STAND. COM. REP. NO.835-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2350

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Tourism and Culture, to which was referred S.B. No. 2350, S.D. 2, entitled:

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

begs leave to report as follows:

The purpose of this bill is to promote the linkage between tourism and Hawaii's natural environment by distributing a portion of the revenues from the transient accommodation tax (TAT) to fund programs that support state parks and other activities that maintain Hawaii's natural environment.

Specifically, this bill:

(1) Caps the share of the TAT deposited in the Tourism Special Fund at $50,000,000 annually;

(2) Requires the Hawaii Tourism Authority (HTA) to expend, from the $50,000,000, at least $1,000,000 annually on activities that support efforts to manage, improve, and protect Hawaii's natural environment and areas frequented by visitors;

(3) Allocates 90 percent of any TAT revenue designated for the Tourism Special Fund in excess of $50,000,000 annually to the State Parks Special Fund and allocates ten percent of any TAT revenue designated for the Tourism Special Fund in excess of $50,000,000 annually to the Hawaii Statewide Trail and Access Program, up to a total of $2,000,000 annually;

(4) Requires the Department of Land and Natural Resources (DLNR) to develop a master plan in coordination with the HTA, for the expenditure of any excess TAT revenues as provided for in (3); and

(5) Allocates any TAT revenue designated for the Tourism Special Fund in excess of $52,000,000 annually to be deposited in the general fund;

In addition, this bill clarifies that:

(1) Not more than three percent of the moneys in the Tourism Special Fund shall be used for administrative expenses, including $15,000 for a protocol fund, and for the salaries and expenses of the Office of Tourism; and

(2) Not more than ten percent of any moneys awarded under contract or agreement shall be used for administrative expenses, including all salaries and wages of the contractor or the contractor's employees.

DLNR, Hawaii Chapter of the Sierra Club, Hawaii's Thousand Friends, and Trust for Public Land supported this bill. The Department of Business, Economic Development, and Tourism, HTA, Hawaii Hotel Association, Hawaii Business Roundtable, Maui Hotel Association, Hawaii Activities and Tours Association, The Chamber of Commerce of Hawaii, Visitor Industry Coalition, Paradise Cruise, Ltd., and the Waikiki Improvement Association opposed this bill. The Tax Foundation of Hawaii offered comments.

Your Committee recognizes the cultural and economic benefits of supporting our state parks and other natural resources. However, your Committee must also ensure that funds for the marketing and promotion of the tourism industry, which drives Hawaii's economy, are readily available, especially in light of the recent economic slowdown.

Accordingly, your Committee has amended this measure by:

(1) Raising the cap of the share of TAT revenues deposited in the Tourism Special Fund to $61,000,000 annually;

(2) Deleting the provision allocating TAT revenues designated for the Tourism Special Fund in excess of $52,000,000 annually, to the general fund;

(3) Deleting the provision establishing that not more than ten percent of any moneys awarded under any contract or agreement shall be used for administrative expenses, including all salaries and wages of the contractor or contractor's employees;

(4) Clarifying that the provisions relating to the allocations of excess TAT revenues designated for the Tourism Special Fund shall begin on July 1, 2002, and shall apply to any fiscal year; and

(5) Making technical, nonsubstantive amendments for purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Tourism and Culture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2350, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2350, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

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

 

____________________________

JERRY CHANG, Chair