Hawaii-2023-HB1375-Amended

SECTION 1. The legislature finds that the Hawaii tourism authority has failed to effectively execute its duties to manage the tourism marketing plan for the State.

In 2021, the legislature repealed the Hawaii tourism authority's exemption from the Hawaii public procurement code through Act 1, Special Session Laws of Hawaii 2021. As a result, all procurements by the Hawaii tourism authority must comply with the Hawaii public procurement code.

Due to mismanagement by the Hawaii tourism authority, the award of a $34,000,000 contract for the marketing of Hawaii as a tourism destination to the United States major market area has been in a state of uncertainty since 2021. This situation has been widely publicized and has demonstrated the Hawaii tourism authority's noncompliance with the Hawaii public procurement code.

The legislature finds that it is necessary and appropriate to dissolve the Hawaii tourism authority.

Accordingly, the purpose of this Act is to:

(1) Establish an office of tourism and destination management that will be governed by a nine-member board of directors consisting of:

(A) A member from the county of Hawaii;

(B) A member from the county of Maui;

(D) A member from the city and county of Honolulu;

(E) A member from the hospitality industry;

(F) A member from the airline industry;

(G) A member from the retail industry; and

(H) A member with a background in Hawaiian culture; and

(I) A member with a background in agriculture;

(2) Transfer the functions, duties, appropriations, and positions of the Hawaii tourism authority to the office of tourism and destination management;

(3) Require the office of tourism and destination management to implement certain county destination management action plans;

(4) Dissolve the Hawaii tourism authority;

(5) Appropriate funds for the office of tourism and destination management; and

(6) Appropriates funds for plans, design, construction, and equipment for repairs and improvements of the convention center rooftop terrace deck.

SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . OFFICE OF TOURISM AND DESTINATION MANAGEMENT

§201-A Definitions. As used in this part:

"Agency" means any agency, department, authority, board, commission, the university of Hawaii, or any other unit of the State or its political subdivisions.

"Best practice destination management" means a holistic process that ensures that tourism adds value to the economy, social fabric, and ecology of communities.

"Convention center facility" or "convention center" means the Hawaii Convention Center.

"Executive director" means the executive director of tourism and destination management.

"Hawaii brand" means the programs that collectively differentiate the Hawaii experience from other destinations.

"Office" means the office of tourism and destination management established under section 201-B.

"Regenerative tourism" means a Hawaiian cultural heritage business model that is community-based with cultural development strategies and implements an innovative economic development plan to link consumers and a Hawaiian sense of place through holistic efforts to:

(1) Make net positive contributions;

(2) Create conditions that allow communities to flourish; and

(3) Improve destinations for current and future generations for the well-being of the environment, residents, indigenous communities, and visitors.

§201-B Office of tourism and destination management; establishment; responsibilities. (a) There is established within the department of business, economic development, and tourism for administrative purposes the office of tourism and destination management to:

(1) Create, design, and implement a long-range strategic plan for tourism in Hawaii;

(2) Grow and enhance the tourism industry in the State; provided that the office's initiatives shall follow best practice destination management practices and integrate regenerative tourism;

(3) Conduct strategic research through contractual services with the University of Hawaii or any qualified agency or persons that target social, economic, cultural, and environmental aspects of tourism development in the State;

(4) Provide technical or other assistance to agencies and private industry upon request;

(5) Focus on perpetuating the uniqueness of the Native Hawaiian culture and community, and their significance to the quality of the visitor experience, by ensuring that:

(A) The Hawaiian culture is accurately portrayed by Hawaii's visitor industry;

(B) Hawaiian language is supported and normalized as an official language of the State as well as the foundation of the host culture that attracts visitors to Hawaii;

(C) Hawaiian cultural practitioners and cultural sites that give value to Hawaii's heritage are supported, nurtured, and engaged in sustaining the visitor industry; and

(D) A Native Hawaiian cultural education and training program is provided for the members of the visitor industry workforce who have direct contact with visitors; and

(6) Review annually the expenditure of public funds by any visitor industry organization that contracts with the office to implement tourism promotion, development, and management and make recommendations necessary to ensure the effective use of the funds for the development and management of tourism.

(b) There is established within the office of tourism and destination management:

(1) A tourism and marketing branch that shall implement integrated marketing efforts that positively portray Hawaii with a focus on its people and culture;

(2) A convention center branch to manage the convention center and administer the convention center enterprise special fund; and

(3) A destination management branch that shall develop and implement a plan that is inclusive of all islands and promotes a dignified and healthy relationship with the State's natural resources and Hawaiian culture.

