SB 583: Stadium Authority; Hawaii Tourism Authority; Naming Rights; Stadium; Convention Center; Concessions; Advertising; Marketing; Stadium Development Special Fund; Convention Center Enterprise Special Fund

A BILL FOR AN ACT

RELATING TO NAMING RIGHTS.

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

     SECTION 1.  Chapter 109, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§109-     Stadium facility; naming rights; marketing; advertising.  (a)  Notwithstanding any law to the contrary, chapter 102 shall not apply to concessions within the stadium facility.

     (b)  The stadium authority may lease the naming rights of the stadium facility or any portion of the stadium facility or building therein to any public or private entity.

     (c)  Any revenues derived from advertising or marketing in or on the stadium facility, including revenues derived under subsection (b), shall be deposited into the stadium development special fund under section 109-3.5."

     SECTION 2.  Chapter 201B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201B-     Convention center facility; naming rights; marketing; advertising.  (a)  Notwithstanding any law to the contrary, chapter 102 shall not apply to concessions in or on the convention center facility.

     (b)  The authority may lease the naming rights of the convention center facility or any portion of the convention center facility to any public or private entity.

     (c)  Any revenues derived from advertising or marketing in or on the convention center facility, including revenues derived under subsection (b), shall be deposited into the convention center enterprise special fund under section 201B-8."

     SECTION 3.  Section 109-3.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established in the state treasury the stadium development special fund, into which funds collected by the stadium authority shall be deposited, including:

     (1)  All revenues from the stadium development district, including but not limited to [agreements]:

          (A)  Any agreement or [actions] action generating revenue related to stadium operations[,];

          (B)  The lease or rental of facilities or land, [concessions,];

          (C)  Advertising or marketing, including revenues derived under section 109-   ;

          (D)  Any concession;

          (E)  The food and beverage[,] service;

          (F)  The parking[, sponsorship] facilities;

          (G)  Sponsorship and advertising[,utilities and]; and

          (H)  Utilities, infrastructure, and development;

     (2)  All gifts or grants awarded in any form from any public agency or any other source for purposes of the stadium development district;

     (3)  All proceeds from revenue bonds issued for the purpose of the stadium development district; and

     (4)  Appropriations made by the legislature to the fund."

     SECTION 4.  Section 201B-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established the convention center enterprise special fund, into which shall be deposited:

     (1)  A portion of the revenues from the transient accommodations tax, as provided by section 237D-6.5;

     (2)  All revenues or moneys derived from the operations of the convention center to include all revenues from [the]:

          (A)  The food and beverage service[, all revenues from the];

          (B)  The parking facilities [or from any];

          (C)  Any concession[, and all revenues from the];

          (D)  The sale of souvenirs, logo items, or any other items offered for purchase at the convention center; and

          (E)  Advertising or marketing, including revenues derived under section 201B-   ;

     (3)  Private contributions, interest, compensation, gross or net revenues, proceeds, or other moneys derived from any source or for any purpose arising from the use of the convention center facility; and

     (4)  Appropriations by the legislature for marketing the facility pursuant to section 201B-7(a)(7)."

     SECTION 5.  Section 445-112, Hawaii Revised Statutes, is amended to read as follows:

     "§445-112  Where and when permitted.  No person shall erect, maintain, or use a billboard or display any outdoor advertising device, except as provided in this section:

     (1)  The display of official notices and signs, posted by order of any court or public office, or posted by any public officer in the performance of a public duty, or posted by any person required to do so by any law or rule having the force of law;

     (2)  Any outdoor advertising device announcing a meeting or series of meetings is not prohibited by this section if displayed on the premises where the meeting or series of meetings will be or is being held.  Meeting, as used in this section, includes all meetings regardless of whether open to the public or conducted for profit and includes but is not limited to sports events, conventions, fairs, rallies, plays, lectures, concerts, motion pictures, dances, and religious services;

     (3)  Any outdoor advertising device indicating that the building or premises on which it is displayed is the residence, office, or place of business, commercial or otherwise, of any individual, partnership, joint venture, association, club, or corporation, and stating the nature of the business;

