Bill Text: HI SB1215 | 2025 | Regular Session | Introduced
Bill Title: Relating To The Transient Accommodations Tax.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-27 - Referred to EDT, WAM/JDC. [SB1215 Detail]
Download: Hawaii-2025-SB1215-Introduced.html
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THE SENATE |
S.B. NO. |
1215 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO the transient ACCOMMODATIONs tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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 makes clear that the State's natural and cultural resources are required to be held in 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 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; the stability of natural systems, including food systems and water quality; and the ecosystems, services, fisheries, economic resilience, and health and safety of the State.
The legislature notes that the visitor industry is critically important for the State's economy. In 2019, the visitor industry brought in $17.75 billion in total visitor spending to businesses in Hawaii, generated $2.07 billion in taxes, and supported 216,000 jobs statewide.
The legislature asserts that the visitor industry should be provided with resources to improve the quality of the visitor experience to sustain the economic benefits to Hawaii, and equally importantly, to synergize tourism with the quality of life for Hawaii's residents. The visitor industry should move toward regenerative tourism by attracting responsible visitors and implementing solutions to overcrowded attractions and overtaxed infrastructure. Tourism should be environmentally friendly, culturally sensitive, and synergistic with a high quality of life for the State's residents.
The beaches of Waikiki provide an example of resources needed to improve the quality of visitor experience. Waikiki is recognized as Hawaii's primary visitor destination. In 2018, the Hawaii Tourism Authority found that Waikiki accounts for ninety per cent of all visitor accommodation units on Oahu and nearly half of all units in the State. Sand beaches are extremely important to the quality of visitor experience. In 2008, Hospitality Advisors LLC found that more than ninety per cent of visitors considered beach availability in Waikiki as very important or somewhat important. Sea level rise constitutes a serious threat to the beaches of Waikiki. The Waikiki beach improvement and maintenance program seeks to restore and improve Waikiki public beaches, increase beach stability through improvement and maintenance of shoreline structures, providing safe access to and along the shoreline and increase resilience to coastal hazards and sea level rise.
Hawaii residents currently contribute to the protection and management of the State's natural resources through taxes, environmental care, subsistence, cultural practices, and the exercise of the values and practices embodied in the Hawaii State Constitution. However, with escalating visitor impacts and an increasing global threat to the island ecosystems, there is an immediate need for additional resources to protect, restore, sustain, manage, and conserve Hawaii's natural resources. A regenerative tourism contribution has been suggested by the Hawaii tourism authority as a means to obtain the necessary resources.
The legislature believes that a one per cent transient accommodations tax (TAT) increase is necessary to provide the visitor industry with resources to improve visitor experience to sustain the economic benefits to Hawaii. This one per cent TAT increase could generate the necessary funding each year to offset the adverse impacts of visitors and conserve Hawaii's irreplaceable green infrastructure in perpetuity.
The legislature further finds that a malama aina visitor impact tax is a type of "green tax" or "environmental protection tax", which have been successfully implemented in many visitor destinations throughout the world, including the European Union, Galapagos Islands, Japan, New Zealand, and Palau. In these locations, the taxes have demonstrated compounding benefits for visitors, residents, and natural landscapes and seascapes.
The legislature believes that establishing a malama aina visitor impact tax as a one per cent increase in the TAT in Hawaii would be a significant and effective way to raise additional revenue to offset visitor impacts and ensure a healthy environment for future generations. A malama aina visitor impact tax provides a reasonable and appropriate way to generate these needed revenues.
Accordingly, the purpose of this Act is to:
(1) Establish a malama aina visitor impact tax program, to be administered by the department of business, economic development, and tourism;
(2) Establish a malama aina visitor impact tax special fund to fund the malama aina visitor impact tax program; and
(3) Temporarily increase the transient accommodations tax by one per cent and deposit the additional tax revenue into the malama aina visitor impact tax special fund.
SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part
. MALAMA AINA
VISITOR IMPACT TAX PROGRAM
§201-A Definitions. For purposes of this part:
"Department" means the department of business, economic development, and tourism.
"Program" means the malama aina visitor impact tax program established in section 201-B.
