Loading...
HomeMy WebLinkAboutMIN FC 2026/06/02 (2024-2026)Committee on Finance 37" Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 June 2, 2026 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 11:30 a.m., in the Council Chambers, Hilo, by Mr. James E. Hustace, Acting Chair. ROLL CALL: Present: Mr. James E. Hustace, Vice Chair Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather Kimball, Member Mr. Dennis "Fresh" Onishi, Member Ms. Rebecca Villegas, Member Absent & Excused: Mr. Matt Kaneali`i-Kleinfelder, Chair STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 24.35: REPORT OF CHANGE ORDERS AUTHORIZED: APRIL 1-15, 2026 From Finance Director Diane Nakagawa, dated May 12, 2026, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Approve: Ms. Kierkiewicz moved to close file on Comm. 24.35. Seconded by Mr. Onishi. ACTING CHR. HUSTACE: Members, any discussion on Communication 24.35? We do have our Finance team here and respective members from departments. No questions from the body? I do have one question for Ms. Kalua-Lewis please if you don't mind, for DPW (Department of Public Works), or Director Segawa. You're welcome to come up as well. Sorry. You're hiding there behind Mr. Keltner. FC-37 June 2, 2026 (Note: At this time, Public Works Business Manager Kelsey Kalua-Lewis came forward to address the members of the Committee.) MS. KALUA-LEWIS: Good morning. Kelsey Kalua-Lewis, Public Works. ACTING CHR. HUSTACE: Good morning. Just a question on the packaged air conditioning unit. Let's see, this is an amendment for an extension of time, correct? MS. KALUA-LEWIS: Yes, correct. So it's to extend the rental for a six-month period. ACTING CHR. HUSTACE: And what are the next steps after the rental of this unit? MS. KALUA-LEWIS: So the next steps, Building is working on the best solution to either, I believe, to replace or fix the current chiller up there. They're in the process of working on that project right now. ACTING CHR. HUSTACE: And this extension to the end of September gives enough time for that permanent fix to your knowledge? MS. KALUA-LEWIS: At this point, to my knowledge, yes. ACTING CHR. HUSTACE: Okay. Okay. Thank you very much. I appreciate the time. MS. KALUA-LEWIS: You're welcome. Thank you. ACTING CHR. HUSTACE: Of course. Any other questions? Okay, seeing none. All those in favor of closing file on Communication 24.35, please say "aye." Vote on Comm. 24.35: The motion to close file on Comm. 24.35 was carried by Filed the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Acting Chair Hustace — 8. Noes: None. Absent: Committee Member Kaneali`i-Kleinfelder —1. Excused: None. Page 2 FC-37 June 2, 2026 Comm. 24.36: REPORT OF CHANGE ORDERS AUTHORIZED: APRIL 16 — 30, 2026 From Finance Director Diane Nakagawa, dated May 14, 2026, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Motion to Approve: Ms. Kierkiewicz moved to close file on Comm. 24.36. Seconded by Mr. Onishi. ACTING CHR. HUSTACE: Members, any questions on this particular communication? Ms. Galimba, please. MS. GALIMBA: Thanks. This is for DPW. I just wanted to ask about Item 11, the park expansion and improvements. ACTING CHR. HUSTACE: For Parks? MS. GALIMBA: Is it for Parks? Sorry. It says DPW here. ACTING CHR. HUSTACE: It does. You are right. (Note: At this time, Parks and Recreation Business Manager Charmaine Felipe came forward to address the members of the Committee.) MS. FELIPE: Good morning. Charmaine Felipe, Business Manager for Parks and Recreation. So although it says DPW, it's just that the contract runs through DPW. MS. GALIMBA: Okay. Thanks. So I just wanted to ask about a little more detail on this. Is this added on? I see that it's for hazardous soil and mutation, expanding comfort station, et cetera. So I just wanted to ask about the process for this. Is it, as you were starting to do it you saw more things needed to be done or was it higher costs, or what? MS. FELIPE: Sure. Thank you for that. So this is in addition to Change Order 4. Change Order 4 had to deal with testing of the soil and disposing of it, which caused Change Order 5 where we had to purchase a base course and top soil to cap off the piece of grass that was removed or the exposed dirt had to be topped off with base course and top soil. And also for the comfort station, when this went through the permitting process, it came back that we needed to add additional stalls to the comfort station. MS. GALIMBA: I see. So was this all sort of, well you said there's like four and five and then this. So I kind of remember us talking about soil remediation earlier. MS. FELIPE: Yeah. The earlier one was the testing and the disposal. So now this section is to remediate the section that had the contaminated soil. Page 3 FC-37 June 2, 2026 MS. GALIMBA: And this was all sort of the plantation era type soil contamination. MS. FELIPE: Yes. MS. GALIMBA: Okay. Thanks so much for the details. MS. FELIPE: You're welcome. ACTING CHR. HUSTACE: Thank you, Ms. Galimba. Any other questions from the body? Ms. Felipe, I actually have a question for you regarding that. Thank you. So Change Order 4, what you discussed with Council Member Galimba, because we just talked about this recently. So I went back and looked at that date. So May 41h, we were talking about Communication 