Report Title:

Mass Transit; General Excise Tax Increase

Description:

Increases the GET and use tax in counties with populations in excess of 500,000 by one-half per cent for mass transit development for those counties; creates the mass transit special fund; limits counties access to state highway funds; redistributes fuel taxes and highway fund moneys based on county contributions; sunsets in ten years.

THE SENATE

S.B. NO.

2052

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to MASS TRANSIT FUNDING.

 

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

SECTION 1. The purpose of this Act is to provide state funding for the development of a mass transit system in more populous counties. The legislature finds that the federal government will provide supplemental funding for mass transit projects if the locality demonstrates a financial commitment to fund a project.

The purpose of this Act is to levy a mass transit excise and use tax dedicated for expenditure on development of a mass transit system.

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

"237-   Mass transit excise tax. (a) In addition to the general excise taxes levied under this chapter, there shall be assessed, levied, and collected a mass transit excise tax on sales occurring in counties with a population in excess of five hundred thousand. The amount of the tax shall be one-half per cent. The tax shall be imposed in the same manner and to the same extent as provided in this chapter for the general excise tax.

(b) The mass transit 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) Proceeds realized from the mass transit excise tax under this section shall be deposited into the mass transit special fund under section 51D-  .

(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 mass transit excise tax."

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

"238-   Mass transit use tax. (a) In addition to the use taxes levied under this chapter, there shall be assessed, levied, and collected a mass transit use tax on uses in the State occurring in counties with a population in excess of five hundred thousand. The amount of the tax shall be one-half per cent. The tax shall be imposed in the same manner and to the same extent as provided in this chapter for the use tax.

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

(c) Proceeds realized from the mass transit use tax under this section shall be deposited into the mass transit special fund under section 51D-   .

(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 mass transit use tax."

SECTION 4. Chapter 51D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"51D-   Mass transit special fund; establishment. (a) There is established in the state treasury a special fund to be known as the mass transit special fund, into which shall be deposited moneys collected from the mass transit excise tax under section 237-   and the mass transit use tax under section 238-  . All interest earned or accrued on moneys deposited in the mass transit special fund shall become realizations of the fund.

(b) The moneys in the mass transit special fund shall be expended solely to provide funding for the development of a mass transit system in any county having a population in excess of five hundred thousand."

SECTION 5. Section 243-6, Hawaii Revised Statutes, is amended to read as follows:

"243-6 Fuel taxes, dispositions. (a) The "city and county of Honolulu fuel tax" shall be paid by the department of taxation into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the city and county of Honolulu for deposit into the fund known as the "highway fund" created by section 249-18.

The "county of Kauai fuel tax" shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Kauai for deposit into the fund known as the "highway fund" created by section 249-18.

The "county of Hawaii fuel tax" shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Hawaii for deposit into the fund known as the "highway fund" created by section 249-18.

The "county of Maui fuel tax" collected on account of liquid fuel sold or used on the island of Lanai or sold elsewhere for ultimate use on the island of Lanai, shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the fund known as the "highway fund" created by section 249-18, for expenditure on the island of Lanai. The "county of Maui fuel tax" collected on account of liquid fuel sold or used on the island of Molokai or sold elsewhere for ultimate use on the island of Molokai, shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the fund known as the "highway fund" created by section 249-18, for expenditure on the island of Molokai. The remainder of the "county of Maui fuel tax" shall be paid by the department into the state treasury, and shall, by the state director of finance, be paid over to the director of finance of the county of Maui for deposit into the fund known as the "highway fund" created by section 249-18.

(b) Each of the [foregoing] taxes under subsection (a) shall be expended for the following purposes[, for the island] in the several counties based upon the amount of taxes under this section generated by the particular county and for which the tax revenue is specially indicated[,or, if none, for the county for which the tax revenue is indicated]:

(1) For payment of interest on and redemption of any bonds duly issued or sold on or after July 1, 1951, under chapter 47 for the financing or aiding in financing the construction of county highway tunnels, approach roads thereto, and highways. Such payments of interest and principal on the bonds when due, shall be first charges on such moneys so deposited in the fund.

