Bill Text: HI HB2406 | 2024 | Regular Session | Amended
Bill Title: Relating To State Finances.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-03-07 - Referred to EET/WTL/AEN, WAM/JDC. [HB2406 Detail]
Download: Hawaii-2024-HB2406-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2406 |
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THIRTY-SECOND LEGISLATURE, 2024 |
H.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO STATE FINANCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii's natural environment faces significant pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources. Climate change and overuse are placing our natural and cultural resources in increasing peril by creating greater risk of fire, flood, coastal erosion, loss of reefs, and pollution of our air and water supplies threatening lives, homes, visitor accommodations, fisheries, stability of other natural systems, and irreplaceable Hawaiian cultural landscapes enjoyed by Hawaii residents and tourists. The current underinvestment in our natural and cultural resources significantly limits the ability of the State and our communities to improve management of our lands, waters, and cultural sites to reduce these risks and to respond to climate crises when they occur. Climate change will intensify and increase the threat of these emergencies unless we take significantly greater action now to prevent them.
The recent tragedy on Maui
due to the Lahaina wildfire resulted in unbearable loss of lives, homes,
infrastructure, and businesses and will have severe economic costs for
residents and public agencies for the response, remediation, and rebuilding, as
well as ongoing revenue losses for Hawaii's tourism industry and state and
local governments. This tragic event is
a wake-up call for all Hawaii residents, businesses, and public agencies to
significantly increase efforts to prevent climate crises and limit the damage
when crises do occur.
Non-native grasses and other non-native
plants, mismanaged lands, and reduced water availability present continuing
wildfire risks to the lives and homes of Hawaii residents, hotels and other
visitor accommodations, native ecosystems and cultural landscapes, and Hawaii's
tourism-dependent economy. In addition
to wildfires, climate crises also result from the loss and degradation of our
coral reefs that protect homes, beaches, businesses, and infrastructure from
coastal erosion. Coastal erosion often
exposes and damages historic Hawaiian burials, as sand dunes were a traditional
burial location across Hawaii.
Furthermore, the degradation of coral reefs threatens fisheries and
other ocean life that are important to the State's tourism industry, provide
food for residents, and contribute significantly to Hawaii's quality of
life. Hawaii's forests and other
watershed lands are critical to the quality and quantity of water that sustains
families, visitors, businesses, and native fish and wildlife. Hawaii's water supplies will be impaired
unless greater action is taken to protect and restore forest and watershed
lands in the State.
The legislature also finds that climate
change will cause more frequent and severe droughts that threaten the water
supplies that sustain homes, visitor accommodations, and sensitive natural and
cultural resources. Climate change will
also cause more intense storms leading to more floods causing water
contamination; damage to homes, businesses, and infrastructure; and risk of
life and health.
The legislature further finds that the
number of floods per year has already sharply increased since the 1960s and is
expected to keep rising. Significant
pollution events and chronic release of contaminants weaken the resiliency of Hawaii's natural environment
and pollute
the air, land, fresh water supplies, and nearshore
waters, threatening the health of Hawaii residents, visitors, and fish and
wildlife.
Climate crises can cost taxpayers billions
of dollars in response and recovery costs and repairs to infrastructure, while
reducing revenues, especially if the crises adversely impact tourism and other
industries. The costs borne by the
public to respond to and recover from climate crises exceed the
costs of preventing them by billions of dollars.
Climate change is impacting health in a
myriad of ways, including by leading to death and illness from increasingly
frequent extreme weather events such as heatwaves, storms, and floods;
disrupting food systems; and increasing zoonoses and food-, water-, and
vector-borne diseases and mental health issues.
Climate change can disrupt food availability, reduce
access to food, and affect food quality. Projected increases in temperatures, changes
in precipitation patterns
and extreme weather events, and reductions in water
availability may all result in reduced agricultural productivity and disrupt
food supply
chains, which could be detrimental to the Hawaiian islands.
The work of the department
of land and natural resources and other departments, agencies, and community
partners directly improves the health and sustainability of Hawaii's lands,
waters, and cultural sites through actions such as fencing in native forests to
restrict ungulates and stop the spread of invasive species and diseases such as
rapid ohia death; stream surveys to monitor native stream species health and
water levels; and restoring coral reefs through propagation and release of sea
urchins. Hawaii has many of the solutions
to prevent and mitigate climate crises by looking to indigenous Hawaiian land,
water, ocean, and cultural site stewardship practices. Perpetuation of traditional Hawaiian
management practices, including fishponds, loi kalo, and mauka-makai ahupuaa management,
results in increased groundwater recharge, decreased sediment reaching the
ocean and reefs, increased community volunteerism, and increased public
education and changed behaviors about pono stewardship practices.
