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SB1076
wTHE SENATE
S.B. NO.
1076
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
relating
to transportation
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION
1
.
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The legislature finds that the State has been
struggling to expedite project delivery, especially for projects that increase
port resilience and operational efficiency.
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The existing law authorizes the harbors division of the department of transportation
to enter into capital advancement contracts with private parties for any public
improvement to or construction of a state port facility when the director of
transportation determines that a capital advancement contract promotes the best
interest of the State.
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The legislature further finds that the
current cap of $2,000,000 per contract or aggregate $5,000,000 per party limits
the scope, type, and number of projects that can be completed under a capital
advancement contract and therefore needs to be increased to facilitate improved
project delivery.
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Accordingly, the purpose of this Act is to
increase the current limits on capital advancement contracts.
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SECTION
2
.
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Section 266-19.5, Hawaii Revised Statutes, is
amended to read as follows:
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"�
266-19.5
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Private financing of
harbor improvements.
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(a)
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Notwithstanding any law to the contrary, the
department of transportation may enter into a capital advancement contract with
a private party for any public improvement to or construction of a state
harbor, commercial harbor, roadstead, or other waterfront improvement belonging
to or controlled by the State, if the director of transportation determines
that a capital advancement contract promotes the best interest of the State by
finding that:
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(1)
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Private
development is likely to be less costly than any other type of contract;
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(2)
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Private
development provides needed public improvements on a significantly more timely
basis; or
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(3)
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Public
financing for the public improvements is not available on a timely basis.
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(b)
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A capital advancement contract under subsection (a) may be financed by
legislative appropriation to reimburse the private party or by credit against
the private party's future rental or tariff payments to the State; provided
that the terms of the contract shall ensure that the State benefits financially
from the arrangement and that public use of the facility is maintained;
provided further that capital advancement contracts under this section shall
not be general obligations of the State for which the full faith and credit of
the department is pledged and the legislature shall have no obligation to
appropriate funds to reimburse a private party to a capital advancement
contract.
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(c)
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A capital advancement contract under subsection (a) shall be subject to
the requirements of chapters 103 and 103D and be subject to the approval of the
department of transportation; provided that all related transactions shall be
subject to state audit.
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(d)
�
The department of transportation may execute capital advancement
contracts pursuant to subsection (a) with a total contract value of [
$2,000,000
]
$
or less
without legislative approval.
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[
If the
total value of a capital advancement contract pursuant to subsection (a) is
greater than $2,000,000 then the department of transportation shall obtain
legislative approval in the form of the adoption of a concurrent resolution
affirming the purpose, project, and contract issuance prior to executing the
capital advancement contract.
]
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The
total aggregate value of all capital advancement contracts entered into by the
department pursuant to this section shall not exceed [
$5,000,000
]
$
in any [
calendar
]
fiscal
year.
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(e)
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The department shall submit a report to the
legislature of all executed capital advancement contracts for the previous
twelve-month period from December 1 to November 30 no later than twenty days
prior to the convening of the regular session of 2026 and each regular session
thereafter.
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[
(e)
]
(f)
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For the purposes of this section:
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"Capital advancement contract"
means an agreement between the department of transportation and a private party
whereby the private party agrees to furnish capital, labor, or materials for a
public improvement to or construction of a state harbor, commercial harbor,
roadstead, or other waterfront improvement belonging to or controlled by the
State and in return for which the private party may be reimbursed in a manner
to be determined by the department.
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"Total value" includes any
contract extension, project redesign, add-ons, or any other occurrence, act, or
material cost that may increase the cost of the contracted project."
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SECTION 3.
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Statutory material to be repealed is bracketed and stricken.
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New statutory material is underscored.
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SECTION 4.
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This Act shall take effect on July 1, 2025.
INTRODUCED BY:
_____________________________
Report Title:
DOT; Harbor Improvements; Capital Advancement Contracts;
Reports
Description:
Increases the caps for the total contract value for any
one Capital Advancement Contract (CAC) and the total aggregate value of CACs in
a fiscal year entered into by the Department of Transportation with private
parties for harbor improvements.
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Requires reports to the Legislature from the DOT.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.