New laws deal with pot, rail tax

Gov. David Ige approved a five-year extension of the half-percent excise tax surcharge on Tuesday to raise more money to cover cost overruns on Honolulu’s $6 billion Oahu transit project, and also put his personal stamp of approval on a plan to establish a statewide network of dispensaries to distribute medical marijuana.

Both bills generated controversy this year, and Ige opted to quietly approve the measures without staging public signing ceremonies.

The excise tax surcharge was originally scheduled to expire in 2022, but House Bill 134 extends the surcharge on Oahu residents until 2027.

The surcharge generated $248.5 million to support the rail project last year, and is expected to generate an additional $1.8 billion in revenue for rail during the five-year extension.

Officials with the Honolulu Authority for Rapid Transportation have said they need the five-year extension to cope with a possible $910 million funding shortfall for the project because construction bids came in higher than expected last year.

Honolulu Mayor Kirk Caldwell asked state lawmakers to make the surcharge permanent to cover the projected operating losses for the rail system in the years ahead, and to pay for additional extensions of the system to central Kapolei and Manoa.

However, lawmakers would agree only to a five-year extension to complete the line now under construction from Kapolei to Ala Moana.

"The primary reason I signed this bill is because we made a commitment years ago, and we must keep this commitment to see rail to its completion," Ige said in a written statement Wednesday announcing he had signed the bill extending the tax.

"I, too, have concerns about cost overruns," Ige said. "The excise tax is an investment by the taxpayers of Hawaii, and my job is to ensure that their hard-earned money is being spent efficiently, effectively and productively."

To pursue that goal, Ige said he is asking the Honolulu Authority for Rapid Transportation to provide him with annual progress reports on the revenue, costs and progress of the rail project.

"This report will be shared with not only my administration, but with the Legislature and the public, and it will be measured against specific goals and targets," Ige said in a prepared statement.

Ige said the annual report will be used as a tool to guide policymakers in the future "to ensure the project stays on schedule and on budget, and to inform the public of the status of their investment."

The bill also authorizes the neighbor island counties to impose their own half-percent excise tax surcharge on those islands provided the county councils approve an ordinance authorizing the new surcharge by July 1.

Ige on Tuesday also approved HB 321, which will create up to 16 dispensaries to distribute medical marijuana to Hawaii patients. Hawaii now has nearly 13,000 legally registered medical marijuana consumers, and the new law would allow the first dispensaries to open to serve them as early as July 2016.

"I support the establishment of dispensaries to ensure that qualified patients can legally and safely access medical marijuana," Ige said. "We know that our challenge going forward will be to adopt rules that are fair, cost effective and easy to monitor. The bill sets a timeline. We will make a good-faith effort to create a fair process that will help the people most in need."

Hawaii approved a state law in 2000 allowing for medical marijuana use by patients with a prescription, but never set up a system for distributing cannabis. Patients or their caregivers have had to either grow their own, or rely on the black market for their supplies.

The new marijuana dispensary law prohibits counties from enacting zoning regulations that discriminate against licensed dispensaries and production centers, and allows the legal transport of medical marijuana in public places by qualified patients, caregivers or workers employed by licensed medical marijuana facilities.

ON THE BOOKS

With Ige’s signature

>> House Bill 134: Extends the half-percent excise tax surcharge for Oahu to 2027. It also authorizes neighbor island counties to impose their own half-percent surcharge if the county councils approve them by July 1, 2016.

>> House Bill 321: Creates up to 16 dispensaries to distribute medical marijuana.

Without Ige’s signature

>> House Bill 541: Requires each University of Hawaii campus to prepare an operations plan.

>> Senate Bill 1092: Repeals or reclassifies various special funds as recommended by the state auditor.

>> Senate Bill 1297: Amends the cigarette tax and tobacco tax law by changing the amount allocated to the trauma system special fund, and establishing maximum dollar amounts that will be distributed among various other special funds.

>> Senate Bill 118: Requires the Department of Business, Economic Development and Tourism and the state Tax Department to study the impact of real estate investment trusts in Hawaii.