While the State has many of the solutions
for prevention, the State and the counties currently do not have the needed
resources to implement even the highest-priority climate crises prevention
measures. Furthermore, delays in federal
reimbursements, when available, make it difficult to sustain response efforts
when climate crises strike. The State
has a compelling and urgent need to increase funding to prevent climate crises
and fully respond to crises when they occur.
The purpose of this Act is to:
(1) Establish the climate health and environmental action special fund to prevent climate crises and more effectively respond to climate crises when they occur;
(2) Levy an additional $25 tax on transient accommodations;
(3) Allocate transient accommodations tax revenue to the climate health and environmental action special fund; and
(4) Narrow exemptions for the transient accommodations tax.
SECTION 2.
The Hawaii Revised Statutes is amended by adding a new chapter to be
appropriately designated and to read as follows:
CLIMATE HEALTH AND ENVIRONMENTAL ACTION SPECIAL FUND
§ -1 Definitions. As used in this chapter, unless the context otherwise requires:
"Climate crisis"
includes but is not limited to wildfires; sea level
rise and
coastal erosion resulting in loss of beaches, public infrastructure, and public
facilities; exposure and damage to coastal burials; loss or degradation of
reefs; extreme heat; droughts;
floods; and pollution that contaminates drinking water or nearshore waters.
"Chairperson" means the
chairperson of the board of land and natural resources.
"Department" means the department
of land and natural resources.
"Fund" means the climate health
and environmental action special fund.
"Nonprofit organization" means an
organization that has been granted tax exempt status by the Internal Revenue
Service pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as
amended, and that has among its charitable purposes preventing or responding to
climate crises; preservation, restoration, or management of natural or cultural
resources for cultural perpetuation, scientific, historic, educational,
recreational, scenic, wildlife, or open-space purposes; protection of the
natural environment or biological resources, or both; preservation,
enhancement, or both, of wildlife; and protection of native Hawaiian cultural
resources and practices related to the protection of Native Hawaiian cultural
resources.
"Resilience" includes but is not limited to the ability to anticipate, prevent, prepare for, and respond to climate crises events, trends, or disturbances.
§ -2 Climate health and
environmental action special fund. (a) There is established in the state treasury
the climate health and environmental action special fund to be administered by
the chairperson to minimize the impacts of, and respond to, climate crises.
(b) Moneys from the fund shall be expended only for the following purposes:
(1) Wildfire prevention and response strategies to protect communities, sites frequented by tourists and other visitors, and sensitive environmental and cultural resources. Highest priority shall be placed on environmentally beneficial wildfire prevention strategies, including removal of non-native grasses and other non-native vegetation; propagation and planting of native species; restoration of stream flows; restoration of forests and watersheds; and restoration, or establishment and enhancement, of traditional Hawaiian land management and agricultural practices;
(2) Flood prevention;
(3) Coral
reef protection and restoration and other environmentally beneficial strategies
that protect fisheries or help prevent shoreline erosion and coastal flooding;
(4) Emergency
drinking water supplies when droughts or water pollution prevent the
traditional water supplies from meeting the drinking water needs of residents
and visitors. Measures may include but
are not limited to conservation measures, temporary extension of pipelines, and
the use of trucks or other vehicles needed to deliver emergency water supplies;
(5) Provision
of emergency sources of electricity from portable renewable energy sources, as
needed, for communities adversely impacted by a climate crisis;
(6) Heat management, including green infrastructure and programs that plant trees and vegetation that can cool ecosystems and help keep buildings and their surroundings cooler;
(7) Shoreline
restoration and coastal management to address and adapt to sea level rise and
coastal erosion;
(8) Other
environmentally compatible strategies to prevent or reduce the potential harm
that climate crises can cause;
(9) Protection
of lives, homes, businesses, sites popular with tourists and other visitors,
and infrastructure when climate crises occur;
(10) Perpetuation
of indigenous Hawaiian land, water, ocean, and cultural site stewardship
practices;
(11) Preparation
of climate crises prevention and response strategies and plans; and
(12) Costs to administer this chapter.
