Lawmakers Highlight Need for More Affordable Housing and Statewide Coordination at Informational Briefing with State and City Agencies

Joint Senate and House informational briefing on affordable housing in Hawaii

With the shortage of affordable housing options for the moderate income workforce, Hawaii lawmakers today held a joint Senate and House informational briefing to learn more about affordable housing needs in Hawaii.

Senators and representatives heard from various government agencies to learn about the status of existing and planned affordable housing projects, and their plans to address the growing need for affordable housing as the state’s population and housing demands increase.

“We convened this informational briefing because there’s an urgent need for affordable housing,” said Sen. Suzanne Chun Oakland, chair of the Senate Committee on Human Services. “And it’s necessary that we get everyone involved at each level and at the same table to discuss where we are at, what we are doing and what needs to be done to meet the housing needs of Hawaii’s residents.”

In 2011, the Hawaii Housing Finance and Development Corporation (HHFDC) released the Hawaii Housing Planning Study which revealed 50,000 new units needed to be built between 2012 and 2016 to meet demands. Of that number, based on Department of Housing and Urban Development (HUD) income guidelines, about 19,000 are needed for household incomes of 80 percent of area median income (AMI) and below. (This is $43,250 for 1-person household, and $61,750 for 4-person household). HHFDC has procured a new updated study that will be released later this year.

Senator Chun Oakland and Representative Hashem receive updates on existing and planned affordable housing projects from government agency officials

“Hawaii’s workforce deserves to live in housing they can afford,” said Rep. Mark Hashem, chair of the House Committee on Housing. “Nearly half of Hawaii’s homeless population are working persons who are unable to afford steady permanent housing. In addition to addressing the housing shortage for those at AMI, we also need to ensure there is enough help for hard-working low-income individuals to obtain housing units.”

During the briefing, lawmakers questioned the Hawaii Community Development Authority (HCDA) about reserved housing requirements for workforce housing in the Kakaako district.

“Our constituents remain concerned that developers are reserving affordable housing units at the 140% of AMI mark, which is not reasonable for many of Hawaii’s working population,” said Chun Oakland. “HCDA needs to be doing more to address the housing needs of the people at 100% of AMI and below.”

Sen. Donovan Dela Cruz, chair of the Senate Committee on Economic Development, Government Operations and Housing, questioned the siloed approach to planning for affordable housing projects for transit oriented development (TOD).

Senator Dela Cruz at a July 23, 2014 informational briefing on affordable housing

“It seems like all agencies have their own plan and no one is working together,” said Dela Cruz. “Instead of this siloed approach to workforce housing in relation to TOD, there must be an overall statewide approach. There’s going to be housing located around the various TOD stations. Why are we not working together?”

This past session, the legislature created a TOD Working Group to bring together all major players to plan for the future in a comprehensive and succinct way.

Senator Espero at a July 23, 2014 informational briefing on affordable housing

Sen. Will Espero, chair of the Senate Committee on Public Safety, Intergovernmental and Military Affairs, expounded on the effect veterans returning home will have on Hawaii’s housing needs in the future.

“Our veterans fought for our nation’s principles of freedom and liberty and deserve to raise their families in housing they can afford,” said Senator Will Espero, chair of the Senate Committee on Public Safety, Intergovernmental and Military Affairs. “As our veterans return home, we need to ensure they have access to services to ensure a smooth transition back to civilian life.”

Other issues related to affordable housing discussed included the growing number of people on the waitlist of public housing and Hawaiian homelands. In public housing, there is approximately 30,000 people waitlisted (using three people per family as the average). That is about 10,000 families on the waitlist. For Hawaiian homelands, 26,926 applicants are waitlisted and 43,080 applicants are pending.

During the 2014 Legislative Session, lawmakers approved measures to help with affordable housing. They include:

  • SB2542 (Act 163) – Restores the allocation of conveyance tax collections to the rental housing trust fund to 50% beginning July 1, 2014. It is estimated that this law will generate $33,100,000 for the Rental Housing Trust Fund, which is used to leverage funds for the building of affordable housing units.
  • HB2251 (Act 162) – Increases the Hula Mae Multifamily Revenue Bond authorization limit from $750 million to $1 billion. The program will help first-time buyers afford a 30-year mortgage at a competitive rate and provides down payment assistance. There’s a high demand for this type of financing and in 2013 the total dollar value of requests exceeded the amount available. Increasing this amount will allow for the continuation of development and preservation of affordable housing for lower income households.

