Senate Standing Committee on Economic Development and Tourism

Aloha, and welcome to the hearing with the Senate Committee on Economic Development and Tourism. Today is Tuesday, March 17, 2026. This is our 1pm agenda and we're in Conference Room 229. This hearing is being streamed live on YouTube. In the unlikely event that we must abruptly end this hearing due to technical difficulties, the committee will reconvene on Thursday, March 19, 2026 at 1:01pm in Conference Room 229. We have a one minute time limit for all testifiers, as we have various agendas to get through this afternoon.

So agenda is seven bills. First up is Senate Bill 2411 relating to the Department of Business and Economic Development and Tourism. First up on the testifier's list is Director Tokioka from Department of Business and Economic Development. Thank you. Next up, Deborah Halbert from University of Hawaii. Thank you. Next up, Sherry Menor from Chamber of Commerce.

Aloha, the

Chamber of Commerce stands on the victim testimony in support of

Thank you, Naya. Next up, Keone Nakoa from testifying from Kupu.

Okay. I'm Keone Nakoa from Kupu.

Thank you. Next up Dave Erdman testifying for Retail Merchants Hawaii in support. We have 12 people in support of the measure. Anyone else who's willing to testify on this measure? I'll see none.

Member, any questions?

2,411. David, please. So, Director, do you think that what is proposed in this bill can be implemented by groups in the private sector such as the Chamber of Commerce?

Well, I would let them speak for that, but I would say that we have, ever since I've been at at DeepEd, worked with them closely. And in my testimony, I said support. But we do have some comments, and I know you have it in the testimony. So to answer your specific question, I would say yes, but that would be something that I would let the chamber answer.

And then if David had to implement the program,

how much do you think would cost on an annual basis?

I'm not sure, chair. I will get that information back to you before the day is over.

Thank you. Chamber of Commerce, please.

Chair, vice chair. Hi, Nadia.

So are you do you think that the chamber could implement this measure?

Well, the chamber is ready to continue doing what it's doing and building on the foundation that has been building since 2017 in in leading these employer, educator, local career pathway

opportunities.

And so to answer your question, the chamber is really willing to look at all of the options, do what it takes to see that the momentum that is led by the employers right now continues. Because right now, this investment, it comes this opportunity comes at a time when employer engagement is at an all time high, and they need to collectively focus on workforce challenges is critical. Sector partnerships is a national best practice, and it presents one of the most effective uses of workforce funding because it's employer led, demand driven, and aligned with real labor market needs. So we've we've built the model since 2017. And to answer your question further about, cost, in 2025 alone, more than $100,000 was raised through employer and individual community contributions, Anywhere from, you know, $5 plus on the individual contribution side to $2,500 all the way up to $50,000 commitments from

employers. And, recently in February, the chamber held a cross sector employer meeting at which over 200 employers and partners were in attendance. So this kind of momentum is unprecedented. And so furthermore, yes, we we wanna do what it

the

takes. Sounds good. Thank you.

Is there any questions? Okay. Thank you. Moving on to House Bill 2583, HD 1, relating to economic development. First up, DBEDT, Dennis Ling. Thank you. Next up, Sherry Menor for Chamber of Commerce.

The Chamber of Commerce Hawaii stands on its written testimony in support.

Thank you. Next up, Mihoko Ito testifying for Hawaii Bankers Association on Zoom.

Not present on Zoom, Chair.

Thank you. With comments. We have Brian Miyamoto in Hawaii Farm Bureau in support. Dave Erdman, Retail Merchants of Hawaii, in support. Pam Tumpap, Maui Chamber of Commerce, in support. As well as Carla Kuo for Hawaii Island Chamber of Commerce, and Glen Kagamida in support. Anyone else wanting to testify on this measure? Seeing none. Questions? Business Development and Support Division.

So just one question. Why should the state spend more money when you already have the Community Based Economic Development Program that has a similar objective of increasing access to capital for small businesses?

