HOUSE OF REPRESENTATIVES

H.B. NO.

2010

TWENTY-NINTH LEGISLATURE, 2018

H.D. 1

STATE OF HAWAII

S.D. 2

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TOURISM.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

SECTION 1. Section 201B-8, Hawaii Revised Statutes, is amended to read as follows:

"201B-8 Convention center [enterprise] operations and maintenance special fund. (a) There is established the convention center [enterprise] operations and maintenance 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)] (1) 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; and

[(3)] (2) 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, including any transfers from the tourism special fund established under section 201B-11 for marketing the facility pursuant to section 201B-7(a)(7).]

provided that all moneys in excess of $6,000,000 at the close of June 30 of each year shall be deposited into the general fund.

(b) Moneys in the convention center [enterprise] operations and maintenance special fund shall be used by the authority for the payment of any and all of the following:

[(1) Debt owed to the department of budget and finance relating to the convention center; and

(2)] (1) 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 201B-7(a)(7)[.]; and

(2) Salaries for convention center personnel.

(c) Moneys in the convention center [enterprise] operations and maintenance special fund may be:

(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 authority until such time as the moneys may be needed; provided that the authority 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] operations and maintenance special fund."

SECTION 2. Section 201B-11, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Moneys in the tourism special fund shall be used by the authority for the purposes of this chapter[,]; provided that:

(1) [Not] No more than [3.5 per cent of this amount] $2,800,000 shall be used for administrative expenses[, including $15,000 for a protocol fund to be expended at the discretion of the president and chief executive officer]; [and]

(2) [At least $1,000,000 shall be made available to support efforts to manage, improve, and protect Hawaii's natural environment and areas frequented by visitors.] No more than $49,200,000 shall be used for marketing expenses;

(3) No more than $2,500,000 shall be used for research expenses;

(4) No more than $5,800,000 shall be used for sports marketing expenses; and

(5) Moneys shall be used for the operation of a Hawaiian center and the museum of Hawaiian music and dance at the Hawaii convention center pursuant to section 237D‑6.5(b);

provided further that nothing in this subsection shall be construed to affect the amount of transient accommodations tax revenue allocated to the fund pursuant to section 237D-6.5(b).

For the purposes of this subsection, "administrative expenses" means office equipment, salaries, and supplies."

SECTION 3. 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) $26,500,000 shall be allocated to the convention center enterprise special fund established under section 201B-8;

(3) $82,000,000] (2) $60,300,000 shall be allocated to the tourism special fund established under section 201B-11; provided that:

(A) Beginning on July 1, 2012, and ending on June 30, 2015, $2,000,000 shall be expended from the tourism special fund for development and implementation of initiatives to take advantage of expanded visa programs and increased travel opportunities for international visitors to Hawaii; and

(B) Of the [$82,000,000] $60,300,000 allocated[:

(i)], $1,000,000 shall be allocated for the operation of a Hawaiian center and the museum of Hawaiian music and dance at the Hawaii convention center; [and

(ii) 0.5 per cent of the $82,000,000 shall be transferred to a sub-account in the tourism special fund to provide funding for a safety and security budget, in accordance with the Hawaii tourism strategic plan 2005-2015; and

(C) Of the revenues remaining in the tourism special fund after revenues have been deposited as provided in this paragraph and except for any sum authorized by the legislature for expenditure from revenues subject to this paragraph, beginning July 1, 2007, funds shall be deposited into the tourism emergency special fund, established in section 201B-10, in a manner sufficient to maintain a fund balance of $5,000,000 in the tourism emergency special fund;

(4)] (3) $103,000,000 shall be allocated as follows: Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22.8 per cent; provided that commencing with fiscal year 2018-2019, a sum that represents the difference between a county public employer's annual required contribution for the separate trust fund established under section 87A-42 and the amount of the county public employer's contributions into that trust fund shall be retained by the state director of finance and deposited to the credit of the county public employer's annual required contribution into that trust fund in each fiscal year, as provided in section 87A-42, if the respective county fails to remit the total amount of the county's required annual contributions, as required under section 87A-43; [and

(5)] (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

(C) Operation and maintenance costs of public lands, including beaches, connected with enhancing the visitor experience[.];

(5) $16,500,000 shall be allocated to the department of business, economic development, and tourism; provided that the funds allocated shall be expended for other economic development initiatives and programs;

