Maui County Council BFED Committee Covers Bill 81 and TAT Update on July 28, 2026

The Budget, Finance, and Economic Development Committee met on July 28, 2026, to consider two items: Bill 81 (2025), which would require disclosure of use restrictions on county-owned property when requesting appropriations, and a discussion on the Transient Accommodations Tax (TAT) billing, collection, and system implementation. The committee heard public testimony, debated Bill 81, and received an update on TAT progress. No consent calendar was presented.

Public Comments & Testimony

• Jesse Long (calling in) testified in support of the TAT discussion, expressing hope that Maui County becomes more self-reliant in managing its revenue. He also inquired about the availability of a South Maui residency office for testifiers. No other public testimony was offered for either agenda item.

Discussion Items

Bill 81 (2025) – Disclosure of Use Restrictions on County-Owned Property

• Purpose: To require the administration to disclose any use restrictions (e.g., funding source conditions, executive order requirements, deed restrictions) when requesting appropriations for development on county-owned property, ensuring consistency with authorized uses. This was prompted by the use of open space funds to acquire property (Kaulu Onapili) that was later repurposed for affordable housing.
• Administration Position: Deputy Managing Director Aaron Wade expressed no objection, suggesting the information could be included in transmittals or budget appendices.
• Council Positions:
  • Chair Sugimura (sponsor) argued the bill ensures transparency and prevents future confusion as council members and administrations change.
  • Member Batangan supported the disclosure requirement, noting it would help newer members understand property restrictions.
  • Member Johnson acknowledged the prior transparency but saw codification as beneficial for future administrations.
  • Member Paltin expressed frustration, stating the bill was unnecessary because the current administration was transparent; she also urged focus on pressing housing issues, such as rising rents for low-income tenants in 201H projects.
  • Member Rollins Fernandez suggested the bill was an election-year ‘gotcha’ but later stated she could support it for consistency.
  • Member Cook noted the bill clarifies how special-purpose funds can be swapped when property use changes.
• Key Data: The property in question was purchased with $1.434 million from the Open Space Fund; the FY2027 budget includes an appropriation from the Affordable Housing Fund to reimburse the Open Space Fund.

Transient Accommodations Tax (TAT) – Billing, Collection, and System Update

• Update from Deputy Director Zelensky and Revenue Manager Nighthart:
  • The TAT software implementation (by FAST Enterprises) is on schedule, going live on October 5, 2026 (approx. one week ahead).
  • The county currently has 15,000 TAT taxpayers; the department has 6 positions (5 active, 1 vacancy).
  • Annual TAT revenue is trending at $70 million.
  • Policies and procedures have been developed for refunds, penalties, and interest.
  • A refund of approximately $1 million was issued to a large West Maui taxpayer after it was determined a property did not qualify as a short-term rental.
  • The new system will collect Tax Map Key (TMK) numbers, which the state does not require, allowing for district-level reporting.
• Council Concerns:
  • Member Batangan questioned whether some collection activities require rulemaking under HRS Chapter 91; the committee requested a written opinion from Corporation Counsel.
  • Member Paltin urged collaboration with the state for enforcement and suggested exploring joint task forces.
  • Member Cook asked about auditing the state’s TAT distribution; Deputy Director Zelensky noted limited cooperation from the state.
  • Member U’u-Hodgins asked about the statute of limitations for collections (three years from annual reconciliation).
• **No legislative action was taken; the item was for information and discussion only.

Key Outcomes

• Bill 81 (2025): The committee voted 9-0 (with all members present in favor) to recommend passage on first reading to the full council. The motion was made by Chair Sugimura and seconded by Member Cook.
• TAT Update: No vote was taken. The committee received the update and agreed to have Corporation Counsel provide a written response regarding HRS Chapter 91 compliance. Members also discussed potential state legislation and further collaboration with the state Department of Taxation.