Loading...
HomeMy WebLinkAboutMIN FC 2026/06/16 (2024-2026)CALL TO ORDER: ROLL CALL: Committee on Finance 38t' Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii June 16, 2026 The regular meeting of the Committee on Finance was called to order at 10:31 a.m. in the Council Chambers, Kailua-Kona, by Mr. Matt Kaneali`i-Kleinfelder, Chair. Present: Mr. Matt Kaneali`i-Kleinfelder, Chair 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 L. Kimball, Member (via videoconference from Hilo; came in later) Mr. Dennis "Fresh" Onishi, Member Absent & Excused: Ms. Rebecca Villegas, Member 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. 23.36: REPORT OF FUND TRANSFERS AUTHORIZED: APRIL 16 — 30, 2026 From Controller Jon Arbles, dated May 14, 2026. Vote on Comm. 23.36: Mr. Hustace moved to close file on Comm. 23.36. Filed Seconded by Ms. Kierkiewicz and carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: None. FC-38 June 16, 2026 ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 586-26: AUTHORIZES THE PLANNING DEPARTMENT TO AWARD FUNDS TO POHAKU PELEMAKA THROUGH THE KILAUEA RECOVERY GRANT PROGRAM Provides $142,000 in grant funds to P6haku Pelemaka to provide relief, recovery, mitigation, and long-term resilience for disaster damages, losses, and suffering caused by the 2018 Kilauea eruption. Reference: Comm.928 Intr. by: Council Member Kierkiewicz (B/R) Motion on Approve: Ms. Kierkiewicz moved to recommend adoption of Res. 586-26. Seconded by Mr. Hustace. CHR. KANEALI`I-KLEINFELDER: Council Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I believe Patti Pinto from the Recovery Division is on Zoom or might be in the Hilo Chambers. Aloha, Patti. She reached out to our office. There were a couple of other projects that were requiring a fiscal sponsor in order for them to receive funding to deliver community designed resilience efforts. I had an opportunity to meet with Kristin McCormick; she's with the Red Road Resilience Hub. She's doing a really phenomenal job in designing and preparing for implementation of these particular activities and I just want to mahalo nui, Leila Kealoha, for all of her support to be the fiscal sponsor for these projects. Patti, is there anything that you would like to offer? I appreciate you being in the audience and helping to shepherd this through. She's saying no. She's so incredibly humble, but she works so very hard to ensure that our lower Puna community gets the support that they need as we continue to rebuild after the 2018 eruption. Just looking for everyone's support here. Thank you, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Anyone else? Okay. Hearing and seeing none, motion is on the floor to forward Resolution 586-26 to Council with a favorable recommendation. All in favor? Vote on Res. 586-26: The motion to recommend adoption of Res. 586-26 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: None. Page 2 FC-38 June 16, 2026 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 Postponed: June 2, 2026 (Note: There is a motion by Council Member Hustace, seconded by Council Member Onishi to recommend passage of Bill 163 on first reading.) (Note: Comms. 909.2, 909.3, and 909.4, from Council Member James E. Hustace, dated June 15, 2026, transmitting proposed amendments to Bill 163, were circulated.) CHR. KANEALI`I-KLEINFELDER: Mr. Hustace, go ahead. MR. HUSTACE: Thank you, Chair. I first want to thank for the time that everyone took to provide feedback and share their prospectives on the proposal before you. Since our last deliberation on Bill 163, I had the opportunity to consider input from all of you, my colleagues, and continue discussions with our Real Property Tax (RPT)Division and office there. As I noted in the introduction of Bill 163, the intent is to explore whether targeted property tax relief can help qualifying families retain generational lands and maintain connections to properties that have often remained in family ownership for decades. I appreciate the testimony that we received today particularly highlighting that preservation of ancestorial lands is not solely an economic issue but one that also involves family history, culture, genealogy, and community continuity. I also appreciate the questions regarding the implementation, eligibility requirements, documentation, and the overall administration of the program. So I hope today's further discussion can give everyone an opportunity to continue evaluating these issues and determine whether this proposal can serve as a meaningful tool for our community and family generational lands here on Hawaii Island. Motion to Amend: Mr. Hustace moved to amend Bill 163 with the contents of Comm. 