The following government agencies who provided testimony include Hawaii Community Development Authority (HCDA), Hawaii Housing Finance and Development Corporation (HHFDC), Department of Hawaiian Home Lands (DHHL), Hawaii Public Housing Authority (HPHA), Department of Defense, City and County of Honolulu’s Office of Housing.

All of the briefing material posted here: http://www.capitol.hawaii.gov/session2014/testimony/INFO_TESTIMONY_HMS-EGH-PSM-HSG_07-23-14.pdf

State Senate Adjourns Session Approving More than 240 Bills Including Key Measures that Improve the Lives of Hawaii’s People

Lawmakers remain vigilant throughout legislative session striking a balance on measures supporting keiki, kupuna, workers and environment



The Hawaii State Senate today adjourned the 2014 session passing more than 240 bills that align with its initial priorities to make Hawaii a better place for everyone now and in the future through initiatives supporting Hawaii’s keiki, kupuna, workers and the environment.

“The ability to compromise and work together is essential to making good laws that help Hawaii’s people today and in the future,” said Senate President Donna Mercado Kim. “It is thanks to the patience and passion of our members and advocates that we were able to complete another successful session.”

“With anything we do in life, it’s always about balance. That’s the same way we look at it here in our majority caucus,” said Sen. Brickwood Galuteria. “Every issue will have two opposing sides. Our job as lawmakers is to come out at the end of session with worthy legislation that improve the quality of life of our people. I think we did just that and I’m proud of my colleagues in the Senate Majority.

The Senate Majority, whose members are Democrats, this afternoon took action on its final bills of the session. Some of the major bills discussed and approved were several education measures that align with earlier action emphasizing the Senate’s commitment to Hawaii’s keiki, the future of Hawaii.

Lawmakers passed four bills relating to education, one prohibiting teachers from using seclusion and creating conditions and procedures for the use of restraint in schools in order to promote the safety and well-being of students (HB2257), and another raising the salary cap of the superintendent of education in order to attract and retain exemplary candidates (HB2257). The third bill will allow charter schools to charge fees on the use of facilities to help cover operating costs (HB1745).

Overall, many of the notable bills this session focused on prevention and maintaining core services and projects. Lawmakers funded initiatives that address imminent problems (as part of the joint majority package) such as the rise in kupuna population, spread of invasive species, and effects of climate control. Lawmakers also remained committed to providing continued support for the people most in need, including Hawaii’s keiki, k?puna and workers who earn the lowest wages.

The governor has 45 days from the time a bill was received to veto it, sign it into law, or allow it to pass into law without his signature.

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Highlights of Bills Passed this Session

Minimum Wage Increase

SB2609: Increases minimum wage rate to $7.75 per hour beginning on 1/1/15, $8.50 per hour beginning on 1/1/16, $9.25 per hour beginning on 1/1/17, and $10.10 per hour beginning on 1/1/18. Increases the tip credit to 50 cents per hour beginning on 1/1/15, and 75 cents per hour beginning on 1/1/16; provided that beginning 1/1/15, the combined amount the employee receives in wages and tips is at least $7 more than the applicable minimum wage

TAT for Counties
HB1671: Increases the current cap on transient accommodations tax revenues to be distributed to the counties for two fiscal years. Establishes a working group to determine future county allocation ceiling amounts and the appropriate division of the provision of public services between the State and counties.

Turtle Bay Resort Conservation Easement
HB2434: Establishes a method to use transient accommodations tax revenues to pay the debt service on revenue bonds issued by the Hawaii tourism authority to acquire a conservation easement in Turtle Bay, Oahu.

