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Increase in Maui County’s share of hotel room tax among bills moving on in Legislature

Kaniela Ing

Maui County could see a small increase in its share of the hotel room tax and money for an agricultural park in South Maui, and there may be hope for 250 low-income residents who are looking at being priced out of their Lahaina apartments as the Legislature cleared a key deadline Thursday.

The House and Senate had to pass bills by the Thursday deadline and send them over to the other chamber for consideration. Usually bills that do not pass either chamber at this point die this session, which ends May 4.

Among the bills making the crossover deadline was Senate Bill 1290, which originally called for increasing the hotel room tax allocation to the counties to 45 percent. But the measure has been amended, meaning Maui County’s take will not increase significantly, said Maui County Council Chairman Mike White’s office.

Currently, Maui County receives $23.5 million in transient accommodations tax revenues, under a $103 million cap for the counties. In the original bill, Maui County would have received $34.2 million, but the current amended bill has the county garnering $24.6 million, White’s office said.

White has lobbied for more funding for the counties from the tax, saying that the money offsets county costs related to tourists, such as fire and police services.

Kyle Yamashita

Another measure, House Bill 1586, which would have phased out the counties’ share of the hotel room tax over a three-year period, has died. The House Finance Committee on Feb. 28 recommended that the item be deferred.

Under the bill, counties likely would have had to increase property tax rates, which are the lowest in the nation, to make up for the loss of funding, said Upcountry Maui Rep. Kyle Yamashita, one of the co-sponsors of the bill. This would have meant that nonresidents, who buy homes but do not pay state incomes taxes, would end up paying more through property taxes. It would have been a way to shift the tax burden to nonresidents who own property in the state.

A bill that makes an appropriation for the acquisition of land, planning, design and construction of an agricultural park in South Maui remains alive. House Bill 446 was sponsored by South Maui Rep. Kaniela Ing. Among the crops that could be grown in the ag park is industrial hemp.

Also making the crossover deadline was Senate Bill 1266, which would allow the state to start negotiations to keep the Front Street Apartments affordable or to acquire the property. A companion bill in the House died.

Owners of the Front Street Apartments recently exercised an option to remove the property from affordability requirements that were tied to the development of the property, the bill said. This would allow the operators to begin renting apartments at market rates and to raise rents for existing tenants in a few years

Currently, there are more than 250 low-income residents at the 142-unit state funded project, which was developed in 2001 as an affordable rental housing project.

Also making it to the next step was House Bill 620, which seeks funding to add four positions to the Kaho’olawe Island Reserve Commission’s staff, bringing its total to 19.

The state agency that serves as caretaker and manager of the former U.S. Navy bombing range, used to operate with 19 employees until it needed to make budget cuts when its $44 million trust fund, set up by the federal government, dwindled.

Now KIRC depends on outside grants and aid along with state funding to continue to operate.

House Bill 620 is running parallel to the state budget bill in the House, which also calls for more staff and operations funding. KIRC Executive Director Michael Naho’opi’i said “so far so good” on the KIRC bills, noting that there still was a long way to go.

There is additional money for KIRC in bills this session. The House Capital Improvement Project list includes $700,000 for its Kihei information and cultural learning center in the Kihei Boat Ramp area and $1.5 million for the next two years to conduct dry-land reforestation on Kahoolawe.

In other measures:

• House Bill 790, dealing with reporting of pesticide use, which garnered the attention of Maui residents and Maui County Council Members Alika Atay and Elle Cochran, failed to make it out of the House. The bill would have established disclosure and public notification requirements for outdoor application of restricted-use pesticides and insecticides in various sensitive areas by large-scale agricultural operations. Atay, Cochran and supporters flew to Oahu to testify in favor of the measure.

• A bill to increase the number of 2nd Circuit Court District judges on Maui from three to four remains alive.

• A bill to rename Mokulele Highway as Maui Veterans Highway continues to advance.

• Companion bills that establish the University of Hawaii Promise Program to provide scholarships for the unmet needs of qualified students enrolled at any UH campus or any community college campus also crossed over. The measure would fill the shortfall after scholarships and awards.

* Melissa Tanji can be reached at mtanji@mauinews.com.

* This article includes a clarification from the original published on Saturday, March 11, 2017. State Senate Bill 1290 would increase Maui County’s share of the hotel room tax. The headline was unclear on the intent of the proposed legislation.

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