(c) The office shall be headed by a board of directors that shall consist of nine members who shall be appointed by the governor as provided in section 26-34; provided that:

(1) One member shall represent the hospitality industry;

(2) One member shall represent the airline industry;

(3) One member shall represent the retail industry;

(4) One member shall have a background in Hawaiian culture;

(5) One member shall have a background in agriculture;

(6) One member shall reside in the county of Maui and be appointed from a list of three names submitted by the senate president;

(7) One member shall reside in the county of Kauai and be appointed from a list of three names submitted by the senate president;

(8) One member shall reside in the county of Hawaii and be appointed from a list of three names submitted by the speaker of the house of representatives; and

(9) One member shall reside in the city and county of Honolulu and be appointed from a list of three names submitted by the speaker of the house of representatives.

All appointed members of the board of directors may continue in office until their respective successors have been appointed; provided that a holdover member shall not hold office beyond the end of the second regular legislative session following the expiration of the member's term of office. The board of directors shall elect a chairperson from among its members; provided that the director of business, economic development, and tourism shall serve as the chairperson until a chairperson is elected by the members of the board. The members shall serve without compensation, but shall be reimbursed for expenses, including traveling expenses, necessary for the performance of their duties.

(d) There shall be an executive director of tourism and destination management who shall have the same rights and benefits of other public employees, including membership in public employee health and pension benefits plans under chapters 87A and 88, and shall:

(1) Be appointed and may be removed by the board of directors;

(2) Report to the board of directors;

(3) Have knowledge, experience, and expertise in the areas of accommodations, transportation, retail, entertainment, Hawaiian culture, and agricultural lands;

(4) Be responsible for the day-to-day operations of the office; and

(5) Not be subject to chapter 76.

§201-C Powers and functions, generally. (a) Except as otherwise limited by this part, the office may:

(1) Sue and be sued;

(2) Make and alter bylaws for its organization and internal management;

(3) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;

(4) Contract for or accept revenues, compensation, proceeds, and gifts or grants in any form from any public agency or any other source;

(5) Design, coordinate, and implement state policies and directions for tourism and related activities taking into account the economic, social, cultural, and physical impacts of tourism on the State, Hawaii's natural environment, areas frequented by visitors, best practice destination management, and regenerative tourism;

(6) Have a permanent and strong focus on Hawaii brand management;

(7) Coordinate all agencies and engage the private sector in the development of tourism-related activities and resources;

(8) Work to eliminate or reduce barriers to travel by providing a positive and competitive business environment, including coordination with the department of transportation on issues affecting airlines and air route development;

(9) Market and promote sports-related and entertainment‑related activities and events;

(10) Coordinate the development of new products with the counties and other persons in the public sector and private sector, including the development of sports, culture, health and wellness, education, technology, agriculture, and environmental tourism;

(11) Establish:

(A) A public information and educational program to inform the public of tourism and tourism-related problems; and

(B) A program to monitor, investigate, and respond to complaints about problems resulting directly or indirectly from the tourism industry and take appropriate action as necessary;

(12) Encourage and engage in the development of tourism education, training, and career counseling programs;

(13) Develop and implement emergency measures to respond to any adverse effects on the tourism industry, pursuant to section 201-I;

(14) Set and collect rents, fees, charges, or other payments for the lease, use, occupancy, or disposition of the convention center facility without regard to chapter 91;

(15) Notwithstanding chapter 171, acquire, lease as lessee or lessor, own, rent, hold, and dispose of the convention center facility in the exercise of its powers and the performance of its duties under this part;

(16) Acquire by purchase, lease, or otherwise, and develop, construct, operate, own, manage, repair, reconstruct, enlarge, or otherwise effectuate, either directly or through developers, a convention center facility; and

(17) Adopt rules in accordance with chapter 91 with respect to its projects, operations, properties, and facilities.

(b) Except as otherwise limited by this part, the office, through the executive director may:

(1) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this part; provided that the office may enter into contracts and agreements for a period of up to five years, subject to the availability of funds; provided further that the office may enter into agreements for the use of the convention center facility for a period of up to ten years;

(2) Represent the office in communications with the governor and the legislature;

(3) Provide for the appointment of officers, agents, a sports coordinator, and employees, prescribing their duties and qualifications, and fixing their salaries, without regard to chapters 76 and 78, if funds have been appropriated by the legislature and allotted as provided by law;

(4) Purchase supplies, equipment, and furniture;

(5) Allocate the space or spaces that are to be occupied by the office and appropriate staff;

(6) Engage the services of qualified persons to implement the State's strategic tourism management plan or portions thereof as determined by the office; and

(7) Engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice.

