(BIVN) – A bill that proposes new a tax credit and surcharge for Hawaiʻi tour helicopters is on the verge of being passed by the State Legislature.

Senate Bill 1069 SD1 HD1, according to its description, “establishes a tax credit for taxpayers who install a helicopter noise-canceling technology system on a helicopter owned by the taxpayer and operated primarily within the State during the taxable year,” and also “establishes a tour helicopter surcharge.” The bill also establishes a helicopter noise-canceling technology system special fund. 

On March 29, the House Finance Committee recommended that the measure be passed. Before that, the bill – which passed the State Senate in early March – went to the House Judiciary Committee. That version of the bill contained the noise-canceling technology tax credit, but did not contain the surcharge provision. It also contained language “prohibiting commercial flights of tour helicopters within one mile of residential neighborhoods during certain times,” specifically between the hours of 6 p.m. and 8 a.m. Monday through Saturday, or between the hours of 6 p.m. and 9 a.m. on Sundays or holidays.

Helicopter companies opposed to the bill pointed out in testimony that the Federal Aviation Administration (FAA) is the only entity with authority to govern U.S. airspace.

The issue has been an ongoing frustration for many residents on the Big Island, who say the noise generated by constant helicopter tours is impacting their quality of life. Similar concerns from Oʻahu residents, expressed during a March 21 Judiciary Committee hearing on the bill, show its a state-wide concern.

“Why don’t we just ground the helicopters until they can prove to us they can do it quietly,” quipped Rep. Tom Brower (D, District 22), after hearing multiple testimonies from residents distressed by the helicopter noise.

“The company’s not gonna just quit flying,” said Eric Lincoln, the Director of Operations for Blue Hawaiian Helicopters. “We employ over 300 people in this state. Paid a significant amount of tax.”

“How about the flight path?” asked Rep. Cynthia Thielen (R, District 50). “How could we deal with that to get them out over the water?” A deputy attorney general answered that it’s not within the state’s power to mandate that.

“I represent Puna, where because of the lava, my whole community gets inundated,” said Rep. Joy San Buenaventura (D, District 4). “Every time we try to work with Blue Hawaiian and others we keep running into FAA.”

“Can we control, like we control taxi cabs?” Rep. San Buenaventura asked. “We can control licensing, right? I think that’s the genesis of the bill – a tax credit. Because we can control tax credits as far as state taxes.”

“I’m thinking about carrot-and-stick,” she said.

The thinking of the Representative from Puna is reflected in the changes made to the bill in the Judiciary committee, which removed the provisions that prohibited the flights of commercial tour helicopters within one mile of a residential neighborhood, and added a tour helicopter surcharge on commercial helicopter businesses in the State. The tax credit for noise-canceling technology remained in the bill.

“SB 1069 does not provide the necessary guidelines to help reduce or mitigate noise, instead it penalizes both businesses and the consumer by placing a surcharge per seat that will make an already large expense even more more expensive,” wrote Paradise Helicopter CEO Calvin Dorn about the amended bill. Dorn added that while there are mitigation systems that can be put into place, “noise canceling technology systems do not currently exist.”

Dorn also shared the same concern expressed by the Department of the Attorney general, that the bill might be subject to a preemption challenge under the federal Anti-Head Tax Act, which the AG says provides that a state “may not levy or collect a tax, fee, head charge, or other charge on—(1) an individual traveling in air commerce; (2) the transportation of an individual traveling in air commerce; (3) the sale of air transportation; or (4) the gross receipts from that air commerce or transportation.”

Hawaiʻi County Mayor Harry Kim, who has tried to find resolutions to the tour helicopter noise issue on the Big Island, testified on the amended bill:

I gather that House Judiciary decided to remove the provisions of SB 1069, SD1, which prohibited the flights of commercial tour helicopters within one mile of a residential neighborhood and limited the hours of a helicopter’s operations. I regret that such prohibitions have been deleted, but must defer to your best judgment in this matter as to what can survive legal scrutiny and the legislative process.

I also must defer to the experts to suggest what the appropriate decibel level should be to qualify for the credit, and how much the credit should be. But I would ask this Committee to be as stringent as reasonably possible. To qualify for the benefit of a tax credit, the helicopter industry must become a responsible and considerate corporate member of our community, and it is not there yet.

The bill will next go the full House for a vote on third reading.