Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Third Special Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 9 entitled:

begs leave to report as follows:

The purpose of this measure is to appropriate $10,000,000 for the immediate implementation of an integrated marketing plan to market and promote the State of Hawaii as a visitor destination; provided that up to $5,000,000 may be expended through January 31, 2002, and no further expenditures shall be made until the Hawaii Tourism Authority reports to the Legislature at a public hearing and the legislative committees submit a favorable report.

Testimony in support of this measure was received from Department of Business, Economic Development, and Tourism, Hawaii Tourism Authority, Chamber of Commerce of Hawaii, Retail Merchants of Hawaii, Hawaii Attractions Association, Visitor Industry Coalition, Hawaii Restaurant Association, Waikiki Improvement Association, ILWU Local 142, Maui Hotel Association, DFS Hawaii, Hilton Hawaiian Village, Outrigger Enterprises, Starwood Hotels & Restaurants Worldwide, Inc., and Media Matters. The Hawaii Visitors and Convention Bureau submitted comments.

Your Committee finds that the visitor industry's significant contributions to Hawaii's economy have been dealt a severe blow as a result of the aftermath of the terrorists actions of September 11, 2001. If Hawaii's visitor industry is to recover in a timely manner, immediate action must be taken to increase the marketing of Hawaii as a preferred destination. Your Committee is aware that other tourism destinations are planning or have already embarked on aggressive tourism promotions, and Hawaii must be equally active in its marketing.

Your Committee has amended this measure to delete the requirement that the Hawaii Tourism Authority report to the Legislature at a public hearing and that the legislative committees issue a favorable report before the expenditure of the remaining $5,000,000.

Your Committee remains concerned, however, that these expenditures should be a matter of public record and will instead require the Hawaii Tourism Authority to report to the Legislature by March 1, 2002 on its implementation of an integrated plan to market in response to the changed market conditions resulting from the terrorist attacks of September 11, 2001. The report shall include the details on how the $10,000,000 was expended, and how these expenditures relate to other expenditures by the Hawaii Tourism Authority for marketing.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 9, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 9, S.D. 1, and be placed on the calendar for Third Reading.