Report Title:

Tourism; HTA Board; Tourism Emergency

Description:

Makes technical amendment to tourism law regarding development of measures of effectiveness.  Removes ex-officio members from the Hawaii Tourism Authority (HTA) Board and places them in an advisory group to HTA.  Expands the scope of a tourism emergency to include a national or global economic crisis.  Transfers tourism-related functions from the Department of Business, Economic Development, and Tourism to HTA.  Earmarks an unspecified percentage of moneys allocated to the Tourism Special Fund from the Transient Accommodations Tax to be used for tourism product development and cultural programs.  (SB264 HD1)

THE SENATE	S.B. NO.	264
TWENTY-FIFTH LEGISLATURE, 2009		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TOURISM.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 201-3, Hawaii Revised Statutes, is amended to read as follows:

     "§201-3  Specific research and promotional functions of the department.  Without prejudice to its general functions and duties, the department of business, economic development, and tourism shall have specific functions in the following areas:

     (1)  Industrial development.  The department shall [determine]:

(A) Determine through technical and economic surveys the profit potential of new or expanded industrial undertakings; [develop]

(B) Develop through research projects and other means new and improved industrial products and processes; [promote]

(C) Promote studies and surveys to determine consumer preference as to design and quality and to determine the best methods of packaging, transporting, and marketing the [State's] state's industrial products; [disseminate]

(D) Disseminate information to assist the present industries of the [State,] state, to attract new industries to the [State,] state, and to encourage capital investment in present and new industries in the [State; assist] state;

(E) Assist associations of producers and distributors of industrial products to introduce these products to consumers; and [make]

(F) Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (2)  Land development.  The department shall [encourage]:

(A) Encourage the most productive use of all land in the [State] state in accordance with a general plan developed by the department; [encourage]

(B) Encourage the improvement of land tenure practices on leased private lands; [promote]

(C) Promote an informational program directed to landowners, producers of agricultural and industrial commodities, and the general public regarding the most efficient and most productive use of the lands in the [State; and make] state; and

(D) Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (3)  Credit development.  The department shall [conduct]:

(A) Conduct continuing study of agricultural and industrial credit needs; [encourage]

(B) Encourage the development of additional private and public credit sources for agricultural and industrial enterprises; [promote]

(C) Promote an informational program to acquaint financial institutions with agricultural and industrial credit needs and the potential for agricultural and industrial expansion, and inform producers of agricultural and industrial products as to the manner in which to qualify for loans; and [make]

(D) Make grants or contracts as may be necessary or advisable to accomplish the foregoing;

     (4)  Promotion.  The department shall disseminate information developed for or by the department pertaining to economic development to assist present industry in the [State,] state, attract new industry and investments to the [State,] state, and assist new and emerging industry with good growth potential or prospects in jobs, exports, and new products.  The industrial and economic promotional activities of the department may include the use of literature, advertising, demonstrations, displays, market testing, lectures, travel, motion picture and slide films, and other promotional and publicity devices as may be appropriate;

    [(5) Tourism research and statistics.  The department shall maintain a program of research and statistics for the purpose of:

(A) Measuring and analyzing tourism trends;

(B) Providing information and research to assist in the development and implementation of state tourism policy;

(C) Encouraging and arranging for the conduct of tourism research and information development through voluntary means or through contractual services with qualified agencies, firms, or persons; and

(D) Providing tourism information to policy makers, the public, and the visitor industry.  This includes:

(i) Collecting and publishing visitor-related data including visitor arrivals, visitor characteristics and expenditures;

(ii) Collecting and publishing hotel-related statistics including the number of units available, occupancy rates, and room rates;

(iii) Collecting and publishing airline-related data including seat capacity and number of flights;

(iv) Collecting information and conducting analyses of the economic, social, and physical impacts of tourism on the State;

(v) Conducting periodic studies of the impact of ongoing marketing programs of the Hawaii tourism authority on Hawaii's tourism industry, employment in Hawaii, state taxes, and the State's lesser known and underutilized destinations; and

(vi) Cooperate with the Hawaii tourism authority and provide it with the above information in a timely manner;] and

  [(6)] (5)  Self-sufficiency standard.  The department shall establish and update biennially a self-sufficiency standard that shall incorporate existing methods of calculation, and shall reflect, at a minimum, costs relating to housing, food, child care, transportation, health care, clothing and household expenses, federal and state tax obligations, family size, children's ages, geography, and the number of household wage earners.  The department shall report to the legislature concerning the self-sufficiency standard no later than twenty days prior to the convening of the regular session of 2009, and every odd-numbered year thereafter.  The recommendations shall address, among other things, the [utilization] use of any federal funding that may be available for the purposes of establishing and updating the self-sufficiency standard.

