HB 743: RELATING TO FISCAL SUSTAINABILITY.

A BILL FOR AN ACT

RELATING TO FISCAL SUSTAINABILITY.

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

     SECTION 1.  The legislature finds that maintaining fiscal sustainability during development is critical.  New development proposals need to be evaluated not only against adopted development regulations and construction standards, but should be judged, in part, based on the long-term revenues and costs incurred by public entities.

     The legislature further finds that land use planning would benefit from incorporating a methodology that evaluates existing and proposed development by their expected fiscal contributions and ongoing costs for services and infrastructure.  Such a methodology would give decision-makers and the public the information needed to assess both individual project proposals and regional investments.  The development of such a methodology requires the assistance of a steering committee and an entity with the necessary fiscal modeling expertise.

     Accordingly, the purpose of this Act is to:

     (1)  Require the office of planning and sustainable development to:

          (A)  Develop a model to assess the fiscal impacts of land use development projects and regional infrastructure investments; and

          (B)  Establish a fiscal sustainability steering committee to advise in the development of the model; and

     (2)  Appropriate funds for the development of the fiscal impact model, related staffing, and support for the steering committee.

     SECTION 2.  (a)  The office of planning and sustainable development shall develop a model to assess the fiscal impacts of land use development projects and regional infrastructure investments.  The office may procure consultant services, subject to the requirements of chapter 103D, Hawaii Revised Statutes, for the development and implementation of the fiscal impact model.

     (b)  The development of the fiscal impact model shall include but not be limited to the following:

     (1)  A model, customized for each county, that allows for the assessment of fiscal costs and benefits of individual land development projects and regional investments within the same market.  The model shall be capable of capturing estimated ongoing maintenance costs and future replacement costs of infrastructure serving land development projects and any annual general costs, including public safety and administrative services.  The model shall allow users to input data so that:

          (A)  State and county fiscal revenues and costs can be mapped by land use type;

          (B)  Fiscal productivity of various development patterns in the State can be compared at the parcel level, by land use type;

          (C)  The value of any new development can be measured and evaluated, and measured against proposed entitlements;

          (D)  Public policy decisions can be analyzed to reduce or eliminate taxpayer subsidies; and

          (E)  Funding of capital improvements can be prioritized based on their anticipated return on investment;

     (2)  Training for state and county employees in the use, methodology, and updating of the model, including developing user-tested training material, so that upon completion of the model's development, county employees can successfully use and update the model; and

     (3)  Ensuring that the model outputs can be easily read and interpreted, with geo-referenced visual mapping, by members of the public.

     (c)  The office of planning and sustainable development shall establish and provide support for a steering committee to advise on the development of the fiscal impact model.  The steering committee shall be comprised of the following members:

     (1)  The director of the office of planning and sustainable development, or the director's designee, who shall serve as the co-chairperson of the committee;

     (2)  The director of finance, or the director's designee, who shall serve as the co-chairperson of the committee;

     (3)  The director of taxation, the director's designee, or the department of taxation's research and planning officer;

     (4)  The administrator of the research and economic analysis division of the department of business, economic development, and tourism, or the administrator's designee;

     (5)  The budget and finance directors of each county, or the county directors' respective designees; and

     (6)  The planning directors of each county, or the county directors' respective designees.

     (d)  The office of planning and sustainable development shall submit a report on the development of the fiscal impact model to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $300,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the development of the fiscal impact model pursuant to section 2 of this Act.

     The sums appropriated shall be expended by the office of planning and sustainable development for the purposes of this Act.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to hire one full-time equivalent (1.0 FTE) temporary planner (planner V equivalent), who shall be exempt from chapter 76, Hawaii Revised Statutes, to manage the fiscal impact model development project and support the work of the steering committee as required pursuant to section 2 of this Act.

     The sums appropriated shall be expended by the office of planning and sustainable development for the purposes of this Act.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Land Use; Fiscal Impact Model; Fiscal Sustainability; Appropriation

Description:

Requires the Office of Planning and Sustainable Development to develop a model that assesses the fiscal impacts of land use development projects and regional infrastructure investments.  Appropriates funds.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to fiscal sustainability.

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

     SECTION 1.  The legislature finds that maintaining fiscal sustainability during development is critical.  New development proposals need to be evaluated not only against adopted development regulations and construction standards, but should be judged, in part, based on the long-term revenues and costs incurred by public entities.

     The legislature further finds that land use planning would benefit from incorporating a methodology that evaluates existing and proposed development by their expected fiscal contributions and ongoing costs for services and infrastructure.  Such a methodology would give decision-makers and the public the information needed to assess both individual project proposals and regional investments.  The development of such a methodology requires the assistance of a steering committee and an entity with the necessary fiscal modeling expertise.

