Hawaii Legislature Concludes with Tax Reduction, Zoning Revisions, and Aid for Maui Fire Victims

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Hawaii lawmakers concluded a legislative session on Friday, heavily focused on addressing Maui’s needs post-last year’s deadly Lahaina wildfire. They also tackled Hawaii’s housing shortage, tax cuts, and measures supporting unique Hawaii agricultural products like coffee and macadamia nuts. In a more playful gesture, they designated the “shaka” as the official state gesture.

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Here’s a glimpse of some major legislation passed during the 60-day session that commenced on Jan. 17:


Lawmakers allocated $1 billion to cover various Lahaina disaster-related costs, including $500 million for emergency housing for displaced residents and $124 million in rental assistance for those ineligible for aid from FEMA.

Acknowledging how global warming has heightened wildfire risks statewide, legislators allocated funds for more firefighting equipment, a state fire marshal, and forest restoration.


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

The zoning measure mandates counties to permit two additional dwellings on each residentially zoned lot to promote higher density development.

House Speaker Scott Saiki, a Democrat, informed reporters on Wednesday that this differed from previous attempts to address the state’s housing shortage, which 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 highlighted vacation rentals, revealing a significant portion of Maui dwellings rented to tourists on a short-term basis. This prompted lawmakers to pass a bill granting counties the authority to phase out vacation rentals and prioritize residents. Gov. Josh Green signed the measure into law on Friday.

Maui’s mayor promptly acted on this bill by announcing county legislation to 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.


Lawmakers passed measures establishing standards for coffee and macadamia nuts, two of Hawaii’s most valuable crops.

The coffee bill mandates Hawaii-grown and processed coffee to contain no less than 51% Hawaii-origin coffee starting in July 2027. The legislation highlighted that existing law allows coffee blends identified as from the Kona, Kau, and Kauai coffee growing regions to contain only small amounts of beans from these places, deceiving consumers and harming coffee growers.

Regarding macadamia nuts, lawmakers passed legislation requiring 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 processors sell imported nuts in island-themed packaging without indicating their origin.


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

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

Yamashita noted that these changes are just the first step in necessary 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, mentioned that her Republican caucus has long advocated for the tax measures.

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


Lawmakers moved to designate the “shaka” as 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 use the shaka to say hi and bye as well as thanks and aloha.

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