House passes an empty bill

Members of the state Senate and House of Representatives are likely headed for a contentious showdown over bills involving water rights, vacation rentals, renewable energy, the homeless and each county’s share of the transient accommodations tax.

Among the hundreds of bills that lawmakers gave preliminary approval to on Tuesday, those bills touched off some of the most spirited debate on the floor of the two chambers at the state Capitol.

Most of the measures — including a mysteriously blank bill that House members passed over the objections of a handful of members — will now advance to conference committee negotiations in the final weeks of this year’s session.

Those conference committees are made up of both House and Senate members who will attempt to iron out their differences on the bills. In cases where the two sides cannot agree, the bill will die for the year. The 2016 session is slated to wrap up May 5.

As their session began Tuesday morning, senators strained to speak above about a dozen protesters gathered outside their chamber, chanting “Ola i ka wai” — “Water is life” — and banging on empty water jugs with sticks.

The “Return Our Water Rally” included supporters of East Maui taro farmers who were there to pressure senators to kill House Bill 2501. The bill initially would have allowed Alexander & Baldwin to retain its rights to water flowing through dozens of streams and tributaries in East Maui while challenges to its water permits are resolved by the courts, the Board of Land and Natural Resources and the state water commission.

However, in a surprise move, the Senate Ways and Means Committee amended the bill last week to exclude A&B from being covered under the measure. It will now apply only to about 10 other water permit holders throughout the state.

The protesters wanted the Senate to vote the measure down, worried that lawmakers would use the bill as leverage in negotiations with the House and could reinsert A&B into the bill during conference committee.

The bill was passed, however, with a vote of 17-6. Sens. Laura Thielen (D, Hawaii Kai-Waimanalo-Kailua) and Sam Slom (R, Diamond Head-Kahala-Hawaii Kai) were excused. Slom, the lone Republican in the Senate, is scheduled to undergo coronary bypass surgery.

Vacation rentals

Thielen, whose father is in the hospital, left the floor session early, but not before she was able to score a victory for those concerned about the proliferation of illegal vacation rentals and the millions of dollars in revenue that tourism officials estimate the state is losing annually because owners aren’t paying the transient accommodations tax.

In a narrow 13-11 vote, Thielen persuaded lawmakers to heavily amend House Bill 1850, which she characterized as a “sweetheart deal” for Airbnb, the online vacation rental site that’s employed a number high-profile, local lobbyists this year.

The bill would have allowed companies such as Airbnb to act as a tax collection agent.

“What the amendment does is it prevents tax scofflaws, individual unit owners, from hiding operations behind an Airbnb license,” said Thielen.

She said the amended bill would also thwart the latest iteration of the online vacation rental market: renting out tents in state and county parks.

A bill with no content

On the House side, lawmakers took the extremely unusual step of approving on the floor a bill relating to geothermal power that does not actually have any content. That so-called “short-form” bill will now go to conference committee and can be amended there to insert language that can then become law.

No public testimony is allowed in conference committee, effectively shutting out the public from providing input on a hotly contested issue.

“Significant issues that come before this body deserve the transparency that comes with a public discussion on the merits of the issue,” Rep. Jarrett Keohokalole (D, Kahaluu-Ahuimanu-Kaneohe) told his colleagues. He was one of six House members to vote against the bill’s passage.

House Finance Chairwoman Sylvia Luke said in an interview that she allowed the blank bill to advance because lawmakers from Hawaii island are divided over how to handle geothermal regulation. A previous version of the measure was criticized for undermining county regulatory authority.

“At this point in time, what we’re trying to do is allow the proponents and opponents to work out some language,” she said. “If they don’t come to an agreement, then we’re not going to pass anything.”

She conceded that the handling of the bill was “unusual.”

‘Criminalizing’ homelessness

A measure proposed by Gov. David Ige’s administration to create a new offense called “criminal trespass on state lands” encountered some resistance from House members who worried it would essentially “criminalize homelessness.”

