Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 816
                                     S.D. 1
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Tourism, to which was referred S.B. No.
816, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to ensure that the convention
center is operated in an effective and efficient manner by:

     (1)  Extending the sunset date of the Convention Center
          Authority (CCA) for another year, until June 30, 2000;

     (2)  Requiring the Legislative Auditor to continue to audit
          and monitor the progress of CCA in resolving various
          outstanding issues and problems prior to its extended
          sunset date on June 30, 2000.

     The Department of Business, Economic Development, and
Tourism (DBEDT), CCA Board, the Maui Hotel Association, Diamond
Resort Hawaii, the Activity Owners Association of Hawaii, and the
Visitor Industry Coalition commented on this bill.

     Your Committee recognizes the division of responsibilities
between CCA and the Hawaii Tourism Authority (HTA) in operating,
managing, and marketing the convention center.  As such, in the
interest of efficiency and effectiveness, it is your Committee's
belief that these responsibilities be streamlined under the

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                                 Page 2

purview of a single agency.  However, such a transition of
responsibilities should be initiated and executed in a timely,
orderly, and responsible manner to allow CCA time to address
several ongoing priority issues and to enable HTA to adjust to
its new responsibilities.

     Based on revenue projections of the Council on Revenues' and
DBEDT's proposed restructuring of the existing debt of the
convention center, it is anticipated that revenues from the
Transient Accommodations Tax (TAT) and other interest will cover
the debt service reimbursement of the convention center, and
result in a projected revenue surplus up to fiscal year 2003.
These projections are the result of combining the Tourism and the
Convention Center Special Funds.  As such, any reimbursement for
the debt service of the convention center to the general fund
will allow the Tourism Special Fund to level the debt service
obligation to an amount that will preserve the intention of the
Legislature to adequately fund HTA in a manner that is consistent
with Act 156, Session Laws of Hawaii 1998.  Furthermore, the
transfer of the Convention Center Special Funds to the Tourism
Special Fund will also allow the timely use of a carryover
balance of approximately $17,000,000 at the front end of the
financial plan.  Presumably, the TAT projection revenues will
increase to a level that is sufficient to cover the reduced debt
service requirements and the net operations of the convention

     After careful consideration, your Committee has amended this
bill by, among other things:

     (1)  Extending the sunset date of the CCA to June 30, 2001;

     (2)  Deleting the provision that requires the Legislative
          Auditor to audit and monitor the progress of the CCA;

     (3)  Transferring all moneys in the Hawaii Convention Center
          Operations Special Fund and the Hawaii Convention
          Center Capital Special Fund to the Tourism Special Fund
          on July 1, 1999;

     (4)  Assigning the funding responsibility for the debt
          service and operating requirements of the convention
          center to HTA on July 1, 1999;

     (5)  Assigning the responsibility to market, operate,
          manage, and maintain the convention center from CCA to
          HTA on July 1, 2001;

     (6)  Changing the composition of HTA on July 1, 2001;

                                 STAND. COM. REP. NO. 1419
                                 Page 3

     (7)  Transferring the employees, equipment, records, and
          other personal property of CCA to HTA, and all
          equipment, records, and other personal property of CCA
          related to basic data and visitor research to DBEDT's
          Research and Economic Analysis Division, on July 1,

     (8)  Appropriating funds for fiscal biennium 1999-2001 from
          the Tourism Special Fund for the operations and
          expenses of the convention center on July 1, 1999; and

     (9)  Clarifying the purpose, intent, and findings of the

     As affirmed by the record of votes of the members of your
Committee on Tourism that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
816, S.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 816, S.D.
1, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Tourism,

                                   JERRY L. CHANG, Chair