SB2696 SD2

SECTION 1. The legislature finds that each year, Hawaii's reefs, oceans, beaches, and forests provide billions of dollars in value to the economy, supporting the well-being of our communities and visitors alike. For our tourism industry, our ecosystems are vital. Inseparable from our culture, our environment is integral to our visitor experience.

The legislature also finds that even though these natural resources are critical for the visitor industry and resident communities, Hawaii invests less than one per cent of its state budget into those assets. Hawaii's total conservation funding gap has been estimated as high as $360,000,000 annually, constituting a major unfunded liability that poses a significant risk to our business climate and our economic resiliency.

The legislature further finds that our State's vital ecosystems and the resources they harbor continue to decline, due to lack of adequate investment in proven and effective conservation approaches. Data demonstrates growing concern that tourism's positive contribution to the economy may not outweigh the impact that visitors have on the environment. Ten million visitors enjoyed the benefits of Hawaii's ecosystem and natural environment in 2019, and the number of visitors is expected to rise. Increased demand on our natural resources requires innovative conservation financing mechanisms focused on reversing the decline in our ecosystems and the associated risks for our visitor industry and communities.

The legislature also finds that innovative financing mechanisms such as green fees are trending around the globe as triple bottom-line solutions to better manage visitor impacts on eco-systems and natural resources. Green fees may be referred to as eco-taxes, tourist taxes, green taxes, and environmental, conservation and tourism levies. In general, green fees require mandatory payments made by visitors to government entities for the explicit purpose of supporting conservation and natural resource management.

By following the benchmarks and mandates required by the Hawaii climate change mitigation and adaptation initiative enacted as chapter 225P, Hawaii Revised Statutes, and by following the data generated under the Aloha+ Challenge natural resource management goals, the legislature seeks to better understand if and how green fees can accelerate support for these efforts, while ensuring that implementation is fair and beneficial for all.

The purpose of this Act is to appropriate funds for a feasibility and implementation plan focused on the establishment of a green fees program, for the explicit purpose of closing the conservation funding gap and meeting the goals of the Hawaii climate change mitigation and adaptation initiative and the Aloha+ Challenge natural resource management goals.

SECTION 2. (a) The office of planning shall prepare a feasibility and implementation plan to assess a green fee on a per visitor, per stay basis. The plan shall include, at a minimum:

(1) An analysis and breakdown of Hawaii's conservation funding gap that exists in current natural resource and climate change funding relative to meeting the goals set forth in chapter 225P, Hawaii Revised Statutes, and the Aloha+ Challenge natural resource management goals, and the extent to which Hawaii's unfunded conservation liabilities will increase based on the current rate of funding;

(2) An analysis and review of the current use of natural resource and climate change funding throughout state departments and agencies;

(3) An examination of all existing tax and fee structures that exist to support climate change mitigation efforts;

(4) An examination of all existing tax and fee structures placed on the visitor accommodation and tourism industries;

(5) A discussion of the advantages or disadvantages of increasing, decreasing, or reallocating existing taxes relative to the option of establishing a new green fee;

(6) Development of proposed green fee rate structures that would be required to close the conservation funding gap over a five-year period;

(7) Consideration of a dedicated bond issuance or other financing mechanism that will ensure the most effective management of funds and result in use of revenues collected for the specific purposes of this Act;

(8) Identification of potential short-term and long-term impacts on the Hawaii's tourism industry and overall economic outlook, including possible market impacts and economic and workforce considerations; and

(9) Development of a ten-year implementation plan with the imposition of fees to begin no later than 2022, including a proposed fee schedule, benchmarks, indicators, and mandatory impact reporting.

(b) The office of planning, in consultation with the Hawaii tourism authority and the department of land and natural resources, shall establish an advisory group that shall advise the office in the development of the plan described in subsection (a) and initiate outreach and engagement efforts related to the plan. The director of the office of planning shall serve as the chair of the advisory group. The members of the advisory group shall include the following individuals or their designees:

(1) The director of finance;

(2) The director of taxation;

(3) The director of business, economic development, and tourism;

(4) One senator appointed by the president of the senate;

(5) One member of the house of representatives appointed by the speaker of the house of representatives;

(6) The members of the Hawaii climate change mitigation and adaptation commission; and

(7) Persons accepting an invitation by the chair of the advisory group; provided that invited persons shall be:

(A) Representatives of other relevant state agencies;

(B) Representatives of business or industry groups whose respective members would be affected by the implementation of the plan;

(C) Representatives of non-governmental organizations having an interest in climate change issues and natural resource protection; or

(D) Other relevant parties that the chair has determined are necessary to assist the advisory group in fulfilling its purpose or provide comments upon completion of the plan.

(c) The office of planning shall submit an interim report to the legislature of its progress, findings, recommendations and timeline for completion of the plan no later than December 31, 2020. The interim report shall also include a preliminary determination of the conservation funding gap amount.

(d) The office of planning shall submit a final report to the legislature of its progress, findings, and recommendations, including proposed legislation for the establishment and implementation of a green fees program, no later than October 31, 2021.

(e) Nothing in this Act shall preclude the office of planning from executing contracts with appropriate entities having expertise in tourist industry green fees.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2020-2021 for a feasibility and implementation plan prepared by the office of planning relating to the establishment of a green fee program in Hawaii.

The sum appropriated shall be expended by the office of planning for the purposes of this Act; provided that no funds shall be made available under this Act unless the office of planning obtains matching funds from the private sector for fifty per cent of the cost of the feasibility and implementation plan.

SECTION 4. This Act shall take effect on December 31, 2033.

THE SENATE	S.B. NO.	2696
THIRTIETH LEGISLATURE, 2020		S.D. 2
STATE OF HAWAII