STAND. COM. REP. NO. 669

Honolulu, Hawaii

, 2025

RE: H.B. No. 504

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

Your Committees on Tourism and Water & Land, to which was referred H.B. No. 504 entitled:

"A BILL FOR AN ACT RELATING TO ENVIRONMENTAL STEWARDSHIP,"

beg leave to report as follows:

The purpose of this measure is to increase the transient accommodations tax to establish a source of revenue for environmental stewardship, to be implemented through additional funding to the Department of Land and Natural Resources.

Your Committees received testimony in support of this measure from the Department of Land and Natural Resources; Hawaiʻi Climate Change Mitigation and Adaptation Commission; Kuaʻāina Ulu ʻAuamo; Malama Maunalua; Care for ʻĀina Now Coalition; Makahanaloa Fishing Association; Resources Legacy Fund; Hawaiʻi Land Trust; Hawaiʻi Ocean Legislative Task Force; Hawaiʻi Reef and Ocean Coalition; Climate Protectors Hawaiʻi; Mālama Learning Center; Mālama Pūpūkea-Waimea; Council for Native Hawaiian Advancement; The Nature Conservancy - Hawaiʻi and Palmyra; Sustainable Coastlines Hawaiʻi; Kupu; Hoʻōla Farms; and numerous individuals. Your Committees received testimony in opposition to this measure from the Kohala Coast Resort Association; Grassroot Institute of Hawaii; Maui Chamber of Commerce; and numerous individuals. Your Committees received comments on this measure from the Department of Taxation; Hawaiʻi Tourism Authority; and Tax Foundation of Hawaii.

Your Committees find that a modest, reasonable increase in the transient accommodations tax can generate sorely needed funding to support the restoration of the State's valuable natural resources, help prevent and respond to the climate crisis, and leave a strengthened environmental legacy for future generations.

Your Committees have amended this measure by:

(1) Having the new rates for the transient accommodations tax take effect on January 1, 2027;

(2) Having the tax per night on each furnishing of a transient accommodation in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program take effect on January 1, 2027;

(3) Changing its effective date to July 1, 3000, to encourage further discussion; and

(4) 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 Tourism and Water & Land that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 504, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 504, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Tourism and Water & Land,

____________________________ MARK J. HASHEM, Chair

____________________________ ADRIAN K. TAM, Chair