Hawaii ‘visitor impact fee’ bill moves forward

A “visitor impact fee” bill that would require any nonresident aged 15 or older to pay for an annual license to visit a state park, beach, forest, hiking trail or other natural area is still alive.

Senate Bill 304 moved out of the House Committee on Finance on Wednesday with amendments. Committee chair Rep. Kyle Yamashita (D, Spreckelsville-Upcountry Maui) called the bill “a work in progress,” and said the plan is to “blank out” the potential cost of the license and discuss it further.

Initially there were eight House and Senate proposals to implement so-called green fees, and most supported requiring tourists over the age of 15 to buy an annual $50 license to use the state’s natural resources. SB 304 was the only one of these measures to cross over this legislative session, and Wednesday’s committee hearing was its last referral since it was received from the Senate.

During a well-attended hearing, the high-profile initiative resulted in robust discussion and drew broad community support from state agencies, nonprofits and even college and high school students. Lawmakers were considering the latest version of SB 304, which says that the license could be purchased online, via an app or through retailers and nonprofit groups. It also allows for unspecified civil penalties, which also would not be imposed until five years after the new fees go into effect.

The measure establishes within the state Department of Land and Natural Resources a visitor impact fee program, which will receive funding for five full-time employees. The bill also creates a special fund for the program, which would provide sustained funding for the protection, restoration, regeneration, enhancement and care of Hawaii’s natural and outdoor recreational resources. DLNR, which testified in strong support of the measure, would be able to distribute grants out of the fund to nonprofits.

State Deputy Attorney General Daniel Morris also testified in strong support of the bill. “This is an innovative program that will allow the state to address the impacts of visitors on our state-owned natural resources,” Morris said. “No other state has really adopted a program with this type of breadth or this type of potential to address those adverse impacts.”

It was pretty clear early in the legislative session that there was great appetite among lawmakers to implement some sort of green fees. The visitor fee concept was emphasized on the 2022 campaign trail with some candidates for various offices suggesting that fees aimed exclusively at visitors also could help limit tourism as arrival numbers continue to climb in a post-COVID-19 era. Gov. Josh Green touted it in his State of the State address.

DLNR chairperson Dawn Chang said in written testimony, “The establishment of green fees in several other tourism-focused economies has allowed places like the Republic of Palau, Galapagos Islands, New Zealand, and the Maldives to allow greater investment in their natural resources — reducing the overall impact of tourism on their environments, improving the quality of visitor experiences, and supporting community stewardship of these special places.”

Passage of the bill would fit with the push among Hawaii lawmakers to better manage the destination, and there is already some precedent for it. However, there has been some resistance, especially by those in Hawaii’s tourism industry, who are concerned that the bill will confuse visitors at best and dampen tourism demand at worst.

Indeed, Chang was not immediately able to answer questions from several members of the House Committee on Finance about how the bill would be implemented and enforced given that it might not be immediately clear to visitors which sites, especially beaches, fall under state jurisdiction.

Morris said the bill allows for rule-making, which along with its educational component, would clarify concerns.

The idea of paying for usage is not new to Hawaii; however, thus far the charges have been site-specific. Following record rainfall that triggered catastrophic mudslides on the north shore of Kauai in 2018, Haena State Park was rebuilt with a new approach by the state to limit parking and charge entry fees.

Back in the mid 1990s, legislation was authored to charge visitors to enter Hanauma Bay for a special maintenance and preservation fund — along with a mandatory educational video so visitors can better appreciate the nature preserve, along with instructions on how they should behave.

Diamond Head State Monument charges fees to nonresidents, who are required to make entry and parking reservations.

Models like these seem to be the visitor industry’s preference. Stephanie Donoho, Kohala Coast Resort Association’s administrative director, testified that the association is “in support of the state collecting visitor impact fees for the use of our state’s natural resources, including state parks, beaches, trails, natural areas and other facilities, but only if those fees are directly reinvested in those natural areas for maintenance, upkeep and preservation.”

Donoho said, for example, Hapuna Beach State Recreation Area has collected more than $1.5 million in fees from visitors, but the fees have not been reinvested into the park. She said the association believes that the Legislature should take a deeper dive into the revenues and expenditures from previously established visitor fee programs before moving this bill forward and committing to new ones.

Keith Vieira, principal of KV & Associates, Hospitality Consulting, said Hawaii’s visitors already are paying the nation’s highest lodging taxes, which rose 30% after the 2021 Legislative session when lawmakers gave counties the right to levy their own TAT.

Vieira said visitors are paying about 18% in combined TAT and general excise tax for their lodging and some of these taxes, which were created to support tourism and the Hawai‘i Convention Center, should be put toward conservation efforts.

“It’s just taking advantage of our No. 1 industry because no one has alternative plans to drive revenue. (Tourists) don’t vote and there is a belief that no matter what we do they’ll come anyway,” he said. “This is just a money grab, and eventually it will just be swept into the general fund. That’s what the Legislature always does.”

Jack Richards, president and CEO of Pleasant Holidays LLC, said visitors may accept the fees as they have with national parks across the United States; however, he said the timing might be off given uncertainty in the U.S. economy and Hawaii’s soaring prices.

Richards said bookings to Hawaii have grown softer this year, and he attributes much of the pullback to higher prices. On average, he said, it costs a couple $1,962 more to visit Hawaii than it did in 2019 before the pandemic, and $630 more than it did last year.

“Is $50 a big deal? I don’t think so, but we won’t know until it happens,” Richards said, adding that he’s actually more concerned about pushback from visitors to Hawaii over the numerous high resort fees and parking fees.

Richards said he thinks the current Hawaii proposal is complicated. He recommends that lawmakers instead consider implementing a model similar to one in Mexico, where visitors are charged a nominal fee at checkout.

“Charging a $2, $3, even $5 Hawaii restoration fee and using that money to invest in infrastructure to repair beaches and parks would be much more salable” he said, adding if the fee passes he hopes that some of it would go toward beach erosion, especially at Kaanapali, where visitors are complaining about the loss of sandy shores and the washed-out walks.

The Tax Foundation of Hawaii and the Grassroot Institute of Hawaii have questioned the legality of the measure.

Ted Kefalas, director of strategic campaigns for the Grassroot Institute of Hawaii, said in written comments, “The U.S. Supreme Court frowns upon any law that would restrict the right to travel freely between states and has ruled against disparate resident/nonresident tax schemes under both the Privileges and Immunities Clause and the Equal Protection Clause.”

Kefalas said unless residents, who are also are injurious to Hawaii’s ecosystem, are also charged for a similar license, “the entire scheme risks being overturned on a legal challenge.”

Morris, however, said the Department of the Attorney General “feels that the program is narrowly tailored and would pass constitutional muster.”

———

Star-Advertiser staff writer Dan Nakaso contributed to this report.