"Resident of Hawaii" means an individual who has:
(1) Filed or paid state income taxes for the previous tax year; or
(2) Established domicile in the State, as evidenced by documentation showing the individual's address, including any of the following:
(A) A valid Hawaii driver's license;
(B) A valid Hawaii state identification card;
(C) A valid school identification card issued by a school in the State; or
(D) Any other official document issued to the individual within the last thirty days by a government agency, financial institution, insurance company, or utility company in the State.
"Special fund" means the malama aina visitor impact tax special fund established pursuant to section 201-C.
"Visitor" means an individual located in the State who is not a resident of the State.
§201-B
Malama aina visitor impact tax program;
established. There is
established within the department the malama aina visitor impact
tax program to allocate funds to state agencies to:
(1) Improve
the quality of visitor experience to sustain the economic benefits contributed
by the visitor industry; and
(2) Protect, restore, and manage the State's natural and cultural resources.
§201-C Malama aina visitor impact tax
special fund; established. (a) There is established within the state
treasury the malama aina visitor impact
fee special fund into which shall be deposited:
(1) Appropriations made to the special fund by the legislature;
(2) For the period beginning on January 1, 2026,
to December 31, 2030, all transient accommodations tax and surcharge on state
tax revenues allocated to the special fund pursuant to section 237D-2(f)(1)(B);
and
(3) Grants, gifts, and donations
from public agencies and private persons.
All interest earned or accrued on moneys deposited in the special fund shall become part of the special fund.
(b) The
special fund shall be administered by the department with transparency and
accountability in a manner that maximizes the effectiveness of the program.
(c) Moneys
in the special fund shall be expended to:
(1) Implement
and administer the program, including the development
and implementation of a visitor impact fee strategic plan that includes
a timetable for the implementation of the objectives
and policies of this part; and
(2) Be allocated to appropriate state agencies to fund projects that provide resources to the visitor industry, improve visitor experience to sustain economic benefits to Hawaii, help offset adverse environmental impacts caused by visitors, and ensure that the State's natural resources are maintained for continued use by visitors. Examples of permissible projects under this subsection include the Waikiki beach improvement and maintenance program and projects that directly restore, enhance, and protect, in perpetuity, natural resources and the State's unique and fragile ecological status, including projects that:
(A) Protect, restore, or enhance terrestrial and marine natural resources impacted by heavy usage of licensees;
(B) Increase the resilience and adaptation of Hawaii's natural resources with environmentally beneficial strategies to reduce the adverse impacts of climate change, including coastal erosion, sea level rise, damage to reefs, ocean acidification, coral bleaching, damage to land resources, and other impacts exacerbated by licensees; or
(C) Remove and control invasive species and propagate and plant native species in state-owned recreational areas utilized by licensees.
(d)
Moneys allocated from the special fund to
state agencies pursuant to subsection (c)(2) shall be in addition to and
shall not supplant any portion of the base budget of the state
agencies.
§201-D Report to legislature. (a) The
department shall submit a report of its findings and recommendations on
the program and special fund, including any proposed legislation, to the
legislature no later than twenty days prior to the convening of the regular
sessions of 2026, 2027,
2028, 2029, 2030, and 2031. The
report shall include:
(1) Status and progress
of the program, including how the program:
(A) Assisted the visitor industry with resources to improve the quality of visitor experience to sustain the economic benefits to the State;
(B) Restored, enhanced, and protected
Hawaii's state-owned natural resources and its unique and vulnerable ecosystem
during the previous fiscal year, as well as the benefits that have accrued or
will accrue from those expenditures for the benefit of the State's natural
resources; and
(2) An accounting of the receipts of and expenditures from the special fund.
(b) The department shall publish the reports submitted to the legislature pursuant to subsection (a) on its website for public access."
PART II
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;
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.
(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 (c)(3), 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;]
December 31, 2025, 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 shall be deposited quarterly into the mass transit special fund
established [under] pursuant
to 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) Notwithstanding the tax rates established in
subsections (a)(5) and (c)(3), the tax rates levied, assessed, and collected
pursuant to subsections (a) and (c) shall be 11.25
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 shall be deposited quarterly as follows:
(A) One per cent into the mass transit
special fund established pursuant to section 248-2.7; and
(B) One
per cent into the malama aina visitor impact tax special fund established
pursuant to section 201-C.