Joint Majority Package
Supporting Hawaii’s Kupuna
HB1713 SD2 and SB2346 SD1 HD2 supports Hawaii’s kupuna through funding of aging, long-term care and investor education programs

Protecting the Environment
HB1714: Establishes an interagency sea level rise vulnerability and adaptation committee under the State Department of Land and Natural Resources.

HB1716: Appropriates $5 million to the Hawaii Invasive Species Council for invasive species prevention, control, outreach, research, and planning, passed out of committee earlier this month.

Voter Registration
HB2590: Allows voter registration at absentee polling places beginning in 2016 and late voter registration, including on Election Day, beginning in 2018. Appropriates funds.

Other Notable Bills

Government Reform
Lobbyist Disclosure
SB2629: Requires lobbyists and specified individuals to report to the Hawaii State Ethics Commission, within 30 days of adjournment sine die of a special session of the Legislature, on contributions and expenditures made to lobby on legislative matters considered during that special session. (SD2629 HD1

SB2634: Requires individuals who spend more than $750 on lobbying during a statement period to itemize each expenditure in certain categories, as applicable.

Financial Disclosure
SB2682: Fifteen boards and commissions will be required to file public financial disclosure statements

Sunshine Exemption for Counties
HB2139: Authorizes a limited meeting where any number of county council members may attend a board’s or community group’s meeting to discuss council business, provided that certain requirements are met. Repeals 6/30/2016.

Police Misconduct
SB2591: Police departments will have to disclose more information about police misconduct. They will have to report to the Legislature how many officers were suspended or fired in a given year, and whether the disciplinary action resulted in criminal charges or was still subject to a union appeal.

Affordable Housing
Rental Housing Trust Fund
SB2542: Increases the allocation of conveyance tax collections to the rental housing trust fund from 30 percent to 50 percent beginning July 1, 2014. The rental housing trust fund is used to provide loans or grants for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. It is estimated that restoring the allocation of conveyance ta collections to 50 percent will generate $33, 100,000 for the rental housing trust fund for fiscal year 2014-2015.

Bonds for Affordable Housing
HB 2448: Authorizes HHFDC to issue bonds for infrastructure for land owned by an eligible developer for the construction of affordable housing.

Housing Choice Voucher
HB1539: Requires the return of a housing choice voucher to the Hawaii Public Housing Authority upon the death or removal from assistance of the last original household member or upon the youngest minor of the family reaching the age of 21 or 23 if the minor is a full-time student. Prohibits adding legal guardians to the household unless the legal guardian is also eligible for participation in the program

Hula Mae Multifamily Revenue Bond
HB2251: Increases the Hula Mae Multifamily Revenue Bond authorization limit from $750,000,000 to $1,000,000,000. Hula Mae helps qualifying first-time homebuyers with 30-year mortgages at competitive rates and offers some down payment assistance.

Hawaiian Homelands
HB2288: Amends the Hawaiian Homes Commission Act to permit the Department of Hawaiian Home Lands to dispose of department-owned or department-controlled improvements, or space within an improvement, on Hawaiian home lands through direct negotiation.

Public Safety
Nonviolent Offender reentry pilot project
HB2363: Provides systematic reentry programming for nonviolent, low-risk drug offenders by establishing and funding a reentry pilot project for nonviolent, low-risk drug offenders.

Statute of limitations on sex abuse cases
SB2687: Extends the period during which a victim of child sexual abuse may bring an otherwise time-barred civil action against the victim’s abuser or an entity with a duty of care, including the State and counties.

Sexual Assault, statute of limitations
HB2034: Removes the statute of limitations for criminal actions arising from sexual assault in the first and second degrees and continuous sexual assault of a minor under the age of fourteen years.

Habitual property crimes
HB2205: Imposes a mandatory minimum term of one year imprisonment upon conviction for the offense of habitual property crime. Authorizes probation only for a first conviction of the offense of habitual property crime.

Prostitution
HB1926: Amends the offense of prostitution to include sadomasochistic abuse under the definition of “sexual conduct” and clarify that a law enforcement officer shall not be exempt from the offense if the law enforcement officer engages in sexual penetration or sadomasochistic abuse while acting in the course and scope of duties. Amends the offense of solicitation of a minor for prostitution. Clarifies sentencing of repeat offenders and enhanced sentences for repeat violent and sexual offenders. Amends the applicability of a deferred acceptance of guilty plea or nolo contendere plea.

