STAND. COM. REP. NO. 866

Honolulu, Hawaii

RE: S.B. No. 775

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 775, 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 adjust the transient accommodations tax rate based on the number of tourists visiting the State within a calendar year.

Your Committee received written comments in opposition to this measure from the Department of Taxation, one member of the Maui County Council, Kohala Coast Resort Association, and Maui Chamber of Commerce.

Your Committee received written comments on this measure from the Department of Business, Economic Development, and Tourism; Hawaii Tourism Authority; and Tax Foundation of Hawaii.

Your Committee recognizes that the tourism industry is a vital component of the State's economy. Your Committee anticipates that the number of tourists visiting the State is expected to increase as Hawaii recovers from the coronavirus disease 2019 (COVID-19) pandemic. Accordingly, your Committee believes that collecting additional transient accommodations tax revenues would help to meet the State's budgetary needs for public services, infrastructure, and other matters.

Your Committee has amended this measure by:

(1) Specifying that the Hawaii Tourism Authority and Department of Business, Economic Development, and Tourism shall determine the number of visitor arrivals in the State for each calendar year, and that the Department shall publish that number in the State of Hawaii Data Book no later than June 30 of the following calendar year;

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(3) Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

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. 775, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 775, S.D. 2.

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

________________________________

DONOVAN M. DELA CRUZ, Chair