Legislators in conflict over bills for projects

State senators took steps Tuesday to revive a $500 million investment in state construction, the Senate’s signature idea to help with economic recovery that was in danger of failing this week because of House inaction.

The Senate wants to direct $500 million in bond-financed construction across several state agencies, concentrating on repair and maintenance proj­ects at public schools, hospitals and other buildings that have been neglected. Senators also want to temporarily streamline permitting and procurement for proj­ects under $1 million.

The House has embraced a $300 million increase in bond-financed construction that Gov. Neil Abercrombie proposed and has suggested a broader range of procurement and environmental exemptions to speed the proj­ects.

The competing bills for how best to use state construction to help stimulate the economy put the Senate and House on parallel tracks going into the final weeks of the session that ends in May.

Last year, disagreements about tax policy led to a stalemate that prevented agreement on dozens of unrelated bills. Many legislators do not want differences about construction to cause a similar standoff in an election year.

Sen. David Ige (D, Aiea-Pearl City), chairman of the Ways and Means Committee, said the Senate’s approach "makes sense on all fronts."

"We do believe that it addresses the most direct impact that state government can have on the economy. We do believe that by providing a temporary change in the procurement laws, we could accelerate gettings proj­ects out," he said.

"It makes investments in each and every agency and in those areas that are most important to allow them to move forward."

Senators have described the bill as their priority, labeling it Senate Bill 2012 to show its importance. The Senate sent the bill to the House in late February, but the House has not scheduled a hearing.

With a procedural deadline approaching this week, the Ways and Means Committee and the Economic Development and Technology Committee on Tuesday added the bill’s language to another measure that has already passed the House — House Bill 2145 — which, if approved by the full Senate, would keep the legislation alive as an option for conference committee.

House majority Leader Pono Chong (D, Mau­na­wili-Kane­ohe) said House members want to keep the discussion about new state construction spending as part of the capital improvement proj­ect blueprint in the budget. The House version of the CIP budget reflects Abercrombie’s request for $300 million in bond-financed construction, including some repair and maintenance proj­ects that overlap with the Senate’s plans.

House leaders have been apprehensive about incurring significantly more debt from bond sales.

"I think for the House, our position has always been that we do need to help the construction industry; at the same time we have to be fiscally responsible," Chong said.

The House has advanced several bills to streamline the procurement process, along with a controversial proposal to give the governor the temporary authority to establish lists of state proj­ects exempt from environmental review.

"There’s still hundreds of millions of dollars appropriated on the books. So I don’t care how much you put into 2012 to increase construction, if there’s no way for it to get out on the street, it’s academic," Chong said.

Early Tuesday the House Finance Committee agreed to give the governor the power to exempt certain types of proj­ects from environmental review but added provisions to encourage consultation and to fully preserve the opportunity for legal challenges.

The Department of Transportation, Department of Land and Natural Resources and the state Office of Planning support the bill — Senate Bill 755 — to help streamline the construction process and discourage duplicate state and federal regulatory reviews.

The governor would have the authority to create exemption lists through June 2015. The bill also exempts certain state proj­ects from special management area permit and shoreline setback variance requirements.

But Gary Hooser, director of the state Office of Environmental Quality Control, said there is no need to give the governor expanded authority since an exemption process already exists. He said it would set a bad precedent and create a separate set of rules for public and private proj­ects.

"It is unnecessary as there is now in place an established procedure which already provides a straightforward, easy-to-implement exemption list process for actions or proj­ects that are likely to have no or negligible environmental impacts," he told the committee.

The Senate does not appear eager to approve similar exemptions. Ige said the proj­ects the Senate envisions mostly involve deferred maintenance that would likely not require extensive regulatory or environmental oversight. The Senate would limit the streamlined procurement and permitting to the specific proj­ects identified in its construction plan.

Abercrombie has not publicly taken sides. His office told the Senate on Tuesday that the administration supports leveraging historically low interest rates for increased construction that might help the economy. But the Governor’s Office also cautioned senators that debt service requirements should be kept in consideration.

Kalbert Young, state budget director, said the exemptions legislators are considering, including the ones that apply to environmental review, could reduce the lengthy state construction process.

"I think the value of getting these additional proj­ects through really comes out of the exemptions, because there are already more than a billion dollars’ worth of queued-up proj­ects that are moving through the pipeline, just from the current fiscal year alone," he said.