Human Trafficking
HB2038: Establishes the Human Trafficking Victim Services Fund to be administered by the DLIR to provide support and services to human trafficking victims. Also establishes human trafficking victim fees to be imposed upon persons convicted of labor trafficking and prostitution offenses.

Internet Crimes Against Children
HB702: Establishes an Internet Crimes Against Children Fee for each felony or misdemeanor conviction. Specifies order of priority for collection of fees. Establishes an Internet Crimes Against Children Special Fund. Requires deposit of fees collected into the Special Fund. Appropriates funds

Health
Tanning
HB 611: Prohibits tanning facilities from allowing the use of tanning beds by anyone under 18 and imposes fines for violations.

Hawaii Health Connector Oversight
SB2470: Establishes the Hawaii health connector as the State of Hawaii Health Insurance Exchange.

West Maui Hospital
HB2213: Authorizes the issuance of special purpose revenue bonds to assist West Maui Hospital and Medical Center Foundation, Inc. in establishing a hospital in west Maui

Cost-Effective Healthcare
HB1752: Appropriates funds to provide primary medical, dental, and behavioral healthcare to uninsured and underinsured patients and restores basic adult dental benefits to Medicaid enrollees; and appropriates funds to community health centers to provide outreach.

Hawaiian
Geothermal on Hawaiian Home Lands
SB2953: Provides that all royalties from geothermal resources on Department of Hawaiian Home Lands (DHHL) lands shall be paid to DHHL. 

Higher Education
UH Hilo Astronomy Center
SB3093: Makes an appropriation to the University of Hawaii at Hilo to support its memorandum of agreement with RISE 21st Century After School Program.

Education
Charter Schools
HB1745: Authorizes the State Public Charter School Commission to assess fees on non-state entities and individuals to help offset its operating costs. Establishes pre-opening procedures and requirements for charter applicants. Clarifies that beginning with fiscal year 2015-2016, appropriations for the state public charter school commission are separate and in addition to appropriations for charter schools. Makes other amendments to Hawaii’s charter school law for clarity and consistency. Requires a report on the Commission’s staffing and operational expenditures.

Restraint and Seclusion
HB1796: Prohibits the use of seclusion in public schools; establishes conditions and procedures for the use of restraint in public schools; and requires collection and review of data. Requires reports. Makes an appropriation.

Superintendents Salary
HB2257: Adjusts the salary cap of the Superintendent of Education. Requires an annual evaluation of the Superintendent of Education based on outcomes determined by the Board of Education. Repeals June 30, 2024.

Hawaii 3R’s
HB2598: Renames the Hawaii 3R’s School Repair and Maintenance Fund the Hawaii 3R’s School Improvement Fund. Requires the transfer of moneys collected pursuant to section 235-102.5(b), Hawaii Revised Statutes, and authorizes the transfer of any other moneys received in the form of grants and donations for school-level improvements and minor repairs and maintenance to the Hawaii 3R’s School Improvement Fund.

Mandatory Kindergarten
SB2768: Makes kindergarten mandatory for children who will be at least five years of age on July 31 of the school year, unless otherwise exempt.

Agriculture
Milk Control
HB2009: Establishes a minimum reserve requirement in the Milk Control Special Fund to cover contingency costs in the administration of the State’s Milk Control Act. Specifically includes audits as a contingency cost.

Macadamia Research
HB1931: Appropriates funds to DOA to research and develop methods for the prevention and treatment of macadamia felted coccid. Makes an appropriation. Effective 7/1/2014.

Lower Hamakua Ditch
HB2179: Limits the toll that the Board of Agriculture may charge for water from Lower Hamakua Ditch. Takes effect on 7/1/2015.

