HB1947 HD1

PART I

SECTION 1. The legislature recognizes that tourism is a vital component of Hawaii's economy and it is essential to ensure that this resource is managed effectively to support the State's well-being.

The legislature finds that the state auditor and an independent public accounting firm have identified deficiencies in internal controls, organizational management, program development, and tourism management at the Hawaii tourism authority, underscoring the urgent need for organizational reform.

The legislature further finds that a governance study commissioned by the Hawaii tourism authority has shown that a change in culture, direction, and organizational structure is needed to promote and protect tourism as a highly valuable asset for the State and its people.

Therefore, the legislature finds it prudent to eliminate the Hawaii tourism authority and place the functions of branding, marketing, and coordinating and promoting the State within the department of business, economic development, and tourism. This change is intended to strengthen tourism management and foster confidence among stakeholders in the State's strategic approach to managing a world-class destination. With these changes and oversight from the legislature, a balance can be achieved to accommodate the needs of economic development and those of sustainability and destination management.

Accordingly, the purpose of this Act is to:

(1) Repeal the Hawaii tourism authority and transfer its functions to an office of tourism to be established within the department of business, economic development, and tourism; and

(2) Appropriate funds.

PART II

SECTION 2. Chapter 201B, Hawaii Revised Statutes, is repealed.

PART III

SECTION 3. Chapter 201, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . OFFICE OF TOURISM

§201-A Definitions. As used in this part, unless the context otherwise requires:

"Advisory board" or "board" means the advisory board on tourism.

"Agency" means any agency, department, authority, board, commission, the university of Hawaii, or any other unit of the State or its political subdivisions.

"Office" means the office of tourism.

"Convention center facility" or "convention center" means any combination of land, buildings, and improvements thereon, acquired or developed by the State, and includes exhibition halls, meeting rooms, a plenary session hall, and support space that reflect a Hawaii sense of place; any other structure or facility required or useful for the operation of a convention center, including commercial, office, community service, parking, garage, and other supporting service structures; and, all necessary, useful, and related equipment, furnishings, and appurtenances.

"Destination management" means a collaborative and coordinated process with public, private, and community stakeholders to manage the various elements of a visitor destination to:

(1) Create, implement, and monitor strategies that attract targeted visitor markets and improve visitor experiences;

(2) Improve natural and cultural resources valued by Hawaii residents and visitors;

(3) Develop and maintain tourism-related infrastructure to prevent overcrowding and overtaxing sites and resources; and

(4) Ensure that the provision of services enhances the visitor experience.

"Destination stewardship" means the shared responsibility of government, communities, residents, businesses, and visitors to intentionally manage a place in a way that protects its natural environment, cultural heritage, and social fabric while supporting a healthy, resilient economy so the destination can thrive for current and future generations.

"Hawaii brand" means the qualities and programs that collectively differentiate the Hawaii experience from other destinations.

"Public agency" means any office, department, board, commission, bureau, division, public corporation agency, or instrumentality of the federal, state, or county government.

"Regenerative tourism" means a tourism model that:

(1) Is designed and carefully managed to bring net benefits to local communities and destinations; and

(2) Implements an innovative and sustainable economic development plan to:

(A) Make net positive contributions;

(B) Create conditions that allow communities to flourish;

(D) Improve destinations for current and future generations for the well-being of the environment, residents, indigenous communities, and visitors.

§201-B Office of tourism; established. There is established within the department the office of tourism.

§201-C Advisory board on tourism. (a) There is established within the department the advisory board on tourism. The advisory board shall consist of twelve members; provided that:

(1) The members shall be appointed by the governor as provided in section 26-34, except as provided by this section;

(2) The members shall include at least one representative each from the city and county of Honolulu and the counties of Hawaii, Kauai, and Maui;

(3) One member shall be appointed by the speaker of the house of representatives, and one member shall be appointed by the president of the senate;

(4) At least six members shall have knowledge, experience, and expertise in the area of accommodations, transportation, retail, entertainment, or attractions, and at least one member appointed by the governor shall have knowledge, experience, and expertise in the area of Hawaiian cultural practices;

(5) At least one member shall represent a tourism-impacted entity;

(6) The governor shall make appointments to ensure the fulfillment of all requirements of paragraphs (2) and (4); provided that upon the occurrence of a vacancy subject to paragraph (3), the governor shall notify the speaker of the house of representatives and the president of the senate of any unfulfilled requirements pursuant to paragraphs (2) and (4), and the speaker of the house of representatives or the president of the senate, as appropriate, shall appoint a member who fulfills those requirements; and

(7) No person who has served as a member of the board of directors of an organization or business that is under contract with the office of tourism shall be eligible to sit as a member of the advisory board until at least two years have expired between the person's termination from the contracting organization or business and the person's appointment to the advisory board.

