Senate committees split on bill exempting Hawaiian homelands housing from school impact fees

Lawmakers and state agencies on March 20 debated HB 1088 HD1, a bill that would exempt housing developed by the Department of Hawaiian Home Lands from school impact fees. The Committee on Education recommended deferring the measure, the Committee on Hawaiian Affairs voted to pass it as written, and the Committee on Housing also deferred action.

The bill drew testimony from the Department of Education, the School Facilities Authority, the Department of Hawaiian Home Lands and outside groups about how impact fees are collected and used and whether exemptions would undercut the fund that pays for school land and construction.

Dean Uchida, deputy superintendent for the Department of Education, said the department is willing to support eliminating the construction-cost component of the impact fee for government affordable-housing developers, including the Department of Hawaiian Home Lands, "but we'd like to keep the requirement for the land contribution for future public school sites." Uchida added that the land component is important "should any development produce more students that would exceed the capacity of the existing schools in the area."

Katie Lambert, testifying on behalf of the Department of Hawaiian Home Lands, said DHHL stood in "strong support" of the measure and noted DHHL's written testimony attached the 10th emergency proclamation for affordable housing and that the relevant exemption remains in the 11th proclamation. Lambert also said DHHL had received a pre-hearing amendment proposal from the Waihuli Hawaiian Homestead Association and had "no objection" to that proposed amendment.

Kenya Tam, appearing for Ricky Fujitani and the School Facilities Authority, said SFA submitted testimony in support and stood available for questions. Tom Yamachika of the Tax Foundation of Hawaii urged greater scrutiny of the program, saying a prior state auditor report (No. 19-13) identified administration problems and constitutional concerns and that large sums in the program have not been spent.

Public commenters and several senators pressed the agency witnesses on how much money has been collected in particular districts, how the money may be used, and whether land conveyed to the Department of Education under prior agreements has been accepted or remains unclaimed. A legislator asked specifically about funds collected for the Kalihi–Ala Moana district; Uchida said DOE would provide a breakdown but did not have the detailed district-level figures during the hearing.

Witnesses and legislators repeatedly raised two practical concerns: whether the state should waive the construction-cost portion of impact fees while preserving the land-contribution requirement, and whether fees collected in a district can actually be used in that same district to add capacity or build new schools. Uchida said the law allows more flexibility in using impact-fee revenues for renovations or leased space where land is scarce, citing recent statutory changes.

Questions during the hearing highlighted long-standing administrative issues. Yamachika said the program has about $29,000,000 doing nothing and cited the state auditor's report. Committee questioning also noted reports that some district calculations and student-generation data have not been updated since 2019, and DOE witnesses acknowledged they would need to follow up on some of the audit recommendations and provide additional detail to the committee.

Committee actions were split at the end of the hearing. The Committee on Education recommended deferring HB 1088 HD1 for further work. The Committee on Hawaiian Affairs then called a vote and, by voice, adopted the chair's recommendation to pass HB 1088 HD1 as is; the chair voted yes, Senator San Buenaventura registered her vote with reservations, and Senators Ihara, Keohokalole and LeCort voted aye. The Committee on Housing announced it would defer the measure as well.

The next steps are that Education and Housing will hold the bill again after follow-up information is provided, while Hawaiian Affairs forwarded a positive recommendation. The hearing record indicates committee staff or agency witnesses will supply more detailed district-level accounting and status of land conveyances to DOE.