STAND. COM. REP. NO. 2812

Honolulu, Hawaii

RE:    S.B. No. 2987

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2987, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE TRANSIENT ACCOMMODATIONS TAX,"

begs leave to report as follows:

     The purpose and intent of this measure is to address the allocation of transient accommodations tax revenues.

     Specifically, this measure:

     (1)  Makes permanent the annual allocation of $103,000,000 of transient accommodations tax revenues to the counties; and

     (2)  Establishes a state-county functions working group on July 1, 2022.

     Your Committee received written comments in opposition to this measure from the Office of the Mayor of the County of Hawaii, Maui County Council, Hawaii State Association of Counties, a Maui County Councilmember, a Hawaii County Councilmember, and one individual.  Your Committee received comments on this measure from the Department of Budget and Finance, Office of the Mayor of the City and County of Honolulu, and Tax Foundation of Hawaii.

     Your Committee recognizes that Act 174, Session Laws of Hawaii 2014, temporarily increased the $93,000,000 cap on the distribution of transient accommodations tax revenues to the counties to $103,000,000 for fiscal years 2014–2015 and 2015–2016.      Given that the counties have often asked for stability in funding, rather than allow the cap to be reduced back down to $93,000,000, this measure makes the $103,000,000 cap permanent.  Your Committee also recognizes that the issue of state-county relations should be reviewed again in the future to determine if the transient accommodations tax revenue allocation should be changed.  Your Committee therefore believes that the formation of a working group in 2022, as required by this measure, is suitable for this purpose.

     Your Committee has amended this measure by changing the effective date to July 1, 2076, to facilitate further discussion.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2987, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2987, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

JILL N. TOKUDA, Chair