House Standing Committee on Tourism

Convening this morning's Joint Hearing on the Committee. House Committee on Tourism. I have myself as and the Committee on Joint on Water and land. Today is February 13, 2025 on the 9:00 a.m. agenda here in conference room. On behalf of the community tourism, I have myself. Vice Chair Templo, Rep. Ilagon, Rep. Todd, you want to introduce your Members?

Okay. No, I usually don't. Sorry I'm not as nice as you. Hello, my name is Mark Hashem. I'm the Chair of Waterland. And to the right of me is the Vice Chair, Representative Rochelle Lamasao and Representative Shimizu. And Representative Morikawa. Came all the way from Maui. I mean Hawaii. Sorry.

And Suza.

Oh, and Suza is here too. Sorry, wrong island.

See, you're excused.

I thought her name was.

Apologize. I thought it was Brett Morikawa. Okay, going on. Thank you. Chair does want to note that today is deadline. So we are going to impose a two minute time limit for your testimony. If you are on Zoom, make sure that we can see you and unmute yourself when you are called.

We are not responsible on our end for any disturbances on your end. But in case of a catastrophic catastrophe, we will recess and reconvene at another time that will be announced. Okay. First on our agenda, House Bill 504, relating to environmental stewardship.

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

First up to testify we have the Department of Taxation. Thank you. Next up we have Hawaii Tourism Authority. Not present. Next up we have DLNR. Thank you. Next up we have the Climate Change Mitigation Adaption Commission. Amazing. Next up we have Care for ʻĀina Now Coalition.

Hello. My name is Trisha. I'm representing the Coalition, 63 community groups, nonprofits, and small businesses working in ecotourism. I just want to underscore the urgency for a measure like this this year and also underscore the importance of having dedicated funding distributed to community groups.

Thank you. Next up we have the Hawaii Ocean Legislative Task Force.

Aloha, Chairs, Vice Chairs, and Members of the Committees. My name is Hanna Lesiak and I'm here on behalf of the Ocean Legislative Task Force, and I'm also a member of the Care for ʻĀina Now Coalition. But our Ocean Task Force is comprised of over 120 individuals from numerous organizations, all of which who care deeply about the protection of our 'āina and our oceans. I just wanted to emphasize that now more than ever is the time to build a safety net for our environment, so I urge you to support this bill. Thank you.

Thank you. Next up, we have Care for ʻĀina Now, Jocelyn Herbert.

Aloha. Good morning, Chairs, Vice Chairs, Members of the Committees. My name is Jocelyn Herbert. Here on behalf of the Care for ʻĀina Now Leadership Committee, which has grown to be 10 organizations serving the conservation, Native Hawaiian, and community interests. We're here in strong support of this bill.

I think we all know that Hawaii is facing increasing threats and realities of wildfire, flooding, coral bleaching, and more. We found there's a $560 million annual shortfall in addressing these threats, and this bill does two very important things to address these challenges. One, it would create a dedicated funding source to care for these resources.

And two, it creates an opportunity for visitors to invest and contribute to Hawaii's lands and waters that they come here to enjoy. We just released polling earlier this week that finds that fully 75% of folks polled who are visitors support the idea of an environmental stewardship fee. They want to come and help pay to take care of these resources that they come to enjoy. So please advance this bill for the benefit of our residents and visitors alike. Thank you for the opportunity. Mahalo.

Thank you. Next up, we have Ted Bohlen.

Good morning, Chair Tam, Chair Hashem, Vice Chair Templo, Vice Chair Lamosao. Ted Bohlen for the Hawaii Reef and Ocean Coalition and Climate Protectors Hawaii in strong support of this bill. I think it's clear that there has been an underfunding of environmental protection measures for Hawaii. We have great resources. Our economy depends on people coming to enjoy those.

