SB1065 SD1

PART I

SECTION 1. The legislature finds that prior to the coronavirus pandemic, the effects of tourism on Hawaii's economy, environment, and way of life for residents was undergoing reflection and change. However, the impact of the pandemic on the State and residents provided a greater opportunity to rethink and transform Hawaii's tourism industry for a post-pandemic world in a manner beneficial for Hawaii and its future.

In July 2021, the Hawaii tourism authority announced its intent to become a more effective destination management organization. The legislature notes that destination management has become a major focus of the Hawaii tourism authority and is at the heart of its 2020-2025 Strategic Plan Update. The legislature further notes that the Hawaii tourism authority reorganized its structure and operations to support the goal of Mālama Ku‘u Home (caring for my beloved home) through the principles of regenerative tourism. Tourism marketing and tourism management are fundamental responsibilities of the Hawaii tourism authority and are critical to sustainable tourism.

The legislature further finds that according to the Hawaii state planning act, planning for the State's economy regarding the visitor industry shall be directed toward the achievement of a visitor industry that constitutes a major component of steady growth for Hawaii's economy. To achieve the visitor industry objective, state policy requires, among other things, the following:

(1) Ensuring that visitor industry activities are in keeping with the social, economic, and physical needs and aspirations of Hawaii's people; and

(2) Encouraging cooperation and coordination between the government and private sectors in developing and maintaining well-designed, adequately serviced visitor industry and related developments that are sensitive to neighboring communities and activities.

Tourism growth, development, and management in the State must be aligned with the objectives and policies of the Hawaii State Planning Act.

The legislature believes that each county should have greater control of its own visitor industry. Currently, the legislature appropriates moneys to the Hawaii tourism authority, which then contracts with various businesses or awards grants to promote the State as a visitor destination.

The legislature also believes that those moneys should instead be expended by the counties so that each county may develop a visitor marketing approach that is more appropriate to the county than a singular approach by the Hawaii tourism authority that applies statewide.

Accordingly, the purpose of this Act is to:

(1) Ensure that the scope and responsibilities of the Hawaii tourism authority encompass best practice destination management and regenerative tourism;

(2) Require the Hawaii tourism authority to develop a tourism management plan that includes tourism marketing, best practice destination management, and regenerative tourism; and

(3) Allocate moneys to the respective county economic development offices for visitor marketing contracts and nonprofits that benefit the county.

PART II

SECTION 2. Section 201B-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Best practice destination management" means a holistic process that ensures that tourism adds value to the economy, social fabric, and ecology of communities.

"Regenerative tourism" means tourism that focuses on reducing harm associated with tourism and restoring the harm that tourism has already done to the natural environment through collective holistic efforts to:

(1) Make net positive contributions;

(2) Create conditions that allow life to flourish; and

(3) Improve destinations for current and future generations for the well-being of the environment, residents, host communities, and visitors."

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

"(a) Except as otherwise limited by this chapter, the authority may:

(1) Sue and be sued;

(2) Have a seal and alter the same at its pleasure;

(3) Through its president and chief executive officer, make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter; provided that the authority may enter into contracts and agreements for a period of up to five years, subject to the availability of funds; [~~and~~] provided further that the authority may enter into agreements for the use of the convention center facility for a period of up to ten years;

(4) Make and alter bylaws for its organization and internal management;

(5) Unless otherwise provided in this chapter, adopt rules in accordance with chapter 91 with respect to its projects, operations, properties, and facilities;

(6) Through its president and chief executive officer, represent the authority in communications with the governor and the legislature;

(7) Through its president and chief executive officer, provide for the appointment of officers, agents, a sports coordinator, and employees, subject to the approval of the board, prescribing their duties and qualifications, and fixing their salaries, without regard to chapters 76 and 78, if funds have been appropriated by the legislature and allotted as provided by law;

(8) Through its president and chief executive officer, purchase supplies, equipment, or furniture;