(1) Tourism promotion, development, and management;

(2) Product development and diversification issues focused on visitors;

(3) Promotion, development, and coordination of sports‑related and entertainment-related activities and events;

(4) Promotion of Hawaii, through a coordinated statewide effort, as a place to do business, including high technology business, and as a business destination;

(5) Reduction of barriers to travel;

(6) Marketing, management, use, operation, or maintenance of the convention center facility, including the purchase or sale of goods or services, logo items, concessions, sponsorships, and license agreements, or any use of the convention center facility as a commercial enterprise; provided that contracts issued pursuant to this paragraph for the marketing of all uses of the convention center facility may be issued separately from the management, use, operation, or maintenance of the facility;

(7) Tourism research, market development-related research, and statistics to:

(A) Measure and analyze tourism trends;

(B) Provide information and research to assist in the development and implementation of state tourism policy; and

(i) Visitor arrivals, visitor characteristics, and expenditures;

(ii) The number of transient accommodation units available, occupancy rates, and room rates;

(iii) Airline-related data, including seat capacity and number of flights;

(iv) The economic, social, and physical impacts of tourism on the State; and

(v) The effects of the office's strategic tourism management plan on the measures of effectiveness developed pursuant to section 201-D; and

(8) Any and all other activities necessary to carry out the intent of this part.

(d) The office may delegate to staff the responsibility for soliciting, awarding, and executing contracts and for monitoring and facilitating any and all contracts and agreements developed in accordance with subsection (c).

(e) Where public disclosure of information gathered or developed by the office may place a business at a competitive disadvantage or may impair or frustrate the office's ability to either compete as a visitor destination or obtain or utilize information for a legitimate government function, the office may withhold from public disclosure competitively sensitive information, including:

(1) Completed survey forms and questionnaire forms;

(2) Coding sheets; and

(3) Database records of the information.

(f) The office shall do any and all things necessary to carry out its purposes, to exercise the powers and responsibilities given in this part, and to perform other functions required or authorized by law.

(g) The powers and functions granted to and exercised by the office under this part are declared to be public and governmental functions, exercised for a public purpose, and matters of public necessity.

§201-D Strategic tourism management plan; measures of effectiveness. (a) The office shall develop a strategic tourism management plan that promotes tourism marketing, complies with best practice destination management, and promotes regenerative tourism. The plan shall be a single, comprehensive document that shall be updated annually and include the following:

(1) Statewide Hawaii brand management efforts and programs;

(2) Targeted markets;

(3) Efforts to enter into Hawaii brand management projects that make effective use of cooperative programs;

(4) Program performance goals and targets that can be monitored as market gauges and used as attributes to evaluate the office's programs; and

(5) The office's guidance and direction for the development and coordination of promotional and marketing programs that build and promote the Hawaii brand, which shall be implemented through county contracts and agreements with destination marketing organizations or other qualified organizations, including:

(A) Target markets and the results being sought;

(B) Key performance indicators; and

(b) In accordance with subsection (a), the office shall develop measures of effectiveness to assess the overall benefits and effectiveness of the strategic tourism management plan and include documentation of the progress of the strategic tourism management plan toward achieving the office's strategic plan goals.

§201-E Destination management action plan; objectives; county destination management action plans. To meet the destination management objectives for each county, the office shall perform the actions specified in each of the following three-year plans:

(1) Oahu destination management action plan;

(2) Maui Nui destination management action plan;

(3) Hawaii island destination management action plan; and

(4) Kauai destination management action plan,

during the specified phases.

§201-F Assistance by state and county agencies; advisory group. (a) Any state or county agency may render services upon request of the office.

(b) The office may establish an advisory group that may meet monthly or as often as the office deems necessary and may include the executive director, director of transportation, chairperson of the board of land and natural resources, chairperson of the board of trustees of the office of Hawaiian affairs, executive director of the state foundation on culture and the arts, and chair of the travel industry management advisory council of the University of Hawaii to advise the office on matters relating to their respective departments or agency in the preparation and execution of suggested:

(1) Measures to respond to tourism emergencies pursuant to section 201-I;

(2) Programs for the management, improvement, and protection of Hawaii's natural environment and other areas frequented by visitors and residents;

(3) Measures to address issues affecting airlines, air routes, and barriers to travel to Hawaii;

(4) Programs to perpetuate the culture of Hawaii and engage local communities to sustain and preserve the Native Hawaiian culture; and

(5) Programs that include tourism marketing, best practice destination management, and regenerative tourism as part of an overall strategic tourism management plan.

§201-G Applicability of Hawaii public procurement code; convention center contractor; construction contracts. The construction contracts for the maintenance of the convention center facility by the private contractor that operates the convention center, by its direct or indirect receipt of, and its expenditure of, public funds from the department or the office, or both, shall be subject to part III of chapter 103D.

§201-H Convention center enterprise special fund. (a) There is established in the state treasury the convention center enterprise special fund, into which shall be deposited:

(1) A portion of the revenues from the transient accommodations tax, as provided by section 237D-6.5;

(2) All revenues or moneys derived from the operations of the convention center to include all revenues from the food and beverage service, all revenues from the parking facilities or from any concession, and all revenues from the sale of souvenirs, logo items, or any other items offered for purchase at the convention center;

(3) Private contributions, interest, compensation, gross or net revenues, proceeds, or other moneys derived from any source or for any purpose arising from the use of the convention center facility; and

(4) Appropriations by the legislature for marketing the facility pursuant to section 201-C(c)(6).

