HB 504: DLNR; DOA; HTA; Department of Budget and Finance; Department of Transportation; Transient Accommodations Tax; Minimum Tax; Increase; Natural Resources; Working Group; Fees; Reports; Appropriations

A BILL FOR AN ACT

RELATING TO ENVIRONMENTAL STEWARDSHIP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

     SECTION 1.  The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community.  The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations.  The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources.

     The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources.  The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.  The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities.  Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs.  Additional funds are also needed to respond to climate crises when they occur.

     The legislature further finds that as contemplated, the transient accommodations tax is intended to be applied fully and equitably wherever a transient accommodation occurs within the State.  While the State's lodging and hotel establishments have been complying with, and paying their share of the transient accommodations taxes, tax collections on short-term rental operators have fallen short.  Additionally, there is no existing transient accommodations tax levied on commercial passenger vessels, which in 2024, accounted for 972,820 passenger port calls at port facilities under the jurisdiction of the department of transportation.

     The legislature believes that a modest increase in the transient accommodations tax can generate greatly 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.  The increased tax is a reasonable and appropriate way to generate these needed revenues.

     Accordingly, the purpose of this part is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources.

     SECTION 2.  Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows:

     ""Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, cabin, stateroom, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, vehicle equipped with or advertised as including sleeping accommodations, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, commercial passenger vessel, or other place in which lodgings are regularly furnished to transients."

     SECTION 3.  Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:

     "§237D-2  Imposition and rates.  (a)  There is levied and shall be assessed and collected each month a tax of:

     (1)  Five per cent for the period beginning on January 1, 1987, to June 30, 1994;

     (2)  Six per cent for the period beginning on July 1, 1994, to December 31, 1998;

     (3)  7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;

     (4)  8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and]

     (5)  9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and

     (6)       per cent for the period beginning on January 1, 2027, and thereafter,

on the gross rental or gross rental proceeds derived from furnishing transient accommodations.

     (b)  Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter.

     (c)  There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:

     (1)  7.25 per cent on the fair market rental value until December 31, 2015;

     (2)  8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and]

     (3)  9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and

     (4)       per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter.

     (d)  Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter.  Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.

     (e)  Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25]      per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:

     (1)  [The]      per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and

     (2)  If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.

     The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b).

     (f)  Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 per passenger per port entry on any commercial passenger vessel at any port facility under the jurisdiction of the department of transportation.  Per passenger taxes under this section are charged on a per voyage or per itinerary basis and will not be charged more than once per port entry if a vessel uses a state commercial harbor property or facility more than once on a single voyage or itinerary.  Transient accommodations taxed under this subsection are not subject to levy, assessment, and collection pursuant to subsection (a)."

PART II

     SECTION 4.  (a)  There is established a transient accommodations tax enforcement working group within the department of taxation for administrative purposes.

     (b)  The working group shall assess and make recommendations on the best practices to enforce the transient accommodations tax, including a mechanism to ensure collection from all transient accommodations subject to the tax.

     (c)  The working group shall consist of the following members:

     (1)  The director of taxation, or the director's designee, who shall serve as chair of the working group;

     (2)  One representative from each county department responsible for transient accommodation tax collection;

     (3)  A representative from the hotel and lodging industry, to be invited by the chair of the working group;

     (4)  A timeshare operator, to be invited by the chair of the working group;

     (5)  A representative from a short-term rental organization, to be invited by the chair of the working group; and

     (6)  Other relevant individuals, to be invited by the chair of the working group.

     (d)  The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026.

PART III

     SECTION 5.  The legislature finds that pasture leases are managed by ranchers to contribute to food security, economic resilience, soil health, and other ecosystem services.  This beneficial land use should be supported for continued agricultural land stewardship under the management of the department of agriculture.

     The purpose of this part is to require the department of land and natural resources to transfer agricultural leases under its jurisdiction to the department of agriculture.

     SECTION 6.  Agricultural leases under the jurisdiction of the department of land and natural resources shall be transferred to the department of agriculture for the continued use of agriculture and land stewardship.

PART IV

     SECTION 7.  The department of land and natural resources shall submit a report to the legislature no later than twenty days prior to the convening of the regular sessions of 2026 and 2027 on each project funded through section 8 of this Act.  The report shall contain the following information:

     (1)  Progress and outcomes of each project;

     (2)  The total project cost;

     (3)  Benefits to visitors; and

     (4)  How the project protected, restored, or enhanced Hawaii's natural resources and its unique and vulnerable ecosystem during the previous fiscal year.