Yes. That what our comment was is that the state does have an existing program, the CBED program, Community Based Economic Development Loan Program. So if the statute was going to be amended to create this loan loss program, it could be instead of a a new program, it could be put under the CBED program.

Thank you. Yep. Okay. Okay. Next up, HB 1612 relating to economic development. First up, director, Tokioka with, DBEDT.

Thank you, chair DeCoite and vice chair Wakai. Deepak stands on this, testimony in support. And this was an initiative that was, directed by the House and the Senate chair. And, you know, the task force came up with some recommendations. We feel really good about the recommendations. We wanna thank Seth Colby, who is now the Budget and Finance Director for leading this charge. And we're available to answer any questions if you do have them.

Thank you. Thank you very much, sir. Next up, Jennifer Chun, acting administrator testifying for DBEDT. Thank you. Next up, Jonathan Chick, for small business regulatory review board, in support. Chamber of Commerce Hawaii, not Hania. Thank you. Next up, Ted Kefalas for Grassroots Institute of Hawaii in support. Seven other seven other individuals in support as well as one with comments. Anybody else wishing to testify?

Aloha, Chair, Vice Chair, and Member Fukunaga. I'm Matt Pearlberg on behalf of Holomua Collaborative. I do believe we did submit our written testimony, but I can check with staff to make sure that it did make part of the packet today. My apologies if it didn't come through. Holomo stands in support of all bills that will help keep or make Hawaii affordable so local families do not need to move to Hawaii.

The recommendations of the business revitalization task force as in this bill, we find are very helpful in pursuing that goal. There are a significant number of local residents who believe that Hawaii is not a good place to do business and increasing the goal or increasing our standing nationally and sending that message to our community that Hawaii is a place where you can do business and can succeed is how we are ultimately going to diversify the economy, which we know that this committee is constantly working on available for any questions you may have. Mahalo.

Thank you. Anybody else wishing to testify on behalf of the measure? Seeing none members, any questions? All Senator Wakai.

Jim. I think it's fantastic to have goals, but you already issue an was it NBC or something that does an annual ranking of states? And we already know that we're pretty terrible

Yes.

As a business environment. So why do we need another report to tell us we're terrible?

Because you guys asked us to do that, and we we wanted to find measuring tools. And the MSNBC ranking is just one way to show the community and the legislature that we have hit some of these targets that were asked by it. And we the the committee couldn't think of other methods to show how we how the economy has has improved. So that's why, we believe that this is one way of doing it. It's not the only way to do it, but that was what the task force came up with.

Yeah. But we have UHERO doing studies. We have outside entities like MSNBC doing studies. And this this bill comes with an appropriation. So we're gonna spend more money on yet another study that tells us we're not doing very well economically.

That's what the task force was asked to come up with recommendations, and this is what the recommendation one of the recommendations was. It was is this, attachment to the MSNBC, ranking polls?

I just think that if we're gonna spend money, it should be to actually move the needle rather than just examine how the situation needs a lot of improvement.

Do you have

any estimate on what this annual cost is gonna be?

Oh, and by the way, Senator DeCoite, to answer the question from the last bill, it's a 100,000, and that was brought up by the chamber. No. But I can find out the cost for this, senator. Okay?

Okay. Thank you.

Thank you. Okay. Moving on to HB 1613 relating to Hawaii Technology Development Corporation. First up, Trung Lam testifying for HTDC. Thank you. Next up, Chamber of Commerce.

Chamber of Commerce, Hawaii stands on its written testimony in support.

Thank you. Next up, Alexi Drouin testifying from Hawaii Angels on Zoom.

Aloha chair, vice chair, and member of the, committee. My name is Alexi Drouin. I'm the assistant director at Hawaii Angel. I stand in support of my written testimony and strong support of HB 1613. Hawaii is a thriving tech and startup ecosystem, and what we need now is to tell the the world and tell our story about it.

This bill would help us fund a permanent marketing and branding specialist at HTDC to help us promote that in the Hawaii innovation eco, ecosystem. And this would allow us to attract more tech talent to come here and work in Hawaii, more founders to start companies here, and investors to back local start ups, as well as bring Kaimana home. So there's no other position that offer this level of scalable economic return, in my opinion. So this is why I respectfully urge your support in, passing this bill to the next stage. Thank you.

