House Standing Committee on Tourism

Thank you, everyone. Convening this morning's hearing for, Joint Hearing on the Committee on Tourism and the Committee on Economic Development and Technology. For the purposes of hearing two bill, one bill that is joint and another bill that is a single with just the Tourism Committee. Today is February 11, 2025. Time is 10:30am here in Conference Room 423.

We will start with the first item on the agenda, House Bill 916, relating to the low income housing tax credit. It allows tax credits claimed under the state's low income housing tax credit program to be used to offset taxes imposed by the state transient accommodations tax law.

It specifies that tax credits amount applies applied to the state transient accommodations taxes be limited to the state transient accommodations taxes imposed in the same county in which qualified low income buildings is located, and it makes permanent Act 129. First up to testify, we have HHFDC in support. Okay, we'll go back to them if they show. Next up, we have Department of Taxation.

Aloha, Chairs and Vice Chairs. My name is Eliza. I'm from the Department of Taxation. The Department of Taxation would like to emphasize a couple things about this bill. First of all, this bill poses very significant challenges to administer and would create a more complex tax system for everybody. Second of all, tracking and verifying an income tax credit that is given to an entity that flows through to individuals and investors and then is gone through to a TAT account would be very difficult and makes it susceptible to abuse.

Third of all, this isn't in our testimony, but I want to emphasize that this bill would create a tax credit for someone who didn't pay this tax. So for example, a hotel collects TAT from a customer who's staying at a hotel and passes it on to the Department of Tax and they are the one who's going to get the TAT credit. So the hotel owner would benefit from the tax credit, although it's the person who's staying at the hotel or accommodation, transient accommodation, who pays the tax. Thank you.

Thank you. Next up, we have Tax Foundation of Hawaii.

Good morning, Chairs and Members of the Committee. This is Jade McMillen on behalf of the Tax Foundation of Hawaii. We've submitted some comments on the measure. We noted in our comments that there could be consumer protection issues that arise when the TAT, when, pardon me, when the taxpayer passes on the TAT to get, but it's allowed to offset that talk collected through the credit. Thank you.

Thank you. That is all the individuals that we have signed up to testify. Is there anyone else wishing to testify on the measure before us, starting with those in person? Anyone on Zoom? Okay, seeing none. Members, any questions?

Okay, we'll move on to the next item on the agenda, which is House Bill 1006, relating to Agribusiness Development Corporation and includes agriculture tourism and the definition of enterprise to authorize the Agribusiness Development Corporation to financially support farming businesses engaged in agricultural tourism. First up, we have Department of Agriculture in support. Okay, we'll go back to them if they come. Next up, we have ADC in support.

Good morning, Chair, Vice Chairs, Members of the Committee. I'm Wendy Gady. I'm with the Agribusiness Development Corp, and we're going to stand on our written testimony of support. And I think there's three reasons if I'm sitting in your seats I'd want to know. First of all, the farmers came to us and asked for us to add this into our statute. Secondly, it diversifies their income. And third, it provides both technical and financial support for their operations. I'm available for any questions. Thanks.

Thank you. Next, we have DBEDT in support. Okay, we'll move on. Next, we have Hawaii Farm Bureau in support. Okay, that is all that we have signed up to testify. Chair does want to note that, in addition to them, we have received a total of eight testimony, pieces of testimony in support and one in opposition.

Is there anyone in the audience wishing to testify on the measure before us? Is there anyone on Zoom wishing to testify on the measure before us? No. Seeing none. Members, any questions? None. We're going to do a short recess.

We're going to reconvene this morning's Joint Hearing on the Committee on Tourism, Committee on Economic Development and Technology.

Time is 10:30am, date is February 11, 2025, and here in Conference Room 423. First up, we have House Bill 916 relating to the low income housing tax credit. Chair's recommendation is to defer it. I think that, you know, this needs more time to work.

It's a great idea, but I encourage the Department of Taxation and DBEDT to try to work to see how we can move this forward if there is a possible way to do it. Moving on to our next item on the agenda, House Bill 1006, relating to Agribusiness Development Corporation. Chair's recommendation is that we pass this as is. Members, any comments or questions? Seeing none. Vice Chair for the vote.

Voting on House Bill 1006 HD 1. Chair's recommendation is to pass as is. Chair and Vice Chair vote aye. [Roll Call] Chair, your recommendation is adopted.

Thank you, Members. This hearing is adjourned.