(6) $3,500,000 shall be allocated to the department of education; provided that the department of education shall administer a grant program to allow public schools to apply for funding for kindergarten through twelfth grade education-related economic development initiatives and programs related to hospitality and tourism industry careers and related post-secondary education programs for career technical education, adult education, and early college programs for the hospitality and tourism industry career pathways; provided further that the department of education shall submit an annual report of its expenditures pursuant to this paragraph to the legislature no later than twenty days prior to the convening of each regular session of the legislature;

(7) $7,891,000 shall be allocated to the University of Hawaii system; provided that of the funds allocated:

(A) $4,999,070 shall be allocated to University of Hawaii community colleges statewide for academic programs relating to a hospitality and tourism industry career pathway; and

(B) $2,891,930 shall be allocated to four-year University of Hawaii campuses for academic programs relating to a hospitality and tourism industry career pathway;

(8) $3,000,000 shall be allocated to University of Hawaii athletics; provided that the funds allocated shall be expended for student athlete travel;

(9) $9,608,554 shall be allocated to the department of land and natural resources; provided that the funds allocated shall be expended to address the impact of tourism on the natural resources of the State and support efforts to manage, improve, and protect Hawaii's natural environment and areas frequented by visitors to the State. Funds shall be allocated as follows:

(A) $2,908,554 shall be allocated to the division of state parks and expended for contracts for county lifeguards at the following state parks:

(i) Makena state park, county of Maui;

(ii) Haena state park, county of Kauai;

(iii) Hapuna beach state recreation area, county of Hawaii; and

(iv) Kaena point state park, city and county of Honolulu;

(B) $1,400,000 shall be allocated to the division of state parks for park management, including management of comfort stations, maintenance of park grounds and trails, and expenditures relating to refuse collection and disposal, utilities, parking congestion, and personnel;

(C) $1,500,000 shall be allocated to the division of conservation and resources enforcement to be allocated and expended for:

(i) Increased maintenance, monitoring, patrolling, and enforcement at state small boat harbors and state parks;

(ii) The engagement of members of the public, especially visitors to the State, who use state small boat harbors and state parks, to provide education on administrative rule requirements in an effort to reduce violations and prevent repeated violations;

(iii) Dedicated staff to concentrate efforts and conduct regular patrols at state small boat harbors and state parks; and

(iv) Regular maintenance of equipment, tools, and supplies to ensure officers are prepared to patrol in any environment;

(D) $1,200,000 shall be allocated to the division of aquatic resources; provided that the funds allocated shall be expended for:

(i) The development of public service announcements and other materials regarding the impact of public and commercial uses of aquatic resources on coral reefs and other marine life, and regarding good practices by visitors and residents to protect corals, monk seals, whales, dolphins, turtles, and other marine life; and

(ii) Monitoring marine resources in marine life conservation districts, including but not limited to Kealakekua bay in the county of Hawaii, Molokini shoal and Honolua bay in the county of Maui, Hanauma bay and Waikiki in the city and county of Honolulu, and other protected areas, such as Haena in the county of Kauai, to inform appropriate management and ensure the sustainability of these marine resources;

(E) $1,200,000 shall be allocated to the division of forestry and wildlife for:

(i) Increased maintenance, personnel, and site improvement costs, especially for high-use areas, of state trail and road features;

(ii) Increased staff site visits to address various issues associated with trail management, including issues with trailhead parking within small communities;

(iii) Conducting regularly scheduled maintenance for state trails;

(iv) Locating and developing off-highway-vehicle sites statewide that meet the needs of all off-highway-vehicle users;

(v) Increasing enforcement efforts to combat vandalism;

(vi) Installing and maintaining signs and other infrastructure; and

(vii) Improving the Na Ala Hele program by protecting and expanding legal access to trails and public rights-of-way; and

(F) $1,400,000 shall be allocated to the division of boating and ocean recreation and expended for:

(i) Cleaning up of marine debris and abandoned and grounded vessels;

(ii) Operating the day use mooring buoy program;

(iii) Addressing marine debris and abandoned and grounded vessels impacting public health and safety on beaches, shorelines, and in nearshore waters;

(iv) Engaging the public, especially ocean users, through education and safety campaigns regarding marine debris and the day use mooring buoy program;

