Senate Standing Committee on Education

Welcome 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 p.m. 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 legislature'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 legislature's website.

I'd like to take this time to remind our testifiers that due to time restrictions on our hearing, we will be limiting testimony to one minute for testifier purpose. 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 1088 HD1 relating to school impact fees which exempts housing developed by the Department of Hawaiian Homelands from school impact fees. Testify.

Good afternoon. Chairs, Vice Chairs, Members of the Committee, Dino Chida, 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 and the Department of Climate Homes and is open to eliminating the construction cost impact fee for DHHL probably as well as any other government affordable housing developer.

But we'd 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 the area. Thank you.

Thank you. Ricky Fujitani, Executive Director, SFA.

Members, Questions? partner with Hawaiian Homelands.

Aloha Kenya Tam, testifying for Ricky Fujitani from the School Facilities Authority. We submitted testimony in support of this measure and we'll stand on that testimony and available for any questions. Thank you.

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.

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 in strong support. We do want to note that our testimony makes reference and attaches the 10th emergency proclamation for affordable housing.

We're actually in the 11th proclamation, but the exemption that exists there for school impact fees for DHHL is still in the 11th. We also want to make note that we have no objection. We did receive pre hearing notice from the Waiahuli Hawaiian Homestead Association about their proposed amendment and we have no objection to that. Thank you.

And available for questions. Thank you.

Tom Yamachika, Tax foundation of Hawaii.

Good afternoon. Chairs, vice chairs, Committee Members, Tom Yamachika from Tax foundation of Hawaii. The school impact fee program has had some difficulties, one of which is that because of the current restrictions on the Fund or and I'm talking but not only the school impact fee program but its predecessor, none of the money's been spent.

So we have about 29 million currently doing nothing in this program. So. We kind of raised the question and not only that, but the Auditor in report number 1913.

Can you speak up, ace? It's hard to hear.

Okay, I'm very sorry. We also note that the State Auditor in report number 1913 has called attention to several problems regarding the Administration of the School impact fees and has raised constitutional concerns. 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 on this measure? Members questions?

Chair, Hawaiian Homes. For the record.

Oh, Katie Lambert, Department of Hawaiian Homelands.

Okay, thank you. How many built homes do you think you have in the pipeline, say in the next five years?

So we do have attached to our testimony and I think this was in response to this big when it was going through previous committees, we were asked to try to quantify what the cost would be. So part of our testimony does note locations where we are planning, I think largely Act 279 projects.

And so in the excuse me. So in the pipeline, for example, we have a lot of things coming up in our Kapolei. In fact, on Saturday we're having a lot offering for our East Coppola developments and you can see that the school impact fees there would be $4,000,940-70.

I'm sorry, 700 $760 with a, with potential or anticipated lots being 1220 upcoming in the pipeline. So we do have that and it's we also have Hawaii County noted 600 so I'm so sorry. 1684 Lots with housing projected. Maui county with lots and dwelling units of 1421 lots with housing 1304 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. Thank you Chair.

Thank you Members for the question. Department of Hood Please. Good afternoon. Can you explain when you say that the apartment would be open to support the elimination of the construction impact fee for dhhm, provided agency provides necessary land for future public.

Right. I think part of what we've been looking at is there's two components to the impact fee. One is the land and one is the construction costs. 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 the school.

If the school is needed, if we don't collect the construction costs?

Whether you collect the construction costs or.

Not, 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 we. Charge you the fee, Correct.

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 impact fee is 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 I looked at what was passed out to us as far as your impact fees. And you have areas Kalihi to Ala Moana, Leeward to Oahu to Oahu, Central Maui, West Maui. And yet these fees, I mean, like Kalihi to Alamoana.

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 when the Tod things came up that allows the DOE to purchase like a warehouse or lease space for school because we understand that the land area might be limited. So they allow for more flexibility in how the fees could be used in that Ala Moana to Kalihi corridor.

