STAND. COM. REP. NO.206

Honolulu, Hawaii

, 2003

RE: S.B. No. 248

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Tourism, to which was referred S.B. No. 248, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE CONVENTION CENTER,"

begs leave to report as follows:

The purpose of this measure is to repeal the limit on the amount of revenues that can be deposited into the convention center enterprise special fund.

Testimony in support of this measure was received from the Hawaii Tourism Authority (HTA) and The Hawaii Hotel Association. Testimony in opposition was received from the Department of Budget and Finance. Comments were received from the Tax Foundation of Hawaii.

Act 253, Session Laws of Hawaii (SLH) 2002, established the convention center enterprise special fund (special fund), codified as section 201B-8, Hawaii Revised Statutes, to receive a portion of revenues from the transient accommodations tax (TAT) and other sources. Act 253, SLH 2002, also provided that any amount in excess of $31 million derived from the TAT be deposited into the general fund.

According to testimony of the HTA, $31 million is insufficient for it to meet any major maintenance requirement for the Hawaii Convention Center (Center). Operating costs of the Center is estimated at $12.5 million on revenues of $9 million, and debt service is $26.5 million. With a $31 million limit on deposits into the special fund, this leaves less than five per cent for maintenance, which is inadequate to meet major maintenance requirements for the $200 million Center. Your Committee is concerned about adequate maintenance of the Center, but is not willing to totally remove the deposit cap into the special fund.

Your Committee agrees with the HTA and has amended this measure by reinstituting the limit on deposits to the special fund and raising the limit to $34 million. The HTA indicated that it could work with this amount.

As affirmed by the record of votes of the members of your Committee on Tourism that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 248, S.D. 1, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as S.B. No. 248, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Tourism,

____________________________

DONNA MERCADO KIM, Chair