     SECTION 8.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for projects that:

     (1)  Protect, restore, or enhance the State's natural resources, including native forests, native plants and animals, aquatic resources, coastal lands, and freshwater resources, and promote economic development relating to the tourism industry;

     (2)  Address climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; these projects may include vegetation management to reduce wildfire risk, coastal environmental management and restoration, or watershed restoration to reduce flooding and enhance water management;

     (3)  Promote sustainable tourism models and destination management to reduce visitor impacts on the natural environment; or

     (4)  Ensure that the State's natural resources are maintained for future visitors;

provided that the department of land and natural resources may utilize these funds for consultants, personnel, contracts, and administrative costs required to develop and implement these projects; provided further that the department of land and natural resources shall consult with the Hawaii tourism authority and the respective county on tourism-related projects.

     The sums appropriated shall be expended by the department of land and natural resources for the purposes of this part.

PART V

     SECTION 9.  (a)  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the sum of $           or so much thereof as may be necessary for fiscal year 2026-2027 for the operating budget of the Hawaii tourism authority; provided that no sums appropriated shall be expended unless the Hawaii tourism authority enters a formal agreement with vendors and contractors of the Hawaii tourism authority and representatives of the visitor industry outlining clear commitments toward the purchasing of local products by the visitor industry, as follows:

     (1)  By January 1, 2030, local products shall constitute a minimum of thirty per cent of total products purchased by the visitor industry during each calendar year, as measured by the per cent of total product cost; and

     (2)  By January 1, 2050, local products shall constitute a minimum of fifty per cent of total products purchased by the visitor industry during each calendar year, as measured by the per cent of total product cost.

     (b)  Provided that of the sum appropriated for fiscal year 2025-2026, the following amounts shall be allocated accordingly:

     (1)  $           for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions for BED113;

     (2)  $           for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and brand and marketing expenses for BED114;

     (3)  $           for personnel expenses for BED115;

     (4)  $           for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions, and destination stewardship and community expenses for BED116; and

     (5)  $           for personnel services BED117.

     (c)  Provided that of the sum appropriated for fiscal year 2026-2027, the following amounts shall be allocated accordingly:

     (1)  $           for personnel services, including the establishment of six full-time equivalent (6.0 FTE) positions for BED113;

     (2)  $           for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and branding and marketing expenses for BED114;

     (3)  $           for personnel services for BED115;

     (4)  $           for personnel services, including the establishment of four full-time equivalent (4.0 FTE) positions, and destination stewardship and community expenses for BED116; and

     (5)  $           for personnel services for BED117.

     (d)  The sums appropriated shall be expended by the Hawaii tourism authority for the purposes of this Act.

PART VI

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

     SECTION 11.  This Act shall take effect on July 1, 3000.

Report Title:

DLNR; DOA; HTA; Department of Budget and Finance; Department of Transportation; Transient Accommodations Tax; Minimum Tax; Increase; Natural Resources; Working Group; Fees; Reports; Appropriations

Description:

Amends the transient accommodations tax rate beginning on 1/1/2027.  Beginning 1/1/2027, requires collection of a monthly tax of $20 per passenger per port entry or any commercial passenger vessel at any port facility under the jurisdiction of the department of taxation.  Establishes a Transient Accommodation Tax Enforcement Working Group.  Requires the transfer of all agricultural leases under the jurisdiction of the Department of Land and Natural Resources to the Department of Agriculture.  Appropriates funds to the Department of Land and Natural Resources for certain environmental stewardship projects.  Appropriates funds to the Hawaii Tourism Authority for its operating budget request.  Requires reports to the Legislature.  Effective 7/1/3000.  (SD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO ENVIRONMENTAL STEWARDSHIP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

     SECTION 1.  The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community.  The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations.  The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources.

     The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources.  The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.  The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities.  Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs.  Additional funds are also needed to respond to climate crises when they occur.

     The legislature further finds that as contemplated, the transient accommodations tax is intended to be applied fully and equitably wherever a transient accommodation occurs within the State.  While the State's lodging and hotel establishments have been complying with, and paying their share of the transient accommodations taxes, tax collections on short-term rental operators have fallen short.  Additionally, there is no existing transient accommodations tax levied on commercial passenger vessels, which in 2024, accounted for 972,820 passenger port calls at port facilities under the jurisdiction of the department of transportation.

