Hawaii Governor Vetoes Aquarium, Tiny House and Other Bills

Gov. David Ige announced that he has vetoed 13 of 15 bills on his Intent to Veto list.

HB 523 Relating to Recycling and HB 575 Relating to Public Lands will become law.

VETO LIST:

SB 1240         RELATING TO AQUATIC LIFE

This bill requires the Department of Land and Natural Resources (DLNR) to define “sustainable” and establish a policy for sustainable collection practices through take limits. This bill also prohibits the DLNR from issuing new aquarium fish permits to use fine meshed traps or fine meshed nets and prohibits the transfer of permits after five years.

Rationale: Since the release of the Intent to Veto List on June 26, this issue has been highlighted across numerous local and national media outlets. The Office of the Governor has received thousands of phone calls and emails from constituents expressing their support for and opposition to this bill. The one thing everyone can agree on is that one of Hawai‘i’s most valuable resources, the coral reef, must be protected. The Department of Land and Natural Resources (DLNR) and Gov. Ige agree that sustainable policies and practices are needed. The governor has no objection to the first part of the bill that requires the DLNR to define “sustainable” and establish policies for sustainable collection.

The DLNR is committed to working with all stakeholders to come up with a better solution. Discussions have begun on “limited entry” aquarium fisheries, expanding Fishery Replenishment Areas (FRAs) to O‘ahu, capping permit numbers, addressing catch limits, and establishing permit fees. Gov. Ige is committed to introducing legislation and/or administrative rules that will properly address all concerns, and create policy that will establish Hawai‘i as the best managed sustainable nearshore fishery in the world.

Regarding this measure, the governor has concerns that the science does not support the claims made in this bill. In West Hawai‘i, where approximately 80 percent of Hawai‘i’s aquarium catch comes from, FRAs were established to reverse the decline in fish populations. The Division of Aquatic Resources (DAR) and the DLNR have collected data over 17 years and completed more than 6,700 surveys in this area, and have found that aquarium fish populations are generally stable or increasing. Unfortunately, there is no similar data for O‘ahu, which is the other location where aquarium fish are caught. Based on the extensive scientific data from West Hawai‘i, it would be premature to phase out aquarium collecting permits.

Furthermore, it must be understood that this bill does not prohibit fish collecting. It simply prohibits the issuance of new permits to use small meshed nets and traps. The meshed nets and traps are an important tool for aquarium fish collectors. There is hope that this will eventually phase out the industry. This would take decades as currently proposed. The worldwide demand for aquarium species could lead to new and more destructive ways of collection.

SB 410           RELATING TO COLLECTIVE BARGAINING

This measure broadens the scope of collective bargaining negotiations by requiring negotiations on the implementation of terms and conditions of employment, including making these violations grievable by employees who disagree with such working conditions.

Rationale: This bill directly impacts the ability of state departments to effectively manage its workforce by negating management rights to direct its workforce and requiring union consent on such matters as assignment, transfer and discipline.

SB 562           RELATING TO TORT LIABILITY

This bill requires the Attorney General to defend any civil action or proceeding brought in any county, based on any negligent or wrongful act or omission of a lifeguard who provides lifeguard services at a state beach park.

Rationale: This bill is objectionable because it requires the Attorney General to defend the counties for any civil action or proceeding, without exception. Although the liability protections of Act 170 lapsed on June 30, 2017, the Attorney General will defend any civil action or proceeding based on acts or omissions of county lifeguards working on state beaches that are within the scope of the lifeguard’s duties.

HB 1414        RELATING TO THE DEPARTMENT OF TAXATION

This bill requires the auditor to investigate and report on problems with the Department of Taxation’s tax system modernization project.

Rationale: The Department of Taxation is awaiting the findings and results of an independent verification and validation of the tax system modernization project, a study being done by an independent contractor. The State Auditor also stated that it may be difficult to identify and assess operational issues until the project is completed and there has been sufficient time for the department and users to identify any operational problems.

HB 1309        RELATING TO GRANTS

This measure requires the Director of Finance to seek repayment of operating grants appropriated by the Legislature, if the grantee discontinues the activities or services approved in the grant.

Rationale: This bill is contrary to the intent of Chapter 42F, Hawai‘i Revised Statues, which authorizes the Legislature to appropriate general funds to nongovernmental organizations for operations serving the public, only to require the reimbursement of such funds at a later date. Further, the Director of Finance does not have the capacity to monitor all grantee programs, and relies on each state agency to enforce the provisions of the grant application and contract between the agency and grantee. It would be more appropriate for repayment negotiations to be handled by the expending agency that has had the initial contractual relationship with the grantee, and not the Department of Budget and Finance.

SB 722           RELATING TO EFFICIENCY MEASURES

This measure requires the Director of Finance and a selected state department to develop and implement the efficiency measures pilot project as part of the state’s budget system.