Mahalo.

Thank you. Next up, Zach Hernandez testifying for Thrive Hawaii on Zoom.

Not present on Zoom, chair.

Thank you. In support, Lauren Zobo, executive director testifying for Hawaii Food Industry, also on Zoom.

Also not present, chair.

In support. Thank you. William Annenson for Maritime Group in support. Naomi Kukak, also in support for Simonpietri Enterprise LLC as well as Chenoa Fret. Funds work for Blue Startups and Doreen Wong as an individual in support. Anyone else wishing to testify on this measure? Seeing none members, any questions? HTVC, please. So so if the positions were necessary, can you tell me why they were not included in the budget In your budget?

At the time when we put together the budget request, the NIST funding was still stable. We did earlier that year, we did hear about, you know, when the Federal Government started cutting federal funds. The NIST, which supports our manufacturing, is has been on the rocks. Right now, we're working on releasing the year nine funding. And the year 10 funding is, I would say, at least a 50-50 chance. And then the recompete after that is unknown at this time.

Okay. Thank you. Okay. Next up, HB 1614 relating to economic development. For such long term lamb testifying on behalf of Technology Development Corporation. Thank you. Next up, Chamber of Commerce.

The Chamber of Commerce, Hawaii stands on the street and testimony in support.

Thank you, .... Lauren Zirbel, Hawaii Food Industry Association on Zoom.

Not present on Zoom chair.

Thank you. In support, Hawaii Farm Bureau, Brian Miyamoto in support. William Anderson also in support for Maritime Group, Naomi Kukak, Simone Pietri Enterprise LLC in support and Herman Kugler, MacKay Ocean Engineering also in support. Anyone else wishing to testify on the measure? Seeing none, members, any questions? Seeing none, HTDC, please. So is Hawaii losing any federal funds due to the lack of state matching funds?

It's hard to tell because when you apply, sometimes you need some degree of commitment. So, I mean, it may be it lacks, you know, we will not apply for available grants if there's not available match. We did we have not turned down anything we want, but we only apply for things where we know we have match available.

So if the state was to put $10,000,000, do you think you could obtain federal funds in the amount of 15,000,000?

It's possible. Majority of the grass I see is usually a one to one match. Five to one is maybe R and G between versus the one to one match. So if we I would say we can at least bring in 10,000,000 to match the 10,000,000.

Thank you. Okay. Next up, HB 2,590 relating to taxation. For Sub Creative Industries, Georgia Skinner. .

Thank you, chair, vice chair, members of the committee. Georgia Skinner 's down for testimony and support.

Thank you. Next up, Department of Taxation for Hawaii Department of Taxation

Hi. Good afternoon, Senator and Vice Chair, members of the committee, Garrison Kurth from Department of Taxation. We'll stand on our testimony providing comments on administration. Any other questions?

Thank you. Thank you. Next up, Christopher Wicking for IOT local 665. In support, Tommy Yamachika for Tax Foundation, Hawaii on Zoom.

Thank you, chair, vice chair, members of the committee. Tom Yamachika from Tax Foundation. I will stand on a written testimony, be available for questions.

Thank you, Tom. You're probably one of the only guys in our shop for everyone on Zoom that is present, and you're never missing an action. Thank you.

Am I missing an action all the time?

You're here in present. Next up, Melissa Ptak for Motion Picture Association, also on Zoom.

Yes. Thank you very much to members of the committee. Melissa Ptak with the Motion Picture Association, the trade association for the major studios. This bill, we're in strong support. It does three things.

It ensures that payroll service companies will be assessed the GET on only that portion of their receipts that it's attributable to their service fee and not on the wages that they pass through to the workers. Second, it restores the classification of motion picture and TV production as manufacturing. And third, it repeals a provision enacted in 2022 that requires any expenditures in order to be qualified expenses to be taxed at the highest rate of GET. So we would appreciate corrections on the GET, which will make this program more competitive and attract more of our member companies' projects to Hawaii, creating good jobs. The last thing is is we would ask that the effective date be 01/01/2026, common in tax laws.

