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Committee backs TAT increase proposal to fund climate and natural‑resource stewardship with amendments
Summary
Senate Bill 1396 SD3 HD2 — a proposal to increase the transient accommodations tax to fund climate resilience, natural resource stewardship and sustainable tourism — advanced with amendments after robust support from environmental groups and concerns from tourism operators.
The House Committee on Finance recommended passage with amendments Monday of Senate Bill 1396 SD3 HD2, a proposal to raise the transient accommodations tax (TAT) and direct revenue to climate hazard mitigation, environmental stewardship and sustainable tourism initiatives.
Supporters including the governor’s office, the Nature Conservancy, the Care for ‘Āina Now coalition and the Resources Legacy Fund argued the state faces a large, documented funding gap for natural resource stewardship and disaster preparedness. The Care for ‘Āina Now coalition cited a study finding an estimated $560 million annual funding shortfall for conservation and resource management in Hawaii. "We simply cannot afford the next Lahaina," said Maka Gibson of the Care for ‘Āina Now coalition.
Polling cited by the Nature Conservancy showed 76% visitor support for an environmental fee in January 2025, testimony noted. Proponents said dedicated funding would support community groups, watershed restoration, flood mitigation, and workforce expansion for prevention and response.
Opposition and concerns: the Activities and Attractions Association and some tourism stakeholders urged caution and said TAT is already among the highest in the U.S. "We oppose this bill as written at what I would say is our TAT is the highest in the nation," said Antoinette Davis of the Activities and Attractions Association. Industry representatives warned higher TAT could heighten costs for visitors and reduce spending on tours, restaurants and retail.
Committee changes and next steps: the committee adopted technical amendments and inserted debt‑service language; it left open conference negotiations on the exact rate increase (the governor had proposed a 1% increase in earlier briefings). The committee noted the need for a dedicated fund and to ensure funds flow to multiple agencies and community partners rather than a single department.
Ending: Lawmakers advanced the bill with amendments and acknowledged tradeoffs between immediate revenue needs for resilience work and possible impacts on tourism spending; the measure will go to conference to finalize rate, fund structure and distribution of proceeds.
