House Standing Committee on Housing

Good morning. I'd like to call to order our House Housing Committee hearing for Wednesday, March 18. We are on our 9am agenda, and it's 09:05AM in Conference Room 430. Sorry for the late start.

We had some technical difficulties and some last minute changes here. But thanks for bearing with us. We will be situating a two minute time limit to ensure allow as many people as possible to testify here. Please keep your testimony within two minutes. Because morning hearings must adjourn part of the new floor session, it's possible that not all testifiers may have the opportunity to testify.

Please, in that event, know that your written testimony will be considered by the committee. I don't think we're gonna get to that point, but just be aware. Please, if you're on Zoom, keep yourself muted and your video off while we did testify. And after your testimony is complete, the Zoom chat function will allow you to chat with the technical staff only. Please use the chat only for technical issues.

If you're disconnected unexpectedly, you may attempt to rejoin the meeting. And, please note that the house is not responsible for any bad Internet connections on the test of ours end. And please avoid using any trademarked or copyrighted images, and always please refrain from profanity or uncivil behavior. Such behavior may be grounds for removal from the hearing without the the ability to rejoin.

Alright we will dive right into our agenda. The first item on the agenda is SB2190 SD2, relating to inclusionary zoning. Vice chair for the testimony.

HHFDC in support.

Army chair, vice chair, CSAG on the testimony in support.

Thank you. Hawaii YIMBY in support. Grassroot Institute of Hawaii in support.

Aloha, chair, vice chair, Ted Kefalas, of Grassroot Institute. Stand on our written testimony in support.

Thank you. Housing Hawaii's future in support.

Aloha. Perry Arrasmith, Housing Hawaii's Future, stand on our testimony in support, thank you.

Thank you. Office of Hawaiian Affairs in opposition on Zoom.

Present.

Not present?

Present.

Oh, present.

They just started.

OHA.

We'll come back to OHA. Hawaii Apple Seed Center for Law and Economic Justice in support. Aloha Independent Living Hawaii in opposition. Two individuals in opposition and one in support. OHA, are you connected?

She's still on?

I'm trying to verbally log them in.

Anyone online or in person other than OHA wishing to testify on SB2190 SD2? Let's see. OHA?

Alright members any questions?

Seeing none. Next item agenda is SB 233 SD one relating to housing. Vice chair for the testimony.

Employee public housing authority with comments.

Each precinct stands at its testimony.

Thank you. Department of the attorney general with comments.

Good morning, chair, vice chair, member, deputy attorney general, Commander Abang. I just would like to highlight a couple of things from our written testimony, specifically in regard to the amendment which provides, HHDC and HPHA with autonomy and personal personnel matters. We would recommend clarifying the scope of that autonomy, including in how it interacts with civil service provisions of Chapter 76, as well as applicable collective bargaining requirements under Chapter 89, ratified by statutes. And in regard to the limit of employment contracts, we recommend that the provision be removed. But specifically, if the committee would like to keep the provision in, we recommend that the claims, unless approved by the legislature by Concurrent Resolution, be removed to avoid any separation of power issues.

I thank you, and I'll be available for any

questions. Thank you.

HHFDC with comments.

Morning, chair, vice chair. We stand for a testimony

in supporting with comments. I believe that the council we offer will address the concerns by the Department of the Attorney General.

Thank you. And one individual in support. Anyone online or in person wishing to testify on the s b 2338 s d one? It's a nutshell.

Members, any questions? I have a question for the attorney general. If we remove the language that allows the legislature to provide for extended contracts to be a resolution, Would HHFDC or HBHA boards have the authority to still renew a contract after the contract period ends?

Yes. The contracts are currently allowed. And if you just remove that portion, it would be allowed to enter into contracts with two year limit at the time.

So we wouldn't need to clarify that the respective boards have the authority to renew a contract. They can do a two year contract and then renew that contract after two years. That's correct. Okay. Thank you. Members, any further questions? All right. Seeing none, next item on the Agenda is s b 2424 s d one related to the Hawaii Housing Finance and Development Corporation, vice chair for the testimony.

HHFDC in support.

We stand by our testimony in support.

Thank you. Hawaii Community Foundation in support. Olomua Collaborative in support. Good, sir. Oh, morning, Josh.

Good morning.

Chair, vice chair, committee members, thanks so much. We do support this. I won't go through, of course, all of our testimony. Just a couple of things I'll note. Our related organization, Honolulu Collective, Joshua, Joshua, did a survey last year and underscored at the depth of the challenge that we've got with people trying to stick around, and we noted that about 75% of people said yes or maybe when asked if they'd leave from less expensive state.

And most of those people said that the reason was housing costs. And that's the reason that we're supporting a bill like this, which is really laser focused on trying to create new housing dedicated for the local workforce by making it easier for them to go through some the processes, to get housing that's, put together by HHFDC. And also to make sure that just because someone has once purchased an HHFDC property doesn't mean they never can again. This really incentivizes people being able to go up the housing ladder, and stay in Hawaii as their living arrangements change. So thanks so much, for hearing this.

We are strongly in support and available for your questions.

Thank you.

Toyota Guarantee of Hawaii, HPM supply, Mana Op, AIO, and Tory Richards in support. Hawaii in support. Church of the Crossroads in support. Housing Hawaii's Future in support.

We stand on our testimony. In support.

Thank you. Thank you. Kobayashi group in support. Hawaii Advocacy Center for Law and Economic Justice in support. AARP Hawaii in support, Limby Hawaii in opposition, Dowling Company in support.

We'll stand on our written testimony. Thank you.

Thank you.

And one individual in support. Anyone online or in person wishing to testify on s d 2424 s d one? Seeing none. Chair.

Members, any questions? I have a question for team HNFC. Morning.

So we've heard some about the difficulties in the current definition of qualified resident and how it makes it difficult for somebody to move up the housing ladder. And, honestly, the only real opposition on this bill is in relation to changing the definition of qualified resident. Could you walk us through how the current definition makes it difficult to move a thousand ladder, what that actually means, and what the changes would allow for?

Under the depth, current definition of qualified resident, a person who owns some majority interest in real property is disqualified from purchasing a unit that is assisted by HHFDC's programs. So, for example, someone that bought a unit in one of our projects earlier, They all still own that unit. They could not buy a larger unit, say, while we still own that unit. So what they would have to do is basically, you have to sell that unit before they can purchase the new unit. And practical terms, that that's very difficult to do.

So this bill attempts to allow people to move up the housing ladder. Where about if you if you bought a HSE assisted unit in the past, you could still purchase another assisted unit if your housing gets changed. So this is a it's a different approach, very different approach to our programs, but we support it because we see that this really could incentivize developers to provide more housing. And that really is what we need now, just more housing to be built in general.

Okay. Thank you. Members, further questions? Alright. Thank you. Next on the agenda is SB 2356 relating to parking. Vice chair of the testimony.

Department of Land and Natural Resources in support. Office of planning and sustainable development in support.

Aloha, chair, vice chair, members of the committee. Diana Setness with the office of planning and sustainable development. We stand on a written consent in support. I hope you have questions. Thank you.

Thank you. Unite Here Local Five in opposition. Hawaii Apple Seed Center for Law and Economics Justice in support.

Not present.

Hawaii Realtors is in support.

We stand on our testimony.

Thank you. Oahu Metropolitan Planning Organization in support. Avalon Development Company in support on Zoom.

Aloha, chair, vice chair, and members of the committee. We stand on our written testimony in support. We think this bill is well written and well targeted. We urge you to pass it. Thank you.

Thank you. Chamber of Commerce Hawaii in support. Hawaii Bicycling League in support, Hawaii INB in support, Grassroot Institute of Hawaii in support.

Aloha. Ted Kephalos of Grassroot Institute will stand on our written testimony in support. Thank you.

Housing Hawaii's future in support. Hawaii's stand on our testimony in support. Thank you. Thank you. Aloha Independent Living Hawaii in support. AARP Hawaii in support. Holumua Collaborative in support.