(9) Through its president and chief executive officer, allocate the space or spaces that are to be occupied by the authority and appropriate staff;

(10) Through its president and chief executive officer, engage the services of qualified persons to implement the State's tourism [~~marketing~~] management plan or portions thereof as determined by the authority;

(11) Through its president and chief executive officer, engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(12) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;

(13) Contract for or accept revenues, compensation, proceeds, and gifts or grants in any form from any public agency or any other source;

(14) Develop, coordinate, and implement state policies and directions for tourism and related activities taking into account the economic, social, and physical impacts of tourism on the State, Hawaii's natural environment, ~~[and~~] areas frequented by visitors[;], best practice destination management, and regenerative tourism;

(15) Have a permanent, strong focus on Hawaii brand management;

(16) Coordinate all agencies and advise the private sector in the development of tourism-related activities and resources;

(17) Work to eliminate or reduce barriers to travel to provide a positive and competitive business environment, including coordinating with the department of transportation on issues affecting airlines and air route development;

(18) Market and promote sports-related activities and events;

(19) Coordinate the development of new products with the counties and other persons in the public sector and private sector, including the development of sports, culture, health and wellness, education, technology, agriculture, and nature tourism;

(20) Establish a public information and educational program to inform the public of tourism and tourism-related problems;

(21) Encourage the development of tourism educational, training, and career counseling programs;

(22) Establish a program to monitor, investigate, and respond to complaints about problems resulting directly or indirectly from the tourism industry and taking appropriate action as necessary;

(23) Develop and implement emergency measures to respond to any adverse effects on the tourism industry, pursuant to section 201B-9;

(24) Set and collect rents, fees, charges, or other payments for the lease, use, occupancy, or disposition of the convention center facility without regard to chapter 91;

(25) Notwithstanding chapter 171, acquire, lease as lessee or lessor, own, rent, hold, and dispose of the convention center facility in the exercise of its powers and the performance of its duties under this chapter; and

(26) Acquire by purchase, lease, or otherwise, and develop, construct, operate, own, manage, repair, reconstruct, enlarge, or otherwise effectuate, either directly or through developers, a convention center facility."

SECTION 4 Section 201B-6, Hawaii Revised Statutes, is amended to read as follows:

"§201B-6 Tourism [~~marketing~~] management plan; measures of effectiveness. (a) The authority shall be responsible for developing a tourism [~~marketing~~] management plan[.] that includes tourism marketing, best practice destination management, and regenerative tourism. The plan shall be a single, comprehensive document that shall be updated every year and include the following:

(1) Statewide Hawaii brand management efforts and programs;

(2) Targeted markets;

(3) Efforts to enter into Hawaii brand management projects that make effective use of cooperative programs;

(4) Program performance goals and targets that can be monitored as market gauges and used as attributes to evaluate the authority's programs; and

(5) The authority's guidance and direction for the development and coordination of promotional and marketing programs that build and promote the Hawaii brand, which are implemented through county contracts and agreements with destination marketing organizations or other qualified organizations, including:

(A) Target markets and the results being sought;

(B) Key performance indicators; and

As used in this [~~section,~~] subsection, "Hawaii brand" means the programs that collectively differentiate the Hawaii experience from other destinations.

(b) In accordance with subsection (a), the authority shall develop measures of effectiveness to assess the overall benefits and effectiveness of the [~~marketing~~] tourism management plan and include documentation of the progress of the [~~marketing~~] tourism management plan [~~towards~~] toward achieving the authority's strategic plan goals."

SECTION 5. Section 201B-7, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

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

(1) Tourism promotion, [~~marketing, and~~] development[;], and management;

(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, 2020, and thereafter, contracts issued pursuant to this paragraph for the marketing of all uses of the convention center facility may be issued separately from the management, use, operation, or maintenance of the facility;

(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; and

(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 effects of the [~~marketing programs~~] tourism management plan of the authority on the measures of effectiveness developed pursuant to section 201B-6(b); and

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

provided that the authority shall periodically submit a report of the contracts and agreements entered into by the authority to the governor, the speaker of the house of representatives, and the president of the senate.