There is a logic in having the tourists pay some amount. I'm not wedded to the TAT as the funding mechanism. I do think we need a funding mechanism, and this is one of them. And as I say, it has some logic to it to have people who come from far away to enjoy our resources, spend something, as many countries around the world have done. The dedicated source of funding is important. Access to funding for community groups is important as well. I think this is a great bill.

I think it's a strong need of Hawaii to do something, and this is the bill that's going forward this year so far. So I urge the Committee, please, Committees, please, to pass it, move it on, and let's see if we can do something to protect our natural resources. Thank you very much for the opportunity to testify.

Thank you. We're going to... I want to let everyone know that we are starting with the people in person first and then we're going to move on to Zoom. Next up we have Hawaiian Islands Lands Trust.

Aloha Mai Kakou. My name is Angela Britten, and I am the Chief of Operations and Philanthropy for Hawaii Land Trust, also known as Hawaiian Islands Land Trust. I stand on our testimony and support of HB 504, which proposes an increase to the TAT to generate dedicated funding for environmental stewardship through the DLNR.

And I would like to add a personal statement. My kumu taught me that the word kuleana, which is often translated as responsibility, also means privilege. As we who live here know, it is a great privilege to live here in Hawaii, but that privilege comes with great responsibility. The responsibility is to actively care for these lands that sustain us.

Just as residents carry this kuleana, so too do the nearly 10 million visitors who come here each year. They worked hard to have the privilege to travel to this amazing place, and with that privilege comes the responsibility to care for it. The funds collected through this tax will provide much needed balance to tourism and responsible community led management, land management. Excuse me. Mahalo for the opportunity to testify.

Thank you. Next up we have the Nature Conservancy, Elizabeth Benyshek. Sorry if I butchered that.

Thank you. I'm Elizabeth Benyshek. I'm with the Nature Conservancy Hawaii and Palmyra, and I, we have submitted our testimony. But I wanted to highlight, just as the Care for ʻĀina leadership said, 75% of visitors support, but it's actually even higher. 85% for repeat visitors, and even 25% of visitors said that they'd be more likely to visit if such structures were in place. I also wanted to highlight that in 2023 we polled voters and found that 63% were in support. So thank you.

Thank you. We're going to now move on to Zoom. First up, we have Kohala Coast Resort Association. Not present. Next up we have Kuaʻāina Ulu ʻAuamo.

Aloha, Committee Members. My name is Kevin Chang, Executive Director of Kuaʻāina Ulu ʻAuamo, which means grassroots growing through shared responsibility. I support everything my colleagues here have already said. KUA also serves on the leadership team for CAT. I just want to emphasize that we believe these funding in the long run need to support shared responsibility and have our communities share in the care for our resources. Mahalo.

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

Good morning, Chairs, Vice Chairs, Members of the Committees. Tom Yamachika, Tax Foundation of Hawaii. We have no problem with the policy objectives of the bill. We do have a problem with the funding source. Tourists do not have unlimited wallets. They cannot vote for you at the ballot box, but they can vote with their feet.

We are not the only resort island destination in the world, and they know this. As economic performance declines, which may be the result of that, so do tax revenues. And that gives you folks even more of a problem because we have less money to spend overall on this or any other priority. I'd be happy to answer any questions. Thank you for the opportunity.

Thank you. Next up, we have Mālama Pūpūkea-Waimea on Zoom.

Aloha, Chairs, Vice Chairs, and Committees. My name is Denise Antolini. For the last 20 years, I've been the volunteer President of Mālama Pūpūkea-Waimea on the North Shore of Oahu. First, thank you for hearing this bill. I think it's really a credit to your vision that you, I hope that you think that it needs to keep moving as a conversation.

He says the Legislature sorts out the various related bills and vehicles. A quick story from the North Shore of Oahu. It's a story that I think is true in all of your districts. Even if you're in an urban district, your constituents love to go country, wherever country is for you. All of those beautiful spots that our residents enjoy, our visitors enjoy, I think you might agree, are severely underfunded.

