Senate committees pass HB 504 with amendments to fund environmental stewardship; adds $20 port fee, TAT enforcement working group

The Senate committees on Economic Development and Tourism and on Water and Land voted March 18, 2025, in Conference Room 229 to pass House Bill 504 (HD2) as amended (SD1) to create a dedicated funding stream for natural-resource stewardship and restoration. The committee action deleted Part 2 of the bill at the Attorney General's recommendation, added a $20 per-passenger-per-port-entry charge, and directed creation of a working group on transient accommodations tax (TAT) enforcement.

The bill responds to repeated testimony that Hawaii faces a large funding gap for natural-resource protection. Ryan Kanakawale, first deputy director of the Department of Land and Natural Resources, said DLNR has identified about $440,000,000 in projects for sustainable tourism, hazard mitigation and climate resilience over the next one to two fiscal years. Jocelyn Herbert of Resources Legacy Fund testified that “Hawaii is facing a $560,000,000 annual shortfall to fund natural resource stewardship.”

Why it matters: backers told the committees HB 504 would create durable funding for forests, reefs, coastal and freshwater resources and help agencies and community groups respond to rising wildfire, flood and storm risks. Opponents — principally industry groups representing hotels, resorts and short-term rentals — warned of administrative complexity, potential economic effects and legal questions about applying a TAT or passenger fee to commercial passenger vessels.

Key committee changes and directions - The committees adopted an SD1 that deletes Part 2 after a Deputy Attorney General advised the panel that adding the contested provisions could violate Article III, Section 14 of the state constitution, which requires a single subject in a bill. Deputy Attorney General Tom Lau recommended removing Part 2 for that reason. - The SD1 incorporates amendments requested by the American Hotel & Lodging Association and the Hawaii Hotel Alliance to broaden definitions of transient accommodations and to address commercial passenger vessels. - The SD1 adds a $20 per-passenger fee for port entries (expressed in the amended draft as a $20 per passenger per port-entry charge) and inserts a new working group on TAT enforcement to be led by the Department of Taxation. The working group must report recommendations, including proposed legislation, to the 2026 Legislature. - The committees asked that the committee report reflect fiscal recommendations from the governor’s office and include reservations and technical amendments.

What supporters said Supporters from conservation coalitions, nonprofits and some business groups urged passage. Hannah Lesiak of the Ocean Legislative Task Force testified in “strong support,” saying the measure would provide “a crucial safety net for our environment.” Maka Gibson of Resources Legacy Fund called for “dedicated funding for natural resource stewardship and restoration.” Will Cain, representing the Office of the Governor, and Daniel Naho, interim CEO of the Hawaii Tourism Authority, stood on their written testimony and said they support the measure with technical comments.

What opponents and agencies warned Industry representatives and lodging groups raised operational and legal concerns. Mackenzie Chase of Expedia Group said a proposed subsection that would tax stays booked with loyalty points “would be very, very challenging to implement.” The Department of Taxation testified that taxing loyalty points would require new audit approaches and enforcement training.

Several senators and the Deputy Attorney General flagged legal risk in applying a state tax or fee to staterooms on foreign-flag commercial passenger vessels; the committee directed further review. Senator comments during the hearing noted the Passenger Vessel Act and federal preemption concerns were issues that may need more legal review before the measure proceeds.

Fiscal and program details discussed - DLNR identified approximately $440 million in near-term projects for mitigation, resilience and sustainable tourism. (Ryan Kanakawale, DLNR) - Testimony cited a statewide annual stewardship funding shortfall of roughly $560 million. (Jocelyn Herbert, Resources Legacy Fund) - Polling cited in testimony reported that 76% of visitors would be willing to pay to restore natural resources; that figure rose to 85% for repeat visitors. (Jocelyn Herbert) - Committees discussed converting the proposed reimbursable general-obligation bond special fund into a regular special fund as recommended by the Department of Budget and Finance.

Next steps The committees passed the SD1 and moved the bill forward; it will next be considered by the Senate Ways and Means Committee. The working group on TAT enforcement must convene under the SD1, include representatives from DOTAX, county TAT collectors, industry and other invited stakeholders, and report back with recommendations and any draft legislation to the 2026 Legislature.

Votes at a glance: other measures the committees advanced or passed on March 18, 2025 - HB 348 (single-use plastics): Passed with SD1 (effective date delayed to July 1, 2026, and minor technical edits to personal-care product definitions). Committee report to note Department of Health enforcement funding concerns. - HB 496 (Mama Kiti / agribusiness-related): Passed as transmitted (defective effective date and appropriation already set in bill language). - HB 774 (value-added products / agribusiness innovation network): Passed as transmitted. - SCR 141 / SR 159 (USDA grant collaboration requests): Passed with technical amendments. - HB 454 (Hawaii Technology Development Corporation funding/accelerator): Passed as transmitted.

The measures above were recorded during the same hearing day and were passed by the relevant committees; each will proceed to the next committee or floor scheduling as required by Senate rules.