(b) The authority shall be responsible for:

(1) Creating a vision and developing a long-range strategic plan for tourism in Hawaii;

(2) Promoting[~~, marketing,~~] and developing the tourism industry in the State; provided that the authority's efforts include best practice destination management and regenerative tourism;

(3) Arranging for the conduct of research through contractual services with the University of Hawaii or any agency or other qualified persons concerning social, economic, and environmental aspects of tourism development in the State;

(4) Providing technical or other assistance to agencies and private industry upon request;

(5) Perpetuating the uniqueness of the native Hawaiian culture and community, and their importance to the quality of the visitor experience, by ensuring that:

(A) The Hawaiian culture is accurately portrayed by Hawaii's visitor industry;

(B) Hawaiian language is supported and normalized as both an official language of the State as well as the foundation of the host culture that draws visitors to Hawaii;

(C) Hawaiian cultural practitioners and cultural sites that give value to Hawaii's heritage are supported, nurtured, and engaged in sustaining the visitor industry; and

(D) A native Hawaiian cultural education and training program is provided for the visitor industry workforce having direct contact with visitors; and

(6) Reviewing annually the expenditure of public funds by any visitor industry organization that contracts with the authority to perform tourism promotion, [~~marketing,~~] management, and development and making recommendations necessary to ensure the effective use of the funds for the management and development of tourism."

SECTION 6. Section 201B-13, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The authority may establish an advisory group that may meet monthly or as the authority deems necessary[,] and which may 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 suggested:

(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[.]; and

(5) Programs that include tourism marketing, best practice destination management, and regenerative tourism as part of an overall tourism management plan."

SECTION 7. Section 201B-16, Hawaii Revised Statutes, is amended to read as follows:

"§201B-16 Annual report. The authority shall submit a complete and detailed report of its activities, expenditures, and results, including the progress of the tourism [~~marketing~~] management plan, developed pursuant to section 201B-6, toward achieving the authority's strategic plan goals, to the governor and the legislature at least twenty days prior to the convening of each regular session of the legislature. The annual report shall include the descriptions and evaluations of programs funded, together with any recommendations the authority may make."

PART III

SECTION 8. Chapter 201B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201B- County share of tourism marketing funds. (a) Moneys appropriated to the authority by the legislature for the marketing of Hawaii as a tourism destination shall be allocated as follows:

(1) Three per cent shall be retained by the authority to cover administrative costs incurred in administering funds allocated pursuant to this section; and

(2) Ninety-seven per cent shall be allocated by the authority to the respective county economic development offices; provided that for each fiscal year, the amount allocated to each county economic development office pursuant to this paragraph shall be commensurate with the percentage of visitor arrivals attributable to that county during the previous fiscal year.

(b) Any moneys allocated to a county economic development office pursuant to this section shall be expended to promote the county as a visitor destination or awarded to nonprofit organizations that benefit the county; provided that no moneys allocated to a county economic development office pursuant to this section shall be expended or awarded in a manner that conflicts with the tourism management plan developed pursuant to 201B-6."

SECTION 9. Section 46-20.7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§46-20.7[]] County transient accommodations tax. Each county may establish a transient accommodations tax not to exceed the maximum rate set forth in section 237D-2.5. The county transient accommodations tax shall be in addition to any state transient accommodations tax. Moneys allocated to a county pursuant to section 201B- shall not be used to reduce any county revenues collected pursuant to a tax established pursuant to this section. A county electing to establish a transient accommodations tax pursuant to this section shall do so by ordinance."

PART IV

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	1065
THIRTY-FIRST LEGISLATURE, 2021		S.D. 1
STATE OF HAWAII