I'll push for Holumua. We'll stand on our next

one. Thank you. Council member, oh, Hodgins in support. Council member, Bolesam in support. Dale Vanderbrink, an individual in support. In person, not present, and four individuals in support. Anyone online or in person wishing to testify on s b 2356 s b one? Seeing none.

Members, any questions? Seeing none. Next item is s b 2981 relating to land use. Vice chair for the desk.

Office of Planning and Sustainable Development in support.

LBST stands on Sprint Test for Support.

Thank you.

Thank you. Unite here local five in opposition. Hawaii Apple Seed Center for Law and Economic Justice in support. Ulupono Initiative in support. Hawaii Realtors in support.

Thank you. Miss Adonard testimony in support.

Thank you. Hawaii YIMBY in support. Kahu Metropolitan Planning Organization in support. Avalon Development Company in support.

Aloha. We stand on our written testimony in support. Thank you.

Thank you. Chamber of Commerce Hawaii in support. Hawaii Bicycling League in support. Brassroot Institute of Hawaii in support. Aloha. We stand on our written testimony in support. Thank you. Housing Hawaii's future in support. Yes. We stand on our testimony in support. Thank you. Thank you. Aloha Independent Living Hawaii in support. AARP Hawaii in support. Holomua Collaborative in support.

Joshua Holomua, Wolf Standard Arts in support. Thanks, Josh.

Thank you. Narad, Hawaii in support. Housing Hawaii's future, Jeff Laopola in support. Council member Uhudgins in support. Individual Dale Vanderbrink in support in person, and 67 individuals in support of this measure. Anyone, online or in person wishing to testify on s B 2981?

Seeing none, chair. Members, any questions? Seeing none. SB3028SD2, Lane Inter property conveyance. Vice chair of the testimony.

Office of Planning and Sustainable Development in support. It's on a testimony in support. Thank you. Department of Taxation with comment.

The tax department will send out its testimony with comments. Thank you.

Thank you. DLNR in support.

Aloha. Department has written testimony in support, and we're here for questions. Thank you. Thank you.

Hawaii Realtors in opposition.

Thank you. We stand on our testimony.

Thank you. Avalon Development in opposition.

Aloha. We stand on our, written testimony in opposition. Thanks.

Thank you. Hawaii MB in support. Church of the Crossroads in support. Catholic Charities Hawaii in support.

Good morning, chair, vice chair, members of the committee. I'm Betty Lou Lars with Catholic Charities Hawaii. We strongly support this bill. We are asking for three amendments, which are in a way similar to one that the bill on the Canadian sects that you heard beforehand, each bill on 2029.

But first of all, we are asking that 10% of this fund be allocated to a new, homeless services special fund. On page two of our testimony explained that this is a really time at risk. The Federal Government has not renewed the second year of the federal funding. This could put 580 units of permanent supportive housing at risk as well as other programs. And so ongoing, we know that ending homelessness is a top street priority.

We feel there is a need for dedicated funding because services are the infrastructure. Just like we need it for housing, we need to really make a difference and to end homelessness. Secondly, we are asking, although it's not in this bill, that 30% of the revenues go to, Department of Hawaiian Home Lands for, the housing needs of Native Hawaiians. We feel this is really an obligation to the state, and it's really important to continue their process and to continue their ability to, create housing for Native Alliance. Thirdly, in the other bill, it reduces the, allocation to the rental housing revolving plan.

It was it has been 50% for many years. Reduces it to 20% with the added revenues. We're asking it be at least a minimum of 30% to the rental housing revolving fund. This fund, of course, has the major fund that is creating housing, for the last 25 years. It's created a thousand keys and there's only increasing the math for it.

So we just ask that we, you know, there are many long term needs of the state, but we ask you to balance the needs for housing, rental housing particularly, with the other needs that will be discussed in this bill as it moves forward. So we urge you to pass this this bill with these amendments. Thank you.

Thank you. Tax Foundation of Hawaii with comments

on Zoom.

Thank you, chair, vice chair, members of the committee. Tom Yamachika from Tax Foundation of Hawaii. We think that the idea of restructuring the convenience tax rates to a marginal rate system as is done for income tax is that's a good idea. We we do have some issue with rates that are several times what they are now. Although, it's impossible to tell from this bill because it's filled with blanks.

We also do not support the idea of having what some testifiers call the dedicated funding source. We think the legislature has to has has the or or should be retaining control of dispositions of of of the tax monies through its oversight function as it as it customarily does. Abdicating the oversight function by giving it to a special fund, we think is not a good idea. Happy to answer any questions. Thank you for the opportunity.

Thank you. Hawaii Children's Action Network Speaks in support.

Aloha, chair, vice chair, members of the committee. I'm Nicole Wu from Hawaii Children's Action Network Speaks. We support this bill. As you all know, our state cannot tax property directly, so we're missing out on a lot of revenue from our, you know, the full luxury multimillion dollar properties. A lot of those owners are from out of state, so they don't pay personal income tax either.

So really getting into sales tax, for these luxury properties is the way to sort of get these very fortunate people who benefit from our beautiful state to pay into the system. The way the bill originally was, it actually lowered the convenience tax for lower value properties, giving a break to people who can't afford to pay more, and then it raises for the for those at the top. And that seems to make a lot of sense to us. We have looked at h b 2049 and it has a different allocation for the revenues in Section four of it. So we request respectfully request that that language be inserted into this bill to be able to take the chance to address some of the state's obligations to the Department of Hawaiian Homelands.

Thank you for hearing my testimony. Please pass this bill.

Thank you. Hawaii Public Health Institute in support. Indivisible Hawaii in support.

Good morning, chair, vice chair, and members of committee. My name is Young you overly and I'm here representing Indivisible. We are in support of this bill with similar request of using the language from HB 2,049, although it's revenue allocation. I know Text Foundation had concerns about it, but I think it's very important that we meet the obligation. So thank you for considering.

Thank you. Grassroot Institute of Hawaii in opposition.

Aloha Tai Kefalas with Grassroot Institute. We'll stand on our written testimony in opposition.

Thank you. Niall Hawaii in opposition.

We stand on our testimony in opposition.

Thank you. Hawaii Appleseed Center for Law and Economic Justice in support. And 18 individuals in support of this measure. Anyone online or in person wishing to testify on SB3028SD2?

Seeing that, sir. Members, any questions?

Real quick.

Okay.

For mister Yamachika. Alright. Sorry. Oh, hi. Aloha, mister Yamachika. In your testimony, you pointed towards Mason manuals. Can you elaborate a little bit on that? Because you did mention in your testimony just not about blanks in the bill.

Yes, representative. Mason's legislative manual is the the parliamentary resource that that many state legislators use, including this one. And and it says, when proposals containing blanks are introduced, these must be filled before other motions to amend or entertain. That's a quote from the manual. We we note that some committees like to create blanks and bills before moving them forward. We don't think this is proper. That's why we had raised that objection.

Okay. Thank you for your clarification. Thank you.

Members, further questions? I have a question for DNR.

Good morning. David Penford DLNR. Good morning. And we also have Jenna from the Na'allah Hele program. Okay.

I guess, two questions. First, you're in the Na'allah Hele. So is would this fund the Na'allah Hele program? Is this what it's related to in this subsection?

Well, the way it's written now, it would accommodate the funding, but it doesn't provide any funding

right now. Yeah. If if the blanks are filled in. So the this the land and trails access program is synonymous within all LA program. Okay. And then currently, where is funding coming from for the program?

I've there's a number of different sources of funding. Maybe Jenna can come up. She's the acting manager for Northwell Hill. Thank you.

Hi. Good morning. Sorry. Trails are generally outside of the purview of my own.

Yeah. It's a

good matter here. So I'm I'm I'm more curious on where the what the existing funding sources are and and honestly what the needs are. And if this were to pass as we contemplate an allocation what the allocation should be. So if you don't mind, just maybe walk me through where the company preferred funding is.

Yeah. So our current funding, we just recently received a $2,000,000 general funds budget, like, in the last couple of years. We have some federal grants from the recreational trails program. We also are grant funded from some federal grants through the rescue. Let me get my American Rescue Plan Funding Act and the Economic Development Administration. So this would be supplemental funding for us. Yeah. And so we probably have about $50,000,000 of backlog projects that we would like to accomplish.

