherwise receive the fee.

46-G County incentives; exemptions. Subject to rules adopted pursuant to sections 46-D and 46-J, qualified projects in a planning district that are approved by the legislative body shall receive exemptions from the zone change process and compliance with zoning standards. Additionally, a county may adopt any other incentives that it deems appropriate to be granted to qualified projects.

46-H Qualified projects; application by developer; review. (a) A qualified developer may submit to a planning agency an application for approval of a qualified project within a planning district. The application, excluding an application for a main-street redevelopment project, shall include a transit ridership study that demonstrates the need for development by determining the size of the service population, transportation demands, and other factors that will achieve desired transit ridership goals and overall land use density, as determined by the planning agency; provided that the overall land use density shall be consistent with existing county general plans and state plans.

(b) The planning agency shall review the application and secure any additional information that the planning agency deems necessary for the purpose of taking action. The planning agency shall take action within forty-five days of the application being deemed complete; provided that the time to take action may be extended up to ten days for good cause. No later than fifty-five days of the application being deemed complete, the planning agency shall notify the developer of the action taken.

(c) If the planning agency approves the application, with or without modifications, the planning agency shall forward the application with its recommendation to the legislative body. The legislative body shall have forty-five days from the date of receipt of the planning agency's recommendation to approve, approve with modifications, or disapprove the application by resolution.

46-I Floor area ratio transfer. (a) There is established a discretionary review process to be conducted by the county legislative body, subject to the recommendation of the county planning director, for the transfer of floor area within a planning district from sending sites to a receiving site within a planning district established pursuant to section 46‑C(2)(B). The purpose of this process is to encourage the transfer of floor area to properties with lot dimensions that allow for additional floor area while complying with the building envelope requirements and building height requirements set forth in a county land use ordinance.

(b) The proposed creation and redemption of floor area ratio transfers shall take place solely on a voluntary basis between consenting parties. Landowners shall not be required to create or convey floor area ratio transfers; provided that floor area ratio transfers shall be created, conveyed, or redeemed in accordance with this section to be recognized by a legislative body.

(c) Floor area ratio transfers shall not involve an existing public park or open space.

(d) All requests to create, convey, and redeem floor area ratio transfer credits shall be accompanied by and occur in conjunction with the following:

(1) A project agreement, including any accompanying permit approval request, improvement permit, development permit, conditional use permit, variance, and master plan permit; and

(2) A proposal to create, convey, and redeem floor area ratio transfer credits on forms prescribed by the director of the planning agency that contain the following information:

(A) Particular to a sending site:

(i) A cover letter identifying the landowner's name, mailing address, and contact information and briefly explaining what the landowner seeks to accomplish;

(ii) A certificate of title demonstrating ownership of the proposed sending site and receiving site;

(iii) A draft covenant that provides the protections and restrictions on the proposed property;

(iv) A baseline documentation report that establishes the current condition of the proposed sending site that contains, at a minimum, a general location map, legal description and sketch of parcel boundaries, and documentation (such as maps, written summaries, and photographs) of existing conditions that relate to the proposed easement restrictions as well as the proposed rights to be retained by the landowner; and

(v) An affidavit signed by the landowner and preparer of the submittal, attesting to the accuracy of the information contained in the baseline documentation report; and

(B) Particular to a receiving site, plans, diagrams, and supporting text that clearly identify and illustrate the location and extent of proposed floor area transfer.

(e) The legislative body shall review and act upon all applications for floor area ratio transfers to create, convey, and redeem floor area ratio transfer credits after receiving a recommendation from the respective county's director of the planning agency.

(f) The legislative body shall make the following findings of fact to approve an application to create, convey, and redeem floor area ratio transfer credits that the:

(1) Receiving site allows for additional floor area while complying with the building envelope requirements and the land use ordinance; and

(2) Creation, conveyance, and redemption of floor area ratio transfer credits enable the subject lots to fulfill the development objectives of the county general or development plans.

(g) The creation, conveyance, and redemption of floor area ratio transfer credits shall be limited by the following:

(1) Floor area ratio transfer credits shall not be created or redeemed in conjunction with a variance approval to exceed any maximum building height or building footprint, or reduce any setback specified in the county land use ordinance;

(2) No more than fifty per cent of the maximum permitted floor area ratio shall be transferred from any sending site; provided that contiguous lots may transfer one hundred per cent of the maximum permitted floor area ratio; and

(3) Floor area ratio transfer credits shall be created and redeemed concurrently. No floor area ratio transfer credit may be reserved for future conveyance to a sending site.

(h) To establish floor area ratio transfer credits, the sending site landowner shall record a covenant running with the land over the sending site consistent with this section. The covenant shall:

(1) Run with the land on the sending site;

(2) Restrict the floor area ratio of the sending site to the ratio established by the transfer; and

(3) Name the planning agency as an intended beneficiary with the right to enforce the covenant.

(i) The director of the planning agency shall maintain a register of all floor area ratio transfer credits both created and redeemed pursuant to this section and shall update this register annually.

46-J Adoption of rules. A planning agency may adopt rules pursuant to chapter 91 that are necessary to effectuate the purposes of this part, including rules to specify materials that shall be necessary components of a complete application."

SECTION 3. The office of planning may establish two temporary positions, subject to chapters 76 and 89, Hawaii Revised Statutes; provided that funding for the positions shall be provided by the Honolulu authority for rapid transportation to carry out the purposes of this Act.

SECTION 4. There is appropriated out of funds to be provided by the Honolulu authority for rapid transportation the sum of $250,000 or so much thereof as may be necessary for fiscal year 2012-2013 for two temporary positions in the office of planning.

The sum appropriated shall be expended by the office of planning for the purposes of this Act.

SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. 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 7. This Act shall take effect on July 1, 2012.


Report Title:

Hawaii Community Development Authority; State-wide Planning; Appropriation



Establishes planning districts and creates a process for developers to apply for residential and commercial qualified projects. Establishes the transit-oriented or main-street redevelopment district program. Authorizes state and county incentives for qualified projects. Establishes a discretionary review process for the transfer of floor area within certain planning districts. Authorizes the office of planning to hire two temporary positions to be funded by the Honolulu authority for rapid transportation, if funds are available. (CD1)




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