Yeah, but aren't you folks consolidating schools?

We are starting that process right now, yes.

In what area?

I think they're looking statewide, except for Maui on enrollment.

Right but we've looked at Central School, Central Intermediate, which is now. Yeah. About consolidating. Right.

Yeah. So this is a statewide effort that we're looking at how they're going to go about it. I think it's just starting, like within the next month or so.

That's why I have concerns about how this impact fee is being implemented because it is intended for large projects that have multi. A lot of multifamily. The smaller projects, which is also have to pay the impact fee. Right.

If it's in. If it's in a declared impact fee district. Right.

So like Kalihi to Ala Moana. So if Kalihi people and they build a small apartment building 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 Kalihi.

You're probably right. Right. Not right now.

So, you know, that's the concern I have. And so we're going to exempt, and I'm not against exempting Hawaii Homelands for the homes that we need. But that's the case all around. Right.

I mean, Kali people are building on their lots because they can't find places to go, and yet they're being impacted by five to $10,000 worth of impact fees, which is big for a family unit.

I understand.

So, you know, this whole thing on impact fees is concern. You have what, 19.9 million, almost $20 million in your Fund statewide. Statewide Fund. And it's been that way for a while, right. Years. You've had all this money not being used.

And I know the law just changed in 2021, since 2021 to now, and you guys have $1.0 billion worth of. Of encumbered funds, CP funds that is sitting there not being utilized. I mean, not being funded because of lack of funds.

Well, the impact fee has to be used in the area was collected, so we cannot just take the money and apply it anywhere. So if it was in. If it was a project in Kapolei, then we'd have to use it for capacity in Kapolei.

Okay. So in Kalihi, how are you going to use the small amount of money that you're going to collect there?

I think they allowed us to do like renovations, add more capacity to existing schools. 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. Your 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 the big guys.

Oh, I don't know who made that statement, but I don't. I don't know. It came from new folks.

Yeah, it's in the audit. This audit was 2019.

But you guys inherited it and it's not a lot that changed, except now they have the law that allows you to use the monies for other things.

I don't know if they went back and looked at what the impact, like what you're talking about in Kalihi, where we're hitting 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. I agree. That was the concern raised in the audit that you folks are not looking at your program and how to implement it. You're so busy looking for new things. I can find a statement that they make in there.

I agree with you.

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 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 an exclude.

So if that's the case, then you should not be charging these small landowners or the small 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 the impact fee right now. That's why.

Okay, thank you, Chair.

Yes, sir.

So just. Just a couple of things. I understand. And when this impact fees came about, it was never, ever, and I'm gonna be clear, was made for somebody who building one extra room in the house or building one 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, Kapolei was never there. It's gonna be. Take this on the record. So you guys Understand that's Ever Plains from Pua Loa Nimitz to Black Rock Nanakuli. That's our community.

You guys keep calling them Kapolei. Don't get me wrong with the Kapolei people. But I'm saying when you guys make development reason why you guys getting confused on the books. Because 96706 is being left out because you guys keep using Kapolei. Kapolei is not Croc center. That's Eva Beach.

A new development of Hawaiian homes is in Eva Beach. The new elementary school is in Eva Beach. The new high school is in Eva Beach. So that's why when you said the highly impact areas to be used, we get families in Eva 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 in Ocean Point going for right now? Huh? $5 million. Anybody in this room we can all put together, we're not gonna afford that house. Our community is going up, the impact is going up. Yes, but the big picture was the large developers.

Haseiko, Gentry, right? They are Horton, right, Coral Ridge, all those areas that making big impact. Right? Not saying they don't. You're talking about you like them, you like them to give, to take away the impact. Okay, fine, but don't take away the land.

But you guys gotta specify to this Committee don't just get the land, you gotta have the developer build the infrastructure. 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 in to build. Correct. 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 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 I don't want to keep hearing that 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? Because if you guys cannot then I understand. But don't tell us all these guys effort reading, you know what I mean? I understand that. I understand too Because I'm a new Senator. I took over from my house here.