(b) Members shall be appointed by the governor for terms of four years; provided that membership on the board shall not exceed eight consecutive years; provided further that each member shall hold office until the member's successor is appointed and qualified.

(d) Seven members shall constitute a quorum, and a minimum of seven affirmative votes shall be necessary for all actions by the office. The members shall serve without compensation, but shall be reimbursed for expenses, including traveling expenses, necessary for the performance of their duties.

§201-D Office of tourism; staff. (a) The office shall be headed by the director of business, economic development, and tourism, ex officio, who shall:

(1) Oversee the staff of the office;

(2) Serve as the liaison to the advisory board on tourism; and

(3) Report to the governor.

(b) The staff of the office shall be exempt from chapter 76 and shall include:

(1) The office of tourism manager, who shall oversee two administrative assistants;

(2) The chief brand officer, who shall oversee two brand managers;

(3) The chief finance and budget officer, who shall oversee:

(A) A procurement manager; and

(B) A procurement assistant;

(4) An attorney and compliance officer;

(5) An account specialist; and

(6) Two administrative staff.

§201-E Strategic tourism management plan; measures of effectiveness. (a) The office shall be responsible for developing a strategic tourism management plan that advances tourism marketing, complies with destination management best practices, and promotes regenerative tourism. The plan shall be a single, comprehensive document that shall be updated every year and include the following:

(1) Statewide Hawaii brand management efforts and programs;

(2) Targeted markets;

(3) Efforts to enter into Hawaii brand management projects that make effective use of cooperative programs;

(4) Program performance goals and targets that can be monitored as market gauges and used as attributes to evaluate the office's programs;

(5) The office's guidance and direction for the development and coordination of promotional and marketing programs that build and promote the Hawaii brand, which are implemented through contracts and agreements with destination marketing organizations or other qualified organizations, including:

(A) Target markets and the results being sought;

(B) Key performance indicators and return on investment; and

(6) Statewide destination management, destination stewardship, and regenerative tourism efforts and programs.

(b) In accordance with subsection (a), the office shall develop measures of effectiveness to assess the overall benefits and effectiveness of the strategic tourism management plan and include documentation of the progress of the strategic tourism management plan toward achieving the office's strategic plan goals.

§201-F Destination management action plans; counties; objectives; execution. To meet the destination management objectives for each county, the office shall perform the actions specified in each of the following plans:

(1) Oahu destination management action plan;

(2) Maui nui destination management action plan;

(3) Hawaii island destination management action plan; and

(4) Kauai destination management action plan,

during the specified phases; provided that the execution of each destination management action plan shall be dependent on the cooperation and participation of the applicable state or county agency.

§201-G Tourism-related activities. (a) The office may enter into contracts and agreements that include the following:

(1) Tourism promotion, marketing, development, and destination management;

(2) Market development-related research;

(3) Product development and diversification issues focused on visitors;

(4) Promotion, development, and coordination of festivals, community events, cultural activities, environmental stewardship activities, sports-related activities, and events that strengthen the relationships between the place and people for Hawaii's residents and visitors alike;

(5) Promotion of Hawaii, through a coordinated statewide effort, as a place to do business, including high technology business, and as a business destination;

(6) Reduction of barriers to travel;

(7) Marketing, management, use, operation, or maintenance of the convention center facility, including the purchase or sale of goods or services, logo items, concessions, sponsorships, and license agreements, or any use of the convention center facility as a commercial enterprise; provided that effective January 1, 2020, and thereafter, contracts issued pursuant to this paragraph for the marketing of all uses of the convention center facility may be issued separately from the management, use, operation, or maintenance of the facility;

(8) Tourism research and statistics to:

(A) Measure and analyze tourism trends;

