THE SENATE S.B. NO. 1396 THIRTY-THIRD LEGISLATURE, 2025 S.D. 2 STATE OF HAWAII A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
THE SENATE S.B. NO. 1396
THIRTY-THIRD LEGISLATURE, 2025 S.D. 2
STATE OF HAWAII
THE SENATE
S.B. NO.
1396
THIRTY-THIRD LEGISLATURE, 2025
S.D. 2
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO ECONOMIC DEVELOPMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii is experiencing a climate emergency. The effects of climate change, such as rising temperatures, prolonged droughts, and increasingly destructive and deadly weather events, are felt across the island chain. These impacts threaten not only the State's vibrant ecosystems but, as actors within these ecosystems, the people of Hawaii as well. To ensure the health, safety, and well-being of Hawaii's lands, waters, and people, successful mitigation of and adaptation to climate change is imperative. The legislature further finds that given the scale and impact of the climate emergency, the State must invest in bold actions to prepare for, mitigate, and adapt to climate change, including resiliency to intensifying natural disasters. A coordinated approach is necessary, and the department of defense, charged with protecting the safety and welfare of the people of Hawaii and the State's lead for hazard mitigation and disaster readiness, is prepared to assume this responsibility, in coordination with the departments of business, economic development, and tourism; land and natural resources; and transportation, as well as the community, to provide for the safety, security, and well-being of Hawaii's places and people. The legislature additionally finds that economic development, in particular, must consider climate change. Tourism, infrastructure, and community development are all predicated upon Hawaii's land and natural resources. Resiliency to and mitigation of climate change must remain at the forefront of any economic development or revitalization project. The legislature also finds that Hawaii needs to invest in efforts to reduce climate change impacts now to limit current and future costs of climate change. The anticipated extent of the impact of climate change is such that state government needs to take comprehensive and coordinated mitigation efforts as soon as possible. Accordingly, the purpose of this Act is to address the impacts of climate change and tourism on the State and mitigate further impacts by authorizing the funding of resiliency projects by: (1) Increasing the transient accommodations tax; and (2) Requiring the governor to request in the budget or supplemental budget submitted to the legislature pursuant to section 37-71 or 37-72, Hawaii Revised Statutes, that an amount of general funds equal to per cent of the moneys collected pursuant to chapter 237D, Hawaii Revised Statutes, be expended to advance specific projects that address climate change and tourism impacts. SECTION 2. Chapter 37, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows: "§37- Climate change and tourism impacts; projects; budget request. The governor shall request, in the budget or supplemental budget submitted to the legislature pursuant to section 37-71 or 37-72, that an amount of general funds equal to per cent of the moneys collected pursuant to chapter 237D be expended to advance specific projects that address climate change and tourism impacts, including projects that mitigate, adapt to, or increase resiliency to climate change and tourism." SECTION 3. Section 237D-2, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (a) to read: "(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, 2025; and (6) per cent for the period beginning on January 1, 2026, and thereafter; on the gross rental or gross rental proceeds derived from furnishing transient accommodations." 2. By amending subsection (c) to read: "(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, 2025; and (4) per cent on the fair market rental value for the period beginning on January 1, 2026, and thereafter." 3. By amending subsection (e) to read: "(e) Notwithstanding the tax rates established in subsections (a)(5) and (6) and (c)(3)[,] and (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, 2025, and per cent for the period beginning on January 1, 2026, to December 31, 2030; provided that: (1) 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] rates established in subsections (a)(5) and (6) and (c)(3) and (4) 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] rates established in subsections (a) and (c) shall be deposited into the general fund in accordance with section 237D-6.5(b)." SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 2050.
SECTION 1. The legislature finds that Hawaii is experiencing a climate emergency. The effects of climate change, such as rising temperatures, prolonged droughts, and increasingly destructive and deadly weather events, are felt across the island chain. These impacts threaten not only the State's vibrant ecosystems but, as actors within these ecosystems, the people of Hawaii as well. To ensure the health, safety, and well-being of Hawaii's lands, waters, and people, successful mitigation of and adaptation to climate change is imperative.