     The legislature believes that a modest increase in the transient accommodations tax can generate greatly 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.  The increased tax is a reasonable and appropriate way to generate these needed revenues.

     Accordingly, the purpose of this part is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources.

     SECTION 2.  Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows:

     ""Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, cabin, stateroom, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, vehicle equipped with or advertised as including sleeping accommodations, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, commercial passenger vessel, or other place in which lodgings are regularly furnished to transients."

     SECTION 3.  Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:

     "§237D-2  Imposition and rates.  (a)  There is levied and shall be assessed and collected each month a tax of:

     (1)  Five per cent for the period beginning on January 1, 1987, to June 30, 1994;

     (2)  Six per cent for the period beginning on July 1, 1994, to December 31, 1998;

     (3)  7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;

     (4)  8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and]

     (5)  9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and

     (6)       per cent for the period beginning on January 1, 2027, and thereafter,

on the gross rental or gross rental proceeds derived from furnishing transient accommodations.

     (b)  Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter.

     (c)  There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:

     (1)  7.25 per cent on the fair market rental value until December 31, 2015;

     (2)  8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and]

     (3)  9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and

     (4)       per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter.

     (d)  Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter.  Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.

     (e)  Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25]      per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:

     (1)  [The]      per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and

     (2)  If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.

     The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b).

     (f)  Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 per passenger per port entry on any commercial passenger vessel at any port facility under the jurisdiction of the department of transportation.  Per passenger taxes under this section are charged on a per voyage or per itinerary basis and will not be charged more than once per port entry if a vessel uses a state commercial harbor property or facility more than once on a single voyage or itinerary.  Transient accommodations taxed under this subsection are not subject to levy, assessment, and

collection pursuant to subsection (a)."

PART II

     SECTION 4.  (a)  There is established a transient accommodations tax enforcement working group within the department of taxation for administrative purposes.

     (b)  The working group shall assess and make recommendations on the best practices to enforce the transient accommodations tax, including a mechanism to ensure collection from all transient accommodations subject to the tax.

     (c)  The working group shall consist of the following members:

     (1)  The director of taxation, or the director's designee, who shall serve as chair of the working group;

     (2)  One representative from each county department responsible for transient accommodation tax collection;

     (3)  A representative from the hotel and lodging industry, to be invited by the chair of the working group;

     (4)  A timeshare operator, to be invited by the chair of the working group;

     (5)  A representative from a short-term rental organization, to be invited by the chair of the working group; and

     (6)  Other relevant individuals, to be invited by the chair of the working group.

     (d)  The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026.

PART III

     SECTION 5.  The legislature finds that pasture leases are managed by ranchers to contribute to food security, economic resilience, soil health, and other ecosystem services.  This beneficial land use should be supported for continued agricultural land stewardship under the management of the department of agriculture. 

     The purpose of this part is to require the department of land and natural resources to transfer agricultural leases under its jurisdiction to the department of agriculture.

     SECTION 6.  Agricultural leases under the jurisdiction of the department of land and natural resources shall be transferred to the department of agriculture for the continued use of agriculture and land stewardship.  

PART IV

     SECTION 7.  The department of land and natural resources shall submit a report to the legislature no later than twenty days prior to the convening of the regular sessions of 2026 and 2027 on each project funded through section 8 of this Act.  The report shall contain the following information:

     (1)  Progress and outcomes of each project;

     (2)  The total project cost;

     (3)  Benefits to visitors; and

     (4)  How the project protected, restored, or enhanced Hawaii's natural resources and its unique and vulnerable ecosystem during the previous fiscal year.

     SECTION 8.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for projects that:

     (1)  Protect, restore, or enhance the State's natural resources, including native forests, native plants and animals, aquatic resources, coastal lands, and freshwater resources, and promote economic development relating to the tourism industry;

     (2)  Address climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; these projects may include vegetation management to reduce wildfire risk, coastal environmental management and restoration, or watershed restoration to reduce flooding and enhance water management;

     (3)  Promote sustainable tourism models and destination management to reduce visitor impacts on the natural environment; or

     (4)  Ensure that the State's natural resources are maintained for future visitors;

provided that the department of land and natural resources may utilize these funds for consultants, personnel, contracts, and administrative costs required to develop and implement these projects; provided further that the department of land and natural resources shall consult with the Hawaii tourism authority and the respective county on tourism-related projects.

     The sums appropriated shall be expended by the department of land and natural resources for the purposes of this part.

