Report Title:

Excise Tax; Education

Description:

Creates an education tax levied as an excise tax and use tax of one-half per cent.

THE SENATE

S.B. NO.

2042

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO STATE FINANCES.

 

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

SECTION 1. The legislature is very concerned with the state of our economy. Although prudence dictates caution, certain priorities of the State must be met. This Act reflects the legislature's conviction that funds are needed to improve education in the State. This Act achieves this goal by increasing the general excise tax rate by one-half of one per cent and dedicating the increased revenues for educational purposes.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"237-   Education excise tax. (a) In addition to the general excise taxes levied under this chapter, there shall be assessed, levied, and collected an education excise tax of one-half per cent. The tax shall be imposed in the same manner and to the same extent as provided in this chapter for general excise tax.

(b) The education excise tax shall be remitted in the manner provided in section 237-31.

(c) The exemptions under section 237-23 shall apply to this section.

(d) Of the one-half per cent tax proceeds realized under this section:

(1) 0.85 per cent of the one-half per cent shall be deposited into the education special fund under section 302A-  ; and

(2) 0.15 per cent of the one-half per cent shall be deposited into the University of Hawaii capital improvements special fund under section 304-  .

(e) The department of taxation shall report to the legislature annually not later than twenty days prior to the convening of each regular session, beginning with the regular session of 2006, on the gross realizations from the education excise tax and the distributions under subsection (d)."

SECTION 3. Chapter 238, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"238-   Education use tax. (a) In addition to the use taxes levied under this chapter, there shall be assessed, levied, and collected an education use tax of one-half per cent. The tax shall be imposed in the same manner and to the same extent as provided in this chapter for use taxes.

(b) The education use tax shall be remitted in the manner provided in section 238-5.

(c) Of the one-half per cent tax proceeds realized under this section:

(1) 0.85 per cent of the one-half per cent shall be deposited into the education special fund under section 302A-  ; and

(2) 0.15 per cent of the one-half per cent shall be deposited into the University of Hawaii capital improvements special fund under section 304-  .

(d) The department of taxation shall report to the legislature annually not later than twenty days prior to the convening of each regular session, beginning with the regular session of 2006, on the gross realizations from the education use tax and the distributions under subsection (c)."

SECTION 4. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"302A-   Education special fund. (a) There is created in the treasury of the State the education special fund, into which shall be deposited 0.85 per cent of the education excise tax collected by the department of taxation under section 237-  , and 0.85 per cent of the education use tax collected by the department of taxation under section 238-  .

(b) The education special fund shall be used solely for the support of public schools; provided that the allocation to the public schools shall be used to provide funding to each of the forty-two school complexes on a per pupil basis, and shall be expended for repair and maintenance for each school. Other funding may be made through legislative appropriations.

(c) Expenditures from the education special fund shall be made through appropriations of the legislature.

(d) The department shall report to the legislature annually not later than twenty days prior to the convening of each regular session, beginning with the regular session of 2006, on the amounts of receipts, allocation, and utilization of the allocated proceeds from the education excise tax and education use tax."

SECTION 5. Chapter 304, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"304-   University of Hawaii capital improvements special fund. (a) There is created in the treasury of the State the University of Hawaii capital improvements special fund, into which shall be deposited 0.15 per cent of the education excise tax collected by the department of taxation under section 237-  , and 0.15 per cent of the education use tax collected by the department of taxation under section 238-  .

(b) The University of Hawaii capital improvements special fund shall be used solely for the support of the statewide university system and its community colleges; provided that the allocation to the university shall be used to provide funding for repair and maintenance of buildings. Other funding may be made through legislative appropriations.

(c) Expenditures from the University of Hawaii capital improvements special fund shall be made through appropriations of the legislature.

(d) The University of Hawaii shall report to the legislature annually not later than twenty days prior to the convening of each regular session, beginning with the regular session of 2005, on the amounts of receipts and utilization of the allocated proceeds from the education excise tax and education use tax."

SECTION 6. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) The sum from all general excise tax revenues realized by the State that represents the difference between $45,000,000 and the proceeds from the sale of any general obligation bonds authorized for that fiscal year for the purposes of the state educational facilities improvement special fund shall be deposited in the state treasury in each fiscal year to the credit of the state educational facilities improvement special fund;

(2) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund; [and]

(3) A sum, as specified in section 237-  , to be deposited into the education special fund under section 302A-  , and the University of Hawaii capital improvements special fund under section 304-  ; provided that this paragraph shall be repealed on June 30, 2015; and

[(3)] (4) A sum, not to exceed the amount necessary to meet the obligations of the integrated tax information management systems performance-based contract may be retained and deposited in the state treasury to the credit of the integrated tax information management systems special fund. The sum retained by the director of taxation for deposit to the integrated tax information [[]management[]] systems special fund for each fiscal year shall be limited to amounts appropriated by the legislature. This paragraph shall be repealed on July 1, 2004."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2005 and shall be repealed on June 30, 2015; provided that section 237-31, Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 30, 2005.

INTRODUCED BY:

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