On the North Shore of Oahu, Pupukea is a real hot spot. We get huge numbers of visitors. The pathways are eroded, the bathrooms are overloaded, the wildlife is at risk. So I guess the question is, you know, do you feel like the funding in your district for these incredible natural resources, watersheds to coral reefs, is adequate? I think it's not, and we're trying to fill that gap with your help. Last point.

We have also surveyed visitors to our area with QR code surveys, and they're very willing to pay, you know, an amount that goes back into the protecting the resource that they enjoy. So they're seeing a skyrocketing room rates, and I think this increase in TAT is very minimal given the overall increase in room rates that we've seen in the last several years. So mahalo. Appreciate your support and moving it along. Thank you.

Thank you. Next up, we have Sam Dorios.

Aloha. So I'm in strong support of this bill, mostly for practical terms. We rely very heavily on tourists, and they come here specifically to enjoy our pristine, wonderful natural environment. They love our 'āina. I am very concerned at the lack of funding for keeping the environment to be healthy and resilient. We all saw what happened in Lahaina.

I'm not saying Lahaina could have been prevented if we had this bill passed years ago, but maybe. Maybe if there was better stewardship of that area, maybe the fire wouldn't have been so bad, maybe wouldn't have lost. And we saw what happened to Maui when that fire happened. What doesn't concern me is charging $20 for visitors to come visit. They spend a lot of money to come here. They're not going to say, you know, maybe we'll go to Mexico instead because of that $20 thing. No one's going to say that.

And in fact, when you ask, as was already mentioned, when you ask tourists, would they visitors, would they be willing to pay, of course they're willing to pay. They want Hawaii to remain Hawaii. So this is a very big no brainer for me. I think you got to weigh the risk of not passing something like this and to continue to roll the dice the way the environment's been going.

And if you think you're going to get money from in the state, we're short on budget, and if you think you're going to get the federal government to give you money for this, I don't think King Musk is going to go for that. So I think this is a very big no brainer and you should heavily, heavily, heavily consider doing this. Please. Thank you.

Thank you. That is all that we have signed up to testify both on Zoom and in person. Is there anyone else in person first who would like to testify on the bill before us? When you come up, please state your name and the position you hold on the bill.

Good morning. My name is Maka Gibson and I am support of HB 504. Thank you so much for the opportunity to share my manaʻo with you. I am an avid adventurer and traveler and I've paid similar fees as the TAT when I visited beautiful places around the world.

Professionally, I'm a program officer at Resources Legacy Fund, where I develop and implement strategies and projects for Hawaii's environmental equity and justice programs. RLF is a nonprofit and philanthropic organization and locally we partner with community based organizations to promote natural and cultural resource protection and restoration.

What's most important about this bill is that it increases funding for natural resource protection. One of my roles is to administer a federal grant through the EPA called Thriving Communities, which is set up to advance environmental justice programs and projects. It's currently on pause, and I think that really underlines the importance of this bill and highlights how important a grant program to community based organizations would be as part of the package of this bill. Thank you.

Thank you. Is there, is there anyone that wants to testify in person? We're going to move on to Zoom. Anyone on Zoom that wishes to testify? Okay. We'll start with the Committee on Tourism. Members, any questions? Okay. Moving to Water and Land.

Water and Land, any questions? Representative Iwamoto.

Thank you. This is for the Department, if they're here. Okay. How about the Tax Department? Hi, sorry about that. Sorry, I missed your testimony earlier. I apologize if you've already answered this question. But given the... Is it possible to... Sorry. What kind of impact would providing a refundable tax credit to state residents, what kind of impact would... How much would that reduce this fund? And if we could then recover that by increasing even more, raising the TAT even higher, is it possible to do that balance?

There is no refundable tax credit in this bill. But...

I'm just thinking of ways to get more support for this from the public, from at least voters in Hawaii.

