Report Title:

County General Excise Tax; Transient Accommodations Tax

Description:

Amends authority of counties to enact a county general excise tax by removing the mandated percentage. Adjusts transient accommodations tax revenue allocation for counties that enact a county general excise tax.

THE SENATE

S.B. NO.

2729

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to county taxes.

 

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

SECTION 1. Section 46-16.7, Hawaii Revised Statutes, is amended to read as follows:

"§46-16.7 County general excise [and use tax surcharge.] tax. (a) Each county, except the county of Kalawao, may establish a general excise [and use tax surcharge of one-half per cent.] tax. Each county shall establish the general excise [and use tax surcharge] tax by ordinance [adopted before October 1, 1992, which shall take effect on January 1, 1993, and remain in effect for ten years through December 31, 2002, unless earlier repealed, pursuant to subsection (c). No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance. Notice of the public hearing shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing. If a county fails to adopt a county general excise and use tax surcharge ordinance by October 1, 1992, the county shall not be covered by this section.

(b) Each county shall notify the director of taxation within ten days after the county has adopted a general excise and use tax surcharge ordinance, and the director of taxation shall levy, assess, collect, and otherwise administer the general excise and use tax surcharge for the taxable year beginning January 1, 1993, and for taxable years thereafter through December 31, 2002, as provided by chapters 237 and 238.

(c) The general excise and use tax surcharges received from the State by each county shall be used as follows:

(1) The city and county of Honolulu shall use the surcharges to develop a fixed rail rapid transit system. All private source revenues generated or pledged to develop a fixed rail rapid transit system that are received prior to the operation of the system shall be used as county matching funds for moneys requested from the transit capital development fund, pursuant to chapter 51D, before surcharges may be used. The director of finance shall determine whether or not private sources are adequate to meet county matching requirements. The director of finance shall submit a report of the findings to the legislature. Upon legislative acceptance of the findings, within sixty days of the first regular legislative session convened following the submittal of the findings, no additional moneys may be expended from the transit fund; provided that:

(A) Such limitation on the expenditure of moneys from the transit fund shall not occur prior to December 31, 1992; and

(B) Private source revenues received prior to the operation of the system or received in each year that the surcharge is in effect shall be committed to the funding of the capital costs of the fixed rail rapid transit system prior to any determination regarding the duration of the surcharge.

(2) All surcharges collected by the State for the city and county of Honolulu but not used for the purpose of developing a fixed rail rapid transit system shall be deposited into the state treasury to be returned to the taxpayers who resided in the city and county of Honolulu for more than two hundred days of the taxable year in the aggregate during the time that the surcharges were collected, in the form of an income tax credit, the amount of the credit to be determined by law.

(3) The general excise and use tax surcharge shall be repealed upon the determination by the director of finance that all authorized capital costs of the fixed rail rapid transit system or county projects under paragraph (4) have been collected and distributed pursuant to chapter 248.

(4) The counties of Hawaii, Kauai, and Maui shall use the surcharges for public transportation systems, including mass transportation, sewage, or water development, and parks, including park operation, maintenance, infrastructure, or purchase.

(d) As used in this section:

"Capital costs" means nonrecurring costs required to construct a transit facility or system, including debt service, costs of land acquisition and development, acquiring of rights-of-way, planning, design, and construction, including equipping and furnishing the facility or system.

"Private source revenue" means all funds, concessions, development rights, or those assets of value contractually agreed upon with the county from sources other than state, county, or federal governments as a result of, or for the purposes of, developing mass transportation].

(b) No county general excise tax shall be established on any:

(1) Gross income or gross proceeds under chapter 237 taxable at the one-half per cent tax rate;

(2) Gross income or gross proceeds taxable under chapter 237 at the 0.15 per cent tax rate;

(3) Wholesaler or jobber as defined in section 237-4;

(4) Gross income or gross proceeds of sales in interstate or foreign commerce; or

(5) Transactions, amounts, persons, gross income, or gross proceeds exempt from tax under chapter 237."

SECTION 2. Section 237D-6.5, Hawaii Revised Statutes, is amended to read as follows:

"§237D-6.5 Remittances; distribution to counties. (a) All remittances of taxes imposed under this chapter shall be made by cash, bank drafts, cashier's check, money order, or certificate of deposit to the office of the taxation district to which the return was transmitted.

