The 2015 Hawaii State Legislative Session began on Wednesday, January 21st. Over 2700 bills were introduced in both the House and the Senate. The Hawaii Lodging & Tourism Association reviewed every bill and prioritized those that would either negatively or positively affect your business.
During the summer of 2014, we witnessed a changing landscape in our State’s government.
Former Senator David Ige was elected to Governor bringing with him, former Hawai’i Tourism Authority President and CEO, Mike McCartney, as his Chief of Staff.
In the Legislature, Senator Donna Kim retained her position as Senate President and Representative Joseph Souki retained his seat as Speaker of the House.
Senator Jill Tokuda and Senator Ron Kouchi was appointed to Chair and Vice Chair, respectively, of the Senate Committee on Ways and Means.
Representative Tom Brower and Representative Takashi Ohno served this session as the Chair and Vice Chair, respectively, of the House Committee on Tourism.
Senator Gilbert Kahele and Senator J. Kalani English served this session as the Chair and Vice Chair, respectively, of the Senate committee on Tourism and International Affairs.
Representative Sylvia Luke and Representative Scott Nishimoto, served as the Chair and Vice Chairs, respectively, of the House Committee on Finance.
At the end of the 2015 session the State of Hawai’i once again witnessed a shift in power, Senator Ronald Kouchi took over as President of the Senate and named Will Espero as Vice President of the Senate, J. Kalani English as Majority Leader, Josh Green as Majority Floor Leader, Brickwood Galuteria as Majority Caucus Leader and Donovan Dela Cruz as Majority Whip.
The following is a legislative summary of the top issues that came up this year:
AH&LA (National) PRIORITY ISSUES
Congress has recently agreed to extend a program that is quite critical to our industry, known as BRAND USA, for an extended 5 year period. BRAND USA is our nation’s destination marketing organization, a public-private partnership designed at increasing international travel to the United States.
SHORT TERM ONLINE RENTAL MARKET (S.T.O.R.M.):
This is an issue that is being addressed across the nation. The main goals looking to be achieved are to collect due taxes from the VRBO’s (establishing parity), ensure safety for visitors, neighbors and community members alike, establish rules and regulations that abide county ordinances, establish and monitor a registered listing of VRBO’s, and to properly disclose all proper information to the public through online postings such as registration, TAX numbers, and information that ensures consumer protection and transparency.
Currently these States are making a big push for legislation: Hawai'i, California, New York, Georgia, Maine, Florida, Texas, Rhode Island, Massachusetts, Montana, and Tennessee (among others). In total over 70 cities and counties are currently looking at ways to address the proliferation and regulation issues surrounding short term online rentals.
ONLINE TRAVEL AGENCY LITIGATION:
This year the Hawai'i Supreme Court came to a decision on the litigation surrounding the Online Travel Agencies and owed back taxes to the State. The decision has the OTC’s paying back the General Excise Tax owed to the State spanning over 10 years. HLTA issued an official statement along with AH&LA stating that while we are happy with an outcome that addresses the GET, we would have liked to see the issue of owed transient accommodations tax addressed.
In mid-December the National Labor Relations Board (NLRB) released its final rule on governing representation-case procedures (union elections), also known as the “Ambush Rule”. The rule will significantly alter the timeframe for representation elections in the workplace. It shortens the election process down from the current median time of 38 days to as few as 10 days. A joint resolution S.J. Res 8 was passed by both the Senate and House of Representatives which would provide congressional disapproval of the rule submitted by the National Labor Relations Boar relating to representation case procedures. This bill was unfortunately vetoed by the President. The NLRB’s rule went into effect on April 14th and AH&LA is remaining hopeful that a court will overturn the rule in the very near future.
ONLINE BOOKING SCAMS:
Online scams and frauds are plaguing our industry with con-artists on the web ripping off our visitors with fake online booking mechanisms. AH&LA is urging member s of Congress to press the Federal Trade Commission (FTC) in further investigating this problem.
50th STATE PRIORITY ISSUES
Short Term Online Rental Market (S.T.O.R.M):
Numerous bills were introduced in both the House and the Senate that called for ways to regulate the growing market of Vacation Rentals By Owners (VRBO’s). Two bills, SB519 and HB825, gained the most traction. SB519 authorizes the Department of Taxation to enforce civil penalties for operators and plan managers who fail to display their certificate of registration and registration ID numbers for transient accommodations and resort time share vacation plans. HB825 called for the Department of Commerce and Consumer Affairs to establish licensing requirements and enforcement provisions for transient vacation rentals. Both bills ‘crossed over’ to the other chamber; HB825 was killed in the Senate while SB519 went the distance and was recently passed out of Conference Committee, it will be put to Final Reading this week.
Tax Credit for Construction/Renovation:
At the beginning of the Session, we continued to push for the desired tax credit on hotel construction and renovation. HB133, HB572 and SB536 all addressed the issue of bringing back a much desired tax exemption. HB133 and SB536 both ultimately died this year in the Senate Committee on Ways and Means. With new leadership focused heavily on fiscal strength, it wasn’t in the books this year to establish a tax credit for our industry.
Transient Accommodations Tax & County Funding:
This session there were a handful of Bills that addressed the Transient Accommodations Tax in regards to County allocations. In 2014, Act 174 SLH 2014, was established which created a State-County functions working group which is tasked with evaluating the division of duties and responsibilities between the State and counties relating to the provision of public services; and to submit a recommendation to the Legislature on the appropriate allocation of the transient accommodations tax revenues between the State and counties that properly reflect the division of duties and responsibilities relating to the provision of public services. We took the stance that the group should report their findings (scheduled 20 days prior to the convening of the 2016 Legislature), before any legislation addresses the issue of changing the model in which the counties receive TAT allocations.
Labor & Mandatory Sick Leave:
This session there were two bills SB129 and HB496 that required certain employers to provide sick leave to service workers. We opposed both of these bills with the reasoning that the majority of companies in Hawaii currently address the issue of sick leave as an agreement between the employer and employee; we feel that this benefit should not be imposed as a requirement through legislation. Alongside many other associations, chambers of commerce, businesses and organizations we were able to oppose and put a stop to these bills.
Labor & Mandatory Sick Leave:
This session there were two bills that looked to impose new renewable standards milestone and regulations for Hawai'i SB715 and HB623. We opposed language in each bill that required that these standards also be imposed on Large Self-Generators (especially with the growing use of CHP’s or Combined heat and power generators). The language addressing Large Self-Generators was deleted from both bills.