You don't hear me blaming my previous Senator for things that. Because he's not here, you take it up, put on your big boy pants, and you move on. Don't tell us because the person went liberating. Cannot. We cannot do that. And I. And. And I know you long time. You know what I mean?

We work a long time together. You know, the projects we worked on. But the impact fees was never to hurt a 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 were salvaging anything and how we're going to salvage them.

You had to give more details. Thank you, Chair.

Thank you, Members, for the questions. Troy has a question.

All right, Deputy 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. I apologize if you didn't get it. But 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 Mall with impact fee law, and we got like 373.4 acres using the fair share or educational contribution agreement.

To date, since the impact fee law was in place, a lot of the projects got LUC 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 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 west side is saying, he has, you know, you guys got your fair share of land, right? But you're not wanting to 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, 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 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.

This is Gentry now 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 what. What the issue is, but when you're old land, you should be like, okay, we're going to take it.

Or if you don't like those lands or if there's problems, problems with the lands, then maybe it's, you know, and you guys don't want it then. Then I don't know why we need to have this. This. This impact in place if you're not going to take the land anyway.

Yeah, I got to go find out why we're not taking the land. I don't know if the infrastructure is not in yet or where we are on the project, but I'll follow up.

But you can't have it both ways. You can't say, okay, we want the land, but we really, really, we don't want the land.

I don't know what the status is and why the land's not being convinced. 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 Favela is right. I think, you know, 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 part of that, that's why I'm really concerned about 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 Department of Hawaiian Homelands doesn't go through that, but, you know, so I think that's a whole other conversation with them.

But I think when you take a look at impact visa, it has to make sense, right, in terms of what we're trying to do to get, you know, to make sure that we have places. But if. Even if we have places you know, it doesn't make sense if you guys don't want it.

So I think you guys really got to take a deep dive. If you really want this, you. You have to take a deep dive and fix it. And it's been kind of frustrating. The Department says, oh, we want it, we want it.

And yet you letting you look at the audit and most of those things didn't get addressed. So. Thank you, Chair.

Thank you. So going back, can you tell me how much money is been collected to be used for Kalihi schools?

We collected about 500,000 of construction money and 2.8 million in land contribution.

No, but Kalihi, does that include that? Is that only Kalihi or is that Kahlahi? The whole projects that are being built is the Keaumoku area, that whole Ala Moana area there. That's where most of the money coming from.

I want to know how much money Kalihi, you guys charge Kalihi residents or people in that area in Kalihi and how much money can build can be used for the schools. Because you said it's for the area you collected from.

I have to get back to it. I don't have that breakdown right now. Okay.

Because I have an issue with how you guys are breaking it down to. To lump Kalihi with Al Moana area and Kakaako area and all of those areas to me 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 Kali to Ala 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, costs 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 on. So have you folks done that? Have you updated the district calculations?

I don't think so, but I have to go back double check again.

Yeah, I don't think. And this came out before it went to SFA. This came out in 2019. 2019 to the- you both haven't done that. So again, it's difficult for me to support this free going on when you folks have not even attempted. And all we got now is this really fancy PowerPoint.

You guys tend to miss all the stuff, yet you haven't even done what was. What was in the audit.

I agree.

Are the questions, Amanda? If not, recess.

Reconvening the joint committees on Hawaiian Affairs, Education and Housing. The recommendation of the chair of Community on Education is to defer this measure.

On the Committee on Hawaiian Affairs. 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. 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 shares the commendation is to pass as is. Chair votes aye. Senator San Buenaventura is with reservation. Senator Ihara. Aye. Senator Keohokalole? Aye Senator Decorte aye. Chair recommendation has been adopted.

Thank you. Committee on Housing will be deferring this measure as well.

Thank you, Members. Thank you.