Less than a week after apparently agreeing to a compromise, the state House yesterday voted to kill a bill that would have created a five-year moratorium on experiments with genetically modified Hawaiian taro.

The bill was an attempt at compromise after the state Senate backed a 10-year moratorium last session and it would have allowed research to continue on other varieties of taro. But several farmers said after the state House Agriculture Committee passed the bill last Thursday that they wanted the longer moratorium or a permanent ban.

Some farmers of Hawaiian taro fear genetically modified varieties could cross-pollinate with Hawaiian taro and change its purity.

"I think in the best interest of all, we decided to recommit (the bill). But that means those who really wanted a moratorium, there is no moratorium right now," said state Rep. Clifton Tsuji, D-3rd (S. Hilo, Puna, Kea'au), the chairman of the House Agriculture Committee.

The vote to send the taro bill back to committee was among dozens taken yesterday as the House and Senate positioned legislation for second crossover between the two chambers tomorrow. Many of the bills will then go to House and Senate conference committees for negotiations before final votes at the end of the session.

The Senate agreed to its version of the state budget, approved potential loan guarantees to help stabilize interisland airlines, authorized a cultural preserve at Ha'iku Valley, and revived a cap on corporate campaign contributions that was thought dead for the session.

The House moved bills that keep alive discussion on the possible state purchase of Turtle Bay Resort on the North Shore and Galbraith Estate in Central O'ahu, extend the mandatory retirement age for judges from 70 to 80 years old, and restrict the governor's use of emergency powers.

The House also approved an ethics bill barring state officials and lawmakers from employing or appointing members of their immediate families to discourage nepotism. The bill, however, contains a little-noticed provision preventing lawmakers from getting state contracts, which set off an explosive debate.

State Rep. Josh Green, D-6th (N. Kona, Keauhou, Kailua, Kona), a Big Island doctor with a contract with the Hawai'i Health Systems Corp., the state's quasi-public hospital system, accused House leaders of adding the provision as punishment for his support of medical-malpractice liability reform.

House leaders, particularly state Rep. Tommy Waters, D-51st (Lanikai, Waimanalo), were subject to intense public criticism this session for not moving a malpractice reform bill that Green had favored.

Green asked for a House ethics inquiry into Waters' conduct regarding the nepotism bill. He called the bill an "absolutely unethical abomination."

Waters, an attorney who quit his job as a state public defender after he was elected, said the provision was not aimed at any one lawmaker. He said he could potentially lose state contracts he has with the courts to represent certain defendants.

"There is an appearance of impropriety in my mind if you get two state paychecks," Waters said.

The Senate, meanwhile, endorsed a $10.7 billion operating budget, with $5.3 billion in general fund spending, a little bit more than the House had approved.

The Senate version of the budget is $32.4 million less than what Lingle had proposed, while the House version is $67 million less.

State Sen. Rosalyn Baker, D-5th (W. Maui, S. Maui), the chairwoman of the Senate Ways and Means Committee, said the Senate reductions come from denying requests for new spending, making adjustments to job vacancies, and reducing discretionary spending in state departments by between 2.5 percent and 5 percent.

Baker also noted that the Senate would restrict the administration's spending of federal welfare money to keep a healthy reserve in the event of an economic downturn. The Senate also only provides about 10 percent of the requests by nonprofits for grants-in-aid and 8 percent of capital improvement grants-in-aid requests.

The Senate, however, would commit more money overall than the House for capital improvement projects. "Capital investment should be the engine of recovery rather than a casualty of the downturn," Baker said, citing planned investments in the University of Hawai'i, K-12 public schools and public housing.

The loan guarantees for interisland airlines were rushed through in response to the shutdown of Aloha Airlines last week. "It's to help stabilize the existing airlines," said state Sen. J. Kalani English, D-6th (E. Maui, Moloka'i, Lana'i), the chairman of the Senate Transportation and International Affairs Committee.

State Sen. Clayton Hee, D-23rd (Kane'ohe, Kahuku), said the bill is a noble idea but comes too late to save Aloha Airlines. He said taxpayers could end up covering the costs of loan guarantees for Hawaiian Airlines and Mesa Air Group, which owns go! airline, while also paying the higher fares the airlines are likely to charge now that competition is reduced.

The Senate also amended a bill, up for a vote tomorrow, that would place a $25,000 cap on corporate contributions to corporate political action committees and prevent corporations from giving donations directly to candidates. House and Senate leaders had wanted to clarify the campaign-finance law this session but negotiations had fallen apart in the House.

House and Senate leaders had wanted to allow corporations to again use unlimited amounts of money from corporate treasuries for corporate PACs, which was the law for much of the past decade before it was inadvertently changed to a $1,000 cap three years ago. Open-government activists have urged lawmakers not to lift the cap and to instead ban corporate contributions.

The law is under legal challenge before the state Intermediate Court of Appeals.