Thank you very much and happy to answer any questions.

Thank you. Annex of Irish Barber, autism of Hawaii Film Alliance on Zoom.

Not on Zoom, chair.

Thank you in support. Karen Polk, for Kapolei Chamber of Commerce on Zoom.

Also not on Zoom.

Thank you in support. Pam Tumpa for Maui Chamber of Commerce in support. Mercia Palmer, SAG AFTRA in support. Brian Spicer in support. Sally Kala Davis in support. Richard Spellman in support. Deborah Grant in support. Edward C. Lou Good in support. And Jean Simon also in support. Anyone else wishing to testify on the measure? Seeing none members, any questions? DOTAX, please. Thank you. So what is the revenue impact of the bill, of this bill, and what is your estimate of the revenue loss to the state?

I don't have it, and I checked before I came over to see. And I know it wasn't there for the last

hearing too, but I'll find

out. I'm wondering if I'm just the guest, but because I don't do that part of it. But, you know, what they base it on at this

point with the way the

industry's gone down, I mean, it's starting to come back. So that's that's my guess what I have.

Okay. You can get back to us. Thank you.

K.

K. Next up, HB 1950 hd one, relating to the transient accommodation tax First up, Caroline Anderson, interim president for HTA. Thank you. Next up, Director Tokioka, Department of Business, Economic, Development and Tourism.

Thank you, Mr. Chair DPD stands a strong support with this, as well as HTA. When we submitted our testimony, there are some parts of, HTA's testimony that we would include in ours, because Caroline has been there for a long time and she's been through this. So, you know, with marketing and the the industry how it is right now, it's we we need to be a lot more focused. And our goal was to regain the trust by the legislature when we started this whole mission with, the changes in HTA. And I believe that we have done that.

I know that Caroline and David and the entire team at HTA has has been doing their best to be held accountable and do what is asked by the legislature. And and this funding would be dedicated to specifically marketing, which would help us in the transition we're in now, whether it's, you know, the the tariffs and the concerns with the Canadian market coming, the the weekend in Japan, what happened with the wildfires, all of these things have attributed to the lack of visitors coming to Hawaii, and this additional money would make it a lot easier for us to react to some of the changes. If you can remember back in in the days of, you know 10-15 years ago, the budget was $90,000,000. It is now $60,000,000. So we think that this additional marketing fund will certainly help us as we try to build up the type of clientele that we wanna bring to Hawaii and help us support that.

So thank you for that. And with those reasons, we stand in in so in strong support.

Thank you. Sorry. Kiko Kiko McClellan. She did testify for American Hotel and Lodging Associate Association and Hawaii Hotel Alliance.

Hello, Chair DeCoite, vice chair Wakai, members of the committee. Mahalo to you for hearing the measure this this afternoon. First and foremost, we stand mostly on our written testimony and strong support of HB 1950. And we thank your counterpart of the house for collaborating with you in coming up with this concept and introducing this measure. I'd like to call up one critical piece here of our testimony that speaks to this bill's requirement for an annual comprehensive plan submitted to the legislature ensuring transparency and alignment with the states on our industry shared goals of tourism management and community first branding.

I think it's really important chair that as we think through director Troika's comments about how in 2015 Hawaii led the country in tourism marketing and now we don't even make top 10. And the the reality is that in being able to market to the visitors that we hope to attract and in being able to respond to force majeure like the storms of this past weekend, that a dedicated source of funding informed by the legislature's preferences that allow our industry to return even more revenue to our six coffers is critical. So we hope for your strong support of this measure. Mahalo.

Thank you. Cool. Next up, Tom Yamachika, Tax Foundation on Zoom.

Thank you, chair, vice chair, members of the committee. Tom Yamachika from Tax Foundation. We are not fans of special funds funded by an ear mark off of any tax. We don't think it gives you in the legislature sufficient control over what that money is going to be used for. If, for example, there is a great need for, say, back repairs and maintenance or environmental restoration or anything else.