(B) Provide information and research to assist in the development and implementation of state tourism policy; and

(i) Visitor arrivals, visitor characteristics, and expenditures;

(ii) The number of transient accommodation units available, occupancy rates, and room rates;

(iii) Airline-related data including seat capacity and number of flights;

(iv) The economic, social, and physical impacts of tourism on the State; and

(v) The effects of the strategic tourism management programs of the office on the measures of effectiveness developed pursuant to section 201-E(b); and

(9) Any and all other activities necessary to carry out the intent of this chapter;

provided that the office shall annually submit a report of the contracts and agreements entered into by the office to the governor, speaker of the house of representatives, president of the senate, and chairperson of the board of land and natural resources.

(b) The office shall be responsible for:

(1) Creating a vision and developing a long-range strategic plan for tourism in Hawaii;

(2) Developing destination management action plans for each county;

(3) Arranging for the conduct of research through contractual services with the university of Hawaii or any agency or other qualified persons concerning social, economic, and environmental aspects of tourism development in the State; and

(4) Providing technical or other assistance to agencies and private industry upon request.

(c) The office may delegate to staff the responsibility for soliciting, awarding, and executing contracts and for monitoring and facilitating any and all functions developed in accordance with this section.

(d) Where public disclosure of information gathered or developed by the office may place a business at a competitive disadvantage or may impair or frustrate the office's ability to either compete as a visitor destination or obtain or use information for a legitimate government function, the office may withhold from public disclosure competitively sensitive information, including:

(1) Completed survey forms and questionnaire forms;

(2) Coding sheets; and

(3) Database records of the information.

§201-H Tourism emergency. (a) If the office determines that the occurrence of a world conflict, terrorist threat, national or global economic crisis, natural disaster, outbreak of disease, or other catastrophic event adversely affects Hawaii's tourism industry by resulting in a substantial interruption in the commerce of the State and adversely affecting the welfare of its people, the office shall submit a request to the governor to declare that a tourism emergency exists.

(b) Upon declaration by the governor that a tourism emergency exists pursuant to subsection (a), the office shall develop and implement measures to respond to the tourism emergency, including providing assistance to tourists during the emergency; provided that any tourism emergency response measure implemented pursuant to this subsection shall not include any provision that would adversely affect the organized labor force in tourism-related industries. With respect to a national or global economic crisis only, in addition to the governor's declaration of the existence of a tourism emergency, no action in response to the tourism emergency declaration may be taken by the office without the governor's express approval.

§201-I Tourism emergency special fund. (a) There is established outside the state treasury a tourism emergency special fund to be administered by the office, into which shall be deposited the revenues prescribed by section 237D-6.5(b) and all investment earnings credited to the assets of the fund.

(b) Moneys in the special fund shall be used exclusively to provide for the development and implementation of emergency measures to respond to any tourism emergency pursuant to section 201‑H, including providing emergency assistance to tourists during the tourism emergency.

(c) Use of the special fund, consistent with subsection (b), shall be provided for in articles, bylaws, resolutions, or other instruments executed by the office as administrator for the special fund.

§201-J Applicability of Hawaii public procurement code; convention center contractor; construction contracts. The construction contracts for the maintenance of the convention center facility by the private contractor that operates the convention center, by its direct or indirect receipt of, and its expenditure of, public funds from the department of business, economic development, and tourism or the office, or both, shall be subject to chapter 103D.

§201-K Convention center enterprise special fund. (a) There is established the convention center enterprise special fund, into which shall be deposited:

(1) A portion of the revenues from the transient accommodations tax, as provided by section 237D-6.5;

(2) All revenues or moneys derived from the operations of the convention center to include all revenues from the food and beverage service, all revenues from the parking facilities or from any concession, and all revenues from the sale of souvenirs, logo items, or any other items offered for purchase at the convention center;

(3) Private contributions, interest, compensation, gross or net revenues, proceeds, or other moneys derived from any source or for any purpose arising from the use of the convention center facility; and

(4) Appropriations by the legislature for marketing the facility pursuant to section 201‑G(a)(7).