And 50.

About 50,000,000. So we have a wish list that's pretty long. And so a lot of this would go to just supplementally helping repair and maintain some of our trail systems, infrastructures, bridges, parking lots, expansion management plans.

Okay. And that's so I think the description might be a little misleading here. We should amend it, which we can do. But it says to fund land acquisition with Hawaii's statewide trail and access program. But then the text of the bill, it's much broader than just acquisition. It seems like it would allow you guys also to use the acquisition, but it certainly would be maintenance, etcetera.

Yep. And we could do land acquisition as well. We do have some things that we would like to do, like purchase parking areas, you know, acquisition of hiking trails on private lands and things like that.

And what would a meaningful contribution from the conveyance tax be for you folks?

You know what? I would have to do some of the numbers on that. So I could get back to you with that answer.

Okay. Thank you. Appreciate it. Representative Cochran?

Was Lindsay Percy is here?

Yeah. She is.

Is that right? Oh, I'm sorry. I had a quest hi. Sorry. You're here. To drag you out from in the back there. Morning. Thank you. So in your testimony, you mentioned historically the conveyance tax was was designed to cover administrative costs, I guess, for dough tax. Yes.

And I was told that it was to disincentivize, like, outside investment buyers for our lands. So do you know about that point? Why it was created in the first place? My understanding is that the conveyance tax was originally created to help pay for the administrative costs of running DOTAX. But perhaps DOTAX could be could better explain the history of that.

Okay. Alright. I just thought maybe you knew a little bit more in the investments of outside versus our leasing residents. So thank you, Brad. Okay. Alright. Thanks.

Eric Poughton, do you wanna ask DOTAX? Just Same question.

DOTAX here. Here? Yes. Oh, yes, please. I am not familiar with the history of the Oh, okay. Alright. It's here. I mean, I'll just follow-up offline then and k. Consent to the committee with more or if you know, chair.

You know, you might Wanna Tom, the Tax Foundation has said similar to the testimony if you wanna ask them.

Oh, yeah. Mister Yamachika, are you still here?

Yes. I am.

Hi. Did my question, was about the original purpose for the conveyance taxation, if you have a historical, knowledge about that.

Yes. And we have recounted some of that in our testimony. Basically, the conveyance tax, was originally enacted while the state was still running the property tax system. They needed to have, some way of figuring out what the values were because those didn't have to be reported on the conveyances. So so they adopted a relatively modest tax that allowed them to keep track of property values because they had to be declared for tax purposes.

And the the the tax rate at the time was was was was 5¢per $1005¢per thousand dollars.

Okay. And sorry, a follow-up, chair? Miss chair.

Go ahead.

Mister Yamachika, so and then in your with your best knowledge, the appropriations from such tax were utilized for do you recall in particular?

I believe when it was first first enacted, it was a general fund realization. So it it wasn't

No dedicated funding per se.

No. No. I I think the dedicated funding by by a special funds was a much more recent innovation.

Okay. Alright. Thank you. Thank you, chair.

Thanks, Tom. Falcon, any further questions?

No. Thank you.

Members, any additional questions? Alright. Next item on the Agenda is SP3187 ST2 relating to off-site construction. Vice chair of the deskphone.

Office of Planning and Sustainable Development in support.

OPSD stands on for in testimony support. Thank you.

Thank you. Plumbers and Fitters, local 675 in support.

Not present.

AIA Hawaii State Council in support. And two individuals in support. Anyone online or in person wishing to testify on s b 3187 s d two? Seeing none, sir.

Members, any questions?

Yes, sir.

There's a copy.

For, OPSD? Good morning. Hi. Thanks for being here. In your testimony, you said that you folks prefer the HB 2606. Yes. Can you explain?

There? It's because the house version took an amendment from the plumber's union that just changed some of the language to stipulate that they're building housing, according to HRS regulations and for housing in Hawaii.

Okay. Alright. Thanks. Just want a little more clarification. Yeah. No problem. Thank you.

Thanks. Actually, I have a Sure. I have a follow-up question on that. I appreciate the proposed amendment. Is that not implied though, like within the scope of the working group that this would be under Hawaii's building codes?

Yes. But it's always good to give a little bit more clarification. So that they know that these are for factories for, to be built in Hawaii to build housing for Hawaiians.

So if there's any clarification then is that the off-site certification should only apply to factories in Hawaii and not off-site out of state.

Yes. Because we don't wanna create an off-site construction program that outsources all of the construction and possibly puts local labor at risk.

Okay. And this wasn't brought up in your post testimony, but do you have a so the bill right now limits the off-site certification, the scope of the working group, the off-site certification for single family homes under 1,200 square feet. That's usually small. Do you have any do you have a stance on the rationale for being that small and whether that should go up?

OPSD doesn't have, a specific stance on that. It may be better to start with a smaller scope and to really nail that down and to make it easier for the state building co counsel to come up with its proposals. But I do think that it would be beneficial for it to eventually be expanded to multifamily housing and modular housing and possibly one to five story condos. I know in Singapore, they do it on a much larger scale, but just figuring out what would work for Hawaii. Thanks.

Members, further questions? Seeing none. SP 2,378 SD two relating to housing by share of the testimony.

American Council of Engineering in support.

Chair, vice chair, and committee members. My name is Janice Marsters. I'm representing the American Council of Engineering Companies. This bill is very important to us and our industry. We found that after act 295 passed last year to encourage, expedited permitting for housing, that our insurance representatives alerted to us to uninsurable language in the bill.

Two points I wanna make, the, House version of this bill has gone through the House. Received testimony from the American Institute of Architects and, professional liability insurers that, they recommended some additional changes that are reflected in House Bill 1721 HD two. And we wanted to make clear that we support those revisions and recommend that they be made to this Senate version. And just another note, almost the majority of our almost 70 member firms are small businesses, locally owned small businesses, including my own. And this bill is important to us because we're just not in the position to engage in this program with uninsurable terms and conditions.

So I think we'll have a lot more, participation if these, fixes get made. Thank you for the opportunity to testify.

Thank you. Grassroot Institute of Hawaii and support.

Aloha. We'll stand on our written testimony in support.

Thank you. Maui Chamber of Commerce in support. Plumbers and Fitters, Local 675 in support. Anyone in person or online wishing to testify on SB 2,378 SD two? Seeing that.

Members, any questions? Seeing none, next item on the agenda is SB 2398 SD2 related to residential housing utilities. Vice Chair for the testimony.

Board of Water Supply in opposition.

Yes. We're in opposition. Kathy Mitchell with the Board of Water Supply.

Thank you. Avalon Development in support.

Aloha. We stand in our written testimony in support.

Thank you. Hawaii Yimby support. Housing Hawaii's Future in support.

We stand on our written testimony in support. Thank you.

Thank you. And one individual in opposition. Anyone in person or online wishing to testify on SB 2398 SD2? Seeing none, Chair.

Members, any questions?

Chair?

Representative Cochran.

Board of Water Supply, please. Good morning. And thank you for your testimony. Can you just elaborate the high points of your testimony? The main concerns?

Sure. Under a federal act and the Environmental Protection Agency, water utilities are considered a critical infrastructure. The threat of contamination, the threat of cybersecurity, whatever the case may be, we are a critical, infrastructure. Our concern the initial the companion bill, initially, it was about having, water availability, assessments, evaluations, and, and to put up information that may help developers.

Keeping in mind the critical infrastructure. We don't give out information about our infrastructure. This bill, in particular, the current form on page 1, line 14 through 16, and page 3, line 4 through 6, also in, is asking for the board's present inventory of old but unfulfilled, unconstructed, or incomplete developer funded improvements.

That's asking more information beyond the availability of, water. In our testimony in the last stage, last paragraph, we do have a process on parcel parcel specific water availability assessments, and that's readily available should the developer or the permittee comes in or calls. We can provide that information. Yeah.

And thank you. Thank you, Chair. Thank you very much for all those details. Thank you.