(c) In allocating funding for prevention projects, the department shall prioritize projects that include one or more of the following features:
(1) Projects that are cost-effective; or
(2) Projects that accomplish the following, in no particular order of priority: significant benefits relative to their cost; are equitable; protect homes; protect and improve native fish and wildlife habitat; protect natural and cultural resources, including but not limited to those that are important to the tourism industry; and provide nature-based or indigenous-led solutions to help prevent climate crises.
The department shall allocate at least twenty-five per cent of expenditures from the fund each year for grants to counties and nonprofit organizations to plan for and implement climate crisis prevention projects consistent with this subsection.
(d) Grants shall be made to counties and nonprofit organizations to plan for and implement climate crisis prevention projects consistent with subsection (c). Applications for grants shall be made to the department and contain such information as the department shall require by rules adopted pursuant to chapter 91. At a minimum, each applicant shall demonstrate that:
(1) The grant will be used exclusively for activities consistent with the purposes of this chapter;
(2) The applicant has applied for or received all applicable licenses
and permits;
(3) The
applicant will comply with all applicable federal and state laws prohibiting
discrimination against any person on the basis of race, color, national origin,
religion, creed, sex, age, sexual orientation, disability, or any other
characteristic protected under applicable federal or state law;
(4) The
applicant will comply with other requirements as the department may prescribe;
(5) All
activities and improvements undertaken with funds received will comply with all
applicable federal, state, and county statutes and ordinances, including
applicable building codes and agency rules; and
(6) The applicant will indemnify and save harmless the State of Hawaii and its officers, agents, and employees from and against any and all claims arising out of or resulting from activities carried out or projects undertaken with funds provided hereunder, and procure sufficient insurance to provide this indemnification if requested to do so by the department.
(e) To receive a grant under this section an applicant shall:
(1) Be either:
(A) A community-based nonprofit organization determined by the Internal Revenue Service to be exempt from federal income taxation;
(B) A cooperative association; or
(C) An organization providing technical assistance;
(2) In the case of a nonprofit organization, have a governing board whose members have no material conflict of interest and serve without compensation, have bylaws or policies that describe the manner in which business is to be conducted and policies relating to nepotism and management of potential conflict of interest situations, and employ or contract with no more than two members of a family or kin of the first or second degree unless specifically permitted by the department;
(3) Agree to make available to the department all records the applicant
may have relating to the grant that would allow state agencies to monitor the
applicant's compliance with the purpose of this chapter; and
(4) Establish, to the satisfaction of the department, that sufficient funds are available for the effective operation of the activity, business, enterprise, or technical assistance for which the grant is awarded.
(f) The following shall be deposited into the fund:
(1) A portion of the revenues from the transient accommodations tax, as provided by section 237D-6.5;
(2) Revenues
directed to the fund by the chairperson from site-based and other fees
established by the department; and
(3) Other moneys appropriated to the fund by the legislature.
§ -3 Revenue bonds. To the extent necessary, with the
approval of the governor and the required legislative authorization, the
chairperson and director of finance may provide for the issuance of revenue
bonds pursuant to part III of chapter 39 to be paid for from revenues received
pursuant to section -2(c) and section 237D-2(f).
§ -4 Reimbursements. (a)
The department may seek reimbursement for fund expenditures related
to climate crises.
(b)
Damages for which recipients of funds are liable under this chapter include but are
not limited to:
(1) All costs of response, containment, removal, and treatment, including but not limited to monitoring and administration costs incurred as a result of responding to the climate crisis;
(2) Provision of emergency drinking water supplies; and
(3) Injury to, destruction of, or loss of natural resources, including but not limited to the reasonable costs of treating, restoring, or replacing water supplies; rehabilitating fish, wildlife, habitat, and other natural resources; and reasonable costs of assessing those losses.
(c) Any damages recovered under this section shall be in addition to and shall not count against the recovery of any other damages or other costs recovered pursuant to other laws.
(d) Moneys recovered from responsible parties
under this section shall be deposited into the fund, except for costs necessary
to reimburse the department of the attorney general for any costs associated
with recovery of those damages.
§ -5 Technical advisory committee. (a)
The chairperson shall appoint a technical advisory committee to
advise the department on strategies to prevent and respond to climate crises.
