Report Title:

Integrated Tax Information Management Systems; Special Fund

 

Description:

Authorizes DOTAX to enter into performance-based contracts to enhance or acquire automated tax systems for the implementation and administration of the taxes imposed under title 14, Hawaii Revised Statutes. Creates an Integrated Tax Information Management Systems Special Fund to pay for performance-based contracts for the integrated tax information management systems and administrative and operating expenses related to the integrated tax information management systems revenue-generating initiatives. (SB1839 HD1)

 


THE SENATE

S.B. NO.

1839

TWENTY-FOURTH LEGISLATURE, 2007

S.D. 2

STATE OF HAWAII

H.D. 1

 

 

 

 

A BILL FOR AN ACT

 

 

relating to tax systems.

 

 

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

 


SECTION 1. This Act shall be known as the "Continuing Integrated Tax Information Management Systems Revenue-Generating Initiatives Act of 2007".

The purpose of this Act is to provide revenue-generating initiatives that will be benefits-funded, meaning the vendor will only be paid when measurable increases in revenues resulting from the initiatives are collected by the State. The revenues will be used by the department of taxation to enhance its computer system and to streamline related operational procedures.

SECTION 2. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"231- Integrated tax information management systems special fund. (a) There is established in the state treasury the integrated tax information management systems special fund, into which shall be deposited tax revenues as provided by sections 235-119, 237-31, and 238-14. The director of taxation may retain and deposit the amounts necessary to meet the obligations of the performance-based contracts for the integrated tax information management systems. The amounts transferred by the director of taxation to the integrated tax information management systems special fund shall be limited to the amounts appropriated by the legislature.

(b) Moneys in the special fund shall be expended by the department to pay for:

(1) The performance-based contracts for the integrated tax information management systems; and

(2) Administrative and operating expenses related to the integrated tax information management systems revenue- generating initiatives.

Unless otherwise provided by law, all other receipts shall immediately be deposited into the state treasury."

SECTION 3. Section 36-27, Hawaii Revised Statutes, is amended to read as follows:

"36-27 Transfers from special funds for central service expenses. Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Housing loan program revenue bond special fund;

(8) Housing project bond special fund;

(9) Aloha Tower fund created by section 206J-17;

(10) Funds of the employees' retirement system created by section 88-109;

(11) Unemployment compensation fund established under section 383-121;

(12) Hawaii hurricane relief fund established under chapter 431P;

(13) Hawaii health systems corporation special funds;

(14) Tourism special fund established under section 201B-11;

(15) Universal service fund established under chapter 269;

(16) Integrated tax information management systems special fund under section [231-3.2;] 231- ;

(17) Emergency and budget reserve fund under section 328L-3;

(18) Public schools special fees and charges fund under section 302A-1130(f);

(19) Sport fish special fund under section 187A-9.5;

(20) Neurotrauma special fund under section 321H4;

(21) Deposit beverage container deposit special fund under section 342G-104;

(22) Glass advance disposal fee special fund established by section 342G-82;

(23) Center for nursing special fund under section [[]304A-2163[]];

(24) Passenger facility charge special fund established by section 261-5.5;

(25) Solicitation of funds for charitable purposes special fund established by section 467B-15;

(26) Land conservation fund established by section 173A-5;

(27) Court interpreting services revolving fund under section 607-1.5;

(28) Trauma system special fund under section 321-22.5;

(29) Hawaii cancer research special fund;

(30) Community health centers special fund; and

(31) Emergency medical services special fund[[];

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year.[]]"

SECTION 4. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Transportation use special fund established by section 261D-1;

(2) Special out-of-school time instructional program fund under section 302A-1310;

(3) School cafeteria special funds of the department of education;

(4) Special funds of the University of Hawaii;

(5) State educational facilities improvement special fund;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Funds of the employee's retirement system created by section 88-109;

(9) Unemployment compensation fund established under section 383-121;

(10) Hawaii hurricane relief fund established under chapter 431P;

(11) Convention center enterprise special fund established under section 201B-8;

(12) Hawaii health systems corporation special funds;

(13) Tourism special fund established under section 201B-11;

(14) Universal service fund established under chapter 269;

(15) Integrated tax information management systems special fund under section [231-3.2;] 231- ;