24.33, about Waiakea Uka Park and the testing and soil remediation. That contract says it was $10.7 million in the original contract and here it's showing that the contract was $4.8 million. Are these the same contracts? I'm just seeing a different original contract figure. MS. FELIPE: So there's two. There is a contract and the state contract, which totals $10 million. ACTING CHR. HUSTACE: So they were combined in a previous — MS. FELIPE: Yes. ACTING CHR. HUSTACE: Okay. Is that typical that we're combining the state contract with the County contract work too, to present that total? I guess I'm not seeing it that way where we have the contract kind of being lumped together. So really the County contract is $4.8 million. MS. FELIPE: Yes. ACTING CHR. HUSTACE: Okay. But then the percentages of the original contract would change, right? That's why I'm seeing some confusion in the numbers here because it shows a percent of the original contract, like if you did Change Order 4, that 1.1 percent cumulative change order is 10.5 percent of the original of $10 million. Is that equivalent to what we're showing here then? MS. FELIPE: So this change order brings the overall percentage to 17.16 percent. ACTING CHR. HUSTACE: Okay. MS. FELIPE: So as far as how it was broken up it's consistent with the previous change order. Page 4 FC-37 June 2, 2026 ACTING CHR. HUSTACE: Okay. But this one didn't include the state contract in it then as compared to how Change Order 4 was laid out, it didn't really include that state contract, correct, from what we see in Change 5? MS. FELIPE: It did as far as I can see on what's written on the form that was submitted. ACTING CHR. HUSTACE: Okay. But not in terms of what we see here in the communication though? It just shows the County contract I think. MS. FELIPE: I see. Correct. That may have been miswritten. ACTING CHR. HUSTACE: Because we would show both contracts together then possibly, right? MS. FELIPE: Right. Yes. Yes. ACTING CHR. HUSTACE: Okay. Director Nakagawa, anything else? Sony. Thanks, Ms. Felipe. I appreciate your work on this here. (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Good morning. Diane Nakagawa, Finance Department. Council Member Hustace, I will go ahead and review the previous one that you're referencing. But normally any changes are with the contract number that is stated. So we don't normally combine contracts for totals for this particular purpose of reporting. The reflections on the percentages are with that contract and contract total. So there may have been an error in the previous one, but this one should be the total for this contract, and the 38 percent should reference the cumulative change order. But we will go ahead and review the previous to make sure. ACTING CHR. HUSTACE: I appreciate that. But it's not normal that we would see the state contract on there. They were combined in the previous communication. MS. NAKAGAWA: Right. It's not. And I'll go take a look at that. Normally what's listed in the change order report should reference the contract date, exact contract that we're making a change to and the percentage of that contract. ACTING CHR. HUSTACE: Yes. I got that. Thank you so much, Director. MS. NAKAGAWA: You're welcome. Page 5 FC-37 June 2, 2026 ACTING CHR. HUSTACE: Sorry, Ms. Felipe. One more question on a different project. Thank you. MS. NAKAGAWA: Sure. ACTING CHR. HUSTACE: With regards to contract C.012876 on the reroofing and repairs for a number of facilities. MS. FELIPE: Yes. ACTING CHR. HUSTACE: There's a couple gyms, community centers, play courts. What is the timeline for the construction work that's laid out? MS. FELIPE: That I'm not sure of. I can get back to you with that. ACTING CHR. HUSTACE: Okay. Because with a number of different facilities I'm sure that you have Engineering Partners, Inc. is doing all the replacement work for all these different facilities. MS. FELIPE: They are the consultants for all. ACTING CHR. HUSTACE: Just the consultant. Okay. And so there will be subcontracts for all the construction work under them? MS. FELIPE: The construction work gets bid out separately once they're completed. ACTING CHR. HUSTACE: Bid out separately. Okay. So they're just doing the design analysis. MS. FELIPE: Yes. ACTING CHR. HUSTACE: Okay. So this is specifically just for designing the roof repairs at these facilities then? MS. FELIPE: And this change order actually is for the fire alarm system at one of the gyms. ACTING CHR. HUSTACE: Right. So kind of adding that on top of this, yeah. MS. FELIPE: Yes. Because after their inspection the system cannot be repaired it has to be replaced. ACTING CHR. HUSTACE: Got it. That's good to know. Okay. Thank you. So we'll probably see more future work going forward after they've completed all their consultant design work. Page 6 FC-37 June 2, 2026 MS. FELIPE: Yes. ACTING CHR. HUSTACE: Got it. Thank you, Ms. Felipe. Any other questions, body? Okay. Hearing none, all those in favor of closing file on Communication 24.36 please say "aye." Vote on Comm. 24.36: The motion to close file on Comm. 24.36 was carried by EflgAl the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Acting Chair Hustace — 8. Noes: None. Absent: Committee Member Kaneali`i-Kleinfelder —1. Excused: None. Comm. 574.2: SECOND QUARTER REPORT OF NONCAPITALIZED DONATIONS: JANUARY 1 —MARCH 31, 2026 From Finance Director Diane Nakagawa, dated May 12, 2026, transmitting the above report pursuant to Resolution 200-25. Vote on Comm. 574.2: Ms. Kierkiewicz moved to close file on Comm. 574.2. Filed Seconded by Mr. Onishi and carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Acting Chair Hustace — 8. Noes: None. Absent: Committee Member Kaneali`i-Kleinfelder-1. Excused: None. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 575-26: AUTHORIZES THE ACCEPTANCE OF ALL DONATIONS OF SECURITIES OR PERSONAL PROPERTY NOT COVERED UNDER THE CAPITALIZATION PROCEDURES OF THE DEPARTMENT OF FINANCE THAT ARE RECEIVED DURING THE FISCAL YEAR ENDING JUNE 30, 2027 Provides County Council pre -authorization for the County to accept donations that are not covered by the Finance Department's capitalization procedures for Fiscal Year 2026-2027. Reference: Comm.908 Intr. by: Council Member Kaneali`i-Kleinfelder (B/R) Page 7 FC-37 June 2, 2026 Motion to Approve: Ms. Kierkiewicz moved to recommend adoption of Res. 575-26. Seconded by Mr. Onishi. ACTING CHR. HUSTACE: Members, any discussion or questions on this reso. Director Nakagawa, you just want to give an overview of this one? (Note: At this time, Finance Director Diane Nakagawa came forward to address the members of the Committee.) MS. NAKAGAWA: Thank you. Diane Nakagawa, Finance Department. As with the item before, this is something we bring to the Council annually to allow us authorization to accept upon receipt and then we'll go ahead and do a quarterly report as in the previous item. So normally this time of year we'll come forward asking for us to be able to do that for non -capitalized items. And then you'll see the quarterly report throughout the next fiscal year. ACTING CHR. HUSTACE: Thank you, Director. Any other questions? Council Member Kierkiewicz. MS. KIERKIEWICZ: I'll just note this was actually the brainchild of former Council Chair Aaron Chung. Finance Committee had to deal with a number of resolutions regarding donations to the County and it actually inhibited the ability of a department to utilize the donation because we first needed to accept it as a body. And so this has created so much efficiencies within our processes and it's eliminated a lot of unnecessary paperwork so folks can do other things that are pressing within the County. So it's a great way that we've created efficiencies within our system and then with the quarterly reporting it ensures transparency of what's been given and an opportunity to thank those who made a donation to the County. Thank you. MS. NAKAGAWA: Yeah. That's recommendation forward is greatly appreciated. ACTING CHR. HUSTACE: Thank you, Director. Thank you, Council Member for the history. Alright, any other questions? Okay, Members, all those in favor of forwarding Resolution 575-26 to Council with a favorable recommendation please say "aye." Page 8 FC-37 June 2, 2026 Vote on Res. 575-26: The motion to recommend adoption of Res. 575-26 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Acting Chair Hustace — 8. Noes: None. Absent: Committee Member Kaneali`i-Kleinfelder —1. Excused: None. Relinquish Chair: At this time, Acting Chair Hustace relinquished the Chair to Acting Chair Inaba. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 163: AMENDS CHAPTER 19, ARTICLE 8, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY Establishes a new real property tax dedication for certain properties that are owned by a descendant of a person who owned the property at least one hundred years ago to be subject to the minimum tax. Reference: Comm.909 Intr. by: Council Member Hustace Motion to Approve: Mr. Hustace moved to recommend passage of Bill 163 on first reading. Seconded by Mr. Onishi. ACTING CHR. INABA: Council Member Hustace. MR. HUSTACE: Thank you, Chair. I'm honored to introduce Bill 163 today, which would establish an `Aina Kupuna Dedication Program. First I want to thank my Legislative Assistant Elwin (Freitas) and our Real Property Tax (RPT) Administrators for the conversation, for their efforts and involvement in bringing this policy proposal together for you. Really at the core of this bill is about preserving generational family lands and helping local families navigate our rising cost of living and across the island, many of our families continue to care for lands that have been passed down generation. These properties are often more than financial assets. They are places of history, culture, identity, genealogy, and community connection. And so as property values and taxes increase and assessments increase some families face this growing difficulty of holding on to these passed down inherited lands. In some cases these pressures contribute to the loss of these properties that remain in their families for generations. Once these lands leave, the culture, history, and Page 9 FC-37 June 2, 2026 familial connections tied to them can be difficult to reobtain and sometimes impossible to restore. So Bill 163 seeks to address one aspect of the challenge by creating a voluntary ten-year dedication program that provides significant property tax relief for qualifying descendants or longstanding landowners. Eligible properties will be taxed at the minimum real property tax rate during that dedication period and certain penalties and interest on recent delinquent taxes could be waived. So as stated in the bill, the qualifying properties must be 20 acres or less, owned by descendants of a person who owned the property before January 1, 1926; ownership must remain within the family, and the property must continue to meet those program requirements. The bill also protects agricultural uses. And part of these proposal is not without precedent. Maui County has established and `Aina Kupuna Program in 2021 and the City and County of Honolulu also considered similar legislation. So Bill 163 builds upon these concepts that have already been developed elsewhere across the state although adapting them for our unique circumstances here on Hawaii Island. But unlike the Maui and Honolulu measures, which are generally limited to the properties located within the special management areas, this proposal recognizes many of our Hawaii Island generational lands, our founded rural agricultural communities, ranch lands, mauka areas. This bill also establishes a lower tax threshold for participation and focuses specifically on properties with ownership history dating back before 1926 reflecting on longstanding connections for many local families that have their land that they even steward today. This measure is not intended to solve every challenge facing families with generational lands. I also appreciate the testimony that was received highlighting that the impacts of losing agricultural land are not solely economic. For many families these lands represent a living connection to this history, culture, genealogy, and the sense of place. And so preserving these connections strengthens communities and helps ensure that future generations maintain ties to the land that sustained their kupuna. So I do welcome the discussion on how to make this program more effective, more accessible, and maybe some questions about this. I believe this proposal deserves some thoughtful discussion on this as well. So I look forward to working with my colleagues and see how we can implement some program to this effect and I welcome the feedback and input from our Real Property Tax Administrators here. So, thank you for your consideration. ACTING CHR. INABA: Thank you. Before we go to other members, do you folks want to chime in right now? No. Alright. Council Member Villegas. Page 10 FC-37 June 2, 2026 MS. VILLEGAS: First off, I just want to compliment Council Member Hustace. That was really beautiful, what you just said and the words that you used were poignant. It just really took into consideration so many elements of the connectivity to land and place, and purpose, and belonging. So I really enjoyed hearing you define the purpose and vision of this particular piece of legislation and the vision behind it. So I'm interested to hear what the rest of colleagues, pros and cons, where that leaves us. But the intentionality of it just really resonates. So thank you. ACTING CHR. INABA: Council Member Kimball. MS. KIMBALL: Thank you. Thank you, Council Member Hustace, for bringing this forward. I know that over the years I've had several constituents point to the Maui legislation and City and County legislation and asked about doing something here. I'd like to dive into the numbers and just hear from our Real Property Tax Department. Have you identified how many parcels we're looking at, what the impact would be on revenues, and any of those points. (Note: At this time, Real Property Tax Administrator Lisa Miura and Assistant Administrator Keita Jo came forward to address the members of the Committee) MS. MIURA: Good afternoon. Lisa Miura, Real Property Tax Administrator here with Keita Jo, Assistant Real Property Tax Administrator. We referred back to Maui County to see how many properties they have in their program even though ours is set up a little bit differently just to get a baseline because our computer data has no way to tell us who today is related to an owner of a property from 100 years ago. So I'll be honest, I can't give you a realistic idea other than looking to Maui County, whose values are higher than ours and theirs is focused on the oceanfront. So it's going to be higher end properties. They have 36 applications currently in their system. There was only five new ones within the last few years. Their revenue loss in support of this program is $1,006,782 this past year. The average parcel received a tax break of $27,996. MS. KIMBALL: Yeah. You bring up one of the questions I had about, and I don't know Council Member Hustace, if you've sort of done any evaluation. How difficult or easy do you think it may be for some of these owners to actually prove that historical connection? I know that we have challenges even tracking ownership within the last 50 years much less the last century. Have you looked into that at all? And let me ask my other question too. The other question I had too is around the definitions that are going to apply to this particular area for the code, and just to confirm that you, or your legislative staff, or LRB (Legislative Research Branch) have kind of confirmed that there's not going to be any ambiguity created or conflict with respect to the agricultural dedication programs and those definitions. I