(b) The technical advisory committee shall include but shall not be limited to:
(1) Experts
in wildfire prevention and response;
(2) Experts in coral reef, forest, stream, and watershed protection and
restoration;
(3) Experts
in the protection, restoration, and cultural stewardship of native Hawaiian
cultural sites;
(4) Experts
in providing emergency drinking water and other resources that can help
minimize the impact of climate crises on residents and visitors;
(5) Experts
in climate change resilience, including indigenous land and water stewardship
practices;
(6) At
least one representative from each county; and
(7) Other
experts as identified by the chairperson.
(c) The technical advisory committee shall meet at least twice each year to advise the chairperson regarding the implementation of this chapter.
(d) The chairperson shall appoint one of the
members to serve as chair of the technical advisory committee.
§ -6 Reports to the legislature; audits. The department shall submit a report to the
legislature, no later than twenty days prior to the convening of the regular
session of 2026 and every year thereafter, on the uses of the fund and progress
in implementing projects and other strategies to reduce the likelihood and
severity of climate crises.
Beginning January 1, 2028, and each three
years thereafter, the governor shall provide for an audit to ensure that funds
were expended only for purposes authorized in this chapter. The audit shall be transmitted to the fiscal
committees of each house of the legislature no later than twenty days prior to
the convening of the regular session of 2029 and every five years
thereafter."
SECTION 3.
Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:
"§237D-2 Imposition and rates. (a) There is levied and shall be assessed and collected each month a tax of:
(1) Five per cent for the period beginning on January 1, 1987, to June 30, 1994;
(2) Six per cent for the period beginning on July 1, 1994, to December 31, 1998;
(3) 7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;
(4) 8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; and
(5) 9.25 per cent for the period beginning on July 1, 2010, and thereafter;
on the gross rental or gross rental proceeds derived from furnishing transient accommodations.
(b) Every transient accommodations broker, travel
agency, and tour packager who arranges transient accommodations at
noncommissioned negotiated contract rates and every operator or other taxpayer
who receives gross rental proceeds shall pay to the State the tax imposed by [subsection]
subsections (a)[,] and (f), as provided in this chapter.
(c) There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:
(1) 7.25 per cent on the fair market rental value until December 31, 2015;
(2) 8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; and
(3) 9.25 per cent on the fair market rental value for the period beginning on January 1, 2017, and thereafter.
(d) Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter. Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.
(e) Notwithstanding the tax rates established in subsections (a)(5) and (c)(3), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be 10.25 per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:
(1) [The]
percent of the tax revenues levied, assessed, and collected pursuant to
this [subsection that are in excess of the revenues realized from the levy,
assessment, and collection of tax at the 9.25 per cent rate] section
shall be deposited quarterly into the mass transit special fund established
under section 248-2.7; and
(2) If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.
The
remaining tax revenues levied, assessed, and collected [at the 9.25 per cent
tax rate pursuant to subsections (a) and (c)] shall be deposited into the
general fund in accordance with section 237D-6.5(b).
(f) In addition to the taxes imposed under subsections (a) and (c), there is levied and shall be assessed and collected each month a tax of $25 on each furnishing of a transient accommodation, including transient accommodations furnished for cash or charge, at no charge, on a complimentary or gratuitous basis, for a nominal charge, or in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program."
SECTION 4. Section 237D-3, Hawaii Revised Statutes, is amended to read as follows:
"§237D-3 Exemptions. This chapter shall not apply to:
(1) Health care facilities including all such facilities enumerated in section 321-11(10);
(2) School dormitories of a public or private educational institution providing education in grades kindergarten through twelve, or of any institution of higher education;
(3) Lodging provided by nonprofit corporations or associations for religious, charitable, or educational purposes; provided that this exemption shall apply only to the activities of the religious, charitable, or educational corporation or association as such and not to any rental or gross rental the primary purpose of which is to produce income even if the income is used for or in furtherance of the exempt activities of such religious, charitable, or educational corporation or association;
(4) Living accommodations for persons in the military on permanent duty assignment to Hawaii, including the furnishing of transient accommodations to those military personnel who receive temporary lodging allowances while seeking accommodations in Hawaii or while awaiting reassignment to new duty stations outside the State;
(5) Low-income renters receiving rental subsistence from the state or federal governments and whose rental periods are for durations shorter than sixty days;
(6) Operators of transient accommodations who furnish accommodations to full-time students enrolled in an institution offering post-secondary education. The director of taxation shall determine what shall be deemed acceptable proof of full-time enrollment. This exemption shall also apply to operators who furnish transient accommodations to students during summer employment;
(7) Accommodations [furnished without
charge such as, but not limited to, complimentary accommodations,
accommodations] furnished to contract personnel such as physicians, golf or
tennis professionals, swimming and dancing instructors, and other personnel to
whom no salary is paid or to employees who receive room and board as part of
their salary or compensation; [and]
(8) Accommodations furnished to foreign
diplomats and consular officials who are holding cards issued or authorized by
the United States Department of State granting them an exemption from state
taxes[.]; and
(9) Accommodations furnished at no charge, including accommodations furnished on a complimentary or gratuitous basis, for the purpose of providing emergency housing to persons displaced as a result of a state of emergency or state disaster, as declared by the governor pursuant to section 127A-14 or 209-2, respectively."