(b) Moneys in the convention center enterprise special fund shall be used by the office for the payment of expenses arising from any and all use, operation, maintenance, alteration, improvement, or any unforeseen or unplanned repairs of the convention center, including without limitation the food and beverage service and parking service provided at the convention center facility; the sale of souvenirs, logo items, or other items; for any future major repair, maintenance, and improvement of the convention center facility as a commercial enterprise or as a world class facility for conventions, entertainment, or public events; and for marketing the facility pursuant to section 201‑G(a)(7).

(1) Placed in interest-bearing accounts; provided that the depository in which the money is deposited furnishes security as provided in section 38-3; or

(2) Otherwise invested by the office until such time as the moneys may be needed; provided that the office shall limit its investments to those listed in section 36-21.

All interest accruing from investment of the moneys shall be credited to the convention center enterprise special fund.

§201-L Exemption of office from taxation. All revenues and receipts derived by the office from any project or a project agreement or other agreement pertaining thereto shall be exempt from all state taxation. Any right, title, and interest of the office in any project shall also be exempt from all state taxation. Except as otherwise provided by law, the interest of a qualified person or other user of a project or a project agreement or other agreements related to a project shall not be exempt from taxation to a greater extent than it would be if the costs of the project were directly financed by the qualified person or user.

§201-M Court proceedings; preferences; venue. (a) Any action or proceeding to which the office, the State, or the county may be a party, in which any question arises as to the validity of this chapter, shall be preferred over all other civil cases, except election cases, in the circuit court of the circuit in which the case or controversy arises, and shall be heard and determined in preference to all other civil cases pending therein, except election cases, irrespective of position on the calendar.

(b) Upon application of counsel to the office, the same preference shall be granted in any action or proceeding questioning the validity of this chapter in which the office may be allowed to intervene.

(c) Any action or proceeding to which the office, the State, or the county may be party, in which any question arises as to the validity of this chapter or any portion of this chapter, or any action of the office may be filed in the circuit court of the circuit in which the case or controversy arises, which court is hereby vested with original jurisdiction over the action.

(d) Notwithstanding any provision of law to the contrary, declaratory relief from the circuit court may be obtained for any action.

(e) Any party aggrieved by the decision of the circuit court may appeal in accordance with part I of chapter 641 and the appeal shall be given priority.

§201-N Assistance by state and county agencies. Any state or county agency may render services upon request of the office.

§201-O Annual report. The office shall submit a complete and detailed report of its activities, expenditures, and results, including the progress of the strategic tourism management plan developed pursuant to section 201-E, toward achieving the office's strategic plan goals, to the governor and legislature no later than twenty days prior to the convening of each regular session of the legislature. The annual report shall include the descriptions and evaluations of programs funded, together with any recommendations by the office."

PART IV

SECTION 4. Section 28-8.3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:

(1) By the public utilities commission, the labor and industrial relations appeals board, and the Hawaii labor relations board;

(2) By any court or judicial or legislative office of the State; provided that if the attorney general is requested to provide representation to a court or judicial office by the chief justice or the chief justice's designee, or to a legislative office by the speaker of the house of representatives and the president of the senate jointly, and the attorney general declines to provide such representation on the grounds of conflict of interest, the attorney general shall retain an attorney for the court, judicial, or legislative office, subject to approval by the court, judicial, or legislative office;

(3) By the legislative reference bureau;

(4) By any compilation commission that may be constituted from time to time;

(5) By the real estate commission for any action involving the real estate recovery fund;

(6) By the contractors license board for any action involving the contractors recovery fund;

(7) By the office of Hawaiian affairs;

(8) By the department of commerce and consumer affairs for the enforcement of violations of chapters 480 and 485A;

(9) As grand jury counsel;

(10) By the Hawaii health systems corporation, or its regional system boards, or any of their facilities;

(11) By the auditor;

(12) By the office of ombudsman;

(13) By the insurance division;

(14) By the University of Hawaii;

(15) By the Kahoolawe island reserve commission;

(16) By the division of consumer advocacy;

(17) By the office of elections;

(18) By the campaign spending commission;

[~~(19)~~ ~~By the Hawaii tourism authority, as provided in section 201B-2.5;]~~

~~(20)~~] (19) By the division of financial institutions;

[~~(21)~~] (20) By the office of information practices;

[~~(22)~~] (21) By the school facilities authority;

[~~(23)~~] (22) By the Mauna Kea stewardship and oversight authority; or

[~~(24)~~] (23) By a department, if the attorney general, for reasons deemed by the attorney general to be good and sufficient, declines to employ or retain an attorney for a department; provided that the governor waives the provision of this section."