Rationale: Imposing additional requirements for data collection on our state budget system requires re-programming older software on mainframe computers at a time when the state is upgrading its IT systems to cloud-based applications. Limited state resources would be better spent updating our budget IT programs into cloud-based applications.

SB 713           RELATING TO BUDGET DOCUMENTS

This measure requires the six-year program and financial plan and budget to include information on tax expenditures.

Rationale: Chapter 23, Hawai‘i Revised Statutes, currently requires the State Auditor to conduct periodic reviews of certain state tax credits, exemptions, exclusions, and deductions, and report such amounts for the previous three years, the current year, and the ensuing two years. These reviews and reports are essentially the same information as the additional reporting required in this bill. The Department of Taxation needs to focus its existing resources on improving tax collections by completing the implementation of our tax system modernization, rather than providing additional reports that may be of limited use to the overall budget process.

SB 1588        RELATING TO GENERAL OBLIGATION BONDS

This measure prohibits the issuance of general obligation bonds to finance the repair and maintenance of capital assets where the repair and maintenance costs incurred add value to, and prolong the life of the assets for a period of less than ten years.

Rationale: This measure aims to more closely align the financing of debt with the depreciation of the state’s assets. However, like many other state and county governments, Hawai‘i is faced with a growing number of deferred maintenance projects and a limited pool of operation funds for such projects. Further, the record-keeping necessary to ensure compliance with the tiered structuring of the debt could not be done within existing resources, and would therefore increase the costs of the state’s debt management program.

SB 1073         RELATING TO THE STATE FOUNDATION ON CULTURE & THE ARTS

This measure appropriates funds to the State Foundation on Culture and the Arts to support its artist fellowship program.

SB 1074        RELATING TO THE FIFTIETH ANNIVERSARY OF THE HAWAII STATE CAPITOL

This bill appropriates funds to the State Foundation on Culture and the Arts to plan and coordinate the celebration of the fiftieth anniversary of the Hawai‘i State Capitol.

Rationale for SB 1073 & SB 1074: These bills appropriate funds from the Works of Art Special Fund, which generally consists of proceeds from tax-exempt bonds. Under the Internal Revenue Code, proceeds from tax-exempt bonds cannot be used to finance operating expenses except under limited circumstances. This could potentially jeopardize the fund’s tax exempt status and adversely affect the state’s bond ratings.

HB 2               RELATING TO AGRICULTURE

This bill authorizes the placement of “tiny homes” of 500 square feet or less of living space within the state agriculture district of Hawai‘i County. These “tiny homes” will be used by farm workers or their immediate families on land currently being used for agricultural production.

Rationale: The Hawai‘i County Zoning Code (HCC Chapter 25) already allows for a “farm dwelling” as a permitted use of agricultural-zoned lands. By Zoning Code definition, a “farm dwelling” means a single-family dwelling located on or used in connection with a farm, or if the agricultural activity provides income to the family occupying the dwelling.

In 2015 and 2016, a total of 27 additional farm dwellings were approved by the County of Hawai‘i Planning Department. During that period, all applications for farm dwellings were granted. The administration is committed to working with Mayor Harry Kim and the County of Hawai‘i on addressing the affordable housing issue for farm workers on Hawai‘i Island.

HB 727          RELATING TO MOTORCYCLES

This measure allows the operator of a motorcycle or motor scooter to proceed cautiously between stopped lanes of traffic and on the shoulder lane of highways. The intent is to alleviate congestion and reduce the risk of injury or loss of life.

There is concern that this will compromise road safety. The shoulder lane is designed to accommodate stopped vehicles and emergency vehicles on highways, and bicycles on arterial roadways. While the intent of the bill is to reduce risk or injury or loss of life, there is concern that allowing shoulder lane use to these types of vehicles will instead create more danger for the operators of these vehicles.

HB 627          RELATING TO PUBLIC-PRIVATE PARTNERSHIPS

This measure establishes the Office of Public-Private Partnerships within the Department of Business, Economic Development and Tourism, and appropriate funds for a state public-private partnership coordinator position.

Rationale: Rationale: My administration is fully supportive of public-private partnerships when they are shaped in the right way.  Over the past few years, many departments have engaged in exploring public-private partnerships to leverage private monies to improve on the services provided to the public. Recent affordable housing projects such as Kapolei Lofts are prime examples of how the state can partner with private developers to build affordable units on state lands.

However, there is concern that the lone position of a state public-private partnership coordinator will not be sufficient to adequately coordinate interagency collaboration, maintain analysis reports, and develop future public-private partnership opportunities. Having one office manage all public-private partnership contracts, proposals, and negotiations for the state may create a bottleneck that will slow the progress for agencies already involved in these partnerships.

HB 523 Relating to Recycling will become law with the governor’s signature.

HB 575 Relating to Public Lands will become law without the governor’s signature.

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