Yeah. I mean, there could be. I mean, the Legislature, if they want to, could create a refundable tax credit. But I'm not, I mean, I'm not sure what, what that would be. But. So our testimony was that the $20 surcharge creates administrative difficulties because, you know, tax reporting is basically voluntary.

It's largely voluntary, and people volunteer and report and pay because they understand that we can verify income. You know, so, you know, they will come forward and say that. But with the $20 surcharge, it's really hard for us to verify what the value of the miles are or what the bookings are.

So it's easy to see, you know, an income and certain, you know, reporting statements such as 1099 and be able to verify it. But it would be hard, and so it creates like an unfair and inconsistent and uniform tax system with the $20 surcharge. So it's not that the Tax Department doesn't want to do the work, it just creates a more unfair tax system them.

Rep. Shimizu.

Thank you, Chair. I have a question for DLNR. Are they here? Okay, thank you. Thank you for being willing to answer the question. The question is for these monies that are going to be generated and given to DLNR to take care of the environment, as all these good people are here for, does DLNR have a plan how to implement and use these monies?

Yeah. Mahalo. Leah Laramee with the Climate Change Mitigation Adaptation Commission, who's administratively attached to DLNR. And I've worked very closely with them on this. Yes, we do. We actually, believe in DLNR's testimony there is a link to a story map that identifies different projects and where some of this funding will go. That's very specific to, I believe, the Division of Forestry and Wildlife. But we're looking at expanding that and including others DLNR departments as well as community organizations.

We also, on the Climate Change Commission website, we have a grants projects bridge, which lists a number of different resilience projects as they're titled, that also includes community projects that could also be funded with the this. So these are just ideas, but I believe the process would be to have a grants program which would then funnel the money out to community projects as well as providing funding for DLNR projects themselves.

Thank you. So the link that you reference is in your testimony. Is that the interactive story map?

Correct.

Okay. All right. That's good to hear. Thank you. Thank you, Chair.

Anybody else?

For DOTAX. Sorry about that. Just to add on to Rep. Iwamoto's question. Does the Department, because I don't think we have anyone from the industry here who may have the data. Does the Department have any data on what percentage of TAT revenue is contributed by residents currently? Or like a ballpark figure?

No. I'm not sure how we would be able to track that.

It'd probably have to be through the industry itself then, right? Probably have something.

Yeah. How many residents are. Yeah.

Okay. Thank you.

Anyone else with any questions? Seeing none. We're going to recess for a short bit.

Reconvening this morning's hearing on the House joint hearing on the House Committee on Tourism and the Committee on Water Land. February 13, 2025, 9:00am agenda here in conference room 2, 423. First up, we have HB 504, relating to environmental stewardship.

We had a good robust discussion. So Chair's recommendation is that we pass this out as an HD 1. Noting DOTAX's concerns, we will make the effective date for the surcharge effective January 1, 2027. And we are going to defect the date of this bill. We're all... Oh, yeah, that's it. Members, any comments or questions or concerns or want to say your piece?

Okay. I totally agree that stewardship of the land is utmost and we need to have the tourists participate. I think this is a very Interesting concept. I'm not sure how this exchange for points and miles is going to work. It's a very creative idea, and I give the introducer credit for thinking outside of the box.

I have concerns that the rate of $20 a night is too high, and I'm not sure based on the testimony of Department of Taxation and the Tax Foundation, again, the implementation administratively of this idea. So I feel like it's deserving of moving it forward. So I will support it, but I do have reservations as I stated, so that is my, I guess, position.

Members, any other comments, questions, or concerns? Seeing none, Vice Chair for the vote.

Voting on House Bill 504. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye. [Roll Call] Noting the excused absence of the previously noted Members. Chair, your recommendation is adopted.

Okay. Committee on Water and Land, same recommendation.

Voting on HB 504. Recommendations passed with amendments. Chair and Vice Chair vote aye. [Roll Call] Your recommendation is adopted.

Thank you. This Joint Committee is now adjourned.