CONFERENCE COMMITTEE REP. NO.113-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2192

H.D. 1

S.D. 1

C.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 2192, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII TOURISM AUTHORITY,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose of this bill is to improve the effectiveness and administration of the Hawaii Tourism Authority. Specifically, this bill, among other things:

(1) Increases both the number and the areas of expertise of the members of the Hawaii Tourism Authority (HTA) board, and clarifies that it is a policy-making board;

(2) Requires Senate confirmation of the executive director and caps the executive director's salary at 15 percent of the three percent of the tourism special fund authorized for administrative expenses;

(3) Authorizes the HTA to take into account Hawaii's natural resources infrastructure when developing, coordinating, and implementing state policies and directions for tourism and related activities; provided that the HTA shall support the efforts of other state and county agencies to manage, improve, and protect Hawaii's natural environment and areas frequented by visitors;

(4) Authorizes HTA the right to enter into contracts and agreements that focuses on visitors or promotes Hawaii as a business destination;

(5) Limits HTA's authority to contract for administrative or oversight services for contracts relating to the promotion, development, and coordination of sports-related activities and events;

(6) Requires legislative notice for HTA contracts over $25,000; and

(7) Requires at least every five years, a management and financial audit of all contracts and agreements valued at over $15,000,000 to ensure that the HTA and its major contractors are in compliance with all relevant programmatic and financial requirements.

Your Committee on Conference finds that the HTA is beginning a new phase of its brief history. The search is underway for a new executive director, over half the current members of the board will be replaced by early July, and numerous changes in the management and operations of the HTA are underway as a result of the Auditor's Report No. 02-04, "Management Audit of the Hawaii Tourism Authority," issued in February 2002.

Your Committee on Conference welcomes these changes and believes they should result in a more effective agency that is held to a higher standard of accountability. The further adjustments in this measure will complement those already underway.

Your Committee on Conference remains concerned, however, about the level of legislative oversight necessary to ensure that the public's money is well spent. Members have considered additional contract and management restrictions, but have concluded that these may be premature at this time, given the new management that will be in place within a short time.

Members also discussed the compensation package for the new executive director, and how best to achieve some flexibility within the constraints of accountability for public moneys. Your Committee on Conference notes that the amendment to raise the cap on administrative expenses in the tourism special fund will ensure a competitive compensation package for the executive director, but strongly urges the HTA to regard this as a ceiling, and not the final compensation.

Your Committee on Conference has amended this measure by:

(1) Raising the total number of members appointed by the Governor from lists submitted by the Legislature from four to six;

(2) Requiring that no more than three members shall represent, be employed by, or be under contract to any one sector;

(3) Deleting the provision requiring Senate confirmation of the executive director of the HTA;

(4) Exempting the executive director from the employees' retirement system;

(5) Limiting the compensation package, including salary, of the executive director to 15 per cent of the 3.5 percent authorized for administrative expenses;

(6) Prohibiting private sector contributions for the final compensation package of the executive director;

(7) Authorizing the HTA board to set the duties, responsibilities, hours of work, and other working conditions of the executive director;

(8) Repealing the provision that the executive director be compensated at a salary level set by the Governor;

(9) Deleting the restrictions on HTA's authority to contract for administrative or oversight services for contracts relating to the promotion, development, and coordination of sports-related activities and events;

(10) Raising the cap on administrative expenses in the tourism special fund from 3 to 3.5 percent;

(11) Requiring the HTA to reimburse the auditor for any expenditures incurred in the management and financial audit;

(12) Specifying that the first audit shall be conducted within one year of the effective date of this measure; and

(13) Making technical, nonsubstantive amendments for purposes of style and clarity.

Your Committee on Conference further wishes to note that the amendments to the tourism special fund contained in this measure are in no way in conflict with those made in S.B. No. 2350, S.D. 2, H.D. 2, C.D. 1.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 2192, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 2192, H.D. 1, S.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE SENATE

ON THE PART OF THE HOUSE

____________________________

DONNA MERCADO KIM, Chair

____________________________

JERRY CHANG, Co-Chair

____________________________

BRIAN T. TANIGUCHI, Co-Chair

____________________________

NATHAN SUZUKI, Co-Chair