STAND

STAND. COM. REP. NO. 730-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2061

H.D. 2

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2061, 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:

(1) Repeal the Transient Accommodations Tax (TAT) Trust Fund into which TAT revenues are paid;

(2) Remove the $31,000,000 limit on deposits into the Convention Center Enterprise Special Fund;

(3) Raise the percentage of TAT revenues deposited into the Tourism Special Fund (TSF) from 32.6 to 36.7 percent;

(4) Remove the $62,292,000 threshold at which TAT funds are diverted from the TSF into the State Parks Special Fund (SPSF) and the Special Land and Development Fund (SLDF) for the Statewide Trail and Access Program (Program);

(5) Require $1,000,000 from the TSF be deposited into the SPSF and the SLDF for the Program; and

(6) Provide that 1.2 percent of TAT revenues be deposited into the General Fund.

The Hawaii Business Roundtable, Waikiki Improvement Association, Hawaii Hotel & Lodging Association, and Hawaii Tourism Authority submitted testimony in support of this measure. The Department of Business, Economic Development, and Tourism, Department of Taxation, and Department of Budget and Finance opposed this measure. The Tax Foundation of Hawaii offered comments.

Your Committee has amended this bill by:

(1) Removing the proposed percentage amounts to facilitate further discussion;

(2) Changing the effective date to July 1, 2010, also to facilitate further discussion; and

(3) Making technical, nonsubstantive amendments for clarity, consistency, and style.

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 H.B. No. 2061, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2061, H.D. 2.

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

		____________________________ DWIGHT Y. TAKAMINE, Chair