PART V

     SECTION 9.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 10.  This Act shall take effect on July 1, 3000.

Report Title:

DLNR; DOA; Department of Budget and Finance; Department of Transportation; Transient Accommodations Tax; Minimum Tax; Increase; Natural Resources; Working Group; Fees; Reports; Appropriations

Description:

Amends the transient accommodations tax rate beginning on 1/1/2027.  Beginning 1/1/2027, requires collection of a monthly tax of $20 per passenger per port entry or any commercial passenger vessel at any port facility under the jurisdiction of the department of taxation.  Establishes a Transient Accommodation Tax Enforcement Working Group.  Requires the transfer of all agricultural leases under the jurisdiction of the Department of Land and Natural Resources to the Department of Agriculture.  Appropriates funds to the Department of Land and Natural Resources for certain environmental stewardship projects.  Requires reports to the Legislature. Effective 7/1/3000.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO ENVIRONMENTAL STEWARDSHIP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

     SECTION 1.  The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community.  The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations.  The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources.

     The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources.  The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.  The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities.  Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs.  Additional funds are also needed to respond to climate crises when they occur.

     The legislature believes that a modest increase in the transient accommodations tax can generate greatly 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.  The increased tax is a reasonable and appropriate way to generate these needed revenues.

     Accordingly, the purpose of this part is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources.

     SECTION 2.  Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:

     "§237D-2  Imposition and rates.  (a)  There is levied and shall be assessed and collected each month a tax of:

     (1)  Five per cent for the period beginning on January 1, 1987, to June 30, 1994;

     (2)  Six per cent for the period beginning on July 1, 1994, to December 31, 1998;

     (3)  7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;

     (4)  8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and]

     (5)  9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and

     (6)       per cent for the period beginning on January 1, 2027, and thereafter,

on the gross rental or gross rental proceeds derived from furnishing transient accommodations.

     (b)  Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter.

     (c)  There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:

     (1)  7.25 per cent on the fair market rental value until December 31, 2015;

     (2)  8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and]

     (3)  9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and

     (4)       per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter.

     (d)  Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter.  Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.

     (e)  Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25]      per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:

     (1)  [The]      per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and

     (2)  If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.

     The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b).

     (f)  Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 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.  In addition to amounts owed under this subsection, any additional gross rental or gross rental proceeds derived from furnishing or arranging a transient accommodation in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program shall remain subject to levy, assessment, and collection pursuant to subsection (a)."

     SECTION 3.  The department of land and natural resources shall submit a report to the legislature no later than twenty days prior to the convening of the regular sessions of 2026 and 2027 on each project funded through section 4 of this Act.  The report shall contain the following information:

     (1)  Progress and outcomes of each project;

     (2)  The total project cost;

     (3)  Benefits to visitors; and

     (4)  How the project protected, restored, or enhanced Hawaii's natural resources and its unique and vulnerable ecosystem during the previous fiscal year.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for projects that:

     (1)  Protect, restore, or enhance the State's natural resources, including native forests, native plants and animals, aquatic resources, coastal lands, and freshwater resources, and promote economic development relating to the tourism industry;

     (2)  Address climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; these projects may include vegetation management to reduce wildfire risk, coastal environmental management and restoration, or watershed restoration to reduce flooding and enhance water management;

     (3)  Promote sustainable tourism models and destination management to reduce visitor impacts on the natural environment; or

     (4)  Ensure that the State's natural resources are maintained for future visitors;

provided that the department of land and natural resources may utilize these funds for consultants, personnel, contracts, and administrative costs required to develop and implement these projects; provided further that the department of land and natural resources shall consult with the Hawaii tourism authority and the respective county on tourism-related projects.

     The sums appropriated shall be expended by the department of land and natural resources for the purposes of this part.

PART II

     SECTION 5.  Chapter 39, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

     "§39-     Reimbursable general obligation bond debt service special fund; established; distribution of funds.  (a)  There is established a reimbursable general obligation bond debt service special fund to be administered by the department of budget and finance.

     (b)  Moneys allocated to the reimbursable general obligation bond debt service special fund shall be used to fund debt service payments on general obligation bond funds issued.  All interest earned on the moneys in the special fund shall be credited to the special fund.  The special fund shall be exempt from the central service expenses deduction under section 36-27 and departmental administrative expenses deduction under section 36-30.

