Hawaii Checkout Bag Fee Not Yet Wrapped Up

Civil Beat April 26, 2011

By: Michael Levine

A measure that could give Hawaii the first statewide fee on checkout bags is at a "sensitive" point in negotiations and could be changed dramatically before its conference meeting Wednesday, according to Senate Environment Committee Chair Mike Gabbard.The fee — which would cover both paper and plastic and ranged from a nickel to a quarter per single-use bag in previous versions — has the support of both environmentalists and retail merchants. But concerns about the impact to consumers have the measure hanging in the balance with key deadlines looming."It's very sensitive at this time," Gabbard, the lead negotiator for the Senate and the lead introducer of Senate Bill 1363, told Civil Beat Tuesday. "We're very close but I can't really show my hand right now until I have more of a consensus with more of the players."He declined to go into detail on the status of negotiations but said he'd spoken with the Hawaii Department of Health and other stakeholders and that the conversation included discussion of potential language not found in any of the five versions debated this year.Gabbard's original bill would have charged businesses with gross annual income of $500,000 or more 25 cents for each non-reusable checkout bag provided to a customer starting July 1, 2012. Subsequent Senate amendments defected the date and blanked out the amount of the fee.When the bill arrived in the House, more serious changes were made. A joint House committee knocked the fee down to 5 cents per bag, though the Finance Committee bumped it back up to a dime.House Environmental Protection Committee Chair Denny Coffman, one of three lead House negotiators, said the 10-cent fee is his chamber's position and that the amount of the fee is an important issue."While this bill certainly environmentally does the right thing and has a lot of support, there's a concern that in these hard economic times, is this the right time to put a fee on plastic bags and paper bags for an environmental issue?" he said, summarizing "pushback" he's heard from House colleagues. "Everything we have going affects people."He pointed to proposals that would hike taxes and fees on alcohol, tabacco and pensions as other places where consumers are taking a hit. But like those proposals, the bag fee could be a financial boon for the state as it struggles to balance its budget.In supporting testimony, the Sierra Club estimated a 10-cent fee would generate more than $24 million for the state even if the distribution of single-use bags is cut in half by the fee. Coffman said the House Finance Committee hasn't identified SB 1363 on its list of major revenue generators, but might come knocking as it continues to wrestle with the budget."In a small way it is part of the plan, but it's just not on the top page, which means it could come back," Coffman said. "It could be in play."The House made other substantial changes that may or may not end up in any final version that emerges. A clause was added that would preempt the powers of any county to regulate single-use bags. Existing plastic bag bans on Maui and Kauai will be allowed to stand, but similar proposals in Honolulu and on the Big Island would need to be passed before the bill took effect or not at all.Gabbard, a former Honolulu City Council member, squashed rumors that the Legislature could preempt even the Kauai and Maui bans, saying such a move "is not on the table right now." And Coffman, a Big Island representative, downplayed the importance of preempting Honolulu and Hawaii Counties' efforts."I don't think that preemption thing is a big issue," he said. "I think the CD1 that the Senate's working on right now might change that."The original language introduced by Gabbard would have allowed all counties free reign, stating, "Nothing in this part shall prohibit a county from enacting ordinances that are more stringent in the control or prohibition of non-reusable checkout bags than this part."The House Finance Committee made another late switch that changed the impact on a key player. Though early versions would have given 20 or 25 percent of fee revenues to the stores in perpetuity, HD2 would have ended that practice after just one year.The Hawaii Food Industry Association — representing retailers, wholesalers and manufacturers — has opposed bans on plastic bags on each of the counties because paper is far heavier, which has both economic and environmental costs. But the association repeatedly provided testimony in favor of the bill because a fee would both discourage the use of costly single-use bags and because it would deliver some revenue to the stores.It's unclear if retailers would still be on board with a permanent fee if revenue benefit to the store is short-term.That's just one of the moving parts that could be decided Wednesday."As far as what might happen tomorrow, I'm not sure," Coffman said.