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THE SENATE |
S.B. NO. |
176 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further
finds that a county with a population greater than five hundred thousand is
currently restricted to using the surcharge revenues for capital costs of mass
transit projects while smaller counties may use their surcharge for other
purposes, including operational costs of public transportation systems, and
that the restrictions on the larger counties should be amended to allow for
wider use of the funds.
The purpose of this Act
is to further amend the county surcharge on state general excise and use taxes
by:
(1) Authorizing a county with a pre-existing surcharge on state general excise and use taxes to permanently extend its surcharge to be imposed after December 31, 2030 at a lower rate of one-fourth of one per cent;
(2) Authorizing counties that have not previously adopted an ordinance to establish a surcharge on state general excise and use taxes to establish a surcharge at the rate of one-half of one per cent until December 31, 2030, and thereafter at a rate of one-fourth of one per cent; and
(3) For counties with a population greater than five hundred thousand, authorizing use of surcharge revenues for more than capital costs of mass transit systems, as smaller counties are not restricted to using those revenues only for capital costs of public transportation.
SECTION 2. Section 40-81.5, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a)
Beginning on September 5, 2017, [and ending on December 31, 2031,]
the comptroller, upon the request for payment by the rapid transportation
authority, shall verify that the authority's invoices for the [capital]
costs of a locally preferred alternative for a mass transit project comply with
section 46-16.8(e)."
2. By amending subsection (c) to read:
"(c) After submission of invoices by the rapid
transportation authority for capital costs of a locally preferred alternative
for a mass transit project are verified by the comptroller as an acceptable use
of funds received pursuant to a surcharge on state tax authorized pursuant to
section 46-16.8, the comptroller shall submit a certification statement,
including any appropriate supporting documents, to the department of budget and
finance for the allocation of funds, if available, pursuant to sections 248-2.7
and 248-2.6(d). The certification
statement shall include, at a minimum, the total amount contained in the
invoices for [capital] costs that are verified as an appropriate use of
funds pursuant to section 46-16.8(e)."
SECTION 3. Section 46-16.8, Hawaii Revised Statutes, is amended to read as follows:
"§46-16.8 County surcharge on state tax. (a) Each county may establish a surcharge on state tax at the rates enumerated in sections 237-8.6 and 238-2.6. A county electing to establish this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted prior to December 31, 2005; and
(3) No county surcharge on state tax that
may be authorized under this subsection shall be levied prior to January 1,
2007[, or after December 31, 2022, unless extended pursuant to subsection
(b)].
Notice of the public hearing required under paragraph (1) shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance and, beginning no earlier than January 1, 2007, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.
(b) Each county that has established a surcharge
on state tax prior to July 1, 2015, under authority of subsection (a) may
extend the surcharge [until December 31, 2030,] at the [same]
rates[.] enumerated in sections 237-8.6 and 238-2.6. A county electing to extend this surcharge
shall do so by ordinance; provided that[:
(1) No] no ordinance shall be
adopted until the county has conducted a public hearing on the proposed
ordinance[; and
(2) The ordinance shall be adopted prior
to January 1, 2018].
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax. The director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax.
(c) Each county that has not established a surcharge on state tax prior to July 1, 2015, may establish the surcharge at the rates enumerated in sections 237-8.6 and 238-2.6. A county electing to establish this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;
(2) The ordinance shall be adopted prior to March 31, 2019; and
(3) No county surcharge on state tax that
may be authorized under this subsection shall be levied prior to January 1,
2019[, or after December 31, 2030].
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance. Beginning on January 1, 2019, or January 1, 2020, as applicable pursuant to sections 237-8.6 and 238-2.6, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.
(d) Each county that has not established a
surcharge on state tax prior to July 1, 2023, may establish the surcharge at
the rates enumerated in sections 237-8.6 and 238-2.6. A county electing to establish this surcharge
shall do so by ordinance; provided that no ordinance shall be
adopted until the county has conducted a public hearing on the proposed
ordinance.
A
county electing to exercise the authority granted under this subsection shall
notify the director of taxation within ten days after the county has adopted a
surcharge on state tax ordinance. The
director of taxation shall levy, assess, collect, and otherwise administer the
county surcharge on state tax.
[(d)]
(e) Notice of the public hearing
required under [subsection] subsections (b) [or (c)] through
(d) before adoption of an ordinance establishing or extending the surcharge
on state tax shall be published in a newspaper of general circulation within
the county at least twice within a period of thirty days immediately preceding
the date of the hearing.