     (4)  Any outdoor advertising device that advertises property or services that may be bought, rented, sold, or otherwise traded in on the premises or in the building on which the outdoor advertising device is displayed;

     (5)  The offering for sale of merchandise bearing incidental advertising, including books, magazines, and newspapers, in any store, newsstand, vending machine, rack, or other place where such merchandise is regularly sold;

     (6)  Any outdoor advertising device offering any land, building, or part of a building for sale or rent, if displayed on the property so offered or on the building so offered;

     (7)  Any outdoor advertising device carried by persons or placed upon vehicles used for the transportation of persons or goods, except as provided under section 445‑112.5, relating to vehicular advertising devices;

     (8)  Any outdoor advertising device warning the public of dangerous conditions that they may encounter in nearby sections of streets, roads, paths, public places, power lines, gas and water mains, or other public utilities;

     (9)  Signs serving no commercial purpose that indicate places of natural beauty, or of historical or cultural interest and that are made according to designs approved by the department of business, economic development, and tourism;

    (10)  Any outdoor advertising device or billboard erected, placed, or maintained upon a state office building, if erected, placed, or maintained by authority of a state agency, department, or officer for the sole purpose of announcing cultural or educational events within the State, and if the design and location thereof has been approved by the department of business, economic development, and tourism;

    (11)  Signs urging voters to vote for or against any person or issue, may be erected, maintained, and used, except where contrary to or prohibited by law;

    (12)  Signs stating that a residence that is offered for sale, lease, or rent is open for inspection at the actual time the sign is displayed and showing the route to the residence; provided that the sign contains no words or designs other than the words "Open House", the address of the residence, the name of the person or agency responsible for the sale, and an arrow or other directional symbol and is removed during such time as the residence is not open for inspection;

    (13)  The erection, maintenance, and use of billboards if the billboard is used solely for outdoor advertising devices not prohibited by this section;

    (14)  The continued display and maintenance of outdoor advertising devices actually displayed on July 8, 1965, in accordance with all laws and ordinances immediately theretofore in effect;

    (15)  The continued maintenance of any billboard actually maintained on July 8, 1965, and the display thereon of the same or new advertising devices, all in accordance with all laws and ordinances in effect immediately prior to July 9, 1965;

    (16)  Any outdoor advertising device, displayed with the authorization of the University of Hawaii, on any scoreboard of any stadium owned by the university.  An outdoor advertising device displayed under this paragraph shall be on the front of the scoreboard and face the interior of the stadium;

    (17)  Any temporary outdoor advertising device attached to or supported by the structure of any stadium owned by the University of Hawaii, located within and facing the interior of the stadium, and authorized to be displayed by the university.  For the purpose of this paragraph, "temporary" means displayed for a short period before the official start of organized athletic competition, during the organized athletic competition, and for a short period after the official end of the organized athletic competition;

    (18)  Any outdoor advertising device, displayed with the authorization of the stadium authority, on any scoreboard of any stadium operated by the stadium authority.  An outdoor advertising device displayed under this paragraph shall be on the front of the scoreboard and face the interior of the stadium; [and]

    (19)  Any outdoor advertising device, displayed with the authorization of the stadium authority, on the exterior of any stadium operated by the stadium authority.  Any outdoor advertising device displayed under this paragraph shall be limited to the name of any entity that leased the naming rights of the stadium from the stadium authority; and

   [(19)] (20)  Any outdoor advertising device, displayed with the authorization of the city and county of Honolulu, on the scoreboard of the Waipio peninsula soccer stadium.  The outdoor advertising device shall be:

          (A)  Attached to the bottom of the scoreboard;

          (B)  No longer than the width of the scoreboard; and

          (C)  No higher than twenty-five per cent of the scoreboard height.

          The scoreboard shall be no larger than twenty-eight feet by ten feet.  Any outdoor advertising device displayed pursuant to this paragraph shall be on the front of the scoreboard and face the interior of the stadium; provided that the outdoor advertising device shall not be visible from any thoroughfare."

     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, 2025.

