Bill Text: HI SB1242 | 2018 | Regular Session | Introduced

---

Bill Title: Relating To Taxation.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [SB1242 Detail]

Download: Hawaii-2018-SB1242-Introduced.html

---

THE SENATE	S.B. NO.	1242
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The purpose of this Act is to address 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 at a lower rate of one-fourth of one per cent;

     (2)  Authorizing counties that have not adopted an ordinance to establish a surcharge on state general excise and use taxes prior to the effective date of this Act to establish a surcharge at the rate of one-fourth of one per cent;

     (3)  Reducing the amount deducted from the county surcharge on state tax for the State's costs of assessment, collection, and disposition from ten per cent to the actual costs incurred by the State; and

     (4)  For counties with a population greater than five hundred thousand, authorizing use of surcharge revenues to include "operating costs".

     SECTION 2.  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, or Act 240, Session Laws of Hawaii 2015, prior to the effective date of this Act.

     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 [from January 1, 2023, until December 31, 2027,] 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 July 1, 2016, but no earlier than July 1, 2015].

     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.  Beginning on January 1, 2023, 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 July 1, 2016, but no earlier than July 1, 2015; and

     (3)  No county surcharge on state tax that may be authorized under this subsection shall be levied prior to January 1, 2018[, or after December 31, 2027].

     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, 2018, 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, 2017, 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; and

     (2)  No county surcharge on state tax that is authorized under this subsection shall be levied prior to January 1, 2023.

     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, 2023, 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 (b) [or], (c), or (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 surcharges received from the State for:

     (1)  [Capital] Operating or capital 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).

The county surcharge on state tax shall not be used to build or repair public roads or highways, bicycle paths, or support public transportation systems already in existence prior to July 12, 2005.

     [(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 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 at a rate greater than:

     (1)  [one-half] One-half per cent if prior to January 1, 2028; and

     (2)  One-fourth per cent if after December 31, 2027;

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 the taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied[:

     (1)  Prior] prior to:

          [(A)] (1)  January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted prior to December 31, 2005; or

          [(B)] (2)  January 1, 2018, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but prior to July 1, 2016[; and

     (2)  After December 31, 2027]."

     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 at a rate greater than:

     (1)  [one-half] One-half per cent if prior to January 1, 2028; and

     (2)  One-fourth per cent if after December 31, 2027;

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 tangible personal property and, in the case of a person importing or purchasing tangible 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 the taxable year after the adoption of the relevant county ordinance; provided that no surcharge on state tax may be levied[:

     (1)  Prior] prior to:

          [(A)] (1)  January 1, 2007, if the county surcharge on state tax was established by an ordinance adopted prior to December 31, 2005; or

          [(B)] (2)  January 1, 2018, if the county surcharge on state tax was established by the adoption of an ordinance after June 30, 2015, but prior to July 1, 2016[; and

     (2)  After December 31, 2027]."

     SECTION 6.  Section 248-2.6, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  If adopted by county ordinance, all county surcharges on state tax collected by the director of taxation shall be paid into the state treasury quarterly, within ten working days after collection, and shall be placed by the director of finance in special accounts.  Out of the revenues generated by county surcharges on state tax paid into each respective state treasury special account, the director of finance shall deduct [ten per cent of the gross proceeds of] from a respective county's surcharge on state tax [to reimburse the State for] the actual costs of assessment, collection, and disposition of the county surcharge on state tax incurred by the State.  Amounts retained shall be general fund realizations of the State."

     SECTION 7.  Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, 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; and

     (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 Act 240, Session Laws of Hawaii 2015;

         (B)  This Act shall be repealed on December 31, 2027; and

         (C)  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.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 9.  This Act shall take effect on July 1, 2017.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

County Surcharge on State Tax; Reimbursement

 

Description:

Changes the amount deducted from the county surcharge on state tax to reimburse the State for costs of assessment, collection, and disposition from 10% of gross proceeds to the actual costs incurred by the State.  Allows counties that have established a county surcharge on state tax to permanently extend the surcharge at a lower rate of 0.25%.  Allows surcharge to be used for operating costs.  Allows counties that have not yet established a surcharge to do so at a rate of 0.25%.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.