Coffee Berry Borer
HB1514: Establishes a Pesticide Subsidy Program until June 30, 2019, for the purchase of pesticides containing Beauveria bassiana to combat the coffee berry borer

Energy and Environment
Utilities Regulation
SB2809: Aligns statutory language regarding utility ratemaking with widely accepted utility ratemaking principles and ratemaking practices already applied in Hawaii by allowing utilities in the State the opportunity to earn a fair return on utility property that is “used and useful” for public utility purposes.

Environmental Courts
SB632: Establishes environmental courts as divisions of the circuit courts and district courts to hear proceedings, including certain chapter 91, Hawaii Revised Statutes, proceedings arising from certain environmental laws. Requires the Judiciary to convene a working group and report to the Legislature the total number of environmental-related cases filed in the last five years and recommendations for implementing environmental courts in the State.

Energy Systems Development Special Fund
SB2196: Re-establishes the energy systems development special fund, which was repealed. Extends the repeal of various allocations of the environmental response, energy, and food security tax from 2015 to 2030.

Public Utilities Commission
SB2948: Transfers the administrative placement of the public utilities commission from the department of budget and finance to the department of commerce and consumer affairs. Clarifies the public utilities commission’s authority concerning standard administrative practices, including operational expenditures and the hiring of personnel. Enables the chair of the public utilities commission to appoint, employ, and dismiss an executive officer, fiscal officer, and personnel officer. Establishes that the executive director of the division of consumer advocacy shall be the consumer advocate. Appropriates funds to effectuate the transfer of the public utilities commission and for the hiring of an executive officer, fiscal officer, and personnel officer.

Grid Modernization
HB1943 – Eliminates technical and economic barriers that prevent customer-generators from interconnecting to the Hawaii electric grid

Veterans
General Excise Tax
HB1772: Exempts from the general excise tax amounts received by a contractor of the Patient-Centered Community Care Program established by the United States Department of Veterans Affairs for costs or advances to third party health care providers

Veterans Cemetery
HB1564: Requires the counties to obtain approval from the office of veterans’ services prior to any action that may impact the State’s obligation to establish and maintain veterans cemeteriess

Driver’s License
HB1770: Requires notation of veteran status on state driver’s licenses and identification cards if desired by the applicant. Effective October 1, 2014.

Gold Star Family Day
HB2071: Designates the last Sunday in September as “Gold Star Family Day”.

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Lieutenant Governor Signs Bill to Support HI’s Aerospace Industry

This afternoon Acting Governor Shan Tsutsui signed into law Senate Bill 1256, relating to the Pacific International Space Center for Exploration Systems (PISCES). The measure appropriates fund for PISCES to help foster the development and expansion of the aerospace, robotics, and related industries in Hawaii.

Lieutenant Governor Shan Tsutsui is serving as Acting Governor while Governor Abercrombie is in Taiwan from July 9 to 12.

Lieutenant Governor Signs Bills to Help Build State’s Innovation Economy

Honolulu- Lieutenant Governor Shan Tsutsui signed into law today two measures aimed at supporting the development of Hawaii’s innovation economy and growing our State’s research industry.

House Bill 858, relating to the HI Growth Initiative, appropriates $6,000,000 to the Hawaii Strategic Development Corporation to implement the HI Growth Initiative.  The initiative is an investment program to develop and promote the creation of competitive high-growth companies in Hawaii.

 In order for Hawaii to thrive in today’s economic landscape it is imperative that we make strategic investments now, so that we can build an innovative economy capable of carrying us well into the future,” said Senator Donovan M. Dela Cruz, who chairs the Senate Committee on Economic Development, Government Operations and Housing.  “This initiative provides the tools necessary to support high-growth entrepreneurial companies in State, helping us to create more high-wage jobs and remain globally competitive.”

Senate Bill 1349, relating to economic development, reenacts the tax credit for qualified high technology research activities for six years.  The measure also establishes new reporting requirements. Additionally, it requires DBEDT to conduct studies to measure the effectiveness of the tax credit and submit reports to the legislature.

Hawaii’s lack of career opportunities in STEM related fields has led to an exodus of many of our Island’s talented youth, who are faced with too few career prospects here home,” said Dela Cruz, who introduced the measure. “By reestablishing the qualified research activities tax credit this measure allows Hawaii’s research and development companies to remain competitive with mainland businesses and generate and sustain lucrative high technology jobs for our children.”

