STAND. COM. REP. NO. 1488

Honolulu, Hawaii

RE: H.B. No. 548

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Energy, Economic Development, and Tourism and Water and Land, to which was referred H.B. No. 548, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE TRANSIENT ACCOMMODATIONS TAX,"

beg leave to report as follows:

The purpose and intent of this measure is to allocate funds from transient accommodations tax revenues directly to the Hawaii Tourism Authority, rather than through the special land and development fund, in order to improve certain state facilities in accordance with the Authority's strategic plan.

Your Committees received testimony in support of this measure from the Department of Land and Natural Resources and Hawai‘i Tourism Authority. Your Committees received comments on this measure from the Tax Foundation of Hawaii.

Your Committees find that Hawaii continues to be one of the top destinations for vacationers. In 2017, the State received 9,404,346 visitors. That number is projected to increase to approximately 10,130,000 in 2019. As the number of visitors continues to grow, more strain is put on the State's facilities and natural resources, such as state parks, trails, small boat harbor facilities, and other natural areas that are operated and maintained by state agencies. Your Committees believe that given the continued growth of visitors, more investment is needed in Hawaii's natural resources and environment.

Your Committees received testimony from the Department of Land and Natural Resources indicating that the Department has been increasing its collaboration and communication with the Hawaii Tourism Authority regarding the Authority's promotion of state parks, hiking trails, and beaches and the various impacts associated with tourism and that the agencies mutually concur that emphasis should be directed to quality of experience in a manner that reduces impacts.

The Department of Land and Natural Resources also indicated in its testimony that it does not support the provision in this measure that places the transient accommodations tax revenues under the purview of the Hawaii Tourism Authority and prefers instead a direct allocation of funds to its divisions and programs as a component of their base operating budget. Your Committees agree that a direct allocation would be more efficient and find that amendments to this measure are necessary to effectuate that intent.

Your Committees have amended this measure by:

(1) Deleting the direct allocation of transient accommodations tax revenues to the Hawaii Tourism Authority; inserting a blank amount to be allocated as follows: fifty-five percent to the state parks special fund, thirty percent to the Na Ala Hele statewide trail and access program, and fifteen percent to the beach restoration special fund, and making conforming amendments; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Energy, Economic Development, and Tourism and Water and Land that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 548, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 548, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Energy, Economic Development, and Tourism and Water and Land,

________________________________ KAIALI'I KAHELE, Chair

________________________________ GLENN WAKAI, Chair