Citing doubts about the Hawaii Legislature’s ability to pass a statewide single-use checkout bag fee this year, the Honolulu City Council Wednesday took a major step forward toward a temporary Oahu-only fee on plastic bags.

Wednesday was a turning point.

Until now, the council had been watching the Legislature to see whether it would adopt a statewide fee.

But on Wednesday a committee voted for a three-cent fee on Oahu, and now the measure needs just one more vote from the full council to become law, possibly before the end of the month.

Council Chair Ernie Martin ignored pleas to defer to the Legislature and instead urged colleagues to take action. He told Civil Beat after the vote that he believes the Legislature won’t get the job done this year.

“Based on what they’ve told me, and it’s not just the Finance chair but other members of the House, they’re very reluctant to pass any measure,” Martin said.

House Finance Chair Marcus Oshiro all but told Civil Beat that the Legislature’s not going to pass a statewide fee this year and will instead back off to let the City Council handle it for Oahu.

“At this time, it seems that the various counties in Hawaii have taken the lead in passing legislation tailored to each specific county on single-use checkout bags,” Oshiro’s staff wrote on his behalf in an email late Wednesday afternoon. “It makes sense to let Honolulu work on this measure, as other county councils have done effectively.”

Maui and Kauai already have plastic bag bans in place, and the Big Island’s ban takes effect soon. Honolulu is poised to join its sister counties in regulating checkout bags. But unlike them it won’t impose a ban. On Wednesday it rejected a ban in favor of a fee.

The Legislature And The City

The bag fee has been one of the hottest issues this session at the Legislature.

This week the Hawaii Senate breathed new life into its bag proposal by gutting a dead bill and replacing it with new language. It’s the second straight year that a bag bill has struggled to gain support from House leadership.

Senate Energy and Environment Chair Mike Gabbard and House counterpart Denny Coffman appeared to have struck a deal for a 10-cent fee on the last day of the 2011 legislative session. But the conference committee was unable to complete its work because Oshiro was busy with budget balancing issues and leadership implemented a hard drop-dead time for non-essential measures.

A number of council members have experience in the Hawaii Legislature. Ann Kobayashi, Tulsi Gabbard, Romy Cachola and Nestor Garcia all served as elected officials there, and Tom Berg worked as a staffer in the “square building” before moving across the street.

They’re familiar with the uncertainty of legislative action.

“When you go (to) conference committee, anything can happen,” Cachola said.

Garcia said waiting for the Legislature to act would actually take months since Gov. Neil Abercrombie could veto measures into July. Public Works and Sustainability Chair Stanley Chang said moving the bill forward at this time would allow the council to maintain “maximum flexibility” to deal with the issue independent of the unpredictable legislative process at the Capitol.

Asked if he was confident about his ability to shepherd a bag fee bill through conference committee with the House, Gabbard said, “No. I’m not.”

“Some of the comments that Romy and Nestor made are (right). It’s so unpredictable.”

The council bill, meanwhile, is on the fast track and could be wrapped up within weeks at the April 25 full council meeting. The council still has plenty of issues left to deal with, though.

What Will Fee Revenue Do?

One key difference between a statewide fee and a county fee is that the state can do things with the money that the county cannot.

Until Wednesday’s vote by the Public Works and Sustainability Committee, the city bill called for an outright ban, not a fee. The fee presents a unique problem because counties are authorized by state law (specifically Section 46-1.5 of the Hawaii Revised Statutes) to implement fees only to cover the cost of implementing an “official service.”

The county would need to use the funds specifically on enforcing the ordinance and related programs like recycling and education. Honolulu Environmental Services Director Tim Steinberger told Civil Beat after the vote that even a three-cent fee on millions of plastic bags would likely generate far more than enough money to cover the cost of implementation. The fee assuaged his concerns about creating new work for the department by implementing a ban without a funding source for enforcement, but created a new problem of money that burning a hole in his pocket.

“That’s a lot of money,” he said. “It’s a windfall that we really don’t need because we don’t really need to be driving the cost of government up. We’d like to keep it pretty flat.”

Steinberger said the department’s had some preliminary discussions about whether it should staff up, make temporary hires or contract out the work.

The council might have to confer with city attorneys to see which programs and activities qualify for the fee money.

The state doesn’t have to worry about such things, and can put any extra fee revenue back into the general pot of money or spend it on other environmental programs. The state bill calls for the revenue to be used to protect watersheds and natural area reserves, something Oshiro said was a positive aspect of the proposal and something Abercrombie strongly supports.

But Oshiro said in the email that the state is preserving funding for protecting natural resources, particularly watershed forests, in at least one other measure, so the plastic bag fee revenue isn’t needed for that purpose.

What Kind of Bags?

The state’s proposed fee would have covered both paper and plastic, but the city’s proposal applies only to plastic, not paper.

The stores say paper is more expensive to stock, and no better for the environment. Sierra Club Hawaii Chapter Director Robert Harris suggested a ban on plastic and a fee for paper. And Gabbard said he hopes the council follows his lead and expands its fee.

“One of my main concerns about Bill 10 is them leaving out the paper bags,” Gabbard said.

In the last moments before the vote Wednesday, Chang amended the bill to exempt certain types of bags and to change the definition of “plastic.”

Charge Stores, or Customers?

The council bill would charge a three-cent fee for every plastic checkout bag distributed at the point of sale for one year — from sometime in 2013 until sometime in 2014 (the exact dates are as-yet unclear). After that year, the fee would go up to five cents per bag. At some undetermined point, the fee would be replaced by a full ban.

The stores would be responsible for paying the fee, and could either pass it along directly to customers or eat it themselves. Lobbyists for various retail merchants told the council that they prefer the fee to a ban, which they say cost stores on Maui and Kauai about $30,000 apiece in increased paper costs. But they want customers, not stores, to pay the fee because that approach would do a better job of discouraging the use of plastic checkout bags.

Harris made the same point in testimony. He said allowing the stores to absorb the cost would fail to change consumer behavior.

Normally any further changes — about the use of the funds, the scope of the fee and who should be responsible for the fee — might be hashed out in committee. But the bill now heads back to the full council, and could be passed within weeks.

“We’re going to try to work with some of the amendments based on some of the concerns that were raised today,” Martin told Civil Beat. “There is the legal issue, whether the county can even impose a fee. So that might take a little while. I would be inclined to have it scheduled for April 25, but I can hold off if necessary.”

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