909.3. Seconded by Ms. Kagiwada. Page 3 FC-38 I June 16, 2026 CHR. KANEALI`I-KLEINFELDER: Okay. Thank you, Mr. Hustace. Go ahead. MR. HUSTACE: Thank you, Chair. I'm taking these a little bit out of order; I'm going to start with .3 (Comm. 909.3) here. So this amendment would require that the Finance Department Director of Finance has to submit an annual report to Council regarding the `Aina Knpuna Dedication Program. This report would include the annual number of applicants, total number of applicants, estimated total amount of annual tax relief provided by the program, and an estimated average of annual tax relief per participant. So this amendment is really providing transparency to the program and accountability as the program is implemented and allows the body here on the Council and the public to better understand participation levels, evaluate fiscal impacts, and assess what the programs achieving and it's intended purpose. So thanks for your consideration. CHR. KANEALI`I-KLEINFELDER: Okay. Council Member Kagiwada. MS. KAGIWADA: Thank you so much. In full support of this amendment as well as the main issue. I just want to say that I think this is really important so that we can make sure that we fund and pay for this as we go forward. Right now we don't know what this is going to cost as far as reduced revenues. We know it's important, I think, and we want to do it, but we do need to get a handle on that just so that when we look at that when we come to the budget season next year and looking at our revenue and expenses. So I appreciate this very much and for all the important data it will bring in on many levels. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Anyone else? Hilo? MS. KIMBALL: No. I'm supportive. CHR. KANEALI`I-KLEINFELDER: Okay. We have the motion on the floor to amend Bill 163 with the contents of Communication 909.3, all in favor? Vote on Motion The motion to amend Bill 163 with the contents of to Amend: Comm. 909.3 was carried by the following voice vote: (Approved) Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 8. Noes: None. Absent: Committee Member Villegas —1. Excused: None. CHR. KANEALI`I-KLEINFELDER: Back to the bill as amended. Council Member Hustace. Page 4 FC-38 June 16, 2026 Motion to Amend: Mr. Hustace moved to amend Bill 163, as amended, with the contents of Comm. 909.4. Seconded by Mr. Onishi. CHR. KANEALI`I-KLEINFELDER: Go ahead. MR. HUSTACE: Thank you, Chair. For this amendment there were some questions about the agricultural dedication. So this amendment clarifies how the $10,000 tax threshold applies to properties receiving the agricultural use assessment. So it's currently drafted, some of the qualifying agricultural properties could be unintentionally excluded from the program because their agriculture sometimes significantly reduces their annual tax obligation. So this amendment ensures that agricultural properties are evaluated based on the taxes that would've been assessed absent the agricultural use assessment rather than the reduced taxes resulting from that classification. So the intent here is to treat agricultural properties fairly and ensure that long held property and long family hands actively engage in agriculture are not inadvertently disadvantaged or excluded from participation solely because they're receiving that assessment already. Thanks for your consideration. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Members? Okay. Hearing and seeing none, motion is on the floor to amend Bill 163, as amended, with Communication 909.4. All in favor? Vote on Motion The motion to amend Bill 163, as amended, with the to Amend: contents of Comm. 909.4 was carried by the following (Approved) voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder— 8. Noes: None. Absent: Committee Member Villegas —1. Excused: None. CHR. KANEALI`I-KLEINFELDER: Back to the bill as amended two times. Mr. Hustace, go ahead. MR. HUSTACE: Thank you, Chair. Motion to Amend: Mr. Hustace moved to amend Bill 163, as amended, with the contents of Comm. 909.2. Seconded by Mr. Onishi. CHR. KANEALI`I-KLEINFELDER: Go ahead. MR. HUSTACE: Thank you, Chair. So this amendment here establishes a clear application and review timeline for the initial implementation of the `Aina Page 5 FC-38 June 16, 2026 Kupuna Dedication Program, specifically providing that property owners seeking to participate in the program for the tax year beginning in July 1, 2027, that they submit their application by December 3 1 " of this calendar year. And the amendment requires that the Director of Finance notify applicants of an eligibility determination by mid -February of 2027. So the intent here is to provide