(b) Moneys in the convention center enterprise special fund shall be used by the office for:

(1) The payment of expenses arising from any and all use, operation, maintenance, alteration, improvement, or any unforeseen or unplanned repairs of the convention center, including without limitation the food and beverage service and parking service provided at the convention center facility;

(2) The sale of souvenirs, logo items, or other items;

(3) Any future major repair, maintenance, and improvement of the convention center facility as a commercial enterprise or as a world class facility for conventions, entertainment, or public events; and

(4) Marketing the facility pursuant to section 201‑C(c)(6).

(1) Placed in interest-bearing accounts; provided that the depository in which the money is deposited furnishes security as provided in section 38-3; or

(2) Otherwise invested by the office until the time the moneys may be needed; provided that the office shall limit its investments to those listed in section 36‑21.

All interest accruing from investment of the moneys shall be credited to the convention center enterprise special fund.

§201-I Tourism emergency. (a) If the executive director determines that the occurrence of a world conflict, terrorist threat, national or global economic crisis, natural disaster, outbreak of disease, or other catastrophic event adversely affects Hawaii's tourism industry by resulting in a substantial interruption in the commerce of the State and adversely affecting the welfare of its people, the executive director shall submit a request to the governor to declare that a tourism emergency exists.

(b) Upon declaration by the governor that a tourism emergency exists pursuant to subsection (a), the office shall develop and implement measures to respond to the tourism emergency, including providing assistance to visitors during the emergency; provided that any tourism emergency response measure implemented pursuant to this subsection shall not include any provision that would adversely affect the organized labor force in tourism-related industries. With respect to a national or global economic crisis only, in addition to the governor's declaration of the existence of a tourism emergency, no action in response to the tourism emergency declaration may be taken by the office without the governor's express approval.

§201-J Tourism emergency special fund. (a) There is established outside the state treasury a tourism emergency special fund to be administered by the executive director, into which shall be deposited the revenues prescribed by section 237D‑6.5(b) and all investment earnings credited to the assets of the fund.

(b) Moneys in the special fund shall be used exclusively to provide for the development and implementation of emergency measures to respond to any tourism emergency pursuant to section 201-I, including providing emergency assistance to visitors during the tourism emergency.

(c) Use of the special fund, consistent with subsection (b), shall be provided for in articles, bylaws, resolutions, or other instruments executed by the executive director.

§201-K Exemption from taxation. All revenues and receipts derived by the office from any project or a project agreement or other agreement pertaining thereto shall be exempt from all state taxation. Any right, title, and interest of the office in any project shall also be exempt from all state taxation. Except as otherwise provided by law, the interest of a qualified person or other user of a project or a project agreement or other agreements related to a project shall not be exempt from taxation to a greater extent than it would be if the costs of the project were directly financed by the qualified person or user.

§201-L Private attorneys. (a) The executive director may appoint or retain by contract one or more attorneys who are independent of the attorney general to provide legal services for the office solely in cases of contract negotiations in which the attorney general lacks sufficient expertise; provided that the independent attorney shall consult and work in conjunction with the designated deputy attorney general assigned to the office.

(b) The executive director may fix the compensation of the attorneys appointed or retained pursuant to this section. Attorneys appointed or retained by contract shall be exempt from chapters 76, 78, and 88.

§201-M Court proceedings; preferences; venue. (a) Any action or proceeding to which the office, the State, or the county may be a party, in which any question arises as to the validity of this part, shall be preferred over all other civil cases, except election cases, in the circuit court of the circuit where the case or controversy arises, and shall be heard and determined in preference to all other civil cases pending therein except election cases, irrespective of position on the calendar.

(b) Upon application of counsel to the office, the same preference shall be granted in any action or proceeding questioning the validity of this part in which the office may be allowed to intervene.

(c) Any action or proceeding to which the office, the State, or the county may be party, in which any question arises as to the validity of this part or any portion of this part, or any action of the office may be filed in the circuit court of the circuit where the case or controversy arises, which court is hereby vested with original jurisdiction over the action.

(d) Notwithstanding any provision of law to the contrary, declaratory relief from the circuit court may be obtained for any action.

(e) Any party aggrieved by the decision of the circuit court may appeal in accordance with part I of chapter 641 and the appeal shall be given priority.

§201-N Annual report. The office shall submit a complete and detailed report of its activities, expenditures, and results, including the progress of the strategic tourism management plan, developed pursuant to section 201-D, toward achieving the office's strategic plan goals, to the governor and the legislature at least twenty days prior to the convening of each regular session. The annual report shall include the descriptions and evaluations of programs funded, any contracts and agreements entered into by the office during the preceding calendar year, and any recommendations the office may make."

