STAND. COM. REP. NO. 655

Honolulu, Hawaii

, 2025

RE: H.B. No. 1077

H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

Your Committees on Economic Development & Technology and Tourism, to which was referred H.B. No. 1077, H.D. 1, entitled:

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

beg leave to report as follows:

The purpose of this measure is to:

(1) Authorize the Department of Defense to fund projects that strengthen the State's resiliency against climate change;

(2) Require the Department of Defense to convene a selection committee to review and recommend projects for Climate Mitigation and Resiliency Special Fund allocation;

(3) Establish the Climate Mitigation and Resiliency Special Fund;

(4) Establish the Economic Development and Revitalization Special Fund;

(5) Increase the Transient Accommodations Tax and allocate a portion of the tax to the two newly established special funds; and

(6) Appropriate funds into and out of the special funds.

Your Committees received testimony in support of this measure from the Office of the Governor; Office of the Governor Recovery and Resiliency Unit; Hawaiʻi Climate Advisory Team; Department of Business, Economic Development, and Tourism; Department of Land and Natural Resources; Hawaii Emergency Management Agency; Hawaii Green Infrastructure Authority; Hawaii State Energy Office; Hawaiʻi Climate Change Mitigation and Adaptation Commission; Office of Planning and Sustainable Development; Kuaʻāina Ulu ʻAuamo; Coalition Earth; Climate Protectors Hawaiʻi; Hawaiʻi Ocean Legislative Task Force; Care for ʻĀina Now Coalition; The Nature Conservancy Hawaiʻi and Palmyra; Pacific Whale Foundation; Hawaiʻi Workforce Funders Collaborative; Hawaiʻi Lodging & Tourism Association; and five individuals. Your Committees received testimony in opposition to this measure from the Kohala Coast Resort Association; Libertarian Party of Hawaii; Grassroot Institute of Hawaii; Maui Chamber of Commerce; and seven individuals. Your Committees received comments on this measure from the Department of the Attorney General; Department of Taxation; and Tax Foundation of Hawaii.

Your Committees find that the State must increase its funding for efforts that address the impacts of climate change and contribute to economic development and revitalization. Your Committees recognize that designating allocations to the general fund for these purposes may be a more appropriate funding mechanism.

Accordingly, your Committees have amended this measure by:

(1) Deleting the contents of the measure except for the provisions increasing the Transient Accommodations Tax;

(2) Allocating portions of the revenue from the Transient Accommodations Tax to the General Fund, instead of the special funds, to be earmarked for projects addressing climate change impacts and advancing economic development and revitalization; and

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

As affirmed by the records of votes of the members of your Committees on Economic Development & Technology and Tourism that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1077, H.D. 1, as amended herein, and recommend that it be referred to your Committee on Finance, in the form attached hereto as H.B. No. 1077, H.D. 2.

Respectfully submitted on behalf of the members of the Committees on Economic Development & Technology and Tourism,

____________________________ ADRIAN K. TAM, Chair

____________________________ GREGGOR ILAGAN, Chair