When it comes to environmental measures, the number passed by the Hawai`i Legislature in 2010 was not huge. However, several of the bills passed have far-ranging consequences.
Almost certainly, the most consequential measure is Act 73, which increases to $1.05 the tax on each barrel of “petroleum product” (excluding aviation fuel) distributed to retailers, from the current tax of 5 cents. The bill passed both chambers on April 14. On April 25, it was returned to the Legislature along with Governor Linda Lingle’s veto message. Four days later, both the Senate and the House voted to override the veto, and House Bill 2421 became law.
The act renames the existing tax, known as the environmental response tax, the environmental response, energy, and food security tax. Money raised by the tax – some $22 million a year – will continue to support the state’s oil-spill response fund (at the current 5-cent level) and will also be deposited into the existing energy security special fund (15 cents), the existing energy systems development special fund at the University of Hawai`i (10 cents), and a new agricultural development and food security special fund (15 cents). The remainder will go into the general fund. Allocation of the tax is to be reviewed legislatively each year until the tax expires (2015).
More specifically:
- The cap of $20 million on the environmental response revolving fund is lifted. Previously, when the cap was reached, the tax was no longer to be collected. In addition to addressing oil spill response capabilities and planning and helping to pay for used-oil recycling programs in the counties, the fund may also now be used to “support environmental protection and natural resource protection programs.” These are described in broad terms to include development of alternative energy and concerns related to global warming, air quality, clean water, and polluted runoff, among other things.
- The new agricultural development and food security special fund is to support grants to farmers, help in acquisition of agricultural property and irrigation systems, assist in development of production or processing capacity, and help finance any other activity “that may lead to reduced importation of food, fodder, or feed from outside the state.”
- The scope of purposes for which the existing energy security special fund may be used was expanded. It may now help support the Department of Business, Economic Development, and Tourism’s Hawai`i Clean Energy Initiative (including DBEDT staff positions) and can underwrite, “to the extent possible,” the state’s Greenhouse Gas Emissions Reduction Task Force and Climate Change Task Force. It can also be used to help counties with grants intended to promote objectives of the Hawai`i Clean Energy Initiative.
- The purpose of the energy systems development special fund is unchanged. That fund, which was established in 2007 and is set to expire in 2012, is to be used by the university’s Hawai`i Natural Energy Institute to demonstrate renewable energy sources, help develop and deploy technologies to reduce imported oil demand, and coordinate research projects, among other things. (The first assessment of how that fund is being used is due later this year.)
The measure also establishes the Hawai`i Economic Development Task Force within DBEDT to promote renewable-energy projects, energy efficiency, and development of agricultural infrastructure in keeping with the measure’s purpose.
Although tax increases are generally unpopular, testimony submitted to the Legislature by members of the public on this bill was generally supportive. Much of it was generated by conservation groups, including the Nature Conservancy of Hawai`i, the Sierra Club, which urged that the proposed tax be set at $5 a barrel, and the Conservation Council for Hawai`i. The Hawai`i Farm Bureau, the Chamber of Commerce of Hawai`i, and Enterprise Honolulu (the O`ahu Economic Development Board) were also among those supporting the bill.
Strongly opposed were the Lingle administration’s cabinet officers. Chiyome Fukino, director of the Department of Health, for example, expressed concerns that the bill would actually diminish funds available for oil-spill response planning and preparedness should the measure cause people to consume less fuel. Also opposed (though not initially) was Life of the Land, a group that has embraced the adoption of energy conservation and renewable energy among its primary purposes. Initially it testified in support but later changed its position, objecting to the apparent endorsement in the measure of an undersea cable transmission line and development of a “smart grid” for distributing electrical power and seeking to have coal and palm oil, ethanol, and other imported fuels derived from potential food crops subject to the tax.
Not surprisingly, the Tax Foundation of Hawai`i weighed in also, in opposition to the bill – even in opposition to the very notion of the barrel tax. The enactment of the barrel tax, it fulminated, represented “the classic effort of getting one’s foot in the door with a palatable and acceptable tax rate with the possibility of increasing the tax rate once it is enacted which is what is being proposed by this measure… Proponents ought to be ashamed that they are promoting a less than transparent tax increase in the burden on families all in the name of environmental protection and food security.” Instead, it recommended that all programs to be financed out of the increased tax should simply be paid for with general funds.
Invasive Species: Act 128 is intended to make enforcement of the state’s quarantine laws a little easier by reducing penalties for minor infractions (first-time violators face fines of between $50 and $5,000), while imposing harsher penalties for parties who intentionally spread prohibited or restricted animals or plants.
Quarantine Fee Exemptions: The Legislature approved and the governor signed a measure, now Act 173, that exempts certain bulk freight shipments from the inspection, quarantine, and eradication service fee.
The Conservation Council for Hawai`i was the only environmental non-profit objecting to the bill throughout the session. CCH executive director Marjorie Ziegler noted that spiders were found in aggregate – one of the exempt commodities – shipped from China last year. “What is going to be done to prevent this from happening again?” she wrote in her testimony.
Also opposed to the measure was the Subcontractors Association of Hawai`i, whose testimony pointed out that when the fee was adopted, “it was our understanding that it was in order to offset fees for inspections of containers against the intrusion of invasive species. Why cement would be exempt and not containers full of prepackaged pesticides or roofing material or drywall material or other items when invasive species also have no interest in ‘hitching a ride’ in those containers, we have no idea.” However, the group continued, “we do know that we think it is inherently unfair to start exempting certain types of materials without looking at all materials that perhaps ought to be exempt.”
