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Wednesday, May 12, 2021
May 12, 2021 News Read
By Andrew Walden @ 7:02 PM :: 2102 Views

Bid-Rigging: Hanabusa Chickens out, Blangiardi Appoints her to HART Board Instead

DoH Revokes License of Maui Weed Dealer

VIDEO: Molotov Cocktails at Hawaii Supreme Court, Attorney General Office

'Frankenbill' would suspend tax exemptions for some Hawaii businesses

PBN: …A bill that started the 2021 legislative session as a way to divert all of Hawaii’s conveyance tax to the general fund was amended into a “Frankenbill” that temporarily suspends a number of exemptions to the state’s general excise tax for a range of businesses in an effort to stem a $1.2 billion budget shortfall caused by the Covid-19 pandemic.

House Bill 58, along with a bill to reduce funding for the Hawaii Tourism Authority, is one of several measures passed to balance the state’s two-year budget by increasing or moving taxes around.

The exemptions that would be suspended include one for businesses that pay lease rent and collect rents from sublessees, while several deal with businesses that do business with the federal government and the military, including sales of alcoholic beverages, tobacco products and other ‘tangible property.”

HB58, which was sent to Gov. David Ige on April 28, was originally introduced to move 100% of the proceeds from the conveyance tax paid on real estate transactions to the general fund and then use general obligation bonds to fund the portion that would have gone to the land conservation fund and the rental housing revolving trust.

But when it crossed over to the Senate, it morphed into what Tom Yamachika, president of the Tax Foundation of Hawaii, calls a “Frankenstein bill” or “Frankenbill” — a measure that includes parts of other bills that failed to move on their own. HB58 contains the tax exemptions carved from Senate Bill 56, which stalled when it got to the House.

HB58 would remove those exemptions for two calendar years, starting Jan. 1, 2022 and ending Dec. 31, 2023.

HB58 also would increase the conveyance tax on residential properties selling for more than $4 million — but because the wording of the bill relies on a county's definition of commercial land, it could include many other classifications of property such as land zoned for multifamily development, industrial property and farm land.

Among the G.E.T. exemptions that would be suspended are the “amounts deducted from the gross income of real property lessees because of receipt from sublessees” — for example, a shopping center that pays rent on a ground lease and collects rents from its retail and restaurant tenants.

“It basically puts the onus on the person in the middle,” Yamachika told Pacific Business News. “If that goes away then everything's 4.5%.”

Yamachika used as an example a large retailer that leases space from a shopping center on Oahu, then subleases part of its space to another business. Without the exemption, the G.E.T would be taxed at 4.5% each time rent is paid.

“It's nasty,” Yamachika said of HB58. “That, I think, is the primary thing, with one or two of them that are going to generate the most money, which means disrupt the most people.” …

read … 'Frankenbill' would suspend tax exemptions for some Hawaii businesses

Res 21-116: Stop Rail at Middle Street

HPR: …  "I'm totally exhausted about the inability of our decision-makers to do the right thing, after all the proof they have in front of them," he said. "These are crazy numbers by any standard of infrastructure delivery of project delivery."

City Councilmember Heidi Tsuneyoshi recently introduced Resolution 21-116 which asks the HART board to temporarily halt the project at Middle Street. It also asks the board to suspend procuring future contracts and land purchases for the final leg to Ala Moana Center.

Under her request, the suspension would be lifted when funding to complete the project is secured and a revised plan is sent to the council and the Federal Transit Administration

Like Prevedouros, Tsuneyoshi wants current work between East Kapolei and the Middle Street station to be finished.

"There is no reason why the rail cannot be operational in two years from Kapolei, where it's already there and started, all the way to Middle Street," Prevedouros said. "The rest is extremely challenging. We're talking about a 4-mile bridge through the core of a high-density area with a lot of problems with foundations." …

HPR: The Conversation: Honolulu Rail Critic; Foster Care System

read … Honolulu Rail Critic, City Councilmember Push For Middle Street Endpoint

Ex-Navatek CEO accused of virus loan fraud pleads not guilty

AP: … Martin Kao, who was CEO of Martin Defense Group LLC, formerly known as Navatek LLC, is charged with bank fraud and money laundering. Authorities say he defrauded banks of more than $12.8 million through the Paycheck Protection Program….

Kao transferred more than $2 million into his own personal accounts, according to an indictment. Investigators talked to an executive and a former employee who said the company wasn’t affected by the pandemic, court documents said….

He stepped down as CEO in November, a spokeswoman said….

Trial is scheduled for July. Green said he anticipates the trial will be postponed because the case involves “thousands of pages of discovery.”…

read … Ex-Hawaii CEO accused of virus loan fraud pleads not guilty

The Local-Versus-Outsider Leadership Debate Continues

Cataluna: … The main concern always seems to be not what a job candidate can do, but geographically, where that person came from.