Report Title:

Stadium Authority; Hawaii Tourism Authority; Naming Rights; Stadium; Convention Center; Concessions; Advertising; Marketing; Stadium Development Special Fund; Convention Center Enterprise Special Fund

Description:

Allows the naming rights of the Stadium Facility and Convention Center Facility to be leased to any public or private entity.  Requires any revenues derived from advertising or marketing in or on the Stadium Facility or Convention Center Facility to be deposited into the appropriate special fund of the facility.  Authorizes the display of the name of any entity that leased the naming rights to a stadium operated by the Stadium Authority on the exterior of the stadium.  (CD1)

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 NAMING RIGHTS.

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

     SECTION 1.  Chapter 109, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§109-     Stadium facility; naming rights; marketing; advertising.  (a)  Notwithstanding any law to the contrary, chapter 102 shall not apply to concessions within the stadium facility.

     (b)  The stadium authority may lease the naming rights of the stadium facility or any portion of the stadium facility or building therein to any public or private entity.

     (c)  Any revenues derived from advertising or marketing in or on the stadium facility, including revenues derived under subsection (b), shall be deposited into the stadium development special fund under section 109-3.5."

     SECTION 2.  Chapter 201B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201B-     Convention center facility; naming rights; marketing; advertising.  (a)  Notwithstanding any law to the contrary, chapter 102 shall not apply to concessions in or on the convention center facility.

     (b)  The authority may lease the naming rights of the convention center facility or any portion of the convention center facility to any public or private entity.

     (c)  Any revenues derived from advertising or marketing in or on the convention center facility, including revenues derived under subsection (b), shall be deposited into the convention center enterprise special fund under section 201B-8."

     SECTION 3.  Section 109-3.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established in the state treasury the stadium development special fund, into which funds collected by the stadium authority shall be deposited, including:

     (1)  All revenues from the stadium development district, including but not limited to [agreements]:

          (A)  Any agreement or [actions] action generating revenue related to stadium operations[,];

          (B)  The lease or rental of facilities or land, [concessions,];

          (C)  Advertising or marketing, including revenues derived under section 109-   ;

          (D)  Any concession;

          (E)  The food and beverage[,] service;

          (F)  The parking[, sponsorship] facilities;

          (G)  Sponsorship and advertising[,utilities and]; and

          (H)  Utilities, infrastructure, and development;

     (2)  All gifts or grants awarded in any form from any public agency or any other source for purposes of the stadium development district;

     (3)  All proceeds from revenue bonds issued for the purpose of the stadium development district; and

     (4)  Appropriations made by the legislature to the fund."

     SECTION 4.  Section 201B-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is established the convention center enterprise special fund, into which shall be deposited:

     (1)  A portion of the revenues from the transient accommodations tax, as provided by section 237D-6.5;

     (2)  All revenues or moneys derived from the operations of the convention center to include all revenues from [the]:

          (A)  The food and beverage service[, all revenues from the];

          (B)  The parking facilities [or from any];

          (C)  Any concession[, and all revenues from the];

          (D)  The sale of souvenirs, logo items, or any other items offered for purchase at the convention center; and

          (E)  Advertising or marketing, including revenues derived under section 201B-   ;

     (3)  Private contributions, interest, compensation, gross or net revenues, proceeds, or other moneys derived from any source or for any purpose arising from the use of the convention center facility; and

     (4)  Appropriations by the legislature for marketing the facility pursuant to section 201B-7(a)(7)."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 3000.

Report Title:

Naming Rights; Stadium; Convention Center; Concessions; Advertising; Marketing; Special Fund

Description:

Allows the naming rights of the Stadium and Convention Center to be leased to any public or private entity.  Requires any revenues derived from advertising or marketing in or on the Stadium or Convention Center to be deposited into the appropriate special fund of the facility.  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 NAMING RIGHTS.

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

     SECTION 1.  Chapter 102, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§102-     Naming rights of state-owned facilities; marketing; advertising.  (a)  The naming rights for any state‑owned facility may be leased to any public or private entity.

     (b)  Any revenues derived from advertising or marketing in or on any state-owned facility, including revenues derived under subsection (a), shall be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2050.