You you you can't use it because this monies that go into the special fund will be earmarked for tourism marketing only. So we don't think this is a good idea. We need, legislative flexibility on this, And, I'd be happy to answer any questions.

Thank you. Next up, Stephanie Donoho, Kohala Coast Resort Association in support. And John Pelle of Hawaii Hotel and Lodging Association in support. Any other individual wanting to testify on behalf of this measure?

Aloha, chair decoy, vice chair Wakai, members, senator Fukunaga. Thank you for this opportunity. Aaron Salah, president and CEO of the Hawaii Visitors and Convention Bureau. We stand in strong support. I think one of the the key elements to this is that we are looking at tax revenue that is generated by the industry, looking at one portion of that invested back into the industry in order to assure that we are properly serving not just the tourism industry itself but our entire economy inclusive of community needs.

The goal of this work right now, we have an opportunity to protect what it is that we have, depending on levels of investment, to defend against other destinations, investing at much higher levels than we are, or really to look in a future's way to broaden our horizon to look at what tourism can do not just for the industry itself, but for the entire community. Thank you for the opportunity.

Thank you. Anyone else wishing to testify on behalf of the measure? I see none members. Any questions? Senator Wakai. Surely.

So, Caroline, right now, the bill has a blanked percentage appropriation. But I'm looking at the first version of this bill, and it was pegged at 15. Right? The TAT last year was $813,000,000 So if I did the math on the first iteration of this bill, that would amount to $121,000,000 for you. Is is that the number you wanna chase? I mean, what's what's the number ideal number that would help, really promote tourism for the long term?

Thank you. Thank you, senator, for the question. So the Hawaii Tourism Authority, we understand that the the health side, they are pleased with the 15%. So, you know, we would suggest a range between 10 to 12%, which would be roughly 81,000,000 to 98,000,000.

Right now, you get 63

Right now, we, get 63,000,000. 81,000,000. It was back in 2018 that we had that amount. And again, like, director Toyoka mentioned, we are you know, we wanna make sure that we earn the trust of the legislature and that we can show you can show and demonstrate what we can do with the funds. So we believe at least 10% would be sufficient for us to continue doing our work, having that money to market and promote the islands as well as to protect our brand as as Aaron, president and CEO of HPCB had mentioned. And also, you know, in the end, it will help our communities as well.

Yeah. I mean, I know that for HTA, it's been a yo yo up, down, up, down, and it's hard to have long term marketing plans when you really have no idea what the future holds for you financially. But help me reconcile in my mind. I mean there 2025 visitor spending was from what I remember, was record, right, was $21,750,000,000 in the impact of tourism to to this to the state, despite the diminishing amounts of of dollars you have for for marketing. So help me reconcile all of that.

Right? Because one could argue, like, you know, your your marketing budget is going this way, but visitor spending is going this way. So what's not to like about this current scenario? Help me reconcile in my mind why that would be dangerous for us to continue down this path.

So right now, given the political environment, the geopolitical environment, the increased competition worldwide, like, what we're up against, our marketing budgets haven't increased. It's been actually decreasing. And so to continue to ensure that, our global marketing team can be competitive, put in the the correct activations out there, it's important. One of the other things, you know, we just drafted our strategic plan. The board approved it, and it has to go before director Tokyo and governor for approval.

In that plan, we recognize that, you know, one of the things we need to do is a brand study because we haven't changed our brand in over 1520 years in its time. So that's what some of the money would be used for, as well as, you know, creating those, we call it marketing co ops, again, to leverage our funds with the industries. Again, building building demand back and protecting especially our air seats, air routes to the to the state. That's just some examples.

Okay. It still doesn't help me reconcile in my mind that we're spending as a state less today on tourism marketing, but we're getting a larger and larger return on investment and and impact. So I understand you wanna rebrand and other places are spending more money, but it's it's still it it we're not going in the same one would think they the more you spend on marketing, then the revenues would go up. But in our case, marketing is going down, but revenues are still going up.

