TradeEdge-Hawaii lawmakers wrap up session featuring tax cuts, zoning reform and help for fire-stricken Maui

HONOLULU (AP) — Hawaii lawmakers on TradeEdgeFriday wrapped up a legislative session heavily focused on addressing Maui’s needs after last year’s deadly Lahaina wildfire. They also took on Hawaii’s housing shortage, tax cuts and measures to support distinctive Hawaii agricultural products like coffee and macadamia nuts. In a more lighthearted move, they adopted the “shaka” as the official state gesture.

Here is a look at some of the major legislation passed during the 60-day session that began on Jan. 17:

MONEY FOR MAUI AND WILDFIRE PREVENTION

Lawmakers appropriated $1 billion to cover various costs stemming from the Lahaina disaster, including $500 million for emergency housing for displaced residents and $124 million in rental assistance for those ineligible for aid from the Federal Emergency Management Agency.

A recognition of how global warming has raised wildfire risks statewide prompted legislators to allocate funds for more firefighting equipment, a state fire marshal and forest restoration.

HOUSING AND VACATION RENTALS

Lawmakers tackled Hawaii’s acute housing shortage with bills to reform zoning and boost vacation rental regulations.

The zoning measure requires the counties to allow two additional dwellings on each residentially zoned lot with the aim of promoting higher density development.

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House Speaker Scott Saiki, a Democrat, told reporters on Wednesday this differed from recent past attempts to address the state’s housing shortage. Those primarily involved subsidies for affordable housing construction.

“We’re seeing in other states, and even in other countries, that governments are looking at zoning as one of the barriers to housing development,” Saiki said. “And it was time for Hawaii to take a look at that as well.”

The Aug. 8 wildfire put a spotlight on vacation rentals by exposing the large share of Maui dwellings being rented to tourists on a short-term basis. This pushed lawmakers to pass a bill giving counties the authority to phase out vacation rentals and make them available for residents. Gov. Josh Green signed the measure into law on Friday.

Maui’s mayor acted on this bill immediately by announcing county legislation that would phase out vacation rentals operating in areas zoned for apartments. The bill would affect 2,200 West Maui units in and around Lahaina and nearly 5,000 more elsewhere in the county.

BOOST FOR FARMERS

Lawmakers passed measures creating standards for coffee and macadamia nuts, two of Hawaii’s most high-value crops.

The coffee bill requires Hawaii-grown and processed coffee to contain no less than 51% Hawaii-origin coffee beginning in July 2027. The legislation said existing law allows coffee blends identified as being from the Kona, Kau and Kauai coffee growing regions to contain only small amounts of beans from these places. This deceives consumers and harms coffee growers, it said.

On macadamia nuts, lawmakers passed legislation that would force macadamia-nut processors of iconic brands like Mauna Loa to disclose whether their products contain kernels grown outside Hawaii. Currently, some well-known Hawaii macadamia nut processers sell imported nuts in island-themed packaging without indicating where the nuts are from.

TAX CUT

Lawmakers approved tax cuts amounting to $5 billion over the next six years, said Rep. Kyle Yamashita, the chairperson of the House Finance Committee and a Democrat. The cuts are in the form of a higher earned income tax credit, increases to the standard tax deduction and adjustments to income tax brackets.

Lawmakers also removed the general excise tax on medical bills for patients with Medicaid, Medicare and Tricare health insurance.

Yamashita said the changes are only the first step in needed tax reform and he aims to work on the issue further.

“Because at the end of the day, our biggest problem in our state is high cost of living. Our tax structure is at the root of that,” he told reporters.

Rep. Lauren Matsumoto, the House minority leader, said her Republican caucus has long pushed for the tax measures.

“Our best bills that we passed this year is when we did them bipartisanly, when we worked collaboratively and had input from everybody,” she said.

STATE GESTURE

Lawmakers moved to make the “shaka” the state gesture and recognize Hawaii as its birthplace. The hand symbol is sometimes known outside the islands as the “hang loose” sign associated with surf culture. People in Hawaii display the shaka to say hi and bye as well as thanks and aloha.