Report Title:

Naming Rights; State-Owned Facilities; Concessions; Advertising; Marketing

Description:

Allows the naming rights of any state-owned facility to be leased to any public or private entity.  Requires any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists.  Effective 7/1/2050.  (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 NAMING RIGHTS.

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

     SECTION 1.  Chapter 102, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§102-    Naming rights of state-owned facilities; marketing; advertising.  (a)  The naming rights for any state-owned facility may be sold or leased to any public or private entity.

     (b)  Any revenues derived from advertising or marketing in or on any state-owned facility, including revenues derived under subsection (a), shall be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2050.

Report Title:

Naming Rights; State-Owned Facilities; Concessions; Advertising; Marketing

Description:

Allows the naming rights of any state-owned facility to be sold or leased to any public or private entity.  Requires any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists.  Effective 7/1/2050.  (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 naming rights.

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

     SECTION 1.  Chapter 102, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§102-    Naming rights of state-owned facilities; marketing; advertising.  (a)  The naming rights for any state-owned facility may be sold or leased to any public or private entity.

     (b)  Any revenues derived from advertising or marketing in or on any state-owned facility, including revenues derived under subsection (a), shall be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Naming Rights; State-Owned Facilities; Concessions; Advertising; Marketing

Description:

Allows the naming rights of any state-owned facility to be sold or leased to any public or private entity.  Requires any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists.

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

CONFERENCE COMMITTEE REP. NO. 118

Honolulu, Hawaii

                 , 2025

RE:    S.B. No. 583

       S.D. 2

       H.D. 1

       C.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir and Madam:

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 583, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO NAMING RIGHTS,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to:

     (1)  Allow the naming rights of the Stadium and Convention Center to be leased to any public or private entity; and

     (2)  Require any revenues derived from advertising or marketing in or on the Stadium or Convention Center to be deposited into the appropriate special fund of the facility.

     Your Committee on Conference finds that the cost to maintain and operate the Convention Center and new Aloha Stadium will place a significant financial burden on taxpayers and the State.  This measure will allow public or private entities to lease naming rights for these facilities to provide additional funding sources to operate and maintain these facilities and alleviate the burden on taxpayers and the State.

     Your Committee on Conference has amended this measure by:

     (1)  Inserting language that authorizes the display of the name of any entity that leased the naming rights to a stadium operated by the Stadium Authority on the exterior of the stadium;

     (2)  Changing its effective date to July 1, 2025; and

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

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 583, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 583, S.D. 2, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

STAND. COM. REP. NO.  1917

Honolulu, Hawaii

                , 2025

RE:   S.B. No. 583

      S.D. 2

      H.D. 1

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 S.B. No. 583, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO NAMING RIGHTS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Allow the naming rights of the Stadium Facility and Convention Center Facility to be leased to any public or private entity; and

     (2)  Require any revenues derived from advertising or marketing in or on the Stadium or Convention Center to be deposited into the applicable special fund of the facility.

     Your Committee received testimony in support of this measure from the Stadium Authority.  Your Committee received testimony in opposition to this measure from The Outdoor Circle; Hawaii's Thousand Friends; and numerous individuals.  Your Committee received comments on this measure from the Department of the Attorney General; Department of Budget and Finance; and Hawaiʻi Tourism Authority.

     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 S.B. No. 583, S.D. 2, H.D. 1, and recommends that it pass Third Reading.

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

STAND. COM. REP. NO.  1325

Honolulu, Hawaii

                , 2025

RE:   S.B. No. 583

      S.D. 2

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Labor, to which was referred S.B. No. 583, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO NAMING RIGHTS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Permit any public or private entity to lease the naming rights of any state-owned facility; and

     (2)  Require any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility, or into the general fund if no special fund applies.

     Your Committee received testimony in support of this measure from the Stadium Authority.  Your Committee received testimony in opposition to this measure from the Outdoor Circle.  Your Committee received comments on this measure from the Department of Budget and Finance; Hawaii State Department of Education; Hawaiʻi Tourism Authority; and Hawaii State Public Library System.

