| 47 | | - | PART I SECTION 1. The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community. The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations. The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources. The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources. The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State. The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities. Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs. Additional funds are also needed to respond to climate crises when they occur. The legislature further finds that as contemplated, the transient accommodations tax is intended to be applied fully and equitably wherever a transient accommodation occurs within the State. While the State's lodging and hotel establishments have been complying with, and paying their share of the transient accommodations taxes, tax collections on short-term rental operators have fallen short. Additionally, there is no existing transient accommodations tax levied on commercial passenger vessels, which in 2024, accounted for 972,820 passenger port calls at port facilities under the jurisdiction of the department of transportation. The legislature believes that a modest increase in the transient accommodations tax can generate greatly needed funding to support the restoration of the State's valuable natural resources, help prevent and respond to the climate crisis, and leave a strengthened environmental legacy for future generations. The increased tax is a reasonable and appropriate way to generate these needed revenues. Accordingly, the purpose of this part is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources. SECTION 2. Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows: ""Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, cabin, stateroom, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, vehicle equipped with or advertised as including sleeping accommodations, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, commercial passenger vessel, or other place in which lodgings are regularly furnished to transients." SECTION 3. Section 237D-2, Hawaii Revised Statutes, is amended to read as follows: "§237D-2 Imposition and rates. (a) There is levied and shall be assessed and collected each month a tax of: (1) Five per cent for the period beginning on January 1, 1987, to June 30, 1994; (2) Six per cent for the period beginning on July 1, 1994, to December 31, 1998; (3) 7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009; (4) 8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and] (5) 9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and (6) per cent for the period beginning on January 1, 2027, and thereafter, on the gross rental or gross rental proceeds derived from furnishing transient accommodations. (b) Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter. (c) There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of: (1) 7.25 per cent on the fair market rental value until December 31, 2015; (2) 8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and] (3) 9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and (4) per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter. (d) Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter. Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter. (e) Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25] per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that: (1) [The] per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and (2) If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State. The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b). (f) Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 per passenger per port entry on any commercial passenger vessel at any port facility under the jurisdiction of the department of transportation. Per passenger taxes under this section are charged on a per voyage or per itinerary basis and will not be charged more than once per port entry if a vessel uses a state commercial harbor property or facility more than once on a single voyage or itinerary. Transient accommodations taxed under this subsection are not subject to levy, assessment, and collection pursuant to subsection (a)." PART II SECTION 4. (a) There is established a transient accommodations tax enforcement working group within the department of taxation for administrative purposes. (b) The working group shall assess and make recommendations on the best practices to enforce the transient accommodations tax, including a mechanism to ensure collection from all transient accommodations subject to the tax. (c) The working group shall consist of the following members: (1) The director of taxation, or the director's designee, who shall serve as chair of the working group; (2) One representative from each county department responsible for transient accommodation tax collection; (3) A representative from the hotel and lodging industry, to be invited by the chair of the working group; (4) A timeshare operator, to be invited by the chair of the working group; (5) A representative from a short-term rental organization, to be invited by the chair of the working group; and (6) Other relevant individuals, to be invited by the chair of the working group. (d) The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026. PART III SECTION 5. The legislature finds that pasture leases are managed by ranchers to contribute to food security, economic resilience, soil health, and other ecosystem services. This beneficial land use should be supported for continued agricultural land stewardship under the management of the department of agriculture. The purpose of this part is to require the department of land and natural resources to transfer agricultural leases under its jurisdiction to the department of agriculture. SECTION 6. Agricultural leases under the jurisdiction of the department of land and natural resources shall be transferred to the department of agriculture for the continued use of agriculture and land stewardship. PART IV SECTION 7. The department of land and natural resources shall submit a report to the legislature no later than twenty days prior to the convening of the regular sessions of 2026 and 2027 on each project funded through section 8 of this Act. The report shall contain the following information: (1) Progress and outcomes of each project; (2) The total project cost; (3) Benefits to visitors; and (4) How the project protected, restored, or enhanced Hawaii's natural resources and its unique and vulnerable ecosystem during the previous fiscal year. SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for projects that: (1) Protect, restore, or enhance the State's natural resources, including native forests, native plants and animals, aquatic resources, coastal lands, and freshwater resources, and promote economic development relating to the tourism industry; (2) Address climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; these projects may include vegetation management to reduce wildfire risk, coastal environmental