State lawmakers agreed last week to trim the Hawaii Tourism Authority’s funding but lessened the impact by agreeing to forgive its debt on the Hawai‘i Convention Center.

HTA, the state agency responsible for marketing Hawaii to the world, receives $108.5 million in transient accommodations taxes from the Legislature each year with $26.5 million of it earmarked for the convention center.

The agency stood to lose 44 percent of its budget when House and Senate conferees met Thursday to work out differences on a Senate version of House Bill 2010, which reduced HTA’s convention center fund to $6 million and its tourism fund to $60.3 million.

Instead, conferees agreed to trim HTA’s $82 million tourism special fund to $79 million. The new version of the bill also reduces HTA’s convention center appropriation to $16.5 million from $26.5 million.

However, lawmakers inserted a provision to provide a new $1 million appropriation to HTA to address homeless issues in the tourism areas. The money would be matched by the Hawaii Lodging &Tourism Association.

They also agreed to forgive HTA’s $190 million debt obligation on the convention center. HTA had been required to reimburse the state $26.4 million annually for debt service payments on the general obligation bonds issued to pay for the facility’s $350 million construction costs. The debt has been a source of controversy for years, especially during the last two fiscal years, when HTA started keeping $6.4 million back from its reimbursements.

The amended bill now goes to a floor vote. That vote occurs as state tourism appears to be headed into its seventh consecutive year of record arrivals and tourism spending. It’s also taking place while HTA is still living in the stigma of a February release of a negative audit from the Office of the State Auditor, which said the agency exhibited “lax oversight (and) deficient internal controls.”

“We recognize the efforts that the Senate has put in and the work that you’ve done to hold HTA accountable. We recognize the extensive audit that they went though, and hopefully through reduction they will understand the seriousness of running a tourism industry in Hawaii and they will continue to work with both the Senate and the House to do what is best for the tourism industry,” said state Rep. Sylvia Luke, chairwoman of the House Finance Committee.

State Sen. Glenn Wakai, chairman of the Senate Committee on Economic Development, Tourism and Technology, supported the amended version of the bill, although he and other members of the Ways and Means Committee had previously sought much deeper cuts.

Wakai said he was satisfied with the current cut, which he said equates to a $9.5 million reduction to HTA’s tourism special fund. He estimates that fund was closer to $88.5 million than $82 million counting the money HTA was shorting the state on convention center repayments.

Wakai said the cutbacks will force HTA to be more accountable with its spending and not to market tourism so heavily at a time when many residents are concerned about the negative impacts of unprecedented tourism growth.

“HTA can still keep their foot on the gas, but not as heavy as in the past,” he said.

The House Tourism Committee had stated an earlier preference to keep the HTA’s budget intact and beef up funding for the convention center. But state Rep. Richard Onishi, committee chairman, said the latest version of the bill was a nod to the Senate’s concerns about expenditures brought up in the state audit.

“We felt like there was room for streamlining, and we want greater accountability,” Onishi said.

HTA President and CEO George D. Szigeti said he respects the hard work that the House and Senate put into reaching a compromise.

“It’s too early to assess what the cuts could mean, but the bond-debt forgiveness is a big victory,” Szigeti said.