Senator Dela Cruz also expressed when implementing such programs involving appropriations or tax credits that they need to center around location specific economic development, targeting where the funding will be focused on to spur economic activity, so that our local people can see the progress and positive impacts within their communities.

Statement by Senator Mike Gabbard in Response to Governor’s Signing of Green Infrastructure Financing Bill

Honolulu- Governor Neil Abercrombie signed into law today Senate Bill (SB) 1087, which establishes a green infrastructure financing program.

Senator Mike Gabbard, Chair of the Senate Committee on Energy and Environment, issued this statement in response to the enactment of SB 1087:

This innovative, first in the nation legislation allows us to do something unprecedented and that’s to join bond financing with on-bill repayment,” said Senate Committee on Energy and Environment Chair Mike Gabbard. “This program is going to be huge in providing lower and middle income folks with greater access to PV and other energy efficiency improvements, allowing them to borrow the money at extremely low interest rates and then repay the loans over time on their monthly their electric bills. Laws like this will make our state the model for the world to follow.”

Governor Enacts Measure to Promote Hawaii’s Clean Energy Goals

Honolulu- Governor Neil Abercrombie signed into law today a measure aimed at helping the State of Hawaii achieve its clean energy goals by establishing a green infrastructure financing program.

Senate Bill 1087 provides a lower cost financing alternative for Hawaii businesses and residents to utilize green infrastructure equipment and technology to reduce electricity consumption by leveraging clean energy technology.

Building Hawaii’s clean energy infrastructure at a rate which is affordable for consumers is an essential component in advancing the State’s clean energy initiatives,” said Senator Donovan M. Dela Cruz, who chairs the Senate Committee on Economic Development, Government Operations and Housing.  “We needed to find ways for all of Hawaii’s consumers to benefit from affordable and clean energy options to gain relief from high monthly electric bills. This program establishes an alternative financing method that will ultimately pass savings onto the consumer by providing low-cost financing to enable the installation of green infrastructure equipment. It brings accessible and affordable energy options to all of Hawaii’s individuals, working families, and small businesses.  This is about reducing the cost of living and improving quality of life right here at home.”

The innovative financing method created in this measure will provide a secure financing structure to allow the Department of Business, Economic Development, and Tourism to issue revenue bonds at very competitive rates, which these savings can be passed on to the consumers in the form of lower borrowing costs.

Governor Signs Measures to Encourage Economic Development and Innovation

(Senators Carol Fukunaga and David Ige join the Governor Abercrombie for the signing of House Bill 2319 into law.)

Honolulu- On June 27, 2012 Governor Neil Abercrombie signed into law bills aimed at promoting economic and high technology development in the State. Among the measures enacted include House Bill (HB) 2319, Relating to Economic Development, and HB 2873, Relating to The Pacific International Space Center for Exploration Systems (PISCES).

HB 2319 establishes a $2 million dollar venture accelerator funding program under the Hawai’i Strategic Development Corporation (HSDC) to assist the State’s technology start-ups compete for investment capital. The program will assist in the growth of technology businesses in the State, including areas such as information technology, aerospace, science, renewable energy, engineering, and film and digital media production.

The creation of the venture accelerator funding program provides an urgently-needed means of supporting emerging high tech businesses in Hawai’i,” said Senate Committee on Economic Development and Technology Chair Carol Fukunaga. “It represents an important phase of HSDC’s transition into a more hands-on, working entity rather than solely for disbursements to venture funds.”

(Carol Fukunaga, David Ige, and Will Espero join Governor Abercrombie for the signing of House Bill 2873 into law.)

Looking ahead into the future of innovation and tourism, HB 2873 transfers the Pacific International Space Center for Exploration Systems (PISCES) from the University of Hawai’i to the Department of Business, Economic Development, and Tourism’s Office of Aerospace Development, establishes a PISCES board of directors, and appropriates funds. This measure will give PISCES the flexibility necessary to operate effectively within the rapidly-evolving aerospace sector while keeping Hawaii competitive and attractive to space industry partners.

