North Shore vacation rental owner SharLyn Foo wants state lawmakers to extend tax credits and other support to small-business owners who are struggling to comply with a decade-old federal ban on large-capacity cesspools.

Foo, who recently was fined $40,000 as part of an Environmental Protection Agency crackdown on large-capacity cesspool violators, said the enforcement nearly put her company, Vacation Inns International Inc., out of business. As part of the agreement, the EPA also required Foo to close six of the cesspools at the properties.

“It’s going to cost me at least another $150,000 to close six cesspools,” Foo said. “I’m 60 years old, and I had to remortgage all of my properties and take out a 10-year commercial loan. It’s scary taking on all that debt at my age, but they left me no choice. I want to honor the legacy of my brother, who started the business in the early 1980s to provide an affordable place for surfers to stay on Oahu’s North Shore.”

Foo inherited her business from her late brother, professional surfer Mark Foo, who died in a surfing accident at Maverick’s Beach at Half Moon Bay, 35 miles south of San Francisco. She said the recent penalty and anticipated replacement costs are on top of the thousands that she previously spent pulling kitchens out of units to prevent those units’ cesspools from being pegged as large capacity. The EPA defines large-capacity cesspools as those discharging untreated sewage from multiple residential dwellings, and from nonresidential locations that have the capacity to serve 20 or more people per day.

EPA regulations do not apply to single-family homes connected to their own individual cesspools or to nonresidential cesspools that do not have the capacity to serve 20 or more people. While Foo’s properties are zoned residential, she agreed Aug. 13 to settle her dispute with the EPA.

“I’m not zoned as multiresidential by the city or state, but the EPA renamed me as multiresidential and said the ban also applied to me,” she said. “By the EPA’s definition there are thousands of large-capacity cesspools serving single-family homes.”

EPA spokesman Dean Higuchi estimates that 3,000 large-capacity cesspools have been closed in Hawaii since the 2005 ban. However, he said there are about 1,420 large-capacity cesspools still operating here.

Given the financial burden faced by owners of large-capacity cesspools, Foo said she doesn’t understand why state lawmakers ignored them when approving relief for smaller-cesspool owners. Act 120, which Gov. David Ige signed this year, provides a temporary income tax credit for some owners of cesspools who voluntarily replace them with a septic tank system or an aerobic treatment unit, or connect them to the sewer system.

Staring Jan. 1 a qualifying taxpayer may apply for a tax credit of up to $10,000 for each cesspool that is near a drinking well or within 200 feet of a perennial stream, wetland or the shoreline. The Department of Health, which would oversee the credit, estimates that owners of some 6,664 cesspools in the state would be eligible to apply.

Supporters have called the new law a step in the right direction. However, others have said it should be expanded since it applies to only about 7 percent of the 90,000 cesspools that the Department of Health estimates are operating in the isles.

State Rep. Nicole Loren, who represents several Big Island neighborhoods, said she introduced the bill that became Act 120 because converting cesspools is burdensome. Loren said large-capacity cesspools were included in an earlier version of the legislation, but they were whittled out.

“We thought large-capacity cesspools are already illegal under federal law,” Loren said. “We had to make sure that taxpayers were getting the most bang for their buck. It was decided that tax credits needed to be applied to locations with the greatest economic impacts and for people who had the most need.”

Foo understands that the large-capacity cesspool ban is a federal mandate, but said state help is needed to relieve some of the expense for small businesses and organizations.

“Closures could create job losses, reduce tax collections and trickle-down spending,” she said.

Loren said legislators will continue to tweak Act 120, and large-capacity cesspools could be discussed in the future.

“Maybe something like a low-interest loan program would work,” she said. “We also are pushing the Department of Health to go after federal funding where appropriate.”

State Rep. Tom Brower, who represents Waikiki and Ala Moana, said state legislators are typically sympathetic to small-business owners when they are made aware of their issues. Few large-capacity cesspool owners have come forward, he said.

If they want to see a change, it’s going to take a lot of noise from these people. They need to come forward — the sooner, the better,” he said.