I have a follow-up question. So we did, for the House version, work with the Board of Water Supply and the other water departments around the state to come up with language that I believe you folks were okay with. And we addressed, you know, the the language you just brought up as a concern in this bill is not in the House version. I just wanna clarify, are you folks supportive or okay with the House version of this bill?

There are more, more specific, language about, the number of parcels and so on. We're okay with providing generalized, just, reference maps, on availability. Also, we every month, you know, we have a board, the board meets. The Board of the, Board of Water Supply meets, and there are, we provide reports on the, water levels. So that's available to the public.

But, we have to keep in mind that the water utilities are critical infrastructure. And and given the signs of times, whether it be cyber security attacks, fuel contaminating the water, we have to consider that.

So the language.

So it's really hard to balance, you know, your interest on developing more house and then keeping the water safe. It's it's a balance, and we're coming from the critical infrastructure and to keep our water safe.

Well, I, I appreciate that. The language that we came up with in collaboration with Director Lau says include general descriptions regarding any limitations to availability water service. Parcel by parcel information shall not be required. Utility assets shall not need to be specified.

And geographically identified area should be consistent with the detail in general plan maps developed under Section 46-4 which are, you know, pretty broad. So does that address your concerns around security and identifying infrastructure resources?

Generalized maps. We're, we're thinking about that, posting it on our website, generalized maps. But like I said, there's language in here about going beyond the water availability on in in the Senate version. As far as more in the House version, we're, we still have reservations. As we indicated, collectively, the water utilities, collectively. We still have concerns about keeping our water safe and our infrastructure.

And, could you elaborate then on what those concerns are? Because as far as I'm aware of, we did address those concerns by clearly saying utility assets shall not be specified and just requiring you folks to identify general descriptions. And you know, the broad idea with this bill is that right now, there's a lot of uncertainty for individual property owners on whether they have a good available water to build something like an ADU or an extra unit on their home.

We have heard of this situation a number of times for somebody going through the process of hiring an architect, and then not knowing until late stage in their permit review that there was other than the water. So the idea is on the front end to help people identify when there's water or not.

So they don't have to go through that work. And I'm happy to continue the collaboration with you to come up with language that works from our previous discussion. For the water directors, the House version language works. So this is the first time I'm hearing that that maybe you folks still have concerns on the House language. So if you don't mind just elaborating what those concerns are again, on the House version.

I can elaborate a little bit. I can't speak for the manager and chief engineer of each water utility. I'll, I'll answer it like this. We had a threat to, on Oahu, to our water, the aquifer, and it's still a threat because the investigation is still going on. And just imagine that.

What if it could what if there's a lot of fuel in our aquifer? Imagine the day without water. Water is the lifeline to the quality of life, public health, and safety. Without water, every property owner, every renter, every visitor would be significantly seriously impacted.

We take seriously protecting our water, And we understand the intent of the bill is to balance, and in the front end, developers in their planning and design can still come to our Board of Water Supply or any water utility in the state and get that information.

To post more above and beyond the availability on our website, a reference map, Beyond that, you're asking information the hermit t or the developers asking information about our critical infrastructure. And I just say again, if we don't have any water, much of the people in the state of Hawaii will be impacted.

I appreciate that, and I appreciate water as much as anybody, and I appreciate the work that you folks do to ensure that we have safe, reliable sources of water. But I wanna clarify again that all that the House version is asking is general descriptions regarding any limitations to the availability of domestic water supply. Again, parcel, parcel iteration is not required, utility assets shall not be required. Right? That was the language which you the directors of the water agencies had asked for.

So again, I'm just surprised given that that language is in the House version that I'm hearing now that you folks are maybe not supporting that language. When when I don't, I wanna better understand the connection between the language and the House version and the possible identification of, you know, sensitive assets that shouldn't be disclosed because I don't think there's anything in that version that would require that disclosure.

For the water supply, we're not opposed posting on our website a general description of water availability.

Okay. I appreciate that.

Thank you.

Chair. Sorry.

Thank you. So much.

Representative Cochran.

So what Chair is asking for, that's already, I mean, the the need for developers to know whether they have water or not is already available.

Yes.

For your information to give.

Yes. And they should do that upfront.

Right.

Check with the bottled water utilities upfront. Now I don't know how long it takes. If you're talking about single family residential or you're talking about a condo, we do everything on a case by case evaluation, and water is available on a first come, first served basis.

And one follow-up, Chair. So Maui County, you're aware we have the Show Me the Water Bill. Is there such a thing here for city and county? Show Me the Water, like, kinda we're not gonna approve and entertain your project or anything if you can, you can't show us that you have water for your development. Is there?

I just said we we can show you that we have water.

Well, I mean, it's mandated in Maui County. So, anyways, okay. Well, thank you.

Maui's a little different.

Yeah. We are. Yeah. Thank you.

And I just thanks, thanks for that. I, you know, the intention of the bill, I think large scale developers clearly are gonna go through the process on the front end to ensure. Where we're seeing hang ups is on individuals trying to, you know, somebody who's not a developer who just wants to build an ADU or do a conversion on their own property.

And then they go through this process and then they find out on the back end. And again, I've heard of a number of these stories occurring. And even with some dialogue with the front end, and they still don't find out until after they've hired the architect and go through the permitting process and get rejected.

So like, I think we're trying to come up with something that's beneficial for everybody. Right? Reducing the workload on everybody's front, nobody should be going through all this work if the water is just not there. So we wanna come up with a way that just helps clarify this for everybody so we're not doing wasted effort.

Yes. I'm not sure a law is warranted for that because it's really common sense. If you're a planning, planner, developer, why wouldn't you pick up the phone and call?

Again, this is individual homeowners. And,and if you wanna play a specific example

It, it. For Board of Water Supply, just speak for the Board of Water Supply. Given the introduction of this bill, yes, we are considering hosting on our website. For those who want, who would rather access the website to see more about water availability, we could provide the maps and then provide a contact, contact number.

Yeah. And what the House version would go one step further and would require that there be an essentially an online portal that somebody could put in a request. So the maps are generalized. It clearly says that the maps should not be used for permit determinations. Somebody can't use that map and say, no, you showed me that there's water on the map.

I get my permit. The maps are supposed to be generalized, but if somebody actually wants to go to the process, that the map would have, you know, a link to a submission form that somebody could get a clear answer from you folks to say, yes, you have water. And then that answer would, you know, hold for ninety days or some some period of time where they could use that as the permit determination. So that's what the hope is. It's essentially that one extra step.

And, and because what we've heard is that, yes, this is done case by case. Yes, you might tell somebody there's water, but then a month later, there might not be water. Right? That this is constantly influx.

Yes. Manager and chief engineer, Ernie Lau, has considered the intent and is willing to put on our website necessary information for somebody looking for that.

That's great. That's really good. I appreciate that. Thank you so much. Thank you. Members, further questions? Seeing none, next item on the agenda is SB 2,192 SD one related to housing. Vice chair of the testimony.

Crossroad Institute of Hawaii in support.

Just stand on our end, testimony in support. Thank you.

Anyone in person or online wishing to testify on s b 2192 s d one?

Seeing none, Chair. Members, any questions? Alright. Seeing none, next item on the Agenda is SB 2155 SD1 related to Wastewater Systems. Vice chair for the testimony.

Department of Health with comments on Zoom. Oh. In person

Yeah. Morning chair. Morning vice chair. Community members. I'm Kevin Ewoo from Department of Health. We stand on our written testimony providing comments, and I'll be available for questions.

Thank you. Crossroads Institute of Hawaii with comments.

We'll stand on our written testimony with comments.

Thank you. Anyone in person or online wishing to testify on SB 2155 SD one?

Members, any questions?

Department of Health, please.

Representative Cochran. I mean, that's our Department of Health.

Yeah. Hey.

Hi. Morning.

Is this to help with the cesspool conversions that's being mandated across the state? Is this trying to help assist with that?

No. I don't believe so. I believe this is to allow because our individual wastewater systems, which is septic systems right now, the approved individual wastewater system, has a has a limit, a Max limit of five bedrooms. That's based on the design capacity of the septic system. So it'll allow a six bedroom, actually. So it'll allow a bigger house, basically.

