STAND

STAND. COM. REP. NO. 459

Honolulu, Hawaii

, 2005

RE: S.B. No. 1729

S.D. 1

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

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

"A BILL FOR AN ACT RELATING TO TOURISM,"

begs leave to report as follows:

The purpose of this measure is to redistribute the transient accommodations tax to facilitate the Hawaii Tourism Authority with existing and expanded programs, and to clarify the administrative authority of the Hawaii Tourism Authority.

Testimony in support of this measure was submitted by the Hawaii Hotel and Lodging Association, the Hawaii State Foundation on Culture and the Arts, and the Hawaii Tourism Authority. Testimony in opposition to this measure was submitted by the Department of Business, Economic Development and Tourism, the Department of Budget and Finance, and the Tax Foundation of Hawaii. Comments were submitted by the Department of Taxation.

Your Committee finds that the State's investment in tourism is critical to ensure that Hawaii maintains a successful and sustainable tourism industry. It is imperative that the Authority be given additional resources to effectively and efficiently implement its programs, which will contribute to an increased focus in areas such as safety and security, workforce development, communications, and state parks and trails. Your Committee believes that redistributing the transient accommodations tax will aid the Hawaii Tourism Authority to fulfill its mission and strategic plan.

Your Committee has amended this measure by:

(1) Requiring that moneys that are placed in interest bearing accounts are in accordance with statutory securities and investment guidelines;

(2) Allocating transient accommodations tax revenues to be deposited into the state parks special fund, the special land and development fund, a sub-account in the tourism special fund for safety and security, and the general fund;

(3) Limiting the oversight of the Hawaii Tourism Authority's hiring of personnel by the Governor and executive agencies to times when the Authority receives general funds from the State;

(4) Changing the date from January 1, 2002 to January 1, 2006 as the time that excess deposits in the convention center enterprise special fund are deposited into the general fund;

(5) Repealing the transient accommodations tax trust fund; and

(6) Changing statutory cross references to the Hawaii statewide trail and access program and to the state parks special fund.

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

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

		____________________________ DONNA MERCADO KIM, Chair