STAND. COM. REP. NO. 1102

Honolulu, Hawaii

, 2005

RE: S.B. No. 1729

S.D. 2

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Tourism & Culture, to which was referred S.B. No. 1729, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TOURISM,"

begs leave to report as follows:

The purpose of this bill is to improve the management of the Hawaii Tourism Authority (HTA) and to increase funding for tourism-related programs by:

(1) Adding the Executive Director of the Hawaii State Foundation on Culture and the Arts (HSFCA), as an ex officio nonvoting member, to the Board of Directors of HTA (Board);

(2) Authorizing HTA to develop and implement through its Executive Director a personnel system to provide for the appointment of officers, agents, and employees, subject to the approval of the Board, prescribing their duties and qualifications, and fixing their salaries; provided that:

(A) The Governor and executive agencies shall limit their oversight of HTA's hiring of personnel to those times when HTA receives general funds from the State; and

(B) There is no anticipated revenue shortfall in the Tourism Special Fund (TSF) and that funds have been appropriated by the Legislature and allotted as provided by law;

(3) Authorizing HTA to encourage collaboration between the visitor industry, law enforcement, community organizations, and businesses to develop and implement programs to improve visitor safety and security;

(4) Placing the TSF and Convention Center Enterprise Special Fund (CCESF) outside the state treasury;

(5) Allowing funds in the TSF and CCESF to be placed in interest-bearing accounts or otherwise invested by HTA until needed, subject to certain limitations;

(6) Authorizing HTA to establish a special account in the TSF for deposits of non-tax revenues received from public or public contracts;

(7) Increasing the allocation of transient accommodations tax (TAT) collections to the TSF to 35.4 percent and requiring that 0.5 percent of this allocation be used to provide funding for an Aloha Aina Patrol established in each county and a visitor assistance program established in each county;

(8) Changing the limit on funds deposited in the CCESF to an unspecified amount;

(9) Repealing the TAT Trust Fund;

(10) Distributing one percent of TAT collections as follows:

(A) Ninety percent to be deposited into the State Parks Special Fund; and

(B) Ten percent to be deposited into the Special Land and Development Fund for the Hawaii Statewide Trail and Access Program;

to be expended by the Department of Land and Natural Resources (DLNR) as designated by a plan approved by HTA; and

(11) Depositing 1.5 percent of TAT collections into the general fund.

HSFCA, Hawaii Hotel & Lodging Association, Waikiki Improvement Association, and Outrigger Hotels & Resort supported this bill. HTA supported this bill and suggested amendments. DLNR supported the intent of this measure. The Department of Budget and Finance opposed this bill. The Department of Business, Economic Development, and Tourism, Department of Taxation, and the Tax Foundation of Hawaii offered comments.

Your Committee has amended this bill by:

(1) Deleting the personnel system from the provision that authorizes HTA to appoint officers, agents, and employees through its Executive Director;

(2) Deleting the provision that allows HTA to encourage collaboration between the visitor industry, law enforcement, community organizations, and businesses to develop and implement programs to improve visitor safety and security;

(3) Deleting the provision authorizing HTA to establish a special account in the TSF for deposits of non-tax revenues received from public or private contracts;

(4) Inserting a limit of $35,000,000 for deposits of TAT collections in the CCESF;

(5) Inserting a severability clause;

(6) Changing the effective date of this bill to July 1, 2005; and

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

Your Committee notes that the Attorney General issued a statement expressing a concern that the provision that limits the Governor's oversight of HTA's hiring of personnel to those times when HTA receives general funds from the State conflicts with the State Constitution. Your Committee requests that this issue be addressed by subsequent Committees as this bill moves along the legislative process.

As affirmed by the record of votes of the members of your Committee on Tourism & Culture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1729, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1729, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Tourism & Culture,

 

____________________________

JERRY L. CHANG, Chair