HOUSE OF REPRESENTATIVES

H.B. NO.

1077

THIRTY-THIRD LEGISLATURE, 2025

H.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 our 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 are 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.

     The legislature further 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 further 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.

     The purpose of this Act is to increase the transient accommodations tax and allocate a portion of the tax to the general fund for projects that address climate change impacts and advance economic development and revitalization.

     SECTION 2.  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, 2025; and

     (6)  11 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.

     (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 (a), 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, 2025; and

     (4)  11 per cent on the fair market rental value for the period beginning on January 1, 2026, 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) 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 12 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 3.  Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Except for the revenues collected pursuant to section 237D-2(e), revenues collected under this chapter shall be distributed in the following priority, with the excess revenues to be deposited into the general fund:

     (1)  $1,500,000 shall be allocated to the Turtle Bay conservation easement special fund beginning July 1, 2015, for the reimbursement to the state general fund of debt service on reimbursable general obligation bonds, including ongoing expenses related to the issuance of the bonds, the proceeds of which were used to acquire the conservation easement and other real property interests in Turtle Bay, Oahu, for the protection, preservation, and enhancement of natural resources important to the State, until the bonds are fully amortized;

     (2)  $11,000,000 shall be allocated to the convention center enterprise special fund established under section 201B-8;

     (3)  An allocation shall be deposited into the tourism emergency special fund, established in section 201B-10, in a manner sufficient to maintain a fund balance of $5,000,000 in the tourism emergency special fund; [and]

     (4)  $3,000,000 shall be allocated to the special land and development fund established under section 171-19; provided that the allocation shall be expended in accordance with the Hawaii tourism authority strategic plan for:

          (A)  The protection, preservation, maintenance, and enhancement of natural resources, including beaches, important to the visitor industry;

          (B)  Planning, construction, and repair of facilities; and

          (C)  Operation and maintenance costs of public lands, including beaches, connected with enhancing the visitor experience[.];

     (5)  7.3 per cent of the total revenue collected pursuant to section 237D-2 shall be allocated to the general fund for projects addressing climate change impacts, including projects that mitigate, adapt to, or increase resiliency against climate change; provided that funding may be used for consultant, personnel, and administrative costs required to develop and implement these projects; and

     (6)  7.3 per cent of the total revenue collected pursuant to section 237D-2 shall be allocated to the general fund for projects advancing economic development and revitalization, including projects that advance infrastructure improvements within tourism or resort districts and tourism marketing.

All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection."

     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, 3000.

 

 

Report Title:

Transient Accommodations Tax; Climate Change; Economic Development; Revitalization

 

Description:

Increases the transient accommodations tax and allocates a portion of the tax to the general fund for projects that address climate change impacts and advance economic development and revitalization.  Effective 7/1/3000.  (HD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.