understand maybe the need for a Page 11 FC-37 June 2, 2026 slightly different definition in this area. But I just want to make sure that there was a cross check done to make sure there isn't going to be any gray area created there by having two kind of definitions in the same vicinity. That's all my questions, Chair. Thank you. ACTING CHR. INABA: Council Member Hustace. MR. HUSTACE: Yeah. So the two questions. Your first question about the history and kind of the genealogical tie to property. That's the most challenging for sure, right. And what is proposed in here is that onus and that responsibility falls upon the landowner. So it doesn't fall to our administrative staff to help families figure that out or clear the title. They need to come to the program with a clean title and really have that laid out. And so it does reference Office of Hawaiian Affairs (OHA), other opportunities to help track and other resources out there that may be able to help families figure that piece out. There really isn't an easy way to understand what the impact might be here and that setting it back so far causes some challenges for sure in terms of our paper records and what we have as individual documents. So that's definitely going to be a challenge, what's proposed right here, but it does set some constraints too. So it may make it more challenging but the impact to revenues may not be as big possibly. I don't know. The agriculture definition should be mostly similar if I'm not mistaken on what is defined elsewhere in the chapter. So we tried to align that so the agricultural use and production could also qualify in the space too. ACTING CHR. INABA: Council Member Kimball. MS. KIMBALL: Yeah, thank you for those responses. I'm just spit balling this here with some of the other changes that we've made recently, the idea of putting a sunset date or having it be temporary especially with these programs where we really don't know how many people might actually enroll and what the real fiscal impacts might be. I wonder if it would make sense in this particular case as well to have a five-year limit on it to start off and see how many, people enroll, see what the impact are. That's just because, and Council Member Onishi has mentioned this before, like how difficult it is if something like this ends up being problematic to get the political will to roll it back. Just something to consider. I'm not married to the idea, but maybe just want to throw that out for conversation with the others. I think it's a little imprudent to propose something when we don't know what the impact will be and have really no way of assessing that. That's my thought. Thank you. Thanks again for introducing it. ACTING CHR. INABA: Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Yeah, overall I'm really supportive of the idea. I do have some concerns about the unknowns. Yeah. I mean given what we know is coming with our obligations financially, you know, I have brought it Page 12 FC-37 June 2, 2026 forth that I have other ideas to increase revenue that were not taken up this year potentially that could help with a deficit of this sort. But I think the overall idea is really good. My biggest concern is the timing of it and the unknown part of it and our escalating financial obligations as a County in the next ten years. So I'm not sure if the five-year thing is really the exact right way to do it, but it's an interesting thing to consider. I don't know what other ways, if there could be a cap or a limit on how much in the first year we spend and then look at that. I'm not really sure. But yeah, I do have some concerns just about the unknown and the potential issues when we back ourselves into a corner around this. So I've always really liked what Maui did with this, and I'm happy to see you bring this forward; it looks like there's a lot of similarities there. Can you explain the ten-year part of this? I guess I can see it's going back ten years. But what does it mean going forward for a property that enters this program? Can you explain that please? ACTING CHR. INABA: Council Member Hustace. MR. HUSTACE: Sorry. I think you're referring to the tracking back 100 years. MS. KAGIWADA: I thought you said a voluntary ten year property tax program. MR. HUSTACE: Right. So the program is a voluntary dedication for ten years. So you'd have to enter into the program, and you'd have that commitment of minimum property tax for ten years, unless you violate kind of the program requirements in there. So they would be backed out of the program and there would be penalties for that. But I think that was your question on the ten years, correct? MS. KAGI WADA: Yeah. It was on the ten years. Yeah. But you can re-app for another ten years and another ten years. It's not limited to ten years. MR. HUSTACE: Correct. MS. KAGI WADA: Okay. That's what I want to understand here. Okay. So similar to some of the ag programs that have been proposed, you enter into it for a period of time in order to meet all those criteria, and then it allows you after that period if you want to make some changes, you don't want to stay in the program that's the time you can get out of it. Okay. I understand. Thank you. Yeah. I want to continue to discuss this and figure out how we can make it work. Thank you. I