(v) Partnering with federal agencies to address the effects of marine debris;

(vi) Sponsoring scientific surveys of shoreline marine debris density; and

(vii) Installing and maintaining buoys in the day use mooring buoy program to reduce damage to the marine environment, potential marine debris, and prevalence of grounded vessels;

(10) $8,000,000 shall be allocated as follows:

(A) $2,000,000 to the county of Hawaii;

(B) $2,000,000 to the county of Kauai;

(C) $2,000,000 to the county of Maui; and

(D) $2,000,000 to the city and county of Honolulu;

provided that the funds allocated shall be expended to ensure the safety of users of county parks and beaches; and

(11) $8,000,000 shall be expended on grants, pursuant to chapter 42F, to include but not be limited to Hawaiian cultural initiatives, product development, community programs, and tourism-related grants, as determined by the legislature.

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.

As used in this subsection, "fiscal year" means the twelve-month period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year."

PART II

SECTION 4. 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) State educational facilities improvement special fund;

(5) Convention center [enterprise] operations and maintenance special fund under section 201B-8;

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

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

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

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

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

(11) Tourism special fund established under section 201B‑11;

(12) Universal service fund established under section 269‑42;

(13) Emergency and budget reserve fund under section 328L‑3;

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

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

[[](16)[]] Neurotrauma special fund under section 321H-4;

[[](17)[]] Glass advance disposal fee established by section 342G-82;

[[](18)[]] Center for nursing special fund under section 304A‑2163;

[[](19)[]] Passenger facility charge special fund established by section 261-5.5;

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

[[](21)[]] Land conservation fund established by section 173A-5;

[[](22)[]] Court interpreting services revolving fund under section 607-1.5;

[[](23)[]] Trauma system special fund under section 321-22.5;

[[](24)[]] Hawaii cancer research special fund;

[[](25)[]] Community health centers special fund;

[[](26)[]] Emergency medical services special fund;

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

[[](28)[]] Shared services technology special fund under section 27-43;

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

[[](30)[]] Deposit beverage container deposit special fund under section 342G-104;

[[](31)[]] Hospital sustainability program special fund under [[]section 346G-4[]];

[[](32)[]] Nursing facility sustainability program special fund under [[]section 346F-4[]];

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

[[](34)[]] After-school plus program revolving fund under section 302A-1149.5; and

[[](35)[]] Civil monetary penalty special fund under section 321-30.2,

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 5. 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) State educational facilities improvement special fund;

(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) Convention center [enterprise] operations and maintenance special fund established under section 201B-8;

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

(11) Tourism special fund established under section 201B‑11;

(12) Universal service fund established under section 269‑42;

(13) Emergency and budget reserve fund under section 328L‑3;

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

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

[[](16)[]] Neurotrauma special fund under section 321H-4;

[[](17)[]] Center for nursing special fund under section 304A‑2163;

[[](18)[]] Passenger facility charge special fund established by section 261-5.5;

[[](19)[]] Court interpreting services revolving fund under section 607-1.5;

[[](20)[]] Trauma system special fund under section 321-22.5;

[[](21)[]] Hawaii cancer research special fund;

[[](22)[]] Community health centers special fund;

[[](23)[]] Emergency medical services special fund;

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

[[](25)[]] Shared services technology special fund under section 27-43;

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

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

[[](28)[]] Hospital sustainability program special fund under [[]section 346G-4[]]; and

[[](29)[]] Civil monetary penalty special fund under section 321-30.2,

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 6. Section 87A-42, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) In any fiscal year subsequent to the 2017-2018 fiscal year in which a county public employer's contributions into the fund are less than the amount of the annual required contribution, the amount that represents the excess of the annual required contribution over the county public employer's contributions shall be deposited into the fund from a portion of all transient accommodations tax revenues collected by the department of taxation under section [237D-6.5(b)(4).] 237D‑6.5(b)(3). The director of finance shall deduct the amount necessary to meet the county public employer's annual required contribution from the revenues derived under section [237D‑6.5(b)(4)] 237D-6.5(b)(3) and transfer the amount to the board for deposit into the appropriate account of the separate trust fund."