2. By amending subsection (c) to read:

"(c) Every attorney employed by any department on a full-time basis, except an attorney employed by the public utilities commission, the labor and industrial relations appeals board, the Hawaii labor relations board, the office of Hawaiian affairs, the Hawaii health systems corporation or its regional system boards, the department of commerce and consumer affairs in prosecution of consumer complaints, insurance division, the division of consumer advocacy, the University of Hawaii, [~~the Hawaii tourism authority as provided in section 201B-2.5,~~] the Mauna Kea stewardship and oversight authority, the office of information practices, or as grand jury counsel, shall be a deputy attorney general."

SECTION 5. Section 36-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) Convention center enterprise special fund under section [~~201B-8;~~] 201-K;

(5) Special funds established by section 206E-6;

(6) Aloha Tower fund created by section 206J-17;

(7) Funds of the employees' retirement system created by section 88-109;

(8) Hawaii hurricane relief fund established under chapter 431P;

(9) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(10) Universal service fund established under section 269-42;

(11) Emergency and budget reserve fund under section 328L-3;

(12) Public schools special fees and charges fund under section 302A-1130;

(13) Sport fish special fund under section 187A-9.5;

(14) Neurotrauma special fund under section 321H-4;

(15) Glass advance disposal fee established by section 342G-82;

(16) Center for nursing special fund under section 304A-2163;

(17) Passenger facility charge special fund established by section 261-5.5;

(18) Solicitation of funds for charitable purposes special fund established by section 467B-15;

(19) Land conservation fund established by section 173A-5;

(20) Court interpreting services revolving fund under section 607-1.5;

(21) Trauma system special fund under section 321-22.5;

(22) Hawaii cancer research special fund;

(23) Community health centers special fund;

(24) Emergency medical services special fund;

(25) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

(26) Shared services technology special fund under section 27-43;

(27) Automated victim information and notification system special fund established under section 353-136;

(28) Deposit beverage container deposit special fund under section 342G-104;

(29) Hospital sustainability program special fund under section 346G-4;

(30) Nursing facility sustainability program special fund under section 346F-4;

(31) Hawaii 3R's school improvement fund under section 302A-1502.4;

(32) After-school plus program revolving fund under section 302A-1149.5;

(33) Civil monetary penalty special fund under section 321-30.2;

(34) Stadium development special fund under section 109-3.5; and

(35) Universal immunization purchase special fund under section [[]325-133[]],

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 6. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) Special funds established by section 206E-6;

(5) Aloha Tower fund created by section 206J-17;

(6) Funds of the employees' retirement system created by section 88-109;

(7) Hawaii hurricane relief fund established under chapter 431P;

(8) Convention center enterprise special fund established under section [~~201B-8;~~] 201-K;

(9) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(10) Universal service fund established under section 269-42;

(11) Emergency and budget reserve fund under section 328L-3;

(12) Public schools special fees and charges fund under section 302A-1130;

(13) Sport fish special fund under section 187A-9.5;

(14) Neurotrauma special fund under section 321H-4;

(15) Center for nursing special fund under section 304A-2163;

(16) Passenger facility charge special fund established by section 261-5.5;

(17) Court interpreting services revolving fund under section 607-1.5;

(18) Trauma system special fund under section 321-22.5;

(19) Hawaii cancer research special fund;

(20) Community health centers special fund;

(21) Emergency medical services special fund;

(22) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

(23) Shared services technology special fund under section 27-43;

(24) Nursing facility sustainability program special fund established pursuant to section 346F-4;

(25) Automated victim information and notification system special fund established under section 353-136;

(26) Hospital sustainability program special fund under section 346G-4;

(27) Civil monetary penalty special fund under section 321-30.2; and

[[](28)[]] Stadium development special fund under section 109-3.5,

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 7. Section 84-18, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Subject to the restrictions imposed in subsections (a) through (d), the following individuals shall not represent any person or business for a fee or other consideration regarding any legislative action or administrative action, as defined in section 97-1, for twelve months after termination from their respective positions:

(1) The governor;

(2) The lieutenant governor;