SECTION 3. Section 28-8.3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:

(1) By the public utilities commission, the labor and industrial relations appeals board, and the Hawaii labor relations board;

(2) By any court or judicial or legislative office of the State; provided that if the attorney general is requested to provide representation to a court or judicial office by the chief justice or the chief justice's designee, or to a legislative office by the speaker of the house of representatives and the president of the senate jointly, and the attorney general declines to provide such representation on the grounds of conflict of interest, the attorney general shall retain an attorney for the court, judicial, or legislative office, subject to approval by the court, judicial, or legislative office;

(3) By the legislative reference bureau;

(4) By any compilation commission that may be constituted from time to time;

(5) By the real estate commission for any action involving the real estate recovery fund;

(6) By the contractors license board for any action involving the contractors recovery fund;

(7) By the office of Hawaiian affairs;

(8) By the department of commerce and consumer affairs for the enforcement of violations of chapters 480 and 485A;

(9) As grand jury counsel;

(10) By the Hawaii health systems corporation, or its regional system boards, or any of their facilities;

(11) By the auditor;

(12) By the office of ombudsman;

(13) By the insurance division;

(14) By the University of Hawaii;

(15) By the Kahoolawe island reserve commission;

(16) By the division of consumer advocacy;

(17) By the office of elections;

(18) By the campaign spending commission;

(19) By the [~~Hawaii tourism authority, as provided in section 201B-2.5;~~] office of tourism and destination management, as provided in section 201-L;

(20) By the division of financial institutions;

(21) By the office of information practices;

(22) By the school facilities authority;

(23) By the Mauna Kea stewardship and oversight authority; or

(24) By a department, if the attorney general, for reasons deemed by the attorney general to be good and sufficient, declines to employ or retain an attorney for a department; provided that the governor waives the provision of this section."

2. By amending subsection (c) to read:

"(c) Every attorney employed by any department on a full‑time basis, except an attorney employed by the public utilities commission, the labor and industrial relations appeals board, the Hawaii labor relations board, the office of Hawaiian affairs, the Hawaii health systems corporation or its regional system boards, the department of commerce and consumer affairs in prosecution of consumer complaints, insurance division, the division of consumer advocacy, the University of Hawaii, [~~the Hawaii tourism authority as provided in section 201B-2.5,~~] office of tourism and destination management, as provided in section 201-L, the Mauna Kea stewardship and oversight authority, the office of information practices, or as grand jury counsel, shall be a deputy attorney general."

SECTION 4. Section 36-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) Convention center enterprise special fund under section [~~201B-8;~~] 201-H;

(5) Special funds established by section 206E-6;

(6) Aloha Tower fund created by section 206J-17;

(7) Funds of the employees' retirement system created by section 88-109;

(8) Hawaii hurricane relief fund established under chapter 431P;

(9) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(10) Universal service fund established under section 269‑42;

(11) Emergency and budget reserve fund under section 328L‑3;

(12) Public schools special fees and charges fund under section 302A-1130;

(13) Sport fish special fund under section 187A-9.5;

(14) Neurotrauma special fund under section 321H-4;

(15) Glass advance disposal fee established by section 342G-82;

(16) Center for nursing special fund under section 304A‑2163;

(17) Passenger facility charge special fund established by section 261-5.5;

(18) Solicitation of funds for charitable purposes special fund established by section 467B-15;

(19) Land conservation fund established by section 173A-5;

(20) Court interpreting services revolving fund under section 607-1.5;

(21) Trauma system special fund under section 321-22.5;

(22) Hawaii cancer research special fund;

(23) Community health centers special fund;

(24) Emergency medical services special fund;

(25) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

(26) Shared services technology special fund under section 27-43;

(27) Automated victim information and notification system special fund established under section 353-136;

(28) Deposit beverage container deposit special fund under section 342G-104;

(29) Hospital sustainability program special fund under section 346G-4;

(30) Nursing facility sustainability program special fund under section 346F-4;

(31) Hawaii 3R's school improvement fund under section 302A-1502.4;

(32) After-school plus program revolving fund under section 302A-1149.5;

(33) Civil monetary penalty special fund under section 321‑30.2; and

[[](34)[]]Stadium development special fund under section 109‑3.5,

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 5. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) Special funds established by section 206E-6;

(5) Aloha Tower fund created by section 206J-17;

(6) Funds of the employees' retirement system created by section 88-109;

(7) Hawaii hurricane relief fund established under chapter 431P;

(8) Convention center enterprise special fund established under section [~~201B-8;~~] 201-H;

(9) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(10) Universal service fund established under section 269‑42;

(11) Emergency and budget reserve fund under section 328L‑3;

(12) Public schools special fees and charges fund under section 302A-1130;

