The Senate joint committee on Education recommended passing House Bill 422 with amendments to change how Hawaii collects school impact fees, voting to advance the measure after amendments were adopted.

The amendment deletes the construction-cost component of the school impact fee while keeping the land contribution requirement and an in-lieu fee. It also clarifies that any written agreements executed under HRS 302A part 6 (subpart B) before repeal remain in effect unless all parties agree to change them. The committee inserted exemptions for government projects, Department of Hawaiian Home Lands projects for beneficiaries, single-room dwellings, developments under HRS 40-615(1) and 201H-38, and projects meeting the definition of affordable housing under HRS 46-15-25 and 201H. The amendment increases the number of units required to satisfy the land-component threshold to 100 in several sections and directs the School Facilities Authority (SFA) to adopt rules governing collection of the remaining fees per a State Auditor recommendation.

The committee also removed a proposed full repeal of HRS 302A part 6, subpart B and HRS 46-142.5; and it required the SFA to report to the Legislature on the effect of repealing the construction portion of school impact fees no later than Dec. 15, 2026. The repeal of the construction component will carry a sunset date of June 30, 2029; the committee report allows that the sunset may be removed if the report supports making the change permanent.

Committee members discussed potential impacts on county-level development fees; a senator asked whether county systems that set aside land for schools would be affected. A committee staff speaker and other lawmakers clarified that the amendments preserve the land portion of the fee and that counties’ arrangements for development fees would not be entirely replaced by the state change.

The committee recommendation passed. The committee chair and a majority of senators present voted to adopt the recommendation to pass HB 422, SD1, with the set of amendments described.

The amendment package directs SFA rulemaking, narrows which fee components are repealed, sets reporting and sunset requirements, and preserves existing written agreements unless mutually amended — changes the committee said are intended to assess the efficacy of school impact fees while preserving land-contribution mechanisms.