On the same system.

On on on a septic system.

Yeah.

With the capacity of five bedrooms. So you wanna is that what's happening here? You wanna add on another bedroom to a five capacity septic tank?

So that's where the Department of Health provided comments. So we have to we have to take a look at what the what what else we have to do as far as our rules and the Maximum capacity. If we if we increase the Maximum capacity, there might be other requirements, like a larger beach field or absorption bed, things like that. So we'd we need to take a look at what else what other ramifications or what else what other requirements would have to put in place if we increase, the Max capacity. So the six bedroom is actually for for the the, individual wastewater system is actually increasing the capacity.

Right. Chair, follow-up? Thanks, Claudia. And so where are are there more concentrated areas where this is to address here or in the state? Or I don't know if it's just this island or

I'm I'm not too sure. It's it's just any any house that has any single family home that has individual wastewater system, it'll allow a six bedroom instead of if if they wanna renovate, you wanna add on another bedroom. They would just allow another bedroom.

So basically, areas that aren't tied to county systems. Yes. Right?

They're not.

Yeah. Okay.

They're not tied to a centralized wastewater system.

Yes. Okay. Thank you for your time. Sure.

Real quick session.

Yeah. Representative Muraoka. Sure.

I,I asked this question out of complete and utter confusion. Why do we care how much bedrooms are in the house, and why does this not say bathrooms or kitchens? Because these are what actually drain into the septic system, not a bedroom.

Correct. Industry standards, they use bedrooms as the as the sizing that's to size the design capacity of a septic system. It's it's the industry that uses. And for different states, they have different capacity estimations. So in Hawaii, we have a 100 gallons per person per day and then average of two persons per bedroom.

So that's where we come up with five bedrooms because our max capacity for a cesspool or for a septic system is a thousand gallons. That's the max design capacity you can have for our our our rules. So that's, that's why it's five bedrooms times the two, two people per average, two persons per bedroom times a 100 gallons per person per day. So that's that's where it's yeah. Practically, I know what you're saying.

Like, somebody you could have a shower that's not connected and so on and so forth. But the industry standard is for is using bedroom count as the how how you design the the capacity of the the septic system.

Any further questions? I have a question. So you said in your testimony, Act 224 last year clarified that it would be a max, a max of five bedrooms regardless the number of dwelling units. So that people can be theoretically, it would allow for 51 bedroom dwelling units.

Correct.

And so it does seem like some of the language in this is unnecessary because that was addressed directly. The first part of this bill, which says you can have up to five dwellings in the hallways.

The dwellings portion of the of the, of the measure is not.

Yeah.

Not needed because of the act last year. Yes.

So the part I am interested though, trying to flesh out is the six bedroom.

Six bedroom. Yes.

And so if, say, we were just to amend 342D-73. So essentially amending the language, Mac 224

Yes.

That instead of saying max of five bedrooms, you would say a max of six bedrooms regardless that it would go on units. Just change that five to a six. Like, what would happen? So we're we're changing statute to do that. What would you guys have to do to do that?

Okay so our, our max is a thousand gallons per day. So in our in our administrative rules, that's where we have the 100 gallons per person per day average to come up with a thousand max. If somebody is using a, if the homeowner is using a, like, a seepage pit, a thousand gallons per day, over a thousand gallons per day is gonna actually be considered a it's gonna be an, an injection well. We're a thousand gallons per day. It's gonna be considered an injection well.

At that point, then they're, they're they're gonna need permitting for an injection well. So what we'd have to answer your question, Chair, is we'd have to look at their rules, either. So there's 2, 2 ways for us to implement just putting a sixth bedroom in there. Either we have to increase the capacity, the maximum allowed capacity, which then we'd have to look at other rules, like, regarding injection wells.

Or we would have to revise the rules to reduce our average what, you know, like I said, a 100 gallons per day per person, which, if you've been to some some cesspool meetings or presentations, there are most people would say that's on the high side compared to the rest of the country.

So it, it's on the high side because the operation and maintenance of any individual wastewater system is absolutely the responsibility of the homeowner. So there's a, there's a factor of safety that we put on. There's no monitoring or anything like that for the individual wastewater system. So there's a factor of safety. So what what we have to look at is we have to look at what what risks we're taking by reducing the factor of safety.

If we reduce the average, you know, it's numbers game at that point. Right? The average, say, we go to 75 gallons per person per day, average that then it'll be a 150 gallons a bedroom, then 6 bedrooms would be 900 gallons would be under the thousand. Okay? So that'll be the two things that the Department of Health would have to look at.

How would and then we have to take a good look at it because we wanna we'd also wanna respect the intent of the bill, which is to provide more housing. So we have to balance the public health risk or the health risk with that. Yeah. And that's why we we will take a look at it. That's what we would have to do.

Thank you. Respectfully, my understanding with us being on the high side is that not just on the high side, but is it true that what I've heard is that we're double what the nearest state is as far as gallons per day in the bedroom?

Not, not the nearest state. Yeah. But the yeah. Some states are, are, we're double some states too. Yes. So

Are we the highest? So I mean, are there other states that use 20 gallons per day per bedroom?

20? Yes. Or 200? Yeah. I, I don't believe so. I don't believe so. Yes.

So I guess getting at that then and I appreciate all the work that you're supposed to do. And I, I don't wanna sort of open up this cascade of sequences that that's gonna force you to amend how we're dealing with, you know, injection wells, etcetera, etcetera. But, it does sound like if we did go to six, that are relatively simple fix would be to lower the gallons per day per bedroom to ensure that we could accommodate six.

Correct. And then, and then we would have to I mean, for our, our portion, our, our our responsibility is we have to kinda look at how we will measure the impact to the risks. And, and like like you said, faire, it's I I can't say, you know it seems like it it'll be a a low risk. It does, but I can't say for sure unless we have more science.

Because a lot of the numbers, when we look back and you've been in the the school meetings, when we look back at how some of the numbers were developed in our requirements, we can't find the science and the research, right, behind it. So we really want to stop that trend and have more science or research based for our, our regulatory numbers. Yeah. So we'd have to I, I would, we would like to have some level of research or science. It doesn't have to be a lot, but some level.

To, to back up having 75. I mean, we can use the rest of the country and so on and so forth. There's geology involved with the designs and and with the disposal systems, you know, and things like that. Other factors that we need to look that is unique to Hawaii also. But I'm not saying that it's impossible, and I'm not saying that it would be a high risk that we shouldn't do it. I just said, we, we do have to take a look at it.

Yeah. I appreciate that. And I know some of the work that we've collaborated on is to establish a technical advisory sort of working group

Yes. Correct,

To try and fill in these gaps. And I do think in a perfect world, that information would come first, and then the increase to the bedroom count would come second.

Correct.

That said, it seems like because we are so high in our gallons per day per bedroom, Clearly, I think there wasn't oh, you know, I don't, I don't think any bedroom is using 20 gallons per day. Like, that does seem like a a shocking overestimate.

And, like, so I, I don't wanna get into the place where we're sort of reverse engineering those numbers to meet some statutory mandate, but it does seem like there's room to go down and maybe going to six, like, wouldn't be the end of the world if you guys went down and then, you know, the whole thing's working and the board can do their work.

Yeah. Yeah. So I mean, if if we do go down without without a thorough research or science, then it'll it'll be more on the back end. If something actually starts impacting the environment or public health, then we would have to take care of it on that end of it. Is the risk high or low? I cannot tell you. It sounds like it'll be low. Based off of all the information you have. Yes.

But I cannot tell you for sure. But then so that's just the potential of what we'd have to do on the back end.

Yeah. Understood. Thank you. Thanks for being here. Members, further questions?

Question, Chair.

Yeah. Representative La Chica.

Since the passage of the act last year, has the department implemented.

The study.

Yes.

Oh, the study.

Yeah, to determine that the adjustments to the wastewater flow of the additional bedroom or you, you said right, we're talking talking about, like, does a person, like, actually have.