     (c)  Any amounts allocated and disbursed pursuant to this section shall be subject to the availability of funds deposited and on balance in the special fund.  The director of finance shall not allocate or disburse any amounts from the special fund that are in excess of any amounts deposited and on balance in the special fund.

     (d)  The department of budget and finance shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session on the total amount of funds allocated pursuant to this section.

     (e)  The director of finance may establish rules, exempt from chapter 91, for the purposes of this section."

PART III

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 3000.

Report Title:

Transient Accommodations Tax; Minimum Tax; Increase; DLNR; Natural Resources; Reimbursable General Obligation Bond Debt Service Special Fund; Appropriation

Description:

Amends the transient accommodations tax rate beginning on 1/1/2027.  Beginning 1/1/2027, requires a $20 transient accommodation tax to be levied per night for each furnishing of transient accommodations in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program.  Appropriates funds to DLNR for certain environmental stewardship projects.  Establishes the Reimbursable General Obligation Bond Debt Service Special Fund.  Effective 7/1/3000.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO ENVIRONMENTAL STEWARDSHIP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community.  The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations.  The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources.

     The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources.  The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.  The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities.  Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs.  Additional funds are also needed to respond to climate crises when they occur.

     The legislature believes that a modest increase in the transient accommodations tax can generate greatly 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.  The increased tax is a reasonable and appropriate way to generate these needed revenues.

     Accordingly, the purpose of this Act is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources.

     SECTION 2.  Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:

     "§237D-2  Imposition and rates.  (a)  There is levied and shall be assessed and collected each month a tax of:

     (1)  Five per cent for the period beginning on January 1, 1987, to June 30, 1994;

     (2)  Six per cent for the period beginning on July 1, 1994, to December 31, 1998;

     (3)  7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;

     (4)  8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and]

     (5)  9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and

     (6)       per cent for the period beginning on January 1, 2027, and thereafter,

on the gross rental or gross rental proceeds derived from furnishing transient accommodations.

     (b)  Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter.

     (c)  There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:

     (1)  7.25 per cent on the fair market rental value until December 31, 2015;

     (2)  8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and]

     (3)  9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and

     (4)       per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter.

     (d)  Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter.  Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.

     (e)  Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25]      per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:

     (1)  [The]      per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and

     (2)  If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.

     The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b).

     (f)  Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 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.  In addition to amounts owed under this subsection, any additional gross rental or gross rental proceeds derived from furnishing or arranging a transient accommodation in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program shall remain subject to levy, assessment, and collection pursuant to subsection (a)."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to protect, manage, and restore the State's natural resources, including native forests; native plants and animals; aquatic resources; coastal lands; and freshwater resources.

     The sums appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Transient Accommodations Tax; Minimum Tax; Increase; DLNR; Natural Resources; Appropriation

Description:

Amends the transient accommodations tax rate beginning on 1/1/2027.  Beginning 1/1/2027, requires a $20 transient accommodation tax to be levied per night for each furnishing of transient accommodations in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program.  Appropriates funds to DLNR for protection, management, and restoration of the State's natural resources.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to environmental stewardship.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community.  The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations.  The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources.

     The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources.  The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.  The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities.  Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs.  Additional funds are also needed to respond to climate crises when they occur.

     The legislature believes that a modest increase in the transient accommodations tax can generate greatly needed funding to help restore the State's natural resources, help prevent and respond to climate crises, and leave a more positive environmental legacy for future generations.  The increased tax is a reasonable and appropriate way to generate these needed revenues.

     Accordingly, the purpose of this Act is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources.

     SECTION 2.  Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:

     "§237D-2  Imposition and rates.  (a)  There is levied and shall be assessed and collected each month a tax of:

     (1)  Five per cent for the period beginning on January 1, 1987, to June 30, 1994;

     (2)  Six per cent for the period beginning on July 1, 1994, to December 31, 1998;

     (3)  7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009;

     (4)  8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and]

     (5)  9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to June 30, 2025; and

     (6)       per cent for the period beginning on July 1, 2025, and thereafter,

on the gross rental or gross rental proceeds derived from furnishing transient accommodations.

     (b)  Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter.

     (c)  There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of:

     (1)  7.25 per cent on the fair market rental value until December 31, 2015;

     (2)  8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and]

     (3)  9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2025; and

     (4)       per cent on the fair market rental value for the period beginning on January 1, 2026, and thereafter.

     (d)  Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter.  Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.

     (e)  Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25]      per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that:

     (1)  [The]      per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and

     (2)  If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State.