(3) The administrative director of the State;

(4) The attorney general;

(5) The comptroller;

(6) The chairperson of the board of agriculture and biosecurity;

(7) The director of corrections and rehabilitation;

(8) The director of finance;

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

(10) The director of commerce and consumer affairs;

(11) The adjutant general;

(12) The superintendent of education;

(13) The chairperson of the Hawaiian homes commission;

(14) The director of health;

(15) The director of human resources development;

(16) The director of human services;

(17) The director of labor and industrial relations;

(18) The chairperson of the board of land and natural resources;

(19) The director of law enforcement;

(20) The director of taxation;

(21) The director of transportation;

(22) The president of the University of Hawaii;

(23) The executive administrator of the board of regents of the University of Hawaii;

(24) The administrator of the office of Hawaiian affairs;

(25) The chief information officer;

(26) The executive director of the agribusiness development corporation;

(27) The executive director of the campaign spending commission;

(28) The executive director of the Hawaii community development authority;

(29) The executive director of the Hawaii housing finance and development corporation;

[~~(30)~~ ~~The president and chief executive officer of the Hawaii tourism authority;~~

~~(31)~~] (30) The executive officer of the public utilities commission;

[~~(32)~~] (31) The state auditor;

[~~(33)~~] (32) The director of the legislative reference bureau;

[~~(34)~~] (33) The ombudsman;

[~~(35)~~] (34) The permanent employees of the legislature, other than persons employed in clerical, secretarial, or similar positions;

[~~(36)~~] (35) The administrative director of the courts;

[~~(37)~~] (36) The executive director of the state ethics commission;

[~~(38)~~] (37) The executive officer of the state land use commission;

[~~(39)~~] (38) The executive director of the natural energy laboratory of Hawaii authority;

[~~(40)~~] (39) The executive director of the Hawaii public housing authority; and

[~~(41)~~] (40) The first deputy to the chairperson of the commission on water resource management;

provided that this subsection shall not apply to any person who has held one of the positions listed above only on an interim or acting basis and for a period of less than one hundred eighty-one days."

SECTION 8. Section 225P-3, Hawaii Revised Statutes, is amended to read as follows:

"(c) The commission shall include the following members:

(1) The chairs of the standing committees of the legislature with subject matter jurisdiction encompassing environmental protection and land use;

(2) The chairperson of the board of land and natural resources or the chairperson's designee, who shall be the co-chair of the commission;

(3) The director of the office of planning and sustainable development or the director's designee, who shall be the co-chair of the commission;

(4) The director of business, economic development, and tourism or the director's designee;

(5) The chairperson of the [~~board of directors of the Hawaii tourism authority~~] advisory board on tourism established pursuant to section 201-C or the chairperson's designee;

(6) The chairperson of the board of agriculture and biosecurity or the chairperson's designee;

(7) The chief executive officer of the office of Hawaiian affairs or the officer's designee;

(8) The chairperson of the Hawaiian homes commission or the chairperson's designee;

(9) The director of transportation or the director's designee;

(10) The director of health or the director's designee;

(11) The adjutant general or the adjutant general's designee;

(12) The chairperson of the board of education or the chairperson's designee;

(13) The directors of each of the county planning departments, or the directors' designees; and

(14) The manager of the coastal zone management program."

SECTION 9. Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

"§237-24.75 Additional exemptions. In addition to the amounts exempt under section 237-24, this chapter shall not apply to:

(1) Amounts received as a beverage container deposit collected under chapter 342G, part VIII;

(2) Amounts received by the operator of the Hawaii convention center for reimbursement of costs or advances made pursuant to a contract with the [~~Hawaii tourism authority~~] office of tourism under section [~~201B-7;~~] 201‑G; and

(3) Amounts received by a professional employer organization that is registered with the department of labor and industrial relations pursuant to chapter 373L, from a client company equal to amounts that are disbursed by the professional employer organization for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick leave, health benefits, and similar employment benefits with respect to covered employees at a client company; provided that this exemption shall not apply to amounts received by a professional employer organization after:

(A) Notification from the department of labor and industrial relations that the professional employer organization has not fulfilled or maintained the registration requirements under this chapter; or

(B) A determination by the department that the professional employer organization has failed to pay any tax withholding for covered employees or any federal or state taxes for which the professional employer organization is responsible.