(b) Revenues collected under this chapter shall be distributed as follows:

(1) [17.3] 20.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8; [provided that beginning January 1, 2002, if the amount of the revenue collected under this paragraph exceeds $31,000,000 in any calendar year, revenues collected in excess of $31,000,000 shall be deposited into the general fund;]

(2) [32.6] 38.0 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that [beginning on July 1, 2002]:

(A) [If the amount of revenues deposited into the tourism special fund exceeds $62,292,000 in any fiscal year, of the first $1,000,000 in revenues deposited in excess of $62,292,000:] one per cent of the revenues deposited into the tourism special fund shall be used for tourism promotion and marketing for the city and county of Honolulu; and

(B) $1,000,000 of the revenues deposited into the tourism special fund shall be distributed as follows:

(i) Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

(ii) Ten per cent shall be deposited into the special land and development fund established in section 171-19 for the Hawaii statewide trail and access program;

provided that the total amount deposited into the state parks special fund and to the special land and development fund for the Hawaii statewide trail and access program shall not exceed $1,000,000 in any fiscal year;

[(3) 44.8 per cent of the revenues collected under this chapter shall be transferred as follows: Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22.8 per cent; and

(4) 5.3 per cent of the revenues collected under this chapter shall be deposited into the transient accommodations tax trust fund established under section 237D-5.5.]

(3) 10.2 per cent of the revenues collected under this chapter shall be transferred to Kauai county;

(4) 13.1 per cent of the revenues collected under this chapter shall be transferred to Hawaii county;

(5) 16.1 per cent of the revenues collected under this chapter shall be transferred to Maui county; and

(6) 2.3 per cent of the revenues collected under this chapter shall be deposited to the general fund;

provided that each county shall use one per cent of the revenues transferred pursuant to this section for tourism promotion and marketing in the county.

(c) If more than one county establishes and implements a county general excise tax pursuant to section 46-16.7, revenues collected under this chapter shall be distributed as follows:

(1) 20.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8;

(2) 40.0 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that:

(A) One per cent of the revenues deposited into the tourism special shall be used for tourism promotion and marketing in each of the counties enacting a county general excise tax;

(B) $1,000,000 of the revenues deposited into the tourism special fund shall be distributed as follows:

(i) Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

(ii) Ten per cent shall be deposited into the special land and development fund established in section 171-19 for the Hawaii statewide trail and access program;

provided that the total amount deposited into the state parks special fund and to the special land and development fund for the Hawaii statewide trail and access program shall not exceed $1,000,000 in any fiscal year;

(3) 15.0 per cent of the revenues collected under this chapter shall be transferred to each of the counties that have not established a county general excise tax pursuant to section 46-16.7; and

(4) Any moneys remaining of the revenues collected under this chapter after distribution as provided in this subsection shall be deposited into the general fund;

provided that each county shall use one per cent of the revenues transferred pursuant to this section for tourism promotion and marketing in the county.

(d) All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection, and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.

[(c)] (e) On or before January or July 1 of each year or after the disposition of any tax appeal with respect to an assessment for periods after June 30, 1990, the state director of finance shall compute and pay the amount due as provided in [subsection (b)] subsections (b) and (c) to the director of finance of each county to become a general realization of the county expendable as such, except as otherwise provided by law."

SECTION 3. Section 237D-5.5, Hawaii Revised Statutes, is repealed.

["[§237D-5.5] Transient accommodations tax trust fund. (a) There is established in the state treasury the transient accommodations tax trust fund to be administered by the director of finance, into which shall be deposited the revenues prescribed by section 237D-6.5(b).

(b) All investment earnings from moneys in the trust fund shall be credited to the general fund.

(c) The purpose of the trust fund is to serve as a holding account for transient accommodations tax revenues to supplement shortfalls in the tourism special fund, if the tourism special fund does not receive $63,292,000 in transient accommodations tax revenues as provided in this section.

(d) If the amount of transient accommodations tax revenues distributed to the tourism special fund pursuant to section 237D-6.5(b)(2) is projected by the director of finance to be less than $63,292,000 in the aggregate in a fiscal year, the director of finance, at such times and in such amounts that the director shall reasonably determine, shall deposit moneys from the trust fund to the tourism special fund to provide the tourism special fund with a minimum of $63,292,000 in transient accommodations tax revenues in the aggregate for a fiscal year; provided that any deposit from the trust fund to the tourism special fund shall be limited to the moneys available in the trust fund.

(e) If the tourism special fund receives less than $63,292,000 in transient accommodations tax revenues in the aggregate for a fiscal year, even after receiving moneys from the trust fund, the shortfall shall be noncumulative and shall not represent a claim against future distributions from the trust fund.

(f) No deposit from the trust fund to the tourism special fund shall be made that would cause the tourism special fund to receive more than $63,292,000 in transient accommodations tax revenues in the aggregate for a fiscal year.

(g) Any moneys remaining in the trust fund at the end of each fiscal year shall be credited to the general fund; provided that, upon receipt by the tourism special fund of at least $63,292,000 in transient accommodations tax revenues in the aggregate during the course of a fiscal year, the moneys in the trust fund shall thereafter be credited to the general fund."]

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

SECTION 5. This Act shall take effect upon its approval; provided that sections 2 and 3 shall take effect upon the enactment and implementation by a county with a population of 500,000 or more of a county general excise tax ordinance pursuant to section 46-16.7, Hawaii Revised Statutes.

INTRODUCED BY:

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