     The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b).

     (f)  There is levied and shall be assessed and collected each month a tax of $20 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.  In addition to amounts owed under this subsection, any additional gross rental or gross rental proceeds derived from furnishing or arranging a transient accommodation in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program shall remain subject to levy, assessment, and collection pursuant to subsection (a)."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to protect, manage, and restore the State's natural resources, including native forests; native plants and animals; aquatic resources; coastal lands; and freshwater resources.

     The sums appropriated shall be expended by the department of land and natural resources for the purposes of this Act.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2025.

Report Title:

Transient Accommodations Tax; Minimum Tax; Increase; DLNR; Natural Resources; Appropriation

Description:

Amends the transient accommodations tax rate.  Requires a $20 transient accommodation tax to be levied per night for each furnishing of transient accommodations in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program.  Appropriates funds to DLNR for protection, management, and restoration of the State's natural resources.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 1834

Honolulu, Hawaii

RE:    H.B. No. 504

       H.D. 2

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 504, H.D. 2, S.D. 1, entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to facilitate and generate critical revenues for environmental stewardship in the State.

     Your Committee received written comments in support of this measure from the Office of the Governor; Department of Agriculture; Department of Business, Economic Development, and Tourism; Department of Hawaiian Home Lands; Hawaii Housing Finance and Development Corporation; Hawaii Emergency Management Agency; Care for Aina Now Coalition Leadership Committee; Coalition Earth; Council for Native Hawaiian Advancement; Hawaii Alliance of Nonprofit Organizations; Hawaii Climate Advisory Team; Hawaii Green Growth; Hawaii Land Trust; Hawaii Ocean Legislative Task Force; Hawaii Reef and Ocean Coalition and Climate Protectors Hawaii; Hawaii Wildfire Management Organization; Hawaii Workforce Funders Collaborative; Kuaaina Ulu Auamo; Kupu; Malama Pupukea‑Waimea; Nature Conservancy; Resources Legacy Fund; Sustainable Coastlines Hawaii; and numerous individuals.

     Your Committee received written comments in opposition to this measure from ARDA Hawaii, Grassroot Institute of Hawaii, Kohala Coast Resort Association, Maui Chamber of Commerce, Maui Hotel and Lodging Association, Norwegian Cruise Line Holdings Ltd., and two individuals.

     Your Committee received written comments on this measure from the Department of Land and Natural Resources, Department of Taxation, Hawaii Tourism Authority, Cruise Lines International Association, Hawaii Farm Bureau, Hawaii Lodging and Tourism Association, and Tax Foundation of Hawaii.

     Your Committee finds that Hawaii's natural resources provide irreplaceable and invaluable benefits to residents, visitors, and the global community.  Your Committee further finds that the State's natural resources are held in public trust and must be managed and protected for the benefit of present and future generations.  Your Committee recognizes that Hawaii's natural resources face significant and growing environmental pressures from climate change and the impacts of heavy visitor use.  Your Committee believes this measure will help strengthen environmental stewardship of the State's natural resources and generate critical revenues for these purposes.

     Your Committee notes that, according to the Department of Business, Economic Development, and Tourism, fully funding the Hawaii Tourism Authority Board of Director's approved budget request of $80,000,000 for fiscal year 2026 and $87,000,000 for fiscal year 2027 would generate additional visitor spending totaling more than $600,000,000 for fiscal year 2026 and nearly $850,000,000 for fiscal year 2027 compared to the current $63,000,000 that is in the Hawaii Tourism Authority's base budget.  Your Committee further finds that this measure will foster beneficial impacts on overall sales revenue, household incomes, state tax revenues, and local job creation statewide, as depicted below:

HTA Budget Scenarios, FY2026:

HTA Budget Scenarios, FY2027:

Economic Impact under HTA Budget Scenarios, FY2026:

Economic Impact under HTA Budget Scenarios, FY2027:

Your Committee finds it prudent to make these additional investments for economic resilience during times of uncertainty.  Accordingly, your Committee has amended this measure by making appropriations to the Hawaii Tourism Authority for the budget request approved by the Hawaii Tourism Authority Board of Directors, contingent upon the Hawaii Tourism Authority entering a formal agreement that includes commitments from visitor industry representatives to meet goals for purchasing local products.

