STAND. COM. REP. NO.81

Honolulu, Hawaii

, 2003

RE: S.B. No. 1461

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Tourism and Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 1461 entitled:

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

beg leave to report as follows:

The purpose of this measure is to require each county to earmark two per cent of its portion of the Transient Accommodations Tax (TAT) for programs that support tourism promotion and visitor industry enhancement.

Your Committees received testimony in support of the intent of this measure from the Maui Hotel Association, and the Hawaii Tourism Authority provided comments. The Tax Foundation of Hawaii and a member of the Kauai County Council submitted testimony in opposition to this measure. The Department of Taxation submitted testimony expressing no position on this measure.

Your Committees find that, since the visitor industry is one of the most important sources of revenue for the State, it is critical to provide funds for programs that support tourism promotion and visitor industry enhancement.

Your Committees note that the counties already play a meaningful role in promoting and supporting tourism, and each county dedicates a significant portion of funds for that purpose. Your Committees are also mindful that the State should not micromanage the affairs of the counties.

However, revenues generated by the visitor industry help to support many programs that benefit the entire State, and the Legislature has a responsibility to ensure that tourism programs are adequately funded.

Therefore, to ensure that the counties continue to dedicate funds to create and maintain transportation infrastructure and other projects that benefit both the State and the visitor industry, your Committees find that it is appropriate to require each county to use at least two per cent of its portion of the TAT for that purpose.

Moreover, since the amount of revenues generated by the TAT is directly related to the number of visitors, it is an appropriate source of funds for programs that support the visitor industry. In fact, enhancement of visitor industry programs can lead to more visitors, which in turn will lead to increased TAT collections. Consequently, your Committees find that this measure may have a snowball effect, and generate greater revenues for the counties and the State.

Your Committees note that some, or all, of the counties may already be using an amount equivalent to two per cent of TAT revenues for tourism-related programs. In such cases, the counties can allocate the earmarked funds for existing programs, and will not be required to expend additional funds. This measure will ensure, however, that each county continues to meet the two per cent threshold.

As affirmed by the records of votes of the members of your Committees on Tourism and Transportation, Military Affairs and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1461 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Tourism and Transportation, Military Affairs and Government Operations,

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CAL KAWAMOTO, Chair

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DONNA MERCADO KIM, Chair