[(e)]
(f) Each county with a population
greater than five hundred thousand that adopts or extends a county surcharge on
state tax ordinance pursuant to subsection (a) or (b) shall use the surcharge
revenues received from the State for [capital]:
(1) Capital, operating, or maintenance
costs of a locally preferred alternative for a mass transit project; and
(2) Expenses in complying with the Americans
with Disabilities Act of 1990 with respect to paragraph (1);
provided
that revenues derived from the county surcharge on state tax shall not be used[:
(1) To] to build or repair
public roads or highways, bicycle paths, or support public transportation
systems already in existence prior to July 12, 2005;
[(2) For operating costs or maintenance
costs of the mass transit project or any purpose not consistent with this
subsection; or
(3) For administrative or operating,
marketing, or maintenance costs, including personnel costs, of a rapid
transportation authority charged with the responsibility for constructing,
operating, or maintaining the mass transit project;]
provided
further that nothing in this section shall be construed to prohibit a county
from using county funds that are not derived from a surcharge on state tax for [a
purpose described in paragraph (2) or (3).] the purposes described in
paragraphs (1) or (2).
[(f)]
(g) Each county with a population
equal to or less than five hundred thousand that adopts a county surcharge on
state tax ordinance pursuant to this section shall use the surcharges received
from the State for:
(1) [Operating or capital] Capital,
operating, or maintenance costs of public transportation within each county
for public transportation systems, including public roadways or highways,
public buses, trains, ferries, pedestrian paths or sidewalks, or bicycle paths;
and
(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1).
[(g)]
(h) As used in this section, "capital costs" means
nonrecurring costs required to construct a transit facility or system,
including debt service, costs of land acquisition and development, acquiring of
rights-of-way, planning, design, and construction, and including equipping and
furnishing the facility or system. For a
county with a population greater than five hundred thousand, capital costs also
include non-recurring personal services and other overhead costs that are not
intended to continue after completion of construction of the minimum operable
segment of the locally preferred alternative for a mass transit project."
SECTION 4. Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The county surcharge on state tax, upon the
adoption of county ordinances and in accordance with the requirements of
section 46-16.8, shall be levied, assessed, and collected as provided in this section
on all gross proceeds and gross income taxable under this chapter. No county shall set the surcharge on state
tax to be levied, assessed, or collected at a rate greater than [one-half]:
(1) One-half of one per cent if prior to January 1, 2031; and
(2) One-fourth of one per cent if after
December 31, 2030,
of all gross proceeds and gross
income taxable under this chapter. All
provisions of this chapter shall apply to the county surcharge on state
tax. With respect to the surcharge, the
director of taxation shall have all the rights and powers provided under this
chapter. In addition, the director of
taxation shall have the exclusive rights and power to determine the county or
counties in which a person is engaged in business and, in the case of a person
engaged in business in more than one county, the director shall determine,
through apportionment or other means, that portion of the surcharge on state
tax attributable to business conducted in each county.
(b) Each county surcharge on state tax that may
be adopted or extended pursuant to section 46-16.8 shall be levied beginning in
a taxable year after the adoption of the relevant county ordinance; provided
that no surcharge on state tax may be levied[:
(1) Prior to:
(A)]
prior to:
(1) January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted prior to December 31, 2005;
[(B)] (2) January 1, 2019, if the county
surcharge on state tax was established by the adoption of an ordinance after
June 30, 2015, but prior to June 30, 2018; or
[(C)] (3) January 1, 2020, if the county
surcharge on state tax was established by the adoption of an ordinance on or
after June 30, 2018, but prior to March 31, 2019[; and
(2) After December 31, 2030]."
SECTION 5. Section 238-2.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The county surcharge on state tax, upon the
adoption of a county ordinance and in accordance with the requirements of
section 46-16.8, shall be levied, assessed, and collected as provided in this
section on the value of property and services taxable under this chapter. No county shall set the surcharge on state
tax to be levied, assessed, or collected at a rate greater than [one-half]:
(1) One-half of one per cent if prior to January 1, 2031; and
(2) One-fourth of one per cent if after
December 31, 2030,
of the value of property taxable
under this chapter. All provisions of
this chapter shall apply to the county surcharge on state tax. With respect to the surcharge, the director
shall have all the rights and powers provided under this chapter. In addition, the director of taxation shall
have the exclusive rights and power to determine the county or counties in
which a person imports or purchases property and, in the case of a person
importing or purchasing property in more than one county, the director shall
determine, through apportionment or other means, that portion of the surcharge
on state tax attributable to the importation or purchase in each county.