yield. ACTING CHR. INABA: Council Member Galimba. MS. GALIMBA: Thank you. Thank you for this legislation. I think it's a really great thing and have had folks ask for something similar in my district. I'm just a Page 13 FC-37 June 2, 2026 little confused around the question of like agricultural tourism and farm stays versus residential rental uses for a term less than six months. What's your intention there and also kind of, you know, we're all in the midst of short-term vacation rental considerations so that's a whole sort of ball of wax by itself. But I just wanted to understand what your thoughts are around the use of these lands for farm stays and short-term vacation rentals. MR. HUSTACE: Right. ACTING CHR. INABA: Go ahead. MR. HUSTACE: Thanks. Sorry, Chair. Thank you. So it's really the intent of not having those bigger commercial operations being qualified within this program, but anything that pertains to those agricultural uses. While farm stays is allowable in this capacity here, I think it revolves around the agricultural sector. MS. GALIMBA: I see. So the residential rental use would be if it's something completely not involved with agriculture, that would not be allowed. But if it is an agricultural tourism or farm stay, they could stay overnight and get some funds from that? MR. HUSTACE: I think that's a question that we can work out if we need more specificity on the details on that and where you want to see this piece here. But it's really for the agricultural purposes. The commercial is not included. So it's basically saying that these other less than six months are not permissible, right? MS. GALIMBA: Right, right, right. I see. Okay. Yeah, I have to think around that a little bit and I'm not even exactly sure where we are as far as like Rose Hill and how that's going to play with this. Thank you for clarifying. ACTING CHR. INABA: Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. Thank you for bringing this forward. You know, there's a lot of talk about revenue at this point. But I think what you're trying to deliver here is relief; relief for a lot of our generational `ohana that have found it very difficult to maintain their family lands. And with cost of living increasing and inflation, I think it makes sense to really entertain this type of program so that we can ensure that our local families can still call Hawaii home. If there are issues that need to be worked out here in committee, I'm happy to do that now. If not, I'm also happy to move it forward to Council. I know that you have a great working relationship with the Real Property Tax Office, so that they can think through program mechanics. Administrator, I would be remised if I didn't ask again, do you have the capacity and all the resources needed to implement this program should the Council elect Page 14 FC-37 June 2, 2026 to move forward on it? Because I feel like you understand and appreciate the intent of what is trying to be achieved here. MS. MIURA: Yes. Lisa Mium, Real Property Tax Administrator. That's a loaded question. I'm sure my staff are watching and screaming. So maybe I'll just share a little bit. Some of the problems that we've seen that have come out of the Kuleana Program to provide a little bit on why we're kind of stuck in the middle. We do want to see a program, especially like this, come forward because for kuleana parcels, they have to have been dated and awarded as a kuleana. And so what we've noticed in working within OHA that after families have thought they've had a kuleana parcel for all these years and maintaining the stewardship, and then they do their genealogy only to find out that award wasn't given as a kuleana. They don't qualify. So I believe part of this stems from, and I can't speak for OHA, I saw they did do a long written testimony about it that there was nothing really for these families to qualify. And so, definitely to make it fair and equitable, I believe this is the program or the way to go through it and since Maui had done.it, I can understand. Differences that we do want to point out is the 80 years versus 100 years. This is 100 years and to make it, and I know when we discussed this part of it, it was let's see what we get with the 100 years and maybe if it's not overburdensome then the Council can look at future at changing that. In addition, the property not larger than 20 acres was most homesteads aren't very large and what Council Member was trying to address in protecting. Is it going to be a burden? Yeah, it's another program. I can't pretend it's not. Is it one? And while Keita and I were walking over I'm like, you know, there's so many things that come up and everything is a great intent, and I can see the pros and the negatives to it. I would feel very remised to not support this in the terms of a Real Property Tax Administrator, not just for maybe trying to write some things that could be done better in our Code, but seeing so many families being taxed off their property. And you hear it every time, mostly all testimonies, right, like what are you guys doing for locals, what are you doing for this? And this doesn't specify one ethnicity; it doesn't specify how long someone had to have been on the property because you could have no homestead on it, it's not your main house. It could be