(2) For acquisition, designing, construction, reconstruction, improvement, repair, and maintenance of county main and general thoroughfares, highways, and other streets, street lights, storm drains, and bridges, including costs of new land therefor, when expenditures for the foregoing purposes cannot be financed under state-federal aid projects.

(3) In the case of the city and county of Honolulu, for payment of the city and county's share in an improvement district initiated by the city and county for an improvement listed in (2) above which is permitted to be constructed in the city and county.

(4) For the construction of county highway tunnels, overpasses, underpasses, and bridges, where such improvement cannot be made under state-federal aid projects.

(5) For purposes and functions connected with county traffic control and preservation of safety upon the public highways and streets.

(6) For purposes and functions in connection with mass transit.

(7) For acquisition, design, construction, improvement, repair, and maintenance of bikeways.

(8) No expenditure shall be made, out of the revenues paid into any such fund, which will jeopardize federal aid for highway construction."

SECTION 6. Section 248-9, Hawaii Revised Statutes, is amended to read as follows:

"248-9 State highway fund. (a) Moneys in the state highway fund may be expended for the following purposes:

(1) To pay the costs of operation, maintenance, and repair of the state highway system, including without limitation, the cost of equipment and general administrative overhead;

(2) To pay the costs of acquisition (including real property and interests therein), planning, designing, construction and reconstruction of the state highway system, and bikeways, including, without limitation, the cost of equipment and general administrative overhead; and

(3) To reimburse the general fund for interest on and principal of general obligation bonds issued to finance highway projects where the bonds are designated to be reimbursable out of the state highway fund.

No county shall receive more moneys under this subsection than the amount that it has contributed to the state highway fund.

(b) At any time the director of transportation may transfer from the state highway fund all or any portion of available moneys determined by the director of transportation to be in excess of one hundred thirty-five per cent of the requirements for the ensuing twelve months for the state highway fund as permitted by and in accordance with section 37-53. For purposes of the determination, the director of transportation shall take into consideration:

(1) The amount of federal funds and bond funds on deposit in, and budgeted to be expended from, the state highway fund during the period;

(2) Amounts on deposit in the state highway fund which are encumbered or otherwise obligated;

(3) Budgeted amounts payable from the state highway fund during the period;

(4) Revenues anticipated to be received by and expenditures to be made from the state highway fund during the period based on existing agreements and other information for the ensuing twelve months; and

(5) Any other factors as the director of transportation shall deem appropriate."

SECTION 7. Section 249-18, Hawaii Revised Statutes, is amended to read as follows:

"249-18 Highway fund. (a) All taxes collected under this chapter, except those collected pursuant to sections 249-14 and 249-14.5, shall be deposited in a fund to be known as the "highway fund" and shall be allocated and expended in the [county in which the taxes are collected for the following purposes:] several counties up to the amount of taxes under this chapter collected from the particular county:

(1) For acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, including without restriction of the foregoing purposes, costs of new land therefor, of permanent storm drains or new bridges, as well as repairs or additions to storm drains or bridges;

(2) For installation, maintenance, and repair of street lights and power, and other charges for street lighting purposes, including replacement of old street lights, on county maintained public roads and highways;

(3) For purposes and functions connected with traffic control and preservation of safety upon the public highways and streets;

(4) For payment of interest on and redemption of bonds issued to finance highway and street construction and improvements;

(5) In the case of the city and county of Honolulu, for appropriation for the police department up to the sum of $500,000. No expenditures shall be made out of this fund which will jeopardize federal aid for highway construction;

(6) For purposes and functions connected with mass transit; and

(7) For the acquisition, design, construction, improvement, repair, and maintenance of bikeways.

(b) After expenditures and encumbrances of moneys under subsection (a), any remaining balance as of June 30 of each year shall be transferred on July 1 of the same year to the mass transit fund under section 51D-   , beginning June 30, 2005 until July 2, 2015."

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, 2005, and shall be repealed on July 2, 2015; provided that sections 243-6, 248-9, and 249-18, Hawaii Revised Statutes, shall be reenacted in the form in which they read on June 30, 2005.

INTRODUCED BY:

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