The Senate Committee on Water and Land convened on March 15, 2025, to discuss House Bill 504, which focuses on environmental stewardship in Hawaii. The committee's primary agenda was to review amendments and recommendations related to the bill, ensuring it aligns with legal standards and addresses various stakeholder concerns.

The committee agreed to pass HB 504 with a proposed Senate Draft 1 (SD 1), which includes significant modifications. Notably, part two of the bill was deleted following recommendations from the Attorney General due to legal and constitutional issues. Amendments suggested by the American Hotel and Lodging Association and the Hawaii Hotel Alliance were incorporated, expanding the bill's preamble to include commercial passenger vessels and refining the definition of transient accommodations.

A key change involved the tax structure for transient accommodations. The committee decided to remove the previously proposed language in section 237-2(f) that raised concerns regarding the Department of Education tax. Instead, a new provision was introduced to impose a $20 tax per passenger for each port entry. Additionally, amendments from the Hawaii Cattlemen's Council were included to enhance environmental stewardship and address invasive species.

The committee also established a working group to oversee the enforcement of the Transient Accommodation Tax (TAT). This group will be led by the Department of Taxation (DOTAX) and will include representatives from various sectors, including the hotel and lodging industry, timeshare operators, and short-term rental organizations. The working group is tasked with reporting its findings and recommendations to the 2026 legislature.

During discussions, some committee members expressed reservations about the $20 per passenger fee, referencing another bill (SB 1396) related to the governor's proposal that had already been sent to the House. Concerns were raised regarding the legal implications of taxing foreign-flagged cruise ships, as most operating vessels are not American-flagged.

Senator McAfee highlighted the importance of ensuring that the revenue generated from this bill could help protect essential services, such as Medicaid and free meals for children, amidst ongoing budgetary challenges. The committee acknowledged these concerns and emphasized the need for continued discussions as the bill progresses.

In conclusion, the committee's deliberations on HB 504 reflect a commitment to balancing environmental stewardship with economic considerations and the welfare of Hawaii's residents. The bill will move forward for further discussion in the Committee on Ways and Means, with the hope of addressing the various concerns raised during the meeting.