Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Tourism and Intergovernmental Affairs, to which was referred S.B. No. 2875 entitled:

begs leave to report as follows:

The purpose of this measure is to set parameters for awarding tourism product enrichment and diversification grants to the counties based on the same percentage of revenue the counties receive from the transient accommodations tax.

Testimony in support of this measure was received from the County of Hawaii Department of Research and Development, five members of the Maui County Council, The Visitor Industry Coalition, Hawai`i Hotel Association, and Maui Hotel Association. The Hawaii Tourism Authority (HTA) testified in opposition.

Your Committee finds that the HTA was created to serve a policy-making and broad marketing role to allow Hawaii to compete in the global tourism arena. Allowing the counties to manage their own contracts and make decisions about what is most appropriate for their specific tourism attractions would be a much more efficient use of the State's tourism moneys.

Your Committee has heard a number of suggestions to increase flexibility in the county grants program while maintaining accountability. Your Committee has amended this measure to:

As affirmed by the record of votes of the members of your Committee on Tourism and Intergovernmental Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2875, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2875, S.D. 1, and be referred to the Committee on Ways and Means.