The legislature further finds that given the scale and impact of the climate emergency, the State must invest in bold actions to prepare for, mitigate, and adapt to climate change, including resiliency to intensifying natural disasters. A coordinated approach is necessary, and the department of defense, charged with protecting the safety and welfare of the people of Hawaii and the State's lead for hazard mitigation and disaster readiness, is prepared to assume this responsibility, in coordination with the departments of business, economic development, and tourism; land and natural resources; and transportation, as well as the community, to provide for the safety, security, and well-being of Hawaii's places and people.
The legislature additionally finds that economic development, in particular, must consider climate change. Tourism, infrastructure, and community development are all predicated upon Hawaii's land and natural resources. Resiliency to and mitigation of climate change must remain at the forefront of any economic development or revitalization project.
The legislature also finds that Hawaii needs to invest in efforts to reduce climate change impacts now to limit current and future costs of climate change. The anticipated extent of the impact of climate change is such that state government needs to take comprehensive and coordinated mitigation efforts as soon as possible.
Accordingly, the purpose of this Act is to address the impacts of climate change and tourism on the State and mitigate further impacts by authorizing the funding of resiliency projects by:
(1) Increasing the transient accommodations tax; and
(2) Requiring the governor to request in the budget or supplemental budget submitted to the legislature pursuant to section 37-71 or 37-72, Hawaii Revised Statutes, that an amount of general funds equal to per cent of the moneys collected pursuant to chapter 237D, Hawaii Revised Statutes, be expended to advance specific projects that address climate change and tourism impacts.
SECTION 2. Chapter 37, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:
"§37- Climate change and tourism impacts; projects; budget request. The governor shall request, in the budget or supplemental budget submitted to the legislature pursuant to section 37-71 or 37-72, that an amount of general funds equal to per cent of the moneys collected pursuant to chapter 237D be expended to advance specific projects that address climate change and tourism impacts, including projects that mitigate, adapt to, or increase resiliency to climate change and tourism."
SECTION 3. Section 237D-2, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(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, 2025; and
(6) per cent for the period beginning on January 1, 2026, and thereafter;
on the gross rental or gross rental proceeds derived from furnishing transient accommodations."
2. By amending subsection (c) to read:
"(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, 2025; and
(4) per cent on the fair market rental value for the period beginning on January 1, 2026, and thereafter."
3. By amending subsection (e) to read:
"(e) Notwithstanding the tax rates established in subsections (a)(5) and (6) and (c)(3)[,] and (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, 2025, and per cent for the period beginning on January 1, 2026, to December 31, 2030; provided that:
(1) 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] rates established in subsections (a)(5) and (6) and (c)(3) and (4) 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] rates established in subsections (a) and (c) shall be deposited into the general fund in accordance with section 237D-6.5(b)."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2050.
Report Title: Governor; Transient Accommodations Tax; Budget; Supplemental Budget; Climate Change and Tourism Impacts; Projects Description: Beginning 1/1/2026, increases the Transient Accommodation Tax by an unspecified amount. Requires the Governor to request in the budget or supplemental budget submitted to the legislature for an amount of general funds equal to an unspecified percentage of the transient accommodations tax revenue be expended to advance specific projects that address climate change and tourism impacts. 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.
Report Title:
Governor; Transient Accommodations Tax; Budget; Supplemental Budget; Climate Change and Tourism Impacts; Projects
Description:
Beginning 1/1/2026, increases the Transient Accommodation Tax by an unspecified amount. Requires the Governor to request in the budget or supplemental budget submitted to the legislature for an amount of general funds equal to an unspecified percentage of the transient accommodations tax revenue be expended to advance specific projects that address climate change and tourism impacts. 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.