The passage of this measure is vital to our State’s future economic growth and development,” said Senator Fukunaga. “By promoting innovative industries, PISCES can aid in Hawaii’s economic growth through creation of new, sustainable green industries along with high-paying jobs, workforce development, internships, and education programs in science, technology, engineering, and math.”

Keiki Caucus on collecting money Hawaii is already owed

The Keiki Caucus along with local retailers, employers and union members gathered at the State Capitol to discuss Hawaii’s Use Tax Law and SB 2405, SD1/HB 2352.  This legislation adopts amendments to Hawaii tax laws to implement the streamlined sales and use tax agreement.

The Streamlined Sales and Use Tax Recovery project is a national initiative that enables out-of-state retailers to electronically collect/remit uncollected taxes at the point of sale.  It levels the playing field for local retailers, since the out-of-state retailer collects a 4% use tax comparable to the general excise tax (GET) paid on local purchases.

In support of streamlined sales tax proposal

The Keiki Caucus, along with business and community leaders, yesterday gathered in support of SB 2405 and HB 2352, which would allow Hawaii to implement the streamlined sales and use tax agreement and collect taxes on out-of-state sales. Currently, Hawaii is unable to collect sales tax on out-of-state purchases, including those made through catalogs and over the Internet. The proposed measures would adopt amendments to Hawaii tax laws to implement the existing streamlined sales and use tax agreement.

The amount of sales and use tax revenues that have remained uncollected is significant. “Last year, the National Conference of State Legislatures calculated that $245.5 million was not collected by our state,” said Senator Suzanne Chun Oakland, chair of the Human Services Committee. “At the same time, hundreds of thousands of children and youth in Hawaii are being impacted by the cuts that have already been made in public education, child care, higher education, public health services, youth services and public assistance, to name a few.”

“Think about furlough Fridays,” suggested Representative John Mizuno. “If we had collected that $245 million, would this even be an issue?”

Mizuno also stressed that, “This is not a new tax. It is just uncollected tax.”

For the business community, there is also a concern that businesses selling via catalogs or over the Internet and do not collect the sales and use tax enjoy an unfair advantage. “For us, it’s all about competition,” said Dick Botti of the Hawaii Retail Association. “If somebody can order something from the mainland over the Internet and avoid the taxes, it creates an unfair playing field, and this helps level it. We need this type of legislation.”

According to Carol Pregill of the Retail Merchants of Hawaii, “The retail industry in Hawaii employs about twenty-three percent of our workforce. This bill would give us the opportunity, the latitude, the revenue, the break that we need that we can continue to employ our Hawaii people in our industry.”

Since 1969, Hawaii law has required that buyers pay a tax whenever they purchase something outside of Hawaii through a catalog, the Internet, or by other means. However, the means has not been available to collect those taxes.

“With technology, we now have a way to help our tax departments collect the taxes that are due, help level the playing field for our local businesses, and help preserve those programs that are at the core of government services,” said Senator Carol Fukunaga, chair of the Economic Development and Technology Committee.

In 2003, Hawaii became a participant in the national Streamlined Sales Tax Project by enacting the Hawaii Simplified Sales and Use Tax Administration Act (Act 173, Session Laws of Hawaii 2003). In 2009, the State Legislature passed streamlined sales and use tax legislation by wide margins (23-2 in the Senate, 42-7 in the House) but Governor Linda Lingle vetoed the measure. Twenty-three states representing over thirty percent of the nation’s population have already been certified as being in compliance with the Streamlined Sales and Use Tax Agreement: Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia and Wisconsin.

Proposal for State Purchase of 1.6-Acre Waiehu Beach Park Advances in the Senate

In an effort to keep the 1.6- acre Waiehu Beach Park on Maui in public hands, the Senate Committee on Business and Economic Development voted in support of Senate Bill 3110, which appropriates $750,000 to the state Department of Land and Natural Resources to purchase the park from Wailuku Agribusiness. The bill’s author, Senator Shan S. Tsutsui, praised the committee for taking an important step towards preserving public access to Waiehu Beach Park for generations to come.

Click here for a copy of the press release.

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