Public Service Company; Tax

Authorizes state director of finance to allocate part of the
public service company tax revenues with the counties.

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HOUSE OF REPRESENTATIVES                H.B. NO.1514       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 239, Hawaii Revised Statutes, was
 2 enacted to impose the public service company tax on certain
 3 public utilities in lieu of all other taxes and as a means of
 4 taxing the real property (owned by a public utility or leased to
 5 it by a lease under which the public utility is required to pay
 6 the taxes upon the property) and the personal property of the
 7 public utility.  Specifically, section 239-3, Hawaii Revised
 8 Statutes, provides that public utilities are exempt from the
 9 counties' real property taxes.  Although the public utilities do
10 not pay real property taxes, they still use many services
11 provided by the counties that are funded by the counties' real
12 property tax revenues.  The legislature finds that it would be
13 equitable for the State to share a part of the public service
14 company tax revenues with the counties to compensate them for
15 unrealized real property tax revenues without incurring
16 significant additional administrative costs and burdens.  The
17 purpose of this Act is to provide the respective counties with
18 revenues collected under the public service company tax which are
19 in lieu of real property taxes.

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                                     H.B. NO.1514       

 1      SECTION 2.  Section 239-10, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "239-10  Disposition of revenues.  (a)  All taxes collected
 4 under this chapter shall be state realizations[.]; provided that
 5 after June 30, 1999, the amount of taxes collected under section
 6 239-5(a) and (b) from levy and assessment after June 30, 1998, in
 7 excess of four per cent of a public service company's gross
 8 income shall be kept by the state director of finance in special
 9 accounts in the state treasury.  Out of these special accounts,
10 the state director of finance in carrying out this section shall
11 deduct any cost incurred by the state director of finance and
12 then shall pay the remaining balance to each county as provided
13 in this section.  The payments made by the state director of
14 finance to a county shall be made within five months of the end
15 of the applicable fiscal year.
16      (b)  The director of taxation shall establish by August 1 of
17 each year that portion of taxes collected during the state fiscal
18 year under section 239-5(a) and (b) to be paid into the special
19 accounts, and the county, except for the county of Kalawao, to
20 which the taxes should be distributed.  The amount of taxes in
21 the special accounts to be paid over to each county shall be
22 based upon the proportional contribution of actual tax receipts
23 generated under this chapter within each county, taking into

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                                     H.B. NO.1514       

 1 account a proportionate share of refunds to taxpayers and
 2 contingent liabilities, such as tax appeals.
 3      (c)  No county shall have the right to appeal any assessment
 4 of the public service company tax on a public utility subject to
 5 section 239-5, nor shall any county have any access to any tax
 6 returns or tax return information submitted to the department of
 7 taxation under this chapter."
 8      SECTION 3.  If any provision of this Act, or the application
 9 thereof to any person or circumstance is held invalid, the
10 invalidity does not affect other provisions or applications of
11 the Act which can be given effect without the invalid provision
12 or application, and to this end the provisions of this Act are
13 severable.
14      SECTION 4.  Statutory material to be repealed is bracketed.
15 New statutory material is underscored.
16      SECTION 5.  This Act shall take effect on July 1, 1999.
18                              INTRODUCED BY:______________________

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