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The Honolulu Advertiser
Posted on: Sunday, December 1, 2002

Tourism authority weighs proposals for 2003 season

By Kelly Yamanouchi
Advertiser Staff Writer

The Hawai'i Tourism Authority has begun weighing its legislative agenda for the 2003 session.

Included are proposals to increase tax revenues for tourism, establish a nonprofit sports authority, allow the authority to deposit and spend money from a special account, and allow marketing expenditures without environmental assessments.

The proposals are among 11 items submitted in a draft staff report to the state marketing agency, which will discuss the issues at its meeting this month.

Authority officials say they will need to discuss the package with Gov.-elect Linda Lingle and her administration before finalizing any agenda, and as the authority develops it, staff is continuing to meet with county and tourism industry representatives to gather proposals.

"We're still in the throes of figuring out what the legislative package may be," said authority executive director Rex Johnson.

The authority's final legislative agenda will come at a key time for the state's $10 billion industry and continued engine of economic growth. Hawai'i's visitor industry has struggled to regain visitors since the steep decline that followed the Sept. 11 attacks.

The authority's final focus at the Legislature will provide crucial direction for the industry as it seeks to recapture lost momentum.

Proposals on the preliminary agenda so far are some that are similar to failed legislation of past years, as well as some new ideas.

Among what could be the most significant is a proposal to eliminate the allocation of revenue from the hotel room tax into a trust fund, and to increase the percentage of the revenue that goes into the Tourism Special Fund for the authority to 37.9 percent from 32.6 percent.

The proposal also seeks to remove the $31 million cap on hotel room-tax revenues that can be deposited into the convention center special fund.

The proposals come as analysts say hotel room-tax revenues this year are expected to suffer because of lower hotel occupancy and room rates.

Also on the draft list is a proposal to increase the cap on the authority's administrative expenses from 3.5 percent to 10 percent to allow for more accountability programs and tourism marketing planning. The state auditor earlier this year criticized the authority for a lack of accountability of its spending of state money.

Another item proposes to establish a Hawaii Sports Authority — or a private, nonprofit entity that can receive donations, private and public money, and income to promote or organize sports events and activities. The authority considers financing for sports events as part of its overall duties. Among the authority's major sports contracts are the Pro Bowl and the PGA Tour.

Board members also have raised the idea of the tourism authority being allowed to raise its own money rather than only spending state money, and one item on the list proposes to authorize the authority to deposit money from contracts, grants, awards or gifts into a special account that could be spent without going through the Legislature's appropriation process and the governor's budget process.

Tourism authority staff also have proposed seeking to specify that state money used for marketing and promotion are an exception to the requirement for an environmental assessment before expenditure.

"In lieu of an environmental assessment, a tourism sustainability study will be performed," the draft proposal says. The Department of Business, Economic Development and Tourism is conducting such a study, but a Supreme Court opinion also is pending on a lawsuit filed by the Sierra Club that would require the tourism authority perform an environmental assessment of its annual marketing plan.

Other items on the tentative legislative package report include:

• Authorizing the authority to hire its own lawyer.

• Limiting the liability of sport or recreational activity providers.

• Allowing agricultural tourism as an authorized use within an agricultural district; to allow the regulation of bed-and-breakfast operations in agricultural districts.

• Authorizing general obligation bonds and funds and the appropriation of money to replenish sand on Kuhio Beach.

• Providing a 10 percent tax credit for qualified hotel facilities making qualified improvements with a total cost of $1 million or more by amending the Qualified Improvement Tax Credit law.

• Supporting county proposals to limit counties' liability for land and water recreational areas, to relieve traffic on highways, to improve airports and harbors, and to improve parks and recreational areas.

The tourism authority will hire Okudara & Associates for legislative management consultant services.

Reach Kelly Yamanouchi at 535-2470 or at kyamanouchi@honoluluadvertiser.com.