     Accordingly, the purpose of this Act is to:

     (1)  Require the office of planning and sustainable development to:

          (A)  Develop a model to assess the fiscal impacts of land use development projects and regional infrastructure investments; and

          (B)  Establish a fiscal sustainability steering committee to advise in the development of the model; and

     (2)  Appropriate funds for the development of the fiscal impact model, related staffing, and to support the steering committee.

     SECTION 2.  (a)  The office of planning and sustainable development shall develop a model to assess the fiscal impacts of land use development projects and regional infrastructure investments.  The office may procure consultant services, subject to the requirements of chapter 103D, Hawaii Revised Statutes, for the development and implementation of the fiscal impact model.

     (b)  The development of the fiscal impact model shall include but not be limited to the following:

     (1)  A model, customized for each county, that allows for the assessment of fiscal costs and benefits of individual land development projects and regional investments within the same market.  The model shall be capable of capturing estimated ongoing maintenance costs and future replacement costs of infrastructure serving land development projects and any annual general costs, including public safety and administrative services.  The model shall allow users to input data so that:

          (A)  State and county fiscal revenues and costs can be mapped by land use type;

          (B)  Fiscal productivity of various development patterns in the State can be compared at the parcel level, by land use type;

          (C)  The value of any new development can be measured and evaluated, and measured against proposed entitlements;

          (D)  Public policy decisions can be analyzed to reduce or eliminate taxpayer subsidies; and

          (E)  Funding of capital improvements can be prioritized based on their anticipated return on investment;

     (2)  Training for state and county employees in the use, methodology, and updating of the model, including developing user-tested training material, so that upon completion of the model's development, county employees can successfully use and update the model; and

     (3)  Ensuring that the model outputs can be easily read and interpreted, with geo-referenced visual mapping, by members of the public.

     (c)  The office of planning and sustainable development shall establish and provide support for a steering committee to advise on the development of the fiscal impact model.  The steering committee shall be comprised of the following members:

     (1)  The director of the office of planning and sustainable development, or the director's designee, who shall serve as the co-chairperson of the committee;

     (2)  The director of finance, or the director's designee, who shall serve as the co-chairperson of the committee;

     (3)  The director of taxation, or the department of taxation's research and planning officer;

     (4)  The administrator of the research and economic analysis division of the department of business, economic development, and tourism, or the administrator's designee;

     (5)  The budget and finance directors of each county, or the county directors' respective designees; and

     (6)  The planning directors of each county, or the county directors' respective designees.

     (d)  The office of planning and sustainable development shall submit a report on the development of the fiscal impact model to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $300,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the development of the fiscal impact model pursuant to section 2 of this Act.

     The sums appropriated shall be expended by the office of planning and sustainable development for the purposes of this Act.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to hire a temporary full-time equivalent (1.0 FTE) planner (planner V equivalent), who shall be exempt from chapter 76, Hawaii Revised Statutes, to manage the fiscal impact model development project and support the work of the steering committee as required pursuant to section 2 of this Act.

     The sums appropriated shall be expended by the office of planning and sustainable development for the purposes of this Act.

     SECTION 5.  This Act shall take effect on July 1, 2025.

Report Title:

Land Use; Fiscal Impact Model; Fiscal Sustainability; Appropriation

Description:

Requires the Office of Planning and Sustainable Development to develop a model that assesses the fiscal impacts of land use development projects and regional infrastructure investments.  Appropriates funds.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  710

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 743

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Water & Land, to which was referred H.B. No. 743 entitled:

"A BILL FOR AN ACT RELATING TO FISCAL SUSTAINABILITY,"

begs leave to report as follows:

     The purpose of this measure is to require the Office of Planning and Sustainable Development to develop a model that assesses the fiscal impact of land use development projects and regional infrastructure investments.

     Your Committee received testimony in support of this measure from the Hawaiʻi Appleseed Center for Law & Economic Justice; Housing Hawaiʻi's Future; and three individuals.  Your Committee received comments on this measure from the Department of Taxation and Office of Planning and Sustainable Development.

     Your Committee finds that fiscal impact modeling is a means of analyzing the long-term financial effects of land use decisions on government revenues and expenditures.  Your Committee further finds that a fiscal impact assessment tool could be used by the counties or state agencies to evaluate whether development proposals or regional land use patterns positively contribute to the ongoing operational, maintenance, and replacement costs of public infrastructure, facilities, and services required to support development.

     Your Committee has amended this measure by:

     (1)  Authorizing a designee of the Director of Taxation to serve in place of the Director as a member of the steering committee to advise on the development of the model;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Water & Land that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 743, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 743, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Water & Land,