STAND. COM. REP. NO. 475

 

Honolulu, Hawaii

 

RE: S.B. No. 1290

S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

Your Committees on Economic Development, Tourism, and Technology and Public Safety, Intergovernmental, and Military Affairs, to which was referred S.B. No. 1290 entitled:

 

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

 

beg leave to report as follows:

 

The purpose and intent of this measure is to:

 

(1) Provide a fair, consistent, and predictable priority allocation of transient accommodations tax revenues to the tourism special fund;

 

(2) Maintain the allocation of transient accommodations tax revenues to existing obligations at present levels;

 

(3) Provide a fair, consistent, and predictable allocation of the balance of the transient accommodations tax revenues between the State and the counties; and

 

(4) Provide flexibility to the tourism special fund, State, and counties in the utilization of their respective allocations.

 

Your Committees received testimony in support of this measure from the Office of the Managing Director, City and County of Honolulu; County of Hawaii; Hawaii County Council; County Council, County of Maui; Hawaii State Association of Counties; and four individuals. Your Committees received testimony in opposition to this measure from the Hawaii Tourism Authority. Your Committees received comments on this measure from the Department of Budget and Finance and Tax Foundation of Hawaii.

 

Your Committees find that the transient accommodations tax has evolved, and its structure and frequent amendment, combined with the cyclical nature of the visitor industry and the tax revenues it generates, has resulted in ongoing discussion among various stakeholders as to simplifying and clarifying the tax. Your Committees find that the application of the transient accommodations tax and the allocation of its revenues should be clear, consistent, and predictable over time. Your Committees further find that the transient accommodations tax is a vital revenue source for the counties and that allocating forty-five percent of the remaining revenues to the counties will create a fair, consistent, and predictable allocation between the State and counties.

 

Your Committees have amended this measure by:

 

(1) Removing language that would have adjusted the Hawaii Tourism Authority budget based on inflation;

 

(2) Removing the $500,000 allocation for structural improvements to parks and public facilities to be determined with community input;

 

(3) Increasing the allocation for the operation of a Hawaiian center and the museum of Hawaiian music and dance at the Hawaii convention center to $1,000,000; and

 

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

As affirmed by the records of votes of the members of your Committees on Economic Development, Tourism, and Technology and Public Safety, Intergovernmental, and Military Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1290, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1290, S.D. 1, and be referred to your Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Economic Development, Tourism, and Technology and Public Safety, Intergovernmental, and Military Affairs,

 

________________________________

CLARENCE K. NISHIHARA, Chair

 

________________________________

GLENN WAKAI, Chair