     If a Committee on Conference is convened on this measure, your Committee respectfully requests that the Committee on Conference consider:

     (1)  The legal concerns raised in the written comments submitted by the Cruise Lines International Association regarding a $20 fee on any commercial passenger vessel;

     (2)  Appropriating the sum of $16,989,989 to the Hawaii Tourism Authority for fiscal year 2025-2026 in section 9 of the measure, including the following allocation amounts:

          (A)  $444,326 for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions for BED113;

          (B)  $10,060,713 for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and brand and marketing expenses for BED114;

          (C)  $11,617 for personnel expenses for BED115;

          (D)  $6,438,711 for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions, and destination stewardship and community expenses for BED116; and

          (E)  $34,622 for personnel services BED117; and

     (3)  Appropriating the sum of $23,987,249 to the Hawaii Tourism Authority for fiscal year 2026-2027 in section 9 of the measure, including the following allocation amounts:

          (A)  $1,725,829 for personnel services, including the establishment of six full-time equivalent (6.0 FTE) positions for BED113;

          (B)  $14,034,448 for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and branding and marketing expenses for BED114;

          (C)  $14,796 for personnel services for BED115;

          (D)  $8,168,081 for personnel services, including the establishment of four full-time equivalent (4.0 FTE) positions, and destination stewardship and community expenses for BED116; and

          (E)  $44,096 for personnel services for BED117.

     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 H.B. No. 504, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 504, H.D. 2, S.D. 2.

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

STAND. COM. REP. NO. 1331

Honolulu, Hawaii

RE:    H.B. No. 504

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Economic Development and Tourism and Water and Land, to which was referred H.B. No. 504, H.D. 2, entitled:

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

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Amend the transient accommodations tax rate beginning on January 1, 2027;

     (2)  Beginning January 1, 2027, require a $20 transient accommodation tax to be levied per night for each furnishing of transient accommodations in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program;

     (3)  Appropriate funds to the Department of Land and Natural Resources for certain environmental stewardship projects; and

     (4)  Establish the Reimbursable General Obligation Bond Debt Service Special Fund.

     Your Committees received testimony in support of this measure from the Office of the Governor; Department of Business, Economic Development, and Tourism; Department of Land and Natural Resources; Hawaii Green Infrastructure Authority; Hawaiʻi Climate Change Mitigation and Adaptation Commission; Hawaiʻi Ocean Legislative Task Force; Hawaiʻi Reef Ocean Coalition; Hawaiʻi Climate Advisory Team; Resources Legacy Fund; Care for ʻĀina Now Coalition; The Nature Conservancy, Hawaiʻi and Palmyra; Hawaii Cattlemen's Council, Inc.; Kauai Climate Action Coalition; Council for Native Hawaiian Advancement; Hawaiʻi Alliance of Nonprofit Organizations; Malama Learning Center; Coalition Earth; Kuaʻāina Ulu ʻAuamo; Kuleana Coral Restoration; and twenty-seven individuals.

     Your Committees received testimony in opposition to this measure from the American Resort Development Association-Hawaii; Hawaii Lodging and Tourism Association; Maui Hotel and Lodging Association; Kohala Coast Resort Association; The Westin Maui Resort and Spa; Maui Vacation Rental Association; Oʻahu Short-Term Rental Alliance; Hawaiʻi Mid and Short-Term Rental Alliance; Grassroot Institute of Hawaii; Maui Chamber of Commerce; Ribbon Rock Maui; Honu Hawaiʻi Home LLC; EGF LLC; Aliʻi Resorts, LLC; Napili Kai Beach Resort; and numerous individuals.

     Your Committees received comments on this measure from the Department of Taxation, Department of Budget and Finance, Hawaiʻi Tourism Authority, Hawaii Community Development Authority, Department of the Attorney General, Tax Foundation of Hawaii, Expedia Group, Council on State Taxation, American Hotel and Lodging Association, Hawaiʻi Hotel Alliance, Marriott International, and one individual.

     Your Committees find that the State's natural resources and ecosystems are experiencing significant environmental stress due to climate change and overuse from the State's large tourism industry.  As the Hawaii State Constitution mandates that the State's natural and cultural resources be protected and maintained for future generations, it is imperative to institute preventative and mitigative legislation to respond to this environmental crisis.  Your Committees further find that additional funding is necessary to close the gap between existing and needed funding for the management of the State's natural resources.  By establishing innovative financing mechanisms, this measure will bolster existing investments in natural resource management, protect public trust resources, and address insufficient conservation funding.