What’s that about? …

In terms of assets, a local candidate is seen as someone who can hit the ground running because they understand all the intricacies of island culture, even though some of those conventions are outdated and frankly, regressive. (Do you really need to know why “What school you grad?” is a coded way to quickly assess social status to be an effective manager of a project or department? Um, not really. Other skills are more important.)

The selling point for a candidate from out-of-state is that person comes in with no encumbrances or potential conflicts of interest. An outsider won’t have cousins who work in the organization or long-held grudges within the department. An outsider comes with a clean slate, and no favors owed to anyone.

(Oh, but in Hawaii, we love favors. We love having a friend on the inside. It is how so much business is transacted.)

On the downside, an insider has been part of the problematic system that needs to be fixed. Maybe that person has new ideas, but old habits and calcified routines are hard to break. Friends and cousins might be offended.

As for bringing in an outsider, well, that’s cold water on any local management hopeful who has put in the years only to be passed over because, this time around, being from Hawaii wasn’t in fashion.

The internal candidate versus mainland hotshot debate is often influenced by whoever has just washed out as leader of the organization. Instead of pointing to the specific actions that led to a former leader’s shortcomings, their point of origin becomes the accepted reason they didn’t work out….

read … The Local-Versus-Outsider Leadership Debate Continues

Incoming Hawaii Teachers Union Chief Offers Changes In Style Not Substance

CB: … The Hawaii State Teachers Association has grown increasingly powerful under the leadership of Corey Rosenlee, playing a key role in keeping classrooms closed for months, pushing out the current superintendent and even getting teachers a $2,200 bonus.

Critics say the union has gone too far beyond its focus of advocating for teachers and students and is wielding outsize influence over statewide policy, elections and other issues.

So what will change when Rosenlee passes the baton to the union’s current vice president, Osa Tui Jr., in July? Tui says not much in terms of policy, although he has a different style.

“We’ve been on the right path lately and I want to keep the ship pointed in that right direction,” he said last week.….

Former Gov. Neil Abercrombie, who led the state from 2010 to 2014, also accused the HSTA of forgoing its mission of empowering students by looking out only for its own members.

“They’re a privileged class, from their point of view,” he said. “Students are the last consideration of the present leadership and the public interest is the last thing.”

Abercrombie argued the problem existed even before Rosenlee’s tenure, citing the union’s 2013 opposition to his proposal to create a public preschool network that he said “helped to kill preschool in Hawaii.”

The union supported Abercrombie in 2010 but endorsed his Democratic primary challenger, Ige, in 2014….

“HSTA is a major statewide political powerhouse,” said Randall Roth, an author and former UH Manoa law professor. “They just have tremendous power. If the union decides it doesn’t want someone elected or appointed, they have an incredible amount of power to influence the governor and legislative races.”

Under Rosenlee, who has led the union since 2015 but is barred by term limits from serving as president again, the union fought to delay the reopening of classrooms during the pandemic until it was satisfied that enough teachers were vaccinated to make it safe.

He also led the charge against Superintendent Christina Kishimoto, accusing her of trying to reopen schools too quickly and of leadership failures. Kishimoto announced in March that she would not seek a renewal when her contract expires at the end of July….

Rosenlee, meanwhile, is vying for the superintendent job, putting him in the unusual position of potentially crossing over as a union chief to overseer of the entire K-12 single district statewide school system….

read … Incoming Hawaii Teachers Union Chief Offers Changes In Style Not Substance

Ex-police chief to lead board review on police shootings

SA: …Gary Yabuta, executive director of the Hawaii High Intensity Drug Trafficking Area and a 31-year veteran and former chief of the Maui Police Department, was unanimously voted to serve as LEOIRB chairman…

CB: Hawaii Police Shootings Board Says It Will Step Up Its Work

read … Ex-police chief to lead board review on police shootings

Hawaii Family Forum member survey exposes strong anti-vaccine sentiment

HCH: … To the first question which asked whether the respondent will be getting vaccinated, 42% said yes, they already have or plan to; 39% said no; 12% are waiting for “more studies”; and 4% “don’t know yet.”

Three percent said no to the vaccine “if it contains aborted fetal cells.”

Andrade was not surprised by the answers to the vax-or-not-to-vax question. She said they match what people have been telling her over the past year.

As to whether the vaccine should be mandatory, an overwhelming 91% said no; the rest, yes.

Most respondents had little love for their civic leaders. For the question on the handling of the pandemic, most of them checked the box “They need to go” for the governor, lieutenant governor, state legislators, the mayor and public health leaders. Handling the pandemic “very well” was the least marked box for these folks…..

read … Hawaii Family Forum member survey exposes strong anti-vaccine sentiment

How one state worker helped open the door to Cryptocurrency in Hawai‘i

HB: … Today, the fate of cryptocurrency in Hawai‘i depends on one woman. As commissioner of financial institutions in the Department of Commerce and Consumer Affairs, Iris Ikeda has considerable authority over the regulation of digital currency exchanges. In part, this is because there are no state laws designed to govern the exchanges, which proliferated following the invention of Bitcoin in 2008.