SECTION 5. Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b)
Except for the revenues collected pursuant to section 237D-2(e)[,]
and (f), revenues collected under this chapter shall be distributed in
the following priority, with the excess revenues to be deposited into the
general fund:
(1) $1,500,000 shall be allocated to the Turtle Bay conservation easement special fund beginning July 1, 2015, for the reimbursement to the state general fund of debt service on reimbursable general obligation bonds, including ongoing expenses related to the issuance of the bonds, the proceeds of which were used to acquire the conservation easement and other real property interests in Turtle Bay, Oahu, for the protection, preservation, and enhancement of natural resources important to the State, until the bonds are fully amortized;
(2) $11,000,000 shall be allocated to the convention center enterprise special fund established under section 201B-8;
(3) An
allocation shall be deposited into the tourism emergency special fund,
established in section 201B-10, in a manner sufficient to maintain a fund
balance of $5,000,000 in the tourism emergency special fund; [and]
(4) $3,000,000 shall be allocated to the special land and development fund established under section 171-19; provided that the allocation shall be expended in accordance with the Hawaii tourism authority strategic plan for:
(A) The protection, preservation, maintenance, and enhancement of natural resources, including beaches, important to the visitor industry;
(B) Planning, construction, and repair of facilities; and
(C) Operation and maintenance costs of
public lands, including beaches, connected with enhancing the visitor
experience[.]; and
(5) $
shall be allocated to the climate health and environmental action special fund
established under section -2.
All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.
[As used in this subsection,
"fiscal year" means the twelve-month period beginning on July 1 of a
calendar year and ending on June 30 of the following calendar year.]"
SECTION
6. There is appropriated out of the
general revenues of the State of Hawaii the sum of
$ or so much
thereof as may be necessary for fiscal year 2024-2025 to be deposited into the climate health and environmental action special fund.
SECTION 7. There is appropriated out of the climate
health and environmental action special fund the sum of
$ or so much
thereof as may be necessary for fiscal year 2024-2025 for the establishment of
full-time equivalent ( FTE) positions in the department
of land and natural resources to administer the climate
health and environmental action special fund.
The sum appropriated shall be expended by
the department of land and natural resources for the purposes of this Act.
SECTION 8. In accordance with section 9 of article VII of the Hawaii State Constitution and sections 37‑91 and 37‑93, Hawaii Revised Statutes, the legislature has determined that the appropriations contained in H.B. No. , will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. In addition, the appropriation contained in this Act will cause the general fund expenditure ceiling for fiscal year 2024‑2025 to be further exceeded by $ or per cent. The combined total amount of general fund appropriations contained in only these two Acts will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. The reasons for exceeding the general fund expenditure ceiling are that:
(1) The appropriation made in this Act is necessary to serve the public interest; and
(2) The appropriation made in this Act meets the needs addressed by this Act.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 3000.
Report Title:
DLNR; Climate Health and Environmental Action Special Fund; Transient Accommodations Tax; Appropriation; Expenditure Ceiling
Description:
Establishes the Climate Health and Environmental Action Special Fund in the Department of Land and Natural Resources to minimize the impacts of, and respond to, climate crises. Imposes an additional $25 dollar tax on transient accommodations. Allocates a portion of transient accommodations tax revenue to the Climate Health and Environmental Action Special Fund. Narrows the transient accommodations tax exemption for accommodations furnished at no charge or on a complimentary or gratuitous basis to accommodations for the purpose of providing emergency housing to persons displaced as a result of a state of emergency or state disaster. Effective 7/1/3000. (HD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