     The department shall be the central agency to coordinate film permit activities in the [State.] state."

     SECTION 2.  Section 201B-2, Hawaii Revised Statutes, is amended by amending subsections (b), (c), (d), and (e) to read as follows:

     "(b) The authority shall be headed by a policy-making board of directors [which consists] that shall consist of twelve [public, voting] members[, and four ex officio nonvoting members]; provided that:

     (1)  [Twelve public, voting] The members shall be appointed by the governor as provided in section 26-34, except as otherwise provided by law;

     (2)  The [twelve public, voting] members shall be composed of at least one representative each from the city and county of Honolulu and the counties of Hawaii, Kauai, and Maui; the remaining [public] members shall be appointed at-large;

     (3) [Of the twelve public, voting members, three] Three members shall be appointed by the governor from a list of three names submitted for each appointment by the president of the senate, and three shall be appointed by the governor from a list of three names submitted for each appointment by the speaker of the house of representatives; provided that if fewer than three names are submitted for each appointment, the governor may disregard the list;

     (4)  At least six [of the twelve public, voting] members shall have knowledge, experience, and expertise in the area of visitor industry management, marketing, promotion, transportation, retail, entertainment, or visitor attractions, and at least one shall have knowledge, experience, and expertise in the area of Hawaiian cultural practices; provided that no more than three members shall represent, be employed by, or be under contract to any sector of the industry represented on the board;

     (5)  The governor shall make appointments to ensure the fulfillment of all requirements; provided that any appointments made after July 1, 2002, shall be made to fulfill the requirements in place when the appointments are made;

    [(6) The director of business, economic development, and tourism, or a designated representative, shall be an ex officio nonvoting member;

(7) The director of transportation, or a designated representative, shall be an ex officio nonvoting member;

(8) The chairperson of the board of land and natural resources, or a designated representative, shall be an ex officio nonvoting member;

(9) The executive director of the state foundation on culture and the arts, or a designated representative, shall be an ex officio nonvoting member;] and

   [(10)] (6)  No person who has served as a member of the board of directors of the Hawaii Visitors and Convention Bureau shall be eligible to sit as a [public, voting] member of the board of directors of the Hawaii tourism authority until at least two years have expired between the person's termination from service on the Hawaii Visitors and Convention Bureau board and the person's appointment to the authority's board of directors.

     (c) [The public members] Members shall be appointed by the governor for terms of four years.  Each [public] member shall hold office until the member's successor is appointed and qualified.  Section 26-34 shall be applicable insofar as it relates to the number of terms and consecutive number of years a member may serve on the board.

     (d) The board shall elect a chairperson from among the [voting] members.  [The director of business, economic development, and tourism or the designated representative shall not be chairperson of the board.]

     (e) Seven [voting] members shall constitute a quorum and a minimum of seven affirmative votes shall be necessary for all actions by the authority.  The members shall serve without compensation, but shall be reimbursed for expenses, including traveling expenses, necessary for the performance of their duties."

     SECTION 3.  Section 201B-6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  In accordance with subsection (a), the authority shall [be responsible for developing] develop measures of effectiveness to assess the overall benefits and effectiveness of the marketing plan and include documentation of the directly attributable benefits of the plan to the following:

     (1)  Hawaii's tourism industry;

     (2)  Employment in Hawaii;

     (3)  State taxes; and

     (4)  The State's lesser known and [underutilized] underused destinations."

     SECTION 4.  Section 201B-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  The authority may enter into contracts and agreements that include the following:

     (1)  Tourism promotion, marketing, and development;

     (2)  Market development-related research;

     (3)  Product development and diversification issues focused on visitors;

     (4)  Promotion, development, and coordination of sports-related activities and events;

     (5)  Promotion of Hawaii, through a coordinated statewide effort, as a place to do business, including high technology business, and as a business destination;

     (6)  Reduction of barriers to travel;

[[](7)[]] Marketing, management, use, operation, or maintenance of the convention center facility, including the purchase or sale of goods or services, logo items, concessions, sponsorships, and license agreements, or any use of the convention center facility as a commercial enterprise; provided that effective January 1, 2003, and thereafter, the contract for management of the convention center facility shall include marketing for all uses of the facility; [and]