family or property that you've taken care of for many years such as agriculture property. So I would have to state that for the fairness and equity and while we don't usually lobby, we are supportive over this program. Even though I won't be here in ten years when this is renewed because I will be retired by then, so I can leave it open to Keita as well. How we implement it makes me a little nervous. There's some minor things we would clarify just for the record if it gets to County Council. Page 15 FC-37 June 2, 2026 MS. KIERKIEWICZ: Can you identify which sections you are feeling a bit challenged over and would like clarity or would like to suggest an amendment? MS. MIURA: Sure. I'm not suggesting an amendment, just clarity for the record. I believe I know what the intent is on it, but just for the record going forward for future administrations or the public who might interpret something differently. On Page 1, under the definitions, Item 2; we do want clarification if this includes hosted rentals. The way our interpretation is it does not. It's any residential rental uses for a term of less than six months, non-agricultural. And on Page 1, under eligibility, we just want to clarify for the record that we understand the penalties and interest would be waived including the two years prior to qualification of that period. But if no taxes are paid during that period, once the ten years end, if there's no renewal, we wouldn't go back and assess for the penalties and interest, but we would going forward. On Page 2, under A at the very top, we just want to clarify that our understanding is the property did not have to stay in that family for the last 100 year period, but the owner today is just providing genealogy to someone who owned the property in January 1, 1926 or previously and that they're not having to prove ownership all the way through it remained in the family, and that's similar to how the kuleana is and that's how we read it and that's more for clarification purposes. So if I'm wrong on any of these, Council Member Hustace will tell me. And then the big one on Page 2, under b at the very bottom under the petition process, the director may require the petitioner to provide. The ownership today at least one percent interest, one owner, something needs to be in the applicant's name as of today not looking at the business side of it. And we want to clarify if that shows on our record that there's unknown heirs or unknown owners, they can't come back and say, "That's me. I'm the unknown person." It has to actually show in that person's name. And I can just see that coming up so we wanted to clarify that's our understanding. It has to be in their name. And the last would be more of a comment under Page 3, Item 3. There's been a lot of discussion about agriculture, and we have had families reach out who read the bill that felt that they would qualify with the exception that they've been doing agriculture this whole time, so their tax bills have not been up to the $10,000. And so their concern is that they would not qualify for it and if there was a way around that. When I read it the $10,000 is right there; it's written. So I didn't know if that could be looked at in the future so that they probably could qualify because I believe that's the intent. And in one case that we're aware of, they will not be able to apply for the new agricultural program because they would not qualify. That's all. Page 16 FC-37 June 2, 2026 MS. KIERKIEWICZ: Thank you. And I look forward to Council Member Hustace confirming, clarifying all the points that you've raised. What is a realistic next step in your mind? MS. MIURA: If Council approves the bill, whether there's amendments or not, just make some clarifications on it so we know how to do it procedurally as far as administering the program. And then we would get the word out somehow on our website. MS. KIERKIEWICZ: Okay. You wouldn't want to socialize this program idea before it's passed by the Council? MS. MIURA: Socialize, like public hearing? MS. KIERKIEWICZ: I'm just curious. Or not public hearings. I know that in the past you've done mailers just to get a temperature check, a pulse check in the community around folks understanding, willingness to take advantage of the program. I know folks here are like to crunch numbers at the same time. Who's going to take advantage of it, what is the financial loss of the County, how do we make up that income elsewhere? So I'm just wondering if there's any sort of public outreach that we do as we're discussing the bill and seeing if there's any fine tuning that needs to be done kind of following that engagement. MS. MIURA: Yes. I like that idea. I don't necessarily know how we would go about noticing everyone since I don't know who they are. If the value changes from less than $10,000, it would open it up to more individuals, but at the same time it might be more fair because you have properties on the west side of the island, obviously it's going to be very easy to hit that $10,000. On the east side I do still think they have family significance and maybe it won't hit that number. But how we get it out to every person other than the assessment notice; that's our one big thing a year that we notice every single owner, lessee, addressee of the