(13) Sport fish special fund under section 187A-9.5;

(14) Neurotrauma special fund under section 321H-4;

(15) Center for nursing special fund under section 304A‑2163;

(16) Passenger facility charge special fund established by section 261-5.5;

(17) Court interpreting services revolving fund under section 607-1.5;

(18) Trauma system special fund under section 321-22.5;

(19) Hawaii cancer research special fund;

(20) Community health centers special fund;

(21) Emergency medical services special fund;

(22) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

(23) Shared services technology special fund under section 27-43;

(24) Nursing facility sustainability program special fund established pursuant to section 346F-4;

(25) Automated victim information and notification system special fund established under section 353-136;

(26) Hospital sustainability program special fund under section 346G-4;

(27) Civil monetary penalty special fund under section 321‑30.2; and

[[](28)[]]Stadium development special fund under section 109‑3.5,

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 6. Section 84-18, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) Subject to the restrictions imposed in subsections (a) through (d), the following individuals shall not represent any person or business for a fee or other consideration regarding any legislative action or administrative action, as defined in section 97-1, for twelve months after termination from their respective positions:

(1) The governor;

(2) The lieutenant governor;

(3) The administrative director of the State;

(4) The attorney general;

(5) The comptroller;

(6) The chairperson of the board of agriculture;

(7) The director of corrections and rehabilitation;

(8) The director of finance;

(9) The director of business, economic development, and tourism;

(10) The director of commerce and consumer affairs;

(11) The adjutant general;

(12) The superintendent of education;

(13) The chairperson of the Hawaiian homes commission;

(14) The director of health;

(15) The director of human resources development;

(16) The director of human services;

(17) The director of labor and industrial relations;

(18) The chairperson of the board of land and natural resources;

(19) The director of law enforcement;

(20) The director of taxation;

(21) The director of transportation;

(22) The president of the University of Hawaii;

(23) The executive administrator of the board of regents of the University of Hawaii;

(24) The administrator of the office of Hawaiian affairs;

(25) The chief information officer;

(26) The executive director of the agribusiness development corporation;

(27) The executive director of the campaign spending commission;

(28) The executive director of the Hawaii community development authority;

(29) The executive director of the Hawaii housing finance and development corporation;

(30) The [~~president and chief executive officer of the Hawaii tourism authority;~~] executive director of the office of tourism and destination management;

(31) The executive officer of the public utilities commission;

(32) The state auditor;

(33) The director of the legislative reference bureau;

(34) The ombudsman;

(35) The permanent employees of the legislature, other than persons employed in clerical, secretarial, or similar positions;

(36) The administrative director of the courts;

(37) The executive director of the state ethics commission;

(38) The executive officer of the state land use commission;

(39) The executive director of the natural energy laboratory of Hawaii authority;

(40) The executive director of the Hawaii public housing authority; and

(41) The first deputy to the chairperson of the commission on water resource management;

provided that this subsection shall not apply to any person who has held one of the positions listed above only on an interim or acting basis and for a period of less than one hundred eighty‑one days."

SECTION 7. Section 88-9, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) A retirant may be employed without reenrollment in the system and suffer no loss or interruption of benefits provided by the system or under chapter 87A if the retirant is employed:

(1) As an elective officer pursuant to section 88-42.6(c) or as a member of the legislature pursuant to section 88-73(d);

(2) As a juror or precinct official;

(3) As a part-time or temporary employee excluded from membership in the system pursuant to section 88-43, as a session employee excluded from membership in the system pursuant to section 88-54.2, [~~as the president and chief executive officer of the Hawaii tourism authority excluded from membership in the system pursuant to section 201B-2,~~] or as any other employee expressly excluded by law from membership in the system; provided that:

(A) The retirant was not employed by the State or a county during the six calendar months prior to the first day of reemployment; and

(B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement;

(4) In a position identified by the appropriate jurisdiction as a labor shortage or difficult-to-fill position; provided that:

(A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;

(B) No agreement was entered into between the State or a county and the retirant, prior to the retirement of the retirant, for the return to work by the retirant after retirement; and

(C) Each employer shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability; or

(5) As a teacher or an administrator in a teacher shortage area identified by the department of education or in a charter school or as a mentor for new classroom teachers; provided that:

(A) The retirant was not employed by the State or a county during the twelve calendar months prior to the first day of reemployment;

(B) No agreement was entered into between the State or a county and the retirant prior to the retirement of the retirant, for the return to work by the retirant after retirement; and

(C) The department of education or charter school shall contribute to the pension accumulation fund the required percentage of the rehired retirant's compensation to amortize the system's unfunded actuarial accrued liability."