Oh, the act last year was to adjust the dwelling. You know, the number of dwelling units. There's measures this year about a technical advisory.

Since then until today, did you work on any type of study to see how this would be, you know, implemented and, like, what the impact would be on, like, the wastewater.

We started informal groups of, of experts and stakeholders. Yeah. But we haven't done we haven't started, like, research, scientific research study or anything like that.

So what would this entail to kind of get us to a point where there is, you know, a definition of an, an updated definition of what could entail, I guess, what's an acceptable use or what's an actually documented use, if that makes sense for.

Yep.

So are you asking what would it entail to actually get to an accurate gallons per day per day, which is the number I think that may.

Yeah. Yeah. Yeah.

I think the technical advisory group will be a a huge because we would have to, like, sure, as Dan said, you know, we're the we're the highest in the country. So we'd have to look at all the factors that every state, you know, looked at also to determine why we're the highest. Yeah. So there there would be there would be some you know, we'd have to get a lot of information of how things are being done. And then there's really the science unless somebody come up, comes up within the technical advisory group.

You know, because there there's gonna be different concerns from different stakeholders. Like, some some might be all the the levels of some kind of contaminant or nitrate, say, for example, in the ground. Some might be, like, how far does it travel from the, how far does anything you put in the ground travel from that location? So there's a lot of factors that that gotta be looked at. And then I think the stakeholder advisory group would would bring all those factors together.

The stakeholder group would be so, convened by you, but, like, would have, like, numbers from each county, for example.

Correct.

But to get, to amend the 100 gallons per day per person and determine, like, actual use, you would need legislation or you would just need admin rules?

Admin rules. We just need admin rules. And I think what the group will allow us is the group will determine what everybody is comfortable with. You know, so say we don't have exact science and an exact research for it, but at least it'll be the group. And then everybody agrees that the risks are, like, how I said it, Chair Evslin, like, we don't we can't measure the risk.

But if everybody agrees that the risk is low and and every stakeholder agrees, then we can take that step. Right? The Department of Health would have more reason to take that step. Because everybody agrees that the the risk is lower even though we don't have absolute scientific, but we have all this industry information, we have everything else, then everybody, the whole group, which hopefully covers everyone. Yeah.

Everyone then then we all come together and we all agree that, yeah, 75 is the lowest. So let's go to 75 and we'll we'll implement it. And then again, if it ends up being a a bigger impact than we, then end the whole group, now the whole group has to help us figure out, okay, what do we do now?

Do you know when this number was identified?

Oh I, I can, I can find that out for you.

But, like, decades? It's, like, been decades? And there's no formal structure to revisit this number?

Not not no. We don't have.

Okay. So we've had that 100 gallon per day proportion per day since before I was born, kind of like me.

Probably.

Okay. Okay. Thank you.

I think I have a stupid question.

Since twenty years ago.

Well, okay. Thank you.

A stupid follow-up to that. So I know water usage per household is public, currently semi public. I've gotten access to information.

Yes. Water usage is.

And, you know, we know how many bedrooms each household has. It doesn't seem like it would be that hard to just sort of take an island's per house water usage divided by the number of bedrooms in the house and at least get up come up with a figure that, like, what our house is using for water.

But what I'm hearing you saying is that that's not quite all there is, that we, you're also looking maybe at, like, topography and soil types to see how far water is moving in the soil. Is that the calculation for water use per bedroom per day from what I heard you describing to Rep. La Chica is maybe not just a simple calculation of how much is that average home in Hawaii using?

The impact, the impact, from the the cesspool discharges is, so if we actually increase the the capacity. So if we're if we're looking at then the geography, the geology isn't gonna play that bigger role if we're looking at reducing the average balance per day per person per day. Yeah. The geology is when we actually try to measure if there are impacts or not to an increased flow.

Yep. Yeah. Because if if we add more people to a house, it's gonna increase. We can we can go back and forth at how much it increases or right? But it, it will increase the flow that that septic system saw.

Yep.

So now it did, it is their impacts to the environment. That's when the geology the geology comes.

Gotcha.

Yeah. Alright. Alright. Thank you. We all got a good lesson in going forward today. Thank you. Members, any further questions? Seeing none, next item on the agenda, SB 3219 proposing Amendment seven, sections twelve and thirteen of the vice day constitution. Vice chair of the decimal.

HPHA in support.

HPHA stands on testimony in support.

Thank you. Office of Planning and Sustainable Development in support.

OPSD stands on in testimony in support. Thank you.

Thank you. HHFDC in support. HHFDC in support. Thank you. HCDA in support. Present. Navi in Hawaii in support.

Send our written testimony in support.

Thank you. Hawaii Realtor is in support.

Thank you. We sent our testimony in support.

Thank you. Nya in support.

We sent our testimony in support.

Thank you. Doctor Horton Hawaii in support. Your order stands on as testimony in support. Thank you. Avalon Development in support.

Avalon stands on our written testimony and strong support.

Thank you. Pacific Resource Partnership and support.

Vice chair chair Andrew Pereira. This partnership is standing on our written testimony and strong support. Strong support. Thank you.

Thank you. Hawaii Regional Council of Carpenters in support.

Morning, chair, vice chair, members. Mark Clemente for the Hawaii Regional Council of Carpenters. Strong support of this measure. I was just gonna stand on my written testimony, but as I kept reading testimony, there's there's a point I want to make. So debt limits, they exist for a reason.

They protect taxpayers by ensuring that when the public backs the project, risk is capped and responsible. But this proposal before you hear is fundamentally different. These bonds are not backed by taxpayer dollars. They're backed by growth generated within the project itself. So in other words, growth pays for growth.

Because of that structure, they should be treated differently than traditional county bonds. And if the project performs, it funds its own infrastructure. If it falls short, it's not the public that takes that risk. It's the investors, the bond holders. So this is a responsible performance based approach to financing the infrastructure we need to build housing without placing additional burden on our taxpayers.

Further, HRS 46 dash 106 subsection I, the bondholders cannot compel the county government or the state government to pay back those those bonds should the project fall short. So I just want to make that very clear. Thank you.

Thank you. Housing Hawaii's future in support. Please turn on our testimony in support.

Thank you.

Tax Foundation of Hawaii with comments.

Thank you, chair, vice chair, members of the committee. Tom Yamachika for Tax Foundation. Our concern is with the exception to the constitutional debt, say, the constitutional debt limit. One of the features of this bill is to exempt these bonds from the constitution debt debt limit, and we're concerned about that because the debt is supposed to be paid back by increased property tax revenues from the development that, of course, has yet to occur. And if they're if the debt's not paid back, then the bondholders are gonna have some recourse.

And where they're gonna go against? Probably the county. And if that's if that's not true, then then I I stand corrected. But if it is true, then then we have a problem. Thank you very much. I'll be I'll be happy to answer any questions.

Thank you. We received testimony and support from Maui County Council Chair, Alice Lee, and testimony and support from council member, Hodgins, and one individual in support. Members, you also got a late testimony from Land Use Research Foundation. I have it to you for SB 3219. Anyone in person or online wishing to testify on SB 3219? Signature.

Members, any questions? Representative Carpenter?

Carpenter's Union?

Hello?

How are you?

Good.

Good. So thank you. You mentioned that the for the the bonds and the debt that would not need to be paid back if something should go awry, I suppose?

The the risk would be borne by the bondholders, the investors. I mean, that's written into the bill. It's solely payable by maple language. So on page eight of the bill, line one well, it starts in line 20 of the previous page. But, basically, the housing infrastructure growth funds secured solely by all real property taxes levied by a political subdivision. So those are the TIF districts.

Right. A follow-up, sir.

That's our taxpayer dollars that originally are being forked out in order to right?

But the date that doesn't exist yet. So it's that that growth that will be developed by the infrastructure will finance the bonds.

And I think that's where my concern it can occur. An issue could occur if it just doesn't play out.

Then the bondholders won't bear that risk.

Right. Exactly. So, yeah, there's just some, I guess

And they're not allowed to

do that could occur, although because this is, like, you know, sort of projecting in the future what can be or can't be and stuff. So

Well, 48 out of 50 states have this in place, and it's been successful in most states. Yeah. I think it's time we jump on that. We need every tool in the quiver to fight our housing crisis, and this is just one other tool.

