Comments on HB467 HD1
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February 9, 2021 Representative Mark Nakashima, Chair Representative Scott Matayoshi, Vice Chair House Committee on Judiciary and Hawaiian Affairs Hawaii State Legislature Comments on HB467 HD1 Dear Representative Nakashima, Representative Matayoshi and Members of the House Committee on Judiciary and Hawaiian Affairs, The Kohala Coast Resort Association appreciates the Legislature’s intent to support redevelopment of the Banyan Drive Area with the establishment of the Waiakea Peninsula Redevelopment District. A healthy and vibrant tourism economy on both sides of the island of Hawaii is important to the economic future of our island as a whole. We believe that a strong inventory of visitor accommodations in Hilo will improve our visitors’ overall experience, hopefully leading to a longer length of stay, and a better of appreciation of the diverse opportunities our island has to offer. We also believe that a strong accommodations sector in Hilo will continue to help airlines consider direct service to our island, through either the Ellison Onizuka Kona International Airport at Keahole or the Hilo International Airport. We appreciate that you are seeking a representative from the hotel sector to serve on this important committee, so that everyone has a chance to understand the corporate perspective in decision making about long-term land use and leases. KCRA is a collection of master-planned resorts and hotels, situated north of the Kona International Airport which represents more than 3,500 hotel and timeshare accommodations and an equal number of resort residential units. This is approximately 35 percent of the visitor accommodations available on the Island of Hawai`i. KCRA member properties annually pay more than $25 million in TAT, $25 million in GET and $11 million in property taxes. KCRA members employ more than 5,000 Hawaii Island residents. Thank you for your favorable consideration of HB467 HD1. Sincerely, Stephanie Donoho Administrative Director PO Box 6991, Kamuela, HI 96743 * (808) 747-5762 * [email protected] * www.kohalacoastresorts.com DAVID Y. IGE ISAAC W. CHOY GOVERNOR DIRECTOR OF TAXATION JOSH GREEN M.D. LT. GOVERNOR STATE OF HAWAII DEPARTMENT OF TAXATION P.O. BOX 259 HONOLULU, HAWAII 96809 PHONE NO: (808) 587-1540 FAX NO: (808) 587-1560 To: The Honorable Mark M. Nakashima, Chair; The Honorable Scot Z. Matayoshi, Vice Chair; and Members of the House Committee on Judiciary & Hawaiian Affairs From: Isaac W. Choy, Director Department of Taxation Date: February 11, 2021 Time: 2:00 P.M. Place: Via Video Conference, State Capitol Re: H.B. 467, H.D. 1, Relating to Public Lands The Department of Taxation (Department) provides the following comments regarding H.B. 467, H.D. 1, for your consideration. With respect to taxation, H.B. 467, H.D. 1, exempts the costs of construction of work or improvements of a redevelopment project, including material and tools, from general excise and use taxes. H.D. 1 has a defective effective date of January 1, 2050. First, the Department notes that the exemption from the general excise tax extends to labor and materials, while the exemption from the use tax applies to material, parts, or tools. The Department suggests that the exemptions be made the same for both to avoid any conflict or confusion. Second, the Department notes that it will be difficult for a seller to determine if material, parts, or tools are being used by the purchaser on a qualified redevelopment project. The Department suggests that some means be established so that sellers can be protected from improper claims that an item is being purchased for a qualified project. Finally, the Department requests that the general excise and use tax exemption be made applicable no earlier than January 1, 2021 to allow the Department sufficient time to make the necessary form, instruction, and computer system changes. Thank you for the opportunity to provide comments. 808-733-7060 1259 A‘ala Street, Suite 300 Honolulu, HI 96817 808-737-4977 February 11, 2021 The Honorable Mark M. Nakashima, Chair House Committee on Judiciary & Hawaiian Affairs Via Videoconference RE: House Bill 467, HD1, Relating to Public Lands HEARING: Thursday, February 11, 2021, at 2:00 p.m. Aloha Chair Nakashima, Vice Chair Matayoshi, and Members of the Committee, I am Ken Hiraki, Director of Government Affairs Committee, testifying on behalf of the Hawai‘i Association of REALTORS® (“HAR”), the voice of real estate in Hawai‘i, and its over 10,000 members. HAR supports House Bill 467, HD1, which authorizes the designation of areas or regions of public lands classified as commercial, industrial, resort and hotel, and the establishment and implementation of guidelines for the redevelopment of the areas or regions. The State currently leases state land to many entities for commercial, industrial, hotel and resort purposes. Unfortunately, lessees have virtually no economic incentive to invest in the property within the