SECTION 8. Section 206E-34, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The Hawaii community development authority shall:

(1) Designate and develop the state-owned land for the cultural public market;

(2) Accept, for consideration, input regarding the establishment of the cultural public market from the following departments [~~and agencies~~]:

(A) The department of agriculture;

(B) The department of business, economic development, and tourism;

(D) The department of labor and industrial relations; and

(E) The [~~Hawaii tourism authority;~~] office of tourism and destination management;

(3) Consider and determine the propriety of using public‑private partnerships in the development and operation of the cultural public market;

(4) Develop, distribute, and accept requests for proposals from private entities for plans to develop and operate the cultural public market; and

(5) Ensure that the Hawaiian culture is the featured culture in the cultural public market."

SECTION 9. Section 225P-3, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The commission shall include the following members:

(1) The chairs of the standing committees of the legislature with subject matter jurisdiction encompassing environmental protection and land use;

(2) The chairperson of the board of land and natural resources or the chairperson's designee, who shall be the co-chair of the commission;

(3) The director of the office of planning and sustainable development or the director's designee, who shall be the co-chair of the commission;

(4) The director of business, economic development, and tourism or the director's designee;

(5) The chairperson of the board of directors of the [~~Hawaii tourism authority~~] office of tourism and destination management or the chairperson's designee;

(6) The chairperson of the board of agriculture or the chairperson's designee;

(7) The chief executive officer of the office of Hawaiian affairs or the officer's designee;

(8) The chairperson of the Hawaiian homes commission or the chairperson's designee;

(9) The director of transportation or the director's designee;

(10) The director of health or the director's designee;

(11) The adjutant general or the adjutant general's designee;

(12) The chairperson of the board of education or the chairperson's designee;

(13) The directors of each of the county planning departments, or the directors' designees; and

(14) The manager of the coastal zone management program."

SECTION 10. Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

"§237-24.75 Additional exemptions. In addition to the amounts exempt under section 237-24, this chapter shall not apply to:

(1) Amounts received as a beverage container deposit collected under chapter 342G, part VIII;

(2) Amounts received by the operator of the Hawaii convention center for reimbursement of costs or advances made pursuant to a contract with the [~~Hawaii tourism authority under section 201B‑7;~~] office of tourism and destination management under subsection 201-C(c); and

(3) Amounts received by a professional employer organization that is registered with the department of labor and industrial relations pursuant to chapter 373L, from a client company equal to amounts that are disbursed by the professional employer organization for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick leave, health benefits, and similar employment benefits with respect to covered employees at a client company; provided that this exemption shall not apply to amounts received by a professional employer organization after:

(A) Notification from the department of labor and industrial relations that the professional employer organization has not fulfilled or maintained the registration requirements under this chapter; or

(B) A determination by the department that the professional employer organization has failed to pay any tax withholding for covered employees or any federal or state taxes for which the professional employer organization is responsible.

As used in this paragraph, "professional employer organization", "client company", and "covered employee" shall have the meanings provided in section 373L-1."

SECTION 11. 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;~~] 201-H;

(3) An allocation shall be deposited into the tourism emergency special fund, established in section [~~201B‑10,~~] 201-J, 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~~] authority's 2020-2025 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

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 12. Act 231, Session Laws of Hawaii 2005, section 2, is amended by amending subsection (c) to read as follows:

"(c) The Hawaii community development authority shall:

(1) Designate and develop the state-owned land for the cultural public market;

(2) Accept, for consideration, input regarding the establishment of the cultural public market from the following departments and agencies:

(A) The department of agriculture;

(B) The department of business, economic development, and tourism;

(D) The department of labor and industrial relations; and

(E) The [~~Hawaii tourism authority;~~] office of tourism and destination management;

(3) Consider and determine the propriety of [~~utilizing~~] using public-private partnerships in the development and operation of the cultural public market;

(4) Develop, distribute, and accept requests for proposals from private entities for plans to develop and operate the cultural public market; and

(5) Ensure that the Hawaiian culture is the featured culture in the cultural public market."

SECTION 13. Chapter 201B, Hawaii Revised Statutes, is repealed.

SECTION 14. Sections 6E-18, 23-13, 23-76, 46-11, and 171‑173, Hawaii Revised Statutes, are amended by substituting the term "office of tourism and destination management", or similar term, wherever the term "Hawaii tourism authority", or similar term, appears, as the context requires.

SECTION 15. All rights, powers, functions, and duties of the Hawaii tourism authority are transferred to the office of tourism and destination management.

SECTION 16. All employees who occupy civil service positions and whose functions are transferred to the office of tourism and destination management by this Act shall retain their civil service status, whether permanent or temporary. Employees shall be transferred without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The executive director of the office of tourism and destination management may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

SECTION 17. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii tourism authority relating to the functions transferred to the office of tourism and destination management shall be transferred with the functions to which they relate.