Okay. Thank you for your comments.

Quick follow-up, Mark. So it does say secured solely by all real property taxes levied by a political subdivision. So what happens, say revenue property tax revenue is less than expected from the development. Would they sort of like refinance and extend that, you know, amortization period for the bond? Or or do we have any case studies in places that have had this occur?

That's a good question. I can get back to you on that.

I agree with that. And I mean, it does seem very clear here that it is payable solely by Republic exhibitions in the TIF District. I think that part is clear, so the county shouldn't be on the hook further as you said.

Right.

But it does seem something that may be really possible to just extend that payoff period.

Yeah. And I think HRS, like I mentioned earlier, 46106 does give guidance as to those types of situations

as well. But I can get back to you.

Appreciate that. Thanks. Thank you. Members yeah. Representative Cochran?

No. No. Sorry. Yeah. Then thank you. But I had for Mr. Yamachika.

Oh, okay. Yeah.

We're sorry.

Oh, Yamachika today?

Yamachika still here? Yeah. Hi. Aloha. Thank you. Thank thank you for your testimony and time. So, sorry. It was my train of thought right now. The real oh, should things so real property tax from the different districts will be on the hook should something go not as planned. Do you foresee that affecting their bond ratings?

Well, I mean, certainly

I mean, they're saying this sorry. Sorry. If I can just add, that this won't affect debt limit and things of that nature, but I think, you know, yeah, how would this would it or wouldn't, I guess, affect bond ratings?

Well, I mean, for the for the bonds themselves, the fact that then they're they're not backed by the full faith and up full faith and credit of the county or the state makes them riskier and therefore more expensive. And I I think, you know, the the the 46Dash106 was mentioned. Well, I mean, if we if we already have that authority, then why do we need the Conam? That's number one. And number two is if if we are gonna be using 47 c to do this, which is what the the next bill proposes, which is the per the companion bill to this this Conam bill, is it clear and and and I you know, I'm I'm not an expert in in in in property bond law, but is it clear that, you Know46106 applies to Chapter 47 c?

I I don't know the answer to that question, and I hope it is clear.

Okay. Well, thank you again for your time and expertise in the field. Mahalo. Thank you, sir. Thank you.

Members, any further questions? Sure. Are you are you gonna take a follow-up to a question?

Yeah. Just just a follow-up to that. Question. If there is any shortfall, typically, a county will step in to cover the shortfall because it could affect the county's bond rating. But the assurances that the county would have would be in a development agreement.

So there are certain assurances that, the county can make with the developer that if, there's not enough revenue from the, real property taxes coming in, then, the developer would cover any shortfall. So it's the due diligence of the county when they're forming these districts to make sure that there's backstops in place.

That's good. Renee. Thank you. I'm sorry. Andrew, you can stay. Representative?

For the states that have this in place, what is the decision make how do how do they project the revenue in the with the county's

I'm not a bond expert, but I understand that the bond writers typical bond writers typically see how much revenue could be generated, and they write the bonds 30% under that that amount so so that there's some leeway there. So, for example, the the Mesa District, the Aloha Stadium District has zero property taxes coming in. They would do an assessment of how much RPT would be generated as the development comes in, and then they would write the bonds pretty substantially under that amount so that there's no shortfall in the future.

Do you know how far ahead they project in terms of years?

Again, I'm not an expert, but they would look at the development, and I think it's the due diligence of the counties when they're they're putting together these housing infrastructure growth bond districts to make sure that there's, agreements in place with the home builders so that there's there's an ability to cover the shortfall should want.

And should this pass? It would be up to the counties to set up each of the

Correct. So it's really interesting with our research with Stifel, the financial services company that this could even be done down to the city block, so The districts can be large or small, but you're really leveraging that future growth to put the infrastructure in place. And finally, our research has shown that, by having, the infrastructure put in place by government through these types of creative financing, you can lower the cost of housing by about 30%, and that directly benefits our people. Thanks.

Thank you. Members, further questions? Seeing none, final item agenda, SB3218SC2 related to bond. Please share the best ones.

{Vote} FTSD stands on its written testimony in support. Thank you.

Thank you. Attorney attorney general's office with comments.

Morning chair, vice chair, members. Ian Robertson, deputy attorney general. We've submitted testimonies, submitting expressing comments on this bill noting that as it's currently written, it doesn't appear to provide a sufficient process to facilitate, actually issuing, housing infrastructure of both bonds.

Thank you. {Vote}

Anyone online or in person wishing to testify on SB3218SC2?

Seeing none, chair. Members, any questions? Representative Parker?

For Oak oh, yeah. Was it OPA? No. Sorry. AG's office. Ian Robertson?

Yes. Hi.

Good morning. Thank you for being here. So, yeah, I just wanted to get your elaboration on your concerns. I know that you're mentioning there's a lot of required consultation that really should need to be done here.

And you're saying there's a lack of procedural, you know, procedures in place for this to roll out. And so just a little more, yeah, elaboration on those concerns?

Mhmm.

Yeah. So the the bill as it's currently written does, incorporate these new types of bonds into 47-1, but that's not, that section doesn't provide procedures as to issuing the bonds like you might see for other types of bond issuances. Some of the people have referred to Chapter 46. You know, there there is a process in there as an example.

And so a a follow-up, sir. And so do you folks have that type of expertise, like, you know

In house? Or the the attorney general

That means, like, for further, you know, bond counsel type knowledge and

We would need for for something like that, given the high technical nature and the, you know, the significant financial impacts of it, that would need to be something that's worked out in consultation with qualified bond counsel. We don't have the expertise in house.

Okay. Yeah. So you'd have to outsource I mean, hire out so to speak.

Yeah. Or look look for somebody to talk to then.

Right. Yeah. Okay.

Out outside the department, WBS. Yes.

Okay. Well, thank you. Thank you for your time.

Ian, thanks for being here. Could you maybe just briefly explain the work that we've done to come up with some implementation language on this?

Sure. We we did look at some some proposals and we did confirm with bond counsel on that. That bond counsel that was on a contract for something else who happened to be available. And bond counsel did suggest some edit edits to that. So I'm not I'm not sure where you're at as far as that, but we did have that conversation. Yes.

I appreciate that. And thank you for your folks' work on that. And, you know, we'll get to a dirt decision making, but I think it'll help address some of representative Cochran's concerns. But thank you. Thank you. Thank you very much. Thank you. Members, any further questions? Alright. Seeing none, I'll brief recess.

Reconvening our house housing committee hearing for decision making. The first item on the Agenda is SB2190 SD2. And I just wanna note, OHA was online trying to testify in opposition. They were having technical issues, which is why we weren't able to get them up, but we did receive their written comments. So members, you all have OHA's written testimony in opposition.

I recommend that we move out in HD one with a defective date on this bill. Members, any questions, comments, or concerns?

Sure. Yeah. Oh, good.

I'm gonna w on this one, and I appreciate the conversation we're having around inclusionary zoning this session, because I think it's really important we base our policy on research and evidence. And I acknowledge that a lot of that research and evidence shows that there are some problematic impacts of IZ. But I also you know, there's research that shows when it's used strategically and targeted, there are some benefits like making sure that lower income people can live in higher income neighborhoods and addressing economic segregation. We need something we balance against overall housing supply and cost. So just being cautious and then definitely not for it. Okay.

We'll copy.

Yeah. I mean, I'm open and grateful for discussion here on the subject matter. I think I support I concur with OHA. And I'm sorry they weren't here to testify, but, you know, I I just coming from county, I suppose the county home rule type of aspects of it kinda yeah. Pardon me the wrong way, I guess. So anyhow, yeah, just w r at this time. Thank you.

And yeah. Then we're welcome.

You know, I I also agree with Cochran that all of the nail on the head with this testimony. So based on all his testimony, I'm gonna know.