So if you think about the last, TT collection, I believe, and I will look to Jennifer Chen on this, TT was down from my recollection of the numbers, and I could be wrong. But I think we also need to remember is that this is investment into into our industry. And so, you know, while, you know, yes, last year we had visitor expenditures growing over visitor arrivals. We still have to keep reinvesting in in the the product as well as in marketing, again, to to keep our share, to grow our share, as well as to protect what we have as well.

Okay. Thank you. Any other questions? Thank thank you,

Charlie. Hotel Alliance. Charlie. Hotel Alliance.

Thank you, guys. So in regards to the bill, what's your thoughts on the special fund, aside from the testimony that you folks has given us? Where our numbers are today, and how we increase that?

Can I answer your question first? Is that okay? Is that okay? Jerry Gibson, President of the Hawaii Hotel Alliance. There's two reasons why, big reasons why I spend went up. One, if you look at the segmentation of what's selling right now, luxury was way up.

Okay. So therefore, your rates are higher. You're gonna spend more. The other thing is we are spending more. Right? We're spending a lot more money than we were years ago. For instance, shipping went up 21.3%. Right? So I could go on a whole litany of things that have gone up.

That's why the spend has gone up so much. It's not because we're doing better. Although, intuitively, you may think that. That is not the case. We're actually flat to down. And if you look at occupancy, that's exactly what you see year over year. So does that answer your question or do you have any more questions?

I just wanna try to make a clear connection between how marketing dollars lead to local financial benefit.

And we can talk about that ROI.

Let me give you some numbers to to answer your earlier question, Vice Chair. Just adjusting 2018's spend of $82 million for inflation in 2026 dollars would be $102.5 million. So if we were just comparing apples to apples, spending the same amount of money that we spent in 2018 adjusted for inflation today, we would be spending about $102 million marketing Hawaii as a destination.

The acting CEO for HTA was correct that TAT revenues have actually declined year over year from 2023 to 2024 to 2025. DBEDT puts out a fantastic fact sheet that we use to reference in creating our testimony today. And it did decline from 2023 over 2022 for obvious reasons. I'm sorry, 2023 to 2024 by 4.3% and another decline by 1.8% from 24 to 25.

And yet collections increased in previous years. And so the question is why? So as the industry faces the same inflationary factors that our state government faces, the revenue take is dynamic. And so just because a hotel costs more doesn't mean that one of our members is making more.

It does mean that our state and the residents of our state do benefit from that increased costs that we pass on to our guests because it increases the amount of TAT that is generated per room. We did see a decrease in lift of roughly 1% from over the past year.

And that was, that's challenging for our membership at AHA and AHLA. We represent 33,000 hotel rooms at HHA and a 164 unique member properties throughout Hawaii at AHLA. And when you dig down into the numbers, while the state is doing okay from TAT collections, our membership is not.

And the reason we highlight that is that the marketing dollars that we relied on in past years to build unique marketing campaigns around. Right? It's not just the state going in and buying. It is Hyatt and Marriott, and it is our friends at Outrigger who go and buy around what Hilton is doing in conjunction with the HTA spend. Those dollars are smaller, and it makes that impact smaller.

And it makes it more challenging for our hotels where we want to see guests staying attract those exact visitors. And with a dynamic pricing model, to answer your question, Chair, it would allow the legislature who would have oversight, more oversight the way the bill is written of these dollars to suggest that perhaps there is a kitty, a healthier kitty that allows us to respond to an inclement weather event.

Right? Where Jerry yesterday anticipated $30-40 million in lost bookings. It looks like the number is much higher than that now that we have more clarity on the the cancellations over the last week and week and a half going forward. And it's not helpful when Inside Edition does a special on the waterways in Hawaii and not in a positive way.

And so in order to combat that, we need more flexibility as a state so that the membership of organizations like ours can come in and say, great. Organization x that the state has given the authority to go and move forward with a nimble campaign to support marketing is doing this. We can tie into this. Last year, we had to ask the Governor for $6.3 million. Was it Jerry?