As used in this paragraph, "professional employer organization", "client company", and "covered employee" shall have the meanings provided in section 373L-1."

SECTION 10. Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Except for the revenues collected pursuant to section 237D-2(e), revenues collected under this chapter shall be distributed in the following priority, with the excess revenues to be deposited into the general fund:

(1) $1,500,000 shall be allocated to the Turtle Bay conservation easement special fund beginning July 1, 2015, for the reimbursement to the state general fund of debt service on reimbursable general obligation bonds, including ongoing expenses related to the issuance of the bonds, the proceeds of which were used to acquire the conservation easement and other real property interests in Turtle Bay, Oahu, for the protection, preservation, and enhancement of natural resources important to the State, until the bonds are fully amortized;

(2) $11,000,000 shall be allocated to the convention center enterprise special fund established under section [~~201B-8;~~] 201‑K;

(3) An allocation shall be deposited into the tourism emergency special fund, established in section [~~201B-10,~~] 201‑I, in a manner sufficient to maintain a fund balance of $5,000,000 in the tourism emergency special fund; and

(4) $3,000,000 shall be allocated to the special land and development fund established under section 171-19; provided that the allocation shall be expended in accordance with the Hawaii tourism authority strategic plan for:

(A) The protection, preservation, maintenance, and enhancement of natural resources, including beaches, important to the visitor industry;

(B) Planning, construction, and repair of facilities; and

All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection."

PART V

SECTION 11. All rights, powers, functions, and duties of the Hawaii tourism authority are transferred to the office of tourism within the department of business, economic development, and tourism.

All employees who occupy civil service positions and whose functions are transferred to the office of tourism by this Act shall retain their civil service status, whether permanent or temporary. Employees shall be transferred without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The director of business, economic development, and tourism may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

SECTION 12. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii tourism authority relating to the functions transferred to the office of tourism shall be transferred with the functions to which they relate.

SECTION 13. All rules, policies, procedures, guidelines, and other material adopted or developed by the Hawaii tourism authority to implement provisions of the Hawaii Revised Statutes that are reenacted or made applicable to the office of tourism by this Act shall remain in full force and effect until amended or repealed by the office of tourism pursuant to chapter 91, Hawaii Revised Statutes.

In the interim, every reference to the Hawaii tourism authority in those rules, policies, procedures, guidelines, and other material is amended to refer to the office of tourism, as appropriate.

SECTION 14. All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the Hawaii tourism authority, pursuant to the provisions of the Hawaii Revised Statutes, that are reenacted or made applicable to the office of tourism by this Act shall remain in full force and effect. Upon the effective date of this Act, every reference to the Hawaii tourism authority or its president and chief executive officer therein shall be construed as a reference to the office of tourism, or the director of business, economic development, and tourism, as appropriate.

PART VI

SECTION 15. 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 2026-2027 to be allocated for the following positions established in section 3 of this Act:

(1) $ for one full-time equivalent (1.0 FTE) office of tourism manager;

(2) $ for two full-time equivalent (2.0 FTE) administrative assistants to the office of tourism manager;

(3) $ for one full-time equivalent (1.0 FTE) chief brand officer;

(4) $ for two full-time equivalent (2.0 FTE) brand managers;

(5) $ for one full-time equivalent (1.0 FTE) procurement manager;

(6) $ for one full-time equivalent (1.0 FTE) procurement assistant;

(7) $ for one full-time equivalent (1.0 FTE) chief finance and budget officer;

(8) $ for one full-time equivalent (1.0 FTE) attorney and compliance officer;

(9) $ for one full-time equivalent (1.0 FTE) account specialist; and

(10) $ for two full-time equivalent (2.0 FTE) administrative staff.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 16. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 17. In codifying the new sections added by section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 18. Sections 6E-18, 23-13, 23-76, 46-11, 76-16, and 206E-34, Hawaii Revised Statutes, are amended by substituting the words "office of tourism" whenever the words "Hawaii tourism authority" appear, as the context requires.

SECTION 19. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 20. This Act shall take effect on July 1, 3000; provided that section 15 of this Act shall take effect on July 1, 2026.

HOUSE OF REPRESENTATIVES	H.B. NO.	1947
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII