Report Title:

Environmental Protection; Conveyance Tax

Description:

Increases the conveyance tax to provide a stable funding mechanism for the natural area reserves system and to address the problems of invasive species. Creates a $600,000 threshold at which the tax increase applies. (SB1517 HD1)

THE SENATE

S.B. NO.

1517

TWENTY-SECOND LEGISLATURE, 2003

S.D. 2

STATE OF HAWAII

H.D. 1


 

A BILL FOR AN ACT

 

RELATING TO ENVIRONMENTAL PROTECTION.

 

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

SECTION 1. The legislature recognizes the value of Hawaii's natural resources to its economy, culture, and quality of life, but an alarmingly small amount of money is invested each year to protect our natural capital base. Currently, the department of land and natural resources has allocated only one per cent of the State's budget to protect and manage Hawaii's precious natural and cultural resources--the very foundation of our island community and economy. Especially critical are the department's efforts to ensure that our basic necessities, such as water supply, are protected for future generations. Equally important are protecting our native plants, animals, and ecosystems and defending Hawaii from the onslaught of invasive species.

The silent invasion of Hawaii by introduced plants and animals, diseases, and other pests is the single greatest threat to our economy, the health and lifestyle of Hawaii's people, and the environment. Invasive species already cause millions of dollars in crop losses, destroy native forests and watersheds, contribute to the extinction of unique Hawaiian plants and animals, and spread diseases. Pests, such as the brown tree snake and red imported fire ant, would change the character of Hawaii forever. The value of real estate would certainly drop if these invasive pests became established.

The legislature has already determined that the conveyance tax is an appropriate means to fund the conservation of natural resources on private land by dedicating twenty-five per cent of the current assessment to the natural area partnership program and forest stewardship program, which assist private landowners in managing important natural resources on private land. However, such dedicated funding has not been provided for the natural area reserves system on state-managed land.

The legislature has also determined that the nexus is clear to use a portion of the conveyance tax for watershed protection and the youth conservation corps. The development, sale, and improvement of real estate in Hawaii puts additional pressure on natural areas, Hawaii's water resources, and watershed recharge areas.

The purpose of this Act is to increase the conveyance tax and provide a stable funding mechanism for the natural area reserves system and to protect Hawaii's natural resources from the onslaught of invasive species.

SECTION 2. Section 247-2, Hawaii Revised Statutes, is amended to read as follows:

"247-2 Basis and rate of tax. The tax imposed by section 247-1 shall be based on the actual and full consideration (whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit) paid or to be paid, which shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance, and shall be at the rate of 10 cents per $100 of such actual and full consideration[;] or 20 cents per $100 of such actual and full consideration paid for all transfers or conveyances of realty of $600,000 or greater; provided that in the case of a lease or sublease, this chapter shall apply only to a lease or sublease whose full unexpired term is for a period of five years or more, and in those cases, including (where appropriate) those cases where the lease has been extended or amended, the tax in this chapter shall be based on the cash value of the lease rentals discounted to present day value and capitalized at the rate of six per cent, plus the actual and full consideration paid or to be paid for any and all improvements, if any, which shall include on-site as well as offsite improvements, applicable to the leased premises; and provided further that the tax imposed for each transaction shall be not less than $1."

SECTION 3. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year, [twenty-five] thirty-five per cent shall be paid into the rental housing trust fund established by section 201G-432 and [twenty-five] thirty-five per cent shall be paid into the natural area reserve fund established by section 195-9; provided that the funds paid into the natural area reserve fund shall be annually disbursed by the department of land and natural resources [after joint consultation with the forest stewardship committee and the natural area reserves system commission] in the following priority:

(1) To natural area partnership and forest stewardship programs[;], after joint consultation with the forest stewardship committee and the natural area reserves system commission;

(2) Projects undertaken in accordance with watershed management plans pursuant to section 171-58 [or], watershed management plans negotiated with private landowners[;], management of the natural area reserves system pursuant to section 195-3, and early detection and rapid response programs for invasive species; and

(3) The youth conservation corps established under chapter 193."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on September 1, 2003.