management and restoration, or watershed restoration to reduce flooding and enhance water management; (3) Promote sustainable tourism models and destination management to reduce visitor impacts on the natural environment; or (4) Ensure that the State's natural resources are maintained for future visitors; provided that the department of land and natural resources may utilize these funds for consultants, personnel, contracts, and administrative costs required to develop and implement these projects; provided further that the department of land and natural resources shall consult with the Hawaii tourism authority and the respective county on tourism-related projects. The sums appropriated shall be expended by the department of land and natural resources for the purposes of this part. PART V SECTION 9. (a) There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the operating budget of the Hawaii tourism authority; provided that no sums appropriated shall be expended unless the Hawaii tourism authority enters a formal agreement with vendors and contractors of the Hawaii tourism authority and representatives of the visitor industry outlining clear commitments toward the purchasing of local products by the visitor industry, as follows: (1) By January 1, 2030, local products shall constitute a minimum of thirty per cent of total products purchased by the visitor industry during each calendar year, as measured by the per cent of total product cost; and (2) By January 1, 2050, local products shall constitute a minimum of fifty per cent of total products purchased by the visitor industry during each calendar year, as measured by the per cent of total product cost. (b) Provided that of the sum appropriated for fiscal year 2025-2026, the following amounts shall be allocated accordingly: (1) $ for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions for BED113; (2) $ for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and brand and marketing expenses for BED114; (3) $ for personnel expenses for BED115; (4) $ for personnel services, including the establishment of two full-time equivalent (2.0 FTE) positions, and destination stewardship and community expenses for BED116; and (5) $ for personnel services BED117. (c) Provided that of the sum appropriated for fiscal year 2026-2027, the following amounts shall be allocated accordingly: (1) $ for personnel services, including the establishment of six full-time equivalent (6.0 FTE) positions for BED113; (2) $ for personnel services, including the establishment of one full-time equivalent (1.0 FTE) position, and branding and marketing expenses for BED114; (3) $ for personnel services for BED115; (4) $ for personnel services, including the establishment of four full-time equivalent (4.0 FTE) positions, and destination stewardship and community expenses for BED116; and (5) $ for personnel services for BED117. (d) The sums appropriated shall be expended by the Hawaii tourism authority for the purposes of this Act. PART VI SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 11. This Act shall take effect on July 1, 3000. |
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| 47 | + | PART I SECTION 1. The legislature finds that Hawaii's natural resources, including reefs, oceans, forests, streams, estuaries, shorelines, and beaches, provide irreplaceable and invaluable benefits to visitors, residents, and the global community. The Hawaii State Constitution establishes that the State's natural and cultural resources are subject to the public trust and therefore must be managed and protected for the benefit of present and future generations. The Hawaii State Constitution further requires the State and its agencies to protect and enforce native Hawaiian rights, including traditional and customary practices associated with, and dependent upon, carefully managed and abundant natural resources. The legislature further finds that Hawaii's natural environment faces significant environmental pressure from climate change and the heavy use it receives from persons traveling to enjoy the State's natural resources. The current underinvestment in the State's natural resources poses a significant liability to the visitor industry and to Hawaii's residents; the stability of the State's natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State. The escalating impacts from climate change and visitor use create an increasing threat to Hawaii's island ecosystem and communities. Additional funding is needed to restore the State's natural resources to help prevent climate crises from occurring, including wildfires, floods, coastal erosion, and degradation of coral reefs. Additional funds are also needed to respond to climate crises when they occur. The legislature further finds that as contemplated, the transient accommodations tax is intended to be applied fully and equitably wherever a transient accommodation occurs within the State. While the State's lodging and hotel establishments have been complying with, and paying their share of the transient accommodations taxes, tax collections on short-term rental operators have fallen short. Additionally, there is no existing transient accommodations tax levied on commercial passenger vessels, which in 2024, accounted for 972,820 passenger port calls at port facilities under the jurisdiction of the department of transportation. The legislature believes that a modest increase in the transient accommodations tax can generate greatly needed funding to support the restoration of the State's valuable natural resources, help prevent and respond to the climate crisis, and leave a strengthened environmental legacy for future generations. The increased tax is a reasonable and appropriate way to generate these needed revenues. Accordingly, the purpose of this part is to increase the transient accommodations tax to create a source of revenue for environmental stewardship, to be implemented through additional funding to the department of land and natural resources. SECTION 2. Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows: ""Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, cabin, stateroom, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, vehicle equipped with or advertised as including sleeping accommodations, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, commercial passenger vessel, or other place in which lodgings are regularly furnished to transients." SECTION 3. Section 237D-2, Hawaii Revised Statutes, is amended to read as follows: "§237D-2 Imposition and rates. (a) There is levied and shall be assessed and collected each month a tax of: (1) Five per cent for the period beginning on January 1, 1987, to June 30, 1994; (2) Six per cent for the period beginning on July 1, 1994, to December 31, 1998; (3) 7.25 per cent for the period beginning on January 1, 1999, to June 30, 2009; (4) 8.25 per cent for the period beginning on July 1, 2009, to June 30, 2010; [and] (5) 9.25 per cent for the period beginning on July 1, 2010[, and thereafter;] to December 31, 2026; and (6) per cent for the period beginning on January 1, 2027, and thereafter, on the gross rental or gross rental proceeds derived from furnishing transient accommodations. (b) Every transient accommodations broker, travel agency, and tour packager who arranges transient accommodations at noncommissioned negotiated contract rates and every operator or other taxpayer who receives gross rental proceeds shall pay to the State the tax imposed by [subsection] subsections (a)[,] and (f), as provided in this chapter. (c) There is levied and shall be assessed and collected each month, on the occupant of a resort time share vacation unit, a transient accommodations tax of: (1) 7.25 per cent on the fair market rental value until December 31, 2015; (2) 8.25 per cent on the fair market rental value for the period beginning on January 1, 2016, to December 31, 2016; [and] (3) 9.25 per cent on the fair market rental value for the period beginning on January 1, 2017[, and thereafter.] to December 31, 2026; and (4) per cent on the fair market rental value for the period beginning on January 1, 2027, and thereafter. (d) Every plan manager shall be liable for and pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter. Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter. (e) Notwithstanding the tax rates established in subsections [(a)(5)] (a)(6) and [(c)(3),] (c)(4), the tax rates levied, assessed, and collected pursuant to subsections (a) and (c) shall be [10.25] per cent for the period beginning on January 1, 2018, to December 31, 2030; provided that: (1) [The] per cent of the tax revenues levied, assessed, and collected pursuant to this [subsection that are in excess of the revenues realized from the levy, assessment, and collection of tax at the 9.25 per cent rate] section shall be deposited quarterly into the mass transit special fund established under section 248-2.7; and (2) If a court of competent jurisdiction determines that the amount of county surcharge on state tax revenues deducted and withheld by the State, pursuant to section 248-2.6, violates statutory or constitutional law and, as a result, awards moneys to a county with a population greater than five hundred thousand, then an amount equal to the monetary award shall be deducted and withheld from the tax revenues deposited under paragraph (1) into the mass transit special fund, and those funds shall be a general fund realization of the State. The remaining tax revenues levied, assessed, and collected [at the 9.25 per cent tax rate pursuant to subsections (a) and (c)] shall be deposited into the general fund in accordance with section 237D-6.5(b). (f) Beginning on January 1, 2027, there is levied and shall be assessed and collected each month a tax of $20 per passenger per port entry on any commercial passenger vessel at any port facility under the jurisdiction of the department of transportation. Per passenger taxes under this section are charged on a per voyage or per itinerary basis and will not be charged more than once per port entry if a vessel uses a state commercial harbor property or facility more than once on a single voyage or itinerary. Transient accommodations taxed under this subsection are not subject to levy, assessment, and collection pursuant to subsection (a)." PART II SECTION 4. (a) There is established a transient accommodations tax enforcement working group within the department of taxation for administrative purposes. (b) The working group shall assess and make recommendations on the best practices to enforce the transient accommodations tax, including a mechanism to ensure collection from all transient accommodations subject to the tax. (c) The working group shall consist of the following members: (1) The director of taxation, or the director's designee, who shall serve as chair of the working group; (2) One representative from each county department responsible for transient accommodation tax collection; (3) A representative from the hotel and lodging industry, to be invited by the chair of the working group; (4) A timeshare operator, to be invited by the chair of the working group; (5) A representative from a short-term rental organization, to be invited by the chair of the working group; and (6) Other relevant individuals, to be invited by the chair of the working group. (d) The working group shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026. PART III SECTION 5. The legislature finds that pasture leases are managed by ranchers to contribute to food security, economic resilience, soil health, and other ecosystem services. This beneficial land use should be supported for continued agricultural land stewardship under the management of the department of agriculture. The purpose of this part is to require the department of land and natural resources to transfer agricultural leases under its jurisdiction to the department of agriculture. SECTION 6. Agricultural leases under the jurisdiction of the department of land and natural resources shall be transferred to the department of agriculture for the continued use of agriculture and land stewardship. PART IV SECTION 7. The department of land and natural resources shall submit a report to the legislature no later than twenty days prior to the convening of the regular sessions of 2026 and 2027 on each project funded through section 8 of this Act. The report shall contain the following information: (1) Progress and outcomes of each project; (2) The total project cost; (3) Benefits to visitors; and (4) How the project protected, restored, or enhanced Hawaii's natural resources and its unique and vulnerable ecosystem during the previous fiscal year. SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for projects that: (1) Protect, restore, or enhance the State's natural resources, including native forests, native plants and animals, aquatic resources, coastal lands, and freshwater resources, and promote economic development relating to the tourism industry; (2) Address climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; these projects may include vegetation management to reduce wildfire risk, coastal environmental management and restoration, or watershed restoration to reduce flooding and enhance water management; (3) Promote sustainable tourism models and destination management to reduce visitor impacts on the natural environment; or (4) Ensure that the State's natural resources are maintained for future visitors; provided that the department of land and natural resources may utilize these funds for consultants, personnel, contracts, and administrative costs required to develop and implement these projects; provided further that the department of land and natural resources shall consult with the Hawaii tourism authority and the respective county on tourism-related projects. The sums appropriated shall be expended by the department of land and natural resources for the purposes of this part. PART V SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 10. This Act shall take effect on July 1, 3000. |
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