certainty for both applicants and the Real Property Tax Division to establish clear deadlines during the program's first year of implementation and this will help ensure sufficient time for application review, verification, and administrative processing. Thank you for the consideration. CHR. KANEALI`I-KLEINFELDER: Thank you. Discussion? Council Member Kagiwada. MS. KAGIWADA: Thank you. I see we have Administrator Miura here. I just wanted to check in with you about this timeline and your team's ability to perform this as written. (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 morning. Real Property Tax Administrator Lisa Miura; Keita Jo, Assistant Administrator, is in Hilo. We're definitely grateful that this moved to December 31", for this first year, instead of September 1", like it was written because we had major concerns about the September 1st MS. KAGIWADA: Okay. Other than that though, you feel like this timeline is doable for you and your team? MS. MIURA: Yes. It's a compromise. We can do this. MS. KAGIWADA: Okay. MS. MIURA: Keita, any thoughts? MR. JO: Nothing to add. MS. KAGIWADA: Okay. I can see that you're pushing yourselves and that's great. It's something that a lot of people want. Just double checking then that this also allows for if there was a challenge for your ruling for people to have enough time to do that challenge? MS. MIURA: Do you mean our office having enough time or the public? MS. KAGIWADA: The public. Page 6 FC-38 June 16, 2026 MS. MIURA: I believe it's going to be a challenge for some but there are those that already tried to submit for kuleana applications and were unfortunately not in a kuleana award that could probably submit right away and there are others that we've heard from that could apply right away as soon as the form is available. But there are going to be others that don't have the property in their name, and I don't know if they'll get to it. But the program doesn't end the applications, they would just have to wait another year. MS. KAGIWADA: Okay, great. Thank you. Thank you so much. That's all I needed. I support this. CHR. KANEALI`I-KLEINFELDER: Thank you. Any other discussion? MS. KIMBALL: Chair, if I may? CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball, go ahead. MS. KIMBALL: I have a question and a comment to the maker. So as I understand this, this is just the timing for this initial go around. One of the things I recall us discussing in committee is potentially, you know, just making this a temporary program and not something that is in perpetuity, so we have a chance to reevaluate at a future point. So I'm wondering if that is something that can be considered. Secondly, just kind of from a drafting standpoint, having some other legislation that I have worked on that specifies dates for these sort of transitional periods. I might suggest that you reach out to LRB (Legislative Research Branch) for some drafting language to include in the ordinance itself that would repeal this section after that February 2027 date so that we just don't mark up our code with state specific content that becomes invalid at a later point. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Hustace. MR. HUSTACE: Thanks, Chair. Thanks, Council Member Kimball. This is in the noncodified section of the bill itself. MS. KIMBALL: Thank you for that clarification. MR. HUSTACE: No problem. Yeah. So it's in Section 2, so it won't sit in the language of the code itself, but just for that initial implementation. And there just needs some clarification on the last sentence there, maybe it just needs a coma to just be very clear. So it's "Upon determination the petitioner or properties not eligible for dedication as `Aina Kupuna, the director shall notify the petitioner no later than February 15, 2027." Just providing clarity there for the intent of that language. Thanks, Chair. Page 7 FC-38 June 16, 2026 CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball, anything further on that point? MS. KIMBALL: Not at this time. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. Council Member Inaba. MR. INABA: Thank you. I just want to clarify that when Council Member Hustace's office produces the next draft that that coma can be included since it is a grammatical correction. Is that right, Mr. Brown? MR. BROWN: Yes. So when the next draft comes out, I know LRB can work with Council Member Hustace's staff on making sure that the correction is made as you would see fit. MR. INABA: Thank you. In support. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no further discussion on the amendment. Mr. Clerk, is that correct? We're on Communication 909.2 still, yes? MR. BROWN: Yes, correct. We are on the amendment. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you, Mr. Clerk. On the amendment, all in favor? Vote on Motion The motion to amend Bill 163, as amended, with the to Amend: contents of Comm. 909.2 was carried by the following (Approved) voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 8. Noes: None. Absent: Committee Member Villegas — 1. Excused: None. CHR. KANEALI`I-KLEINFELDER: We are now back to the main motion, Bill 163, as amended. Mr. Hustace. MR. HUSTACE: Thanks, Chair. I appreciate the opportunity here and thank you for the consideration on the amendments to just kind of clarify different aspects of it for the implementation, accountability, and really establishing some clarity around the agricultural assessment. So thank you for your consideration on those Page 8 FC-38 June 16, 2026 and amending the bill thus. Open for other questions and discussion on this and I appreciate the support. Thank you, Chair. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Members, questions on Bill 163, as amended? Okay. I do have one question from the maker. In Section 19, without a section; Aina Kupuna dedication; establishment, eligibility; for eligibility requirements, the total amount of real property taxes assessed on the property for the ten tax years immediately preceding a petition for dedication as `aina knpuna is more than $10,000. Was the intention for the entire ten years or the preceding tax year and then if an individual was under $10,000 in assessed taxes, would they not be eligible then, and was that the intention. MR. HUSTACE: Thanks, Chair. Yes. The intention is to put some guide marks and boundaries on that. The Maui proposal had it at $50,000, and our assessments are a little bit lower there of course, so it was really to being that figure down and set that threshold at $10,000. And then now with the amended language, there's some kind of carve out and a specialty for agricultural use because those are the properties are valued even below that sometimes. CHR. KANEALI`I-KLEINFELDER: Okay. Thank you. Ms. Miura, could you help me just briefly? Real property taxes assessed is both building and land, correct? MS. MIURA: Correct. So that would be the total taxes due each year. CHR. KANEALI`I-KLEINFELDER: And the way this is worded, the total amount of real property taxes assessed for the ten years immediately preceding a petition for dedication is more than $10,000. MS. MIURA: Correct. CHR. KANEALI`I-KLEINFELDER: That would mean ten years of taxes has to be more than $10,000 as the assessment from — MS. MIURA: The taxes itself, not just the assessed value. CHR KANEALI`I-KLEINFELDER: Okay. And that's ten years of taxes. MS. MIURA: Total. So it has to be more than $10,000 they paid in taxes or that would've been due if they paid on time. CHR. KANEALI`I-KLEINFELDER: Okay. Okay. Okay. And then finally, thank you, Ms. Miura. To the maker, when I originally read this, I thought this was specific to our native Hawaiian residents owning property before 1926. But as I read it further, it doesn't necessarily mean native Hawaiian. It's just anyone who's owned property for before and since 1926 at this point. Page 9 FC-38 Vote on Bill 163: Draft 2 (Approved) ADJOURN- MENT: Approved: Mr. Matt Finance ( MK/tk June 16, 2026 MR. HUSTACE: Yes, that's correct, Chair. CHR. KANEALI`I-KLEINFELDER: Okay. Overall I like the idea, and it looks like you have the support to move it on. So thank you for bringing this forward. Thank you, Ms. Miura. The one piece that I really did like, Mr. Hustace, was the not more than 20 acres because if we went past 20 acres there's some very interesting components that could apply to our large landholders here who've been around for a long time but own some very substantial landholdings that would have a fairly large impact on our tax bases here in Hawaii County. So thank you for reigning that in a little bit and focusing on our residents who have smaller properties. Anything further from the Council? Okay, hearing and seeing none. Motion is on the floor to forward Bill 163, as amended, with the contents of Communication 909.2, 909.3, and 909.4, to the Council with a favorable recommendation. All in favor? The motion to recommend passage of Bill 163, as amended to Draft 2, on first reading was carried by the following voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kierkiewicz, Kimball, Onishi, and Chair Kaneali`i-Kleinfelder — 8. Noes: None. Absent: Committee Member Villegas —1. Excused: None. There being no further business on our agenda today, Chair Kaneali`i-Kleinfelder adjourned the meeting at 10:54 a.m. Thank you very much. Chair (Date) Page 10