SECTION 7. Section 171-19, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is created in the department a special fund to be designated as the "special land and development fund". Subject to the Hawaiian Homes Commission Act of 1920, as amended, and section 5(f) of the Admission Act of 1959, all proceeds of sale of public lands, including interest on deferred payments; all moneys collected under section 171-58 for mineral and water rights; all rents from leases, licenses, and permits derived from public lands; all moneys collected from lessees of public lands within industrial parks; all fees, fines, and other administrative charges collected under this chapter and chapter 183C; a portion of the highway fuel tax collected under chapter 243; all moneys collected by the department for the commercial use of public trails and trail accesses under the jurisdiction of the department; transient accommodations tax revenues collected pursuant to section [237D-6.5(b)(5);] 237D-6.5(b)(4); and private contributions for the management, maintenance, and development of trails and accesses shall be set apart in the fund and shall be used only as authorized by the legislature for the following purposes:

(1) To reimburse the general fund of the State for advances made that are required to be reimbursed from the proceeds derived from sales, leases, licenses, or permits of public lands;

(2) For the planning, development, management, operations, or maintenance of all lands and improvements under the control and management of the board pursuant to title 12, including but not limited to permanent or temporary staff positions who may be appointed without regard to chapter 76; provided that transient accommodations tax revenues allocated to the fund shall be expended as provided in section [237D‑6.5(b)(5);] 237D-6.5(b)(4);

(3) To repurchase any land, including improvements, in the exercise by the board of any right of repurchase specifically reserved in any patent, deed, lease, or other documents or as provided by law;

(4) For the payment of all appraisal fees; provided that all fees reimbursed to the board shall be deposited in the fund;

(5) For the payment of publication notices as required under this chapter; provided that all or a portion of the expenditures may be charged to the purchaser or lessee of public lands or any interest therein under rules adopted by the board;

(6) For the management, maintenance, and development of trails and trail accesses under the jurisdiction of the department;

(7) For the payment to private land developers who have contracted with the board for development of public lands under section 171-60;

(8) For the payment of debt service on revenue bonds issued by the department, and the establishment of debt service and other reserves deemed necessary by the board;

(9) To reimburse the general fund for debt service on general obligation bonds issued to finance departmental projects, where the bonds are designated to be reimbursed from the special land and development fund;

(10) For the protection, planning, management, and regulation of water resources under chapter 174C; and

(11) For other purposes of this chapter."

SECTION 8. Section 201B-2, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) The board shall appoint one person to serve as president and chief executive officer, exempt from chapters 76 and 88 who shall oversee the authority staff; provided that the compensation package, including salary, shall not exceed fifteen per cent of the [3.5 per cent] $2,800,000 authorized for administrative expenses under section 201B-11(c); [and] provided further that the compensation package shall not include private sector moneys or other contributions. The board shall set the president and chief executive officer's duties, responsibilities, holidays, vacations, leaves, hours of work, and working conditions. It may grant other benefits as it deems necessary."

SECTION 9. Section 201B-10, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established outside the state treasury a tourism emergency special fund to be administered by the board, into which shall be deposited the revenues prescribed by [section 237D‑6.5(b).]           . All investment earnings from moneys in the special fund shall be credited to the tourism special fund established pursuant to section 201B-11."

PART III

SECTION 10. The department of budget and finance shall cancel the reimbursable general obligation bond debt relating to the convention center owed by the Hawaii tourism authority to the department of budget and finance in the principal amount of $176,805,289 or so much thereof as may be owed, together with any accrued and unpaid interest.

PART IV

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on July 1, 2018.


 


 

Report Title:

Hawaii Tourism Authority; Convention Center Operations and Maintenance Special Fund; TAT; Debt

 

Description:

Renames the convention center enterprise special fund as the convention center operations and maintenance special fund, repeals the allocation of transient accommodations tax revenues to that fund, amends the allowable uses of that fund, and adds a cap to the amount of moneys deposited into the fund. Defines administrative expenses as used in section 201B-11(c), HRS, as office equipment, salaries, and supplies. Caps the amount of money from the tourism special fund that can be used for research and sports marketing expenses. Redistributes transient accommodations tax revenue from the Hawaii Tourism Authority to different state agencies and the counties for certain purposes. Requires the Department of Budget and Finance to cancel the reimbursable general obligation bond debt relating to the Convention Center that is owed by the Hawaii Tourism Authority. (SD2)

 

 

 

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