STAND. COM. REP. NO. 2931

Honolulu, Hawaii

RE:    H.B. No. 2259

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committees on Tourism and International Affairs and Economic Development, Environment, and Technology, to which was referred H.B. No. 2259, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO ECONOMIC LEAKAGE,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Require the Department of Business, Economic Development, and Tourism to prepare a report that examines linkages between the State's tourism industry and other local industries of the State to reduce economic leakage and improve the State's economic input-output model; and

     (2)  Make an appropriation to the Department of Business, Economic Development, and Tourism to prepare the report.

     Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism.

     Your Committees find that economic leakage occurs when revenue generated by an industry is not retained in the State's economy but instead is lost to foreign economies.  Currently, the amount of the State's economic leakage in the tourism industry is unknown.  Certain foods, souvenirs, jewelry, and other products imported to Hawaii for the purpose of supporting the tourism industry are notable sources of economic leakage in the State.

     Your Committees further find that some economic leakage is unavoidable, as certain products cannot be sourced locally, and that not all economic leakage is detrimental to the State's economy, as leakage in one industry may prompt increased spending in other industries.  Information identifying linkages between the State's economic leakage in the tourism industry and local non-tourism industries can help policy makers develop strategies to strengthen and diversify the State's economy.

     Your Committees have amended this measure by changing the effective date to July 1, 2016.

     As affirmed by the records of votes of the members of your Committees on Tourism and International Affairs and Economic Development, Environment, and Technology that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2259, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2259, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Tourism and International Affairs and Economic Development, Environment, and Technology,

________________________________ GLENN WAKAI, Chair

________________________________ J. KALANI ENGLISH, Majority Leader