TAXATION AND FINANCE

 

     Section 3.  The taxing power shall be reserved to the State, except so much thereof as may be delegated by the legislature to the political subdivisions, and except that all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties, with the exception of the county of Kalawao.  The legislature shall have the power to apportion state revenues among the several political subdivisions. [Ren and am Const Con 1978 and election Nov 7, 1978]

 

Note

 

  Regarding proposed constitutional amendment to this section by SB 2922, L 2018, the Hawaii supreme court declared the ballot question invalid on October 19, 2018, SCPW-18-0000733.

 

Attorney General Opinions

 

  As section authorizes delegation of taxing power to political subdivisions, §248-2, authorizing counties to set real property tax rate, is not in violation of article VI, §1.  Att. Gen. Op. 68-25.

  Cited, in determining that the ten per cent deduction of the county surcharge for the costs of assessment, collection, and disposition of the county surcharge on state general excise tax into the state general fund is neither unconstitutional nor illegal.  Att. Gen. Op. 15-1.

 

Law Journals and Reviews

 

  Real Property Tax Litigation in Hawaii.  III HBJ No. 13, at pg. 57.

 

Case Notes

 

  Where city ordinance did not require that funds generated by a "convicted persons" charge be used to defray the city’s investigative and prosecutorial costs associated with the individual payor’s case, leaving open the possibility that the charge could be used for general revenue raising purposes, ordinance was not a "service fee" under §46-1.5(8), but a tax, which the State did not empower the city to impose; thus ordinance was invalid.  89 H. 361, 973 P.2d 736.

  Because this section and §246A-2 cover the whole subject of the counties’ real property taxation power and embrace the entire law on the matter, §248-2, by limiting Maui county’s real property taxation powers, is in conflict and is repealed by implication.  90 H. 334, 978 P.2d 772.

  Waiahole Ditch water use permittees being required to fund subsequent stream studies and monitoring activities was not an illegal "tax" where the studies directly benefited permittees by helping them prove as required under §174C-49 that their uses were "reasonable-beneficial" and "consistent with the public interest" and by also allowing them exclusive use of public resources in the interim, despite the present absence of such proof.  94 H. 97, 9 P.3d 409.

  The constitutional rule of tax immunity did not operate to immunize the State from the contractual obligations it voluntarily assumed through its leases to pay the real property taxes of its lessors.  99 H. 508, 57 P.3d 433.

  "The counties", as referred to in this section, means county or local governments, i.e., county councils.  115 H. 15, 165 P.3d 916.

  Where charter amendment usurped the county government's/county council's "functions, powers and duties relating to the taxation of real property", the charter amendment was unconstitutional pursuant to this section.  115 H. 15, 165 P.3d 916.

  Amounts assessed against insurers for payment into the insurance regulation fund under §431:2-215 was a regulatory fee and not an unconstitutional tax where (1) the charges were assessed by the commissioner; (2) the assessments were placed into a special fund intended to reimburse the division for insurance industry regulating costs; and (3) moneys from the fund to pay for services provided by the departments of commerce and consumer affairs and budget and finance, and to buttress the division's reserve fund were "used for the regulation or benefit of the parties upon whom the assessment was imposed".  120 H. 51, 201 P.3d 564.

  Where regulatory fees assessed against insurers by the insurance commissioner, an officer of the executive branch, for payment into the insurance regulation fund under §431:2-215 were transferred by the legislature via transfer bills from the insurance division into the general fund, and the regulatory fees became available for general purposes as if derived from general tax revenues, the transfers violated the separation of powers doctrine under this section and §26-10(b).  120 H. 51, 201 P.3d 564.

  Cited:  73 H. 449, 834 P.2d 1302.

 

 

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