$6.4 million to help Maui, and it worked. But we don't think that it makes sense to have to respond to every emergent event because we don't have sufficient base marketing to weather, no pun intended, these sorts of events and to have the flexibility to do targeted marketing that are going to attract the kind of business that you want.

I will point out that three out of every 10 General Fund dollars comes from tourism. 30% of all General Funds come from tourism. And the way that this is structured, we think that, with your oversight, there is a common sense way of creating marketing plans that identify how many tax dollars you're returning like we did with the the campaign last year.

Yeah. And I wanna point out there was a, there was a mini model. The one in Maui really went to what we're looking at today. You know, we spent 6.4 million. The ROI, and Jennifer will help me with this, but it's between seventeen and 21 times. I mean, that is incredible.

If you look at Kaanapali now this year compared to last year, they have picked up, and why is that? Because we're out there in the world. And it's done nothing but help us. And so you know when you know Aaron and Tom you know look at a marketing budget for this year, they have all the components in it.

They're looking at a return on investment for the people of Hawaii. And that's exactly what we think we can do. These things are only not dynamic, but their rates are only not dynamic, but they're also organic. As they go up, we make obviously more TAT. And that's really important to keep in mind. So, yeah.

I think that's my point. We can do this with the model that HVCB is putting together. And it's up to us. We understand that to prove to you from, you know, a business point of view that this can happen. And we plan to do that.

Thank you. And, you know, I just wanted to say thank you because when you guys did step up forward for the Lahaina fires, I mean, you guys asked nothing of the state at that time but executed perfectly to make sure visitors were taken care of in an upfront fashion of financial support on your end's behalf until the state kinda stepped in after the fact having to make the ask. So thank you.

Thank you, Senator.

Thank you. Any other questions?

I just have an idea. City State has has a tiered hotel occupancy tax. Right? We look at personal income tax. You're, you know, a basic wage earner, you get less tax. Right? You're making $200,000 a year. You make, we charge you 11%. Right? Could we have like a tiered TAT?

So if you're staying at, and I don't wanna diminish like the Pagoda. Right? But so the Pagoda pays less rate. TAT is 11%. Pagoda pays 9%. You're Ritz-Carlton, you're like, you know, the high end guys, you pay 14%. Right? Wouldn't, would that be a fair way to assess a hotel tax on on the various hotels?

I'd have to think about that a little bit, but I think a blend is better. I think one tax is better. First of all, you know, most hotel chains say, Hilton or Marriott, something like that, they have a blend of different types of properties. Right? So as a company, I think it would be better to have one tax in that blend. I think it's something to think about, but you know, it may be more difficult from an accounting standpoint also for the state and that kind of thing.

Yeah. Because we treat like all hotels as equals. But you guys are not all equal.

Yeah. The, in recent months, the Hawaii Hotel Alliance and AHLA hosted a delegation, from Tokyo. And, you know, every year they bring different members of their tax collection divisions here to learn and share. And on the docket was how to apply a more equitable TAT in Tokyo. And interestingly, Senator, to your point, in certain parts of Tokyo, they do have a tiered tax rate.

And that strategy is one that is deployed in order to find a way of exempting their kamaaina from paying local taxes. 0 to 10,000 yen is no tax. 10,000 to 15,000 yen is a flat tax of 100 yen per night, and 15,000 yen and higher is 200 yen per night per accommodation. And so they found a very creative way of tiering their tax collections in order to allow for lower end travel. Let's say they're traveling for a baseball game to Tokyo.

There's not staying out of Ritz-Carlton. They're staying at some more economical establishment. It allows them to, without running into other issues, do that. So if you were to reconstruct, Chair, tax collections in a way that wanted to, without violating the Commerce Clause, say, we're gonna make more affordable travel not apply to a TAT. That is possible.

It does put a heavier burden on our luxury rooms, which, you know, it's like I use this analogy that the hotel industry is a lot of being a rancher. Right? Everybody wants to buy a rib eye. You can't make money if you cannot sell a hamburger. Right? And so as an industry, we have to have the ability to both sell the rib eye and have the hamburger option available for people that that wanna eat hamburger. I I like hamburger steak, you know.

