House and Senate leaders agreed Friday to deposit $150 million into the state’s budget reserve, or “rainy day fund,” to prepare state government for the next recession, an unprecedented move that boosts the amount of cash stashed in the fund to more than $250 million.
Gov. David Ige had asked lawmakers to deposit $100 million into the fund, but House Finance Chairwoman Sylvia Luke said she expects the state will carry enough money over from this year to next year to tuck away the larger sum of $150 million.
“It will be a huge investment for the future to ensure that — just in case there’s an economic downturn — we have a large pot of money that the state can go to as opposed to increasing taxes and fees and furloughing employees and closing down schools,” she said.
Ways and Means Chairwoman Jill Tokuda said the state Council on Revenues has been warning that the growth in the state’s economy will slow. “It’s looking bright now, but that’s not going to last forever. This is very much a pendulum swing,” she said.
The idea is to ensure that “when things are tough, we will have the reserves to carry us through,” said Tokuda (D, Kailua-Kaneohe).
Lawmakers also tentatively agreed to move $37 million from the general treasury into the state Highway Fund, a step that the state Department of Transportation said is needed because the highway fund is being drained.
Ige this year requested increases in the state’s gas tax, weight tax and registration fees to replenish the Highway Fund, but lawmakers rejected those ideas.
Instead, they opted to shift money from the general treasury to the Highway Fund as a way to ensure the state can continue with needed roadwork and to provide the necessary state matching funds for projects that qualify for federal funding.
Those bills and dozens of others passed or failed in a flurry of last-minute House-Senate negotiations Friday evening as lawmakers scrambled to reach agreements before a 6 p.m. deadline. All bills that will pass this year had to be in their final form Friday night and ready for floor votes next week before the Legislature’s scheduled adjournment Thursday.
Measures that did not make that deadline included a proposal to create a sports and entertainment authority to attract and promote local, national and international events; and a bill to establish a statewide system of mail-in voting for all elections.
Another high-profile bill that did not survive Friday’s deadline was House Bill 2740, which would have imposed limits on the Hawaii Medical Service Association’s controversial new policy of requiring doctors to get pre-authorization from a mainland company before ordering imaging tests for patients.
The bill as approved by the state House would have prohibited health insurers from requiring pre-authorization that causes “undue delays” in patient care, and would have made the insurance company legally responsible if any patient injuries were caused by pre-authorization delays.
HMSA on Dec. 1 began requiring all physicians in its network to go through Arizona-based National Imaging Associates Inc. to approve diagnostic imaging exams, including MRIs, CT scans and other cardiac-related procedures.
Doctors have complained that the new policy is delaying critically needed imaging tests and that those delays could harm patients.
House Health Chairwoman Della Au Belatti said House and Senate negotiators finally reached a stalemate on the bill.
“While it pains me to defer this, I think again awareness has been raised, and we can certainly in the interim look at ways … that maybe we can improve the standards and ask insurers to be more forthcoming,” said Belatti (D, Moiliili-Makiki-Tantalus).
Senate Consumer Protection and Health Chairwoman Rosalyn Baker said, “I think because the spotlight has been shined and we know what the issues are, we will expect everybody going forward in good faith will resolve any remaining issues.”
Baker (D, West Maui-South Maui) said lawmakers might want to work with the Legislative Reference Bureau to gather information and research on best practices in other states “that will allow us to better craft the standards by which pre-authorization should happen in our state.”
Lawmakers approved a bill authorizing the state Department of Taxation to enter agreements with online travel companies such as Airbnb to have the company act as a tax collection agent for the state.
The measure would allow a “transient accommodation broker” such as Airbnb to collect hotel room taxes and general excise taxes on behalf of the state from vacation rental operators who book through the company.
Rep. Jo Jordan (D, Waianae-Makaha-Makua) said the bill is not intended to pre-empt or limit the authority of the counties to enforce local land use regulations, including ordinances that ban vacation rentals in some neighborhoods.
“I wanted to make that clear up front that we are not going to supersede our counties in any way, shape or form,” she said.
The bill would require monthly reports to the Taxation Department, and the transient accommodation broker would be required to notify all of its clients in Hawaii that it will be responsible for collecting their taxes and forwarding them to the state.
The bill would also authorize the state tax director to require each broker to provide a list of the operators and plan managers with each annual return along with their federal tax identification numbers, she said. The state could also demand “any other information that is required” to ensure proper payment of their taxes, she said.
The broker would also be required to supply the names and addresses of the operators when the state requests them in connection with an administrative proceeding such as an audit. The new law would expire in five years unless it is renewed by the Legislature.
Another measure that failed to make the deadline was Senate Bill 3071, which would have authorized the state Department of Land and Natural Resources to purchase nearly 7,800 acres at Kapua in South Kona or exchange state lands for the property.
The measure was one of the last bills introduced by the late Sen. Gil Kahele (D, Hilo) before he died earlier this year. Kahele’s family comes from the Kapua area, and he had advocated for a state purchase of the land for years.
He signed SB 3071 proposing that the state buy and preserve the Kapua land in January while he was hospitalized after suffering a heart attack, and Kahele died the following day.
Kahele’s son, Kai, was appointed by Ige to fill the vacant Hilo Senate seat after the elder Kahele’s death. Kai Kahele has pressed for passage of the bill to pursue a purchase or land exchange to acquire the Kapua lands, but the measure failed in the House.
House Majority Leader Scott Saiki said the House would not accept the bill because it proposed to purchase or trade for the property before the state had determined the land’s value.
After the bill failed to pass, Senate President Ron Kouchi said Friday he signed off on a waiver at Kahele’s request to allow for a special hearing next week on a resolution asking DLNR to investigate the possibility of a purchase or land exchange for the property.
Lawmakers gave preliminary approval to a measure that will allow specially trained psychologists to prescribe certain medications for people with mental illnesses on the neighbor islands.
Belatti said House Bill 1072 was a compromise, and the psychologists who are granted prescriptive authority will have to work in collaboration and consultation with licensed physicians.
Belatti said lawmakers agreed to the bill because of the shortage of psychiatrists in rural areas of the state who can prescribe medications to control mental illnesses.
“It was really important because we know that there was a lack of access to care on the neighbor islands,” she said. “This is going to help.”