last 10 to 15 years, knowing their lease will expire. In turn, with uncertainty of one’s lease extension, it has led to public lands that are underused and deteriorating. Many of the circumstances that faced the State of Hawai‘i and the City & County of Honolulu when the future of Kaka`ako was at risk can be related to the issues of the Waiakea Peninsula (Banyan Drive) and Kanoelehua Industrial Area. Existing regulations and state policies do not address the needs of Hilo businesses operating on Public Lands resulting in a less-than-thriving commercial zone. This measure will encourage revitalization of public lands. As a result, from a taxation perspective, this measure will enhance the revenue generating potential of these properties, including increases in the Transient Accommodations Tax from revitalized hotel and resort areas. Mahalo for the opportunity to testify. REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. DAVID Y. IGE CRAIG K. HIRAI GOVERNOR DIRECTOR ROBERT YU DEPUTY DIRECTOR STATE OF HAWAI‘I ADMINISTRATIVE AND RESEARCH OFFICE EMPLOYEES’ RETIREMENT SYSTEM DEPARTMENT OF BUDGET AND FINANCE BUDGET, PROGRAM PLANNING AND HAWAI‘I EMPLOYER-UNION HEALTH BENEFITS TRUST FUND MANAGEMENT DIVISION OFFICE OF THE PUBLIC DEFENDER P.O. BOX 150 FINANCIAL ADMINISTRATION DIVISION HONOLULU, HAWAI ‘I 96810-0150 OFFICE OF FEDERAL AWARDS MANAGEMENT (OFAM) WRITTEN ONLY TESTIMONY BY CRAIG K. HIRAI DIRECTOR, DEPARTMENT OF BUDGET AND FINANCE TO THE HOUSE COMMITTEE ON JUDICIARY & HAWAIIAN AFFAIRS ON HOUSE BILL NO. 467, H.D. 1 February 11, 2021 2:00 p.m. Room 325 RELATING TO PUBLIC LANDS The Department of Budget and Finance offers comments on House Bill (H.B.) No. 467, H.D. 1. H.B. No. 467, H.D. 1: establishes a framework to identify areas of public lands that are classified as commercial, industrial, resort, and hotel parcels in need of revitalization; provides for redevelopment of the parcels; creates a nine-member planning committee for each redevelopment district to provide policy direction and prepare a redevelopment plan; authorizes a local redevelopment agency to contract with a developer for construction of non-residential projects within a redevelopment area; establishes a revolving fund for each redevelopment district that would generate revenues through 50% of the income, revenues and receipts from the public lands in the redevelopment district, legislative appropriations, grants, gifts, and other funds; and creates the Waiakea Peninsula Redevelopment District on the island of Hawai‘i, the Waiakea Peninsula Redevelopment District Planning Committee, and the Waiakea Peninsula Redevelopment District Revolving Fund. No. 1 Capitol District Building, 250 S. Hotel Street, Honolulu, Hawaii 96813 -2- As a matter of general policy, the department does not support the creation of any revolving fund which does not meet the requirements of Section 37-52.4, HRS. Revolving funds should: 1) serve a need as demonstrated by the purpose, scope of work and an explanation why the program cannot be implemented successfully under the general fund appropriation process; 2) reflect a clear nexus between the benefits sought and charges made upon the users or beneficiaries or a clear link between the program and the sources of revenue; 3) provide an appropriate means of financing for the program or activity; and 4) demonstrate the capacity to be financially self-sustaining. In regard to H.B. No. 467, H.D. 1, it is difficult to determine whether the proposed source of revenues will be self-sustaining for each revolving fund that is created. Thank you for your consideration of our comments. Kūpuna for the Moʻopuna committed to the well-being of Hawaiʻi for the next generations to come [email protected] STOP LEGAL THIEVERY! COMMITTEE ON JUDICIARY & HAWAIIAN AFFAIRS Rep. Mark M. Nakashima, Chair Rep. Scot Z. Matayoshi, Vice Chair DATE: Thursday, February 11, 2021 TIME: 2:00PM PLACE: Room 325 Testimony of Kūpuna for the Moʻopuna HB 467 HD 1 - RELATING TO PUBLIC LANDS. STRONG OPPOSITION HB 467 HD1 inhibits the State from fulfilling its fiduciary obligations in the disposition of public lands. Before voting on this measure, we urge you to watch the video “PUBLIC LAND TRUST: JUSTICE DELAYED IS JUSTICE DENIED” to know what you are voting on. https://www.kamakakoi.com/plt Now that you KNOW, vote NO to HB 467 HD 1. Ua mau ke ea o ka ʻāina i ka pono! BEFORE THE HOUSE JUDICIARY AND HAWAIIAN AFFAIRS COMMITTEE February 10, 2021 HOUSE BILL 467 Relating to Public Lands Aloha Chair Nakashima, Vice Chair Matayoshi, and Members of the Committee, Ka Lāhui Hawaiʻi Kōmike Kalai'āina submits the following written testimony in STRONG OPPOSITION to House Bill 467 which would allow the Department of Land and Natural Resources to issue a rent reduction or waiver for certain lessee's expenses for demolition or provision of basic infrastructure and authorizes a local redevelopment agency to contract with a developer for construction of non-residential projects on any Public lands within a redevelopment area.