And members, I also just wanna verify this. It is pretty narrowly applicable to prohibiting IC requirements on housing exclusively for sale or rent in perpetuity buyers or renters who are residents of the state. Our owner occupants are do not fall and do not own any other real property. Right? So this essentially would be a very narrow segment of the market of likely deemed restricted units.

And I think that's why we didn't see county opposition because it wouldn't necessarily force an overhaul of the agency programs. And we have another ISE bill moving through the Senate house bill which is moving to the Senate, which does something else. And these two could stand, you know, doing sort of different things relatively narrowly. So, but, totally acknowledge the concerns. Further questions or comments? Right. Seeing none, Vice Chair for the vote.

Voting on SB2190 SD2. The recommendation is to pass with amendments. [Roll call]. The recommendation is adopted.

Thank you. The next item agenda is SB233 SD1 relating to housing. I recommend that we move out to each d one on this as well. And I recommend that we change the contract term to three years for both HHFDC and HPJ provisions. Based on the A G s testimony that we removed the allowance for Concurrent Resolution for both HPHA and HHFDC contract terms, that we removed the language on page six, lines five through eight, which, those are project level outcomes and not necessarily, like, employee level outcomes that we should be measuring performance by.

That we changed all the references, the finance director references to finance manager. That we delete the language regarding autonomy and personal matters for both HHFDC and HPHA, and that based on the testimony from HHFDC, that we clarify in both subsection two and three of the bill that all employees, subsection b, are exempt from Chapter 76 and section 26 dash 35 a four. That we delete all of the language on page four, line 17 to page five, line 12, while retaining just the provision that the finance manager shall be paid a salary set by the board. As the rest of that language, I believe is overly prescriptive for a job description codified in statute. And based on the AG's testimony that we clarify that the bill applies prospectively and does not affect employment contracts lawfully executed before its effective date.

Documents as necessary and, will be defecting the date. Members, questions, comments, or concerns? Correct. Seeing none, Vice Chair for the vote.

Voting on SB2338 SD1, the recommendation is to pass with amendments. Noting all members present, Any reservations? [Roll call]. The recommendation is adopted.

Thank you. Our next item is SB 2424 SB 1. My recommendation is that we Mhmm. Just replace the contents of the bill entirely with the companion for this, which is HB 1742, which was mostly some tech amendments and clarification that I think was better for it used in the in the house version. Members, questions, comments, or concerns? Representative Grandinetti.

More on this one also. Mostly just around the one year owner occupancy requirement, and I appreciate that we're trying to build in more flexibility for local families. I just feel that we should focus on primarily serving owner occupants.

Yeah. Just a question. Are we allowed to create all language available in place even though it's expanded?

Yes. And and honest, we could we could address it by doing substantial tech amendments. Honestly, it's just easier to just sort of deal constantly. They are they are substantially the same thing. So, yes, we can. Thanks. Members, are there questions?

Yeah. I agree with I agree with rep grandanetti about the minimum year. And because of that, I don't know.

Yeah. Yeah.

Same. And I think I stated in the original discussions that when testimonies came in before us Yep. Of my concerns.

Thanks. And I I appreciate those concerns. I think what we're trying to balance here is a real issue about people buying into these units and getting locked into a unit and not being able to upsize as their family grows, and also not being able to build equity over time. Maybe as their incomes grow, right, you just, like, you buy a studio and you're essentially committed to that studio, and we need to figure out a

way to resolve that, which this bill is a essentially committed to that studio, and we need to figure out a way to resolve that, which this bill is attempting to do. Also, you know, if the unit had to be permanently occupied by a white resident, so it would allow some flexibility for long term renting. I also think we're building housing, like, more rental housing is also a good thing. So, so but, you know, but but 100% of the tenants. Sure. Yes?

When you say, occupied by a Hawaii resident, those can also be, you know, investor people too, though. You know what I mean? We look at, you know, res local and our workforce housing people and but this can also apply to a newly transplanted person can come in too. So, you know, it just opens it up for that broader investment from outside, I suppose, is one of, I think, stated concern at that time.

I think importantly, the unit though couldn't be left vacant, it could be short term rented. Right. Right. So in my mind, as long as we're ensuring that these things are occupied, that's that's step one.

And and also really importantly, right, the structure of the bill is to ensure that these have that provision for 80% of the units will have that forever, instead of the current 201 h program, which 50% of the units are income restricted for ten years, and then that disappears, and they'll go to market to whoever. So there's trade offs in both options. This is preserving that option. It just provides some more flexibility for this option.

Thanks.

Yeah. Chair. Thank you for clarifying that. I'll I'll just change from no to a reservation.

Thank you. Members, further questions, comments, concerns? Seeing none, vice chair for the vote.

Voting on SB 2424 SD1, the recommendation is to pass with amendments, noting the reservations of representative Grandinetti and Muraoka. Any other reservations? And the no vote for rep Cochran, any no votes? No vote for rep, pierick. Recommendation is adopted.

Thank you. Next item agenda is SB2356 SD1 relating to parking. Well, this apparently is my favorite subject. We'll be deferring this bill, because we'll be incorporating much of the language into the next bill. Next item is SB2981 relating to land use.

So, it's still I mean, it's minimum parking restrictions statewide in a way that is, much, much, much, much, much broader in applicability than anything the house has, deliberated on previously. My intention here is to move something forward that has the best chance of passage. And here are some concerns that were brought up on previous house efforts. Will be, I recommend that we adopt the language from HB 1919 HD three. But removing the provisions in that bill relating to a use childcare facilities, commercial spaces under 3,000 square feet, and part b in its entirety.

This addresses essentially every specific instance of concern that was brought to me regarding the previous bill, and, and would be much, much more narrow in its scope than the previous iteration of h 1919 h three. I'd like to also add language, that prohibits off street parking requirements within a t o d. On because this already is applicable in Honolulu already doesn't have a minimum off street parking requirements within T O d's. So this would be more optimal to the neighbor island TODs, which each neighbor island has, you know, relatively small TOD and town class. Members, questions, comments, or concerns?

Okay. Signature. Signature. Alright. Was there someone

I thought I was waiting. I knew there were some concerns coming.

Let's see. Well, the Unite Here's testimony, did did were you able to work with that. Wait.

Union to because you said you addressed all the opposition and testifying people, I guess.

Yeah. No. Just to be clear, I addressed the I had addressed specific comments of concern from Members of the House. Oh. From conversations that I had around HB1919 with them. So members brought to me specific concerns with HB1919 on provisions of the bill. That's what I was addressing.

Not outside public concerns.

Yeah. I mean, I Okay.

I would off the top of my head know what the concerns of the union were. Okay. But again, the bill is much much much more narrow in its in its scope.

And sorry. Yep. So the general effect, I guess, for a county right now as you stated in your amendments, what would that look like?

So the remaining provisions of the bill would be that units, affordable units, senior housing, disabled housing, units under 1,200 square feet, and conversions of commercial space and mixed use housing would be exempt. And I'm speaking off the top of my head here, but I'm relatively positive that everything else in the bill was removed. So the applicability, you know, would be those types of developments would be exempt from minimum parking requirements on the clear. Somebody is building senior housing or housing for the disabled, then that's like a multifamily structure. There's likely to get financing to build that.

It'd be some level of parking required by the financers, but it's not gonna be, you know, very unlikely to be one unit per stall. And that clearly, we don't need that much parking for those types of housing, because the residents are much less likely

to drive. Okay. And alright. I I again, you know, the imposition on counties, I guess, has always been my and if I I prefer and and thank you for these adjustments. Definitely more palatable.

And I just know that there's, like, more one on one case by case issues. And so I know you're trying to, like, put words in there to to sort of spell it out, you know, the parameters and guardrails and what have you. So I get it. Alright. So just, you know, w r because the unintended consequences can happen. Yep. Especially with rebuilding of Lahaina and things at this time. So that's my so WR for me at this time. Appreciate that. Thanks for your efforts.

Oh, thank thank you. But I also wanna clarify, you know, as the commercials the commercial space provision was taken out. So for the rebuilding of Lahaina, unless there's mixed use spaces, it largely wouldn't have it in fact in our commercial areas. Okay. Members, further questions, comments, concerns?

Are you deleting part b?