(b) Each county surcharge on state tax that may
be adopted or extended shall be levied beginning in a taxable year after the
adoption of the relevant county ordinance; provided that no surcharge on state
tax may be levied[:
(1) Prior
to:
(A)] prior
to:
(1) January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted prior to December 31, 2005;
[(B)] (2) January 1, 2019, if the county
surcharge on state tax was established by the adoption of an ordinance after
June 30, 2015, but prior to June 30, 2018; or
[(C)] (3) January 1, 2020, if the county
surcharge on state tax was established by the adoption of an ordinance on or
after June 30, 2018, but prior to March 31, 2019[; and
(2) After December 31, 2030]."
SECTION 6. Section 248-2.7, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:
"(b)
[For the period beginning] Beginning on January 1, 2018, [to
December 31, 2030,] transient accommodations tax and surcharge on state tax
revenues allocated to the mass transit special fund pursuant to sections
237D-2(e) and 248-2.6 shall be deposited into the special fund. All interest earned on the moneys in the
special fund shall be credited to the general fund. The mass transit special fund shall be exempt
from the central service expenses deduction under section 36-27 and
departmental administrative expenses deduction under section 36‑30.
(c)
Upon receiving a certification statement from the comptroller pursuant
to section 40-81.5, the director of finance shall allocate and disburse moneys
in the mass transit special fund to the director of finance of a county with a
population greater than five hundred thousand; provided that the director of finance
shall only disburse those amounts that are certified in the certification
statement for that county for the purposes specified in section 46-16.8; [provided
further that revenues allocated from the special fund shall not be used for:
(1) Operating or maintenance costs of
the mass transit project or any purpose not consistent with section 46-16.8(e);
or
(2) Administrative, operating,
marketing, or maintenance costs, including personnel costs, of a rapid
transportation authority charged with the responsibility for constructing,
operating, or maintaining the mass transit project;]
provided further that the total amount of funds that are available, allocated, and disbursed by the director of finance pursuant to this section shall not be in excess of the total amount indicated on the certification statement. The director of finance may allocate and disburse moneys pursuant to this section on a monthly basis.
Any amounts allocated and disbursed pursuant to this section shall be subject to the availability of funds deposited and on balance in the special fund. The director of finance shall not allocate or disburse any amounts from the special fund that are in excess of any amounts deposited and on balance in the special fund."
SECTION 7. Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, as amended by Act 1, Special Session of 2017, is amended by amending section 9 to read as follows:
"SECTION
9. This Act shall take effect upon its
approval[; provided that:
(1) If none of the counties of the State
adopt an ordinance to levy a county surcharge on state tax by December 31,
2005, this Act shall be repealed and section 437D‑8.4, Hawaii Revised
Statutes, shall be reenacted in the form in which it read on the day prior to
the effective date of this Act;
(2) If any county does not adopt an
ordinance to levy a county surcharge on state tax by December 31, 2005, it
shall be prohibited from adopting such an ordinance pursuant to this Act,
unless otherwise authorized by the legislature through a separate legislative
act;
(3) If an ordinance to levy a county
surcharge on state tax is adopted by December 31, 2005:
(A) The ordinance shall be repealed on
December 31, 2022; provided that the repeal of the ordinance shall not affect
the validity or effect of an ordinance to extend a surcharge on state tax
adopted pursuant to an act of the legislature; and
(B) This Act shall be repealed on
December 31, 2030; and section 437D‑8.4, Hawaii Revised Statutes, shall
be reenacted in the form in which it read on the day prior to the effective
date of this Act; provided that the amendments made to section 437D-8.4, Hawaii
Revised Statutes, by Act 226, Session Laws of Hawaii 2008, as amended by Act
11, Session Laws of Hawaii 2009, and Act 110, Session Laws of Hawaii 2014,
shall not be repealed]."
SECTION 8. This Act shall not affect the validity or
effect of any surcharge on state tax adopted pursuant to Act 247, Session
Laws of Hawaii 2005; Act 240, Session Laws of Hawaii 2015; Act 137, Session
Laws of Hawaii 2017; Act 1, Special Session Laws of Hawaii 2017; and Act 11,
Session Laws of Hawaii 2018, prior to the effective date of this Act.
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 2023.
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INTRODUCED BY: |
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Report Title:
General Excise Tax; County Surcharge; Tax Assessment
Description:
Authorizes a county with a pre-existing surcharge to continue the surcharge after December 31, 2030 at a lower rate of one-fourth per cent. Authorizes counties that have not adopted a surcharge ordinance on state tax to adopt a surcharge ordinance at the current rate of one-half of one per cent through December 31, 2030 and at a rate of one-fourth of one per cent after December 31, 2030. Expands the authorized use of surcharge revenues to more than capital costs for counties with a population greater than five hundred thousand.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.