Conference committee approves CD1 changing school impact fees, exempts certain affordable housing

A joint House and Senate conference committee on April 25 voted to pass a CD1 amending HP 422 HD1 SD2, a bill that changes how school impact fees are calculated and collected.

The CD1 would repeal the construction-cost component of school impact fees and exempt government housing developments, affordable housing units and projects, and Hawaiian homeland housing from the fee. The measure also directs the School Facilities Authority to adopt rules governing fee collection and requires the authority to report to the Legislature on the program’s efficacy before the bill’s sunset date. The proposed CD1 footer distributed to members was labeled 2025-3280 proposed-3; the CD1 would be effective upon approval and would sunset after five years.

Committee members said they had reached agreement on the bill’s language and moved to pass the CD1 with amendments. The chair called the recommendation and cast an affirmative vote. Representatives Miyake, Peruso and Moraoka recorded affirmative votes; on behalf of the Senate, co-chairs Chang, Kim and Kidani recorded affirmative votes. Senators Hashimoto and Shimano were recorded as excused. The measure passed and the committee announced “we have a bill.”

Committee members noted the CD1 is mostly technical and clarifies several points, including that a land-in-lieu component is not charged for projects under 100 units, that the School Facilities Authority may develop rules governing fee collection, and that the authority must report to the Legislature prior to the sunset date. The CD1’s five-year sunset and effective-upon-approval language were emphasized during the conference discussion.

The committee did not record further amendments on the floor during the hearing. The bill’s fiscal release (FIN) and whether the Department of Budget chair (WAM) had signed off were discussed earlier during other items on the agenda; for this bill the committee indicated relevant fiscal clearances were in place. Next steps are formal transmittal of the conference committee report and any administrative steps required to publish the CD1 and notify legislative clerks of the committee’s action.

The action affects municipalities and housing developers that currently pay school impact fees under the construction-cost component; the School Facilities Authority will have rulemaking responsibility if the bill becomes law. The committee did not provide an implementation timeline beyond the CD1’s effective language and sunset provision.