SECTION 18. All rules, policies, procedures, guidelines, and other material adopted or developed by the Hawaii tourism authority to implement provisions of the Hawaii Revised Statutes that are made applicable to the office of tourism and destination management by this Act, shall remain in full force and effect until amended or repealed by the department of business, economic development, and tourism pursuant to chapter 91, Hawaii Revised Statutes.

In the interim, every reference to the Hawaii tourism authority or the board of directors of the Hawaii tourism authority in those rules, policies, procedures, guidelines, and other material is amended to refer to the office of tourism and destination management and the executive director of the office of tourism and destination management, as appropriate.

SECTION 19. There is appropriated out of the general revenues of the State of Hawaii the sum of $60,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for the establishment, administration, and operation of the office of tourism and destination management and to fund the positions as provided in section 20; provided that the appropriation shall be allocated as follows:

(1) $4,110,649 for administrative costs;

(2) $17,969,351 for destination management; and

(3) $37,920,000 for branding, including major sports.

The sums appropriated shall be expended by the office of tourism and destination management for the purposes of this Act.

SECTION 20. (a) Notwithstanding any other law to the contrary, the office of tourism and destination management shall be organized as provided in this section for fiscal years 2023‑2024 and 2024-2025.

(b) The office of tourism and destination management shall be headed by one full-time equivalent (1.0 FTE) executive director position, who shall be assisted by one full-time equivalent (1.0 FTE) assistant executive director position; provided that the executive director shall be paid a salary not to exceed ninety per cent of the salary of the director of business, economic development, and tourism. The assistant executive director shall be paid a salary not to exceed ninety per cent of the executive director's salary. There shall be established one full-time equivalent (1.0 FTE) management analyst position and one full‑time equivalent (1.0 FTE) executive assistant position, who shall report to the assistant executive director.

(1) One full-time (1.0 FTE) equivalent chief financial officer position, who shall report to the assistant executive director;

(2) One full-time equivalent (1.0 FTE) budget and fiscal officer position;

(3) One full-time equivalent (1.0 FTE) administrative assistant position, who shall report to the budget and fiscal officer;

(4) One full-time equivalent (1.0 FTE) procurement manager position, who shall report to the chief financial officer; and

(5) One full-time equivalent (1.0 FTE) administrative assistant position, who shall report to the procurement manager.

(d) There shall be established:

(1) One full-time equivalent (1.0 FTE) chief branding, cultural, and marketing officer position, who shall report to the assistant executive director and be assisted by one full-time equivalent (1.0 FTE) administrative assistant position;

(2) One full-time equivalent (1.0 FTE) senior brand manager position and one full‑time equivalent (1.0 FTE) senior cultural manager position, who shall report to the chief branding, cultural, and marketing officer;

(3) Three full-time equivalent (3.0 FTE) brand manager positions, who shall report to the senior branding manager; and

(4) One full‑time equivalent (1.0 FTE) cultural specialist position, who shall report to the senior cultural manager.

(e) There shall be established:

(1) One full-time equivalent (1.0 FTE) director of destination management position, who shall report to the assistant executive director and who shall be assisted by one full-time equivalent (1.0 FTE) administrative assistant position; and

(2) One full-time equivalent (1.0 FTE) natural resource manager position, one full-time equivalent (1.0 FTE) Oahu community specialist position, one full-time equivalent (1.0 FTE) Kauai community specialist position, one full-time equivalent (1.0 FTE) Maui community specialist position, and one full-time equivalent (1.0 FTE) Hawaii island community specialist position, who shall report to the director of destination management.

(f) There shall be established one full-time equivalent (1.0 FTE) director of the convention center position, who shall report to the assistant executive director.

SECTION 21. There is appropriated out of the convention center enterprise special fund the sum of $28,500,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for payment of expenses arising from any and all use, operation, maintenance, alteration, improvement, or any unforeseen or unplanned repairs of the convention center, including without limitation the food and beverage service and parking service provided at the convention center facility; the sale of souvenirs, logo items, or other items; for any future major repair, maintenance, and improvement of the convention center facility as a commercial enterprise or as a world class facility for conventions, entertainment, or public events; and for marketing the convention center facility.

The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 22. There is appropriated out of the general revenues of the State of Hawaii the sum of $64,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 for plans, design, construction, and equipment for repairs and improvements of the convention center rooftop terrace deck.

The sum appropriated shall be expended by the office of tourism and destination management for the purposes of this Act.

SECTION 23. In codifying the new sections added by section 2 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 24. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 25. This Act shall take effect on July 1, 2023; provided that amendments made to section 237D-6.5, Hawaii Revised Statutes, by section 11 of this Act, shall not be repealed when that section is repealed and reenacted on June 30, 2023, pursuant to section 9 of Act 229, Session Laws of Hawaii 2021.

HOUSE OF REPRESENTATIVES	H.B. NO.	1375
THIRTY-SECOND LEGISLATURE, 2023		H.D. 3
STATE OF HAWAII		S.D. 3