I like Wagyu hamburger too.

Maybe not Wagyu hamburger, Senator, but, you know. I think that you are onto something that it is possible. I don't know that we can contemplate that the way that, I guess, related to taxation, be a heavy lift at this juncture. But, you know, in theory, yes.

It would, it would be a very flexible way for you, as policymakers, to decide that we are going to still generate the revenue that we need. We would urge you to allow us as advocates for the industry to provide you as much information as possible on how that might affect the different sectors as you contemplate something like that.

Yeah. It's important to have the rainbow of choices, you know, because of, one, affordability. Right? You know, not everybody can stay at the Ritz-Carlton every night. That's for sure. And so that's something that we have to really keep in mind.

Yeah. Any questions? Seeing none. Short recess.

We are back for decision making for 1:00 agenda. First up HB 2411, HD 1. We're gonna be passing with an SD 1 making any necessary technical non-substantive amendments and defecting defective date to July 1, 3050. Members, discussion? Seeing none. Vice Chair Wakai for the vote. Chair goes aye.

I vote yes. [Roll Call] Chair, your recommendation is adopted.

Thank you. Next up, HB2583 HD1 relating to economic development. We're gonna be passing with an SD1 by defecting the effective date to July 1st 3050. Members any discussion? Seeing none, Vice Chair Wakai for the vote.

Chair DeCoite?

Aye vote yes. Senator Fukunaga?

Aye.

Aye.

Senators Kim and Fevella, excused. Chair, recommendation's adopted.

Thank you. Next up, HB 1612. You know, we already have a mechanism to address this. And, you know, we've been tasked with studies after studies and in a time when constraints of funding has been huge for us. I have full faith that DBEDT can manage handling this. So we are gonna defer this measure. Thank you. Next up, HB 1613 HD1, relating to Hawaii Technology Development Corporation. We're gonna be passing with an SD1 by defecting the effective date to 07/01/3050. Members, any discussion?

Seeing none, vice chair Wakai for the vote. Chair goes aye.

I vote yes. Senator Fukunaga?

Aye.

Senator Kim, if available, excused, chair recommendation your is adopted.

Thank you. Next up, HB 1614 HD1 relating to economic development. We will be passing with an SD1 by defecting defective date to 07/01/3050. Members, any discussion? Seeing none, Vice Chair Wakai for the vote, Chair goes aye.

I vote yes. Senator Fukunaga?

Aye.

Senator Kim and Fevella are excused. Chair, your recommendation is adopted.

Thank you. Next up, HB 2,590 HD1 relating to taxation. We're gonna be passing on SD1 by making any necessary technical and non substantive amendments and defecting defective date to 07/01/3050. Also let the committee report reflect that the next committee WAM consider the amendments recommended by DOTAX as they relate to the bill's fiscal implications. Members, any discussion? Seeing none, vice chair for the vote, chair goes aye.

Aye.

Aye vote yes. Senator Fukunaga?

Senators Kim and Fevella are excused. Chair recommendation is adopted.

Thank you. Next up, HB 1950 HD1 relating to the transient accommodation tax. Very grateful for the discussion, going back and forth. I would like, I'm gonna pass this with an SD1 by making any necessary technical non substantive amendments and defecting the effective date to 07/01/3050. Also reflecting in a committee report, HDA's testimony, as well as a discussion we've just had with Hawaii Hotel Alliance in visiting, what it's gonna look like in a tiered, tax, structure, as well as, the different scenarios also within a blend, tax structure as well.

And we want to continue to move this measure from better discussion. Yes. With that being said, members, any discussion? Seeing none, vice chair Wakai for the vote, chair goes aye.

Aye.

Senator Kim and Fevella are excused. Chair, your recommendation is adopted.

I vote yes, Senator Fukunaga.

Thank you. Thank you, members. Thank you, Paula for being here. With that, we are adjourned.