Lawmakers probe $28 million in unused school impact fees as bill narrows exemptions

The House Housing Committee on Feb. 13 considered HB1713, a measure intended to clarify how school impact fees apply to certain affordable housing projects and to exempt residential developments of fewer than 100 units from some requirements. Randall Watt, a deputy attorney general, told the committee the statute refers in places to "low‑ to moderate‑income households" but HRS chapter 302A contains no definition; he recommended the definition be added to avoid ambiguity.

School Facilities Authority testimony and funds: A representative for the School Facilities Authority told the committee that roughly $28,000,000 sits unspent across several district subaccounts and that, to date, not a dollar has been used. "In total, about $28,000,000, but it's in 4 districts," the representative said. Committee members pressed on whether any money has been spent (the answer in testimony was no) and discussed legal constraints following recent U.S. Supreme Court decisions applying the Nolan/Dolan nexus test to administratively imposed fees.

Legal and policy issues: Witnesses noted the Nolan/Dolan test constrains how impact fees may be expended and that the state is exploring other bills and budget avenues to allow expenditure (for example, for pre‑K or district‑wide uses with an appropriate nexus). Committee members discussed whether repealing the fee entirely is preferable versus a staged clean‑up of the statute; the chair signaled interest in repeal as an eventual position but advanced a narrower amendment in committee.

Committee action: The committee moved HB1713 out with amendments and a recommendation to pass with amendments; the chair said the committee may recommend repeal language in a replacement of section 2 during conference discussions to allow more comprehensive reform.