     Your Committee finds that the maintenance and operation of certain government facilities can come at a hefty price for tax payers and the State.  Permitting public or private entities to lease naming rights for state facilities and using funds derived from the advertising or marketing related to the naming rights provides an additional funding source to operate and maintain these facilities.

     Your Committee has amended this measure by:

     (1)  Limiting provisions that would have allowed the leasing of naming rights to any state-owned facility to the Stadium Facility, or portion thereof, and the Convention Center Facility, or portion thereof;

     (2)  Specifying that the revenues generated pursuant to this measure are to be deposited into the Stadium Development Special Fund or the Convention Center Enterprise Special Fund, as appropriate;

     (3)  Changing the 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 record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 583, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 583, S.D. 2, H.D. 1, and be referred to your Committee on Finance.

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

STAND. COM. REP. NO. 837

Honolulu, Hawaii

RE:    S.B. No. 583

       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 S.B. No. 583, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO NAMING RIGHTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to allow the sale or lease of naming rights for any state-owned facility.

Specifically, this measure:

     (1)  Allows the naming rights for any state-owned facility to be sold or leased to any public or private entity; and

     (2)  Requires any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists.

     Your Committee received written comments in support of this measure from the Stadium Authority.

     Your Committee received written comments in opposition to this measure from The Outdoor Circle.

     Your Committee received written comments on this measure from the Department of Budget and Finance, the Hawaii State Public Library System, and the Hawaii Tourism Authority.

     Your Committee finds that the cost to operate and maintain state-owned facilities continues to rise.  Your Committee recognizes the need to identify innovative revenue streams to ease the pressures on the general funds of the State.  Your Committee, however, believes that the State should retain flexibility with respect to the transfer of naming rights and preserve the State's reversionary right to the property interest.  Therefore, your Committee finds that leasing, rather than selling, naming rights, is the appropriate method to provide additional revenue streams, while allowing flexibility to terminate naming rights or negotiate new transfers of naming rights upon expiration of the lease term.

     Your Committee has amended this measure by removing the authorization to sell naming rights.

     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. 583, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 583, S.D. 2.

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

STAND. COM. REP. NO. 477

Honolulu, Hawaii

RE:    S.B. No. 583

       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 Government Operations, to which was referred S.B. No. 583 entitled:

"A BILL FOR AN ACT RELATING TO NAMING RIGHTS,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Allow the naming rights of any state-owned facility to be sold or leased to any public or private entity; and

     (2)  Require any revenues derived from advertising or marketing in or on any state-owned facility to be deposited into the appropriate special fund of the state agency that owns the facility or into the general fund if no appropriate special fund exists.

     Your Committees received testimony in support of this measure from the Stadium Authority and Hawaiʻi Tourism Authority.

     Your Committees received testimony in opposition to this measure from the Outdoor Circle and one individual.

     Your Committees received comments on this measure from the Department of Budget and Finance.

     Your Committees find that with rising costs of goods and services and the increasing reliance of residents on local, rather than federal, services, it is critical that the State capitalize on new, innovative methods of revenue generation to operate at maximum functionality.  By allowing the sale or lease of naming rights to state-owned facilities, this measure offers a simple additional revenue stream that the State can use to cover costs and furnish services to the public.

     Your Committees note the concerns raised in testimony by the Department of Budget and Finance that if the sale or lease of naming rights pertained to a state-owned facility that was developed using proceeds from tax-exempt bonds, it may be deemed a violation of the Internal Revenue Code that restricts the private business use of tax-exempt bond proceeds or bond-financed property.  This could jeopardize the tax-exempt status of the bonds, resulting in significant adverse consequences to the bondholders and causing the State to take costly remedial actions.

     Your Committees also note the discussion held during the hearing on this measure regarding the adoption of a global-type process under which the State would retain the naming rights but obtain public input on, for example, the content, placement, and scope of billboards.

     Your Committees find that these issues merit further consideration and respectfully request that subsequent Committees to which this measure is referred examine these matters.

     Your Committees have amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

     As affirmed by the records of votes of the members of your Committees on Economic Development and Tourism and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 583, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 583, 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 Government Operations,