THE SENATE

S.B. NO.

168

TWENTY-SEVENTH LEGISLATURE, 2013

S.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO HAWAIIAN AFFAIRS.

 

 

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

 


     SECTION 1.  The legislature finds that the State of Hawaii is currently dealing with a financial crisis.  As a result of the recent economic downturn, state and county governments have had to reduce or eliminate various public services.  All eighteen of the state principal departments, including the Department of Education and University of Hawaii, are underfunded and understaffed.  In the wake of this shortfall in revenue, the State is also faced with growing debt and unfunded pension and welfare obligations in the billions of dollars.

     Adding to this already challenging situation is the recent decision of the Hawaii Supreme Court, which held in Nelson v. Hawaiian Homes Commission, 127 Haw. 185 (2012), that the State must provide "sufficient funds" to cover the administrative and operational expenses of the department of Hawaiian home lands.  This obligation, currently about $15,000,000 per year, not only runs in perpetuity but also requires a back payment.

     The department of Hawaiian home lands is also facing a fiscal crisis.  The $600,000,000 settlement awarded to the department of Hawaiian home lands in 1995 was largely spent by the prior administration, and this award will likely be completely diminished in about two years.

     The purpose of this Act is to create an innovative approach to:

     (1)  Provide a settlement vehicle, regarding the Nelson decision, between the State and the department of Hawaiian home lands that would ensure that "sufficient funds" are provided by the State to the department of Hawaiian home lands;

     (2)  Generate much needed revenues for the general fund and the department of Hawaiian home lands;

     (3)  Create a vehicle to obtain revenue that will not require the State or the department of Hawaiian home lands to bear up-front costs; and

     (4)  Utilize lands and assets that are not Hawaiian home land trust lands to generate revenue.

     In summary, this Act authorizes the department of Hawaiian home lands to enter into public-private partnerships for projects that will create revenue to provide the "sufficient funds" that the State must provide to the department of Hawaiian home lands.

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

"CHAPTER

PUBLIC-PRIVATE PARTNERSHIP FOR THE BENEFIT

OF HAWAIIAN HOME LANDS

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

     "Applicant" means any individual or private entity who seeks to enter into a public-private partnership under this chapter.

     "Department" means the department of Hawaiian home lands.

     "Individual" means a natural person.

     "Private entity" means any company, corporation, limited liability company, partnership, or sole proprietorship that has no officer, director, shareholder, or managerial employee that is an employee of the State.

     "Qualifier" means an affiliate, affiliated company, officer, director, or managerial employee of an applicant, or a person who holds greater than a five per cent direct or indirect interest in an applicant.

     §   -2  Authority for department of Hawaiian home lands to enter into public-private partnerships.  (a)  Notwithstanding any law to the contrary, the department of Hawaiian home lands, by using the request for proposals process or by direct negotiation, may enter into an agreement with a private entity or individual for the private development, management, and operation of any land or the private development, management, and operation of any enterprise.

     (b)  The department of Hawaiian home lands may enter into public-private partnerships in the following areas:

     (1)  The lease, development, management, and operation of any lands that will result in revenue for the department;

     (2)  The development, management, and operation of an enterprise that will result in revenue for the department;

     (3)  The development of any concept proposed by an applicant that would result in revenue for the department, even if the concept requires legislative changes to existing statutes or regulations; and

     (4)  Any other area that may result in revenue for the department.

§   -3  Criteria for selection of private entity or individual.  The following criteria shall be considered for all applicants that seek to enter into a public-private partnership with the department:

     (1)  The applicant's history of success in either the development of land or the management and operation of a private enterprise;

     (2)  The applicant's history of, or a bona fide plan for, community involvement or investment in the project proposed by the applicant;

     (3)  The applicant's financial ability to fund the development of the land or private enterprise; maintain adequate liability and casualty insurance; and provide an adequate surety bond;

     (4)  Sufficient data identifying the applicant's sources and adequacy of capital to develop, construct, operate, and maintain the land development or enterprise;

     (5)  The applicant's adequacy of capital to develop, construct, operate, and maintain, for the duration of the project, the proposed development or enterprise in accordance with the requirements of this chapter; and also to pay off its secured and unsecured debts in accordance with any financing agreements and other contractual obligations;

     (6)  The extent to which the applicant or any of its qualifiers have developed land or operated an entity in either:

         (A)  A metropolitan area in a tropical climate that has an oceanfront beach; or

         (B)  A rural area in a tropical climate.

          Tropical climate means an area that is classified as a tropical climate on the Köppen climate classification; and

     (7)  The caliber of the applicant's development or private enterprise, including the amount of economic benefit to the community, anticipated or actual number of employees, compliance with federal and state affirmative action guidelines, and projected or actual gross receipts.

     §   -4  Fee charged to applicant.  The department shall be authorized to assess each applicant a nonrefundable application fee in an amount to be determined by the department that shall be paid to the department at the time of application.  The purpose of the nonrefundable fee is to defray the costs associated with the department's review of the proposal."

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

 


 


 

Report Title:

Hawaiian Affairs; Public-Private Partnership; Department of Hawaiian Home Lands

 

Description:

Authorizes the department of Hawaiian home lands to enter into public-private partnership agreements with any individual or private entity to create revenue for the department.  (SD1)

 

 

 

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