[[](8)[]] Tourism research and statistics to:

(A) Measure and analyze tourism trends;

(B) Provide information and research to assist in the development and implementation of state tourism policy;

(C) Provide tourism information on:

(i) Visitor arrivals, visitor characteristics, and expenditures;

(ii) The number of transient accommodation units available, occupancy rates, and room rates;

(iii) Airline-related data including seat capacity and number of flights;

(iv) The economic, social, and physical impacts of tourism on the state; and

(v) The impact of ongoing marketing programs of the authority on Hawaii's tourism industry, employment in Hawaii, state taxes, and the state's lesser known and underused destinations;

and

(9)  Any and all other activities necessary to carry out the intent of this chapter;

provided that for any contract or agreement valued at $25,000 and over, the authority shall provide notice to the speaker of the house of representatives and the president of the senate on the same day that such notification is given to the governor."

     SECTION 5.  Section 201B-9, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§201B-9[]]  Tourism emergency.  (a)  If the board determines that the occurrence of a world conflict, terrorist threat, national or global economic crisis, natural disaster, outbreak of disease, or other catastrophic event, regardless of when or where it occurs, adversely affects Hawaii's tourism industry by resulting in a substantial interruption in the commerce of the State and adversely affecting the welfare of its people, the board shall submit a request to the governor to declare that a tourism emergency exists.

     (b)  Upon declaration by the governor that a tourism emergency exists pursuant to subsection (a), the authority shall develop and implement measures to respond to the tourism emergency, including providing assistance to tourists during the emergency; provided that any tourism emergency response measure implemented pursuant to this subsection shall not include any provision that would adversely affect the organized labor force in tourism-related industries.  With respect to a national or global economic crisis only, in addition to the governor's declaration of the existence of a tourism emergency, no action in response to the tourism emergency declaration may be taken by the authority without the governor's express approval."

     SECTION 6.  Section 201B-13, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§201B-13[]]  Assistance by state and county agencies[.]; advisory group. (a)  Any state or county agency may render services upon request of the authority.

(b)  The authority shall establish an advisory group, which shall include the director of business, economic development, and tourism, director of transportation, chairperson of the board of land and natural resources, and executive director of the state foundation on culture and the arts to advise the authority on matters relating to their respective departments or agency in the preparation and execution of:

(1) Measures to respond to tourism emergencies pursuant to section 201B-9;

(2) Programs for the management, improvement, and protection of Hawaii's natural environment and other areas frequented by visitors;

(3) Measures to address issues affecting airlines, air routes, and barriers to travel to Hawaii; and

(4) Programs to perpetuate the cultures of Hawaii and engage local communities to sustain and preserve the native Hawaiian culture."

     SECTION 7.  Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Revenues collected under this chapter shall be distributed as follows, with the excess revenues to be deposited into the general fund:

     (1)  17.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8; provided that beginning January 1, 2002, if the amount of the revenue collected under this paragraph exceeds $33,000,000 in any calendar year, revenues collected in excess of $33,000,000 shall be deposited into the general fund;

     (2)  34.2 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that [beginning on July 1, 2002, of]:

(A) Not less than       per cent of the revenues deposited shall be used for tourism product development and cultural programs;

(B) Of the first $1,000,000 in revenues deposited:

         [(A)] (i)       Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

         [(B)] (ii) Ten per cent shall be deposited into the special land and development fund established in section 171-19 for the Hawaii statewide trail and access program;

              [provided that of the 34.2 per cent,]

(C)  0.5 per cent shall be transferred to a sub-account in the tourism special fund to provide funding for a safety and security budget, in accordance with the Hawaii tourism strategic plan 2005-2015; [provided further that of] and

(D) Of the revenues remaining in the tourism special fund after revenues have been deposited as provided in this paragraph and except for any sum authorized by the legislature for expenditure from revenues subject to this paragraph, [beginning July 1, 2007,] funds shall be deposited into the tourism emergency trust fund, established in section 201B-10, in a manner sufficient to maintain a fund balance of $5,000,000 in the tourism emergency trust fund;

         and

     (3)  44.8 per cent of the revenues collected under this chapter shall be transferred as follows:  Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22.8 per cent.

     All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection."

     SECTION 8.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 9.  This Act shall take effect upon its approval, except that section 7 shall take effect on July 1, 2009.