Beach Transit Corridors: Act 160 (House Bill 1801) adds a new section to Chapter 115 of Hawai`i Revised Statutes, which deals with the public’s right to beach access. The new law authorizes the Department of Land and Natural Resources to “maintain access within beach transit corridors” by requiring private property owners to keep such corridors adjacent to their land free from “the landowner’s human-induced, enhanced, or unmaintained vegetation that interferes or encroaches in the beach transit corridors.”
As the bill passed through the Senate, language that addressed vegetation deliberately planted to encroach on the beach was removed from the bill, sparking a flood of public protest. Addressing such encroachments had been one of the motivating forces behind the legislation. By the time the bill was moved out of conference, the language was restored.
Monk Seals: Recent killings of monk seals have highlighted the slap-on-the-wrist penalty provisions for knowingly harming these perilously endangered creatures. Act 165 is intended to correct that by making the intentional taking or killing of a monk seal a Class C felony, with the range of penalties that entails, and may be subject to a fine of up to $50,000.
Shark Protections: The Legislature passed out two bills intended to protect sharks: House Bill 2853 would have banned the feeding of sharks in state waters; Senate Bill 2169 – now Act 148 – bans the sale, possession, and distribution of dried shark fins.
The first of these would have had a chilling effect on the shark-tour operations off the North Shore of O`ahu. Typically, these involve chumming for sharks, then putting visitors into shark cages dropped into the water, where they can see the sharks milling about for the bait. In her notice of veto, Lingle stated that the measure violated the state Constitution by addressing subjects broader than those contained in the bill’s title (“Relating to Impounded Vessels”).
Act 148 is intended to stop the trade in shark fins, whose take can be cruel and wasteful, involving the removal of fins and tails from animals that are then tossed back to sea. Federal law and the pre-existing state law have attempted to stop this practice by requiring that any dried shark fins brought to port have to be able to be matched up with whole shark carcasses. The new law goes further, however, bulking up penalties for violators and addressing the sale and use of shark fins in Asian cuisine. Under the new law, restaurants having existing stocks at the time the law became effective (July 1) are given one year to use up those stocks. First-time violators face a fine of up to $15,000. Repeat violators may be fined up to $35,000 and face forfeiture of any fins, commercial marine licenses, vessels, fishing equipment, or other property involved in the violation. Third-time offenders face a fine of up to $50,000, forfeiture of property, and imprisonment of up to a year.
At the recent meeting of the Western Pacific Fishery Management Council, the shark-fin ban was the subject of much uninformed discussion. The short law – a copy of which was distributed – clearly states that the term “shark fin” refers to the “raw or dried fin or tail of the shark.” Yet council members professed to be confused, asking what would happen if they were to land a shark carcass still bearing its fins. “It doesn’t matter if it’s attached or unattached to shark,” said council member Sean Martin. “Any time you catch a shark, you’re in possession of its fins… We’ll need some clarification for the industry to understand what is allowed.”
Laura Thielen, a voting council member representing the state of Hawai`i, agreed. “We had asked the Legislature to provide clarifying language,” she said. “We recognize finning may be banned, but shipments may not be.” Further, she said, the law may interfere with the commerce clause of the U.S. Constitution.
Budget Information for 2009 Still Not Available
In setting budgets, knowing what agencies spent in past years is one of the most critical pieces of information. However, on this point, the Lingle administration’s Department of Budget and Finance has fallen behind schedule. As a result, neither the legislators nor members of the public have been provided with complete information for any fiscal year since the completion of the 2008 fiscal year (June 30, 2008).
By law, Budget and Finance is supposed to deliver a so-called Variance Report to the Legislature by November 30 of each year. This report is to contain the complete record of expenditures for the previous fiscal year as well as each agency’s expenses for the first three months of the current year (through September 30), and compare those figures with budgeted amounts. The idea is to allow legislators and other interested parties to see how expenses stack up against budgets so that in the next legislative session, whatever adjustments may be called for can be made.
The last Variance Report posted is up-to-date as of September 30, 2008.
Since November 30, 2009, Environment Hawai`i has made frequent calls to the Budget and Finance office, asking when the Variance Report for Fiscal Year 2009 will be published. Time and again we were told to expect it “within a few weeks.”
Without the report, it is impossible to know how much agencies actually spent in FY 2009 and to compare that against the amounts they were given in their budget. The task of understanding where state taxpayer dollars go – challenging under the very best of circumstances – becomes impossible.
In the case of the Department of Land and Natural Resources, until 2009, the annual operations budget had been increasing slowly, to the point that it stood around $111 million. A year earlier, the budget had been $107.6 million, but actual expenditures fell below that by 9 percent ($98.3 million). How much of the 2009 allotment remained unspent has not been publicly disclosed.
What is known is that the budget for the 2010 fiscal year was pared back to $104 million, while that for 2011 has been further reduced to $98.7 million.
If the budgets of the Division of Boating and Ocean Recreation and the Bureau of Conveyances are dropped out of that total (neither division has much to do with managing natural resources; their place in the department is explained more by historical fluke than anything else), the DLNR’s budget drops to $82.4 million for fiscal 2010 and $77.6 million for the current fiscal year. The average cutback for each division comes to just over 6 percent. The number of permanent full-time positions was also cut: from 767 in FY 2010 to 739 in FY 2011 (4 percent).
Click on the link below for a summary of the DLNR budgets for 2010 and 2011:
DLNR_2011_Budget.xls
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