(16) Emergency and budget reserve fund under section 328L-3;

(17) Public schools special fees and charges fund under section 302A-1130(f);

(18) Sport fish special fund under section 187A-9.5;

(19) Neurotrauma special fund under section 321H-4;

(20) Center for nursing special fund under section [[]304A-2163[]];

(21) Passenger facility charge special fund established by section 261-5.5; and

(22) Court interpreting services revolving fund under section 607-1.5;

(23) Trauma system special fund under section 321-22.5;

(24) Hawaii cancer research special fund;

(25) Community health centers special fund; and

(26) Emergency medical services special fund[[];

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned.[]]"

SECTION 5. Section 235-119, Hawaii Revised Statutes, is amended to read as follows:

"235-119 Taxes, state realizations. [All] (a) Except as provided in subsection (b), all income taxes shall be for the use of the State and shall be paid into the state treasury at such times as the director of finance shall direct.

(b) The director of taxation shall pay the income taxes into the state treasury as a state realization; provided that a sum, not to exceed the amount necessary to meet the obligations of the performance-based contracts for the integrated tax information management systems, may be retained and deposited into 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 into the integrated tax information management systems special fund shall be limited to amounts appropriated by the legislature."

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 $90,000,000 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 for public school capital improvement program needs; [and]

(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, not to exceed the amount necessary to meet the obligations of the performance-based contracts for the integrated tax information management systems, may be retained and deposited into 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 into the integrated tax information management systems special fund shall be limited to amounts appropriated by the legislature."

SECTION 7. Section 238-14, Hawaii Revised Statutes, is amended to read as follows:

"238-14 Taxes state realizations. [All] (a) Except as provided in subsection (b), all taxes collected under this chapter shall be state realizations.

(b) The director of taxation shall pay the use taxes into the state treasury as a state realization; provided that a sum, not to exceed the amount necessary to meet the obligations of the performance-based contracts for the integrated tax information management systems, may be retained and deposited into 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 into the integrated tax information management systems special fund shall be limited to amounts appropriated by the legislature."

SECTION 8. Act 273, Session Laws of Hawaii 1996, is repealed.

SECTION 9. (a) Notwithstanding any other law to the contrary, the department of taxation may enter into performance-based contracts to enhance or acquire automated tax systems, including computer hardware and software, for the implementation and administration of the taxes imposed under title 14, Hawaii Revised Statutes, including any amendments.

(b) For the purposes of this Act:

"Performance-based contract" means a contract under which compensation to the vendor shall be computed according to performance standards established by the department of taxation. Any performance-based contract entered into by the department of taxation for such purpose shall provide for the payment of fees:

(1) Based on a contractually specified amount of the increase in the amount of taxes, interest, and penalties collected and attributable to the implementation of the revenue-generating initiatives; or

(2) On a fixed-fee contract basis to be paid from the increase in the amount of taxes, interest, and penalties collected and attributable to revenue-generating initiatives.

(c) Notwithstanding any other law to the contrary, the department of taxation shall award performance-based contracts pursuant to the requirements of chapter 103D, Hawaii Revised Statutes.

SECTION 10. The department of taxation shall report to the legislature no later than twenty days prior to the convening of every regular session with respect to the status of any performance-based contract and shall provide an accounting of all moneys appropriated. The report shall include:

(1) Detailed information on the costs and benefits of implementing the automated tax systems;

(2) The amount of increased tax, interest, and penalties collected that is attributable to the automated tax systems;

(3) The amount paid to the vendor or vendors contracted; and

(4) The information from the preceding fiscal year. SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $ for fiscal

year 2007-2008 to be deposited into the integrated tax information management systems special fund.

SECTION 12. There is appropriated out of the integrated tax information management systems special fund the sum of $ or so much thereof as may be necessary for fiscal year 2007-2008 to be used for the purposes of the integrated tax information management systems special fund established pursuant to section 231- , Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of taxation for the purposes of section 231- , Hawaii Revised Statutes.

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2007; provided that the amendments to section 237-31, Hawaii Revised Statutes, by this Act, shall not be repealed when section 237-31, Hawaii Revised Statutes, is reenacted on June 30, 2008, pursuant to Act 304, Session Laws of Hawaii 2006.