     Your Committees note the concerns raised in the testimony of the Office of the Governor that, to ensure that the additional transient accommodation tax revenues are made solely available for environmental stewardship, climate and hazard mitigation, and sustainable tourism, the revenues must be deposited into a special fund that allows the moneys therein to be used for these purposes.  Your Committees also note the concerns raised by the Office of the Governor and other testimony that the Reimbursable General Obligation Bond Debt Service Special Fund, proposed in Part II of this measure, will not satisfy this requirement, as there is no nexus between the special fund and environmental stewardship, and the moneys in the fund cannot be expended for the purposes above.  Therefore, there is a need to amend this measure to address this issue.

Accordingly, your Committees have amended this measure by:

     (1)  Inserting language to amend the definition of "transient accommodations" to include the furnishing of cabins, staterooms, and commercial passenger vessels;

     (2)  Deleting language that would have imposed a tax of $20 per night for transient accommodations furnished using points, miles, or other amounts provided through a membership, loyalty, or rewards program;

     (3)  Inserting language that requires, beginning on January 1, 2027, collection of a monthly tax of $20 per passenger per port entry on any commercial passenger vessel at any port facility under the jurisdiction of the Department of Transportation;

     (4)  Replacing language in part II that would have established the Reimbursable General Obligation Bond Debt Service Special Fund with language that establishes a Transient Accommodations Tax Enforcement Working Group to assess and make recommendations on the best practices to enforce the transient accommodations tax, including a mechanism to ensure collection from all transient accommodations subject to the tax;

     (5)  Inserting as part III, language that requires the transfer of all agricultural leases under the jurisdiction of the Department of Land and Natural Resources to the Department of Agriculture for the continued use of agriculture and land stewardship;

     (6)  Amending section 1 to reflect the amended purpose of part I; and

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

     Your Committees note that this measure, as amended, does not designate a special fund into which the additional transient accommodation tax revenues shall be deposited.  Your Committees find that this matter merits further consideration and respectfully request that subsequent Committees to which this measure is referred further examine the issue.

     Your Committees further note the discussion held during the hearing on this measure regarding the proper legislative vehicle to increase the Transient Accommodation Tax to provide funding for environmental protection and climate change mitigation.  Your Committees respectfully request that subsequent Committees to which this measure is referred consider S.B. No. 1396, S.D. 3 (2025), as a vehicle to accomplish these funding objectives.

     As affirmed by the records of votes of the members of your Committees on Economic Development and Tourism and Water and Land that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 504, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 504, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

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

STAND. COM. REP. NO.  1112

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 504

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 504, H.D. 1, entitled:

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

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Amend the Transient Accommodations Tax rate beginning on January 1, 2027;

     (2)  Beginning January 1, 2027, require a $20 Transient Accommodation Tax to be levied per night for each furnishing of transient accommodations in exchange for points, miles, or other amounts provided through a membership, loyalty, or rewards program; and

     (3)  Appropriate funds to the Department of Land and Natural Resources for protection, management, and restoration of the State's natural resources.

     Your Committee received testimony in support of this measure from the Department of Land and Natural Resources; Mālama-Pūpūkea-Waimea; The Nature Conservancy, Hawaiʻi and Palmyra; Kauai Climate Action Coalition; Hawaiʻi Ocean Legislative Task Force; Council for Native Hawaiian Advancement; and numerous individuals.  Your Committee received testimony in opposition to this measure from the Kohala Coast Resort Association; Grassroot Institute of Hawaii; and Maui Chamber of Commerce.  Your Committee received comments on this measure from the Department of Taxation; Hawaiʻi Tourism Authority; Tax Foundation of Hawaii; Kuaʻāina Ulu Auamo; Hawaiʻi Reef & Ocean Coalition; Climate Protectors Hawaiʻi; Mālama Learning Center; Care for ʻĀina Now Coalition; Resources Legacy Fund; Sustainable Coastlines Hawaiʻi; and numerous individuals.

     Your Committee has amended this measure by:

     (1)  Clarifying that the appropriation may be used for various environmental stewardship projects;

     (2)  Authorizing the Department of Land and Natural Resources to utilize funds for consultants, personnel, contracts, and administrative costs to develop and implement the environmental stewardship projects;

     (3)  Requiring the Department of Land and Natural Resources to submit reports to the Legislature on funded projects;

     (4)  Establishing a Reimbursable General Obligation Bond Debt Service Special Fund to fund debt service payments on general obligation bonds; and

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

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 504, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 504, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

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,