property, and that's over 140,000 mailings. MS. KIERKIEWICZ: That's expensive. MS. MIURA: It's expensive and people will always have a lot of questions. And before, we were trying to get out the ag kupuna program information now along with everybody that needs to renew, that needs to go through a bid process, you know what I mean. By the time we get through all of that, you guys will be through the next several meetings, and it could change if amendments come forward. So I would love to know a good way to reach the public without it being a large expense where I could avoid procurement. I would appreciate knowing what that would be. MS. KIERKIEWICZ: Yeah. Just a question for Council Member Hustace, the kind of community outreach that was done to inform this measure. I know that Page 17 FC-37 June 2, 2026 we've all received calls looking for relief by `ohana, but I'm just wondering if socializing this idea to see who would take advantage or the questions they might have to help inform any amendments, if there are any. But thank you for being here. I appreciate having this discussion. Thank you. ACTING CHR. INABA: Any other discussion? Council Member Hustace. MR. HUSTACE: Yeah. Chair, I'd love to hear your thoughts as well. So I just want to thank everyone's input on this. And I appreciate, Administrator and Assistant Administrator, on your work here as well. Yeah, I know I've been receiving calls from community about how to provide relief is something we get often. So this was a way to look at that real property tax mechanism as a means. I've been kind of sharing this idea in community about what that might look like, but I think a lot of people struggle with their property and trying to track how far back it is in their family. So there is some really opportunity to expand information there for sure. I'm not sure what that quite looks like but I'm happy to kind of reach out to community and see if there's any kind of buy in on something like this. So yeah, thank you. ACTING CHR. INABA: Thank you for introducing this. This was something that our office had started, but glad that you have finished it off. Question on the decision for 1926. MR. HUSTACE: You know, we were looking at dates. Maui County did 80 years and they even had, I believe there was some amendment where they were going to do a rolling 80 years. I don't think that went through, but they were looking at a set 80 years back. And 80 years back, we're looking at post war, so there's a lot of economic development, investment, in the lands here in the state and the counties. I really wasn't set on that time. I wanted to go a little bit further back than that. Oahu County, their proposal was 50 years back and that didn't go forward, right, that was not approved as an ordinance there. So, I really wanted to set a time pre war that kind of tracked generations back further. And I was just kind of set on those 100 years, tracking back from now and what that looks like kind of post War I, pre World War II, before significant investment in our communities here. ACTING CHR. INABA: Okay. I think I just need a little more time on the date. I don't think I really have concerns about the structure that has been proposed. But I can remember when I was trying to imagine this, like what is the appropriate date, and I don't think I have the answer for that right now. But I'll think about it in the next couple weeks. But with that, any other discussion? Council Member Hustace. MR. HUSTACE: Thank you, Chair. I appreciate that. I mean the date is I think important, about how far back we go or to look at does it roll, what does it mean, does it stay stagnant and then people have to track in 20 years, 120 years back, Page 18 FC-37 Vote on Motion to Postpone: (Approved) ADJOURN- MENT: Approved: Mr. Matt Finance ( MK/tk June2,2026 that sort of thing. So kind of maintaining that time of time and space there. I welcome any ideas on what that may look like. I just thought setting on that 100 years would be a significant marker in time from now when this could potentially be set in stone. So I appreciate any other thoughts you have on that. just wanted to go a little further back than what Maui had proposed there. But I do appreciate that conversation so I would like to postpone this for further discussion here in committee. ACTING CHR. INABA: Just a moment. MR. HUSTACE: Sure. Thank you, Chair. ACTING CHR. INABA: Just wanting to confirm because Administrator Miura brought up. So on Page 2, A at the top, for the record, whether this passes and people apply right away or people apply for it 10 years from now, the date that makes someone eligible is somebody; they are a descendant of someone who owned the property prior to January 1, 1926. Is that correct? MR. HUSTACE: Yes, Chair. ACTING CHR. INABA: Okay. Thank you. With that, I'll take your motion. MR. HUSTACE: Thank you, Chair. Mr. Hustace moved to postpone Bill 163 to June 16, 2026. Seconded by Mr. Onishi and carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, Villegas, and Acting Chair Hustace — 8. Noes: None. Absent: Committee Member Kaneali`i-Kleinfelder-1. Excused: None. There being no further business on our agenda today, Acting Chair Inaba adjourned the meeting at 12:20 p.m. Thank you very much. `i-Kleinfelder, t32o (Date) Page 19