(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)(A) 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)."
SECTION 4. 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)[,]
or (f), 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.
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 5. Section 248-2.7, Hawaii Revised Statutes, is amended to read as follows:
"§248-2.7 Mass transit special fund; established; distribution of funds. (a) There is established a mass transit special fund to be administered by the department of budget and finance.
(b) For the period beginning on January 1, 2018,
to [December 31, 2030,] December 31, 2025, transient
accommodations tax and surcharge on state tax revenues allocated to the mass
transit special fund pursuant to sections 237D-2(e) and 248-2.6 shall be
deposited into the special fund. All
interest earned on the moneys in the special fund shall be credited to the
general fund. The mass transit special
fund shall be exempt from the central service expenses deduction under section
36-27 and departmental administrative expenses deduction under section 36-30.
(c) For the period beginning on January 1,
2026, to December
31, 2030, transient accommodations tax and surcharge on state tax
revenues allocated to the mass transit special fund pursuant to sections
237D-2(e)(1) and 248-2.6 shall be deposited into
the special fund. All interest earned on
the moneys in the special fund shall be credited to the general fund. The mass transit special fund shall be exempt
from the central service expenses deduction under section 36-27 and
departmental administrative expenses deduction under section 36-30.
[(c)] (d) Upon receiving a certification statement from
the comptroller pursuant to section 40-81.5, the director of finance shall
allocate and disburse moneys in the mass transit special fund to the director
of finance of a county with a population greater than five hundred thousand;
provided that the director of finance shall only disburse those amounts that
are certified in the certification statement for that county for the purposes
specified in section 46-16.8; provided further that revenues allocated from the
special fund shall not be used for:
(1) Operating or maintenance costs of the mass transit project or any purpose not consistent with section 46‑16.8(f); or
(2) Administrative, operating, marketing, or maintenance costs, including personnel costs, of a rapid transportation authority charged with the responsibility for constructing, operating, or maintaining the mass transit project;
provided further that the total amount of funds that are available, allocated, and disbursed by the director of finance pursuant to this section shall not be in excess of the total amount indicated on the certification statement. The director of finance may allocate and disburse moneys pursuant to this section on a monthly basis.
Any amounts allocated and disbursed pursuant to this section shall be subject to the availability of funds deposited and on balance in the special fund. The director of finance shall not allocate or disburse any amounts from the special fund that are in excess of any amounts deposited and on balance in the special fund.
[(d)] (e) The director of finance shall post all
certification statements received from the comptroller pursuant to section
40-81.5 on the department of budget and finance's website within ten working
days of payments made pursuant to this section.
[(e)] (f) The department of budget and finance shall
submit an annual report to the legislature not later than twenty days prior to
the convening of each regular session on the total amount of funds allocated
pursuant to this section.
[(f)] (g) The director of finance may establish
rules, exempt from chapter 91, for the purposes of this section."
PART III
SECTION 6. In codifying the new sections added by section 2 and referenced in section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect upon its approval; provided that sections 3, 4, and 5 of this Act shall take effect on January 1, 2026; provided further that on December 31, 2030, this Act shall be repealed and sections 237D-2, 237D-6.5, and 248-2.7, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act.
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INTRODUCED BY: |
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Report Title:
DBEDT; TAT; Malama Aina Visitor Impact Tax Program; Malama Aina Visitor Impact Tax Special Fund; Reports
Description:
Establishes the Malama Aina Visitor Impact Tax Program within the Department of Business, Economic Development, and Tourism to allocate funds to state agencies to improve the quality of visitor experience to sustain the economic benefits contributed by the visitor industry and protect, restore, and manage the State's natural and cultural resources. Establishes the Malama Aina Visitor Impact Tax Special Fund to fund the program. Increases the transient accommodations tax by one per cent from 1/1/2026 to 12/31/2030 and requires the additional tax revenues to be deposited into the Special Fund. Requires the Department to submit annual reports to the Legislature. Repeals 12/31/2030.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
