STAND. COM. REP. NO.1226-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2350

S.D. 2

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 2350, S.D. 2, H.D. 1, entitled:

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

begs leave to report as follows:

The purpose of this bill is to improve the linkage between tourism and the state park system by earmarking a portion of Transient Accommodation Tax (TAT) revenues deposited into the Tourism Special Fund to supplement the state park system. Specifically, this bill:

(1) Caps the amount of TAT revenues deposited into the Tourism Special Fund at $61,000,000

(2) Requires the TAT revenues in excess of $61,000,000 that are distributed to the Tourism Special Fund in any fiscal year to be disbursed as follows:

(A) 90 percent into the State Parks Special Fund; and

(B) 10 percent into the Hawaii Statewide Trail and Access Program;

Up to a maximum amount of $2,000,000 per fiscal year;

(3) Requires the Hawaii Tourism Authority (HTA) to expend at least $1,000,000 from the Tourism Special Fund annually to support the management, improvement, and protection of Hawaii's environment and areas visited frequently by visitors; and

(4) Requires the Department of Land and Natural Resources (DLNR) to develop a master plan in coordination with HTA for the expenditure of the excess TAT revenues.

DLNR, a member of the Kauai County Council, Trust for Public Land, Maui Hotel Association, Hawaii Chapter of the Sierra Club, and Hawaii's Thousand Friends submitted testimony in support of this bill. The Department of Business, Economic Development, and Tourism, Department of Budget and Finance, Visitor Industry Coalition, and the Chamber of Commerce of Hawaii submitted testimony in support of the intent of this bill. HTA and the Kauai Chamber of Commerce submitted testimony in opposition to this bill. Tax Foundation of Hawaii submitted comments on this bill.

Your Committee has amended this bill by:

(1) Establishing the Transient Accommodations Tax Trust Fund (Trust Fund) to serve as a holding account to ensure that the Tourism Special Fund receives at least $64,292,000 annually;

(2) Requiring 5.3 percent of annual TAT revenues to be deposited into the Trust Fund;

(3) Specifying that any funds remaining in the Trust Fund at the end of the fiscal year, or when the Tourism Special Fund receives at least $64,292,000 in TAT revenues during a given fiscal year, shall be deposited in the general fund;

(4) Reducing the percentage of annual TAT revenues to be deposited into the Tourism Special Fund from 37.9 to 32.6 percent;

(5) Deleting the Requirement that HTA expend at least $1,000,000 from the Tourism Special Fund annually to support the management, improvement, and protection of Hawaii's environment and areas visited frequently by visitors;

(6) Removing the cap on TAT revenues that may be deposited into the Tourism Special Fund;

(7) Deleting the purpose section; and

(8) Making technical, nonsubstantive changes for purposes of style and clarity.

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

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

 

____________________________

DWIGHT Y. TAKAMINE, Chair