Ikeda was appointed to her position by then-Gov. Neil Abercrombie in 2011. Immediately prior to her appointment, she was associate counsel for American Savings Bank, and had previously worked for Finance Factors and Ohana Pacific Bank. Ikeda says that when she was appointed, she was the first commissioner with a banking background in over 20 years. Her appointment pleased bankers, she says, because she understands bank-ing and the challenges that banks face.

She was also no stranger to government. Her resume included stints as a researcher for then-Lt. Gov. Mazie Hirono and as a senior aide to Honolulu City Council member Andy Mirikitani….

Ikeda reached out to Mike McCartney director of the Department of Business, Economic Development & Tourism. McCartney introduced Ikeda to Len Higashi, acting director of the Hawaii Technology Development Corp. Higashi says he immediately saw a parallel between the Entrepreneurs Sandbox that HTDC runs in Kaka‘ako and the regulatory sandbox that Ikeda was proposing.

“In software terms, a sandbox is a place where you do your trial experiments. It’s OK if you mess up because it’s not live yet,” he says. “We were blown away that this type of innovative thinking would come out of the regulatory body of the state because the state has a bad reputation of moving real slow.”

The HTDC board agreed to partner with DFI in 2019, and together they began planning the Digital Currency Innovation Lab. Participating companies would complete an application similar to the one for money transmitters, and DFI would vet them. In exchange for the companies providing data to DFI and complying with the terms of the program, DFI would “allow the admitted digital currency issuers to conduct business in Hawai‘i without first obtaining a state money transmitter license.” Basically, DFI agreed to take “no action” in enforcing the existing statutes, specifically relaxing the “permissible investments” requirement for cohort participants.

The program was announced in March 2020, and the first cohort of 12 participating companies was announced in August 2020: Apex Crypto, bitFlyer USA, BlockFi Trading, CEX.IO, Cloud Nalu, Coinme, ErisX, Flexa Network, Gemini Trust Co., Novi Financial, River Financial and Robinhood Crypto….

Of the twelve companies in the first cohort, one was not listed among those which completed the program: Robinhood Crypto. In our interview, Ikeda would not refer to Robinhood Crypto by name. Instead, she said that participating companies agreed to report certain data. Companies that did not send the required reports were removed from the program, she said, but only after multiple warnings and opportunities to comply with the reporting requirements.

Applications for the second cohort of the Digital Currency Innovation Lab opened in January 2021, and the structure of the program remains the same, with DFI issuing a “no action message” and agreeing to “not take any action against these companies.” The new cohort will be able “to conduct business in Hawai‘i without the need to obtain a state money transmitter license through June 30, 2022,” just shy of the election to replace Gov. David Ige, who is limited to two four-year terms.

read … How one state worker helped open the door to Cryptocurrency in Hawai‘i

Vendor Fined $65K for Setting up Beach Chairs

HNN: … Every day, Chris Sanger and his team make the trek from his shop in the Ilikai Hotel to the other side of the Hilton lagoon to set chairs and umbrellas on the beach for customers.

In March, the Department of Land and Natural Resources began investigating Sanger after the Hilton Hawaiian Village complained about him setting up before renters arrive.

On two separate occasions, a DOCARE officer said there were umbrellas put up that were not in use for about an hour.

On April 9, a state investigator took video around 7:45 a.m. and reported 18 chairs on site, but no customers using them….

(This is a top investigative priority for DOCARE?)

In addition to giving Sanger a cease and desist, Sanger is getting slapped with a $62,000 dollar fine plus an extra $3,242.30 for the over 60 hours of investigative work conducted by DOCARE officers.

Sanger said he stopped pre-setting chairs after getting the cease and desist letter on April 14.

But DLNR said based on Hilton Hawaiian’s Village video taken on April 16, Sanger continued to place chairs on the beach.

As part of the investigation, DLNR shared videos the Hilton Hawaiian Village took on May 6. Their managing agent, Robert Martin, pointed out in one of the videos that six out of eight chairs set up on the beach were unoccupied.

SA: Beach services operator in Waikiki to contest $62,000 fine

read … Facing serious fine, beach rental owner says he feels unfairly targeted

Small Farmers Deserve Better Support Than The ADC Has Provided

CB: … Twenty-five years after the agency was created, it's past time for change….

read … Small Farmers Deserve Better Support Than The ADC Has Provided

More Homeless Mayhem: Man, 39, in critical condition after suspect sets him on fire in downtown Honolulu

SA: … A 39-year-old homeless man was critically injured after an unknown suspect poured an accelerant on him and ignited it while the victim was sleeping in the doorway of a building in downtown Honolulu early today, police said.

The suspect set the victim on fire in the doorway of a business building at 1300 Pali Highway near Longs Drugs at about 5:45 a.m., according to police.

“The guy was completely in flames. He was just screaming,” said a witness who declined to give her name….

Police said the victim was taken in critical condition to a hospital.

Honolulu police have opened an attempted murder investigation. There are no arrests at this time.

read … Man, 39, in critical condition after suspect sets him on fire in downtown Honolulu

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