State Attorney General Douglas Chin has said the bill is needed to close a “gap” in state trespassing laws because it isn’t clear those laws apply to areas under highways, at harbors or on unfenced agricultural lands. The new offense would be a petty misdemeanor punishable by up to 30 days in jail and a $1,000 fine.

Rep. Kaniela Ing (D, South Maui) said the bill seems to target homeless people and families, “but we know through history that criminalizing does nothing to alleviate homelessness.”

He said it might be more appropriate for the state to “do the opposite of this bill and open all state parks after hours for anyone who needs to sleep, and I think that would really get the conversation going, because of course this would be very unpopular,” he said.

Keohokalole said he expects the bill will have a significant impact on his community, where he said there are “numerous” homeless camps on state lands. Unless the state provides services to those people, police could raid those camps and force the homeless out into parks and shopping centers.

“I don’t think that solves the problem,” he said.

Rep. Ryan Yamane (D, Mililani-Waipio-Waikele) said the Ige administration is trying to address “health and safety concerns” related to people under overpasses or on the sides of roads, at airports and at harbors. The administration is not trying to “target the homeless,” he said.

The measure creating the new trespassing offense was easily passed by the House, with six members voting against it.

County coffers

House lawmakers also expressed concerns about Senate Bill 2987, which would reduce Honolulu’s share of the hotel room tax and increase the proportionate share of the tax that goes to the other counties.

Currently the state transfers $103 million in hotel taxes a year to the counties, and Honolulu receives 44 percent of that amount. Senate Bill 2987 would reduce the city’s share to 30 percent and divide the extra money among the other counties.

It isn’t clear whether the state will continue next year to transfer $103 million to the counties, because that portion of the bill was left blank in the latest draft. However, if the state continues to transfer that amount, the measure would reduce the city’s annual share of the tax proceeds by about $15 million.

Rep. Calvin Say (D, Palolo- St. Louis Heights-Kaimuki) wondered aloud whether the city would have to increase property taxes if it were to lose a significant share of the hotel tax.

“All I’m getting at is, let’s not play a game with the people of the state of Hawaii since we’re all in the same canoe,” Say said.

Luke (D, Punchbowl- Pauoa-Nuuanu) said the changes to the hotel room tax bill grew out of discussions with neighbor island Council members who argued that Oahu benefits disproportionately from the hotel room tax. Those neighbor island officials pointed out the hotel tax is being used to finance the Hawai‘i Convention Center, which they say benefits only Oahu.

Luke said the formula for dividing up the tax revenues among the counties was set decades ago, “and it’s time for us to kind of re-look at the distribution.”

Luke openly dislikes Honolulu Mayor Kirk Caldwell, but when asked whether that is why her committee amended the hotel tax distribution formula, she replied, “Of course not.”

Caldwell issued a statement Tuesday saying he hopes the House will reconsider. Two-thirds of the visitors to the state come to Oahu, and those visitors generate tax revenue for the state through both the hotel room tax and the general excise tax, he said.

Tax hikes shelved

Lawmakers generally are deeply reluctant to raise taxes in an election year, and this year is proving that rule. Proposals by the governor’s administration to increase the state gasoline tax, weight tax and registration fees to provide more money for construction and maintenance of state highways all appear to be dead for the session.

A bill that would have increased the cigarette tax to 20 cents from 16 cents per cigarette also appears to be dead in what could turn out to be a major blow to the University of Hawaii Cancer Center.

The cigarette tax hike was expected to raise an extra $14.3 million a year, with about half of that additional funding to be earmarked for the cancer facility. However, that measure stalled in the House Finance Committee.

Ige asked lawmakers to appropriate $4 million this year to support the operations of the Cancer Center. With the cigarette tax increase apparently failing, Jerris Hedges, dean of the John A. Burns School of Medicine and interim director of the Cancer Center, said Ige’s request for extra funding is the “key centerpiece to restoring the support that the Cancer Center had from the state.”

The center already receives a share of the revenue from the state cigarette tax, but has seen that income stream taper off as revenue from the tax has declined.

The Senate responded to Ige’s proposal by including $4.5 million for the Cancer Center in its draft of the state budget, but the House did not offer any extra funding for the facility in its budget proposal.